The verdict on the U.S. Federal Reserve's quantitative easing program, including part 2, or QE2, will not be rendered for years. It may be longer, given the many areas of financial and economic policy the program has touched.

Anyone who says they definitively and incontrovertibly know QE2's long-term impact is not being genuine: many more data points have to occur to judge, for example, how QE2 affected banker lending psychology, let alone its impact on the U.S. economy.

That said, we can glean clues and insights by looking at current conditions, and one short-term data point reveals that since Fed Chairman Ben Bernanke disclosed the implementation of QE2 on August 27, the S&P 500 is up 17%, Bloomberg News reported Friday.

Continue reading A Bernanke Rally? S&P 500 Up 17% Since QE2 Announced

A Bernanke Rally? S&P 500 Up 17% Since QE2 Announced originally appeared on BloggingStocks on Fri, 17 Dec 2010 16:40:00 EST. Please see our terms for use of feeds.

In my new book, The Age of Deleveraging: Investment Strategies for an Era of Slow Growth and Deflation, I discuss nine reasons for slow U.S. economic growth and real GDP gains of about 2% annually in the long run.

1. U.S. consumers will shift from a 25-year borrowing-and-spending binge to a saving spree. This will spread abroad as American consumers curtail the imports of the goods and services many foreign nations depend on for economic growth.

Continue reading Nine Reasons for Slow U.S. Economic Growth

Nine Reasons for Slow U.S. Economic Growth originally appeared on BloggingStocks on Fri, 10 Dec 2010 12:30:00 EST. Please see our terms for use of feeds.

Continue reading Chasing Value: Bonds, Gold, Stocks and Capital Flight

Chasing Value: Bonds, Gold, Stocks and Capital Flight originally appeared on BloggingStocks on Mon, 15 Nov 2010 16:30:00 EST. Please see our terms for use of feeds.

The world of international finance is a complex web. The U.S. is still the powerhouse when it comes to gross domestic product. Yet, while perched on top of the heap, the U.S. faces major problems with high-level debt and unemployment.

The U.S. Federal Reserve is faced with having to issue massive amounts of debt just to keep pace with the growing deficits. Now the Fed is planning another round of stimulus by buying more treasuries, dubbed QE2.

Continue reading Why Would Any Country Buy U.S. Treasuries?

Why Would Any Country Buy U.S. Treasuries? originally appeared on BloggingStocks on Sun, 03 Oct 2010 11:40:00 EST. Please see our terms for use of feeds.

Continue reading Is the Fed's 'QE2' About to Leave the Port?

Is the Fed's 'QE2' About to Leave the Port? originally appeared on BloggingStocks on Wed, 22 Sep 2010 16:00:00 EST. Please see our terms for use of feeds.

Continue reading Closing Bell: Little Action on Less Care (RIMM, ORCL, JNJ, STU, C and ARNA)

Closing Bell: Little Action on Less Care (RIMM, ORCL, JNJ, STU, C and ARNA) originally appeared on BloggingStocks on Fri, 17 Sep 2010 16:00:00 EST. Please see our terms for use of feeds.

The U.S. economic recovery is now proceeding at an anemic pace, a 1.6% GDP growth rate in the second quarter. And to top it off, certain analysts are arguing "the Fed is out of ammunition" and that means a double-dip recession is ahead.

Well, you can consider "betting" against the Fed, and assume even worse economic conditions are ahead, but before you do, contemplate the following:

• The Fed has already signaled that it's not likely to decrease the size of its balance until it sees sustained evidence of substantial GDP growth, and an increase inf capacity utilization. The calculation here is that the Fed is going to increase its balance sheet, including the purchase of long-term U.S. Treasuries, putting even more downward pressure on long-term interest rates.

Continue reading Is the Fed out of Ammunition?

Is the Fed out of Ammunition? originally appeared on BloggingStocks on Fri, 27 Aug 2010 15:00:00 EST. Please see our terms for use of feeds.

On top of the dot-com, NASDAQ, housing, oil, and commodity bubbles, add another, potential ephemeral rise: a bond bubble.

Could a bond bubble, or at least a U.S. bond bubble, occur? Indeed it could, and here's how it might appear.

Institutional investors, flush with cash, are unable to profitably deploy capital in stock-based (or comparable equity-based) investments, due to unattractive projected returns, stemming from the slow, uneven U.S. and global recoveries.

Continue reading Is the U.S. Experiencing a Bond Bubble?

Is the U.S. Experiencing a Bond Bubble? originally appeared on BloggingStocks on Tue, 17 Aug 2010 17:00:00 EST. Please see our terms for use of feeds.

Continue reading PIMCO: 25% Chance of Deflation in U.S.

PIMCO: 25% Chance of Deflation in U.S. originally appeared on BloggingStocks on Thu, 05 Aug 2010 17:10:00 EST. Please see our terms for use of feeds.

Continue reading Gary Shilling: Where to Invest in a Deflationary Economy

Gary Shilling: Where to Invest in a Deflationary Economy originally appeared on BloggingStocks on Tue, 03 Aug 2010 18:00:00 EST. Please see our terms for use of feeds.

