[ARCHIVE] Make Your Move

Changing Expectations

Sept. 7, 2012

The Federal Reserve makes a false assumption that feelings about the future drive economic trends.

Federal Reserve Chairman Ben Bernanke’s Jackson Hole speech defended prior Federal Reserve Board actions and made the case of another round of quantitative easing (QE3) in the relative near term. There are several options available to them, the details of which are not important for this discussion. One of the more intriguing was a belief that the Federal Reserve Board could manage people’s expectation of the future, and that would in and of itself make the future better. The theory is that actions follow group belief.

That could also be stated that we regularly succumb to self-fulfilling prophecies be they positive or negative. The problem with that is that business confidence indicators are not statistically reliable leading indicators. Our CEO, Brian Beaulieu, just looked into this subject and determined that the business confidence index for the U.S. and China are not reliable. This means that the Fed can work as hard as they can to change people expectations, but that does not change the future. Economic realities and trends determine the future, not our feelings about that future.

About the Author

Alan Beaulieu Blog | President

One of the country’s most informed economists, Alan Beaulieu is a principal of the ITR Economics where he serves as President. ITR predicts future economic trends with 94.7% accuracy rate and 60 years of correct calls. In his keynotes, Alan delivers clear, comprehensive action plans and tools for capitalizing on business cycle fluctuations and outperforming your competition--whether the economy is moving up, down, or in a recession.

Since 1990, he has been consulting with companies throughout the US, Europe, and Asia on how to forecast, plan, and increase their profits based on business cycle trend analysis. Alan is also the Senior Economic Advisor to NAW, Contributing Editor for INDUSTRYWEEK, and the Chief Economist for HARDI.

Alan is co-author, along with his brother Brian, of the book MAKE YOUR MOVE, and has written numerous articles on economic analysis. He makes up to 150 appearances each year, and his keynotes and seminars have helped thousands of business owners and executives capitalize on emerging trends.

Prior to joining ITR Economics, Alan was a principal in a steel fabrication company and also in a software development company.