It's a dark time for the US economy. The official line from the White House is that a recovery is on its way but the numbers are telling us something else.
Yesterday, I did a blog entry where Richard Russell, author of the famous Dow Theory Letters, was telling investors to sell and focus on cash and gold instead.
Now to confirm the gloom, we have Morgan Stanley warning that the US housing crisis is not over yet. In fact, it warns that the shadow inventory of homes will take four years, or 47 months, to clear at the current sales rate in the market. To put it bluntly, people simply aren't buying. US unemployment has risen again to 9.9% and the banks aren't lending money. According to the report, 10% of loans are delinquent.
Yes, new home sales in the US might have risen to their highest level in two years but the Morgan Stanley report suggests that might be a mirage. The US housing crisis might get a second leg. At the very least, it will take at least four years before the US shows any signs of recovery.
What makes it even worse is that the US money supply has now contracted to its lowest level since the Great Depression.
We are looking at many more years of hard times for the US.
no comment untill now