It seems as though the U.S is on a much slower pace to recovery than other parts of the world. It may be that many people in general are beginning to learn about the Federal Reserve’s ways of “FIXING” the economy with low interest rate policies, which give those who save very little return on interest and give the illusion that borrowing is easy and affordable because there is more wealth available. Even businesses, now aware of the dangers of a low inflation- sparked economic bubble, may clearly be refusing to fall for the age-old boom-bust trap.
Then again it could clearly be a lag effect that hasn't quite gone into work yet. We clearly know the banks have yet to recover from their investment losses and with many homes and properties on foreclosure or short sale its a continued loss on their books just hiding within their balance sheets. For many buyers they have began to notice the hassle with dealing with banked owned homes. The CPI has not changed significantly but its my prediction that as the PPI continues to go up companies will soon have to raise prices therefore costing us the consumer more. With FED interests rate still remarkably low people may soon began to take risks with starting up companies and creating jobs. My only fear is that if things do get better we as Americans will began to follow into the same mail invested traps as the past. Causing even a larger economic downturn. It will be interesting to see how long interest rates remain relatively low.
Here is a brief article by Peter Schiff explaining his theory on why the Dual Mandate by the Fed doesn't even matter.
http://www.businessinsider.com/debate-over-dual-mandate-2010-11
Then again it could clearly be a lag effect that hasn't quite gone into work yet. We clearly know the banks have yet to recover from their investment losses and with many homes and properties on foreclosure or short sale its a continued loss on their books just hiding within their balance sheets. For many buyers they have began to notice the hassle with dealing with banked owned homes. The CPI has not changed significantly but its my prediction that as the PPI continues to go up companies will soon have to raise prices therefore costing us the consumer more. With FED interests rate still remarkably low people may soon began to take risks with starting up companies and creating jobs. My only fear is that if things do get better we as Americans will began to follow into the same mail invested traps as the past. Causing even a larger economic downturn. It will be interesting to see how long interest rates remain relatively low.
Here is a brief article by Peter Schiff explaining his theory on why the Dual Mandate by the Fed doesn't even matter.
http://www.businessinsider.com/debate-over-dual-mandate-2010-11
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