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 There are a dozen significant economic indicators that are warning that the U.S. economy is heading into a recession. The Dow may have soared past the 15,000 mark, but the economic fundamentals are telling an entirely different story. If historical patterns hold up, the economy is heading for a very rocky stretch. For example, the price of copper is called "Dr. Copper" by many economists because it so accurately forecasts the future direction of the U.S. economy. And so far this year the price of copper is way down. But that is not the only indicator that is worrying economists. Home renovation spending has fallen dramatically, retail spending is crashing in a way not seen since the last recession, manufacturing activity and consumer confidence are both declining, and troubling economic data continues to come pouring out of Asia and Europe. So why do U.S. stocks continue to skyrocket? Will U.S. financial markets be able to continue to be divorced from reality? Unfortunately, as we have seen so many times in the past, when stocks do catch up with reality they tend to do so very rapidly. So you better put on your seatbelts because a crash is coming at some point. (Read More....)
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 You better get ready, because there are a whole host of signs that economic trouble is on the horizon. U.S. economic growth slipped into negative territory during the fourth quarter of 2012. That was the first time that has happened in more than three years. Several important measures of manufacturing activity have also contracted in recent weeks, and consumer confidence is way down. There is a tremendous amount of economic pessimism in the air right now, and Americans are pulling enormous amounts of money out of our banks and they are buying up precious metals at unprecedented rates. Meanwhile, our "leaders" seem very confused about what is happening. For example, Senate Majority Leader Harry Reid continues to insist that we are "in a recovery", and some other Democrats are calling the latest GDP numbers "the best-looking contraction in U.S. GDP you'll ever see". On the other hand, the Federal Reserve says that economic growth has "paused" in recent months, and therefore a continuation of their latest quantitative easing scheme is necessary. Well, no matter how hard any of them try to spin the numbers, there is no way that they are going to get them to look good. Despite four years of outrageous "stimulus" spending by the federal government, despite four years of record low interest rates, and despite four years of unprecedented money printing by the Federal Reserve, the U.S. economy continues to perform miserably. Later this year the federal government will probably finally acknowledge that we have entered another recession, even though the truth is that if the federal government used honest numbers they would indicate that we are already in one. In any event, nobody should have ever expected that our debt-fueled prosperity would last forever. When the debt bubble that we have been living in completely bursts, a "recession" will be the least of our worries. (Read More....)
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 The economic implosion of Europe is accelerating. Even while the mainstream media continues to proclaim that the financial crisis in Europe has been "averted", the economic statistics that are coming out of Europe just continue to get worse. Manufacturing activity in Europe has been contracting month after month, the unemployment rate in the eurozone has hit yet another brand new record high, and the official unemployment rates in both Greece and Spain are now much higher than the peak unemployment rate in the United States during the Great Depression of the 1930s. The economic situation in Europe is far worse than it was a year ago, and it is going to continue to get worse as austerity continues to take a huge toll on the economies of the eurozone. It would be hard to understate how bad things have gotten - particularly in southern Europe. The truth is that most of southern Europe is experiencing a full-blown economic depression right now. Sadly, most Americans are paying very little attention to what is going on across the Atlantic. But they should be watching, because this is what happens when nations accumulate too much debt. The United States has the biggest debt burden of all, and eventually what is happening over in Spain, France, Italy, Portugal and Greece is going to happen over here as well. (Read More....)
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 Summer vacation is over and things are about to get very interesting in Europe. Most Americans don't realize this, but much of Europe shuts down for the entire month of August. I wish we had something similar in the United States. But now millions of Europeans are returning from their extended family vacations and the fun is about to begin. During August economic conditions continued to degenerate in Europe, but I figured that it wouldn't be until after August that the European debt crisis would take center stage once again. And as I wrote about last week, if there is going to be a financial panic, it typically happens in the fall. The stock market has seen quite a nice rally over the summer, and many investors are nervous that we could see a significant "correction" very soon. The month of September has been the absolute worst month for stock performance over the past 50 years, and it has also been the absolute worst month for stock performance over the past 100 years as well. Of course that does not guarantee that anything is going to happen this year. But things in Europe continue to get worse. Unemployment rates are spiking, manufacturing activity is slowing down, housing prices are crashing and major financial institutions are failing. What is happening in Europe right now appears to be an even worse version of what happened to the United States back in 2008. (Read More....)
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 If you were hoping for a recession in 2012, then you are going to be very happy with the numbers you are about to see. The U.S. economy is heading downhill just in time for the 2012 election. Retail sales have fallen for three months in a row for the first time since 2008, manufacturing activity is dropping like a rock, sales of new homes are declining again, consumer confidence has moved significantly lower and a depressingly small percentage of businesses anticipate hiring more workers in the coming months. Even though the Federal Reserve has been wildly pumping money into the financial system and even though the federal government has been injecting gigantic piles of borrowed cash into the economy, we still haven't seen an economic recovery. In fact, we appear to be on the verge of yet another major downturn. In California the other night, Barack Obama told supporters that "we tried our plan — and it worked", but only those that are still drinking the Obama kool-aid would believe something so preposterous. The truth is that the U.S. economy has been steadily declining for many years and now we have reached another very painful recession. (Read More....)
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