An economic contraction, often referred to as a “recession,” officially occurs when a country experiences two consecutive quarters of decreasing gross domestic product (GDP). An economic contraction can also be viewed as a general slowdown in a country’s economic activity; a period when the unemployment rate is rising, corporate profits are decreasing, personal income is declining, and bankruptcies are also on the rise.
Economic Contraction was last modified: September 7th, 2013 by admin
Immediate term outlook:
The bear market rally in stocks that started in March 2009, extended because of unprecedented central bank money printing, is coming to an end. Gold bullion is up $1,000 an ounce since we first recommended it in 2002 and we are still bullish on the physical metal.
Short-to-medium term outlook:
World economies are entering their slowest growth period since 2009. The Chinese economy grew last year at its slowest pace in 24 years. Japan is in recession. The eurozone is in depression. With almost half the S&P 500 companies deriving revenue outside the U.S., slower world economic growth will negatively impact revenue and earnings growth of American companies. Domestically, America’s gross domestic product grew by only a meager 2.3% in the second quarter, which will negatively impact an already overpriced equity market.