- RHINEBECK, NY -- The United
States' economy is in meltdown mode. The Panic of '08, the beginning of
the worst financial crisis to ever have hit modern America, is under way.
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- But despite the daily doses of dire economic data pointing
to disaster, the media doesn't report how bad it really is (if they report
it at all), while Wall Street and Washington deny a recession is coming
... or proclaim that should one arrive, the economic landing will be gentle.
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- For all those needing more proof of just how bad it is
or how bad it will get, the evidence is clear and the outcome is predictable.
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- The Dow fell 315 points on Friday, capping off its fourth-straight
monthly decline. Oil prices have passed $103 a barrel, while gas at the
pump is expected to hit $4 a gallon by the summer driving season.
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- The beaten down dollar continues its dive against the
euro, and keeps dropping against six major counterparts to the lowest level
since 1973 when Richard Nixon decoupled the greenback from gold.
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- New home sales are at their lowest level since February
1995, house prices slid by a record 15 percent from a year ago, and construction
spending fell the most since 1994. Home prices in 20 US cities fell in
December by the most on record and sales of existing homes in the US fell
in January to the lowest level since records began. Nearly 200,000 newly
constructed single-family homes are sitting empty, the most since 1973
when the Commerce Department began compiling the statistics.
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- Consumer prices surged 4.1 percent last year, the most
in 17 years. Wholesale costs accelerated to 7.4 percent in January, the
biggest jump since 1981. Durable-goods orders for January plunged 5.3 percent
and consumer sentiment fell to the lowest level since February 1992.
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- The Commerce Department reported the economy grew a paltry
0.6 percent in the fourth quarter of 2007, while the National Association
for Business Economics estimates growth for the first quarter of 2008 will
slow to a meager 0.4 percent.
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- The Labor Department reported initial claims for unemployment
insurance climbed 19,000 last week the second-highest level since a surge
in claims in the aftermath of Hurricane Katrina in 2005.
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- The National Association of Purchasing Managers-Chicago
index of regional business conditions tumbled to 44.5, its lowest since
December 2001 well below the level of 50 that separates growth from
contraction while manufacturing shrank at the fastest pace in almost
five years.
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- Duh Evidence
- Yet, despite the facts that tell the story, "experts"
and politicians claim the economic damage is light and the ship of state
isn't sinking. "The evidence is piling up that the economy is slipping
into at least a mild recession," said Scott Anderson, a senior economist
at Wells Fargo & Co., who had forecast that the Chicago index would
only drop to 48.
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- "I don't think we're headed to a recession,"
President Bush said last Thursday, echoing Fed Chief Bernanke's prediction
to Congress that "the US economy will return to a strong growth path
with price stability."
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- Inconceivably, despite the ample evidence pointing to
Wall Street's failure to predict past and current economic trends ... and
Washington's dismal track record of massive strategic blunders and costly
economic errors the press pumps out the swill for the ill-informed and
terminally gullible to swallow.
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- Publisher's Note: We do not provide financial advice,
we are trends forecasters. As Trends Journal subscribers, you are well
aware of our dollar/gold forecasts and their accuracy over the past several
years. With the Federal Reserve trending toward moving interest rates lower
and with the Euro zone planning to keep their rates steady the prospects
for the dollar to dive toward $1.60 euros is highly probable before the
fourth quarter.
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- As the dollar weakens, gold prices will move closer to
hitting our $2000 per ounce target. (See "Gold 2000," 4 November
2007.) In the interim, and in the absence of wild card events, we forecast
that gold will swiftly move toward the $1,200 to $1,500 trading range,
and experience a sharp correction before proceeding higher.
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- Gerald Celente
- Founder/Director
- The Trends Research Institute
- E-mail: gcelente@trendsresearch.com
- Website: www.trendsresearch.com
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- Media Relations: 845.876.6700 Ext. 311
- Cheri Van Deusen:Cheri@trendsresearch.com
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- © MMVIII The Trends Research Institute
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