“The United States of America, right now, has the strongest, most durable economy in the world,” said President Obama, in his State of the Union address, on Tuesday night. What performance metrics he based his assertion on is unclear. But we’ll give him the benefit of the doubt.
Photo credit: Natacha Pisarenko / AP
Maybe this is so…right now. But it isn’t eternal. For at grade, hidden in plain sight, a braid of positive and negative surface flowers indicate an economic strike-slip fault extends below. What’s more, the economy’s foundation dangerously straddles across it.
Actually, it probably isn’t so – the Atlanta Fed’s GDP Now measure, which has proven surprisingly accurate thus far, indicates that the US economy is hanging by a thread – and the above chart does now yet include the string of horrendous economic data released since January 8.
Something must slip. A massive vertical rupture is coming that will collapse everything within a wide-ranging proximity. It is not a matter of if it will come. But, rather, of when…regardless of what the President says.
Here at the Economic Prism we have no reservations about the U.S. – or world – economy. We see absurdities and inconsistencies. We see instabilities perilously pyramided up, which could rapidly cascade down. We just don’t know when.
Comprehending and connecting the infinite nodes and relationships within an economy are beyond even the most intelligent human’s capacity. Cause and effect chains are not always immediately observable. Feedback loops are often circuitous and unpredictable. What is at any given moment may not be what it appears.
Not Without Consequences
For instance, the Federal Reserve quadrupled its balance sheet following the 2008 financial crisis, yet consumer prices hardly budged. Undeniably, the Bureau of Labor Statistics’ consumer price index is subject to gross manipulation. We’re not endorsing the veracity of the CPI.
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