The U.S. economy is "tipping into a new recession" and there's nothing President Barack Obama or the U.S. Federal Reserve can do to prevent it, according to Lakshman Achuthan, co-founder of the Economic Cycle Research Institute (ECRI).
Now, if you're wondering why you should believe this prediction ahead of others then there's something you should know: According to The Economist
, Achuthan's predictions on the direction of economy - either toward recession or recovery - have never been wrong.
"We don't make false alarms," Achuthan said, noting that ECRI did not forecast a recession last year when other prognosticators were.
A new recession could topple the stock markets into another deep funk like the one caused by the 2008-2009 downturn when the markets plummeted more than 50%.
The ECRI uses dozens of leading indexes to make its forecasts, and as of last week, Achuthan said those indicators were all pointing to a recession.
"We're seeing the weakness spread widely," Achuthan told MarketWatch
. "There's a contagion...that's not going to be snuffed out. The nature of a recession is not a statistic. It's a vicious feedback loop. Sales fall, production falls, income falls and that depresses sales. We're in that and it's going to run its course."
Worse still, he doesn't think any governmental policy changes can prevent it.
"It is not reversible," Achuthan told Bloomberg Radio
. "There is virtually nothing that can be done to avert what is going to happen."
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