Who Said Economies Always Have to Grow?

Oct. 6, 2011 - PRLog -- Stocks

The equity markets have been as pitiful as I can ever remember. I know they have not dropped as much as they did in 2008, but the indicators have pointed to equities being in a bull market and yet prices still dropped. Now, it could be because of the news and if US stocks surge up (rise a bunch) the 4th quarter of this year then I will look back and see the 3rd quarter as a news driven deal. However, equally as likely, is for stocks to stay down or drop even further.

Economy and Government Fiscal Policy

In August, Americans earned less, the first decline in nearly two years. With less income, consumers could cut back on spending and weaken an already-fragile economy. Oil went down about 10% in September.  Housing prices also remain week. If the world governments would have just let everything reset in 2008 and 2009, we would probably be in much better shape as a global economy. Throughout the history of the world, we can read about economies and countries having periods of fat and periods of lean. It’s not that big of a deal, but it can turn into a much bigger deal when the government tries to step in and control the natural cycles.

Our government wants our economy to be constantly growing; that is complete nonsense. So the governments of the world have decided that to improve our weakening economies they need to go out and print money and take on more debt. Spending and more debt, always improves financial situations. That is the logic because it worked in China…supposedly. And again this is complete foolishness.  The US government reminds me of controlling parents who say, “I just want my child to be happy.” Economically speaking, times are not always growth. In life, we don’t always succeed. We need to learn to be content and have joy in whatever circumstance we are in. Watching the government make all of these unwise decisions, just because our economy isn’t growing, I think is crazy.

I believe the government should just hold interest rates at 4% until Jesus comes back. I believe the money supply should be replaced not expanded. Maybe print 1 or 2% of total money supply each year. Then I think the governments should sit back and watch the natural processes and cycles take place. Instead of printing money, God told Joseph to store up grain during the 7 years of fat. That is exactly what our government needs to do as well. But how can they store up anything when they are so far over budget. To me it is almost a waste of time to even discuss it because God has already said we are moving towards a one world currency/mark.

The US Dollar

The US dollar index appears poised to rise during the 4th quarter of this year. The US dollar continues to be a safe haven. It’s funny, everybody talks trash about the US dollar but when rubber meets the road, investors worldwide move their money into the US Dollar over the Euro. The US dollar kind of bottomed out on August 29th, and has risen about 6.2% since then. Glad I moved my clients into the US dollar index, from our foreign currencies, on 9/12/2011.

Quick News on the Banking Industry

“Banking, an industry that has imposed steep costs on the American economy, is about to get even more expensive. Bank of America, the nation's largest bank, says it is going to levy a $5 per monthly fee on its debit card customers. The New York Times reports that Bank of America isn't alone. "Wells Fargo and Chase are testing $3 monthly debit card fees. Regions Financial based in Birmingham, Ala., plans to start charging a $4 fee next month."

As the banks stick it to customers, they're blaming it on regulations that have sapped reliable streams of revenue. In effect, regulatory changes are pushing banks to change their business model.” – by Daniel Gross of the Contrary Indicator

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