Manufacturing Sales in Canada Continue to Plunge

No matter how it is spun, Canada is edging close to a recession, as the latest manufacturing numbers from Statistics Canada confirm.

Sales in the latest quarter plummeted 2.1 percent to $49.8 billion during April, resulting in overall manufacturing sales down 7.3 percent from the same period in 2014.


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Why Gold is Going to Soar

Gold is now trading at close to where it had been five years ago, as investors overall remain on the sidelines because of uncertainty surrounding the usual catalysts associated with a cyclical uptrend in the yellow metal; elements such as hints of a recession, market correction, proof of inflation, and a weak U.S. dollar, among other things.

Since the Federal Reserve has been the primary impetus behind the bull stock market, and it has resulted in interfering with the price mechanism of the market, it's difficult to ascertain its condition because of artificially low interest rates, which has encouraged some companies to take risks they may not have taken in a market that had more of an honest and measurable performance metric.

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U.S. Economic Growth Stalls in Fourth Quarter

The anemic economic growth in the U.S. for the fourth quarter of 0.1 percent underscores the fact there is little or no momentum going forward, in spite of the media outlets already trying to spin it as a positive move forward.

Taking into account the gross domestic product data point to no real growth, missing the estimated 0.5 percent growth analysts had been looking for, again, confirms we are a long way from a healthy economy; both in the U.S. and the world.

Every time these types of numbers come out and explode the recovery myth, there are always those that say if it wasn't for this factor or that factor things would be healthier economically. You don't say. They're right. If report after report shows there are specific, but different factors hampering the economy, that means there are multiple reasons for slow or little growth, not alleged unique factors that are only a temporary drag on the economy.

Juggling few numbers actually made the 0.1 percent growth data happen, as the original numbers revealed there was a contraction. The government changed the export and import numbers to get the positive, albeit irrelevant growth. It's been two years since growth was this slow in the U.S.

The spin this time around is the slowdown came from inventory accumulation and a big cut in military spending. Presumably all that is going to go away in the first quarter of 2013.

Even the idea that terminology in the mainstream media say that optimism may be down some because of the slow pace of the recovery. Recovery? GDP of 0.1 percent isn't a recovery. And when you include the fact that the government massaged the numbers in order to ensure there wouldn't be a contraction reported, it is even worse than is being reported.

Original estimates were the economy had contracted by 0.1 percent. Those are probably the more accurate numbers, and should be assumed to be so by investors.

Even the employment numbers are being spun as positive, even though the jobless claims are just about the same as in 2007-2009 recession. How can that be construed as a recovery in any way? It can't. It's a lie, and we need to take that into consideration in our decision-making.

Marc Faber Sees Major Stock Correction Coming

In an interview on the FuturesNow program, Marc Faber, who is author of the Doom Boom & Gloom report, said investors need to prepare for a huge drop in the market in the near future, which will provide a great buying opportunity for those who are ready for it.

Faber said, "I have a lot of cash at the moment, because on this rally since April I have been lightening up on positions."

Following on the footsteps of an accurate call in the early part of June that it was time to acquire equities, specifically those that had good dividend yields, where the Standard & Poor's 500 has jumped close to 14 percent since that time, Faber now tells investors they need to consider reversing those positions, saying he is now heavily in cash in anticipation of the downturn.

"Unfortunately I have a lot of dollars. I just want to have a lot of cash because I think that within the next six to nine months we can buy just about anything 20 percent lower than it is now," Faber noted.

Recently Faber said the U.S. economy has a 100 percent chance of going into a recession.

Will Oil Trigger Next Recession?

I was confident that the Fed had already begun printing. That seemed quite evident by the overall action in the commodity markets, the dollar, and the fact that stocks were unable to correct in the normal timing band for a daily cycle low. However, I didn’t really expect Ben would come out and publicly admit it. That one took me by surprise Thursday. I guess Bernanke wants to get full value for his attack on the dollar and make sure that markets are rising into the election.

