Rick Santelli: GDP Numbers Are “Depressingly Weak”

There’s the Obama recovery for ya….

CNBC has more on the math.  So what’s the problem here?  Three things:

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2.  Household income is depressed, and many are still paying down (or paying off) credit cards.  Keep this in mind as well: the economic downturn is a credit crisis — it’s not a banking crisis or a housing crisis or a jobs crisis.  Until Americans feel comfortable spending 120% of their income again (that’s a bit too hot — but you see where I’m driving at) then the economy is not going to come roaring back to life.  Americans will spend what they have… and not what they might earn tomorrow.

3.  The Fed keeps digging the hole deeper.  Inflationary pressures are going to crush savings and 401ks unless the economy roars back to life.  So long as we keep printing money, there is less incentive for businesses to invest… because whatever the shortfall, the Fed will simply recapitalize through the printing press — which has now become more profitable (?!) than actually doing business in America.

This is why businesses are caught in a bit of a Catch-22.  Banks have the money, but they are unwilling to lend.  Small businesses see opportunity, but they don’t have the capital to chase it.  Homeowners want to go and spend, but they don’t have the credit or confidence to invest in their households.

Meanwhile, QEnfinity subsidizes the problem so that banks and businesses don’t have to choose, and #2 postpones #1 from making a decision about the federal budget… which invariably creates the conditions in #3.

…thus the Obama economic recovery continues.

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