We begin on this eve of July 4—when we celebrate “Life, Liberty, and the pursuit of Happiness”—with an article on money and happiness.  Then, we present two articles—one relating to the Federal Reserve’s plans to withdraw stimulus and another about the rate of economic growth.

Using Money to Buy Happiness.  In this article, two scientists offer advice on getting the most happiness from your dollar.  “To a large degree, how

[emphasis added] you spend is just as important as how much you spend…we suggest that people should stop thinking exclusively about how to get more money, and instead focus more on whether they are getting the most happiness out of the money they already have…stuff is not bad for our happiness…but stuff also doesn’t make us any happier…Buying experiences, in comparison do seem to create more happiness for every dollar spent….one of the biggest mistakes we all make with our money is that we fail to use it in ways that maximize the amount of time we spend engaged in activities that make us happy.  Instead, we often accidentally use money in ways that seem like they will make us happy, but instead doom us to unhappy time…thinking about how every purchase you make is going to affect your time allows us to spend money in ways that buy us happier time.”

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Careless talk may cost the economy.  Martin Wolf, a British journalist widely considered to be one of the most influential writers on economics, penned this piece with the subtitle:  If the Fed had been more prudent, premature tightening might have been avoided.  Yields on 10-year US Treasuries rose by 0.88% between May 2 and June 21, to 2.51%. “If the Fed had been more careful, this premature monetary tightening might not have happened.  As it is, the fall in prices of the world’s most important financial securities could materially damage recovery, as it lowers prices of riskier assets across the world.”  One of the challenges is “proper management of expectations…this may be too late now…the right way to proceed is to stress only conditions, not timetables…nobody knows when the conditions for tightening will emerge, because nobody knows how the economy will perform.  We should look forward to a world of higher long-term interest rates on safe-haven bonds.  But we should not need to enter that world yet.  Policy makers need to speak softly about exits [from current policy].”  Financial Times (tiered registration required).

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U.S. Economy Looks Weaker, as GDP data is revised.  When the Federal Reserve made its “taper talk” announcement June 19, part of its justification was the expectation of accelerating economic growth.  However, following that announcement, the Department of Commerce revised downward its estimate of Gross Domestic Product for the first quarter—from a previous estimate of 2.4% to a less robust pace of 1.8%.  We don’t know the Federal Reserve’s reasons for “happy talk” on June 19 about accelerating economic growth.

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And in case you missed it, click here to read last week’s blog post on Chairman Bernanke’s discussion of tapering the pace of bond-buying.

We hope you enjoy reading these articles along with us and that you find them informative.  Please forward this to your friends and family.

J. Mark Nickell & Co.


Disclosure – The articles mentioned in This Week with J. Mark Nickell & Co. are for information and educational purposes only. They represent a sample of the numerous articles that the firm reads each week to stay current on financial and economic topics. The articles are linked to websites separate from the J. Mark Nickell & Co. website. The opinions expressed in these articles are the opinions of the author and not J. Mark Nickell & Co. This is not an offer to buy or sell any security.  J. Mark Nickell & Co. is under no obligation to update any of the information in these articles. We cannot attest to the accuracy of the data in the articles.