Looking for some back articles and wanting to try out posting with our new setup I found this one by Mike Kimel (formally known as Cactus) from July, 2010. It is always fun to look back.*
He presents his data and argument regarding where we’re going and concludes:
This time, I’m not as comfortable; given where and how the Fed has been putting Money I just don’t see increases in the real money supply as being quite as effective as normal. The money is going to fill in a big hole the financial industry created in its collective balance sheet, and isn’t necessarily leading to a lot of additional spending. Furthermore, with all the talk of austerity, it wouldn’t be surprising if the Federal Government starts cutting back on spending.
Given that the weight of the evidence seems almost equally balanced on both sides, this little thing tips it slightly for me: unless and until the Fed starts removing money from the system, I don’t think we’re going into a second dip. But given the Federal Government’s current policies, I don’t expect much more than mediocre growth for the next few quarters either.
Hey Cactus, you thinking of doing a hedge fund by any chance? : )