Consumer confidence is plummeting, big banks are hoarding cash, top financial experts are issuing recession warnings and it seems like almost everyone is trying to accumulate as much gold as possible. Now that the G20 nations have all pledged to dramatically cut government spending in an effort to get debt under control, worries about a double-dip recession have reached a fever pitch. Words: 1171
Lorimer Wilson, editor of www.FinancialArticleSummariesToday.com, provides below further reformatted and edited [..] excerpts from Michael T. Snyder’s (http://themostimportantnews.com/) original article* for the sake of clarity and brevity to ensure a fast and easy read. He goes on to say:
At times like these, it is hardly going out on a limb to say that we are headed for hard economic times. In fact, it seems like almost everyone in the financial world is either declaring that a recession is coming or is busy preparing for one. The truth is that bad economic signs are everywhere. The following are 25 such signs:
#1) The Conference Board’s Consumer Confidence Index declined sharply to 52.9 in June. Most economists had expected that the figure for June would be somewhere around 62. To get an idea of how bad this is, the index was at 100 back during the baseline year of 1985.
#2) Major banks are being instructed to hoard cash in preparation for the next financial crisis.
#3) French bank Societe Generale is forecasting that gold could reach $1,430 an ounce in the third quarter of this year due to fears of a double-dip recession.
#4) Paul Krugman of the New York Times declared in a recent column that we are about to enter “the third depression”.
#5) According to one recent poll, about eight out of every 10 Americans expect the Gulf of Mexico oil spill to damage the U.S. economy and drive up the cost of gas and food.
#6) Mark Zandi, chief economist of Moody’s Analytics, is not optimistic about the chances of avoiding another recession.
#7) The U.S. Department of Agriculture is forecasting that the number of Americans on food stamps will increase to 43 million in 2011.
#8) George Soros claims that a European recession in the coming months is “almost inevitable”.
#9) Kevin Giddis, the Managing Director of Fixed Income at Morgan Keegan, says that a lot of people are making some really large financial bets that a recession is on the way.
#10) The Center on Budget and Policy Priorities recently said that U.S. states in fiscal 2011 could be facing the worst budget situation that they have experienced since the economic downturn began in 2007.
#11) Federal Reserve Chairman Ben Bernanke is publicly saying that the U.S. unemployment rate is quite likely to remain “high for a while”.
#12) The National League of Cities is warning that large numbers of cities across the U.S. will be facing horrible economic conditions over the next couple of years.
#13) According to the Wall Street Journal, debates have already begun inside the Federal Reserve about what to do in the event of a “double-dip” recession.
#14) In May, sales of new homes in the United States dropped to the lowest level ever recorded. The truth is that the American people know economic hard times are coming and so they aren’t running out and buying expensive new homes that they can’t afford.
#15) Mike Whitney says that without more “stimulus” from the federal government a recession by the end of 2010 is extremely likely.
#16) One recent poll found that 76 percent of Americans believe that the U.S. economy is still in a recession.
#17) Richard Russell, the famous author of the Dow Theory Letters, is not mincing words about what he believes is headed our way….
“Do your friends a favor. Tell them to “batten down the hatches” because there’s a HARD RAIN coming. Tell them to get out of debt and sell anything they can sell (and don’t need) in order to get liquid. Tell them that Richard Russell says that by the end of this year they won’t recognize the country. They’ll retort, “How the dickens does Russell know — who told him?” Tell them the stock market told him.”
#18) The Bank of International Settlements said in its annual report that major banks on both sides of the Atlantic Ocean continue to remain “highly leveraged and still appear to be on life support”.
#19) Mish Shedlock recently raised eyebrows by openly proclaiming that “an economic depression is here”.
#20) Bob Chapman of the International Forecaster is very pessimistic about the state of the world economy maintaining that “the US and UK will follow…and go down, perhaps before the end of the year.”
#21) An article on Bloomberg’s website says that 46 U.S. states are facing a “Greek style” financial crisis.
#22) Charles Cooper at Oriel Securities says that worries about the global economy right now are actually very good for the price of gold.
#23) Richard Suttmeier recently wrote an article for Forbes magazine in which he predicted that “home prices will decline again with risk of another 50% down to get house prices back to levels of 1999 / 2000.”
#24) University of Maryland professor Peter Morici is warning that the decision by European governments to slash their budgets makes the prospect of another recession much more likely.
#25) John P. Hussman, fund manager of Hussman Strategic Total Return and Hussman Strategic Growth, has issued a full-fledged recession warning: “Based on evidence that has always and only been observed during or immediately prior to U.S. recessions, the U.S. economy appears headed into a second leg of an unusually challenging downturn.”
What Should Your Action Plan Be?
1. Start preparing for difficult times
a) get out of debt,
b) reduce expenses,
c) develop additional streams of income,
d) start storing up food and supplies for when things really fall apart.
After all, you don’t start preparing once the storm has already arrived – you start preparing the moment that you see the first signs of trouble on the horizon. There is no excuse for not getting yourself prepared. The signs that we are headed towards an economic nightmare are all around us. Do what you have to do for yourself and for your family.
So. will we see the full-fledged economic collapse that so many analysts are warning of before the end of 2010? Of course it is possible, but it seems much more likely that we will just see the beginning of another recession that could certainly deepen into a depression as we head into 2011 and 2012. There are so many variables and so many moving parts that it is always difficult to predict exactly how things will play out.
What does seem virtually certain, however, is that we are heading into a time of extreme economic stress.
– The above article consists of reformatted edited excerpts from the original for the sake of brevity, clarity and to ensure a fast and easy read. The author’s views and conclusions are unaltered.
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