Jean Jacques Chenier Market commentary

Jean Jacques Chenier 06-20-2009
The current recession and aging population is contributing to larger fiscal deficits. Future obligations tell us these numbers are likely to grow. The only panacea is economic growth that can make these obligations affordable. There are only two ways to resolve the issue – increase revenues or cut expenditure. Both of these are not palpable and to any politician who wishes to get re-elected. It is easier to ignore the problem till such time that blows up and then find a scapegoat.
It is obvious that the Fed will not retrieve the money it has printed in time. It never has. The US will inflate its way out of recession ... for a while. At some point, of course it will trigger a dollar crisis and longe term interest rates will shoot higher stopping the recovery in its track.
For the time being the big question is the timing. It's too early to tell but I'll keep you posted.
Jean Jacques Chenier