Econ Thoughts from 4 Sept 2009

     When "Biggie" Bernake announced the economy's growth was not sufficient to withdraw stimulus, and that quantitative easing would remain until March of 2010, it seemed to contradict his statement that the recession was mainly over. 

     Will consumers now resume their spending, and the banks their lending? The banks certainly don't seem to be falling for it. By leaving the stimulus in place longer than originally planned, isn't the Fed confirming that economic recovery isn't nearly as imminent as Biggie has misled? 

     The markets players were believers till yesterday. There seemed to be a belief that the Fed rates would stay near zero a while, but now they think about what will happen when the government begins to remove stimulus. Stock markets fell Wednesday, and the Treasury rates rose. 
     What happens with the Fed when commercial real estate continues its sand-State craterings and Unemployment continues at a real rate over 20%? I see a recession-level existence for many people, at least into 2012.

     Looking at the only real leading indicator of a continuing world economic decline: Gold is soaring 4/9/09 at $1,014.