Although the U.S. stock market continues to hit new nominal highs on a nearly daily basis, the U.S. economy bumps along at a lackluster pace. This disconnect has been achieved by a massive Fed experiment in monetary stimulation.
Last month, Americans were transfixed by the amateur theatrics undertaken by the Washington political establishment in connection with the debt ceiling crisis. The bad faith, poor tactics and wholesale avoidance of reality were offered by all players in very large doses.
In recent months economic commentators and financial markets have focused almost excessively on the Federal Reserve's quantitative easing ("QE") policy as the market's main driver. However, last month two senior economists at the Federal Reserve called this devotion into question.
In late September Germans will go to the polls for a national election to determine the makeup of their national parliament, the Bundestag. Some believe that Chancellor Merkel's ruling coalition may be vulnerable.
In short, the policies of central banks, combined with those of overbearing government, are crushing the middle class and with them the single most important bastion of democracy.
Last week, EU growth projections were reduced by a further 0.1 percent to a negative 0.4 percent. Facing this grim reality and shrinking resistance from the dominant Germans, the EU bureaucracy appear to be becoming more lenient.
Today, we are witnessing an epic, international struggle between the natural forces of a deflationary recession pitted against the inflationary forces unleashed by the monetary expansionism by three of the world's most important central banks: the Fed, the Bank of Japan, and the ECB.
Members of the EU elite may be purposefully leveraging the crisis to push for a centralized European banking system to cement the political framework of an EU superstate.
Bernanke has indicated that the Fed will maintain both zero percent interest rates and massive QE into the foreseeable future. We must assume that such moves will continue to create dubiously impressive trends in spending and stocks.
Singapore, alone, has been able to sustain genuine economic growth in the context of a strong national currency.
For the past few years, the Fed has maintained that the U.S. inflation rate, which is represented by the Consumer Price Index, or CPI, has hovered around two percent. Most consumers who buy food, goods and services such as health in the real world, will find this figure derisory.
EU finance ministers approved a new "Financial Transactions Tax" (FTT) that has implications for market competitiveness around the world.
Coming during a time of supposed central bank cooperation, the decision to withdraw billions of dollars of bullion was bound to raise eyebrows.
Fearing debasement of the U.S. dollar and the Japanese Yen, the euro has become a de facto second reserve currency.
Though a short-term fix may have been reached, the Entitlement Cliff still looms large and descending down this precipice could seal the fate of the U.S. dollar.
Given the drift in Washington, those who had hoped for a significant improvement in the United States fiscal prospects will have nothing but lumps of coal in their Christmas stockings.
Big government is the culprit. It will not be reduced effectively without term limits that will require concerted grass roots action to implement.
The unconventional monetary policies unleashed on the world since the beginning of the Great Recession have upended the financial rule book.
Despite the difficulties, I believe that ultimately the horse will pass the finish line; the Continent has too many economic bright spots to simply slip into irrelevance.
Since the depths of the 2008 financial crisis, central banks around the world have increased their gold holdings. As of January of this year, the International Monetary Fund estimated that official reserves had hit a six year high.
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