Sorry for being imprecise. I meant stimulus in the traditional Keynesian sense of govt spending. I think only 20-30% (or maybe less) actually been spent and we'll be into 2010 before the even the bulk of it is out the door IIRC. I don't normally hear monetary policy referred to as stimulus, but I won't swear to it.
Doom and gloom ..... I heard this too many time about just about almost every major currency. The EUR and GBP had the same story about 6-8 months ago. I want to see unrevised data. Remember there are liars, dam liars and then there are statatiscains. Akuma
Well, Keynesian theory is a bunch of nonsense pushed by silly academics and funded by the international elite bankers. It's just an excuse for governments building up debt indefinitely & printing money. But that should be besides the point. Are you at all considering the TARP & TALF? Also, have you read the stimulus bill? If you had, you would know that most of the money is not going anywhere productive. How about pointing exactly where the government stimulus has had any productive effect.
Actually, elements of Keynes' theories have been a part of our economic policy since at least FDR. If you really believe what you posted, then you have a very jaundiced view modern macro-economic theory. One which is shared by many people, but jaundiced nonetheless. Also, the printing money bit would be monetary policy rather than fiscal (aka Keynesian) policy. The programs you mentioned are part of the current monetary policy of the Fed and Treasury so I think I already covered that. IMHO, govt spending is always going to be about as efficient as buck shot at 100 yds. But you'll still hit something. In other words, as long as the money goes into the pockets of people who will spend it, then it has served it's purpose.
Some Austrain is going to get out their wooden spoon and spank you Xenix..... Clearly you haven't read Von Mises.... Theres a difference between real money in the system and fiat money created out of thin air. fiat money in von mises world would have a negative effect on the economy over time. Its not just a debt issue. There are issues about proper and effective allocation of capital. Governments are highly ineffective at creating legimate growth thru money printing. This is very basic von mises work... he gets into specifics which deal with most every case further along into reading him. But I doubt that a fiat money culture like ours would teach this subject in school....
I was hoping that if I didn't speak the name of 'he who cannot be named' that the Austrian school wouldn't come up. But then I still believe in the Easter bunny too. I had never heard of Von Mises until this year but he seems to have a devoted following. I did look at the the wikipedia entry but can't say that I got much out of it. I agree with you though about attempts to 'monetize' the debt. Personally I don't think that's what's happening, but no doubt it is a debatable issue. I don't think there is really any viable alternative to a fiat system though. The money supply has to be able to expand and contract to accommodate the business cycle. Maybe the Austrians have an idea of how to eliminate this little annoyance. If so, I guess I wouldn't have any metaphysical issues with a hard currency.
all very interesting - but the debt will be monetized politicians do not have the will to unwind these things -- politicians of either ilk (left, right or center) so the dollar is 'scrip' waiting to happen you heard it here first....
Foreigners would be dumping all US assets if dollar collapse and own their own currency. remember all dollar collapse follows economic collapse...many companies won't survive.. no country can be prosperous to have declining currency..a declining currency is ominous to economic decline. interest rates increase and stocks collapse. they sell at any price to get out of the USD and convert to another currency war, debt,political and economic(walls street) corruption and moral corruption is increasing in the US......religion is in decline etc. during the Asian currency crisis when asian currencies collapse abd USD strengthen in 1997,,,the asian economies collapse. much of the world capital flowed because the USD was so strong it's interesting now that the decline in USD results in increase in index equities. but with USD collapse you have positive correlation....decline in USD AND decline in index equities positive correlation. that day hasn't occurred but would occur if USD collapse from losing foreign reserve or some other event.
Growth will only start happening again when newspapers' classified ads are chock full of advertisements, "Wanted: Manufacturing Electrical Design Engineer, $200k starting salary + relocation + stock bonus. New grads welcome to apply". Until then, its fluff. Seriously, follow the labour market. The economy cannot and will not start to revive itself until the US engineering workforce is back to work, designing new products, building new factories, and creating a sustainable base of production (for export). Consumerism is dead. Long live engineers and factory workers! Bankers and consumers will *not* be leading this recovery, so to look towards the health of those sectors would be, IMHO, dumb. As the economy picks up steam, the bond market will progressively be increasingly devastated as inflation will be very difficult to stop. The best place to be positioned is in countercyclical industries right now, probably moreso as an employee, than as an investor.
^^^ The reserve premium built into the dollar could be north of 60% face value. There's a huge international push - led by Asia, Russia and parts of EU - for alternative reserve currencies. Or a popular, basket-weighted SDR. Geitner has admitted he's open to other reserves. This is striking and absolutely paramount to any macro forecast. Considering Geitner and Bernacke make policy, they could very well push us over the cliff by keeping the doubled monetary base in circulation, indefinitely. And that's with todays anemic borrowing. What if loan activity picks up in 6 months, and Bernacke refuses to raise by at least 200 basis points?!? Efficiency is critical to velocity, yea. But if the Central Bank refuses to sop up the mess, that efficiency will quickly morph into a confetti-party. I thought Roubini nailed it on CNBC, the other night. If Bernacke tightens too quick, we do a double-dip recession. More asset deflation will choke banks/lending. If Bernacke waits too long to raise, we get another credit, equity and commodity bubble that will ultimately crash harder - on softer ground - than the current! Catch 22, right? Now remember, who does Bernacke work for? Who owns the Federal Reserve System? Which Industry is guaranteed bailouts by virtue of their "too-big-to-fail" status (real or imagined)? Do any of you think Bernacke will throw his Boss (FED Shareholders) under the proverbial Bus to save Joe Schmoe from 8 dollar Gas and 6 dollar bread?? Seriously.... This is the New American economy - one of curtailed borrowing/spending on the part of the consumer = stagnant GDP + low growth. Saving metrics aren't useful unless one has debt-to-income metrics. Total average household debt should be tracked relative to incomes to answer the key questions of where exactly is the US consumer located along the path of debt repayment? And how long until the consumer debt profile "recovers" (high underutilized debt load = bullish/inflationary or excessive/unsustainable debt load = bearish/deflationary). Those figures are likely out there, in some form. I'm just too lazy to find them. My 2 cents.