At this point all the pieces are in place for the inflationary spike and currency crisis I’ve been predicting for 2014. We now have open ended QE that is tied to economic output and unemployment. But since debasing currencies has historically never been the cure for the bursting of a credit bubble, all the Fed is going to produce is spiraling inflation. So as this progresses we are going to see the Fed printing faster and faster as the result they are looking for never materializes. This is what will ultimately drive the currency crisis at the dollar’s next three year cycle low in 2014.

At this point, watch the price of oil if you want to know when the next recession is going to begin. As I’ve pointed out many times in the past, recessions (well, at least since World War II) have all been preceded by a sharp spike in the price of energy. Any move of 100% or more in a year or less, has historically been the straw that breaks the camel's back. Modern economies cannot survive that kind of shock. It invariably triggers the collapse of consumer discretionary spending and economic activity comes to a grinding halt.

In 2007 oil surged out of the 3 year cycle low into a parabolic advance as Bernanke trashed the dollar in the vain attempt to halt the sub-prime collapse. That 200% spike in oil is what tipped the economy over into recession, which was then magnified in the fall of `08 as the financial bubble and debt markets imploded.

I think it’s safe to say that Bernanke doesn’t understand his role in causing the recession of 08/09 as he is now making the same mistake again. I think he believes the recession was solely triggered by the financial meltdown. That was the icing on the cake, but not the initial trigger that caused the recession.

Despite the complete inability of QE to heal the economy or job market, and since he really has no other tool, Bernanke just keeps doing the same thing over and over expecting a different result, but never getting it.

Commodities are the check that prevents Keynesian economic policies from healing the global economy. Keynesian academics either don’t understand this, or refuse to acknowledge it. Until they do, or we install Austrian economic advisers in the government, we are destined to continue making the same mistakes over and over.

So we will watch the price of oil as it rises out of its three year cycle low. If it hits $160 by next summer that will probably be enough to start the economy on the next downward spiral. If politicians get involved (and I’m sure they will) and try to impose price controls, they will multiply the damage and probably guarantee that the next economic downturn escalates into a truly catastrophic depression.

Until we see the spike in oil and the corresponding damage to the economy, no one has any business try to short anything, well maybe bonds, but even that will be risky because the Fed is going to be actively trying to prop the bond market up and keep interest rates artificially low.

All in all there is going to be so much money to be made on the long side, especially in precious metals, that no one needs to fool around with puny little gains on the short side, especially in a market that is going to be hell to trade from the short side. The time to sell short will be in 2014 after the dollar’s next three year cycle low. The dollar’s rally out of that bottom will correspond with the next global economic collapse, ultimately caused by the decisions made by the ECB and the Fed this past week. I dare say if they could see the damage their decisions are going to inflict upon the world and the dire unintended consequences, maybe they would finally stop kicking the can down the road and let the economy heal naturally. Of course that would entail several years of severe pain and politicians, as we all know, are extremely allergic to that.

2014-2015 is when we are going to see the stock market drop 60-75% and the next great leg down in this secular bear market. But until then there’s probably a pretty good chance we are going to see the S&P at new all time-highs in the next 6 months – 12 months.

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Warren Buffett: Still in a Recession, Will be "for Awhile"

It was good to hear Warren Buffett admit we are still in a recession, and that we're not going to get out of if "for awhile."

Many analysts and commentators have been slapped down by Buffett's comments, as they have taken any positive bit of economic news and spun it into a real recovery.

Buffett noted at the Burlington Northern Santa Fe railroad owned by Berkshire Hathaway (NYSE:BRK-A), that they were only back to 61 percent of capacity from before the recession, and that is their best performer.

He added that it is probably performing better than the vast majority of businesses in the U.S. at this time, giving somewhat of a loose measure as to where things are at.

Responding to the assertion the recession was over last year by the National Bureau of Economic Research, Buffett rightly laughed, saying "they define it differently" then he does.

