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Donald Swenson
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It would seem that monetary policy has its limitations going forward. The 2012 election may help with direction as our economic issues are finally reaching the general public's interest. D
The Eurozone seems destined to collapse from a lack of demand in the consumer sectors. This is likely to make it near impossible to increase tax revenues and GDP. Could a break-up of the union help with management of these problems? The USA according to this website is in similar shape: www.usdebtclock.org. It seems like growth can not reach the levels necessary to pay back our debts. I don't think that QE policies will help as the issue is demand and confidence (in my opinion). D
My view is that trade decreased because the psychology of the market changed. Keep in mind that our monetary unit is now a non-thing (psychological) and when mass psychology changes, than decisions (including the import and export of goods) also changes. The old days of a material monetary unit are now history. Today, our 'dollar' is created via decisions of our FOMC and our Fed influences the entire marketplace via their psychology and philosophy. Mass psychology also changes when historic events are internalized by participants in the marketplace. The crash of 2008 was such an event, in my opinion. D
Market speculators tend to follow the actions and policies of the Fed. If the Fed continues with QE policies, it is most likely that oil, gold, and silver and other base metals will increase in price. Speculators tend to invest their funds based on actions and policies of the Fed and the FOMC. D
Why should the Federal Reserve provide loans on illiquid collateral from a bank which primarily uses the funds overseas? I presume that the collateral used at the discount window was less then immediately liquid. Why not require that these branches hold sufficient liquid collateral for crisis situations? And I would suggest that U.S. Banks should also be required to hold more liquid assets for times of stress.
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Apr 13, 2011