- Is Our Economy’s Cinderella Carriage About to Turn Into a Pumpkin?
by Charles Hugh Smith, http://charleshughsmith.blogspot.ca/
The past six years of expansion have been as illusory as Cinderella’s magic carriage.
The clock is about to strike midnight, and our Cinderella economy’s magic carriage will revert to a pumpkin. The magic of the Federal Reserve’s flood-the-fields policies of zero interest rates (ZIRP) and liquidity (via quantitative easing (QE) and other programs) had an expiration date of December 2014, judging by the negative gross domestic product (GDP) in the first quarter and the deep slump in corporate profits:
U.S. GDP falls 0.7%
U.S. corporate profits sink 5.9%, biggest drop since 2008
There are many other indications that the Fed’s magic has worn off: new orders are slumping, for example: