As the Debt Ceiling Kabuki Dance Starts Anew

By: Gary Tanashian | Fri, Sep 27, 2013
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Inflation spigots are open and running 24/7...

Monetaory Base; Total (BOGMBASE)

and an economy that needs to purge the excesses keeps resisting the inflation...

Velocity of M2 Money Stock (M2V)

Within this, we are in a phase where policy makers appear effective because at the margins the economy is creeping toward improvement. But in the big picture?

Leading Index for the United States (USSLIND)

We see a continuum of 1-2% growth in the variables that lead the economy, which appears to be 'just right', like Goldilocks' porridge. So we are back on trend and I guess everybody's happy.

Nonfarm Private Manufacturing Payroll Employment (NPPMNF)

Well, don't let manufacturing payrolls cause undue concern. Automation is THING 1 in manufacturing today. I know this because I lived it for a few decades. Employment must be reduced and maximized for reasons of productivity.

Total Nonfarm Private Payroll Employment (NPPTTL)

Overall Payrolls are coming back on trend, with changes in full/part time dynamics. But policy has been working toward improvement.

Corporate Profits vs 3-Month Treausry Bill vs Federal Debt

See how hard policy is working? ZIRP keeps T Bills pinned with free money available to banks. Corporate profits are rising and so is the debt required to sustain the whole thing.

So, do you think there is any question about what the politicians will end up doing in this year's edition of the Debt Ceiling Kabuki Dance? Politicians are politicians after all.


Graphs courtesy of St. Louis Fed & SlopeCharts.



Gary Tanashian

Author: Gary Tanashian

Gary Tanashian

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