His definition of the recession is this: "I define it, I think we're in a recession until real per capita GDP gets back up to where it was before. That is not the way the National Bureau of Economic Research measures it. But I will tell you that to any, on any common sense definition, the average American is below where he was before, or his family, in terms of real income, GDP. We're still in a recession. And, and we're not gonna be out of it for awhile..."

Unfortunately, Buffett continues to adhere to his Keynesianism economic theory, saying the stimulus from the government was the right thing to do, even with the devastation it will cause our children and grandchildren, as well as us.

Buffett said, "And, and basically, the government did the right thing in terms of getting the economy going again."

Amazing that he can be so right concerning the economy and so wrong concerning the outright failed stimulus from the Obama Administration.

Recession Over, Happy Days are Here Again?

The pathetic notion set forth by the National Bureau of Economic Research group that the recession has been over since 2009 can't even be taken seriously.

While they attempt to say they took other things into consideration, the key factor was the GDP. The problem and joke with that is throwing of money at the problem via the stimulus is included in the jacked up numbers of the GDP, giving the illusion of a recovery.

That's why when the gimmicks and money ran out, the naked economy was revealed to be what it continues to be: recessionary, and possibly heading to a depression.

The usual attempt to slap this type of garbage down by pointing to the obvious in relationship to no jobs being created is largely ignored, and simply identified as historically being a "lagging indicator." That was also said concerning the depressed housing market as well, among other lagging indicators.

Bizarrely they said the continuing downturn in the US could inflict long-term damage on the economy, resulting in long-term unemployment. All of this with no recession. Amazing how bad things can get in a "recovery."

One thing I do like that these people publicly stated was if there is an economic downturn, it'll be a new recession, not a continuation of the one that allegedly is over.

What time will surely tell - and hopefully will result in the removal of these people who aren't anybody from being taken seriously as economists - is the recession in fact never ended, and covering their rearends by saying if there is a new recession it's not connected to the old one, will expose their agenda and intentions.

That statement that if there is another recession it's a new one, is meaningless. We must accept their conclusion they're telling us, and they're actually trying to control the future outlook for the ongoing recession by saying it will be a new one.

In other words, it's an attempt to protect Keynesianism. If the stimulus is said to have failed, and the recession has continued on, it blows away the anemic economic theory on the spot, leaving even more confusion and needed explanations as to what is really going on.

The answer to economic weakness isn't the government or central banks, it's the removal of barriers to businesses and allowing the free market to thrive.

There can be no doubt we're still in a recession, and no manipulation of the numbers or data can change that fact. Happy days aren't here again, and there is no yellow brick road to follow. As a matter of fact we can rightly say, "goodbye yellow brick road."

Suburban Propane Partners (NYSE:SPH) a Good Dividend Play

There isn't a lot out there in stocks to generate must interest these days, at least without a huge risk factor included with it, but the relatively boring Suburban Propane Partners (NYSE:SPH) could be a good company to take a closer look at.

Don't think this is going to be a stock that will ever be a high flyer; at least with its current products and focus on propane and fuel oil.

Other than a short period of time during the worst part of the recession, Suburban Propane has held pretty strongly, and because of the sector it supplies, will always have a steady, built-in market.

The management has done some good things, including expanding and cutting costs, but it's the dividend which is the most attractive for times like these, and that stands at 7 percent.

And even with the ongoing recession, they are now at a five-year high, so they've done a lot of things right and are resilient.

This is a solid company that won't grow particularly fast, but will give investors a good return with dividends that few companies can offer, and they're continuing to increase their share price in extremely tough economic times.

Suburban finished Tuesday and August at $49.42, gaining $0.35, or 0.71 percent.

Anger Growing Over Obama's Oil Moratorium

Increased anger in the Gulf states is mounting even more, as residents
are looking answer Obama isn't willing to give, and he maintains his stubborn insistence of keeping it in place, even though thousands in the area remain out of work.

Even the idea thrown out last week he may rescind the moratorium earlier than proposed is an illusion, as he's just going to have regulations put in place which will keep people out of work, as well as extend the original moratorium period of time through into 2011.

