PeakTrader.com

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PeakTrader:

The economy is being propped-up, or prevented from receding, by $1 trillion a year budget deficits and endless quantitative easings.

However, I think, it’s worse than that. Only endless quantitative easings is preventing a recession, in this depression.

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And if more Americans were working, food, relative to income, would be even cheaper:

‘Real’ Unemployment Rate Shows Far More Jobless
2 Aug 2012

“Nevada’s U-6 rate is 22.1 percent, up from just 7.6 percent in 2007. Economically troubled California has a 20.3 percent real rate, while Rhode Island is at 18.3 percent.

Those numbers compare especially unfavorably to the national rate, high in itself at 14.9 percent though off its record peak of 17.2 percent in October 2009.

Only three states — Nebraska (9.1 percent), South Dakota (8.6 percent) and North Dakota (6.1 percent) — have U-6 rates under 10 percent.”

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Juandos, at this point, only monetary policy is having a positive effect in boosting real growth, although inflation will likely accelerate faster than real growth.

Of course, financial markets anticipate the future, including changes in monetary policy.

The Fed is attempting to stimulate demand, e.g. through lower interest rates or a “wealth effect,” to generate a self-sustaining virtuous cycle of consumption-employment.

However, there are too many negative forces preventing that virtuous cycle from taking hold, and nothing significant has changed, from the Administration and Congress, to scale-back those forces.

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Jon, are you saying if aggregate income rises and food production is unchanged, then food will not be cheaper compared to aggregate income?

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Jon, of course, if income doubles, e.g. through employment, and spending on food more than doubles, then the proportion of income spent on food increases.

However, that doesn’t mean food became more expensive.

Also, employment increases output.

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http://www.aei-ideas.org/2012/09/the-miracle-of-american-farming-illustrated-by-the-amazing-32000-cow-25000-acre-fair-oaks-dairy-farm/#comments

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PeakTrader:

The private sector tends to create wealth through efficiencies, while government tends to destroy wealth through inefficiencies.

That’s why capitalism has been so successful.

Government should give back to the private sector, not the other way around.

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http://www.aei-ideas.org/2012/09/video-of-the-day-honey-you-didnt-build-that/#comments

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