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.”
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.
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