A recession, and not one of those tepid kinds either, is coming soon to our shores. In fact, a recession is likely already here. The BLS stats are so doctored that when the numbers turn definitively weak, as they did according to last week's official release, one must assume that the employment picture is far worse than advertised. This is just one piece of evidence pointing to an impending recession, but there are far more.
I am not one to crow, well maybe a little, but so far my prognostications from a few months back have been spot on. And since the conditions that informed those predictions have not changed, but rather intensified, I must expect a continuation of events whereby the dollar and the stock market fall, and precious metals, especially Gold, do the opposite. Oh, there will be lots of volatility along the way down, which might serve to fool some folks, but don't be fooled, as a steady deterioration is in the cards for the greenback and for shares.
What seems increasingly clear to this observer is that the Fed can do little if anything to salvage the situation, so those hoping for a rate cut to buoy stocks and other financial instruments really ought to prepare themselves for the worst. In fact, the most recent comments made by the Philly Fed Chief (see link below) seem to be telegraphing that a rate cut is not in the cards when the Fed convenes in roughly two weeks. What would you do if you were a Fed governor, cut rates and risk a run on the dollar with all that entails, or let rates stand pat and watch the equity scene, among others, turn to liquid excrement faster than you can say sub-prime sinkhole? Ultimately the Fed will be forced to cut rates because a depression is more to be feared than hyper-inflation. And while the inevitable rate cuts probably won't have the desired result, one still has to try.