United States GDP (Gross Domestic Product), a Sign of Things to Come or of Things past?

Today’s United States GDP (Gross Domestic Product) report of 2.5% was nearly as expected so lower. The actual expectation was 2.6% that puts our average for the year now at 1.8%. This is not a good GDP. The United States GDP indicates what direction the country is going. It tells us whether we are growing and getting stronger or just stumbling by. Quarter to quarter it is much better but the number for the year so far tells us we have a long way to go.

The concern that should be on everyone’s mind is unemployment. The weekly figures of late have been unusable due to new reporting systems input in many states. That being said the numbers were seeing lately are still weak. The low participation rate is a very bad sign at the least.

What I’m trying to point out is that unless our gross domestic production increases and grows at a stronger rate we will decline as an economy. We need to spur job growth through innovation not through government spending. The current administration has seen it the other way around and as such has not been able to spur any growth of significance.

Meanwhile in the emerging markets China continues to grow at brisk pace. They keep trying to tweak their system in hopes of continue booming growth. Their currency stratagems, to have more direct exchange into Yuan, is certainly one of their long terms. It seems they will be successful in staying in this pattern of growth and competitive posture even with possible financial and credit hiccups. As they grow and their power for trade grows we may lose in the battle for jobs.

Innovation, inspiration, and laws supporting free enterprise are what will encourage growth in the US. At this juncture and under the current administration it is unlikely.

Included here is a chart showing the history of the gold price versus the GDP in an annualized basis. I think this slide tells the story of our current path. It appears that gold will hold onto its gains for quite some time until the United States GDP (Gross Domestic Product) truly begins to turn in the right direction.- Miguel Perez-Santalla

Best regards,

G. Miguel Perez-Santalla

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