Senator Mary Landrieu, Democrat from Louisiana, said in an interview, “This BP (NYSE:BP) oil spill and the moratorium has had the effect of pushing us closer to the recession than we were before. Now people are really getting antsy and anxious and angry, not only angry at BP for the spill but very, very angry at the federal government for imposing what we think is a very poor solution.”

Obama is catering to his environmental extremist base, as inspectors cleared the wells in the area as being fit to be used. If he can't trust his own inspectors, there's another agenda in the wings, and that is the environmentalists' pressuring him to maintain the moratorium, at least until regulations are put in place so Obama can announce he's lifting the moratorium, although the same restrictions will remain in place.

He's of course going to do this right before the elections in order to make it appear he and the Democrats are doing something right.

That won't hold this time, as everyone sees clearly what's going on, and they'll pay for allowing it to become a political issue rather than a people issue.

Bernanke Says He'll Continue to Hide Recession

When Federal Reserve Chairman Ben Bernanke confirmed what he's been saying all along concerning the ongoing recession, that if it continues, he'll be ready to do what it takes to attempt to combat it, he was essentially saying he's going to continue to mask or hide the recession that has never left.

After all, how can anyone justify spending $1 trillion with no results, and then reiterate they'll do it all over again?

Some headlines after Bernanke's speech were strange, as they even went so far as to say he "soothed" the markets. That's right. Old gentle Ben has everyone feeling good that he's going to continue to attack the country through exploiting the generations ahead who'll have to pay for his "soothing" actions; which of course they won't be able to afford.

The reason the economy is sputtering is because the original stimulus is running out of steam, and the real economic condition is simply revealing itself again.

This is why I say Bernanke is in reality saying he's going to continue to hide the recession by providing more "stimulus." Some economic commentators have went so far as to say it's not worth the effort unless another $1 trillion at least is thrown into the economy.

The major way Bernanke and others hide that there's a recession is because the money they throw into the economy is counted as gross domestic product, so they can skew the numbers how they want - in the short term - to make it appear there is real growth.

But as we're learning now, once that money goes through the system, the nakedness of the economy is revealed, and it's not a pretty picture.

We, our children, and our grandchildren will be stuck with the burden of this outrage, just so the government and Federal Reserve can appear to be doing something constructive, when they're in fact a destructive force against the free markets, saddling all of us with a debt so they can make it look like their economic theory works, when it has been the major reason for ups and down of the economic cycle in the first place. Thanks Ben.

Oh yes, the Commerce Department downwardly revised the gross domestic product annual rate from 2.4 percent for the period of April to June, to 1.6 percent.

Jim Rogers: “We never got out of the first recession”

In a telephone interview with Bloomberg, investor and author Jim Roger stated concerning the economic conditions, that “We never got out of the first recession," something we agree with heartily.

As we mention frequently, the GDP of the United States includes the stimulus spending in its results, and so makes things look better than they really are, masking the true state of the economy.

That's why most economic commentators continue to say we're in danger of a double-dip recession.

Stimulus money is leaving the economic system, simply revealing to us the state the economy has always been in.

Also in the interview, Rogers stated this concerning interest rates: “Everyone should be raising interest rates, they are too low worldwide. If the world economy gets better, that’s good for commodities demand. If the world economy does not get better, stocks are going to lose a lot as governments will print more money.”

“We never got out of the first recession,” Rogers added. “If the U.S. and Europe continue to slow down, that’s going to affect everyone. The Chinese economy is 1/10 of the U.S. and Europe and India is a quarter of China, they can’t bail us out.”

Concerning commodities, Rogers is still very bullish, and said even if they grow at a rate of 5 to 6 percent annually, they'll still surpass their all-time high, sometime in the next decade.

Rogers said he remains long on commodities.

Goldman Sachs (NYSE:GS) Says More Fed Stimulus Coming

According to Chief U.S. Economist at Goldman Sachs Jan Hatzius, the Federal Reserve will attempt to stimulate the economy as it continues to show it weakness.

