[M Kehoe]

Good afternoon.

The data from the Fed is in nominal, not real (index adjusted) dollars. Graph the real dollars to nominal dollars and there is a statistically significant difference. In the GDP, to the DPI. Really, the only wild card is a price index. Not much movement (inflation) in the CPI, PPI or the CPE index. None the less, the economy is not showing much growth (see last quarter).

If the Fed's QE 1-n, and near zero rates weren't there, or it's expansionary influence on M1 velocity, you wouldn't see a market at 14400, nor small growth in the housing market.

I'm not going to mention the higher taxes affecting the economy, persistent high unemployment, nor 0bamacare and all that comes with it. I'm just going to say, things aren't looking too good.

5.56mm

[Wyatt's Torch]

If the Fed's QE 1-n, and near zero rates weren't there, or it's expansionary influence on M1 velocity, you wouldn't see a market at 14400, nor small growth in the housing market.

I've posted a thousand times here that the unwinding of the Fed's balance sheet when monetary velocity improves will be challenging and the timing will be critical. the fed has done the proper thing with QE given the deflationary spiral we have been in. When it flips though they have to unwind it properly.

I assume the zero percent growth last quarter has been sufficiently explained by the thousands of economic bloggers so I'm not going to rehash something so obvious.

[Wyatt's Torch]

BTW the GDP chart I posted is real not nominal. It’s chained to 2005 $.