Inflation in the United States has been remarkably low, despite a lethal combination of extremely loose monetary policy and trillion-dollar annual budget deficits, which apparently have become a new normal.
No Quick Fix
No matter who ends up on top in this year’s closely fought presidential election—billed by both Republicans and Democrats as the most important in a generation—don’t get too excited about the winner’s ability to “fix” the economy.
If the 2012 election campaign has plunged you into depression and convinced you that this country is going down the drain, an antidote could be a tour of a college or university campus.
Sub-Saharan Africa didn’t suffer as much in the 2008 global financial crisis as the rest of the world, since it lacked both large banks and sophisticated financial infrastructure, and its levels of consumer and government debt were relatively low.
Pop That Oil Bubble
The oil market has been in a bubble stage for a decade.
Several recent elections in Europe were seen as a referendum on fiscal austerity (and fiscal discipline) and their results were presented as a mood shift in favor of more government spending and economic stimulus.
Too Much Cash
If, as some analysts suggest, holding such huge cash reserves has become necessary for companies to protect themselves, then the economy has become unbalanced and dangerously volatile.
Despite unprecedented creation of money over the past three and a half years, consumer prices remain moderate.
When the financial system faces a major bankruptcy, one that is large enough to threaten its health, it often makes sense to buy time. Regulators, central bankers, multilateral lenders and governments.
The Oil Problem
The year 2012 became the second in a row to start with a run-up in oil prices.