Economic Indicators Not As Contained As Politicians Pretend

What is the consistent message that our politicians keep on conveying? Right, everything is contained. The problem arises when politicians talk about economy they simply look at it differently.

In the past couple of weeks there has been an accumulation of worrying economic indicators, to say the least. This short article provides an overview. Is it a coincidence that gold and silver crashed, just like in the summer of 2008 (a couple of months before the Lehman collapse)?

Telegraph writes: “A growing trend towards excessive risk-taking and lack of action to repair broken bank balance sheets could trigger a “chronic” new phase in the financial crisis, the International Monetary Fund has warned.”

Zerohedge reports the downgrade of Germany because of their exposure to bonds and debts from weak Southern countries. Sounds like a “domino risk” downgrade. “Although Germany’s credit metrics are respectable, the country has exposure to its banks and the weaker EU members. Deutche Bank has adjusted shareholders’ equity to asset near 2% and might need €100B of support. Via the ECB’s Target 2, Germany is owed €700B of which perhaps 50% is collectible and then there is the banks’ southern EMU exposures”

“While expectations for global GDP growth are now expected to be +3.3% for 2013 against +3.2% for 2012, the IMF has just slashed the previously rosy 3.6% expectation as the global economy stalls. The US and Europe had significant cuts to their 2013 GDP growth expectations.” (source)

“This is the biggest plunge in macro data in 10 months. Despite the stock market’s exuberance (at all-time highs), macro data has rolled over dramatically to 4-month lows. Of the major economic data points we have missed 18 of the last 20.” (source)

“The University of Michigan Consumer Sentiment preliminary number for April came in at 72.3, a hefty drop from the March final reading of 78.6. The Briefing.com consensus was for 78.0. The latest number takes us back to a level associated with recessionary consumer sentiment.” (source)

With each passing year the level of economic suffering in this country continues to go up, and we haven’t even reached the next major wave of the economic collapse yet.  The following 21 statistics show the explosive growth of poverty in America. (source)

“Spain can once again be the engine of growth for Europe,” the troubled nation appears to be going from bad to worse. House prices dropped 9.7% YoY in Q4 2012, its biggest drop on record, taking the price back to 2004 levels.” (source)

Meantime, the US monetary base is expanding again. This has always favoured gold and silver prices … but maybe the economy is in such a bad shape that traditional laws do not work anymore … or that money printing has stopped working. Only time will tell.

US_monetary_base_april2013

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