05 Apr GLOBAL GROWTH FORCASTS HAVE BEEN UPGRADED TO THE HIGHEST LEVEL IN 60 YEARS
Growth forecasts are continuing to be upgraded and recent outlooks now suggest world growth could hit a 60 year high in 2021 according to Bloomberg. The reasons are well known…shrinking virus threat, massive US stimulus, and pent up demand.
Inflation is expected to rise in the months ahead but the Federal Reserve has dogmatically stated this rise will only be “transitory.”
There are several progressive Congressional members that are now adamantly stating that there is indeed a free lunch utilizing Fed statements that inflationary pressures are “transitory” while at the same time reiterating forecasts that growth in 2021 can be the greatest in 60 years partially the result of central planning akin to what is prevalent in many socialist countries.
If it was only this simple for if it were the slow or no growth communist or socialist countries would have been leading the world in economic output for decades. History is littered with examples of lesser developed countries that had adopted similar economic plans as to the ones Congress is now pursuing, examples that have at best ended disastrously for the country’s currency, debt and economy.
Growth is being achieved via debt creation, debt creation that will be used to fund the most inefficient use of monies…government spending. Moreover, the vast majority of these funds are not being utilized to increase the productive capacity of the country.
Utilizing a well-known analogy government is giving people fish rather than teaching people to fish via creating policies that are conducive to create a more efficient fishing pole. The latter is economically sustainable.
No one knows the future but history is a good guide to suggest what might happen under similar circumstances.
Radically changing topics, March’s unemployment data was very strong in almost every dimension.
The economic calendar is comprised of serval manufacturing data points, trade data, another job survey and the minutes from the recent FOMC meeting.
Last night the foreign markets were closed for Easter Monday.
The Dow should open moderately higher. The 10-year is off 3/32 to yield 1.74%.