On September 30th Lakshman Achuthan, Co-Founder and Chief Operations Officer of the Economic Cycle Research Institute (ECRI) was interviewed on Bloomberg TV regarding the Recession. Lakshman is interviewed regularly on business television programs for his expert opinions because of ECRI’s impeccable record for being correct with their predictions.  In fact they called the last three recessions without a single false alarm in between.  The big news is Lakshman and ECRI are calling for another recession for the US.

Lakshman says that there is “contagion in the forward looking economic indicators” in the US, meaning that the weakness is now moving from indicator to indicator.  When you have contagion in the indicators a recession is going to be pronounced, persistent and pervasive.  A recession is “inescapable” at this point and it will be a “vicious cycle down.”  It is not a “double-dip” it will be a brand new recession.

Unemployment will get worse, claims will rise and you will see lower production, lower sales and lower income which is what a recession is according to Lakshman.  In fact that is how a recession works, it spreads from sales, to production, to employment, to income which then weakens sales further.

It is important to know that a recession doesn’t mean a bad economy, as we are already experiencing that now; it means that the economy will continue to worsen because it is locked into a “vicious cycle.” How deep the recession will be is unknown but due to how unstable conditions are worldwide and the risks that they present, the recession could become very bad, very fast.

Lakshman also says to expect to see “more recessions, more often.”  We are entering into a period of extreme volatility. Since the 1970’s GDP and employment have been stair-stepping down in every economic expansion, and that is exactly what happened during the last expansion. We are now entering a period of “higher cyclical volatility and lower trend growth would virtually dictate an era of more frequent recessions.”

Things are going to get worse before they get better, which always seems to benefit gold and silver. If you want to protect your assets during this tumultuous time look to gold and silver to provide long-term stability and growth to a diversified portfolio.

There are a few options available in the gold and silver world. Give us a call or request the free gold information kit and we will be happy to educate you as well as assist you in determining what will be the best fit for you in this time of recession.