Keynesian's Wealth Effect?

In the Keynesian Demand Model, personal consumption expenditures, which accounts for something like 70% of GDP, are primarily determined by one's disposable income.  Since real salaries and wages have been declining for the past eight years, this is one reason why GDP's growth has been so anemic. Realizing what has been happening to salaries and wages, the Fed has increasing relied on asset inflation (stock market) to make the consumer feel wealthier (wealth effect) and, of course, feel more comfortable with one's personal financial well being. If individuals feel wealthier due to the rise in the stock market, then, the model predicts that the consumption function, buying by consumers, would shift upward causing GDP to increase. Bad news from the above chart is that the Consumer Comfort Index is diverging from the stock market, which calls into question the positive impact of the so-called wealth effect on the economy.  

NATO's Defense Expenditures

For 2015, NATO's defense expenditures amounted to $900,473,000,000.  Our part of the $900+ billion was $649,931,000,000, or 72% of NATO"s defense expenditures.  In regard to the percentage of our GDP, that mounts to 3.62%.  I don't know about you, but I definitely believe that 27 member NATO countries should take on a greater percentage of the financial burden. (Currently, there are 28 members of NATO, including the United States.)  I am not saying that the United States should get out of NATO. Simply saying, that it is about time that 27 countries need to take on a greater financial responsibility for their own defense. Let's cut our financial support in half.  Our domestic economy could use $325 billion on its home front to defend our borders.

How Did That Turn Out for You?

Subprime Auto Delinquencies Soar Past 2008 Crisis Levels -- But, It is Different This Time, Right?

That's Hillaryious!

Judge Jeanine's Rant: Worth Your Time

"Little Marco:" Now I Know Why Trump Calls Him That

Better Make That 50% Today

Reality Check on Our Nation's Economic Health

Main Streeters: Have You Had Enough, Yet?

Did that caption within the graph make you really upset or what? Since 2006, only the top 10% of U.S. households have seen their incomes rise.  Wall Streeters have become mega rich, while Main Streeters have become mega poor. 

Investors: You May Want to Take Heed of the Current Relationship Between the Monthly 10/20 SMAs

Note: To enlarge, click inside the chart.

Mrs. Clinton and Mr. Trump

Mrs. Clinton release those bank speeches along with those other transcripts of speeches from 2014 to the first quarter of 2015 in which you earned $11,000,000 for 51 talks. Mr. Trump release your tax returns for the past ten years.

Have a Bullish/Bearish Weekend!

Negative Interest Rate Policy : You Lose!

45% of Americans Pay "NO INCOME TAXES"

According to the Tax Policy Center, which is a joint project with the Urban Institute and Brookings Institute, approximately 77.5 million individuals will pay no federal individual income tax for the 2015 tax year. I don't know about you, but I believe everyone should have some skin in the game, even if it is nothing more than $5. Saying that, I am a strong proponent of the Fair Tax.  

Justice Scalia from the Grave

Cashless Society: Main Street Loses Again!

Monopoly Game Goes "Cashless"

The game company is preparing our children for a "cashless society." Most young adults today are already in a cashless environment with the use of their debit cards. A cashless society is closer than most of us realize. 

We will soon see the end of the $100 note and probably the $50 note in support of the removal of the 500 Euro note.  We went from $10,000 bill to $100 bill without even a whisper from society.
Thought for the day: "You may want to consider swapping your $50 and $100 notes for $20 notes while you still can."

What Now, DJIA?

Note: Click inside of chart to enlarge.

Abject Failure of Quantitative Easing, Now Negative Interest Rates

What do we have after "637 interest rate cuts and $12.7 trillion in Quantitative Easing by Central Bankers of the world for the past eight years?"  Weak economic growth and investors starting to rebel against all this quantitative easing.  In other words, absolutely nothing!  Now, these same Central Bankers want to institute a world-wide monetary policy of "negative interest rates."  That is, you deposit $100 in your bank account and after one year, your bank gives you back $98.  What? Yes, you read that correctly.  See, all those QEs have not stipulated consumption spending or business investment. So, these Central Bankers want to try the next great monetary experiment with "negative interest rates." What is their rationale?  Well, if you are not earning any interest on those deposits, you will spend those deposits, which will stimulate the economy through personal consumption expenditures.  No, it will not stimulate the world economies, because individuals and firms will perceive a "NIRP" as another round of abject monetary failure by Central Bankers.

According to Bank of America, this has been the results of all this Central Bank quantitative easing:

1. 637 interest rate cuts over the past eight years
2. $12.3 trillion of asset purchases by global central banks in the past 8 years
3. $8.3 trillon of global government debt currently yielding 0% or less
4. 489 million people currently living in countries with official negative rates policies (i.e. Japan, Eurozone, Switzerland, Sweden, Denmark)-0.92%, the most negative yield in the world (2-year Swiss government bond).