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Economic Outlook

The World Economy – A Balancing Act Soon to Collapse?

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Posted by Martin Armstrong - Armstrong Economics

on Thursday, 26 November 2015 09:48

Screen Shot 2015-11-26 at 8.46.36 AM

Governments have embraced Marx & Keynes because they argued that government had the RIGHT and the CAPACITY to manipulate society by the economy creating Utopia eliminating the business cycle. They create economic disasters, blame others, and then start wars to get out the mess. It is never our interests at stake – only their’s. The Free Market always wins and this age of Socialism where they decide how to spend your money (usually on themselves), is coming to an abrupt end just as did communism. This balancing act has been a disaster because they assumed they had the power to control something they have no clue about how it even functions. Sorry but Smith and Schumpeter win.



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Economic Outlook

Is Turkey Trying to Distract the World From its Debt Crisis Shooting Down a Russian Plane?

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Posted by Martin Armstrong - Armstrong Economics

on Wednesday, 25 November 2015 05:44

UnknownThere is something not quite right about this entire incident of Turkey shooting down the Russian fighter jet and then attacking the rescue helicopter. Sorry, but Turkey is way out of line when they KNEW that Russia had no intention of attacking Turkey. A argument that Turkey will defend its borders implies there is a threat to Turkey, not simply a drive-by. There was plainly no reason for Turkey to take such action. They assume they are a NATO member and thus Russia cannot fire back without starting World War III. This is a totally reckless incident and unimaginable conduct of Turkey under these conditions when they clearly knew they were NOT under attack from Russia no less a single fighter jet.



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Economic Outlook

This Week on the Frontiers: Grow Slow

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Posted by Dan Keeler, WSJ

on Thursday, 19 November 2015 11:17

FrontiersSub-Saharan Africa’s economies are experiencing the lowest growth rate in six years, the IMF announced in its twice-yearly Regional Economic Outlook report. The fund said sub-Saharan Africa’s economies would collectively grow by 3.75% this year. That represents a dramatic downward revision of two percentage points from the IMF’s prediction a year ago, Matina Stevis writes, and 0.75 percentage points off its most recent prediction in April.

“The strong growth momentum evident in the region in recent years has dissipated in quite a few cases,” the IMF said.

According to the IMF’s World Economic Outlook database, just four of the world’s 10 fastest-growing economies are in Africa now.... CLICK HERE for the complete article



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Economic Outlook

Retail Earnings Disaster Points To Gathering Storm

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Posted by John Rubino - DollarCollapse.com

on Friday, 13 November 2015 07:31

The big retail chains are generally seen as pretty good barometers of the health of “the consumer.” And since — in today’s late-cycle debt-binge pseudo-capitalism — the consumer drives the economy, the numbers coming out of the aforementioned retail chains should be cause for worry.

ddddFirst Macy’s got our attention: 

Macy’s Sounds a Holiday Alarm, and Retailers Brace for Heavy Discounting

(New York Times) – When Macy’s, a store closely associated with Christmas, says there is trouble brewing ahead of the holidays, it is enough to send the world of shopping into a tailspin.

The retailer of “Miracle on 34th Street” warned Wednesday that its stores were awash with merchandise after a sluggish fall season and that slow business would force it to go all-out on discounts during the holidays.

Macy’s shares plunged about 14 percent, dragging other retailers down, too. The Hudson’s Bay Company, which owns Saks Fifth Avenue and Lord & Taylor, fell 5 percent, as did Kohl’s. Burlington Stores fell about 7 percent.

Then Nordstrom dropped a bomb: 



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Economic Outlook

U.S. Manufacturing Renaissance Turns Into the Dark Ages

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Posted by Michael Pento - Pento Portfolio Strategiestrategies

on Tuesday, 10 November 2015 08:03

images"government’s abrogation of free markets will ultimately result in economic chaos and entropy"

The October ISM Manufacturing Index, which has been the official barometer of the U.S. manufacturing sector since 1915, came in with a reading of just 50.1. This was a level barely above contraction.

Of the 18 industries surveyed in the Regional Manufacturing Survey, 9 reported contraction in October: Apparel, Leather & Allied Products; Primary Metals; Petroleum & Coal Products; Plastics & Rubber Products; Electrical Equipment, Appliances & Components; Machinery; Transportation Equipment; Wood Products; and Computer & Electronic Products.

And of those nine, the energy market in particular continues to struggle the most. One respondent in the survey noted that the effects of the weak energy market are now beginning to bleed into other areas of the economy.

In addition to this, new orders for U.S. factory goods fell for a second straight month in September (down 1.0 %), confirming the manufacturing sector in the United States has hit a downturn.

