Economy & Investment III

Is our economy picking up?
It looks like it, doesn't it? The unemployment rate has fallen to 8.3%, a sea change from 9.0% a few month ago! It fell to 8.7%, then to 8.5%, and finally to 8.3% last month. Most 10Q reports continue to show upward trends, although the trends seem somewhat tempered from the previous quarter. Stock prices continue to rise. Industrial production is ok. Retail sales are ok. There is no sign of inflation. So are we on track now?

Many believe so. Those who give negative outlooks are minority. One of them is Ben Bernake, the Chairman of FOMC. In a recent Senate hearing, to the question from a senator whether he will hold the low interest rates through the end of 2014 as he had announced last month, he answered yes for the reason that the economy is still weak and the recovery is not robust.

For me, holding the low interest rates through the end of 2014 (not even 2013!) seems too long and too risky. But I am just a mediocre economist, and my concern is based on a pure guess, not hard-crunched data. What does he see what many other mediocre economists do not see? Since those top-notch economists also express pessimism on our economic recovery, I should ask, "What do those top-class economists see what other mediocre economists do not see?"

I believe human history (particularly the progress of it) is led by a few geniuses and not by mass. And here, we are facing another test of the proposition. If you are a believer of the proposition, you should believe Ben Bernanke, and hold stock investments. If you want to follow the mediocre mass, do the investments.