Unsurprisingly, sales of previously owned homes in the U.S. in July, plunged to their lowest level in fifteen years, with a record drop of 27.2 percent. That works out to 3.83 million units sold annually.

June sales were downwardly revised to a 5.26 million-unit pace.

As a result, Hatzius said, “The Fed will eventually move to additional monetary stimulus via asset purchases or other unconventional measures.”

Probably one of most incredible statements made economically, is the casual assertion on what the figure should be. Hatzius concluded, “The Fed will eventually move to additional monetary stimulus via asset purchases or other unconventional measures.” In his mind, there is “no point in doing anything less than” $1 trillion.

Just a casual reference to throwing another $1 trillion of money the government doesn't own for taxpayers to have to pay in the future?

If the prior approximate $1 trillion didn't do anything, how will throwing another $1 trillion at the problem work? It won't, but it'll bring America all the closer to economic collapse than it already is.

It's no different than giving booze to an alcoholic to solve his problem. An addict can't be freed from addiction by imbibing more alcohol.

The outrageous hiring of more government workers and paying all those government employees over double what the private market makes is criminal. After all, who do you think ultimately pays for these high wages? Those who are productive.

How does the idea of adding stimulus play out within those parameters?

We must understand that the government can create nothing as far as wealth and productivity go. So when they spend, they're either taking from existing productive workers or from the productivity of future generations, which will in no way be able to pay back the spending excesses of this administration.

There will be a stimulus for sure, as the Federal Reserve has already stated they're ready to intercede again if the economy continues to weaken.

They must do that because the reasons behind their failure will be exposed, which is stimulus doesn't work, and only robs from the people of the country doing the stimulating.

If a trillion dollars hasn't already exposed that to you, I don't know how you'll ever be convinced until the word depression replaces the word recession as far as the reality we're all experiencing.

We're still in a recession, and the reason that's so is the GDP includes stimulus spending by the government, which is like taking a loan out and using it to buy stuff which produces nothing but consumption, but nothing in the business sector which will help in a sustainable manner.

The inclusion of stimulus in the GDP hides and masks this reality, the reason we hear people say the so-called recovery is slowing, when all it is is returning to its original condition before the stimulus.

Hatzius adds more bleakness to the economic scenario, saying unemployment will increase to 10 percent in 2011, up from the 9.5 percent now.

That seems to say the stimulus will be worthless, which would be true. It's best to let the market take care of these things, as it's much more efficient and will allocate financial resources to areas which will do the most good. Stimulus money doesn't do that, as the $1 trillion already spent testifies to.

Crude Oil Prices Resume Drop on Continuing Recession

Contrary to media assertions, the recession continues and that is starting to weigh on the price of oil as it dropped to a six-week low on Friday, and will plunge again after the Labor Day weekend.

The problem is the so-called stimulus money is gone, which had masked the real condition of the economy, and that is causing the jobless claims numbers to rise to levels which reflect that, along with the falling manufacturing numbers, as represented by the release of the general economic index by the Federal Reserve Bank of Philadelphia, which showed a plunge of 7.7 percent this month.

Again, while seeming to be a contraction, things are just returning to what they've in reality been since the recession began as the stimulus money effects leave the economy.

The government and Federal Reserve were hoping to buy time through spending the hundreds of billions so the private sector could rebound and take their place as creators of jobs and economic growth.

But the stimulus produced a false signal which had CEOs even hailing the economic turnaround, when they were in fact the beneficiaries of taxpayer dollars, rather than demand from the marketplace.

No matter how you look at it though, we're in for a rough ride economically, as there's nothing out there to indicate we're even close to beginning a recovery, and in fact the failure of government interference is being revealed publicly to all, yet the Federal Reserve has give us their assurance they're ready to do and spend what it takes to shore up the recessionary economy again, which will cause even more devastation over the long term.

Crude oil prices and inventory are predictably responding, as the oil inventory of the U.S. surged to its highest level since 1990, according to an Energy Department report.

