Despite assertions that corporate America is paralyzed by uncertainty, reinvestment in both human and monetary capital continues to grow since the end of the recession in 2009.
-Mike Temple, Pioneer Investments
On-shoring, energy infrastructure reinvestment and plant replacement are three trends in the making that will shake American business out of paralysis. In the last “Bond Deer in the Headlights,” I outlined the “Monetary Abolitionists” assertion that out-of-control government spending, made acceptable by historically low interest rates, was responsible for corporate paralysis in investing and hiring.
That camp also believes that as a result we are likely heading for credit crash, and shouldn’t be worried about the possibility of a rising-interest-rate environment. In terms of government spending, my conclusion was that while it’s too early to turn off the fiscal spigot, a plan to deal with government entitlements needs to be mapped out now. In this final installment, I look more closely at the assertion that corporate America has been paralyzed by political uncertainty.