John Williams of ShadowStats.com shares Peter Schiff’s expectation of a new round of quantitative easing from the Federal Reserve. Williams believes the United States economy is slowing down and headed into another recession. He sees inflation rising in the coming years as the markets realize that the Federal Reserve is incapable of actually helping the fundamental economy. In this interview with Greg Hunter of USAWatchdog, Williams explains and defends his reasoning.
Highlights from the interview:
“The GDP number comes out in 3 estimates. The first one, which is the advanced estimate, the one that came in at 2/10ths of a percent, the Bureau of Economic Analysis is guessing at. They tend usually to try to target whatever the consensus is looking at. Well, the consensus forecast was looking at 1% growth. Keep in mind that the general consensus forecast, the people who make those forecasts are employed by Wall Street. Their firms need positive news… So they’re very slow to catch downturns in the economy. It’s unusual that the GDP growth estimate would be so much weaker than the consensus. That was a signal from the Bureau of Economic Analysis to the consensus: ‘Hey guys, the economy in the first quarter was a lot weaker than you thought it was.’ …
“What we’re seeing now is that the outlook for the second quarter is not only weak, but it’s also going to turn negative. Two consecutive quarters of retracting GDP gives you a recession. What I’m looking at here is come sometime between now and July 30th, when they first estimate the second quarter GDP that the markets are going to be looking at a new recession. You’re going to see a lot of numbers in the weeks ahead — retail sales, industrial production, housing. We have a full quarter’s worth of reports ahead. The monthly numbers will tend to be weaker than people are looking at, and it will move the forecast for the second quarter down…”
