His last newsletter spells out the looming crisis for the U.S. economy. Here's a synopsis of what this important economic thinker has to say. According to Mr. Richebacher, people will be shocked at how fast the U.S. economy declines once the bull market ends. So far this year the economy has looked good because companies are building inventories and other one-time factors. This hides a deepening weakness in the economy.
All signs point to a growing profit squeeze.
In fact, the economy is weaker than GDP figures indicate. Contrary to popular opinion, America's profit performance is poor. Furthermore, the booming stock market has been a supplementary source of profits for corporations. This source has now dried up. Corporate America's stingy profit figures have been boosted by the highly-favorable impact of employee stock options.