If you have questions on why our investment accounts are muddling along here are some answers. You may have seen these charts on the internet but for those of you who have not here they are. One year ago folks couldn’t gab enough about the V styled recovery. Looking at the chart of the S&P 500 you can see that since then we’ve managed to stay within a small range.
Inflation was going to trigger massive returns on fixed investments. So far inflation has been non-existent.
Some economists actually worry that we may fall into a period of deflation, much like what has ruined the Japanese economic machine for the past 11 years.
You cannot have a recovery without jobs. The latest numbers show a tad under 10%, and that is probably a low number. In the city of Detroit experts state 24% un-employment as a realistic number. The job picture improves slightly from quarter to quarter but not enough to handle all new workers coming aboard.
With high unemployment and over 100,000 homes foreclosed just last month housing is a no-go. Home values have fallen again, even in the most affluent areas. New home sales have fallen to their lowest level in 50 years.
The consumer is still holding onto his and her pennies. Retail sales increased slightly but not enough to convince investors that this Holiday season will be bright and cheery. The good news is consumers are paying off their credit card and bank loans at a record rate and getting their financial houses in order.
Until a strategic recovery is devised we can expect to continue to muddle in this narrow range. So far all we’ve had are band- aid fixes, confusing plans, political bickering and no leadership.
Questions call Paul @ 877 783 7080 or write him at pstanley@westminsterfinancial.com. Share this blog with someone who cares about their money.
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