Uncle Al's Conundrum Part Five
It is my opinion that Uncle Al has taken the economic thinktank script outlined in "Economic Growth and Lower Interest Rates" to heart. Historically low rates have been his preferred course of action.
Whether the behaviour exhibited by these variables was expected or not; foreign central bank dollar interventions, oil prices, terrorists and globalization (and to date, corporate Americas reluctance to invest at home.); they have all combined to create his conundrum.
Fridays non farm payroll report showed a decent number, yet the dollar dropped against currencies representative of economies in far worse shape than ours (Europe and Japan). Why?
The reason given by the media was: because the number was enough to show economic growth, but not high enough to spur excessive inflation and climbing interest rate fears. The bond market immediately reacted, bonds went up, lowering long term rates. Without interest rate fears, the stock market also rose to a 3 1/2 year high.
I think the real answer lies in the variables outlined above. This leads to the question of the day: How much control over these variables does the Fed and our government still have?
See: Economic Growth and Lower Interest Rates
http://naybob.blogspot.com/2005/03/economic-growth-and-lower-interest.html
See: A Durable Economy
http://naybob.blogspot.com/2005/02/durable-economy.html
See: Uncle Al's Conundrum Part Four
http://naybob.blogspot.com/2005/02/uncle-als-conundrum-part-four.html
Whether the behaviour exhibited by these variables was expected or not; foreign central bank dollar interventions, oil prices, terrorists and globalization (and to date, corporate Americas reluctance to invest at home.); they have all combined to create his conundrum.
Fridays non farm payroll report showed a decent number, yet the dollar dropped against currencies representative of economies in far worse shape than ours (Europe and Japan). Why?
The reason given by the media was: because the number was enough to show economic growth, but not high enough to spur excessive inflation and climbing interest rate fears. The bond market immediately reacted, bonds went up, lowering long term rates. Without interest rate fears, the stock market also rose to a 3 1/2 year high.
I think the real answer lies in the variables outlined above. This leads to the question of the day: How much control over these variables does the Fed and our government still have?
See: Economic Growth and Lower Interest Rates
http://naybob.blogspot.com/2005/03/economic-growth-and-lower-interest.html
See: A Durable Economy
http://naybob.blogspot.com/2005/02/durable-economy.html
See: Uncle Al's Conundrum Part Four
http://naybob.blogspot.com/2005/02/uncle-als-conundrum-part-four.html
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