In fact, U.S. Factory Orders have fallen y/y for 11 of last 14 months; and contracted 6.9% from September 2014.



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Economic Outlook

Is U.S. Heading for Recession?

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Posted by Arkadiusz Sieron - Sunshine Profitsron - Sunshine Profits

on Thursday, 29 October 2015 05:37

nnU.S. corporate sales and profits decreased in the third quarter for the first time since 2009. Is a recession possible in the U.S.? How could it affect the gold market?

Profits and revenues are falling in tandem for the first time in six years. Sales are expected to fall 4 percent, while earnings per share are likely to decline 2.8 percent (so far, only a third of S&P 500 companies have reported). Although some companies – mainly in services and car sales – remain robust, the industrial environment’s (railroad, energy producers, manufacturers) looks really recessionary. Yesterday’s report on durable goods orders leaves no doubt. New orders for manufactured durable goods decreased in September 1.2 percent. On an annual basis, durable goods orders are down for the eighth consecutive month. Following this report, the GDPNow forecast for GDP growth in the third quarter decreased to 0.8 percent from 0.9 percent.

What is a bit surprising, given the low oil prices, is that transportation also looks weaker than expected, due to the manufacturers’ lower demand for cargo. So much for the idea that the industrial slowdown will not spill over to the whole economy. And, just as a reminder, transportation is typically a leading indicator.

The question is whether the U.S. economy as a whole is heading into recession. Well, we have a sales recession, earnings recessionindustrial recession and transportation recession. What’s left? Such developments typically accompany economic recessions. However, there were exceptions when the economy expanded but corporate profits temporarily fell, mainly due to a strong U.S. dollar or low oil prices – factors present also today.

To sum up, there is no recession yet, but investors should not ignore the growing weakness in the manufacturing sector. Financial markets often underestimate an economic slowdown, but it does not mean that the real economy is not on the threshold of a bust. A full-blown recession would certainly be positive for the gold market, especially that the Fed is running out of ammunition. So far, negative economic forces are too limited to qualify as an official NBER recession, but they may be enough for postponing or even abandoning the idea of monetary tightening. This is good news for the gold market.

If you enjoyed the above analysis, we invite you to check out our other services. We focus on the fundamental analysis in our monthly Market Overview reports and we provide daily Gold & Silver Trading Alerts with clear buy and sell signals.

Thank you.

Arkadiusz Sieron
Sunshine Profits‘ Gold News Monitor and Market Overview Editor



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Economic Outlook

U.S. Government Agencies Signal Recession Ahead!

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Posted by Martin D. Weiss Ph.D - Money and Marketsts

on Monday, 19 October 2015 06:30

When no-name naysayers opine that the U.S. economy is headed into a tailspin, you can often take it with a grain of salt.

But when credible, well-established government agencies issue hard data denoting a big decline, it’s a different story: You’ve got to stand up and pay attention. 

Consider, for example …

The U.S. Energy Information Administration (EIA), the primary government authority on energy stats and analysis. Unlike the Fed, it doesn’t make policy or even advocate policy. By law, no outside officer or employee of the government can interfere with what it concludes or says. 

And right now, the EIA says that …

Just from August to September, U.S. crude oil production declined by 120,000 barrels per day …

Production will continue to fall sharply next year, leading to a mass reduction in spending on major oil projects. And, to add insult to injury … 

U.S. crude oil supplies have just surged by 7.6 million barrels — over four times more than analysts expected. 

Meanwhile, executives attending the Oil and Money conference in London warn that a “dramatic decline” in U.S. production is now under way. 

Their reasons: world oil prices are now too low to support U.S. shale oil output, the biggest addition to world production over the last decade. And it’s not just because of declining oil prices; bank financing for shale projects has completely dried up. 

OPEC agrees. The oil cartel sees U.S. production falling for the first time since 2008. The big problem is that, despite falling global demand, OPEC members are not cutting production like they might have in prior years. They’re too afraid to lose an even bigger share of the global oil market. So they continue to pump oil at a feverish pace. 

Impact on global oil prices: No relief from record lows. 

Impact on U.S. economy: Huge. The U.S. energy industry is the third-largest industry in the U.S. And that excludes thousands of companies and millions of jobs that feed off the industry indirectly.

image1The U.S. Department of Agriculture (USDA), unlike the EIA, is responsible for policy. But ever since Abraham Lincoln started the agency during the U.S. Civil War, millions of players in the commodity markets have relied on its forecasts. 

And right now, U.S. agriculture is getting killed.

Take wheat, for example, one of the America’s largest field crops: According to the USDA’s Economic Research Service, U.S. wheat exports have plunged to their lowest level in guess how many years! 

Not 10. Not 20. But 44! 



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