US Economic Recovery: Hey Ben... It's
Time To Put On Your Bathrobe!
The Dynamic Wealth Report
March 4, 2011
by Brian T Mikes, Editor
Last weekend I got a head start on my spring cleaning. I was
going through my clothes closet when I came across something I had
forgotten all about. It was a T-shirt commemorating my dad's 60th
birthday party.
I can't believe that was ten years ago.
I picked up the shirt and memories from the party washed over me like it
was yesterday. I have a lot of great memories from that day. The best
ones were of my dad's friends sharing stories about him.
-------------Sponsor-------------
Where Can You Turn $300 Into $1.3 Million Right Now?
Our own small-company specialist, Robert Morris, has found a
way to 'sniff out' tiny penny stocks on the verge of a major breakout. And
the timing for this has never been better.
You see, the system takes advantage of an obscure SEC regulation that
sends penny stock prices through the roof.
We've seen some stocks gain 852%... 5,450%... even 17,496% in no time
flat.
Click here
for the details...
-----------------------------------
One of the funnier stories was told by my dad's good friend, Ed. They've
known each other since their college days. It's a friendship going back
more than 50 years!
Getting back to the story...
Ed and his wife Phyllis, my mom and dad, and another couple, Ron and
Mimi, used to get together all the time. One of the couples would often
have the other two over on a Saturday night for dinner and drinks.
Now, my parents aren't late night socializers. My dad usually starts
getting sleepy around 10pm. But the other couples liked to keep the
party going until the wee hours of the morning.
Here's the funny part...
Whenever my parents hosted the party, everyone always knew when it was
time to leave. When the clock struck 10, my dad would disappear for a
few minutes. Then he would reappear... in his bathrobe.
It was a big signal the party had come to an end.
I share this story to make a point.
It's time for Fed Chairman Ben Bernanke to put on his bathrobe. He needs
to send a signal that the quantitative easing party is over.
Over the past two years, the Fed has pumped massive amounts of cash into
our monetary system in order to stimulate the US economy. These moves
were necessary to prevent the economy from falling into a deflationary
spiral.
Remember, a deflationary spiral is exactly what brought about the Great
Depression of the 1930s.
The problem with massive monetary stimulus though is it can lead to
runaway inflation. The Fed must withdraw the excess monetary stimulus
from the economy in a timely manner. If they wait too long, inflation
can quickly get out of control.
And we all know how easily inflation can ruin our standard of living.
I say the time is now to begin removing the effects of quantitative
easing from our monetary system. All the economic data this week shows
the economic recovery is firmly on track.
Manufacturing activity expanded in February at the fastest rate since
May 2004. Non-manufacturing activity, which has been accelerating for
six straight months, hit the highest level since August 2005.
And the Fed's own Beige Book report indicates overall economic activity
is "increasing at a modest to moderate pace."
Consumer spending is also continuing to improve. Despite rising gas
prices, consumers spending increased again in January and in early
February. And February retail sales figures beat analysts' estimates
for
the fifth time in seven months.
What's more, business spending levels look like they're about to pick up
sharply.
Small and medium sized businesses, the backbone of the US economy, are
once again starting to borrow money. In the last three months of 2010,
bank loans grew for the first time in two years. This is a clear sign
companies are raising the capital needed to grow their businesses.
As you can see, the US economic recovery is gaining traction.
But it can all unravel faster than a cat's ball of yarn if the Fed
doesn't act quickly. They must begin removing excess stimulus from the
economy before it sparks runaway inflation.
Even Warren Buffett, a great fan of Bernanke and the stimulus program,
believes it's time to say goodbye to QE2. Just the other day, the Oracle
of Omaha said, "[w]e are following policies that will lead to lots of
inflation down the road if things don't change."
It's better to be safe than sorry where inflation is concerned.
Put on your bathrobe Ben. We don't want the economy to suffer from too
big of a hangover.
***Editor's Note*** So what's the best way to
take advantage of all this? The US Dollar. The easing we've
seen over the past year has created a tremendous opportunity in
currencies.
Click here
to get currency expert ' best idea that you can profit from
RIGHT NOW!
• Magnum Hunter Resources (MHR)
was upgraded by Global Hunter Securities from Accumulate to Buy. And the
price target was raised from $8 to $9. The oil and gas producer is
benefiting from rising oil prices.
• Stifel Nicolaus downgraded Global Defense Technology &
Systems (GTEC) from Buy to Hold. The provider of
counter-terrorism technology systems agreed to be acquired for $24.25
per share by an affiliate of Ares Management LLC.
• FBR Capital initiated coverage on Endeavor International
(END) with an Outperform rating and $18 price target. The oil and gas
exploration firm expects strong growth in the years ahead as they ramp
up production from assets in the UK and US.
Share This Story:
Print
Page
Bookmark Us
Home | Whitelist Us |
Terms of Use |
Privacy Policy |
Contact Us | Security |
Site Map