Welcome to Gold World's new weekend review. Each week we'll take a look at the week that was and what's ahead, along with what you may have missed from our free sister sites, Wealth Daily, Energy and Capital, and our free blogs. Enjoy.

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"Ian, I wish you'd stop saying we're in a recession," said a reader. "We haven't had two consecutive quarters of negative growth. We're not in a recession. End of story. The recession debate is silly. We haven't seen a single quarter of negative growth."

That was the e-mail I received earlier this week.

But we'll have to agree to disagree. Though it's tough to discount a recession when:

• Record numbers of Americans are receiving food stamps, which could reach an all-time high of 28 million by year end.
• The average number of Americans filing for unemployment benefits hit a two-year high of 2.824 million.
• Construction spending fell for the fifth month.
• Manufacturing activity dropped 0.3% in February, reflecting weakness in home building and non-residential activity.
• Consumer spending ticked up a scant 0.1%. Remove inflation and the numbers were flat.
• Payrolls put in a third month of negative jobs growth.
• The Chicago Fed National Activity Index sank to -1.04 in February. January and December were revised lower. Says Merrill Lynch, "The three-month moving average, which is a better gauge for national activity, is now below the -0.70 threshold that indicates a recession for two months in a row. This supports our view that the recession began sometime late last year to early this year."

Listen, I'd love to sit here and be economically positive, but that'd be a stretch.

The economy just shed 80,000 more jobs in March, sending the unemployment rate to 5.1% -- its worst read since September 2005. And the March 2008 figure doesn't account for the latest jump in jobless claims.

Worse, according to Merrill Lynch North American Chief Economist David Rosenberg, per the Merrill Lynch "The Market Economist":

"We also have this little matter on our hands called the early stages of recession. We are amazed that everyone quibbles about whether real GDP growth will be fractionally positive or negative this quarter. The population is growing in a 1.0-1.5% band annually, so anything less than that on real GDP means that real per capita income is contracting. That is the way any country's standard-of-living is determined. And as we saw in the final 4Q revision, real GDP growth may have stayed at +0.6% at an annual rate, but the domestic segments of the economy - strip out foreign trade - actually declined at a 0.4% annual rate. This is roughly the same modestly negative trend in what is referred to as gross domestic purchases that occurred in the first quarter of recession back in 1Q2001 and 3Q1990."

That means we're already in a recession.

Worse: "If not for the ongoing support from foreign-derived earnings, US profit growth would be even further in the red. US corporate profits derived from domestic demand sources sagged 30% annualized in the fourth quarter - the fourth decline in the last five quarters, and the year-over-year trend at -6.5% is the worst since the economy was knee-deep in recession back in 3Q2001. Reduced corporate cash flow, in turn, is now causing capital spending plans to falter, underscored in this week's durable goods report which showed that shipments fell 2.8% in February and orders by 1.7%. In fact, as a sign of how the housing recession has now morphed into corporate fatigue, core capital goods orders shown no growth at all since last March."

Yet, there are still economists that believe we can avoid a recession. But what do they know?

Three months into the last recession, not one economist accurately predicted a recession in a survey. Unfortunately for their credibility, later evidence pointed out that a recession had begun at the time of the survey.

The Oracle of Omaha thinks we're in a recession. The CEO of Caterpillar thinks we may be in one. George Soros believes this is the "worst market crisis in 60 years."

JP Morgan chairman and CEO Jamie Dimon thinks America's in a recession... as do 71% of the 51 respondents in a Wall Street Journal poll. Poll respondents also felt there was a 48% chance "that the 2008 downturn could be worse than what was felt in the early 1990s and in 2001."

Even Well Fargo CEO John Stumpf says, "It is now clear that the U.S. and global financial markets are experiencing their worst financial crisis since the Great Depression."

 

Waiting on the Experts

We may have to wait six months for the "experts" to make the official announcement, but truth is we're already there.

Unfortunately, there are those who believe the U.S. is not in a recession, including President Bush. Economic times may be tough, but "America is not in a recession," said President Bush recently. If you want me to say we're in a tough patch, having a tough time, it's bad -- times are rough -- I'll say all those three, because that's the truth," he said.

But he stopped short of declaring a recession, "because there's a definition for the ‘R' word, and we haven't reached the definition."

Okay, sure, the classic definition is two consecutive quarters of GDP declines. But if you go back to the 2001 recession, there was only one negative quarter of GDP. And we may not see one negative quarter in this recession.

Truth Is, America Is In a Recession now...

