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US Leading Economic Index (LEI) Collapse for Minimum of 11 Years – The "Smooth Land" has just been canceled

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Igor Pereira
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  • ANALISTA

Forget the political rhetoric and the optimistic headlines of TV. The most reliable indicator of future economic health in the United States, the Leading Economic Index® (LEI)You just sent out a red code signal we hadn't seen in over a decade. The index fell to its lowest level in 11 years.

US Leading Economic Index (LEI) Collapse for Minimum of 11 Years – The Smooth Land has just been canceled - ExpertFX School

By Igor Pereira, Financial Market Analyst, Junior Member WallStreet NYSE

But the most terrifying data is the duration of the fall: the LEI has been in decline for more than 3 consecutive years. This is the longest negative sequence since the Great Financial Crisis of 2008. In modern economic history, there has never been a fall of this magnitude and duration without a recession occurring or imminent.

What is dragging the LEI into the abyss? The report is clear: manufacturing sector. As we alerted yesterday with ADP data, the American industry is not just slowing down; it is shrinking. New orders for manufactured goods are drying, hours are falling and industrial employment is being decimated.

The chart below shows how new manufacturing orders (New Orders) are collapsing, acting as a heavy anchor for the whole economy:

Math is relentless. The law does not fail. A 3-year decline indicates that the structural foundations of the economy are corroded.

  • For the Economy: The Soft Landing is a fantasy. We're walking to a sudden stop.

  • For the Fed: They're late. Yesterday's interest cut was just the beginning of the panic. They'll have to cut a lot more and print a lot more to try to reverse this chart.

  • For Gold and Silver: This is the perfect scenario. Economic recession + Fed inflationary response = Price explosion potential in real assets.

Conclusion: The law shouted "Recession." The Fed shouted "Liquidity" (with the end of QT). You have two choices: trust the government or trust Gold, who will win?


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