By Bob Stokes On December 13 the Federal Reserve left interest rates unchanged. The Fed's statement said "the economy has been expanding moderately." On December 15, economic reports included: weekly initial jobless claims hitting a three-and-a-half year low; the Philadelphia Fed's Business Outlook for December surprised to the upside; and the National Retail Federation raised its holiday sales forecast. Even so, a not-so-positive thing also happened on the way to the "economic recovery": "Americans got much poorer last quarter, as their collective household net worth suffered the biggest decline in three years." New York Times, December 8 Other things also happened on the way to … [Read more...]
“Darkest Days” for the Economy: Behind Us, or Just Ahead?
Economic skies forecast: slowly clearing, heavy rain returning, or cyclone? Many people still talk about a "recovery," or at worst only see a possible double-dip recession. But what if the mistake was to think the economy was only in a recession in the first place? It can't "double-dip" when it never truly recovered: "The respite following the 2009 stock market low is not a new expansion. It has failed to improve housing sales, barely caused employment to budge, and hasn't managed -- despite the unprecedented manufacture of new Fed money -- to get the total supply of credit back above its 2008 high." Elliott Wave Theorist, Sept. 2011 Indeed, the Federal Reserve's quantitative easing … [Read more...]
Recession Watch- Where are We Now?
Recessions are generally caused by a shrinking money supply and/or an increase in demand for cash. In the last two years the M1 money supply has grown by 40% and still the economy is weak, the unemployment rate is high... basically no recovery. Why? In this article Terry Coxon discusses the slow recovery and how it compares to previous recessions. ~Tim McMahon, editor Economically Sleepwalking Terry Coxon, Senior Economist Until the Great Depression of the 1930s, the average length of a recession was 21 months. The misery that began in October 1929 lasted five times that long – 105 months.... the government pursued an array of policies to prevent prices from falling, which had the … [Read more...]
No Way Out
By Doug Casey, Casey Research I really dislike sounding inflammatory. Saying that things are going to go terribly wrong runs a risk of being classed with those who think the world will end in December 2012 because of something Nostradamus or the Bible says, or because that’s what the Mayan calendar predicts. This is different. In the real world, cause has effect. Nobody has a crystal ball, but a good economist (there are some in existence, though very few) can definitely pinpoint causes and estimate not only what their immediate and direct effects are likely to be (that’s not hard; a smart kid can usually do that) but the indirect and delayed effects. In the first half of this … [Read more...]
The Long Road to Recovery
By David Galland, Managing Editor, The Casey Report Last week the government released the latest unemployment data. Bloomberg, always ready to roll up their sleeves to help its friends in government (get reelected), was running a headline that “Companies in U.S. Added 67,000 Jobs in August.” While I haven’t had time to go through the minutiae of the report, I find myself scratching my head at Mr. Market’s rather positive reaction to the report, given the bullet points: Manufacturing payrolls declined by 27,000. Employment at service-providers fell by 54,000. Retailers cut 4,900 workers. State and local governments gave walking papers to 10,000 people. The federal government … [Read more...]