About this episode
* Another week and another round of bad economic news * Wall Street may be finally paying attention * JOLT Report projected at 5.158 million; came in at 4.994 million * April Retail Sales expected to rise .2%; came in flat * X Automobiles expected an increase of .5, actual number was .1 * Beneath the surface there was a collapse in retail sales in all areas except groceries * Weakest year over year increase in retail sales since 2009 * Department Store Sales experienced the biggest drop since January 2014 * A look beneath the headlines of the jobs numbers reveals that the jobs are not good jobs * The Birth/Death Model assumption added 175,000 jobs to the last jobs report * These numbers came from a biased source * The fact that there is no spending is evidence that the job market is not as robust as the numbers claim * Jobs numbers can be made up but retail sales can't * Wall Street is surprised that we have weak data because they believe we are experiencing job growth * March Business Inventories up .1% versus expectation of .2% * February Business Inventories was revised down from .3% to .2% * I estimate that Q1 GDP will contract by greater than 1% * The Atlanta Fed just revised down their Q2 GDP estimate to .7, which would indicate the U.S. economy contracted for the first half of the year * The Fed is still looking for 3% rise in GDP for 2015, which would mean we would need growth of 6% for the last half of the year * It is more likely that we will get a negative number again for Q2 * Two consecutive contracting quarters will indicate an official recession * If we are in a recession, the Fed will not raise rates and is more likely to respond with stimulus * I predicted that a pause in QE3 would trigger another recession * When the Fed is unable to raise rates to stimulate the economy, the only trick they will have up their sleeve will be QE4 * When that happens, the moves we saw today in the FOREX and Precious Metals markets will look tame by comparison * The dollar has already broken its uptrend * Europe, with the exception of Greece is experiencing growth in GDP, and Great Britain is doing better than Europe, because they shrunk their government instead of applying stimulus * What we are going to get next is old-fashioned Keynesian, pump-priming stimulus * Will that give us economic growth? Not a chance. * The last three rounds of QE didn't give us economic growth and neither will the next one * It may blow more air into the stock market bubble, but the air is going to come out of the dollar bubble even faster * Where is the Fed's balance sheet going to be at the end of QE4? It is 4.5 trillion right now. * How can anyone possibly believe Janet Yellen when she says she is going to shrink the balance sheet? * Are creditors are going to get wise and there is going to be a run on the dollar * You can see the beginnings of it today * The dollar was down across the board * Gold was back to about $1,250; every time it gets to this level it gets knocked down by short-sellers, but eventually they are going to have to give up * All this bad economic data is going to sink in * It is not the weather * The market still has to adjust for the reality that the economy is really weak * The Fed will not admit that QE didn't work, so in the face of recession they will have to do it again Our Sponsors: * Check out FRE and use my code LISTEN20 for a great deal: https://frepouch.com * Check out Infinite Epigenetics: https://infiniteepigenetics.com/GOLD * Check out Justin Wine and use my code SCHIFF20 for a great deal: https://www.justinwine.com Privacy & Opt-Out: https://redcircle.com/privacy