All major market indicators fell today – the DJIA lost 3.5%, gold was down 4%, oil declined 6.5%, and the 15-51 Indicator lost 2.8%. This is what happens when amateur fiscal and monetary policies meet championship caliber threats.
This is what happens when central governance treats symptoms instead of ailments.
Is the world economy in recession? Of course.
The world’s largest customer is the United States of America. Free market spending is the driving force behind her dominance. That free market, as mentioned in many of my previous blogs, is in recession. And when the largest consuming market in the world (America) is in recession, then the largest manufacturing market (China) also contract. This causes trade activity to also decline.
With less trade one needs less currency, less currency protection, and less fuel to transport goods to markets. That’s why gold and oil followed stocks into the basement today.
Add to this another poor piece of information from the US Bureau of Economic Analysis, who announced today that personal income growth declined by 50% from the first quarter to the second. Consumers continue to fall behind all around the world. A sustained economic recovery cannot be had in such a condition.
Of course, none of this is new news (see my previous blogs.) The picture is simply becoming clearer to the Wall Street establishment – who remember, never saw the 2008 crash coming. If they are the first to know, they are always the last to say. Keep that in mind when making your investment decisions. (As an FYI, in disastrous market conditions some 70% of all stocks still have “buy” ratings on them.)
Today was no surprise to me. Stay tuned…