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Wiggin: Bernanke Wrong, Recovery Fictitious

Friday, 25 Sep 2009 01:25 PM

Federal Reserve Chairman Ben Bernanke has declared that the recession is over.

Addison Wiggin, executive publisher of Agora Financial, isn’t buying it.

In an interview with Dan Mangru of Newsmax TV, Wiggin said that the recent economic data, such as GDP and retail sales, don’t tell the whole picture.

“It’s fictitious growth. It’s government stimulus making its way through the economy. But we don’t see any real recovery at the moment.”

Watch the Exclusive Interview with Newsmax TV's Dan Mangru — Click Here Now!

Although the administration has spent more than $19 trillion dollars on bailouts, Wiggin still says that the money has not improved the consumer credit market.

“Fundamentally, what we’re going through right now is a collapse in the consumer economy that has for years been fueled by the consumers’ willingness to borrow and spend beyond its means.”

Wiggin, who is executive editor of The Daily Reckoning, told Mangru that a reversal has occurred in consumer spending and that consumers will save more and borrow less for many years to come.

He also commented on unemployment, which he believes is being underreported by the government, and will reach Depression levels of greater than 30 percent.

“I think we’re approaching that (30 percent unemployment) now. We’re looking at low 20s already if you double the reported figures. We’re already approaching what we considered a grave problem of the Great Depression.”

Wiggin also called the prospect of the double-dip recession “inevitable” because of the artificial inflation of economic data and the stock market through government spending and stimulus.

The next phase of recession, according to Wiggin, would lead to drastic unemployment, devaluation of the dollar, and loss of consumer confidence.

As Wiggin points out, all of these factors will fuel demand for gold by individuals and by nations, who would look to replace dollar holdings with gold.

“If a viable alternative (to the US dollar) presents itself for countries like China, India, South Korea, people who are holding large amounts of US debt, it could be a flip of the switch,” Wiggin says.

The price of gold has recently surpassed $1,000 per ounce, which has sparked a new interest in the precious metal. Wiggin believes that gold’s rise is not due simply to hype.

“This is a long-term sustainable growth trend because it does provide an alternative when there is financial instability and uncertainty.”

Ultimately, Wiggin sees gold rising well above its current levels to between $2,000 and $2,500 an ounce.

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Federal Reserve Chairman Ben Bernanke has declared that the recession is over.Addison Wiggin, executive publisher of Agora Financial, isn’t buying it. In an interview with Dan Mangru of Newsmax TV, Wiggin said that the recent economic data, such as GDP and retail sales,...
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2009-25-25
Friday, 25 Sep 2009 01:25 PM
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