2 sunny mornings after 2 mornings of thunderstorms had to get out of bed 4AM. Sort of hot, but tomorrow may not get over 70 degrees as another storm blows in.
Should I be terrified of Muslim terrorists because of the liberal news media stories about beheadings? Or did deserters get what they deserved? Why did they run off to the Middle East during the Mexican invasion of the USA? Don’t they remember the Alamo? Or are beheadings a Hoax perpetuated by Obama to rationalize what he wants to do anyway, such as expand wars that benefit the military industrial complex that will support Obamacare medical industrial complex necessitated by the junk food stamp industrial complex? Why can’t our psychedelic lesbian troops stop terrorism after flailing 10 years in the Middle East? And spending trillions of dollars?
The Obama recovery was similar to recoveries in the past – fairly easy to forecast. Now it is getting more murky and dangerous. The economy may be headed into a rough period 2015 and beyond. Assuming that Ebola will be controlled, the drought will end, and no big quakes, wars, etc. There are still lots of problems. QE is winding down. But QE set off the current bubble, and now will be acting in reverse. Maybe the end of QE alone is enough in itself to cause a crash. Food prices also may collapse because of a record huge harvest of wheat, corn, soy, etc. The attached graphs show:
1) Stock prices are ridiculously high. QE has been great for the financial industry. CalPERS is taking credit for high investment portfolio returns but they are not admitting that many of their investments have been poor performers. They added a new section on how their poorly performing California investments have furthered social goals. So retirees have to pay for misguided liberal do gooder schemes.
2) House prices have recovered to where they were in the 2005 boom, but not to the 2006-7 peak. My opinion most houses are overpriced. I would sell ASAP and move to a lower priced housing market.
3) Gold prices are still in a boom but have retreated some. If the economy weakens people will sell gold to pay their home mortgage, auto loans, buy food, etc.
4) The dollar has been weak during QE Obama, and was falling under George Bush. The dollar will strengthen as QE ends and interest rates rise. Foreigners will buy dollars to put into USA banks and earn higher interest rates. Wars will encourage foreigners to invest in fortress America. People will not buy so many imports if the economy is weak. A bad economy will mean good times for the dollar.
5) Unemployment has been falling. Employment has been rising. But the labor market is not doing nearly as well as the stock market. Obama and the Fed cares more about the idle rich than workers. No news there.
6) CPI Inflation has been low. QE has been a flop — it did not cause much inflation. The fed should have stopped QE after a year or two. They should have just given all veterans and elderly $20,000 cash. Then we would have seen some inflation.
7) Interest rates have been low — a ripoff for savers and retirees. But low interest rates are great for banks. Banks get to borrow at very low rates then turn around charge borrowers higher rates on credit cards, student loans, home mortgages, auto loans, etc. That borrower interest rates are lower than at many periods in history will encourage borrowers to borrow more than they might have. Thus producing more profits for banks.
8) M2 Money supply has been growing along with inflation. The problem is that much of this money has disappeared overseas in the form of cash, probably funding ISIS terrorism drugs human trafficking, etc. So many people in the USA are deflated — don’t have enough money to buy things, so businesses can’t sell things, so they don’t hire and unemployment remains high. But Mexican gangsters and terrorists are booming and live a life of luxury. It is not fair to inflate foreign crooks while deflating USA citizens.
9) Industrial Production and Real Gross Domestic Product have recovered fairly well (but not really a boom). A little better than employment but not nearly as good as the stock market. Overall the economy has been doing well for the rich and poorly for the poor. On average the economy has recovered but not nearly as much as if a more equitable policy would have been pursued. QE, Obamacare, deficits caused more problems than solutions. Hillary Clinton might be even worse. The markets may crash sooner if they see her getting too popular. There are many risks to the economic outlook.