Brahmason's Blog

In our post of April 1st "USA Economy showing promising signs" we praised USA companies for their investment in employment and inventories and postponed our conclusions till trade gap and consumption would be published this quarter .

The data is indeed very poor as consumption halfs as regards previous indicator , growth reduces to 1.8 % and inevitably trade gap deficit increases as imports to feed inventories increased and found no adequate response in consumption .

The frustration shows better in the increase of unemployed asking for subsidies which mounts up to 429.000 with an average of 408.000 per week during last four weeks . This is real bad because it confirms a dangerous upwards trend which would be in line with the ambiguity in Mr. Bernanke`s speech which for the sharp observer hints a future that will be far from satisfying markets . Specially if we recall that commodity prices continue showing a strong upwards trend that is becoming too much of a problem for the diminishing american average purchase power .

Stagflation is the word as we are continuously repeating , The loss of competitiveness and consequently added value of the american economy reflects in a significant loss of reachness of the USA society .

The country will have to lean on the improvement of exports helped by a lower dollar while housing bubble deflates and long term investments in added value producing companies recovers the lost pace .

By the way the gold always cool and attempt surges over 532 $ as anybody could have guessed .

Brahmason