Skip navigation
#headerOverlay{
color: #ccd6df;
font-size:11px;
line-height:130%;
}
#headerOverlay strong{
color: #ffd226;
}
#headerOverlay a {color:#ccd6df;text-decoration:none;}
#headerOverlay a:hover {color:#ffd226;}
#headerOverlay a:visited {color:#ccd6df;}
#headerOverlay a:visited:hover {color:#ffd226;}
Symbol Lookup
onloadAutoSuggest();
dapMgr.enableACB("SearchBox88x31",false);
dapMgr.renderAd("SearchBox88x31","&PG=CNBSEB&AP=1071&PN=CNBC",88,31);
cnbc_displayUsername("cnbc_usertime","cnbc_username");RegisterSign InMember CenterSign OutRegistercnbc_toggleUserState();HOMENEWSMARKETSEARNINGSINVESTINGVIDEOCNBC TVCNBC 360CNBC U.S.CNBC Asia PacificCNBC EuropeCNBC WorldCNBC HD+
dapMgr.enableACB("kudlow728x90",false);
dapMgr.renderAd("kudlow728x90","&PG=CNBTV7&AP=1390&PN=CNBC",728,90);
/* NORMAL NAVIGATION */
.SHOW_NAV_B {background:url(http://media.cnbc.com/i/CNBC/Sections/CNBC_TV/CNBC_US/Shows/Kudlow/_Common_Components/KR_Nav_Bar_2010.jpg) top left no-repeat; font-family: Arial, Helvetica, sans-serif; height: 20px;}
.SHOW_NAV_BI a {font-family: arial; font-size:11px; font-weight: bold; color:#e4e4e4; margin-left: 0px; margin-right: 0px; padding-left: 10px; padding-right: 12px; _margin-top: 0px; _margin-bottom: 0px; display: inline-block;}
.SHOW_NAV_BI a.On {color:#5fa3f0 ;}
.SHOW_NAV_BI a:hover {text-decoration:none;color:#5fa3f0;}
.SHOW_NAV_BI a:visited {text-decoration:none; color:#e4e4e4;}
.SHOW_NAV_BI a.On:visited {text-decoration:none; color:#5fa3f0;}
.SHOW_NAV_BI a:visited:hover {text-decoration:none;color:#5fa3f0;}
Money & Politics
var cnbcSubHeaderId = document.getElementById('subheader_'+ 33448325);
cnbcSubHeaderId.innerHTML = document.getElementById('renderReaderContent').innerHTML;
HOMEBLOGCAUCUSVIDEO GALLERYKUDLOW'S BIORELATED LINKS
WEEKNIGHTS 7P ET
dapMgr.enableACB("kudlow300x250",false);
dapMgr.renderAd("kudlow300x250","&PG=CNBTV3&AP=1089&PN=CNBC",300,250);
RECENT POSTS» MoreCurrent DateTime: 06:06:30 19 Oct 2010LinksList Documentid: 33310671
cnbc_commentCountMapObj.cnbc_commentCountMap_put("", "33310671_1","cnbcCommentsTxt" );
Will QE2 Sail into a Better Economy?
cnbc_commentCountMapObj.cnbc_commentCountMap_put("39727379", "33310671_1","cnbcCommentsTxt" );
Earth to Obama
cnbc_commentCountMapObj.cnbc_commentCountMap_put("39638871", "33310671_2","cnbcCommentsTxt" );
Election Politics or QE2?
cnbc_commentCountMapObj.cnbc_commentCountMap_put("39634144", "33310671_3","cnbcCommentsTxt" );
Giving Civility A Chance
cnbc_commentCountMapObj.cnbc_commentCountMap_put("39618688", "33310671_4","cnbcCommentsTxt" );
Jobs Tepid, Dems Out, Stocks Up?
