• 375 days Will The ECB Continue To Hike Rates?
  • 375 days Forbes: Aramco Remains Largest Company In The Middle East
  • 377 days Caltech Scientists Succesfully Beam Back Solar Power From Space
  • 777 days Could Crypto Overtake Traditional Investment?
  • 782 days Americans Still Quitting Jobs At Record Pace
  • 784 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 787 days Is The Dollar Too Strong?
  • 787 days Big Tech Disappoints Investors on Earnings Calls
  • 788 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 790 days China Is Quietly Trying To Distance Itself From Russia
  • 790 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 794 days Crypto Investors Won Big In 2021
  • 794 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 795 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 797 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 798 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 801 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 802 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 802 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 804 days Are NFTs About To Take Over Gaming?
The Problem With Modern Monetary Theory

The Problem With Modern Monetary Theory

Modern monetary theory has been…

Is The Bull Market On Its Last Legs?

Is The Bull Market On Its Last Legs?

This aging bull market may…

Ian Campbell

Ian Campbell

Through his www.BusinessTransitionSimplified.com website and his Business Transition & Valuation Review newsletter Ian R. Campbell shares his perspectives on business transition, business valuation and world…

Contact Author

  1. Home
  2. Markets
  3. Other

Mr. Bernanke Has To Know!

Mr. Bernanke has to know in the face of (among many other things):

  • Washington's political gridlock, lack of political will to change that, and a system that promotes 'advantage to political donors';

  • loss of American manufacturing jobs;

  • American structural unemployment - being an environment where workers either are not trained for available jobs, or are geographically dislocated from them;

  • what appears to be a current downturn in the U.S. economy, in the face of all prior and 'ongoing soft' quantitative easing to date;

  • that the oft-spoken and reported idea that 'Americans are the best innovators' and 'that will in the end ensure America will be the continuing reigning world economic power for decades to come' is a myth;

  • that technological innovation broadly speaking results in replacement of jobs with mechanized solutions to productivity, and hence is 'worker unfriendly' - meaning Main Street America unfriendly; and,

  • the Eurozone is a deep and escalating world economic problem

that a continued strategy of 'more quantitative easing' can't restore America's economy to what it was (or latterly 'appeared to be') prior to 2008.

Notwithstanding, for some months now I have said in these Newsletters that QE3 (which is really a misnomer because QE has never really stopped in its various forms since 2008) can be expected in 2012. It looks like the 'time may be coming nigh'.

If this week Mr. Bernanke makes an announcement of QE3, or fails to make an announcement of QE3, watch the reaction of the financial markets carefully. It is highly likely they will respond positively if he does, and negatively if he doesn't. This means the financial markets are, in the short term, detached from value fundamentals - or so I think - and that the game of musical chairs continues.

Context: If one assumes ongoing quantitative easing will not result in meaningful long-term economic recovery, long-term 'investment markets' ought not to respond positively to it.

Topical Reference: Jobless rate pressures Fed toward providing more stimulus, from The Globe and Mail, July 29, 2012 - reading time 3 minutes.


Back to homepage

Leave a comment

Leave a comment