I was very recently reading about the government giving serious consideration to regularly engaging in stock purchases to help offset subdued growth and inflation. I must admit to cringing at this notion.

You may have read articles about this matter. I’ll provide two in this post. With regard to government stock purchases, go here to find a link to a Wall Street Journal article (entitled “Janet Yellen Sees Benefits to Central Bank Stock Purchases”) about Federal Reserve Chairwoman Janet Yellen’s perspective on the idea and go here to read a Bloomberg piece about former Treasury Secretary Larry Summer’s perspective.

In the second article, the Bloomberg one written by Chris Anstey, I find the last sentence about Summer’s position especially unsettling. It states:

“He argued against structural reforms, such as concerted labor-market deregulation, saying that this would serve to promote saving, by generating less certainty for workers.”

I guess I’m still in the crowd that believes you can’t spend your way out of a debt crisis. All of this surely makes careful analysis of a company’s balance sheet all the more important before making an investment in common stock.

See you next time.