OPEC's most recent report on global oil supplies said that the world has "no room" for more crude supplies.

OPEC lowered estimates for world demand and raised predictions for non-OPEC production. Here are the numbers:

• While world demand is forecast to rise by 940,000 barrels per day (bpd) in 2010, this is 10,000 bpd lower than previously estimated.
• Non-OPEC production is set to rise by 640,000 bpd, up from 530,000.

Continue reading OPEC: The World Has 'No Room' for More Oil Supplies

OPEC: The World Has 'No Room' for More Oil Supplies originally appeared on BloggingStocks on Wed, 09 Jun 2010 12:00:00 EST. Please see our terms for use of feeds.

Continue reading In Europe, Deflation Concerns Mount

In Europe, Deflation Concerns Mount originally appeared on BloggingStocks on Wed, 02 Jun 2010 16:30:00 EST. Please see our terms for use of feeds.

The inflation hawks, hard-pressed to find inflation in either the consumer price index or the producer price index, or their core rates, have not given up their mission to find inflation when it doesn't exist, and isn't likely to for a long time.

CPI is running at a 2.2% annual rate, and the core rate is 0.9%. PPI is running at a high annual rate, 5.5%, but exclude food and energy, and the core rate is up just 1.0%.

The typical, alternate argument forwarded? When cash-flush banks start lending in a big way again, we'll have many more dollars chasing essentially the same amount of goods, and inflation will zoom to much higher levels.

Continue reading Is U.S. Inflation About to Heat-Up?

Is U.S. Inflation About to Heat-Up? originally appeared on BloggingStocks on Wed, 26 May 2010 13:00:00 EST. Please see our terms for use of feeds.

Continue reading Debt Crisis Means U.S., EU Inflation Likely to Remain Low

Debt Crisis Means U.S., EU Inflation Likely to Remain Low originally appeared on BloggingStocks on Wed, 12 May 2010 18:00:00 EST. Please see our terms for use of feeds.

The most compelling statistic, so far in 2010, from an investment standpoint? Arguably, it's inflation, or the lack thereof.

More than 12 months in to the biggest fiscal stimulus in the history of the modern world, and more than 15 months into the Fed's quantitative easing program, inflation, as measured by the Consumer Price Index, is running at ... about 2.3% since April 2009, according to data compiled by the U.S. Labor Department. Further, take away the volatile food and energy component, and inflation at the retail level is running at a minuscule 1.1% since April 2009.

Continue reading Despite March's PPI Jump, U.S. Inflation Remains Tame

Despite March's PPI Jump, U.S. Inflation Remains Tame originally appeared on BloggingStocks on Thu, 22 Apr 2010 12:20:00 EST. Please see our terms for use of feeds.

Bloomberg News has published a chart summarizing a recent poll of 57 economists on inflation, and it offers several insights.

• The average inflation rate expected for 2011 is lower than the rate expected for 2010: 2.14% to 2.25%.
• However, the inflation range for 2011 is substantial larger than 2010. In 2010, respondents had inflation ranging from slightly less than 1% to about 4.5%. In 2011, the range was 0.5% to about 6.8%.

Continue reading Deflation Risk Still Exists in U.S.

Deflation Risk Still Exists in U.S. originally appeared on BloggingStocks on Tue, 23 Feb 2010 16:45:00 EST. Please see our terms for use of feeds.

Continue reading Bank of Japan implements modest credit facility as deflation deepens

Bank of Japan implements modest credit facility as deflation deepens originally appeared on BloggingStocks on Tue, 01 Dec 2009 16:40:00 EST. Please see our terms for use of feeds.

Continue reading Which is more likely in 2010: Deflation or inflation?

Which is more likely in 2010: Deflation or inflation? originally appeared on BloggingStocks on Wed, 07 Oct 2009 18:00:00 EST. Please see our terms for use of feeds.

Continue reading PIMCO's Bill Gross buying U.S. Treasuries as protection against deflation

PIMCO's Bill Gross buying U.S. Treasuries as protection against deflation originally appeared on BloggingStocks on Tue, 29 Sep 2009 17:20:00 EST. Please see our terms for use of feeds.

Markets throughout the world have been rallying on the expectation that the world recession is ending. Lurking underneath the surface are some disturbing events.

Japan is in a sharp deflationary spiral. The Corporate Goods Index, which measures wholesale prices, plunged 8.5%, this after a 6.7% drop in June. This is the fastest drop on record.

Let's look at other deflationary numbers. Import prices fell 33.3% in yen terms and 26.5% on a contract-currency basis. Export prices fell 15.3% in yen terms and 6.5% in contract currencies.

Continue reading Japan's deflationary spiral: Wholesale prices plunge 8.5%

Japan's deflationary spiral: Wholesale prices plunge 8.5% originally appeared on BloggingStocks on Wed, 12 Aug 2009 12:00:00 EST. Please see our terms for use of feeds.