It is interesting reading. The US doesn't appear to be collapsing. Far from it.
So the question is whether this growth is likely to push the US towards labour capacity constraints that might cause wages to rise, producing some demand inflation and justify interest rate increases by the Fed? Will this inflation (if it eventuates) justify buying gold?
There are a few problems with that that we have already discussed:
- Very low inflation base
- Low labour participation rate
- High levels of under employment.
And this is also where wealth distributions comes in. Who is benefiting from this increase in national income? American workers who spend a high proportion of their income on goods and services, or America's wealth who are likely to save or invest this addition their already ample financial resources? (The fact that it is the second is at the core of why I think that raising US rates is a really bad idea, and why those who are calling for it are deeply conflicted.)
Afterthought: Increasing corporate profits make the recent sell off look like manna from Heaven.
