The Fix Is In. Government to Rig GDP Again. – Ep. 84

  • Earlier today latest FOMC minutes released
  • Once again the weather is blamed for missed expectations, pretending the economy is better than it is
  • Now the Fed dismiss numbers as inaccurate, because seasonal adjustments are off
  • Why does the government need to seasonally adjust the numbers
  • Yearly GDP is the number that matters
  • Once the numbers begin adjusting the numbers you open the floodgates to manipulation and subjectivity
  • Wall Street analysts tend to be more optimistic for the first quarter
  • Studies show that Consumers spend most money in Q4; by the following Q1 consumers are taking a break
  • Same studies show Q2 is usually stronger
  • Why does the government have to come back with a new GDP measurement in order to come up with a bigger number?
  • To come up with low unemployment numbers they find ways to under-calculate the unemployed and count under-employed
  • Analysts are discounting weak data and expecting eventual rate hikes
  • The Fed is denying the weak economy not because they want to raise rates, but because they can’t admit that their monetary policy has failed
  • Mixed economic data came out this week
  • Housing Market Expectation Index dropped from 56 in April to 54 in May – missing estimates for fifth time in 6 months
  • Housing Starts surged to 6 or 7-year high
  • Lingering optimism for a recovery
  • Walmart came in far below estimates, attributing miss to the strong dollar
  • Walmart is a net importer, so the strong dollar should work in its favor
  • Big drop in gasoline prices in Q1 did not provide a boost for Walmart because the underlying economy is weak
  • Los Angeles is the largest city in the country to pass the $15/hr minimum wage
  • They staggered the increase over 5 years, so adverse effects will not be directly attributed to those who voted for the increased minimum wage
  • It will be difficult to measure decisions not to hire as a result of the minimum wage
  • The $15/hr minimum wage makes it illegal to hire low-skilled workers for less, preventing them from gaining skills in order to earn more later
  • We’re hiring at Schiff Gold – If you are interested contact Matthew Malleo 800-465-3160