The U.S. Economy is Built on Papier-mâché and Politicians’ Promises

This article was published by The McAlvany Intelligence Advisor on Wednesday, November 1, 2017:

What a perfect definition of the American economy! Papier-mâché is defined as a “composite material consisting of paper pieces of pulp, sometimes reinforced with textiles, bound with an adhesive such as glue, starch, or wallpaper paste.” Add in a dose of political promises that everyone knows cannot be kept – not even close – and we have the American economy.

From a distance it looks pretty good. More than pretty good: to the untrained eye the American economy is setting world records, to wit:

–      Gross domestic product (GDP) just put in its best six-month performance in the last three years, growing above three percent on an annualized basis from April through September;

–      Spending on mining, oil, and gas exploration and new well development grew at a 21.7 percent rate in the third quarter, overcoming the negatives imposed by Hurricanes Harvey and Irma;

–      It took the economy just six weeks to recover from those hurricanes;

–      New and continuing claims for unemployment insurance has just fallen to levels not seen since 1973;

–      Investor sentiment has traded above its historical average six times already this year;

–      Consumer sentiment just hit a 13-year high;

–      Consumer outlook vaulted to its highest level since January 2005;

–      Business inventory growth is setting records in anticipation of a blowout holiday season;

–      The Dow (Dow Jones Industrial Average) popped 4.2 percent in October, the third time this year it has hit or exceeded that number;

–      The Dow, the S&P 500 Index, and the NASDAQ are all up 25 percent, 20 percent, and 27 percent respectively since Trump won the presidency last November;

–      631,000 people are now working in the U.S. economy who weren’t working in January;

–      A record 154.3 million Americans are working, the sixth record since January;

–      The National Federation of Independent Business (NFIB)’s Small-Business Optimism Index just touched 105.3, the highest seen since 2006, and is 11 percent higher than the week before the election; and

–      The economy is enjoying the removal or rollback of more than 860 Obama-imposed regulations by the Trump administration, with more to come.

Even Mark Zandi, the chief economist at Moody’s Analytics, has been fooled: “We are at full employment and we are in full swing. Let the good times roll!”

Goldman Sachs added that, at least for the next two years, the U.S. economy is slated to grow at better than three percent a year. No other American banking or investment firm can be found to disagree: none are predicting a recession or even a slowdown.

The only naysayer that can be found is in France! The French bank Natixis, a giant corporate and investment banking firm headquartered in Paris with nearly a trillion dollars under management, ventured the only negative on the U.S. economy: “The U.S. economy will in all likelihood slow down substantially: there is a limit to the rise in the participation rate and the employment rate … investors should therefore prepare for the consequences [including] a market sell-off.”

There are plenty of risks, despite lack of coverage of them by the mainstream media: there’s the insane infant running North Korea, playing with his nuclear-tipped missiles. There are the Iranians determined to become a nuclear power and the prime hegemon in the Middle East. There are the Soros-funded “rent-a-mobs” being shipped from hot spot to hot spot to wreak havoc in their quest to create anarchy and distrust of local police. There’s the towering national debt – not the $20 trillion that most in the media acknowledge but the $200 trillion debt estimated by the Boston University professor who uncovered the bookkeeping shenanigans used by Washington economists to come up with the lower number. There’s the $4 trillion on the Federal Reserve’s balance sheet that’s making its “experts” so nervous they want to offload it onto the U.S. treasury market.

It’s a papier-mâché economy, run by Keynesian fascists who think they know what they are doing, overladen with political promises that can’t be kept. Other than that, the economy is just going along swimmingly.

Sources:

What is Papier-mâché?

The Wall Street Journal: Surprise! The Economy Is Beating Forecasts Again

MarketWatch.com: Dow jumps 4.2% in October, powered by Intel, Microsoft and Wal-Mart

CNBC.com: Get ready for a ‘substantial’ slowdown in the US economy, investment bank predicts