According to Warren Buffett and numerous heavy-hitting CFOs, the recession has already started. Like I said, it may take the "experts" a few more months to catch on and admit it, but we're there.

Fifty-four percent of the CFOs that offered a prognosis in a Duke University/CFO Magazine survey of 475 CFOs said the U.S. is already in a recession. Another 24% said there's a high likelihood of a recession later this year. About 75% of them said they were "more pessimistic this quarter than in the prior quarter about the U.S. economy, reflecting concerns about consumer spending, turmoil in credit and housing markets, and high energy prices."

Fed chief Ben Bernanke can tell us "a recession is possible" all he wants, but we're there.

Sadly, his thinking only mirrors that of past recession ignorance from the Fed. According to "Booms, Busts, and the Role of the Federal Reserve":

When the recession started in April 1960, we heard:

"By and large, however, the economy seems quite solid."
Federal Open Market Committee, May 1960

"[Chairman Martin] was by no means convinced that the situation was serious."
Federal Open Market Committee, July 1960

"The Chairman reiterated his views ... There was a declining picture, ... but the economy was not going over a precipice by any means."
Federal Open Market Committee, October 1960

When the recession started in July 1990, we heard:

"In the very near term there's little evidence that I can see to suggest the economy is tilting over [into recession]."
Chairman Greenspan, July 1990

"...those who argue that we are already in a recession I think are reasonably certain to be wrong."
Greenspan, August 1990

"... the economy has not yet slipped into recession."
Greenspan, October 1990

Do yourself a favor. Stay in the safe havens of gold positions. No one can accurately predict how long this recession will last.

The latest jobs number could force the Fed to cut rates again... aggressively. And as we've seen in the past, that means a weaker dollar, which leads to higher oil and good, which leads to a decrease in consumer buying while spiking gold prices.

Wash... rinse... repeat.

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For the week of March 31, 2008, here's what we covered in Gold World and elsewhere.

The Chevron Commercials: Even Oil Billionaires are Switching to Cleantech
You see, it's not just about energy. It's about efficiency as well. It's not possible to simply wean ourselves off fossil fuels overnight. There will be a series of transitional technologies that help usher in the switch. And it's possible to take those to the bank as well. Just last week, legendary oilman T. Boone Pickens was on CNBC touting the benefits of his natural gas company, Clean Energy Fuels.

Market Outlook Part 2: Energy: Skyrocketing Fossil Fuel Prices Favor Renewables
Up until about mid-2007, oil prices were mostly about fundamentals: the ever-tightening supply situation that we have chronicled on these pages week after week, terrorist attacks and sabotage of oil facilities and pipelines, geopolitical tensions, and the skyrocketing demand for energy from the world's developing economies.

Gold Mining Companies: New $1.6 Billion Gold Producer in the Making
The combined company will retain the name New Gold Inc. and own three producing gold mines in Australia, Brazil and Mexico and development-stage projects in Canada and Chile, including the New Afton mine, which is scheduled to commence production in late 2009.

South African Infrastructure: South Africa's Energy Investment Boom... Ahead of the 2010 World Cup
Africa's largest economy is expected to grow at just under 4% in 2008, doubling the international average and nearly quadrupling the U.S. outlook (around 0.5%, if not flat or negative). In relative terms, at least, South Africa is booming.

Investing in LED Companies: The small cap stock that could stage the next Cree run
Since our January 8th discussion of LED market growth, shares of featured company Cree Inc. jetted from a near $23 low to more than $35, before pulling back. It's a move that helped Pure Energy Traders realize a 310% gain at one point with Cree June 2008 25 call options, and a 52% gain on the underlying stock.

Exploring Today's Gold Stocks: 1Q Ends on a Busy Note for Gold Explorers
We saw some impressive drill results from companies not yet mentioned in the Gold World Drill Rig last week including 8 meters grading 36.5 grams per tonne of gold recovered by Rubicon Minerals and 61 meters grading a 3.04 g/t gold at Golden Arrow 'sPoncha gold/copper project in San Juan, Argentina.

Carbon Reduction Companies: The Pollution Profits No One Knows About
Until recently, I've been hesitant to discuss one of the more direct paths to carbon emission reduction because it involves cleaning up the dirtier side of power generation via fossil fuels. Now, with the Alternative Energy Speculator well under way, we have an outlet to profit from opportunities that sometimes aren't considered green, but reduce harmful emissions nonetheless.

That's it for this week. For more, visit your free EnergyandCapital.com, GoldWorld.com, and WealthDaily.com.

Have a great weekend,

Ian L. Cooper