Submitted by Phoenix Capital Research on 09/21/2012 19:53 -0400
Federal Reserve
Reality
Recession
recovery
Stagflation
Unemployment
By all counts, the latest ISM (a measure of manufacturing in the US) was a complete and total disaster. In August the ISM hit 49. Anything below 50 is considered a recessionary rating.
However, things are even worse below the surface. The ISM is made up of several components. Its Production component is back to May 2009 levels. The New Orders component is back to April 2009 levels.
And worse of all, Prices Paid is up to 54, up from a reading of just 39 in July.
In simple terms this tells us that inflation is hitting “lift off” in the US at the very same time that we are entering a recession that could be on par with that of 2008. And with corn and soybean prices at or near record highs, we could be on the verge of a stagflationary disaster combined with a food crisis at the very same time.
We get additional confirmation of a major economic contraction from corporate earnings. Recently we’ve seen earnings forecast cuts from Fed Ex, Bed Bath and Beyond, Proctor and Gamble, Adobe, Starbucks, McDonald’s and more. Indeed, when you remove financials, S&P 500 earnings FELL year over year for 2Q12.
This is hardly indicative of a strong economy. The fact a record number of Americans are on food stamps doesn’t bode well either. And the Rasmussen Employment Index indicates worker confidence is at levels not seen since the FALL OF 2008!
What does this tell us? That the US Federal Reserve has failed miserably to generate an economic recovery, despite spending trillions of Dollars in bailouts and expanding its balance sheet to $2.8 trillion in size (it was just $800 billion before the Crisis):
Median income today is lower than it was during at the end of 2009 (when the recession supposedly ended)
The percentage of Americans on food stamps has increased from 11% to nearly 15%
The average unemployment duration has increased from 30 weeks to nearly 40 weeks
The civilian employment to population ratio hasn’t budged
I don’t see any of the above pointing towards a “recovery.”
To top it off, the ECRI (which is a much better predictor of recessions than the National Bureau of Economic Research or NBER) believes that the US re-entered a recession in June.
And this is happening at a time when inflation is soaring due to the Fed’s money printing/ loose monetary policies. Agricultural commodities have
http://www.zerohedge.com/contributed/2012-09-21/were-entering-another-economic-collapse-right-inflation-hits-lift
Realist - Everybody in America is soft, and hates conflict. The cure for this, both in politics and social life, is the same -- hardihood. Give them raw truth.
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