This past week's data point of significance for investors has to be the revised, final, fourth quarter U.S. GDP report, which indicated the world's largest economy grew 3.1% in the quarter, as well as 2.9% for 2010.

In 2009, the U.S. economy contracted 2.6% during the Great Recession -- the worst downturn since the Great Depression -- and even though the final 3.1% fourth quarter stat was better than the 2.8% previously estimated fourth quarter growth rate, the growth pace still is not strong enough.

Continue reading Inadequate Q4 U.S. GDP Growth Points to Fed's Extension of QE2

Inadequate Q4 U.S. GDP Growth Points to Fed's Extension of QE2 originally appeared on BloggingStocks on Sun, 27 Mar 2011 10:10:00 EST. Please see our terms for use of feeds.

Is Federal Reserve Chairman Ben Bernanke stoking inflation? Of course he is. Anyone with common sense knows that if you give $600 billion cash to the banks with no qualifications -- as he did with the second round of quantitative easing -- they will use it to speculate in the markets. JPMorgan Chase (JPM) just bought $1 billion of copper.

Bernanke's fatal mistake was that he placed no restrictions on what the banks would do with his $600 billion. If you opened the banks' books, you can bet that they've invested in commodities, currencies and foreign equities and bonds.

Continue reading Bernanke Denies Causing Inflation

Bernanke Denies Causing Inflation originally appeared on BloggingStocks on Fri, 04 Feb 2011 13:30:00 EST. Please see our terms for use of feeds.

Bond money managers are usually glum. Then again, they need to be cautious since they are locking up money at fixed rate of returns. In a volatile world, this can certainly be a risky proposition.

So it should be no surprise that the biggest bond money manager, Bill Gross, is not enthusiastic about 2011. He leads the Pacific Investment Management Co., which has $1.2 trillion under management.

Continue reading Bill Gross Opines on 2011

Bill Gross Opines on 2011 originally appeared on BloggingStocks on Thu, 06 Jan 2011 13:20:00 EST. Please see our terms for use of feeds.

In projecting U.S. GDP growth at about a 2% rate for the remainder of this year and in 2011, I have noted that the two propellants of growth so far in this economic recovery -- the inventory revival and fiscal stimuli -- are largely exhausted.

But are there other sectors of the economy that might serve as the backbone of any meaningful economic recovery? I don't see any, especially with U.S. consumers continuing their saving spree, repaying debts and remaining hesitant to spend like they did during the boom times of earlier years.

Continue reading Bleak Prospects for Further Economic Growth

Bleak Prospects for Further Economic Growth originally appeared on BloggingStocks on Wed, 22 Dec 2010 12:00:00 EST. Please see our terms for use of feeds.

Federal Reserve Chairman Ben Bernanke will appear on 60 Minutes this Sunday to defend his controversial stimulus package, dubbed QE2, of buying $600 billion of Treasury securities.

In the CBS interview, Bernanke explains his intentions with QE2 and defends the notion that this stimulus will not lead to inflation. He also told CBS that he is not ruling out the purchase of more securities.

Continue reading Bernanke on 60 Minutes: We Could Have QE3

Bernanke on 60 Minutes: We Could Have QE3 originally appeared on BloggingStocks on Sat, 04 Dec 2010 12:40:00 EST. Please see our terms for use of feeds.

Reuters quoted Federal Reserve Chairman Ben Bernanke as saying: "We're not in the business of trying to create inflation. Our purpose is to provide additional stimulus to help the economy recover and to avoid potentially additional disinflation, which I think we'll all agree could also be worrisome."

Bernanke claims that inflation is below the Fed's 2% target. That's hogwash! Sure if you use the "core" CPI, which leaves out food and energy, that may be the case. Not to worry.

Continue reading Bernanke Says He Does Not Want to Create Inflation

Bernanke Says He Does Not Want to Create Inflation originally appeared on BloggingStocks on Sun, 07 Nov 2010 11:10:00 EST. Please see our terms for use of feeds.

Almost everybody believes the Federal Reserve is about to implement another round of stimulus. And the reasons cited in favor of such a move are many. One argument put forth is a fear of deflation, as reported in the article by CNNMoney/Fortune. Well, with GDP at 2% for the last quarter, the economy is slow, but it is not sinking into deflation.

Then what is the Fed up to? Why do another round of stimulus? Let's try this argument. The plans are to print perhaps another trillion dollars by buying Treasuries. When the Fed buys Treasuries, the money goes directly to the bankers. The $64,000 question is why give all this money to the bankers?

Continue reading Why Is the Fed Doing Another Round of Stimulus?

Why Is the Fed Doing Another Round of Stimulus? originally appeared on BloggingStocks on Mon, 01 Nov 2010 10:30:00 EST. Please see our terms for use of feeds.

Here's a shocker!. Chicago Fed President Charles Evans claims that the U.S. is an a bona fide liquidity trap! His remarks were given in a speech to the Boston Fed and reported in the Wall Street Journal. In attendance were Fed employees, academics and Wall Streeters.

Evans is proposing a radical departure from established Fed policy, which is to maintain price stability and maximum sustainable employment. Here it is! He wants to foster above-target inflation for a time!

