Today’s results of the Conference Board’s Leading Economic Indicators showed another sharp monthly increase climbing 1.4% compared to February 2010 bringing the annual increase to a whopping 11.95% and leaving the index at a level of 109.6.On the face of it this is clearly a Bullish development as this series (an aggregate of 10 component leading indices) is signaling a clear shift to exceptional expansion.
Yet, one has to keep in mind that the leading index is strongly influenced by growth in the money supply (M2), Average weekly manufacturing hours and the price of stocks (S&P500).
Could we be headed into a second dip (… similar to mid-1981) as the government’s massive Keynesian chicanery shows itself to have only propped demand but failed to encourage real “organic” demand?
Only time will tell…
