Do not fool yourselves by the powers that be...we're in a recession.
Back in 1929, the country started into a couple of recessions that would later be named The Great Depression. Consider this to be The Great Depression 2 because another recession is here. Only this time, our debt accounts for 10 percent of Gross Domestic Product...so it's worse.
Also, some will say that World War II got us out of The Great Depression. That was because the U.S. manufactured weapons and ammunition. We manufactured the steel for those products. We manufactured tanks and other items to fight the war. These days, war does not improve the economy because we fight wars through Boeing, Northrup Grumman and government-defense contractors. It's only profitable for the few, not the many.
But, I digress. Let's begin with the fact that we are in another recession. I reference Mike "Mish" Shedlock in his blog Mish's Global Economic Trend Analysis. In "US in Recession Right Here, Right Now," Shedlock explains how the consumer price index shows a true picture of the economy and that we are, indeed, in a recession.
Then, a couple economists say the U.S. is either in a recession or heading to a depression in this CNBC article, "Global Recession Likely, Depression Possible: Economist." Roger Nightingale, economist and strategist at RDN Associates, is no slouch and he explains that a recession is 65 percent to 75 percent certain for next spring.
Let's also not forget the stock market plummeted this month when Europe appeared in crisis. Sometimes appearances can be deceiving, but not in this case. Europe is in crisis and my sources say France should have its credit downgraded, not the U.S. Meanwhile, Germany is in panic that they will have to bail out the entire European Union. But it won't be necessary because the Euro will eventually collapse.
I spoke with someone from Portugal who told me that the PIIGS countries (Portugal, Ireland, Italy, Greece and Spain) will simply form their own currency and leave the EU, meaning it will collapse. U.S. banks are tied to these countries, particularly Greece, and that doesn't bode well for the U.S. It means more Euro crisis, more stock market declines.
I predicted the stock market would crash, but if Ben Bernanke thinks QE3 will keep it up, then that just might happen. But it can't happen forever and it may just make 2012 plain scary. Those Mayans may just know what they're talking about.
Today, the stock market discovered consumer confidence plummeted and it simply remained steady. Low consumer confidence means no spending and 70 percent of our GDP goes out the window. Just what are the traders thinking? They're not. The computers are running the show.
So, let's review. Consumer confidence is way down, economists say we are in recession or heading there and the virtual stock market waits for more Quantitative Easing to juice up the stock market.
Eventually, someone has to pay for all this. Guess who it's going to be.
Eventually, someone has to pay for all this. Guess who it's going to be.
Robert Michaels