Continue reading Fed's Evans: The U.S. Is in a Liquidity Trap

Fed's Evans: The U.S. Is in a Liquidity Trap originally appeared on BloggingStocks on Sun, 17 Oct 2010 10:40:00 EST. Please see our terms for use of feeds.

The U.S. Federal Reserve is in a quandary about how to explain its anticipated quantitative easing stimulus, dubbed QE2. Officials worry that an added stimulus will create unwanted inflation.

Fed officials Charles Evans and William Dudley have spoken in favor of the new stimulus. Dudley told the Financial Times that asset purchases and communication are "two potentially complimentary avenues."

Continue reading Fed in a Quandary About How to Explain QE2

Fed in a Quandary About How to Explain QE2 originally appeared on BloggingStocks on Fri, 08 Oct 2010 13:00:00 EST. Please see our terms for use of feeds.

Continue reading U.S. Fiscal Deficit Just Below $1.3 Trillion

U.S. Fiscal Deficit Just Below $1.3 Trillion originally appeared on BloggingStocks on Fri, 08 Oct 2010 10:30:00 EST. Please see our terms for use of feeds.

There is growing debate over whether another round of quantitative easing (QE2) will ease unemployment.

In an interview with the Financial Times, Philadelphia Fed President Charles Plosser set out guidelines for more stimulus. He said: "I think that before we engage in further quantitative easing, we need to be very clear about what it is we are trying to do, how we're going to go about doing it, how we're going to measure whether we're effective at it or not, and how we're going to communicate that."

Continue reading Philly Fed President: How Will QE2 Ease Unemployment?

Philly Fed President: How Will QE2 Ease Unemployment? originally appeared on BloggingStocks on Mon, 04 Oct 2010 10:40:00 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.

Developed countries are scrambling to put in place more rounds of stimulus to prop up their faltering economies.

The U.S. Federal Reserve has already pledged or spent an unbelievable $12.2 trillion to bail out a handful of bankers. The Fed slashed interest rates to zero and it is now purchasing more treasuries with proceeds from existing purchases. Finally, at its recent meeting the Fed stated that it stands ready to inject more stimulus in the economy.

Continue reading $12.2 Trillion Was Not Enough Stimulus

$12.2 Trillion Was Not Enough Stimulus originally appeared on BloggingStocks on Thu, 23 Sep 2010 10:50:00 EST. Please see our terms for use of feeds.

Continue reading Gold Jumps to a New Record High

Gold Jumps to a New Record High originally appeared on BloggingStocks on Wed, 22 Sep 2010 10:00:00 EST. Please see our terms for use of feeds.

The Federal Reserve has posted some data that shows the extent of economic decline in the second quarter. Here are some key numbers, as reported by Reuters.

• Household wealth fell by $1.5 trillion in the second quarter to $53.5 trillion. This sharply lower than the $64.2 trillion at the end of 2007.
• Stock losses amounted to $14.9 trillion, a drop of $1.95 trillion.

Continue reading Household Wealth Falls by $1.5 Trillion in Q2

Household Wealth Falls by $1.5 Trillion in Q2 originally appeared on BloggingStocks on Tue, 21 Sep 2010 11:00:00 EST. Please see our terms for use of feeds.

ECB President, Trichet, Says Cut Public Spending and Raise Taxes originally appeared on BloggingStocks on Fri, 23 Jul 2010 10:30:00 EST. Please see our terms for use of feeds.

Continue reading Has China Averted a Real Estate Crash?

Has China Averted a Real Estate Crash? originally appeared on BloggingStocks on Tue, 11 May 2010 11:00:00 EST. Please see our terms for use of feeds.

The federal government with the help of the Federal Reserve has unlimited power to print money. Just ask chairman Bernanke who pledged $11.2 trillion dollars to bail out a handful of bankers.

Then Congress pitched in with more stimulus money, which was intended mainly to create new jobs. However, states gobbled up a good portion to plug their budget deficits. Now that stimulus money has been used up. Unlike the federal government, state governments cannot print extra money to cover their shortfalls. They must balance their budgets.

Continue reading States Facing $90 Billion in Budget Shortfalls

States Facing $90 Billion in Budget Shortfalls originally appeared on BloggingStocks on Wed, 05 May 2010 17:00:00 EST. Please see our terms for use of feeds.

• The free-fall in employment rolls has stopped. While the U.S. unemployment rate has risen to an unacceptable 9.7%, the unemployment rate would have been much higher without the roughly $800 billion in economic activity generated by the stimulus.
• Tens of thousands of local police officers, fire fighters, teachers, and other public service personnel have retained their jobs -- helping to stabilize the local economies where these civil servants work and live.

Continue reading Fiscal Stimulus Helped Stabilize U.S. Economy

Fiscal Stimulus Helped Stabilize U.S. Economy originally appeared on BloggingStocks on Wed, 17 Feb 2010 04:30:00 EST. Please see our terms for use of feeds.

Continue reading Ray of Light: G-7 Finance Ministers Vow to Maintain Stimulus

Ray of Light: G-7 Finance Ministers Vow to Maintain Stimulus originally appeared on BloggingStocks on Mon, 08 Feb 2010 17:30:00 EST. Please see our terms for use of feeds.