As to the main character in the story of the U.S. economic recovery, the plot thickens …
The preliminary Consumer Sentiment Survey for April from the University of Michigan came in at 69.6, which is greater than the 66.5 expected. The preliminary reading for April is also greater than the 67.5 posted for the prior month.
In March, oil prices climbed steadily higher, as did the price of gasoline. Soft commodity prices rose steadily, driving the cost of food higher. Libya exploded, the broader Middle East continued unraveling, Japan rattled to destruction, nearly floated away, and then began releasing deadly radiation into the land, air, and sea. The ideological brats in Congress threatened a government shutdown, pushed for budgetary cuts that threaten the economic recovery, and news around the deficit and debt sound apocalyptic.
So, how does consumer sentiment go up under such adverse environmental news? Well, as any good writer knows, contradiction breeds tension, a dramatic element every story needs …
Just as the U.S. economy is emerging from a severe contraction caused by a credit crisis, there are pressures to tighten both fiscal and monetary policies in order to rein in an excessive budget deficit and stave off nascent inflation. Sound familiar? It should, because that is precisely what happened in 1937. As students of economic history are aware, those shifts to restrictive policies on the budget and by the Federal Reserve set the stage of the second part of the Great Depression.
Add to the storyline some influential, antagonistic characters also fighting powerful external, negative forces, fighting to keep their own economies from going down, and the drama increases to the point where the reader cannot stop turning the page …
The leaders of Brazil, Russia, India, China, and South Africa also called for stronger regulation of commodity derivatives to dampen excessive volatility in food and energy prices, which they said posed new risks for the recovery of the world economy.
The reader does not know what the outcome will be, but as each page is turned, new information builds tension and drama …
With the deadline for filing individual U.S. tax returns nearing next week, Americans are planning how they will spend their refunds and more than half plan to use at least some of the money on travel.
The story gets ever closer to it inevitable climax. Soon, resolution will arrive, and at that point, all the reader will have to keep interest is the desire to know how the conflict resolution changes the main character in his or her march into the newly defined future …
As you all can see, my musings amuse me, but, if truth be told, until the drama completely unfolds and we know the outcome of these tumultuous times, I am committed to keeping myself upbeat and focused on protecting my money, while simultaneously looking for opportunity.
Trade in the day – Invest in your life …
