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One wouldn't know it by looking at CAT stock, which has gone very much nowhere in the past 5 years thanks to just one thing - an exponential
increase in the company's share buybacks...
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... but the company's publicly disclosed monthly retail sales have just one message for anyone who follows them:
forget recession, there is a global depression going on.
And it is not just in China as many would like to scapegoat: in June, in addition to a -19% drop in Asia Pacific (following a 30% Y/Y plunge a year ago, which in turn followed a 21% drop in 2013), US retail sales posted their first Y/Y decline since February, dropping by 5%.
But the real depression is in Latin America, where CAT retail sales plummeted by a whopping 50%: the most in reported history, and follow an 18% drop from a year earlier.
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Summarizing it all, after an increasingly shallower series of dead CAT bounces in the past year, first thanks to Latin America, and then the US, global retail sales just dropped by 14% - marching the biggest Y/Y decline since the financial crisis.
And the cherry on top:
there has now been an unprecedented 31 consecutive months of CAT retail sales declines. This compares to "only" 19 during the near systemic collapse in 2008.
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In other words, if global demand for heavy industrial machinery, as opposed to unemployed millennials' demands for $0.99 Apple apps, is any indication of the true underlying economy, forget recession: the world is now in a second great depression which is getting worse by the month.
Published on Jul 21, 2015
What about all the talk of the Fed raising interest rates this fall? Former top Wall Street banker Nomi Prins explains, “They have backed themselves into a corner. If you raise interest rates 50 basis points, the market will drop 500 points that day. That’s what you are dealing with. That’s just the reality of the situation that has been created. I think if the Fed does raise rates to save face, it will be by a very small amount. The markets will tank . . . and completely stop raising rates going forward, or they don’t do it at all, which is kind of what’s been happening. . . . If they do raise rates, they create a very big knock on effect.”
So, the Fed is trapped in a never ending money printing policy, and Prins goes on to say, “Yes, they are in the tough spot that they created. They fed into this Frankenstein banking system. . . If they raise rates meaningfully, it will cause a tremendous crash in the markets.”
Join Greg Hunter as he goes One-on-One with Nomi Prins, best-selling author of “All The Presidents’ Bankers.”
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