US economy is still struggling

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Oct. 1 (Bloomberg) -- U.S. stocks fell the most in three months as Treasuries and the dollar rallied after a decline in a gauge of manufacturing and an increase in jobless claims spurred concern over the strength of a recovery from the recession.
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Several economists have expressed the worry that the current recovery is due to the government stimulus. After the stimulus is spent, the economy will face the same difficulty as before - reduced consumer spending and confidence.

The underlying problems of the free market economic system has not been solved - high unemployment, extreme disparity of income, high dependence on mis-priced leverage, bubble in asset prices.

Interest rate is now too low, due to the infusion of public money. When the infusion stops, interest rate will have to increase to a higher level, and that will also affect the stock and property markets.

My view: Do not rely on low interest rate for too long. Do not invest and lock up your money on low interest rate for a few years. Do not invest in property or stocks at inflated prices.

Tan Kin Lian