gabe borenstein

Closing Update for Monday, August 17: Global Sell-Off Visits U.S.

The global investment community must realize that the U.S economy is not synchronized cyclically with the rest of the economic universe.
Psychology is one thing ,but reality is another.
Both U.S administrations had provided a measured liquidity injection into the key economic sectors and succeeded in stabilizing economy.It is the fiscal spending and the monetary policy that is and will be driving the U.S economic expansion not demand pull (inflationary).
Allowing for the multiplier ,the injected liquidity is almost equivalent to the U.S GDP .It is an insurance against the economic failure and a catalyst for unprecedented non inflationary expansion in the period ahead .
The fourth qtr of 2009 should attain 4.5 % GDP growth.
This will assure above average expansion in 2010 and the decline in unemployment to 3.8% .
The current debacle has allowed corporate America to be come mean ,lean competitive machine.
Without the American economic expansion ,Emerging Market economies and Europe and Asia will fail.
To date ,the deflection of the issues that exist outside the U.S economy has allowed the other markets to keep up with the U.S market gains .
This irrational focus on the U.S ,has allowed the global speculators to keep the dollar under the pressure.
I am convinced that as the global community begins to comprehend the fundamental non- inflationary forces that will maintain economic momentum ,the dollar will gain substantially.
The U.S stock market is not ahead of the curve but behind it.
Only months ago ,Depression was consensus,instead we are heading for unprecedented economic expansion.

Closing Update for Monday, August 17: Global Sell-Off Visits U.S.

Market is fine.