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Fed’s GDP and Unemployment Projections: Who Believes Them?

Summary:
Eddie_T2 daysI'll always take the under on GDP. That's a no-brainer in a low-growth world. On unemployment.....I have faith in the ability of the BLS to fake it. Remember how they gamed unemployment numbers post 2008? The numbers kept looking better and better, even when the real unemployment rate was north of 13%. My guess is that the pandemic will do way more to push people into retirement than the 2008 crash. Not just people who who work for wages either. On inflation....the metrics have been so amended as to produce a useless number. It begs the question.....if the cost of food and housing and insurance keep going up precipitously, will it matter to most of us regular people whether the Fed says inflation is 1%, 1.5%, 2%?......We still have to hedge. We hedge for real inflation, not

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Eddie_T

I'll always take the under on GDP. That's a no-brainer in a low-growth world.

On unemployment.....I have faith in the ability of the BLS to fake it. Remember how they gamed unemployment numbers post 2008? The numbers kept looking better and better, even when the real unemployment rate was north of 13%. My guess is that the pandemic will do way more to push people into retirement than the 2008 crash. Not just people who who work for wages either.

On inflation....the metrics have been so amended as to produce a useless number.
It begs the question.....if the cost of food and housing and insurance keep going up precipitously, will it matter to most of us regular people whether the Fed says inflation is 1%, 1.5%, 2%?......We still have to hedge. We hedge for real inflation, not Fed targets, right?

Does it matter that the velocity of money is falling right through the floor? That chart looks pretty ugly.

The Fed is playing a game of musical chairs......low interest rates keeps the asset bubbles inflated and the music playing. If it stops, bad things will surely happen.

Mike Shedlock
Mike Shedlock (Mish) is a registered investment advisor representative for SitkaPacific Capital Management (http://www.sitkapacific.com/). Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.

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