Is The Economy At The Cusp Of The Next Recession…Or Maybe Worse? (Part II)

By Burt Coons (AKA the Plunger) – Re-Blogged From

http://www.Silver-Phoenix500.com

Part II takes a look at the macro economic backdrop for the trade of the year. Spoiler alert- its not a pretty picture, but don’t think doom and gloom, instead embrace crisis and opportunity! With our understanding of the history of oil we now focus on the macro backdrop for our Big Trade.

When the tide goes out you find out who has been swimming naked”– Warren Buffet

“This time around everything gets revealed in the next recession”-Plunger

In the next recession those leaning the wrong way… the levered players, will be forced to heave out their non-productive assets at fire sale prices. Commodity producers with entrenched costs will have to increase production as lower prices beget even lower prices since insufficient cash flows can only be recovered through higher volume production.

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What’s Left To Drive The Recovery? Not Much

By John Rubino – Re-Blogged From Dollar Collapse

US growth, such as it is, has lately been driven by a handful of hot sectors. Car sales have set records, high-end real estate is generally way up, and federal spending – based on last year’s jump in the national debt – is booming.

But now the private sector part of that equation is shifting into low gear. Cars in particular:

Economy Will Miss That New-Car Smell

(Wall Street Journal) – The annual pace of light-vehicle sales fell to a seasonally adjusted 17.2 million in the first quarter from 18 million. That the decline has come despite generous incentives from car companies and still-low gasoline prices suggests that sales are past their peak.

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