Jerome R. Corsi, a Harvard Ph.D., is a WND senior staff reporter. He has authored many books, including No. 1 N.Y. Times best-sellers "The Obama Nation" and "Unfit for Command." Corsi's latest book is "Who Really Killed Kennedy?"More ↓Less ↑
Recent indicators from the financial sector show the U.S. economy is taking a beating, with a possible bursting of the stock market looming on the horizon.
On Friday, April 27, the dollar hit an all-time low of $1.3682 against the euro, before closing at $1.3651.
The GDP decline is a second down quarter, following the 2.5 percent rate reported by the Commerce Department for the fourth quarter 2006.
The economy has slowed considerably from the 4.8 percent GDP growth reported for the first quarter of 2006. WND previously reported the economy may have entered a recession in February 2006, a conclusion further supported by Friday’s sluggish GDP growth report.
Economists widely credited the national collapse in the sub-prime housing market as a primary cause of the GDP slowdown.
Meanwhile, the stock market hit an all-time high of 13,000 last Wednesday, setting a new trading high of 13,148 on Friday, before closing at 13,120.94.
WND previously attributed the continued rise of the stock market to an excess of liquidity in world markets.
Bob Chapman, who publishes a biweekly Internet newsletter, The International Forecaster, http://www.theinternationalforecaster.com/ told his 100,000 worldwide subscribers that, “We are facing the biggest decline in housing values since the 1930s and nobody gets it yet. In former hot markets, prices will fall 15 percent to 25 percent this year and more next year as the tragedy plays out.”
Chapman continued to predict a collapse in the heavily leveraged $1.4 trillion dollar unregulated hedge fund market and in the little-understood derivative market where leveraged exposure may be as high as $500 trillion.
Chapman advised his subscribers that gold was one of the few secure asset classes he was recommending for investors.
An article in TheStreet.com credited legendary value investor, Jeremy Grantham – “the man Dick Cheney, plus a lot of other rich people, trusts with his money” – as saying we are experiencing “the first worldwide bubble in history covering all asset classes.”
Grantham also cited excess liquidity as the culprit, explaining to investors in his newsletter that, “Widely available cheap credit offers investors the opportunity to act on their optimism.”