Happy New Year !!! A most sincere 2015 welcome and ‘All My Best’ to clients. You have made NEAM and my life’s work in the world of personal finance extraordinarily gratifying and fulfilling. For all of that, I cannot ‘Thank You’ enough!! Another nod goes out to prospective clients, mostly from client referrals; welcome to a plain English summation of what I see happening in the midpoint of this decade. As always, let’s examine flashpoints, positive and negative…
Given the late Summer temperatures outside, this is a classic ‘Duh’. But anytime I hear this phrase, I immediately think of Glenn Frey’s 1980’s song, titled the same. It is a great tune, the video even better!! Alas, I chose this for my Gazbit title because of what is happening in the world at present. Where to start?
Although you may have not seen ‘The Hunger Games’, you have probably heard of the movie and soon HG 2 will be showing at a theatre near you. For the uninitiated, the premise is one of survival amongst your peers. Basically, kill or be killed. Barbaric indeed, but true. I bring this up in the context of changing the Gazbit title, slightly, to describe what little effect all the continuous QE (Quantitative Easing) is having on the global economy.
As expected, the Federal Reserve embarked on QE3, or in plain English, buying bonds to force interest rates down even further into the future or perpetuity. Problem is, they added the phrase ‘As Long As It Takes’. Dangerous stuff, in my humble opinion. This ‘bazooka’ approach confirms what I have been saying all along in that the Federal Reserve is scared ****less of deflation and they are pulling all the levers behind the curtain, ala ‘The Wizard of Oz’, in order to avoid just that.
This present day investment phrase will be in vogue throughout 2012, again, as investment markets will vacillate between euphoria and despair or basically a manic-depressive psychological state of mind. Remember when fundamental analysis counted for something? It will again, sometime, but not today. Remember when domestic and international markets were negatively correlated? That was then, today is a whole new paradigm or in plain English, this time it’s different.
Cold and white enough for you? As we have embarked upon an old fashioned winter, I can’t help but tie together the similarities once the spring thaw ensues and our current economy. Experience tells us roads expand and contract with outdoor air temperature fluctuations, exactly the way I see 2011 playing out, periods of exuberance (expansion) with occasional bouts of sadness (contraction). In either case, all one needs to do is avoid the inevitable potholes.
By now, it is only a matter of time, before the Fed starts QE2 in some shape or form. Probably not the “shock and awe” of early 2009, but more of a measured, drip style, if you can call an estimated $100 billion per month a drip. More like a plop. Anyway, do we really need to expand the Fed’s balance sheet anymore? Will it really help consumer demand? My simple answer is ‘No”. Let’s replace QE2 with another buzzword for 2010, austerity. How about reducing spending?
Greetings, world. Welcome to my take on personal finance and how it affects our lives. I figured if other people can do this, so can I. I see all the same media talking heads, opine either on TV, Radio, Online or in Print, but very few are on the front lines, actually advising clients for their professional career. Anyone can give financial advice, but how good is it?
Now that I have my own bully pulpit, let’s makes some waves. It is my personal belief that the Federal Reserve is wrong with QE2, (Quantitative Easing # 2, not the luxury ship from England) because liquidity is not our problem. Government policy is. Very simply, take the uncertainty out of the business world so people can plan, manage and prosper. Or put another way, lead, follow or get out of the way.
