Do 18M unemployed people care what our GDP is?

Things that are not good forr consumer confidence are not good for retail sales BUT today we will be looking at a very positive slice of the year in Q3, when we had Cash for Clunkers and we had housing stimulus and the stock market rose 20% while the dollar fell 7% and the Fed gave free money to the banks and IBanks, which drove many of them to record profits. Our corporations are reporting a Q3 that is much improved over Q2 because global stimulus is pumping money in and, thanks to the plunging dollar, they are paying the American workers they have left 15% less than they did last fall. That’s right suckers - you accept pay in dollars and you are not even smart enough to do what Europeans learned to do long ago - ask for currency-adjusted wages!

The farce in this earnings quarter is you have S&P 500 companies who collect 50% of their revenues overseas paying their American laborers in crappy US dollars. PRESTO - instant 15% "efficiency" savings on real labor costs. Companies have cut back on most capital spending so when you see companies telling you how well their cost-cutting program is going, keep in mind that they laid off 10% of their workers and are paying the remaining 90% just 85% of what they were getting last year when measured in any major currency on the planet except the Dollar and the Yuan.

What will happen when/if the dollar gets expensive again? Most companies have already stripped fixed costs to the bone. If they are forced to come up with 15% more net currency to pay their workforce, the only solution is to lay 15% of that workforce off. That’s why the Fed is in a weak-dollar trap. They probably sit at the table each day and try to come up with more dumb things to say to make sure no one accidentally wakes up one morning and decides to buy dollars. We don’t have a strong dollar policy - we have a weak dollar prison!

-Phillip Davis

I think this is right. Good article Mr Davis !