The Bureau of Economic Analysis (BEA) has released the data for the second quarter of 2019.  The Q2 GDP growth rate of 2.1 percent beat all economic expectations, and highlights strong consumer spending throughout the U.S. economy.

The two primary drags on the Q2 release are also the most volatile: Export/Import contributions (-.65%), and Inventory contributions (-.86%) [table 2]. However, consumer spending was much stronger than anticipated (+4.3%) showing the internal strength of the U.S. labor market and the impact of wage growth which still exceeds 3.6 percent.
The inflation index is still low at 1.5 percent year-over-year, and highlights a point all economic pundits overlook.  With countries attempting to stop the impact of tariffs on their exports they are devaluing their currency (EU and China) and subsidizing their export industries (China).  This has the cumulative effect of lowering their price. As a consequence, and with a strong dollar, the U.S. is importing deflation.
The Fed can do nothing of substance to impact low price inflation because the causes are external to the U.S. economy.  CTH predicted this in 2016, and we stand by that assertion today because we now have almost three years of empirical data to prove it.
Wall Street wants bad news because Wall Street wants a lower fed rate.  As a direct consequence Wall Street’s multinational corporate media bias over the GDP data release is hilarious. The headline from NBC is typical: “Economic Growth Slows Less Than Expected in Second Quarter”….    Sometimes you just have to laugh.
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President Trump has tweeted support for an American artist A$AP Rocky after Swedish authorities file formal charges which may result in a two-year prison term.
It seems remarkable that a street fight, which did appear to be validly self defense, could result in such a serious situation for this young American musician. President Trump has attempted to help the artist who remains in detention, and expresses disappointment in the status.

ABC News – Rapper A$AP Rocky was charged with assault in Sweden on Thursday over a brawl in the streets of Stockholm on June 30, according to prosecutors.
“I have today commenced criminal proceedings against the three individuals suspected of assault causing actual bodily harm, having come to the conclusion that the events in question constitute a crime and despite claims of self-defence and provocation,” said public prosecutor Daniel Suneson, of the City Public Prosecution Office in Stockholm.

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This is funny.  No, really, it is actually funny.  Yesterday the International Monetary Fund (IMF) revised its outlook of the global economy.  If you read the IMF prior “dire forecast” from July 17th –yes, only a week ago– you’ll discover the humor aspect.
The IMF is now upgrading their forecast of U.S. economic growth; and admitting -in essence- that President Trump’s America-First agenda is relocating global wealth back to the primary host nation known as the U.S.A.   The increase in their forecast isn’t a small increase, it is essentially adding .3 percent (from 2.3% to 2.6%) or $60 billion more.

However, you’d have to go through two-thirds of the Reuters press coverage of the IMF release; and plow through a littany of doom and gloom; before you found this obscure reference: “The IMF raised its forecast for U.S. economic growth to 2.6% in 2019, but left its 2020 forecast for 1.9% growth unchanged.”   Apparently the economic team at Reuters has a sad… harrumph!
Even the Washington Post, despite their earnest efforts, couldn’t actually put a negative spin on the new IMF projection:
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Boris Johnson has succeeded in beating his nearest rival Jeremy Hunt for leadership of the conservative party in the U.K. thereby becoming the next Prime Minister. One of the priority challenges for Prime Minister Johnson will be navigating a successful Brexit.

A full three years after the British electorate voted to leave the European Union, the elites in Britain have continued to stymie the referendum in their effort to remain attached to the communal values of the collective society.  Thus gave rapid rise, recently, to the Brexit Party as a national force led by Nigel Farage.  It’s the UK version of ‘deplorables’ vs ‘elites’.
The British Parliament is filled with elected members who stand in opposition to the majority of the British citizenry.  It is amid this professionally political and elitist disconnect that Boris Johnson must now attempt to deliver Brexit, while the purchased politicians of both institutional parties will oppose his effort. [Sound familiar?]
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At first blush this story is just odd.  A U.S. rap star has been held in prison for two weeks following a fight in Stockholm, Sweden.  Various people, including celebrities, have reached out to the White House and President Trump for help.  According to one report the administration was able to gain better holding conditions, but the entire story is weird.

