• 8 hours Why The Gold Rally Flatlined
  • 14 hours The Uranium Sector Can’t Catch A Break
  • 1 day Upcoming Fed Meeting Has Investors On Edge
  • 2 days Global Gold Sector Outlines Responsible Mining Principles
  • 2 days China’s Giant Vampire Fund Loses $120B
  • 3 days McDonalds To Roll Out Robot Drive-Thru Clerks
  • 3 days Savvy Investors Are Betting Big On This Little Data Company
  • 3 days How The Government Is Wasting Tax Money This Year
  • 4 days Supply Concerns Halt Expansion On Tianqi Lithium Plant
  • 4 days The World’s Biggest IPO Is Almost Here
  • 4 days The Relatively Of Money And Happiness
  • 5 days Wall Street Unfazed By Recession Fears
  • 5 days SoftBank Urges WeWork To Pause IPO Plans
  • 5 days Anti-Aging Market To Hit $55 Billion
  • 6 days JPM, Morgan Stanley Take Advisory Roles In Aramco IPO
  • 6 days Are Bonds In A Bubble?
  • 6 days The Unknown Media Giant Taking The World By Storm
  • 7 days From Millennial To Millionaire With One Simple Trick
  • 7 days The 5 Most Expensive Art Pieces Ever Sold
  • 8 days Are Gold Stocks Overbought?
The Problem With Modern Monetary Theory

The Problem With Modern Monetary Theory

Modern monetary theory has been…

Billionaires Are Pushing Art To New Limits

Billionaires Are Pushing Art To New Limits

Welcome to Art Basel: The…

Zombie Foreclosures On The Rise In The U.S.

Zombie Foreclosures On The Rise In The U.S.

During the quarter there were…

John Rubino

John Rubino

John Rubino edits DollarCollapse.com and has authored or co-authored five books, including The Money Bubble: What To Do Before It Pops, Clean Money: Picking Winners…

Contact Author

  1. Home
  2. Markets
  3. Other

Atlanta Fed Sees Far Weaker Than Expected Q1 GDP

Another Monday, another set of "surprisingly" bad economic numbers. A few representative headlines:

China manufacturing prices decline for 18th straight month
Oil prices fall 5% on bad China data, OPEC uncertainty
Global factories parched for demand, need stimulus
Junk bonds suffer a rare negative return in January
US consumer spending softens, savings hit 3-year high
US manufacturing weak again in January
China official PMI misses in January, Caixin PMI shows contraction
Japanese bond yields continue to collapse

There's more, but you get the (very dark) picture. And thanks to the Atlanta Fed's GDPNow program we can see in real time how these numbers translate into current-quarter GDP growth. Apparently the US is looking at yet another weak stretch in which economists (represented by the Blue Chip consensus) are gradually forced to admit that they've wildly overestimated our ability to manage our debt.

GDPNow

GDP growth matters for a couple of reasons. First, an economy that's borrowing a lot of money (as all the major ones are) has to generate large amounts of new wealth or it sinks ever-deeper into a hole that eventually leads to a 1930s-style depression. 1.3% growth does not come close to stopping the expansion of debt/GDP. So every quarter like the current one brings a debt-driven collapse that much closer.

Second and far more interesting in the near-term, slow-growth/high-debt countries eventually conclude that their only remaining option is massive currency devaluation. Europe and Japan are already there, and are aggressively ramping up their own currency war offensives. The US, if history is any guide, will soon (either this year or as part of the next administration's "first 100 days" political offensive) decide that a too-strong dollar is standing in the way of "progress" and will start looking for ways to devalue.

Then the real fun begins -- at least for goldbugs. For holders of dollars it won't be nearly as pleasant. Here's the Canadian version of what's coming for US investors, though the US chart will be steeper and will go on for years instead of months:

90-Day Gold Price in Canadian Dollars

 

Back to homepage

Leave a comment

Leave a comment