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| Fellow Investor,
Maybe tomorrow will be the day Bernanke talks tough on the U.S. economy. Maybe tomorrow will be the day that Bernanke acknowledges that growth may be slow, but what do we expect with unemployment above 9%.
Maybe tomorrow will be the day Bernanke states firmly that it's fiscal policy from the government that's holding the economy back, not monetary policy from the Fed.
After all, inflation is back. Recent Consumer Price Index and Producer Price Index readings show that inflation has accelerated into the 2.2% range favored by the Fed. Bernanke's deflation-phobia is becoming less and less realistic.
QE2 and other stimulus measures succeeded in putting a lot of cash on bank balance sheets. Despite the recent fear that Bank of America (NYSE:BAC) needs to raise cash, the banks have plenty of it. Unfortunately, regulations are restricting banks' use of that cash. And the banks are being stingy with loans. Without a little velocity of money, conditions can feel deflationary.
It's ironic that one of the dual mandates on the Fed is to promote employment. Not sure how the Fed's supposed to do that.
I mean, I understand that low rates makes money for investment cheaper, and hence demand can be pushed higher. But that will only work in an environment of moderate unemployment. We have high levels of structural unemployment that can't improve until the housing market corrects.
Basically, the Fed has done what it can do. It's up to Congress and the administration to do the right thing. Pray for us....
President Obama has been in office for 2 1/2 years, and he's only now actively seeking a jobs bill. Better late than never? Not in my mind. Raising unemployment benefits umpteen times is not a solution, it's a band-aid.
Where would unemployment levels be if those benefits came in the form of job re-training? Would the U.S. workforce be more aligned with current needs?... [continue reading at WyattResearch.com]
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Market Snapshot
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| | US Markets - August 24 Close | | Dow Jones | 11,320.71 | +144 | (+1.29%) | | 
| | S&P 500 | 1,177.60 | +15.25 | (+1.31%) | |
| | Nasdaq | 2,467.69 | +21.63 | (+0.88%) | |
| | Currencies | | EUR/USD | 1.442 | +0.0017 | (+0.115%) | |
| | USD/JPY | 77.115 | +0.15 | (+0.1949%) | |
| | GBP/USD | 1.635 | -0.0013 | (-0.0819%) | |
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