Gold

Shift from QE to forward guidance

In case you missed it Kevin Warsh was on CNBC this morning. Again he made some great points including highlighting one of the downfalls of QE which he suggests has led to a misallocation and “malinvestment” of capital as oppose to hyperinflation which many doomsdayers have been harping on since the beginning of Fed’s Zero Interest Rate and QE policies.

How The Economic Machine Works

In this video Bridgewater’s Ray Dalio explains how in his view the economy is like a machine.   Suggesting that many people don’t understand it – or they don’t agree on how it works – and this has led to a lot of needless economic suffering.

Thoughts on 2011 & 2012

If you missed it S&P 500 index closed the year at 1257 exactly where it had closed one year earlier in 2010!  Setting aside having identical closes two years in a row which was a statistically low probability event; the meager performance on its own wasn’t too surprising considering earnings for S&P 500 companies were up just 3.2% over the last 12 months.

Nash equilibrium

Whether President Obama’s recent job plan aka fiscal stimulus plan will be passed in its entirety or passed partially is still not certain, but what is certain and factually supported given the work of Reinhart and Rogoff is that solving or getting out of this malaise or hangover from our recent credit bubble will take more than just several years.

Current Investing Paradigm

The financial crisis in 2008 effected many different facets of global economy one of which was to increase the uncertainty and risk in various investment decisions.

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