Posted on 07/02/2014 3:23:08 PM PDT by Lorianne
“De hosses run down an den dey come back / Doo dah, doo dah Bet my money on a bob-tail nag / Oh de doo dah day” – “Camptown Races,” Stephen Foster
A trifecta of disappointment last week …
As you know, dear reader, the idea behind the Fed’s ZIRP and QE policies is to stimulate demand. More demand – meaning more consumers spending more money they don’t have on more things they don’t need – is supposed to be a good thing.
Fed economists have bet trillions of dollars on it. Not their money, of course. Each year, since 2008, they’ve put money on the consumer nag. And each year, he’s failed to win, place or even show up. Then the following year, they’ve doubled down… with the chant “the consumer is back.”
The US economy is 70% consumer spending, reason the geniuses at the Fed. So anything they can do to boost consumer spending will also boost the economy. This sort of simpleminded logic is either breathtakingly naïve or mind-bogglingly stupid. Consumers need to have money to spend before they can spend it. If the economy is working properly, they earn it from honest bussing and schlepping.
Consumer demand is not what causes those things to happen. In the abstract, demand is unlimited. But output is not. Nor has it ever been demonstrated that central financial planning works. And as of last week we have more evidence that it doesn’t …
(Excerpt) Read more at acting-man.com ...
Retailers in tourism areas wait for this weekend with bait on their breath and sky high fuel prices.
Well, baited breath, bait on their breath—same thing, you know. ;-)
There is no recovery. None.
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