Saturday, June 26, 2010

Economy faces tough road ahead with slower growth

Total mind control to lull you back to sleep. See, what they want you to think is, sooner or later this is all going to pass, so there's no real need to pay attention. Because if everyone were paying attention, they'd know that the economy is hopelessly terminal and they'd all panic, throw all their assets into gold, stop consuming, start growing their own food, and get off the grid, etc. In other words, they would remove themselves from the State teet. So you get headlines like this, telling you, yeah, it's still bad, it's going to be a tough road, but we'll get out of it eventually.

I know people don't like bad news; they like to live in their comfortable little bubble where everything is okay. But we are not going to get through this. Not by pretending it'll go away and assuming the State is going to figure out a way to fix all this. The only way you'll get through is to assume the worst - because the worst is what you'll get - and prepare accordingly.

    Associated Press -

    The economic recovery won't be catching fire any time soon.

    Businesses and governments are likely to reduce spending in the second half of the year. Consumers, who drive most economic growth, aren't expected to take up the slack.

    The Commerce Department said Friday that the economy grew at an annual rate of 2.7 percent in the first quarter, offering its third and final estimate for the period. It was slower than initially thought because consumers spent less and imports rose faster that previously calculated.

    Economists anticipate even slower growth ahead as companies bring their stockpiles more in line with sales. Factory output has climbed this year. But it was driven more by businesses replenishing their warehouses after the recession and less by consumer demand.

    "The economy is growing, but still at a disappointingly slow pace," said Zach Pandl, an economist at Nomura Securities. Take away businesses restocking their inventories and "you still have a lukewarm recovery," he said.

    Other factors could hold back growth. Federal government stimulus spending is expected to fade. The European debt crisis could slow U.S. exports and world trade. And state and local governments are likely to rein in spending and raise taxes as they struggle to close budget gaps.

Read it all.