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JANUARY 16, 2009

JANUARY 16, 2009

The excellent Shadow Government Statistics economic service [shadowstats.com] makes the following statements today January 16th, 2009 in a flash update.


“The annualized real contraction for fourth-quarter 2008 retail sales was 17.1%.


“Consistent with a still-deepening recession, fourth quarter 2008 production showed an annualized quarterly contraction of 11.5%, following an 8.9% contraction in the third quarter.”


“A depression is defined [SGS] as a recession where peak-to-trough contraction exceeds 10%, a level currently exceeded in annualized terms by both fourth-quarter retail sales and industrial production.”



SUMMARY


Since we at Guild Investment Management predicted several months ago that we were entering a moderate depression, rather than a recession during the current downtrend, few have agreed with our view.  The above data by Shadow Government Statistics shows that the trends in retail sales, which is considered a leading economic indicator, and in industrial production, are strongly indicative that a depression is in the process of developing in the United States.


Thanks for listening.



Guild Investment Management, Inc., a registered investment advisor.  All material presented herein is believed to be reliable.  Investment recommendations and opinions expressed in these reports may change without prior notice.


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