Hurricane Irene's devastation has resulted in over thirty deaths and will add another estimated $6 billion in debt to our already fragile economy. Insurance companies have been burdened with the housing crisis that resulted in thousands of vacant homes being vandalized, several forest fires and major flooding.
When do the locusts arrive?
You may recall that on January 21, 2010 the Supreme Court decided that corporations and labor unions could directly and expressly advocate for, or agains, political candidates for federal office. That, in addition to the 34,000+ lobbyists in D.C. !
Could corporation and labor union money corrupt our democracy?
Does the ruling minimize our individual freedom to vote?
How might that help "kick the can down the road" re our S&P rating for the new "Super Committee"?
Go figure...
As you will recall, it was British economist John Maynard Keynes who, in his "General Theory" writing of 1935, advocated strong government intervention in the economy. And, where has that led us?
Adam Smith, reputed to be the world's "first economist" back in the 1700's, advocated free markets...and less governement intervention. Perhaps Adam was correct! Where might that lead us?
The Fed chair stated that the FOMC will hold interest rates at zero through 2013. The free market however, will likely see greater price inflation due to the Fed's massive increases in money supply. Studies looking back to 1913 reveal that interest rates tend to track inflation.
That said, even if the Fed holds rates low, it is hard to understand how interest rates throughout our economy can remain low going forward. The FOMC Jackson Hole, Wyoming meeting later this month may shed more light on the strategy. Stay tuned.
