Tuesday, December 24, 2019

A massively, dangerously distorted economy.

Even as we got strong income and spending data, another manufacturing number came in weak. The Kansas City manufacturing index charted its lowest print in four years. It was the sixth monthly decline in that index.
[Peter Schiff:] That really is par for the course. We get stronger economic data when it comes to people spending money, but we have weaker data when it comes to generating real production, real wealth, goods production, manufacturing — all that data comes out weaker than expected.”
The final Q3 GDP numbers bear this out. The headline number was unchanged at 2.1%, but consumer spending and government spending were revised up while home building, inventory accumulation, and net exports were revised down. In other words, the economy is being propped up by consumers borrowing and spending money.
[Peter Schiff:] Really, what the GDP numbers are confirming is what I’ve been saying all along – that this is a bubble economy; this is not legitimate economic growth. This is a bubble. Because the only thing that is driving that 2.1% increase in GDP is consumers spending borrowed money and the government spending borrowed money.”
This isn’t what we’re being told by the Trump administration and the financial network pundits. The “strong” economy is not about a boom in manufacturing or industry or business
[Peter Schiff:] This is old fashioned pump-primed, excess government and consumer spending.”
President Trump is wrong to hold up the stock market as an indicator of economic health. And neither he nor the Congress has a clue about economic fundamentals. The Fed failed in its role as fire brigade and just kept the party going after 2007.

America on autopilot. Like the WWII bomber pilot in the Pacific: "We're lost but making great time."

[1] "Peter Schiff: The Most Reckless Combination Of Monetary And Fiscal Policy In History." By SchiffGold, ZeroHedge, 12/23/19.

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