Ocean of Fiat Money, Coming Right Up!

U.S. Economy Contracted In First Quarter, Latest Figures Show – Real Time Economics – WSJ

A first-quarter contraction is looking more and more likely.

A couple weeks ago, the Commerce Departmentsaid U.S. economic output expanded at a seasonally adjusted annual rate of 0.1% in the first three months of the year. A near-stall for the economy, for sure, but at least it wasn’t worse.

That initial estimate was the government’s best guess, using the data available at the time. Based on more up-to-date figures, including the March trade data released last week, private forecasters now expect gross domestic product contracted in the first quarter for the first time in three years.

Look for stocks to go through the roof as “investors” anticipate a huge new money gusher aimed at heading off the possibilities of another “recession.”  (Sneer quotes because we’ve been in a depression going on six years now).


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About Bill Quick

I am a small-l libertarian. My primary concern is to increase individual liberty as much as possible in the face of statist efforts to restrict it from both the right and the left. If I had to sum up my beliefs as concisely as possible, I would say, "Stay out of my wallet and my bedroom," "your liberty stops at my nose," and "don't tread on me." I will believe that things are taking a turn for the better in America when married gays are able to, and do, maintain large arsenals of automatic weapons, and tax collectors are, and do, not.


Ocean of Fiat Money, Coming Right Up! — 2 Comments

  1. This will take some time. First, the institutional to retail flip needs to be completed. Look for the Fed to buy some more time for that to play out, yet continue tightening monetary conditions by continuing to taper. If indeed it did contract the first revision to GDP will be over two weeks from now. That’s when the man on the street may first hear about it. Look for shills to continue to blame the weather for the first quarter contraction. Of course, the second quarter will rebound. The FedGovCo will release positive data for April, which will be revised down only in June, but then May numbers will be reported as “rebounding”. They will be revised down but not until July or August. The first actual GDP for quarter 2 won’t be released until the last day of July. It will be reported initially as an expansion and it too will be revised down, but not until August or September month end. The Fed will jawbone throughout and emphasize ZIRP will be in a place for a “long time”.

    Voila! We’re in August before retail starts to catch on. Three months easy peasy for insitututional money to cram down retail.

    Look for volatility to increase. Buy the VIX.

  2. PS All by design. In the meantime, feed ’em while they’re hungry.

    The usual bagman is left holding the bag, the smart money is out of the market and primed to pick up bargains and then the Fed will begin printing again, after retail barfs it all back up.

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