JACKSON HOLE, Wyo. (MarketWatch) — Federal Reserve Board Chairman Ben Bernanke called the stagnation in the U.S. labor market a grave concern and said he was open to using more quantitative easing as needed to help the economic recovery.

In a speech at the Fed’s Jackson Hole retreat on Friday, Bernanke did not pre-commit to taking action, but he did reinforce the case for more asset purchases. Read full text of comments.

He downplayed the costs of quantitative easing and said the program has worked to “provide meaningful support” to the recovery.

Bernanke called current growth “tepid” and said the economy was “far from satisfactory.” Read a First Take commentary on the speech.

“Taking due account of the uncertainties and limits of its policy tools, the Federal Reserve will provide additional policy accommodation as needed to promote a stronger economic recovery and sustained improvement in labor-market conditions in a context of price stability,” Bernanke said.

Read More at Market Watch. By Greg Robb.

A number of fund managers have begun establishing positions in the precious metal lately, as signs mount that the global economy is facing a troubled second half of 2012. On Wednesday the US Federal Reserve indicated that it was leaning toward another round of monetary stimulus, also called quantitative easing.

Bonds giant Pimco, and hedge funds Paulson & Co and Soros Fund Management, are among those to have built positions in gold recently, according to reporting from Financial News’ sister publication The Wall Street Journal.

Baring Asset Management, with £30bn under management in all, currently holds about 6% of its £7bn multi-asset portfolios in gold. The firm says it is “minded to maintain” this holding in the current environment, but “if there were signs of aggressive monetary stimulus coming into play, we would be inclined to increase it again”.

Read More at efinancialnews.com. By Mark Cobley.

FORTUNE — After months and months and months of speculation, Federal Reserve chairman Ben Bernanke finally appears to be ready to step in and help boost the economy. Unfortunately, Bernanke, and the Fed, may no longer matter.

The economy started to show signs of slowing again back in May. If Bernanke had acted then, the Fed would have been able to keep the recovery going. Indeed, the Fed’s efforts so far appear to have worked. As Bernanke said in his speech on Friday, the central bank’s two controversial rounds of buying bonds – so-called quantitative easing – has lowered long-term interest rates by as much as 1.65 percentage points, and added as many as 2 million jobs.

But everything has a window of opportunity, and Bernanke may have missed his. Top Bank of America U.S. economist Ethan Harris, for instance, believes at this point even if the Fed embarks on another ambitious round of bond buying, the number of jobs produced by the economy each month, which jumped in July, could soon slump back down to zero, or close to it. A recent Congressional Budget Office analysis of fiscal policy came to the same conclusion: Even if the Fed acts, other things now matter more. We’re headed for another recession.

The biggest problem is the Fiscal Cliff. Pretty much everyone agrees that at this point, if left in place the mix of tax increases and spending cuts that are set to begin in January will send the economy into recession. If the economy had been growing stronger at this point, that might have not been the case.

Read More at Fortune. By Stephen Gandel.

That’s the question posed in an interesting new paper by UCSD Professor Takeo Hoshi and University of Tokyo Professor Takatoshi Ito.

Although there has been much discussion recently of debt levels of some European governments, Japan is in a class by itself. Hoshi and Ito (2012) note the consensus among academic researchers that Japan’s current fiscal path is unsustainable:

Doi (2009), Doi, Hoshi, and Okimoto (2011), Doi and Ihori (2009), Sakuragawa and Hosono (2011), Ito (2011), Ito, Watanabe, and Yabu (2011), and Ostry et al. (2010) all find that without a drastic change in fiscal policy, the Japanese government debt to GDP ratio cannot be stabilized.

 Read More at econbrowser.com.

NEW YORK (CNNMoney) — Sure, the economy is adding jobs these days…but most of those positions pay pretty poorly.

Some 58% of the jobs created during the recovery have been low-wage positions, according to a new report by the National Employment Law Project. Only 22% have been mid-wage jobs and 20% higher-wage positions. These low-wage jobs pay $13.83 an hour or less.

“The recovery continues to be skewed toward low-wage jobs, reinforcing the rise in inequality and America’s deficit of good jobs,” said Annette Bernhardt, NELP’s policy co-director. “While there’s understandably a lot of focus on getting employment back to pre-recession levels, the quality of jobs is rapidly emerging as a second front in the struggling recovery.”

The explosion in low-wage job growth comes after the Great Recession hammered the mid-wage job sector. Some 60% of the jobs lost during the downturn were mid-wage, as opposed to 21% of low-wage and 19% of higher-wage positions.

