10/16/12

A must-read article

These are some thoughts you may find interesting. We did. To read the complete study just click here.

****..... the Fed expects the U.S. togain any economic traction from higher stock priceswhen rising commodity prices are curtailing realincome and spending is puzzling. This is particularlyrelevant when econometricians have estimated thatfor every dollar of gained real income, consumptionwill rise by about 70 cents.

**** When the Fed actions lead to higher food and fuel prices,the shock wave reverberates around the world, withmany foreign economies being hit adversely.

**** Economic fundamentals will notimprove until the extreme over-indebtedness of theU.S. economy is addressed, and this is in the realmof scal, not monetary policy.

**** Until the excessive debt issues are addressed, the multi-year trend in ination, and thus the long Treasury bond yields will remain downward.

George Dagnino, PhD Editor,
The Peter Dag Portfolio.
Since 1977
2009 Market Timer of the Year by Timer Digest
Portfolio manager

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