2Q GDP Data Will Be Inflated By Stimulus Checks
Aug 25th, 2008 | By Chuck Butler | Category: Politics & EconomicsThe Daily Reckoning’s currency expert Chuck Butler says America’s Q2 GDP data will likely give the US dollar a boost. But the figure will be artificially boosted by the stimulus checks handed out during this period. Chuck says misleading data cannot hide the fragility of the U.S. economy..
Later this week, we’ll see the first estimate on 2nd QTR GDP, and I’m sure that the pundits that don’t know dookie will be out in force spouting off about the recovery in the U.S. economy and that there is no recession. Let me be the first to say HOGWASH! 2nd QTR GDP will have been inflated with the stimulus checks, it’s that simple!
But look for some dollar strength until the calmer heads prevail on Wednesday when that data prints.
Later in the week, as we all get ready to celebrate the 3-day Labor Day Holiday weekend, we’ll see the Personal Income and Spending data for July… I had a reader tell me I didn’t know what I was talking about when I say that we spend more than we make…
By the end of the week, the markets will be quite confused, as there will be plenty of negative data to deal with, but also that 2nd QTR GDP that will confuse the folks… I’m sure of that!
As Milton Friedman once said, “If you let the government run the Sahara Desert, soon there will be a shortage of sand.”
I just love that thought by Milton Friedman! And it is so apropos for this day and age, eh?
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Chuck Butler, is the author of The Daily Pfennig, which is republished at The Daily Reckoning. His respected analysis is frequently quoted in or referenced by: the Wall Street Journal, U.S. News and World Report, CBS Market Watch, USA Today, CNNfn, the Chicago Tribune and many other publications.
