Officially, the last recession ended in June 2009. But Peter Schiff, CEO of Euro Pacific Capital, doesn’t see it that way.
And he thinks Wednesday’s gross domestic product (GDP) report, which shows the economy contracted 0.1 percent in the fourth quarter, backs him up.
“The weaker-than-expected GDP report shows just how out of touch most professional economists remain with respect to the fundamental weakness of the U.S. economy,” Schiff says in a statement.
“After more than four years of nearly never-ending monetary stimulus and more than $5 trillion worth of new federal debt, the economy remains stuck in a serious recession. The report shows that federal stimulus and deficit spending can’t create sustainable economic growth.”
Rickards believes that as this conflict escalates, it will “cause oil to skyrocket above $190 a barrel, gold to surge to $3,000 an ounce, and, in its aftermath, it could completely decimate the wealth of millions.”
Rickards’ assessment is not one to be taken lightly. The first two “financial wars” he refers to in the interview led to World War II and the economic stagflation of the late 1970s.
And unfortunately, Rickards isn’t alone in his assessment.
MSN Money commented, “The end game for all this . . . is higher inflation combined with economic stagnation,” and The Financial Times reported that “Japan may have fired the first shot.”
The Voice of Russia warned, “Russia is getting ready to defend itself in the global financial war which is going to break out in the near future.”
In the wake of the financial crisis, some have warned that the world was headed for a currency war as global central banks unleash easy monetary policy in their efforts to weaken their local currencies. The intention behind such actions is to boost exports and in turn boost the economy.
Art Cashin, UBS Financial Services Director of Floor Operations, think that the world is about to tip.
From this morning’s Cashin’s Comments:
Currency Warfare – We believe full currency warfare may be ready to break out on a global scale.
The overt move to cheapen the Japanese yen has attracted both attention and participation. (Hedge funds and pseudo hedge funds are aggressively shorting the yen and buying the Nikkei.)
U.S. job growth grew modestly in January and gains in the prior two months were bigger than initially reported, supporting views the economy’s sluggish recovery was on track despite a surprise contraction in output in the final three months of 2012.
Employers added 157,000 jobs to their payrolls last month, the Labor Department said on Friday. There were 127,000 more jobs created in November and December than previously reported.
The unemployment rate, however, edged up 0.1 percentage point to 7.9 percent.
As I write this before today’s payroll number comes out, I am struck by the media’s lack of attention to what is happening in credit markets this week.
The entire world is focused on Dow 14,000, but as I noted in my last writing , inter-market trends are warning that we may be in a correction right here, right now. Deterioration within the market has only gotten worse, and somehow no one is talking about what may be the first signs of a credit event underway.
Our ATAC models used for managing our mutual fund and separate accounts remain defensive, as deterioration persists. Absolute price movement is not being confirmed by inter-market behavior. The odds of a correction starting any day now are high unless a sudden reversal takes place internally in risk assets.
More U.S. small businesses axed workers than added them on average over the past 12 months, putting the Wells Fargo/Gallup Small Business Index for net hiring at negative 10 in January.
Here is a great place to get the latest layoff/closing news. Its updated daily.
Pretty relevant as the jobs number comes out very soon
Check the last few days
February 1 , 2013
AZZ Galvanizing in Benwood W. VA – 20+ Job Lost
Impressions Plus Printing and Copying in Winchester VA
January 31 , 2013
Little Colony Kids in Homewood IL
Southern Estates Books and Antiques in Riverwalk Landing
Bridgeway Center’s Crisis Stabilization Unit
Black Market Store in Anchorage Alaska
Best Buy (Canada ) – 15 Stores, 900 Workers
Goodyear Tire & Rubber Co Closing its Main French Plant and Cuts 39% of French Workforce
Bounce U in North Sarasota FL
Patches, Etc. in St Charles MO
Top`ings Yogurt in Anderson CA
Rain or Shine Garden Supply Store Oregon
Meier’s House of Clocks in Tacoma Wa.
Associated Food Stores Closing 2 Distribution Warehouses in Billings and Helena MT
Coca-Cola Refreshments Inc. will close its Sheboygan production facility – 40 Jobs Lost
Tags: Final Three Months, Fundamental Weakness, Gdp Report, Sustainable Economic Growth, Credit Markets