Federal Reserve Policy IS Working ... Just Not For Americaby Washington's BlogNov. 03, 2010 |
ADL Urged Congress to Pass FISA Law Spying on Americans to 'Protect Israel'
Rep. Thomas Massie Warns Congress is Trying to Pass Hate Speech Laws to Outlaw Criticism of Israel
'Sniper Seen on Roof Overlooking Pro-Palestine Protest' at Indiana University
Mike Johnson Pushes Debunked Lie That Israeli Babies Were 'Cooked in Ovens' On October 7
Claim Jewish Student Was 'Stabbed In The Eye' by Pro-Palestine Protester Draws Mockery After Video Released
Richard W. Fisher, president of the Fed bank of Dallas, said last month: In my darkest moments I have begun to wonder if the monetary accommodation we have already engineered might even be working in the wrong places. Far too many of the large corporations I survey that are committing to fixed investment report that the most effective way to deploy cheap money raised in the current bond markets or in the form of loans from banks, beyond buying in stock or expanding dividends, is to invest it abroad where taxes are lower and governments are more eager to please. This would not be of concern if foreign direct investment in the U.S. were offsetting this impulse. This year, however, net direct investment in the U.S. has been running at a pace that would exceed minus $200 billion, meaning outflows of foreign direct investment are exceeding inflows by a healthy margin.Shahien Nasiripour fills in some details today on why Fed policy is indeed helpful ... just not to America: "Firms continue to cut back on their capital expenditures and R&D outlays," analysts at JPMorgan Chase said in a September report. Money spent on long-term investments and research and development represents less than 55 percent of operating cash flow at the non-financial companies that make up the Standard & Poor's 500 index. It's down from a high of more than 85 percent as recently as 2001, the analysts noted.No wonder the developing world is experiencing a huge asset bubble. See this, this, this, this, this, this, this, this and this. Indeed, as AP writes today: Stocks in developing countries are a likely candidate for the next bubble. Cash from Europe and the U.S. has plowed into emerging markets, such as Brazil and Chile, since the financial crisis, largely because these countries have less debt and faster economic growth than in the developed world.In fact, the Fed has been using our money to bail out foreign countries for years. See this, this, this, this, this and this. Nasiripour also documents:
|