Why First We're Heading Lower

Thu, 07/29/2010 - 07:46 EDT  in
 

Preet Chawla submits: Times are unusually uncertain. These are not my words. Imagine this – you have Malaria, Jaundice, Typhoid and the Flu, all at the same time. The doctor gives you the strongest possible antibiotic and extremely powerful steroids. You feel better and it seems as though there is a recovery. Then a few days later you have fever, are sick again and you feel unusually uncertain. You will need another boost of those powerful steroids or you may be at risk. But the doctor won’t give you those powerful steroids till you are really sick. So until then, your health must deteriorate because the diseases and the problems have not gone away. But don’t worry, the steroids are there.This is what I feel about the health of the US economy. We have many diseases which include high unemployment, a highly levered consumer, under-funded liabilities, a falling housing market and high budget deficits, to mention a few. We tried to treat these problems with QE. Well it helped for a while but take a look at what’s happened over the last few months. The effect of the money pumped is clearly fading and is now jeopardizing the so called “recovery.” The US economy is sneezing once again and we have not solved anything.Complete Story »

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