When John Hussman, in his Weekly Market Comment, noted that the Economic Cycle Research Institute’s (ECRI) Index “has slumped to the lowest level in 44 weeks and has now gone to a negative reading,” he was confirming other recent signals that the economy was giving off, notably here and here, that the possibility of a double dip recession continues to increase.
The attack on the U.S. dollar as the world’s reserve currency intensified over the weekend as French President Nicolas Sarkozy and Russian President Dmitry Medvedev openly discussed replacing the old global financial system with a new international monetary order.
The one thing that economists seem to agree on is that any economic recovery will be an uphill battle for some time to come. But if you’ve ever pulled a heavy wagon up a hill, you know what happens if your fellow pullers decide to become riders instead and jump on the wagon.
The Gulf oil spill has caused serious economic problems. Fisherman and those in the tourist industry have been hard hit by the oil spill itself. Those who work on oil rigs have been hard hit by the politically correct and utterly irrational cessation of oil drilling in the Gulf of Mexico. Tens of thousands of workers are set to lose their jobs, this in a time of high unemployment and economic downturn.
The results of a Gallup poll taken from June 11 through 13 and released on June 17 indicated that more Americans rate the economy and jobs as the nation’s biggest problems than the ongoing oil spill in the Gulf of Mexico.
Just when Americans thought that the bailouts were over, Bloomberg Financial News service reported on June 13 that the final tab for Fannie Mae and Freddie Mac bailout is increasing and may total as much as $1 trillion.
The Federal Reserve’s monopoly on money and credit has caused so many problems for average Americans and the nation that addressing this issue is a prerequisite for returning the nation to economic sanity. Congressman Ron Paul has introduced a bill called the “Free Competition in Currency Act” (H.R. 4248), which would end the government-enforced monopoly by repealing “legal tender” laws, allowing private mints, and eliminating taxes on gold and silver coins.
Before the economic meltdown was in full swing, a Florida real-estate developer named William Pitts correctly read the signs pointing toward tough times ahead. In an effort to preserve some of his savings, he bought financial products that would increase in value as real-estate and banking collapsed. It seemed like the sensible thing to do. But though his analysis was correct, his investments went bust — because the U.S. Federal Reserve made them go bust.
The Wall Street Journal took another look at the $13 trillion national debt written about here last week and announced that, according to a study by economists Carmen Reinhart and Kenneth Rogoff, the economy has now reached the tipping point, the Reinhart-Rogoff Line, better known as the point of no return.
The U.S. Bureau of Labor Statistics just released its employment figures for the month of May, and they would appear to be very encouraging indeed: 431,000 new jobs were created, and the unemployment rate fell to 9.7 percent. President Obama hailed this as proof that his economic policies are succeeding, saying, “This report is a sign that our economy is getting stronger by the day.”
When CNBC announced that the number of workers filing new claims for unemployment benefits fell last week while private employers added new jobs in May, this was “further evidence [that] the labor market was improving.” In more muted fashion, the Associated Press called it a “slow-motion recovery,” but a recovery nevertheless.