Wednesday, February 13, 2013


Although I don't like the situation, there seems to be greater certainty than the past four years.  Here are the areas of certainty I see:

  • Central bank intervention.   The Fed will continue to keep interest rates low and increase asset values through targeted inflation.  For example, the Fed has a stated objective to increase equity and housing prices.  In Japan, the stated objective is to advance the stock market by 17%.
  • Social program emphasis.  The President is focused on social changes versus economic changes for the country.   Mr. Obama seems to have little interest in dealing with the economic issues.  He is more interested in gun control, entitlement growth, and bigger government (e.g. more regulations.) 
  • Growing government debt.  Overall spending cuts are unlikely, despite all the talk by politicians.  With the Fed buying debt and the increase of social programs, spending will grow which will lead to the debt growing also. 
  • Unfortunately, this isn't the type of certainty that will lead to significant economic growth, a bullish investor sentiment and increasing housing prices.  So  the economic situation in the near term future will continue to be same as it has been for the past four years, especially now that  I know what to expect.

    For more on The Practice of Personal Finance, check back every Wednesday for a new segment.

    This is not financial advice. Please consult a professional advisor.

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