We have argued, for quite some time, that the US Economy and/or economic growth is a giant Ponzi scheme perpetuated by careless FED policies and massive credit/liquidity infusion into our financial system. Take that ocean of liquidity away and you will something very ugly swimming underneath. With most of that liquidity going directly to speculation and driving most asset classes into bubble level valuations, today’s GDP growth number of +0.1% is quite shocking. Even for me.

GDP Slows to Crawl in First Quarter, Up 0.1% (Vs 1.2% growth consensus)

Understandably, most economists will blame the weather and baby Jesus for the miss, but the story goes deeper than that.  According to some GDP observers the GDP growth would have been Negative 1.0% if it wasn’t for a temporary, government mandated and massive spending triggered by Obamacare.

Wait what?!?!….Are we in a recession already?

That in itself is irrelevant. What is relevant is that the stock market is sitting at an all time highs, the FED is talking about further tightening and you are most likely fully invested in the stock market. That is what’s really important.

Further, our mathematical and timing work confirms the notions above.Liquidity party or not, it shows a severe recession within the US Economy between 2014-2017. In the past, I have argued that we will be in “an official recession” by the end of 2014 or in Q1 of 2015. By the looks of it might happen faster than I thought.

Again, the FED will be forced to keep this liquidity party going while looking at new ways to re-inflate and stabilize the markets when the bear market of 2014-2017 kicks in. Expect a flat yield curve and much lower equity prices over the next few months/years. If you would be interested in learning exactly when the bear market will start (to the day) and its subsequent internal composition, please CLICK HERE

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GDP Growth Collapses. Is The US Economy In Recession Already?  Google

Economy barely grew in first quarter

The economy grew far more slowly in the first quarter as extreme winter weather helped crimp activity.

The nation’s gross domestic product in the first three months of 2014 increased at just a 0.1% annual pace, down from 2.6% in the fourth quarter, the government said Wednesday. That’s the weakest pace since late 2012.

Economists had expected growth of about 1.1%.

Consumer spending held up well despite the adverse weather, growing at a 3% annual rate, down from 3.3% in the fourth quarter.

But business investment fell 2.1%, and spending on equipment tumbled 5.5%.

Exports declined 7.6% as growth slowed in Europe and China.

Inventories, meanwhile, were a drag on growth as businesses reduced stockpiling after aggressively replenishing shelves in the fourth quarter.

A bright spot was government spending. Federal government spending ticked up 0.7% —the first increase since 2012’s third quarter — as budget cuts eased this year. State and local government spending fell 1.3%.

Analysts say the weak showing was largely the result of some temporary headwinds, including the weather, weak exports and the reduced inventory-building.

Many economists expect growth to pick up to a 3% pace or higher the rest of the year. Housing is expected to gain more traction. Rising household wealth and falling debt should prompt consumers to step up their buying. And federal government spending cuts will be smaller this year, while state and local governments are increasing their spending as their finances improve.