Close X Cookies are necessary for the proper functioning of By continuing your navigation on our website, you are accepting the use of cookies.
To learn more about cookies ...
In the same category

GDP data shakes confidence

IMG Auteur
Published : February 01st, 2013
360 words - Reading time : 0 - 1 minutes
( 0 vote, 0/5 )
Print article
  Article Comments Comment this article Rating All Articles  
Our Newsletter...
Category : Crisis Watch

24hGold - GDP data shakes conf...Wednesday afternoon’s Q4 GDP number was a shock for markets, though less surprising to those of you familiar with our views. Falling business inventories, reduced exports and a 22.5% quarterly drop in defence spending pushing the GDP change into negative territory (-0.1%) for the first time since the country emerged (technically) from recession in 2009. Yesterday’s larger-than-expected rise in unemployment benefit claims also hurt sentiment, though owing to seasonal factors, January can see unusually large fluctuations in this particular data set. Today’s nonfarm payroll numbers – released at 1.30pm GMT (8.30EDT) – will be watched with interest for further signs of economic deterioration.

Despite the dollar being hit by this news – the Dollar Index falling below 79.00 and grinding towards the bottom of its recent trading range – there was no big bullish reaction in precious metals. Gold rose to $1,680 immediately following news of the Q4 GDP decline, but again encountered stubborn resistance that resulted in it falling straight back to $1,650. Silver remains trapped below $32.50, while the weak data has temporarily at least thrown a wrench in the rally we were seeing in platinum, palladium, and other industrial commodities.

The GDP “surprise” should not have been a shock to anyone familiar with the structural problems afflicting the US economy – problems common to many other developed countries. Simply put, for a long-time now GDP has been made to look good by increasing government spending. But of course, as James Turk points out in this Free Gold Money Report article, governments do not create wealth; they consume it. Steady increases in government’s share of the national economy represent an increasing squeeze on the private sector, which translates overtime into a weaker and weaker economy – as the private sector is what creates wealth.

24hGold - GDP data shakes conf...

This isn’t to say that some government spending isn’t needed or worthwhile. But the simple trade-off described above needs to be understood if you want to gain a clear understanding of why the West is in the economic mess it’s in, and one of the main reasons why – as far as central banks are concerned – continued money printing is a political necessity.

Thanks to Goldmoney from
Companies Mentionned : Metals X |
<< Previous article
Rate : Average :0 (0 vote)
>> Next article
Latest comment posted for this article
Be the first to comment
Add your comment
Top articles
World PM Newsflow
Mining Company News
Tribune Res.(Ag-Au)TBR.AX
Notice of Annual General Meeting/Proxy Form
AU$ 4.05-1.22%Trend Power :
Corporate news
Black HillsBKH
3:41 am Black Hills Corp raises its FY15 EPS guidance
US$ 43.33-1.23%Trend Power :
Corporate news
Goodrich Petroleum(Ngas-Oil)GDP
Goodrich Petroleum Announces Private Exchange Transactions for Convertible Senior Notes
US$ 0.82+1.23%Trend Power :
Corporate news
Carmanah Tech CorpCMH.TO
Carmanah Releases Preliminary Financial Results for Q3 2015
CA$ 6.01+2.04%Trend Power :
Corporate news
Black HillsBKH
Black Hills Corp. Raises 2015 Earnings Guidance and Announces Analyst Day Presentation Topics
US$ 43.33-1.23%Trend Power :
Corporate news
Impact Silver(Ag-Au-Cu)IPT.V
IMPACT Silver Provides Update on New Capire Mineral Resource Study
CA$ 0.18+16.13%Trend Power :
Corporate news
Bankers Petroleum(Oil)BNK.TO
Edited Transcript of BNK.TO earnings conference call or presentation 7-Oct-15 12:30pm GMT
CA$ 2.44-6.87%Trend Power :
Corporate news
Cheniere Energy(Oil)LNG
LNG Bust Could Last For Years
US$ 53.04-0.47%Trend Power :
Corporate news
Callon PetroleumCPE
4:18 pm Callon Petroleum announces that the borrowing base under its senior secured revolving credit facility was increased by 20% to $300 mln
US$ 8.86-3.90%Trend Power :
Corporate news
Callon PetroleumCPE
Callon Petroleum Company Announces 20% Increase in Borrowing Base
US$ 8.86-3.90%Trend Power :
Corporate news
Comments closed