Thursday, October 6, 2011

More Keynesian Konfusion: Retail Sales Topping Estimates

Ben Bernanke is printing money like the true mad man he appears to be. This will have an impact on the economy, as understood by those Austrian economists who really believe in the business cycle. It's not always down hill, and the world is certainly not like the econometric models built by the Keynesians, who simply project out what occurred the day before.

Bottom line: At key turning points few recognize the turn as it is occurring. The economy is turning now. Fed manipulation will turn the numbers positive, create another false boom, but this time the price inflation is going to be much more intense. Bernanke got away with strong money printing in late 2008 to early 2009, but that was a period when the demand to hold cash balances was increasing, thus muting the price rise from that money dump.

This time there appears to be no increasing demand to hold cash balances, if anything the demand to hold cash balances is declining. This will result in an amplification of the money printing, which will mean even higher prices.

The latest confusion for the Keynesians, higher retail sales. CNBC reports:

Retail Sales Topping Estimates, Despite Growing Caution

Amid slumping consumer confidence, shoppers remained resilient, and many retailers posted solid results for the month of September...According to Thomson Reuters, U.S. retailers are expected to post an average gain of 4.6 percent in sales at stores open at least a year, or same-store sales.

Update: Even more confusion for Keynesians, this time on the unemployment front. Here's CNBC, again:

New U.S. claims for unemployment benefits rose less than expected last week, according to a government report on Thursday that hinted at an improvement in labor market conditions.

Initial claims for state unemployment benefits climbed 6,000 to a seasonally adjusted 401,000, the Labor Department said, from a revised 395,000 the prior week.

Economists polled by Reuters had forecast claims rising to 410,000 from the previously reported 391,000...[Also]The number of people still receiving benefits under regular state programs after an initial week of aid dropped 52,000 to 3.70 million in the week ended Sept. 24. That was the lowest level since July.

Economists had expected so-called continuing claims to dip to [only]3.72 million from 3.73 million the previous week.

Remeber you heard it here first. No one else is out there forecasting the manipulated resurgent economy that EPJ is forecasting.


  1. I sure hope you're right on this one....

  2. @anon 10:27

    I fully agree with Mr. Wenzel's forecast, but you're actually hoping for price inflation?


  3. He is. And try searching for economic boom or something in that order on Google News.

    Zip, nada, zilch. Everyone is bearish. Everyone.

  4. So you think that precious metals will skyrocket from here?