Posted on 11/22/2015 8:17:22 AM PST by citizen
If you recall, the popular storyline since late last year has been that the U.S. economy is moderately improving while the world’s other major economies – Japan, China, and Europe – are rolling over. The U.S. economy would power through. Moreover, stock prices had achieved a permanently high plateau.
The markets will not be allowed to crash for as long as Obama occupies the Oval Office.
I’m not for these artificially low rates- they undermine thrift and the confidence in America needed for long term investment, among other problems. But raising rates in the midst of the “Great Obama Depression” would only create more job losses and suffering in America . The current policies have run themselves into the corner - the very trap some of us warned about, alas. The way out isn’t clear except for the natural market- clearing - which won’t be pretty either. About all that can be said for it is that it would be temporary whereas the current approach is causing a long- term depression and for many Americans — life- long pain
“The markets will not be allowed to crash for as long as Obama occupies the Oval Office.”
Yes, hence the FEDs stubborn refusal to raise rates way back when they should have.
Sometimes insightful
PermaBear
Yeah, for me it’s a Catch-22. I want some small interest reteun on my savings. I’m near retirement so I can’t gamble any more than I already am on stocks. But raising now will do, at best, as much bad as good and I’m not conviced there will be any good - except Janet can say she did it. woohoo
After the induced housing crash, mostly normal rules of winner-loser should have applied but the DC pols & too-big-to-fail banks looked after themselves instead of righting the economy.
Sometimes insightful
PermaBear
I guess that is a fair assessment of ZH. For my part and looking at world conditions I too have been (and am) bearish since the crash. I simply can’t look at the ZIRP and money printing of central bank’s all over the world as healthy for any economy. The US survives nicely b/c of our reputation of safe haven status.
I think they are kicking the economic can down a road that ends in a cliff.
Yes we are likely moving into a deflationary depression. Unless we get radical change and fast we will be looking back at 2015 as the good old days.
Correct! If there’s any raise in 2016, it will be a token, which will show markets can deal with the token, and stocks will rocket up further.
The Significant Raise will come in Jan 2017, for Trump or Cruz to fix.
Or for Hillary to justify the full march to socialism: when single payer health care is enacted, and when the Fed starts buying stock in US companies.
“deflationary depression” - bad for all, good for nobody - except possibly for the socialists who will use the deprivation to justify their evil ends.
Well, that’s a horrible scenario conclusion! Hope that’s not how it goes but in truth I can’t/won’t argue otherwise.
Plus this is not just the US this is Global. Nobody is doing well.
“Plus this is not just the US this is Global. Nobody is doing well.”
Too true. For the last century and more, the world could mostly depend on the good ole USA economy to be leading the world out of downturns. Not so now. We are trying to keep our own noses above the fiscal water line. And not even our toes are touching bottom.
Dr. Copper – the metal with a PhD in economics – is always the first to know which way the economy will go. Copper’s broad use in industry and many different sectors of the economy, ranging from infrastructure to housing and consumer electronics, makes it a good early indicator of economic activity.
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Bloomberg on metals...
“Copper plunged to the lowest intraday price since May 2009 on concern Chinese demand is slowing and as the dollar traded near its strongest level in more than a decade. Lead touched the lowest since 2010, while all industrial metals retreated.
The metal used in power cables and wiring lost as much as 2.1 percent to $4,590 a metric ton on the London Metal Exchange before trading at $4,654 by 4:51 p.m. in Singapore, while futures slumped as much as 4.3 percent in Shanghai.
Codelco, the largest producer, has cut the premium it will charge buyers in China next year by the most since the global financial crisis, while Arc Resources Co. predicts a 10 percent drop in refined imports by the biggest consumer in 2016.â€
Liquidity Traps are like that
The Bookwoman Christmas Shopping Index is down this year. I went to the annual open house at a small local business I support. This year’s Christmas shopping spending was a quarter of what it was last year. Many factors. Not as many great gifts available. More caution on my part - my healthcare is going over $1000/month next year, just for me - husband is on Medicare. Less holiday spirit due to all the horrors in the news. Not wanting to add to my supply of stuff.
I’m more worried than usual this year about terrorists bombing a mall or other location. They can’t bomb us if we shop online but that’s not the same, plus it doesn’t support local economy and jobs.
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