Famous economic analyst Marc Faber says people need to prepare for a global recession, probably hitting early 2013. It is “100 percent” certain, he said in a recent interview. There is a “meaningful slowdown in India and China” that many investors are missing due to all the focus on Greece and Spain. But it will be global, he said.
For the U.S., the economy is recessionary despite all of the extraordinary efforts by the Fed over the past four years. In that sense, one might argue that, as far as the economy is concerned, the Fed’s actions have become increasingly ineffective. The plunge in the velocity of money to record lows tells us that the Fed is pushing on a string – so no matter what they do there will only be limited traction. Basically, the recession has to run its course.
Japan’s economy sank into recession in the second and third quarters, fueling opposition leader Shinzo Abe’s calls for more stimulus and highlighting the risk that weak growth will derail a planned sales-tax rise.