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Sure it is. Higher interest rates slow the economy which cuts consumption of commodities - which lowers their prices. To certain degree higher commodity prices themselves provide their own break by slowing economic growth.
Ken
There is correlation to QE and commodity prices.
We have 2 QE's for comparison.
QE1 ended and commodity prices came down.
QE2 started and commodity prices went up.
When the dollar is devalued it takes more dollars to by the same items.
The low interest rates are pumping the speculation along with panic buying by countries as they see the prices rise.
Corn/wheat are up over 80% in the past year as one example.
We don't see the effects of this here in the US like third world countries do because we are not spending over 50% of our take home money on food.
We are global now and have to think like that. Other countries problems ARE our problems too because of globalization of industry and jobs.
Private employers, the backbone of the economy, drove nearly all of the March job gains. They added 230,000 jobs last month, on top of 240,000 in February. It was the first time private hiring topped 200,000 in back-to-back months since 2006 — more than a year before the recession started.
The unemployment rate dipped from 8.9 percent in February to 8.8
percent in March. The rate has fallen a full percentage point over the last four months, the sharpest drop since 1983.
i don't buy this. the unemployment rate has dropped only because people can't get unemployment. it has run out for them. stores all over america are closed and closing and there are more homeless than ever. they just don't want you to see this. the news doesn't talk about everything that is going on.
This is the weakest recession recovery ever. It took the Republican takeover of the House to kick start employment.
The GOPers were elected in November 2010. They were sworn in January 2011. They've been in office less than three months.
Employment is a lagging indicator coming out of a recession. Please read http://http://www.aheadofthecurve-thebook.com/11-03.html (broken link) and http:///www.investopedia.com/ask/answers/177.asp (broken link) for starters.
It is absolutely ludicrous to say that the GOP "kick started" the economy in 2.5 months. Especially, if one considers how the Congress has spent it's time:
defunding NPR
defunding Planned Parenthood
delaying implementation of repeal of DADT
supporting the Defense of Marriage Act (DOMA)
more regulations curbing abortion
Reaffirming the "In God We Trust Motto"
Declaring English as America's Official Language
Investigating American Muslims
Repealing something that has not been implemented yet (Obamacare)
Oh yeah, I can see how all of this has "kick started" the economy.
The GOPers were elected in November 2010. They were sworn in January 2011. They've been in office less than three months.
Employment is a lagging indicator coming out of a recession. Please read http://http://www.aheadofthecurve-thebook.com/11-03.html (broken link) and http:///www.investopedia.com/ask/answers/177.asp (broken link) for starters.
It is absolutely ludicrous to say that the GOP "kick started" the economy in 2.5 months. Especially, if one considers how the Congress has spent it's time:
defunding NPR
defunding Planned Parenthood
delaying implementation of repeal of DADT
supporting the Defense of Marriage Act (DOMA)
more regulations curbing abortion
Reaffirming the "In God We Trust Motto"
Declaring English as America's Official Language
Investigating American Muslims
Repealing something that has not been implemented yet (Obamacare)
Oh yeah, I can see how all of this has "kick started" the economy.
I think the GOP taking over the House may have contributed in some way.
Remember..spending bills originate in the House. With this current makeup you may see very few "spending" bills coming from the House.
Pelosi/Reid combination was a suicide mission on US employers with spending bills and many had hidden taxes or mandates on employers.
Private employers, the backbone of the economy, drove nearly all of the March job gains. They added 230,000 jobs last month, on top of 240,000 in February. It was the first time private hiring topped 200,000 in back-to-back months since 2006 — more than a year before the recession started.
The unemployment rate dipped from 8.9 percent in February to 8.8
percent in March. The rate has fallen a full percentage point over the last four months, the sharpest drop since 1983.
How long has it been since the President decided to accept the extension of the Bush tax rates? Somehow it seems that your 4 month period is about the same as that decision from today. I really think that that decision could have been involved, but then ...............
The GOPers were elected in November 2010. They were sworn in January 2011. They've been in office less than three months.
Employment is a lagging indicator coming out of a recession. Please read http://http://www.aheadofthecurve-thebook.com/11-03.html (broken link) and http:///www.investopedia.com/ask/answers/177.asp (broken link) for starters.
It is absolutely ludicrous to say that the GOP "kick started" the economy in 2.5 months. Especially, if one considers how the Congress has spent it's time:
defunding NPR
defunding Planned Parenthood
delaying implementation of repeal of DADT
supporting the Defense of Marriage Act (DOMA)
more regulations curbing abortion
Reaffirming the "In God We Trust Motto"
Declaring English as America's Official Language
Investigating American Muslims
Repealing something that has not been implemented yet (Obamacare)
Oh yeah, I can see how all of this has "kick started" the economy.
Ummmm you do realize they were elected in November right? Business knew that help was on the way and planned accordingly.
I noticed you neglected to mention tax policy and spending cuts. Hey, the Republicans can multi task!!
Whoopie!! As I pointed out we have never stayed in a recession, job growth was inevitable. Yet under Obama it has been both slow and anemic. Hence the award for the weakest recovery ever!
And of course employment isn't the only indicator of economic health, the rest are equally dreadful.
The number of folks participating accounts for retirement and I didn't post that. That's about 64% now and it has been dropping over the past year as the BLS adjusted it.
BLS projected that 67% of ALL jobs would be "created" by Baby Boomers leaving the work-force.
64% is right there with BLS' projections.
Bottom line: No jobs are being created, rather retiring workers are being replaced.
Quote:
Originally Posted by pvande55
Until two years ago, 1982-83 had the worst economic conditions since the Great Depression, with unemployment over 10% for 10 months. It snapped back quicker because it was pushed down so low. In other news, traffic fatalities reached a new low last year. Obviously a lot fewer killed driving to work.
That's funny, but unemployment came back faster because Reagan and Volker spent the first 5 years of Reagan's Administration pulling the cash out off the market dumped their by Kennedy, Johnson and Nixon.
Quote:
Originally Posted by LordBalfor
Then the Fed will raise interest rates and inflation will come back down (same as it's always worked). And - as I've already said - with current interest rates near record lows, there's plenty of room to raise rates without them becoming excessive.
Quote:
Originally Posted by LordBalfor
Sure it is. Higher interest rates slow the economy which cuts consumption of commodities - which lowers their prices. To certain degree higher commodity prices themselves provide their own break by slowing economic growth.
Get your economics degree from a box of Cracker Jacks?
Commodities are increasing in price because of shortages. You can do whatever you want with interest rates and it won't change the fact that bad weather resulted in poor cotton harvests world-wide and the price of clothing is going to increase as a result.
That's called Cost Inflation. It has no bearing on interest rates or the money supply.
If you want to stop the Cost Inflation that is driving commodity prices, then either stop consuming those commodities or start producing them.
There's 26 Million acres of fallow farmland in Ohio. Knock yourself out if you're so inclined. It's still early, you can probably get in a couple of crops of corn, wheat and cotton.
You can also spend a few million dollars to look for iron ore deposits and start mining those. That'll increase world supply and lower the price of iron and related products (like steel).
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