Mucking around with the money supply and interest rates can produce the liquidity trap as it is called in economics. It is a situation of low interest rates and no growth. It may also be a period of deflation which is ironic given that too much money is at the root of inflation. Excess liquidity may also be an indicator of a sound economy waiting for technology and innovation of the creative destruction of Schumpeterian forms to lead activity out of a slump in productive investment.
The fact is that George Bush and the Federal Reserve Bank's lack of understanding about the dangers of a war economy have America investing in the wrong goods and services. The war economy like no other economy leads to depression if for no other reason than business focuses too much on satisfying the needs of the military at the expense of the peaceful community. Rather than innovating with new environmental solutions US industry is still caught up in the military economy.
People are waiting for the diamonds in the haystack of solutions to what ails an over-invested lack lustre boring economic scenario. Meanwhile new military innovations are keeping the US economy afloat. Yes, people are very bored with the economy because it is not giving up it's secrets easily. Hidden away within the activities present in the industrial landscape are gems waiting to be discovered. Investors want to know what these gems are. They are poised to act with a fury that no one will escape, but they cannot act if they don't know! Such is the dangerous flux of the US economy. What we want to see is rapid innovation in energy saving technologies led by Detroit. The leveling of land in the city for agriculture did not escape me!
The housing market ain't it. Surprise! Surprise! The population is aging and there will be so many natural deaths to satisfy housing demand without building new homes. Perhaps, a new round of divorcing would help! If the economy continues the way it is that divorces will happen and the recover could result from broken families splitting into more and more households as they did during the Reagon recession in the early 1980's and the collapse of the banks in Texas. Will we see it unfurl that way?
http://www.washingtonpost.com/wp-dyn/content/article/2010/08/27/AR2010082702066.html?wpisrc=nl_natlalert
Will ye no think kindly on those who would be your friends! May the sun shine with your thoughts, today, and happiness grow in your heart! May you allow yourself some peace of mind.
