I have had a few folks wonder why I am going along with the Federal Reserves’ prediction of real GDP coming in at an annual rate of 2.7% for 2018. I have been very bullish on all things that are related to our President’s agenda. However, I have learned a valuable lesson when it comes to GDP. Our Economy is absolutely booming. There is no questioning that. Consumer Confidence, Small Business Confidence etc. are at all-time highs. Americans are willing to spend more. We saw that during the Christmas Season.
However, what I described above drives the import versus export wedge even wider (NEGATIVE). Keep in mind that the deficit from imports versus exports is completely subtracted from real GDP.
The 4th Quarter is a perfect example. Christmas shopping was off the charts compared to the previous year. Up nearly 6%. Yet the initial GDP came in at 2.6% on January 26th. On February 28th it was revised down to 2.5%. Tomorrow will be the final revision. I anticipate it staying the same.
Charles Payne and Sarah Sanders shared a tweet each that shows who benefited based on Americans spending more money.
If Canada keeps up the rate from January, the 2018 deficit with them will be $43.2 billion dollars!
The GREAT news is that Our President and his Killers absolutely understand what I described. That is why 2018 will be completely dedicated to shrinking the gap between imports versus exports. That will happen through new bilateral trade deals (KORUS yesterday), tariffs (see Charles’ tweet below) and the third component, which is the most important is countries building factories and making devices in our country. Sundance shared what India plans on doing with their $500 million dollar investment in a thread last night (see below).
Charles Payne just shared the tweet below about what China is planning on doing for the first time!
Another person shared the following graph below! We are truly on the cusp of an Energy Explosion that will rock the entire world. We currently have only 1 LNG Terminal in the USA. Look what will happen prior to 2020:
The Department of Energy shared this tweet earlier today. If we are at 4x the amount of LNG exports from the previous year, just think where we will be in 2020!
Folks we are absolutely WINNING! By 2019 and 2020, we will see real GDP annual rates that will blow the lid off of the naysayers. Sit back and enjoy the ride!