Read More at CNN Money. By Tami Luhby.

It’s not surprising that liberals are apoplectic over a provision in the draft Republican Party platform calling for the establishment of a commission to study “possible ways to set a fixed value for the dollar”. After all, this amounts to a “right to life” plank for the dollar, the economy, and the American middle class.

We have now had the discretionary monetary system that the progressives advocate for 41 years. We have seen the results. The numbers aren’t pretty.

During the 180 years that we had one form or another of “a fixed value for the dollar” (1790 – 1970), the U.S. economy grew at an average annual real rate of 3.94%. During the past 41 years of fiat money (1970 – 2011), our real GDP grew at 2.81%.

The difference between these two growth rates is staggering.

If the U.S. economy had continued to expand at 3.94% real over the past 41 years, 2011 GDP would have been $23.6 trillion, 56% higher than it actually was. Our economy would have been more than three times as big as China’s, rather than just over twice as large. And, at the same level of spending, the federal government would have run a $0.5 trillion budget surplus, instead of a $1.3 trillion deficit.

Read More at Forbes.

TAMPA, Fla. (MarketWatch) — Paul Ryan delivered a broadside against President Barack Obama’s economic polices on Wednesday night, and used his prime-time address at the Republican convention to tell voters how he and Mitt Romney will turn America around.

Giving the most important address of his young political career, the 42-year-old Wisconsin congressman doubled down on the Romney campaign’s appeals to anxious voters and also issued a stark warning about reining in government spending and debt.

“We don’t have that much time. But if we are serious, and smart, and we lead, we can do this,” Ryan said

“Before the math and the momentum overwhelm us all, we are going to solve this nation’s economic problems,” Ryan told cheering delegates inside the Tampa Bay Times Forum.

Diving directly into the fight over health care, Ryan pledged to repeal President Obama’s health-care law and defended his controversial ideas to revamp the Medicare program.

Read More at MarketWatch. By Robert Schroeder.

MITT ROMNEY is not the first multi-millionaire to seek the presidency, nor the richest. Ross Perot, the record-holder, spent some of his billions earned from computer data on losing bids in 1992 and 1996. Since then men who owe their or their family’s fortunes to oil, sport, publishing, trial law, ketchup, beer and bestselling autobiographies have followed.

But Mr Romney, who earned his $200m or so as a private-equity executive buying and selling companies, is the first candidate from the world of high-octane finance. As such, he illustrates the changing complexion of America’s rich. The wealthiest 1% of Americans not only get more of the pie (see chart); they are increasingly creatures of finance.

The average household income of the 1% was $1.2m in 2008, according to federal tax data. The ultra-rich skew that average upwards: admission to the 1% began at $380,000 in 2008. The Congressional Budget Office puts the cut-off lower, at $347,000 in 2007, or $252,000 after subtracting federal taxes and adding back transfers. Measured by net worth, rather than income, the top 1% started at $6.9m in 2009, according to the Federal Reserve, down 23% from 2007.

The richest 1% earn roughly half their income from wages and salaries, a quarter from self-employment and business income, and the remainder from interest, dividends, capital gains and rent. According to an analysis of tax returns by Jon Bakija of Williams College and two others, 16% of the top 1% were in medical professions and 8% were lawyers: shares that have changed little between 1979 and 2005, the latest year the authors examined (see chart). The most striking shift has been the growth of financial occupations, from just under 8% of the wealthy in 1979 to 13.9% in 2005. Their representation within the top 0.1% is even more pronounced: 18%, up from 11% in 1979.

Read More at The Economist.

(Reuters) – Investors and economists have become far more skeptical over the past two weeks that the Federal Reserve will announce a new round of bond purchases at its September meeting, according to Reuters polls over the last week.

While hardly portraying a surging economy, U.S. economic data over the last two weeks have, for the most part, come in a little better than forecast.

That has persuaded many economists and fund managers a new round of monetary easing from the central bank is no longer a safe bet, although polls of both groups suggest the result of its September policy meeting will be a close call.

Only 44 percent of fund managers in the Reuters global asset allocation poll published Thursday now think the Fed will announce a third round of quantitative easing, down from 70 percent in the same poll last month.

Similarly, a poll of economists last Friday gave a 45 percent chance of a new round of quantitative easing resulting from the Fed’s September 12-13 policy meeting, a sharp cut from 60 percent in another poll earlier in the month.

Read More at reuters.com. By Andy Bruce and Rahul Karunakar.