• 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