Every economy's best friend is back. Yes! That is right. Our good old buddy from the 80's, Stagflation is back, at least in the UK it is. If you remember last week UK DEC CPI came in YOY of 3.6%, today the UK economy unexpectedly contracted by .5% Q to Q vs. an expected gain of .5%. So you have higher inflation and a contracting stock market. Which is perfect for the banking elite as monetary policy will be accommodative and fiscal policy constrained. The liquidity will flow like fine wine and the brutal austerity on the rest of the idiots that support the banking elite will continue for the foreseeable future. The Pound Sterling is dropping vs the USD like a stone this morning which is portending more money printing from Mr. Osborn. So what we have basically is more of the same.
The US economy which has been patched up by ludicrous spending, tax payer bailouts, and the Fed is showing much better resilience. The FOMC starts their central planning meeting today and we should hear from them tomorrow that they have the banking elite's back once again for the 75th straight month. What the FOMC should do is not to ignore the inflation pressures in food and energy, but then again why focus on these non core items?
The FOMC should lay out a plan to exit this monetary play land called ZIRP. They have to let the economy stand on its own two feet or even try to make an attempt. The US economy is getting better and recovering modestly, how much of that is directly attributed to the FED? That was a trick question! What is clear is this, The FED has engineered an increase in asset prices directly via QE, we need to have a clue when this policy will end and we need help from Benny and the Ink Jets.
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