A simply unprecedented miss in Q2 GDP well below the consensus range, with the official number printing at 1.3%, giving it upside room for revisions in case QE3 does not pass, although at this point it is more than obvious that this number is goalseeked to give Bernanke the carte blanche to start more easing any second. This number follows an epic revision to prior data, with Q1 plunging from 1.9% to 0.4%. The GDP internals were simply appalling: Personal Consumption tumbled from 2.1% to 0.1%, on expectations of 0.8%! The US consumer is dead despite not paying mortgage payments. Lastly, US PCE Core printed at 2.1% on expectations of 2.3%. As we have been expecting since December, the US is on the verge of a triple dip recession within the bigger depression. With a deadlocked Congress, the Fed has no option but to do another monetary stimulus as seen by the surge of gold to near record highs on the data in the $1.625 range and the implosion in the USDCHF to fresh all time lows.
I have a mediation at 10:00 am today so that gives me time to watch the mainstream media tools panic as the status quo is not working. I'm surprised to see that Congress STILL hasn't passed a debt ceiling raise after all this time. I still hold the view that something will be passed, especially in the event of a nasty market crash which will strike fear in the hearts of the congress critters. Still, the damage has been done as the US "political risk" has risen. As I stated before, if you think this debt ceiling debate was bad just wait until the next one and the following one. It surely is difficult running a country in contraction mode.
CNN is on full retard fear mongering mode as they are desperate for something to pass. I keep hearing them saying "that we need the house vote so that the senate can reject it and vote their own bill and then the real negotiations can begin." It's all politics and CNN's fear is that the longer this fiasco goes the worse Obama's re-election chances become. And at this point it's safe to say that Obama's 2012n big is looking dicey. Not that it really matters at this point who is in the presidency as the math is undeniable: the ponzi will eventually fail.
Back to the GDP numbers the 1st quarter final print of .4% is absolutely terrible. Watch the wall street groupthink brigade begin to downgrade the second half of the year as consensus has been for 3% growth. Yeah good luck with those numbers. You see, a GDP miss simply equates to larger deficits as assumed future government revenues are dependent on economic growth. And with the economy in stall mode despite the government borrowing over 11% of GDP, it simply shows that debt saturation is here. There is no way out of this other than default, whether it be by deflationary forces or inflationary forces. And never in the history of the world has a government been taken down by deflation. When push comes to shove, the path of least resistance is print print print. And print is exactly what they will do as the federal reserve is already on standby waiting to flood the world with more digital dollars.
In conclusion, for those out there that are in my generation (aged 28) these are the cards that we have been dealt and we have no choice but to play with said cards. The entire world is in disarray as the Eurozone continues to implode and China's economic distortions are starting to show as well. Eventually the storm will pass as they all do but this crisis period could very well last for over 20 years. The current system will die and a new one will take its place. It may be a better system or a more oppressive one. Time will tell. The only thing we can do is stay informed, be prepared mentally physically and spiritually. Build your network and community. Stay strong. Lose weight and cut the poison food as much as possible. Things are going to get interesting.