Published June 19, 2013
Yesterday Ben Bernanke came to the floor to announce the present and provide a forecast of the economy. The Bernanke charm prevails sending bursts into the global economy. What this means to small business and energy is important to determine the next quarters of business spend and largess. The whispers of “Ben Bernanke’s Fed Maintains Stimulus, Voices Increased Optimism on Economy” resulting in business perception that shapes our future.
Small business and big are affected by the words of Bernanke but are they all listening. Consider the business system. Small business work off the largess of big. Further, small provide efficiency and innovation to big. The relationship is reciprocal. The divide in wealth creation between big and small continue to grow; therefore, when Bernanke clears his throat there is a ripple. The stock market reverberates and shifts position upon the word of the Fed for a contraction or reaction. The connection is that the economy is seeking a balance point that is not clear.
What has been reported, “since 2008, the agency has poured $2.5 trillion into the nation’s economy through these purchases, as a way to keep interest rates low and to prod economic growth,” CNN reported.
“The Fed also released its updated economic projections on yesterday, which point to a quicker drop in the unemployment rate. The agency lowered its unemployment forecasts for this year from 7.5 percent to 7.25 percent, and suggested that it may be as low as 6.5 percent in 2014, according to ABC News. The agency has said it may begin increasing interest rates if that level of unemployment is reached.”
The numbers fail to capture the true rate. The importance of adopting a cultural economic view is that certain escorts of the economy do not compute into the envelope of reporting. The unemployment numbers for Blacks in America is over 13% and continues to rise. Youth unemployment shifts around 16% (16.2 percent, the unemployment rate among Americans ages 16 to 24). When we adjust for these two sectors and economic easing the U.S. unemployment is above 12%.
Consider, reacting to interest rates against the possibility of fail or fuzzy math computations. The economy can grow or be pushed to a imposed diet that cuts programs, social constructs and subsidies that stabilize and undergird development.
“But Bernanke stressed at the press conference that the 6.5 percent rate is not an automatic trigger, but rather a threshold. If the unemployment rate falls below 6.5 percent, but inflation is still not a risk, the agency could keep low rates in place, for example.”
When using a sports metaphor, the U.S. is slicing the ball while looking directly at the green. The risk of not contending with the data leaves a nation running blind in a race of variables that are on the sidelines but in fact are valuable players. The ability to disavow the true numbers and convert people to the lost leader construct produces a cycle of economic ease to disease.
- Bernanke says Federal Reserve Will Likely Slow Down Bond Buying Program (blackchristiannews.com)
- Preparing for life after Bernanke (politico.com)
- Investors Anxiously Await Fed’s Latest Decision on Stimulus (dailyfinance.com)
- Professor Bernanke, Again (erikhare.wordpress.com)
- Fed to start tapering bond purchases this year: Bernanke (japantimes.co.jp)
- Bernanke sends stocks, bonds skittering (cbsnews.com)
- SHTFplan: EPIC RANT: “They Take a Press Release from the Federal Reserve and They Think It Was Written by God” (silveristhenew.com)