Archive for October, 2009

Bush’s Folly, Obama’s Coup de Grâce, Osama’s Victory

The value of the US dollar, along with the value of other currencies, has been declining for over 75 years, since Franklin Delano Roosevelt suspended conversion of US Treasury Bills into gold. The US trade deficit has been building steadily since 1971, when President Nixon cut the final ties to gold. However, the decline of the US […]

What caused US stock prices to rise in early 2009?

The US Federal Reserve flow of funds accounts for Q2 2009 provide a clear explanation of the causes of the recovery in stock prices in the first half of 2009. These statistics show a pattern of behavior quite different from that which has prevailed since 1982. It is too early to say whether […]

Individual investors push stock prices up in Q2 2009

The Federal Reserve flow of funds accounts for US Households (Table F.100) clearly reveal the forces that drove the recovery in equity prices in the first half of 2009. By comparing the flow of funds in the year 2007 (at the top of the bubble), with the flows in Q2 2009, a dramatic shift in investor […]

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