cnbc_commentCountMapObj.cnbc_commentCountMap_put("39615121", "33310671_5","cnbcCommentsTxt" );
Stocks Gallup Higher
cnbc_commentCountMapObj.cnbc_commentCountMap_put("39540157", "33310671_6","cnbcCommentsTxt" );
"?Stop All the Bad Stuff' "” Boehner's Prescription Could Work
cnbc_commentCountMapObj.cnbc_commentCountMap_put("39525088", "33310671_7","cnbcCommentsTxt" );
It's Simple to Balance The Budget Without Higher Taxes
cnbc_commentCountMapObj.cnbc_commentCountMap_put("39519685", "33310671_8","cnbcCommentsTxt" );
The Obama-Emanuel Embrace"”A Hug Too Far
cnbc_commentCountMapObj.cnbc_commentCountMap_put("39500403", "33310671_9","cnbcCommentsTxt" );
cnbc_commentCountMapObj.cnbc_commentCountMap_put("", "33310671_1","cnbcCommentsTxt" );
SHOW TIMESCNBC US:Weeknights 7p ETCNBC Asia:Saturday 06:00 SIN/HKSunday 04:00 SIN/HKCNBC Europe:Monday - Friday 10:00 CETSaturday 06:00 CETSunday 04:00 CETRSS FEED» HelpCurrent DateTime: 06:06:30 19 Oct 2010LinksList Documentid: 28775123Subscribe to this RSS feed
Stay up to date with the Money and Politics blog.
MOST SHAREDCurrent DateTime: 06:18:34 19 Oct 2010LinksList Documentid: 31330905Expiration DateTime: 10/19/2010 6:21:45 AM
cnbc_commentCountMapObj.cnbc_commentCountMap_put("", "31330905_1","cnbcCommentsTxt" );
Do Foreclosure Freezes Benefit Builders?
cnbc_commentCountMapObj.cnbc_commentCountMap_put("http://www.cnbc.com/id/39723660", "31330905_1","cnbcCommentsTxt" );
China Surprises with First Rate Rise Since 2007
cnbc_commentCountMapObj.cnbc_commentCountMap_put("http://www.cnbc.com/id/39737001", "31330905_2","cnbcCommentsTxt" );
Roubini Condemns 'Fatal' German Austerity
cnbc_commentCountMapObj.cnbc_commentCountMap_put("http://www.cnbc.com/id/39736046", "31330905_3","cnbcCommentsTxt" );
Coca-Cola Results Top Expectations, Cites Global Growth
cnbc_commentCountMapObj.cnbc_commentCountMap_put("http://www.cnbc.com/id/39736082", "31330905_4","cnbcCommentsTxt" );
Signs of 'Somewhat Toppish Outlook' for Euro: Charts
cnbc_commentCountMapObj.cnbc_commentCountMap_put("http://www.cnbc.com/id/39735912", "31330905_5","cnbcCommentsTxt" );
BofA's Operating Profit Handily Tops Forecasts
cnbc_commentCountMapObj.cnbc_commentCountMap_put("http://www.cnbc.com/id/39736014", "31330905_6","cnbcCommentsTxt" );
Iran Confirms Planes Being Refused Fuel in Europe
cnbc_commentCountMapObj.cnbc_commentCountMap_put("http://www.cnbc.com/id/39669763", "31330905_7","cnbcCommentsTxt" );
Johnson & Johnson Profit Up Slightly, Despite Lower Sales
cnbc_commentCountMapObj.cnbc_commentCountMap_put("http://www.cnbc.com/id/39737465", "31330905_8","cnbcCommentsTxt" );
Goldman Sachs Beats On Growth in Investment Banking
cnbc_commentCountMapObj.cnbc_commentCountMap_put("http://www.cnbc.com/id/39736176", "31330905_9","cnbcCommentsTxt" );
BofA to Change Checking Accounts, Spread Fees: CEO
cnbc_commentCountMapObj.cnbc_commentCountMap_put("http://www.cnbc.com/id/39736578", "31330905_10","cnbcCommentsTxt" );
cnbc_commentCountMapObj.cnbc_commentCountMap_put("", "31330905_1","cnbcCommentsTxt" );
LATEST VIDEO
» MoreCurrent DateTime: 06:18:15 19 Oct 2010LinksList Documentid: 28776292Nationalized Housing Market 18 Oct 2010
Discussing whether the banks are headed for disaster with a new round of government intervention, with Barry Ritholtz, Fusion IQ; Chris Whalen, Institutional Risk Analytics and CNBC's Jane Wells.
