I believe that we will win! (heard loud and often at SDSU Aztec basketball games).
The President believes, and even the Fed Chairman believes. I think most of the world reluctantly would agree with them. Santa Claus? No, we all know he’s real. The Aztecs? Of course, but we’re talking something a bit different. And I also believe the world did not end, as this might have been the interpretation of the Mayan calendar stopping at on Dec 21, 2012. The US economy looks ready to move to a higher level, if only certain things fall into place. 2013 is setting up to be a banner year, and the stock market has sniffed it out.
Since 2009 the economy has had difficulty moving away quickly from the financial crisis. The deep hole that occurred following and the threat of a longer lasting recession were real and right in front of us. To be sure, the Fed and even the politicians have tried to get our economy on sound footing. But the rate of growth is not acceptable given how far we fell. Many have/will disagree with the methodology of stimulus but that is of no consequence.
The 700 billion of growth initiatives in 2009 instituted just after President Obama took office fell far short of anything useful. Any future package will be scrutinized and picked at for it’s efficacy. Monetary stimulus as provided by the Fed has provided an fertile ground for growth, that will likely continue for years to come.
Today, we have an economy that seems to be limping along but ready to fire. How so? Many of the economic indicators point to this direction. Industrial production is improving, inflation is low and the job situation seems to getting better. The consumer is spending and the housing market is enjoying a renaissance. We don’t need to cover the finer details but these are the major indicators of economic growth.
Overseas, China is re-engaged in their growth plans. This will only help stabilize the global economy. The World Bank last week estimated China’s growth in 2013 will be in the mid 8% range. It appears Europe is out of the danger zone, perhaps even contributing ‘some’ growth in the second half of 2013. Other economies around the world are likely to step up and contribute to global growth.
Impediments to a better economy next year? It’s too obvious – the psychological affects from the fiscal cliff. This crisis has gone on far too long and may be the thorn in the side of the economy. Recessions are created by fear and constant reminders that things will get bad. Consumers and corporations will step back – literally. Natural disasters, wars, attacks – these will also hamper a better recovery. You can’t prepare for these, but you can believe in a better 2013. After all, we got past the Mayan calendar.