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Bernanke – February 2, 2012 – U.S. Presidential Election!

By oilygasminer on | From stockresearchportalblog.com

Bernanke – February 2, 2012 – U.S. Presidential Election!

I strongly suggest you read Federal Reserve Chairman Bernanke’s February 2 testimony before the Congressional Budget Committee. As I read that testimony, there is comparatively little new in it. Mr. Bernanke continues to report that the Federal Reserve expects U.S. inflation to continue at 2% or less for the foreseeable future, that growth in the U.S. economy is of great importance, that growth is dependent on continued and growing U.S. consumer spending, and that the U.S. Federal Government must address its annual federal deficit issues. Arguably, I think Mr. Bernanke’s remarks are more aggressively directed toward Federal Budget deficits than they have been in even the recent past. Certainly It is Mr. Bernanke’s comments with respect to the U.S. Federal Deficit issues, and their potential negative impact the U.S. status as a world economic power (my words) that resonate most strongly with me.

Reading Mr. Bernanke’s testimony has caused me to focus ever more closely on this November’s Presidential election. While I may change my opinion through this spring and summer, my current somewhat more focused views on the U.S. economy and the U.S. political structure are as follows:

first, in my January 3 e-mail I forecasted that President Obama would be re-elected. I continue to believe that as this is written, and think it a virtual certainty if U.S. equity markets continue to show strength in the face of continuing positive U.S. economic reports – witness the U.S. equity markets through January, and their response to the U.S. Department of Labor’s February 4 Jobs Report;
second, I don’t know enough about U.S. Political History to suggest this coming November’s Presidential election is the most important one ever held. That said, intuitively I now believe that it is ‘right up there’ as perhaps one of the most important. Going further, I am increasingly of a mind that it is extremely important for America’s well-being that a Republican majority be elected in both the Senate and the Congress, and that a Republican President be elected. I say this not because I believe in a continuation of an extremely economically disparate society, but because as I currently see things:

for one political party not to control the U.S. Federal Government system at this point in time will very likely lead to “more of the same” by way of political polarization, which in turn will result in delayed decision-making at a time when that polarization has to be harmful and not constructive to America’s economic well-being going forward, and
while I am far from enamored with the broad Republican Party platform, I believe that hard economic choices need to be made to bring America’s Federal Budget deficits into line as quickly as possible. I do not see the Democratic ideologies resulting in that happening. In my view, America simply cannot afford multiple years of further deficits and resultant increases to its cumulative national debt; and,

third, I do not believe as I write this that the Republican Party will gain control of each of the Senate, the House, and the Presidency this coming November. If I prove to be correct in this, I see more of the same ‘molasses running up hill on a very cold day’ in Washington after November, 2012. If that in turn proves to be the case, I do not see U.S. Federal Deficits being brought into line absent a second fiscal crisis that forces the issue. On balance, I see America’s economy as much like a parachutist who has jumped from the airplane, only to find his parachute is ripped on opening. The only question is: Is the rip such the parachutist will survive the jump, or will the tear in his chute become ever larger and his ‘drop speed’ ever greater as a result. Stated differently, will the parachutist break his legs, do more damage to himself than that at impact, or in American military speak ‘pay the ultimate price’. Currently, and irrespective of what on their surface appear to be improving U.S. economic statistics, I don’t see many haystacks in site to cushion the parachutist’s landing.

See ‘The Economic Outlook and the Federal Budget Situation – Testimony on February 2, 2012 by Federal Reserve Chairman Bernanke before the Committee on the Budget, U.S. House of Representatives’ – reading time 8 minutes.

President Obama’s Performance – Iran In Context?

Recently a StockResearchPortal.com Subscriber sent me a link to a rather long article written by David Bromwich, a Professor of Literature at Yale University. The article sets out in some detail Dr. Bromwich’s summarized views of President Obama’s performance over the past three years. While one might cynically presume Dr. Bromwich to be …..continue reading.

Commentary reading time 3 minutes. Referenced article(s) reading time 8 minutes.

U.S. Department of Labor Job Projections – 2020!

On February 1 the U.S. Department of Labor issued a News Release that, subject to the assumptions stated in it, predicted that between 2010 and 2020 there would be 20.5 net new jobs created in America. The fundamental underlying assumptions made when generating this ‘new jobs creation’ forecast …..continue reading.

Commentary reading time 3 minutes, thinking time much longer. Referenced article(s) reading time 13 minutes. This Commentary includes a suggestion that you speak with your Investment Advisor(s) with respect to its subject matter.

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