Salient to Investors: The economy resembles the 1970s more than the 1990s. Alan Blinder at Princeton sees risk of the economy moving in the same direction as it did after 1973, though we are a long way from seeing a sustained rise in inflation. Blinder said the long-term trend in
READ MORE... →Salient to Investors: Martin Feldstein at Harvard writes: Historically rapid monetary growth fuels high inflation. Germany’s hyperinflation in the 1920s and Latin America’s in the 1980s. More moderate shifts in US monetary growth rates fuel inflation. In the 1970s, money supply grew at an average annual rate of 9.6% and
READ MORE... →Salient to Investors: Martin Feldstein at Harvard said: The US economy would still be perilously close to a recession in 2013 even if we don’t go over the fiscal cliff. The end of payroll tax cuts will reduce GDP by 1 percent, and other tax increases and spending cuts may bring over 2
READ MORE... →Salient to Investors: Greece accounts for just 2.3 percent of EU GDP, and 4.3 percent of EU debt. Without Greece , the EU would have had a trade surplus in 2011. Germany has posted a trade surplus every month since May 1991 and has avoided recession since 2009. OECD says the euro is undervalued
READ MORE... →Salient to Investors: Martin Feldstein said Greece cannot be fixed. A Greek departure would be chaotic short-term, but longer-term would return Greece to growth and more robust employment. Italy is in good shape. Spanish regional budget deficits pose a bigger problem than the banking crisis. European leaders lack a longer-term strategy on how to
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