It should be noted that during Friday, all major stock markets ended the week in weekly highs in record territory. In fact, positive data on income and personal expenses helped boost the upward actions to close the week. That being the case, everyone has continued to cheer on the “strong economy”, but during his podcast on Friday, Peter Schiff said that, in truth, the US economy is the biggest bubble in history. And in fact, it is being driven by the most reckless combination of monetary and fiscal policy in history.
And it is necessary to indicate that even when solid income and expense data were obtained, another manufacturing number was weak. The Kansas City manufacturing index recorded its lowest impression in four years. It was the sixth monthly decrease in that index.
Confirming Numbers
The final GDP numbers for the third quarter confirm this. The number of headlines remained unchanged at 2.1%, but consumer spending and government spending were revised upwards while housing construction, inventory accumulation, and net exports were revised downwards. In other words, the economy is being sustained by consumers who borrow and spend money.
That being the case, one could say that what the numbers of GDP really confirm is what some have considered all the time: that it is a bubble economy; This is not a legitimate economic growth. This is a bubble Because the only thing that is driving that 2.1% increase in GDP is that consumers spend borrowed money and the government spends borrowed money.
Undoubtedly, this is an outdated and excessive government and consumer spending in the old way.
And it seems that more and more it will close this decade without a recession. Even so, it has been a decade of extremely low growth. Many decades with recessions still ended with average GDP growth higher than this. This slow growth occurs despite the fact that interest rates were lower in the last 10 years than in any previous decade. When inflation is taken into account, real interest rates were negative for much of the last decade.
So, we had a massive monetary stimulus during this decade. However, despite that, we deliver mediocre overall economic growth to low.
Source: Peter Schiff | SchiffGold
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