There may be not 1 but 2 US economies

Few days back I posted and raised my doubt about the fake US economic growth and now few economists are also joining the chorus.

Renowned economist Nouriel Roubini has an interesting take on the US economy. He is of the view that the official figures that point towards a slow recovery in the US are completely misleading to say the least. Infact, he prefers calling it two economies instead of one. The first one is the picture of the US economy as is painted by the official government figures. The second is the one that is still languishing in recession.



The reasons for this divergence are many. For example, official measures of GDP may grossly overstate growth in the economy. This is because they don't capture the fact that business sentiment among small firms is abysmal. As also the fact that their output is still falling sharply. The country's third quarter GDP growth if corrected for these factors may have been 2% rather than 3.5% opines Roubini. America's official unemployment rate is 10.2%. Now add in discouraged workers and partially employed workers. This figure will jump to a whopping 17.5%. Even this is excluding many other factors. Cuts in working hours, temporary forced leaves and lower wages being the key. All this and more adds to the depression in the economy that the official figures do a very bad job of capturing.

I strongly believe US economic has still the worst to witness, so what are we supposed to do in such scenario....yes....BUY GOLD!!!!!