"Summer of Recovery" is more like a Cold Winter

By Bill Glynn

The much-touted "Summer of Recovery" is turning out to be just the opposite. It is clear that our most conservative monetary body is bracing us for more - and continued bad news. When the Fed speaks, the world listens; but when the Fed speaks with a shaky voice, then we had better pay attention. The simple fact that the Fed has to “stand ready” to step into the markets again should be a telling sign that we are still teetering on a cliff.

Congress is calling its members into an emergency session to borrow and spend $26 billion, tax foreign companies, and pay off the teachers unions... oh, and toss in a few billion for Nancy Pelosi’s state of California. News coverage yesterday was focused on some key elections but investors and economists focused on what signals the Federal Reserve was sending.

It is very important to understand that the Federal Reserve is limited in its ability to play a dramatic role in pumping blood into our economy. They can buy treasuries to keep interest rates at an all-time low, but their balance sheet is already bloated. They are privy to information and a view of the economy that we are not. One moment they say we are experiencing a “modest” recovery and then they turn and say the recovery is not all it's cracked up to be. Their solution? They point to Washington to step in again and implement more failed programs. But the government is just like a deer in the headlights.

I am hopeful someone will listen to the 2-step program I have come up with to solve this issue once and for all. Read more about Bill Glynn's solutions in his new book, "The United States of Bankruptcy." [more...]