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Look, everyone has to stop posting every signal the economy is moving in a given direction. Last week when all indications were negative the cheerleaders could not be found, today they are going crazy. There are good reasons to be contrarian when the indicators move up or down. But as several prosters stated none of this means anuthing if jobs are bot created.
Oh yeah and the laging indicator business, it could reasonably be argued that this blip is only due to the fact that inventories have been depleted. Nobody is predicting unemployment much less than 10% for 2010.
I might agree with you if this were a "typical" recovery. But, as you point out yourself, it is precisely the fact that this "recovery" is only taking place in an environment of historically low rates that has me (and many others) worried. A "normal" recovery will occur with low (but still positive) interest rates because there is real economic growth driving the increased activity. However, what we see now is a supposed recovery that not only requires free money (0% rates), but extraordinary and unprecedented government stimulus piled on top to boot. That doesn't sound like real economic growth, it sounds like a lot of smoke and mirrors to me.
Check out your Econ 101. This is basic stuff. Interest rates are supposed to be low at the end of recessions, when the economy starts to recover. It's not "smoke and mirrors". That's the way economies behave.
I might agree with you if this were a "typical" recovery. But, as you point out yourself, it is precisely the fact that this "recovery" is only taking place in an environment of historically low rates that has me (and many others) worried. A "normal" recovery will occur with low (but still positive) interest rates because there is real economic growth driving the increased activity. However, what we see now is a supposed recovery that not only requires free money (0% rates), but extraordinary and unprecedented government stimulus piled on top to boot. That doesn't sound like real economic growth, it sounds like a lot of smoke and mirrors to me.
The fact that interest are so low is reflective of:
A) The SEVERITY of this particular recession
B) The fact that interest rates were kept far too low during the previous administration.
When the economy was "humming along" 4 or 5 years ago, interest rates should have been raised (and the deficit paid down (as Clinton was doing)). Neither of those were done - and that was CLEARLY a mistake, but there is nothing that can be done about that NOW, it's water under the bridge and we are faced with the situation we have.
The downside was that during the attempts to stablize the economy late last year the Fed was limited in just how much they could lower rates in order to stimulate the economy because rates were ALREADY so darned low.
The upside is that now that the economy HAS apparently hit bottom and recovery is starting, the Fed has a LOT of leeway in regards to raising rates (without a danger of needing to raise them too high).
Had the economy NOT recovered then the Fed would have been "out of bullets" (at least in regards to lowering interest rates any more) - so there WAS significant danger in the fact that rates were already as low as they could go - as there is danger still if the recovery falters.
Fortunately (so far at least) that seems not to be the case.
Look, everyone has to stop posting every signal the economy is moving in a given direction. Last week when all indications were negative the cheerleaders could not be found, today they are going crazy. There are good reasons to be contrarian when the indicators move up or down. But as several prosters stated none of this means anuthing if jobs are bot created.
Oh yeah and the laging indicator business, it could reasonably be argued that this blip is only due to the fact that inventories have been depleted. Nobody is predicting unemployment much less than 10% for 2010.
Inventories should get depleted so that production can start all over again. That's the way economic cycles go. That's how you start the next boom, by getting rid of excess inventory from the previous cycle. This is not rocket science.
Look, everyone has to stop posting every signal the economy is moving in a given direction. Last week when all indications were negative the cheerleaders could not be found, today they are going crazy. There are good reasons to be contrarian when the indicators move up or down. But as several prosters stated none of this means anuthing if jobs are bot created.
Oh yeah and the laging indicator business, it could reasonably be argued that this blip is only due to the fact that inventories have been depleted. Nobody is predicting unemployment much less than 10% for 2010.
I don't understand how anyone can not be happy about positive economic growth?
To have a higher level of growth than at any time in the last 6 years is awesome. Especially considering the hellacious condition we've been in for the last 2 years.
It means we are headed in the right direction if we see that the last 3 months have had healthy and positive growth.
How can it be any kind of a 'recovery' when it's based on taking on ADDITIONAL national debt? Taxpayers are going to have to pay ADDITIONAL amounts to service that debt. It IS no more than smoke and mirrors.
Correct. No different than taking a cash advance on your credit card then claiming that as "income" for the month.
Inventories should get depleted so that production can start all over again. That's the way economic cycles go. That's how you start the next boom, by getting rid of excess inventory from the previous cycle. This is not rocket science.
you dont want a "boom"...because with a "boom" come a "bust
you want STEADY
that's the problem we have been seeing for the last 30 years the boom/bust (bubble economy)cycle has to stop.
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