Tag Archives: recession

A currency war is a battle, supposedly an economic policy to cheapen a country's currency compared to that of others, to promote exports but the real reason, the one that’s less talked about, is that countries actually want to import inflation - a way of creating monetary ease and importing inflation. Let me explain.

Brace yourself! The stock market is ripe for a nasty selloff according to a number of politicians and even more market pundits - but not so fast. Two very reliable long-term recession indicators strongly suggest that a correction – or worse, the end of the bull market - is highly unlikely given the current state of the economy. Let me explain.

So much analysis we see and hear lately is concerned with whether the stock market is in a bubble or not. The truth of the matter, however, is that bear markets do not begin due to bubble-level valuations being reached and then bursting, but in anticipation of half a dozen mitigating factors as outlined in this article.

With the Middle East now lurching towards yet another major war, it’s easy to envision a supply disruption that sends oil back to its previous high or beyond. So the question becomes, what would that do to today’s hyper-leveraged global economy? Bad things, obviously. Here are just 4 things that would likely happen.

I believe that the economy is headed toward a deep recession and that the stock market is extraordinarily overvalued based on unrealistically high expectations for economic output and corporate income...

Gold has a long and impressive record of warning of trouble ahead in the global economy. It has usually been right in the past — and it is telling us right now that the outlook is much less secure than the market assumes. You ignore it at your peril.

5 years into the official economic “recovery” the labor participation rate is still lower than when the recession was declared over in June 2009 by almost a percentage point. It is still over 4 percentage points lower than when the recession officially began. The Federal Reserve chart of employment as a percentage of working age adults proves the point that sometimes a picture is worth a thousand words - sometimes much more. Words: 388; Charts: 1

I don't relish the job of constantly pointing out the risks to the equity markets but since few on Wall Street seem willing (or able) to do this, I'm "making the call" for a market correction, as enough variables have aligned to indicate a high likelihood of stocks heading downwards from here. Words: 1203; Charts: 6

...[F]iscal austerity will envelop most advanced economies this year, rather than just the eurozone periphery and the United Kingdom. Indeed, austerity is spreading to the core of the eurozone, the United States, and other advanced economies (with the exception of Japan). Given synchronized fiscal retrenchment in most advanced economies, another year of mediocre growth could give way to outright contraction in some countries. Words: 780

The current move up over the past 4 years is being driven by the Fed's loose monetary policies (just as other global markets have been driven by their Central Banks). Most bulls believe the loose polices will stimulate enough consumer demand to lead to a significant U.S. economic recovery. We, however, continue to believe the debt - laden consumer, along with the still other unresolved debt burdens, will be a major drag on the U.S. economy, (we are convinced that the market will turn down and make a triple top at levels below the peaks made in 2000 and 2007 while we resume the secular bear market that started in 2000) and that will have negative affects on the global economy.