UK And USA Economies Contract

We’ve noted for years that the U.S. – and the entire globe – faces a another leg down.

Last week, we pointed out that Britain was in a triple dip, with its economy contracting .4 percent in the fourth quarter of 2012, and that the British economy is now worse than during the Great Depression.

Today, the U.S. confirmed that the economy contracted in the fourth quarter of 2012.

For those who are just waking up from their mainstream media-induced stupor, let’s take it from the top …

What Do Economic Indicators Say?

We’ve repeatedly pointed out that there are many indicators which show that the last 5 years have been worse than the Great Depression of the 1930s, including:

Mark McHugh reports:

Velocity of money is the frequency with which a unit of money is spent on new goods and services. It is a far better indicator of economic activity than GDP, consumer prices, the stock market, or sales of men’s underwear (which Greenspan was fond of ogling). In a healthy economy, the same dollar is collected as payment and subsequently spent many times over. In a depression, the velocity of money goes catatonic. Velocity of money is calculated by simply dividing GDP by a given money supply. This VoM chart using monetary base should end any discussion of what ”this” is and whether or not anybody should be using the word “recovery” with a straight face:

 U.S. and British Economies CONTRACTED in Fourth Quarter of 2012

In just four short years, our “enlightened” policy-makers have slowed money velocity to depths never seen in the Great Depression…

Given the track record of government economic statistics, I think it’s safe to assume that the reported contraction is understated.  I don’t know why the contraction in 4Q2012 is a surprise.  The first clue should have been the dearth of reporting on holiday sales.

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