Societe Generale’s notorious bear, Albert Edwards, thinks the US Economy is about to implode and the FED will flood the market with another round of QE. More Fed Stimulus Coming in Inflationary Push
The first quarter U.S. GDP data was a major disappointment to the market as business investment declined due to the intensifying U.S. profits recession. Only the biggest inventory build in history stopped the economy subsiding into a recessionary quagmire. Sales are declining on a year-over-year basis, but we are assured this is due to the cold weather. But if it is not, and sales do not surge in coming months, then the economy is heading into recession. GDP would have fallen 2.5 percent since December without inventory growth”, Edwards said.
I couldn’t agree more. So much so that I continue to maintain that we are in a stealth recessionary mode. Meaning, take away zero interest rates, QE and asset speculation, and you will find the US Economy in a full blown recession.
I would also agree that the FED will flood the market with another round of QE and cut interest rates (after they raise it). With that in mind, it is all about timing at this stage. Before they can do any of the above three things must happen. 1. They must raise interest rates. 2. The stock market must decline and 3. The US Economy must slip into an official recession. For now, they reload.
Why The FED Will Raise Rates Before The Next Round Of QE Google