PMI Declines Most In Eight Months

US Purchasing Manager's Index (PMI) dropped by the most in 8 months. Markit, who compiled the data, said this "will feed fears that the recovery remains on a weak foundation of intense price competition."

As if that's not bad enough, the same report indicated that inflation is surging:
"...on the inflation front, manufacturers experienced a further solid increase in average cost burdens in April." What? You mean higher prices AREN'T good news?

So Fed policies are failing to bring any real or sustainable recovery, after FIVE YEARS of trying, but they ARE stoking the fires of inflation. Historically, inflation is caused by an economy close to full employment that is overheating, by creating greater demand for products than the available supply. But now, the Fed is placing the horse before the apple cart by creating INFLATION FIRST, and hoping prosperity will follow! They are MORE likely to create STAGFLATION (high inflation + recession), and quite possibly even a hyperinflationary depression.

Meanwhile, Wall St shrugs off the bad news. Stocks are flat so far today. Dr. John Hussman, after doing considerable historical research, concludes that the current stock market is priced at DOUBLE its historical true value! And he's being generous in saying that!

And he has the evidence to prove it! In the last two recessions and stock market crashes, the stock market declined by 47% and 57% respectively. Both times, the S&P 500 declined to around the 600 level. Today, central bankers have pushed the S&P 500 to about 1875. If stocks decline in the next crash to the same level, that would represent more than a 67% LOSS in the stock market!