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Euro Pacific Capital Senior Market Strategist John Browne on the outlook for the U.S. economy.
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-- now John Browne senior market strategist for Euro Pacific Capital.
John thank you so much for joining us wonderful to have you.
-- -- the US jobs report first why is the job situation not improving.
Well as it says very bad as them as prolonged period of unemployment for sixty years and I think -- two underlying reasons festival.
The European Union with a GDP of seventeen point two trillion.
-- a -- but 25% of world trade is now the largest economy in the world and it's heading foot deep correction not recession -- depression.
And the threat is that is dragging the rest of the world including United States in to -- of that recession.
That's the fasting and the second thing is that within the United States we have big government and that means.
Big amounts of regulation big amounts of taxation and big amounts of direction of the economy which is stifling the free market.
I -- US economy exist in a vacuum.
Well there is a vacuum unfortunately and that's a leadership vacuum -- vacuum is -- leadership vacuum and it's creating.
Massive on certain -- yeah.
Yeah consumers -- shell shocked.
And Dodd not spending in fact -- quite correctly and heading for recession according cash one point six trillion and the bank.
Company -- are very worried and not investing they've got two trillion in the bank the banks are very another's and then not lending and they've -- many more trillions in the bank so all the money the government is pushing into the system.
Is not actually getting -- to consumer spending which accounts for seven to present about GDP.
So that's the problem is big government and the solution is to get big government out of the way of recovery.
What are your thoughts on US or even world leadership right now because at least here in the -- west.
You've got a string of economic crises today it's the jobs report.
The rhetoric of late has been literally -- after the other health care -- interpreted -- housing.
Mark it certainly -- you mention many other actors in the economy spending.
So many things are just not going right overall GDP is sluggish at best I -- were fortunate in the US to it -- in an expansion rate right.
So is -- an issue with with leadership not -- all of these things together.
Bringing us are proposing to less the American people a comprehensive.
Strategy to recover.
Oh I think the leadership do -- -- and I think they do understand it then all fools.
It's just -- that terrified by the implications.
Because the implication is there's no easy way out.
And even the correct way out is going to be very painful.
And it's -- Like the beginning of the first world war that went a whole lot of -- evil people intent on killing people.
It was -- just things just got out of hand always complex three -- and things they got out of hand.
Because that.
The politicians -- too -- To do what they should've done.
Similar to -- describe change.
It's a trade war and of course it's going to be a war of survival.
Really in a world recession and I've rate goes on at this rate they'll be a worldwide depression many worldwide recession excuse me for a trend that's of that aren't.
If you look at this kind of economic cycle it's being.
Really one of the longest painful recoveries correct writing any economic cycle in recent history so -- and -- Where do we go from here what is your outlook one year two years down the road and he's just this low.
Fairly steady growth for the US or will these conditions in Europe and the big government this fiscal cliff even that we're facing near term.
I guess my question teach on is -- catalyst more positive or negative sounds like the latter now.
Yes your similar -- is negative -- and -- accelerating pace towards depression within Europe.
And an accelerating pace towards a worldwide recession in the rest of the world including United States.
Free enterprise is being crushed -- of oxygen by big government.
And as long as we keep maintaining big government where again to be heading towards disaster.
And that has the -- -- because the recession could so easily slip in to a depression yeah okay -- to having.
-- monetary easing we teased as sad one last comment on you know there is easing last week.
In Europe even China right taking its about the breaks a little bit what would you see -- -- -- that handling.
Our situation from here well well on this amazing thing is they denied that it was coordinated if you don't happen within an -- I mean I can't believe it -- and the what the fact is it's been proved as as we say you know this is the longest period of -- employment.
The quantitative easing is not working because it.
Consumers a story net cash.
Companies a story and I cash the banks distorting that cash so all like quantitative easing in the cash isn't getting to the marketplace.
There's no money coming into buying products.
And the velocity of circulation which is key to growth isn't as well is really don't know.
But I just not wanting to spend and that correct they should be hoarding cash -- -- heading towards a recession.
That's the correct mechanism.
The government's got to get out.
Embittered deficits while -- but we appreciate your analysis and putting it to us so eloquently John Brown -- I'm sorry senator breast eight.
Hello it's it's the truth and again we we so appreciate your analysis and its regular army for -- attempted chat with you thanks again John for.
