Mark Skousen, author, publisher of the newsletter Forecasts & Strategies, and founder of FreedomFest, says the stock market and economy are on the mend.
In an interview with Moneynews.com, Skousen described a recent encounter he had with renowned University of Pennsylvania economist Jeremy Siegel.
“He showed me a very interesting chart that said anytime the stock market declines by more than 50 percent, when it does recover, it goes up an average 25 percent,” Skousen says.
“So I think we’re seeing a very good recovery here.”
Volatility isn’t going away this year, he says. But, “there are some indications that the market and the economy are making a comeback.”
Assessing Federal Reserve Chairman Ben Bernanke and the Obama administration’s economic team, Skousen says, “I’d give both of them pretty low grades. I think they’ve made matters worse.”
Bernanke made a mistake in getting Congress involved in the bank bailout, Skousen says. He opposes the big increases in government spending, saying “it’s all gone to waste.”
The Fed could have spurred recovery “using monetary policy exclusively, and they just mucked it up,” he says.
“So I’m not really too happy with Ben Bernanke, and I don’t like him lowering interest rates to almost zero percent. I think that’s a big mistake as well.”
As for the Obama administration, “their biggest mistake of course is threatening to raise taxes on wealthy Americans,” Skousen says.
“The scariest chart I’ve ever seen” is one comparing the spending under Obama and Bush, Skousen says.
“It makes George Bush look like a piker,” he says.
Skousen sees several investment areas as attractive, infrastructure for example. “There are lots of companies that are involved with the rebuilding of our economy,” he says.
“Certainly the commodities look very strong. They seem to be making a comeback.”
And, if the government can get out of the way, “I even think the financial stocks have shown some life again,” Skousen says.
“Even real estate is showing a little bit of life, believe it or not. So I think again it’s volatile, but we are seeing a recovery in those sectors.”
Skousen acknowledges that it will be difficult to keep government from intervening in the banking system. But, “banks are responding in their entrepreneurial way,” he says.
“There is creative destruction going on. So I’m relatively upbeat about that sector that’s been beaten down so far.”
Skousen will host FreedomFest July 9 to 11 in Las Vegas. “FreedomFest is kind of the focal point if you will for all freedom lovers,” he says.
“We come together once a year to learn about new ideas, about philosophy, about history, about geopolitics.”
Attendees will include Steve Forbes, Larry Kudlow, Newsmax’s Christopher Ruddy, Steve Moore, John Fund, and Ron Paul, Skousen says.
More on the Web at FreedomFest.com.
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