Ladies and gentlemen, we have reached the promise land. Apparently, at least according to the Central Office Of Propaganda And Truth, we have never had it better.
Trump’s forecast of 4% GDP growth close to coming true as Americans spend tax-bill proceeds
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Surging consumer spending is driving GDP well above prior estimates, and it is now tracking near 4 percent for the second quarter.
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That’s almost double the pace of the first quarter.
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Economists say the consumer is seeing the impact of the tax cuts and is spending, as a result of more disposable income
Damn, that sounds good. But it gets even better….
Fed is Rethinking Its Balance Sheet Unwind: Expect Lower LT Rates, Higher Gold
Four Consequences to Fed Delays in Balance Sheet Reduction
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Downward pressure on interest rates : If Fed officials do opt for a bigger balance sheet and decide to continue telling banks to prioritize cash over Treasuries, it may mean lower long-term interest rates, according to Seth Carpenter, the New York-based chief U.S. economist at UBS Securities. “If reserves are scarce right now, and if the Fed does stop unwinding its balance sheet, the market is going to react to that, a lot,” said Carpenter, a former Fed economist. “Everyone anticipates a certain amount of extra Treasury supply coming to the market, and this would tell people, ‘Nope, it’s going to be less than you thought.”’
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Upward pressure on gold
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Downward pressure on the US dollar
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More free money to banks at taxpayer expense
Still, some things are just not making any sense.
The U.S. economy is roaring, but the yield curve is flattening. What gives?
If recent data is any indication, the U.S. is on track to reap a sterling quarter of growth, but that hasn’t stopped the yield curve from flattening toward an inversion, a precursor to a recession.
What gives?
Let me attempt to dismiss this bullish narrative in one paragraph or less.
Today’s market is a speculative time bomb caused by the FED’s monetary policies. Trump’s tax cuts should be viewed as a Morphine shot to a dying and highly leveraged economy. Total S&P earnings jumped from $88 in 2016 to $110 today. Just about where they were in 2014. What growth? When you factor in the fact that most of this earnings growth came from the weak dollar, tax cuts and short-term stimulus, well, things are not looking very good.
In other words, this apparent prosperity is nothing but a giant Ponzi Scheme waiting for its day in the sun. If you would like to find out exactly when the stock market will crater, based on our mathematical and timing work, please Click Here
