Recessionary Warning for US

The US Fed has a conundrum. It is seeing signs of recovery in the US, albeit weak, and everyone is expecting them to raise rates to prove everything is awesome and stop this asset bubble forming stimulus experiment. But the fact is the US is part of the world and the world is simply not doing well. The latest warning sign is World Trade Volume has just taken its steepest and longest decline over the last 6 months since the GFC. The graph below tells the story. When you are the world’s biggest economy and biggest consumer, this spells recessionary forces that don’t gel with a rate rise.

 

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so I am new to this a buddy has started buying some silver and told me about it.
So what's really going on these days. Seems like the world is in turmoil to me.

 

There are lies, damned lies and statistics.

Mark Twain

 

Use to be you could logically tell the difference. Now their merging into one. Where is Mr Spock when you need him? :>)

 

IMO, all investment markets need serious hallucination management.

This is for art investors.

 

You can't kill the metal.

 

Why do the Gold Bugs equate "recession" with a collapse in the Dollar?

I just don't get it.

 

If there is a world recession, every one will look to the dollar for stability as you feel as well. Provided it is not a war were we are initially attacked or involved, and our existence and effectiveness becomes questionable, there is a point where the world will break and even the adversary will have to give in. We are all hoping this doesn't happen but it is not out of the question. This scenario keeps growing as the world gets smaller. Different thoughts, opinions, religions and governments keep conflict alive. We criticize negotiation regardless of who the negotiators are. Congress agreed with it by taking the "no way attitude". I blame every congress man who believes in it. Now the world has adopted it.

 

"every one will look to the dollar for stability"

The dollar as the world's currency may have a limited life. Other countries in Asia including China and Russia are developing a "basket" of currencies to replace the dollar. They are doing this for political and economic reasons. Time will tell if it expands to the point where it impacts the dollar.

 

as mentioned before I am new to this scene. I have read that the Chinese Yuan will be considered for addition to the mixed basket of world currencies. If we do fall based upon debt, I only hope I can survive the drop and perhaps trying to talk a really tough new language that I would slaughter badly.

 

The BRIC nations idea of a replacement originated when the US was in the middle of the then recession and oil and trade had China, Russia, and India riding high. It has changed, compare the currencies today. Anyone in those countries would rather have USD than the local currency. They missed their chance and now they are falling apart in my opinion. All countries lie a little about their resources, but Russia and China hides more due to their 'philosophy', few countries would swap US reserves with them, except to reclaim their own.

 

I'd also say with the potential now for Iran to be stepping right back into the global oil trade using U.S. dollars of course. That the dollar and demand for it is going to be just fine. Both China and Russia's economies are in much worse shape than the U.S. economy is currently.

 

"It has changed, compare the currencies today."

I agree. However economies are dynamic. I wonder how our eighteen trillion dollar debt, and growing, is eventually going to impact the dollar. (trillion is twelve zeros, whew) How much longer can we borrow >40¢ out of every dollar the government spends without impacting the dollar in the global economy.

 

" All countries lie a little about their resources, but Russia and China hides more due to their 'philosophy"

Several years ago, I discovered the Muddy Waters Research website:
http://www.muddywatersresearch.com/

"The Chinese have an old proverb, “浑水摸鱼” (muddy waters make it easy to catch fish). In other words, opacity creates opportunities to make money. This way of thinking has unfortunately become endemic in global capital markets."

 

The Fed may raise rates a quarter of a percent or something miniscule to maintain face, but regardless they will be printing money on the back end soon enough. Global deflation is front and center, and contagion risk is very real.

 

Hey InfleXion, how are you doing. The FED has done exactly like it said it would. It said it would slowly back out of QE which it did, right on the schedule it stated. Yourself and the other statcker siad the FED could never stop printing money becasue the stock market would definitely crash and the FED wouls be forced to print again. Well, that didn't happen. The FED was correct and lived up to its word, but the stackers were dead wrong.

So here we are with the same argument. The FED is saying it will slowly raise rates and it will. What reason do we have to doubt then, when their record shows otherwise. Also, why should we believe the stackers when they were dead wrong the last time and wrong on just about everything else????

 

What ever happened with the two $1 trillion dollar coin idea it looks like that could turn out to be a verry verry pricey set .

 

I was looking at JM Bullion today. It says one price for something but when you add it to the cart it goes up by almost $10 what's up with that?

 

Bunker, as a rule I always buy random things when a buddy tells me to. Then again, I believe in feeding trolls too.


As far as a recession - we're seeing lots of things the feds and media refuse to acknowledge.

1. Healthcare has hit everyone hard - this is inflation in its finest form. I don't know of ANYONE that actually works and has healthcare with costs that went down. By the time this year is said and done, our household will pay about $3k more out of pocket.

2. Minimum wage laws will raise the average price for all goods and services - not only in the areas where they raised the minimum wage, but across the board - since goods and services are distributed. As an added detriment, small business are automating instead of hiring. Computers don't demand wage increases or healthcare (yet).

3. Taxes and fees - all have gone up. By small amounts - but nonetheless all going up. In my area this last year we saw 1/4 percent sales tax increase, our garbage taxes and rate, water taxes (and water FEES which are really just TAXES), and our taxes on electricity also went up. All of these total to about $50 a year. Not much, but it's still $50 a year that I wasn't spending last year. I have several properties that appreciated, and the 2 higher priced ones had substantial increases (the two smaller ones ironically went down a bit). Both of these have me paying an extra few hundred more in property taxes.

Add to this the increased regulation and governmental controls that are continuously being passed by congress.

Call it stealth inflation if you want - but it's there. Just because prices on the shelf are a bit lower (supply and demand) - don't mistake it for things getting cheaper.

Have you looked at the price of a meal in a restaurant lately? There's another stealth inflation cost from healthcare.

For those old enough to remember "dot-com to dot-bom" you should see the handwriting on the wall. For those too young - go read.