- John Williams: U.S. Economy – Plunge, Stagnation & Turning Down Anew!
by Greg Hunter’s USAWatchdog.com
Economist John Williams says to forget about the so-called recovery. What’s coming next is recession or worse. Williams contends, “The fact that we saw a -2.9% contraction in the first quarter, in official reporting . . . you know the economy is in real bad shape. It’s continued to the second quarter, and that will gain recognition as all the data gets published.” Back in 2013, Williams predicted that it would be “game over” in 2014. What are the statistics showing him now? Williams says, “They are showing the economy continues to weaken, and it never recovered. A second quarter contraction here would most assuredly be recognized as a new recession, and I contend we never got out of the old recession. We had plunge, stagnation and, now, we are turning down anew.”
On recent news, the Federal Reserve ending the bond buying program in October. Williams says, “I expect the Fed will always be there to buy it. I looked at their announcement, and the October end is preconditioned on the economy continuing to show positive economic results as the Fed expects. That’s not going to happen. The easings (money printing) that we’ve seen by the Fed have been aimed at propping up the banks by providing liquidity for the banking system. It’s not stimulating the economy. Former Fed Chairman Bernanke admitted the Fed was at a point where there was very little they could do to stimulate the economy. The problem is keeping the banking system afloat. A weaker than expected economy, and we are looking at something that is much weaker than expected, means the banking system is going to be under further stress. It hasn’t recovered since the crisis of the panic of 2008. So, the Fed will want to continue to provide liquidity. The problem is that is not politically popular. So, they have been using the bad economy to bail out the banking system, and that is going to continue. I’ll be surprised if the ‘tapering’ actually comes to an end in October.”
So what happens when the second quarter economy comes in weaker than we are all being told? Williams paints a grim picture and says, “A weaker than expected economy means the budget deficit is going to be worse than expected. A weaker than expected economy will also tend to trigger selling pressure against the dollar. I am still looking for a massive decline in the U.S. dollar. A massive decline and a renewed recession can certainly be a trigger for that.”