Apparently the young American musician was stalked by a group prior to a concert, and a physical confrontation started.  Mr. Rocky’s (aka Rakim May) lawyers say the artist acted in self defense, apparently Swedish authorities consider the event very serious.
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Earlier today President Trump and Vice-President Mike Pence together with their spouses, participated in a presentation ceremony with Dutch Prime Minister Mark Rutte.  The Dutch delegation delivered a U.S flag from D-Day to be displayed at the Smithsonian.
During the event President Trump announced a U.S. military defensive action that resulted in the destroying of a hostile Iranian drone. [Video and Transcript Below]

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[Transcript] – THE PRESIDENT: Thank you very much. Thank you. Before I begin, I want to apprise everyone of an incident in the Strait of Hormuz today involving USS Boxer, a Navy amphibious assault ship. The Boxer took defensive action against an Iranian drone, which had closed into a very, very near distance, approximately 1,000 yards, ignoring multiple calls to stand down and was threatening the safety of the ship and the ship’s crew. The drone was immediately destroyed.
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Earlier today President Trump and Dutch Prime Minister Mark Rutte held a press availability prior to bilateral discussions.  [Video and Transcript]

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[Transcript] – PRESIDENT TRUMP: Thank you very much, everybody. It’s a great honor to be with the Prime Minister of the Netherlands. We’ve become friends over the last couple of years.
PRIME MINISTER RUTTE: Absolutely. Yeah.
PRESIDENT TRUMP: We’ve had a lot of good conversations. We’re dealing on trade, we’re dealing on military, we’re dealing on intelligence. And the relationship has never been better.
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Excellent interview by Charles Payne as White House Manufacturing Policy Advisor Peter Navarro outlines how the strategic road map of MAGAnomics is converging.  If you want to see the future, listen to how Navarro outlines what’s coming.
The six MAGAnomic components to pay attention to include: ♦changes to the Universal Postal Union (UPU); ♦HUD Opportunity Zones; ♦America First raw material policy for infrastructure; ♦retail sales strength; ♦the current status of the U.S-China negotiations; and ♦the USMCA ratification.

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♦The UPU was one of those archaic policy issues set-up with good intentions, and then maintained by ‘stupid’ politicians well after it should have been renegotiated.  It’s good to hear that mess is coming to an end in October.
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An article from Reuters discussing the position of the International Monetary Fund (IMF) is interesting.   Essentially the IMF is warning that “global economies” will contract by $455 billion next year due to the ongoing trade conflict between the U.S., China, the EU and to a lesser extent, Japan.  Yes Alice, there are hundreds of billions at stake.
There’s really no reason to doubt the amount estimated, though I think it’s on the short side, but the yearly value seems in line.  I have no doubt President Trump will cost the “Global Economy” $455 billion…. because that money will be transferring back to the America First economy. That’s what happens as MAGAnomics reverses the IMF trade (wealth distribution) model.

The IMF is correct in part (the effect), incorrect in part (the cause), and mostly hypocritical.  The Euro-minded IMF rails against the high value of the U.S. dollar, but simultaneously ignores the motives behind the intentional devaluation of currencies that are pegged against the dollar.

WASHINGTON (Reuters) – The International Monetary Fund said on Wednesday the U.S. dollar was overvalued by 6% to 12%, based on near-term economic fundamentals, while the euro, the Japanese yen and China’s yuan were seen as broadly in line with fundamentals.

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Last weekend the Daily Mail reported U.K. Ambassador Kim Darroch leveled personal insults against President Trump, the White House and positions the British felt were adverse to their interests in a series of memos dating back to 2017.  Today President Trump responded:

According to additional media reports, British trade minister Liam Fox will apologize to the administration for the inappropriate commentary.

“I will be apologizing for the fact that either our civil service or elements of our political class have not lived up to the expectations that either we have or the United States has about their behavior, which in this particular case has lapsed in a most extraordinary and unacceptable way,” Fox said on BBC radio. (link)

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