The talking heads were busy yesterday morning powdering the GDP pig. By averaging up the ‘disappointing’ 1.5% gain for Q3 with the previous quarter they were able to pronounce that the economy is moving forward at an ‘encouraging’ 2% clip.
And once we get through this quarter’s big negative inventory adjustment, they insisted, we will be off to the ‘escape velocity’ races. Again.
No we won’t!
The global economy is in an epochal deflationary swoon and the US economy has already hit stall speed. It is only a matter of months before this long-in-the-tooth 75-month old business expansion will rollover into outright liquidation of excess inventories and hoarded labor.
That is otherwise known as a recession. Its arrival will be a thundering repudiation of the lunatic monetary policies of the last seven years; and it will send into panicked shock all those buy-the-dip speculators and robo-traders who still presume the central bank is omnipotent.
This post was published at David Stockmans Contra Corner on October 30, 2015.
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