Interesting. Maybe. However, there are some really troubling signs that your opinion may not be correct, though. Think really deep fundamentals. One place you ALWAYS find a recovery is in gasoline demand. When an economy is recovering, truck and car miles driven expand, which causes more demand for gasoline. However, it has been declining since 2009.
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Why? Well, it's not because hybrids and electric cars have sold like hotcakes and it's not because gasoline mileage has increased appreciably in the last 2 years. No. The root cause of the decline in gasoline demand is a slowing economy.
And here is what is even more ominous. If demand for gasoline is declining, and thus, economic activity is declining, why on earth have gasoline prices increased during the same period of declining demand?
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The conclusions are inescapable. Declining gasoline = declining economic activity. Increasing prices, despite declining demand = dollar devaluation relative to oil, which is priced in dollars.
The bottom line is that the Fed's extraordinary monetary policy is failing to heal the fundamental economic issues in this country and failing to kickstart a sustainable recovery. But what it is succeeding in doing is creating massive inflationary pressures. They are so massive that prices are increasing despite declining demand.
Bernanke's grand experiment is going to result in stagflation. In fact, I think we're already there. |
