David Rosenberg, Chief Economist and Strategist at Gluskin Sheff, provided his latest outlook on the economy in a Bloomberg News interview. While he acknowledged that today’s “Black Friday” shopping figures are likely to come in better than he originally anticipated, he discussed several upcoming headwinds for the U.S. economy.
When asked about his call for a double-dip recession in the U.S., he stated that it has been “delayed but not derailed.” Rosenberg noted that in the latest Fed minutes, the Federal Reserve again cut its forecast on the economic outlook, citing a housing market that remains depressed and slowing global growth.
As for the unemployment rate, he does not think it is going to “come down anytime soon.”
With regard to the Fed’s second round of quantitative easing, he does not think QE2 will be able to lead to a sustainable economic recovery because it is far smaller than QE1, and because there is no evidence to suggest it can lead to meaningful wage growth in the U.S.
Furthermore, there is a “major backlash against fiscal stimulus” ahead for the U.S. in 2011, based on the recent election results.
Lastly, when asked about the European sovereign debt crisis, he contended that Europe is on a “de-facto gold standard” because the individual countries cannot fund themselves and are subject to the monetary policy decisions of the European Central Bank (ECB) and the political decisions of the European Union (EU).
While Rosenberg did not discuss his outlook for gold in the interview, the challenging economic scenario that the long-time gold bull described is likely to continue to be quite favorable for the yellow metal.