I am struggling with the challenge of having inferior knowledge and still having to make decisions every day. It would be nice to think that someone like Fed chief Bernanke has perhaps almost perfect knowledge of the relevant economic data and the wisdom to implement the right monetary decisions.
Unfortunately, evidence shows that it is the Fed that has brought on this crisis. It does also appear that the situation is continually made worse by its present actions.
Ben thinks that inflation is too low. Lies, damn lies and statistics; perhaps it's just my advancing age, but never before in my life did I find the data that the government produces as suspect as it appears to me now.
So here are just my current observations:
Commodity prices are close to record highs and the price of the Dollar at record lows. True, credit is still hard to get for small businesses and consumers, but any company with access to the capital markets does not have that problem. At the same time that the commercial real estate sector is still deteriorating, share of many REITs are already trading at higher prices than before the crash !
Even the stock market as a whole has almost made it back up to its high. The federal government is borrowing to the tune of 1.3-1.6 trillion Dollars a year and investment banks are making record profits this year (according to the Wall Street Journal).
Could it be that the Fed that was unable to see the seeds of the crash is now unable to see the beginning of a very serious inflation ?
No comments:
Post a Comment