That means consumers are staying close to home and continuing to cut back on spending.

When taking into account the fundamentals, crude oil prices are still considered too high, and the possibility of increased demand is falling by the wayside. Nothing indicates that will change anytime soon.

In other ominous and understated economic news, Axel Weber, a council member of the European Central Bank, said the European economy may need intervention from the central bank through the end of 2010. That's not surprising, as there was no way the sovereign debt crisis, which has largely been ignored by the media after it was allegedly taken care of, has been resolved, as the sheer size of the problem couldn't be taken care of with a few debt offerings, no matter what the size of them were.

While the austerity measures taken by some nations were a good move, it staggers the mind to think they could go back to throwing money out into the economy of the region through central banks, making the problem even worse than it is.

With oil prices looking to the economy to signal where things are at, the answer is it's in bad shape, with no prospects it's going to turn around in the near future.

That means consumption, at least in the U.S., the world's largest oil consumer, will continue to fall, and oil prices should follow that lead.

In the peak July traveling season, joblessness and higher gas prices held consumption down, keeping demand relatively unchanged at a time it should have been soaring. Gasoline deliveries even fell slightly from last year, averaging 9.257 million barrels in July 2010, in comparison to 9.26 million in July 2009.

Stockpiles in the U.S. rose to 1.13 billion for the week ending August 13, gaining 5.3 million.

New Caterpillar (NYSE:CAT) CEO Likes Growth Prospects of Company

Doug Oberhelman, who recently took over the reins of Caterpillar (NYSE:CAT), is attempting to generate positive feelings about the company, saying he sees little chance there will be a double-dip recession, and confirms guidance for 2012 which had been given in 2009.

Oberhelman said, “We don’t think the world has ended. We think there is going to be fantastic growth in our industries in the future.”

He also said Caterpillar executives are positive about the global economy, and see it growing going forward, with little chance of another recession.

For 2012, Oberhelman said guidance continues to be earnings of $8 to $10 a share on revenue between $55 billion to $60 billion.

These comments were made in his first meeting with analysts since taking over as CEO in June.

This sounds way too optimistic to me, and doesn't take into account recent data showing the economy is either slowing extremely, or never moved out of the recession in the first place.

We have to remember that the government throwing hundreds of billions into the economy doesn't have anything to do with the underlying reasons for the recession, and as results show, once it worked its way through, the economic weakness remains.

The only reason I see for the optimism shown by Oberhelman is the comments made by the Federal Reserve that they're ready to do it all again if the economy begins to falter, and that has already started to happen.

With voters already outraged over the irresponsible government spending, it's hard to believe they'll do it all over again, but this administration and Ben Bernanke don't have any checks or balances, or restraint, when it comes to monetary policy, and that doesn't bode well for America, even if it gives a false impression we've moved out of the recession.

New Jobless Claims Rise Again as Recession Continues

The idea that we ever left the recession is increasingly being realized and proven from data, especially as we see the jobless claims continue to rise now that the stimulus money is out of the picture.

What happened is the hundreds of billions of dollars only masked and covered up the ongoing recession, giving the illusion things had changed for the better.

It's like taking a pain pill and believing because you covered the symptoms of your problem, the problem itself has been taken care of.

The economy isn't going into a double-dip recession, it's simply continuing on with the recession that has in fact never left.

With the government irresponsibly hiring people in order to make it look like the employment numbers were better than we thought, that has unraveled as the private sector is letting go people, not hiring.

This is an issue because someone has to pay for those government workers, and if the private sector isn't able to do it, that only leaves the printing of more money by the Federal Reserve and buying of U.S. debt.

That is a disaster which will continue to debase the U.S. dollar and rack up even more debt the country already can't afford.

As usual, the government is only making the situation worse, and they should have left their hands off of the recession and let things run their course.

Now they're extending it by artificially propping up the data, which backfired because they were hoping to buy time in which they believed the economy would recover, and the focus wouldn't be on what they did because people would be happy things were better.

