iamned.com

The Economy is Still Fundamentally Strong

Stocks are selling off yet again, but this is still a very good buying opportunity since the fundamentals of the economy are actually quite strong. Consumer spending is holding up very well inspite of rising gas, oil, food and and a fake recession and imaginary credit crisis. Also, personal income and worker productivity continues to rise. This is important because as long as consumers are able to put in longer hours at work and become more productive it will help offset economic weakness.

In addition, exports are rising, aided by a cheap dollar and booming globalist demand for commodities, machinery, technology services such as ipods, blackberries, and google click ads. Credit card spending is still shows no signs of slowing. Consumers will continue to max out their cards and incur more debt to maintain their standard of living. It is this propensity for spending, as well as increased productivity and rising wages which has helped stave off a textbook recession, versus the mental recession we’re in now.

Insourcing and outsurcing of labor has also helped bolster the economy. By laying off expensive American workers and cutting back on costly unncessasry expenses such as pensions, dental plans, and medical leave multinational companies can increase thier profit margins, which in turn helps the stock market. The insourced workers contriubte to the US economy by purchasing American goods such as ipods and computers, and food. In the end, cheap labor policies of insourcing, outsourcing, and elliminating unnecessary employee benefits helps everyone.

Keep in mind that unemployment and layoffs can be good for the economy because it helps expand the production possibility frontiers curve. Although the national unemployment numbers may seem dire if you listen the woe is me Obama campaign, the type of unemployment we are experiencing is frictional unemployment; unemployment that comes from people moving between jobs, careers, and locations. Laying off unskilled workers and outsourcing/insourcing increases the incentive for people to improve their skills and perform more productive work, which leads to new technologies and an expanded economy.

In an effort to keep labor cheap McCain has released bi lingual ads advocating guest worker programs. Has Obama done so? Nope because he is a protectionist who wants to see the economy suffer under a socialst agenda.

The best advice is to buy stocks such as GOOG AAPL MOS POT PCX EWZ V MA on the dips anbd ignore the pro-Obama recession crybabies who are spreading undue fear and protectionist propoganda.

2 Responses to “The Economy is Still Fundamentally Strong”

Comment from Michael
Time April 20, 2009 at 10:32 pm

It really is amazing how wrong you have been about absolutely everything. The best part about reading through your blog has been you complete denial about exactly how wrong you have been. You keep calling bottoms and trumpeting your great calls when the market rallies a little bit. I think your ability to deceive yourself is unmatched. I mean, you are still calling this a so called recession. You do realize that when a market rallies 20% after it has dropped 60%, it is still down 52%. I just wanted to point that out for you.