Dollar Policy: Past & Present 18 Oct 2010
Discussing what's killing the Greenback, with Brian Kelly, Kanundrum Capital president and CNBC's Hampton Pearson.
Has Apple Peaked? 18 Oct 2010
Discussing Apple's iPad expectations, with Dan Ackerman, CNET.com and CNBC's Jon Fortt.
CONTACT USComments? Questions?We want to hear from you!E-mail: document.write("");document.write("kudlow"+"@"+"cnbc.com");document.write('');
dapMgr.enableACB("ContextBlog300",false);
dapMgr.renderAd("ContextBlog300","&PG=CNBAL3&AP=1089&PN=CNBC",300,250);
setDefault('cnbc_textbody');Will QE2 Sail into a Better Economy?Published:
Monday, 18 Oct 2010 | 4:10 PM ET Text Size By: Larry KudlowCNBC Anchor
AP
As we all know, Ben Bernanke believes the unemployment rate is too high and the inflation rate is too low. He's certainly right about the former.
However, regarding inflation, booming gold and commodity prices and the sinking dollar suggest that U.S. inflation will be rising in about a year, not falling.
Does the Fed head look at market-driven prices? Surely he does. But it's equally certain that this will not deter him from pump-priming QE2 (Quantitative Easing). Underneath it all, Bernanke believes in the false Phillips Curve tradeoff between inflation and unemployment.
But an interesting question is: How weak is the economy? There's a lot of pessimism about this, but Friday's report on retail sales was very strong. Retail sales are up three straight months for a 7.4 percent annualized rate. Year-to-year retail sales have increased 7.3 percent. That's a strong showing.
Today's report on industrial production showed a surprise drop of two-tenths of 1 percent. However, the 12-month change for production is 5.4 percent, a healthy pace. Inside the report, the production of business equipment continued to rise, and registered a 10.1 percent yearly increase. That is very strong. Business equipment is a key indicator of capital-goods spending and investment, which is crucial to the economy.
And in the last available factory-orders report for August, orders for non-defense capital goods (excluding aircraft) came in 20.2 percent above year-ago levels, with shipments registering a 13 percent gain. Even backlogs are up 4.1 percent year-on-year. This strongly suggests that despite the tax and regulatory threats, highly profitable businesses are in fact expanding -- even while they are not yet hiring all that much.
Another indicator of potential economic strength can be gleaned from the money supply measures. M1, which is transaction money, has grown 10.2 percent at an annual rate for the three months through September. This tracks the pickup in retail sales. Broader money, called M2, has increased 6.7 percent annually over the past five months. During the first five months of 2010, M2 declined 2.2 percent at an annual rate.
So the pickup in money demand could be signaling a better economy after the spring and summer slowdown. Perhaps consumers are moving to beat the tax man who could come crashing down January 1, 2011, unless the Bush tax cuts are extended. Perhaps strong business profits are stimulating growth more than we think. And despite tepid job creation, personal incomes are rising.
Think of it, Mr. Bernanke.
RELATED LINKSCurrent DateTime: 06:06:31 19 Oct 2010LinksList Documentid: 39722936'Quantitative Easing': What Does It Really Mean for Investors?Five Ways More Fed Easing Could Make Things WorseFed Needs Fiscal Help to Boost Economy: Fisher
Questions? Comments, send your emails to: document.write("");document.write("lkudlow"+"@"+"kudlow.com");document.write('');
Read Full Article »
