Weeks ago, “oracles” warned that the global financial situation deserved closer attention and that you should invest with greater caution. The latest data available has showed they have been right once again, hence their nickname. With the US GDP growth that declined at an annual rate of 0.7 percent during Q1 2015, this looks like the locomotive of the global economy has decided to stop, temporarily according to optimistic analysts, whereas the following wagons, particularly Europe, desperately needed speed. Worse this time, bad weather can’t explain what’s been wrong in the US economy and several analysts have suggested that the low GDP growth could finally be the harbinger that the quantitative easing (QE) has had far less positive effect on the real economy than expected.
Furthermore, all this may result from a deep post-2008 change in the behavior of the average US consumer who now seems to prefer saving rather than spending, making him/her an involuntary participant in a possible weakening of the US long-term economic recovery as envisaged by the US government and the Federal Reserve (Fed). The positive cycle of growth in the real economy has yet to be started, despite all the fuel injected by these last years’ massive QE. Consequently, investors have to assess whether the poor GDP growth has translated a temporary situation or if this has been a first indication that the consequences and implications of the global financial crisis have been underestimated and that another recession – the “aftershock” – could still be starting anytime.