The Economy Turns

James E. Miller emails and writes:

Looks like you nailed it.

He includes a link to a Bloomberg story which says:

Federal Reserve Chairman Ben S. Bernanke finally may be catching a break: His easy-money policies are showing signs of speeding up the economic rebound...

Housing may be nearing a bottom as record-low mortgage rates tempt more buyers into the market and confidence among homebuilders climbs to the highest since May 2010. Autos, another part of the economy sensitive to interest rates, are reviving, with carmakers reporting in November their highest sales pace in more than two years.

Banks also are starting to put more of their money to work, expanding commercial and industrial loans last quarter by the most since Lehman Brothers Holdings Inc. went bankrupt in September 2008.

What these Keynes economists still don't realize is that the price inflation is about to get fierce. The turning manipulated economy is too obvious to ignore at this point, even by guys who have bad (Keynesian) economic models. I expect Nouriel Roubini and even Paul Krugman to crack soon and admit the economy is turning. And don't (hee hee) expect Krugman to mention deflation in his start of the year forecasts.

AP: Economy Ends Tough 2011 on a Surprising Upswing

AP economics writer reports what EPJ readers understood months ago was coming:

The economy is ending 2011 on a roll.

The job market is healthier. Americans are spending lustily on holiday gifts. A long-awaited turnaround for the depressed housing industry may be under way.....Factories are busier. Stocks are higher.

Not bad for an economy faced with a debt crisis in Europe and, as recently as this summer, scattered predictions of a second recession at home. Instead, the economy has grown faster each quarter this year, and the last three months should be the best.

Here's what AP reports Krugman-like Keynesian economists were saying as recently as August:

When The Associated Press surveyed 43 economists in August, they pegged the likelihood of another recession at roughly one in four. The Dow Jones industrial average was lurching up or down by 400 points or more some days.

There was plenty of reason for gloom. A political standoff over the federal borrowing limit brought the United States to the brink of default and cost the nation its top-drawer credit rating.

This is I wrote on August 11:

Underneath the surface, though, the Fed is aggressively pumping money, which will create a new manipulated boom. The developing manipulated boom is what the insiders are seeing. Money is flowing and will work its way into the stock market.

I doubled-down in October. This is what I wrote on October 7:

Bottom line: Keynesians are clueless. The private sector continues to improve because of Bernanke money printing and the shrinkage is now pretty much at the local government level, as a result of declining tax revenues (which will also reverse itself in coming months). There is no double dip. The stock market and economy will soon go into a Fed manipulated boom, that will have Keynesians scratching their heads even more.

Rasmussen Employment Index

More confusion for the Keynesians, who have no understanding of the business cycle and thus no early clue as to when it is turning upward.

The Rasmussen Employment Index, which measures workers’ perceptions of the labor market each month, gained five points in November to reach 76.8. Says Rasmussen, generally speaking, an increase in the Rasmussen Employment Index suggests the upcoming government reports on job creation will be better than the prior month.

The index has been climbing for a few months now:

November 2011
76.8

October 2011
71.7

September 2011
73.4

August 2011
69.3

July 2011
70.1