Recently the economy of the United States has started to slow. After a really bad recession, this is not good news.
Exports are strong.
Loan losses are starting to fall.
But look at the demand for mortgage loans:
The Initial Claims for employment are spiking up:
Covered Employment is still not responding:
What's more the Money Multiplier is now FALLING after a really bad fall during the recession.
So what is doing well?
From this chart we see gasoline is the largest increase in retail sales, which is not a good thing for the economy.
By having gasoline prices rising, we see a 'tax' on the consumer that is zapping the recovery of the economy.
Overall, the economy is at best sputtering. At worst, we are headed to a double dip. Because the fiscal policy and monetary policy are about to take the 'gas' off in June, this summer looks to be very dicey. Don Coxe has described Quantitive Easing (which the FED has been doing) as 'heroin' for the economy. When you pull the heroin, you will get some violent reactions. This summer may be a very bumpy ride and I expect the stock market to fall as the monetary policy ends.
1 comment:
You are preaching to the choir. There is NO economic growth without massive deficit spending, and Fed QE. Chris Martenson has it absolutely right in his Crash Course. Exponential growth cannot continue forever, since it requires dense, cheap energy (oil) which is now at it's undulating peak plateau. There is no more growth available. Do NOT take out that next car loan. Who says you will have a job 2 years from now to pay it down with?
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