Money and Investing Thoughts

This article spells out why further government spending through higher debt will not work. Here is a exerpt:

I do not agree at all with modern Keynesians who lacked the restraint of Keynes.  Deficits are supposed to be temporary not structural.  Loose monetary policy is supposed to be temporary, not lingering.

Many policies can “work” when governments have the capacity to take on more debt without harm.  We are past that point now.  Additional debt builds up a larger problem, that will result in a greater crisis later. Emphasis Added.

If you care about government policy and the economy read the whole article:

The Aleph Blog » Blog Archive » Stagflation-Plus.

This guys comments make sense and give some interesting advice on investing for deflation.

This is too good of a quote to pass up. Read the whole article at the Aleph Blog

My view of unions is that they slowly kill whomever they serve. Industries with high unionization die eventually. Countries that support unions die slowly as well.

Unions introduce inflexibility into the economic process which has a huge cost, eventually. Greece is controlled by its unions. They are willing to seek their own prosperity even if it leads to the destruction of the nation. They don’t think the nation will be destroyed, but think that there are parties in power that hold back value from them, and they must be opposed, deluded fools that the unions are.

via The Aleph Blog » Blog Archive » The Lack of Cultural Agreement Roars, the Eurozone Mews.

Jim O’Neill of Goldman Sachs makes some pretty bold predictions concerning the global economy for 2010 and 2011. Who wants to go against Goldman?

U.S. GDP rises 3.5% as stimulus kicks in – MarketWatch.

I think today’s GDP number of 3.5% gain in the 3rd quarter marks the end of the current recession. For background, the economy contracted at a negative 6.4% rate in the first quarter of 2009, shrank 0.7% in the second quarter and now has turned positive.

According to the government bean counters the recession officially started in December, 2007. Before this recession the post WWWII record length was 16 months. This one will be a record, but not by more than 6 or 7 months.

Remember that employment is the last factor to recover after then end of a recession. Typically it takes 6 to 9 months of improving economy before the job situation starts to improve.