That didn't happen, and the importance of going back to limited government and getting out of the way of the private sector doing their job is being seen as vital to the future health of the United States of America.

Consumer Sentiment Drops to 11-Month Low

A survey conducted by Thomson Reuters/University of Michigan named Thomson Reuters/University of Michigan's Surveys of Consumers, found consumer sentiment has fallen to its lowest level in almost a year.

This is an extraordinary turn of events over just a month, as last month the highest level of consumer sentiment had been reached in almost 2-1/2 years. When it is built more on wishful thinking and hope rather than realities of the economy, these types of huge swings can happen quickly, and it of course now has.

In June the numbers were at 76.0, while in July the plunged to 66.5. Economists had been looking for 74.5.

Director of the surveys, Richard Curtin said this, "Income and job prospects were extraordinarily weak and those bleak prospects have made consumers much more cautious spenders."

After the Democrat-controlled Congress stopped their irresponsible spending spree, the reality the economy wasn't growing but was rather being artificially propped up is setting in, and consumers are understanding we've never left the recession, and there hasn't been a recovery.

Consumers also said in the surveys that they aren't going to be buying any big ticket items like automobiles in the foreseeable future, showing again the hype about a recovery was largely reported by the mainstream media as a reality to prop up Obama and the Democrats, rather than hard reporting on the fact that we're still in a recession.

US Economy Loses Another 125,000 Jobs in June

As another 125,000 jobs were lost in the American economy in June, questions concerning whether or not the recession has ever ended continue to grow.

The attempt to spin the fall in the unemployment rate from 9.7 percent to 9.5 percent as a positive was neglected by most, as it only signaled people quit looking for jobs, not that jobs were being created.

All this is after over a $1 trillion was thrown out their to "stimulate" the economy. That has completely failed, and the assertion it would have been worse if it hadn't been done isn't provable, and probably false.

What has really happened is it allowed things to extend longer than they should have, and so what should have been allowed to fail wasn't allowed to fail, and now we're going to have to start dealing with the real economy, which is being revealed to be as weak as ever.

One example of that is the tax credit for new home buyers, which after it ran out showed there was little real demand, and consequently sales plunged by about a third once the program ended.

This is why the government and Federal Reserve need to quit interfering and allow the markets to adjust and take care of business, as they know how to adopt strategy and adapt to the economic realities they face, and government interference only skews the market and makes it harder to analyze and work within because of the huge influx of money which shouldn't have been there in the first place.

Once it runs out, like it has now, the market can than look at the real conditions out there and respond accordingly. This is why stimulus programs have historically extended difficult economic times, as they get in the way of those that know how to respond to and handle them: business.

So when it is said that the recovery isn't as strong as expected, that's really not true. What's true is the illusion and fantasy created by distributing printed money into the marketplace has crumbled, and the real condition of the economy is being revealed.

This is why the private sector is creating very little jobs and the government is, as it's simply spending money hiring workers they don't need in able to make the economy look stronger than it is.

The problem with that of course is there are few new jobs and real wealth being created in the private sector to pay for those government jobs, which pay far above market wages as it is, even though they aren't needed in the first place.

As Margaret Thatcher wisely said years ago, the problem with socialism is eventually you run out of someone else's money.

That's what's happening now, as the Obama administration attempted to play that game in hopes the private sector would pick up in job creation. Now that it hasn't, they've created all these government jobs no one can pay for, and now face the problem of further debt because of it.

Alcoa Inc.(NYSE:AA) Up on No News but a Lot of Hot Air

Some attributed the rise in some blue chips like Alcoa (NYSE:AA) to unprovable statements from Federal Reserve Chairman Ben Bernanke that not only is not another recession not likely, but we're in the middle of a recovery, and it will continue.

My first thought is when did we leave the first recession Ben?

The idea of even taking Bernanke seriously is ridiculous of course, and to imply we're in the midst of a recovery will have an impact of about one day - if that - as the real economic conditions in China, Europe and the United States continues to weigh down on demand for raw materials and products.

I'm not going to get into Bernanke's silly assertions, as how can you argue with someone that says it's going to continue to be a jobless recovery and won't feel like one?

In other words, it's not a recovery but we're going to pretend it is. So don't bother me with data and facts. Bernanke wants us to trust his assertions even if it doesn't line up with the realities of what we're experiencing.

As far as Alcoa, it's going to continue to struggle along with other suppliers and producers of raw materials based on low demand and the resultant low prices.

If there was a real recovery, we would see prices going up, new jobs being created, and no need to say things like it won't feel like a recovery even though it is one, from people like Bernanke.

Alcoa will go up or down based on reality of the markets and not from blowhards like Ben Bernanke who has done as much harm to keep the recession going as anybody has through his endless spending and printing of money.

The aluminum producer did finish the session in positive territory, closing at $10.75, a $0.25 gain, or 2.38 percent increase.

Copper Falls on Renewed Recession Fears

Copper prices fell even further today, dropping by 5 cents to $2.7660 a pound, or 1.9 percent, as recession worries return as macro-economic data confirms what a number of economists and investors have thought, the we had never left the recession, or there was going to be a double-dip recession.

However you want to describe it, there is little positive happening economically to justify anyone saying we're in a recovery, even if they want to say it's a slow recovery. How about a "no" recovery, which is closer to the truth.

All that has happened is the Obama administration and Federal Reserve spent hundreds of billions with literally no effect.

What had been hoped of course was they would buy time so the economy would recover, but that has failed, and the idea of pumping hundreds of billions more into the economy hopefully won't even be considered, as we are already under water as a nation (referring to the U.S.) and further debt will bring up past the point of no return, if we're not already there.

The nail in the coffin was the jobs report, which finally revealed the faux job number being reported as a reason to justify saying we were in an economic recovery. Now that those that were unconvinced have to face the reality that the private sector isn't producing any jobs to speak up, and the props of hundreds of billions has left us in worse shape, and nothing to show for it except the assertion things would have been worst if the government hadn't taken those steps.

That's an unprovable theory, and in fact a small number of economists have stated from the beginning that it wouldn't work and the government and politicians needed to keep their hands off the economy and let it adjust and fix itself.

Of course they couldn't resist spending our children's and grandchildren's future away, and focused shortsightedly on the present, disregarding the consequences they were warned about.

Either way, we're going to experience difficult times ahead of us, and as copper prices show, there is already a cut in demand, and more to come.

This doesn't mean all commodity prices will fall, as iron ore prices were upped again today for Japanese steelmakers by Rio Tinto (NYSE:RTP) and BHP Billiton (NYSE:BHP); although it's questionable as to the sustainability of that move.

But other than gold, and to a lesser degree, possibly silver, most commodity prices will be under strong downward pressure in the near future, as the U.S., China and Europe are all slowing down, and there are really no places to go to make up for that.

Falling Commodity Prices Suggest Ongoing Recession

The ongoing drop in commodity prices implies the recession continues on, as the decline in prices tell us demand has plummeted.

I say an ongoing recession because I've never believed we've left the recession, but only the government stimulus plans and unprecedented printing of money has kept it from being exposed for what it is.

But whether you want to call it a double-dip recession, , u-shaped recession, or something else, the fact is we're set to face more economic difficulty, and after spending trillions around the world, it has done nothing to stop the recession we've been in for several years, and now has been made worse because of the government spending that has hidden and masked the reality.

There is only one reason commodity prices will drop, and that's based on supply and demand. In this case it's all about demand, which has simply dried up.

That drying up comes from the emerging narrative of slowing demand in China, the European Union, and the United States.

The frantic attempts to spin the situation by the U.S. governments and other governments around the world are no longer believable, and we need to be ready as it hits the fan again.

If spending trillions has ended with nothing, we can be sure spending trillions more will do nothing as well, other than continue to decimate people and their spending power.

Consequently gold prices will continue to rise, as well as quality gold mining stocks, as it becomes the only place of safety that can be counted on going forward.