Jupiter, Fla. (PRWEB) September 21, 2007 -- Tony Sagami discusses the six factors that could possibly cause the U.S. economy to fall into a recession. Mr. Sagami takes a closer look at the U.S. and Chinese economies and discusses the factors of both.

Right now, economists put the odds of a U.S. recession at one in three. However, these six signs might be worth considering before ratcheting up forecasts:

#1. The U.S. economy lost 4,000 jobs in the month of August and the share of the working-age population that reports holding a job has fallen to its lowest level in nearly two years.

#2. Oil hit $80 a barrel for the first time ever last week. Other commodities, such as wheat, also hit all-time highs and are up 89% in the last five months.

#3. Gold crept up to $709.60 a ounce despite last week's stock market rally; the metal has rallied for four straight weeks and is approaching its all-time high.

#4. The Commerce Department reported that retail sales rose by an unimpressive 0.3% in August.

#5. The National Association of Realtors reported that pending home sales plunged 12.2% between June and July. That's the worst one-month fall on record. Some 5.12% of the country's mortgages are also now delinquent, meaning the borrower is at least 30 days behind on payments. That's the highest in five years.

#6. The U.S. dollar is in a free fall. The euro just touched a new record high against the greenback, and Canada's currency is trading at its highest level relative to the dollar in 30 years.

Meanwhile, China's economy shows no sign of slowing down any time soon.

The World Bank just raised its 2007 growth forecast for China from 10.4% to 11.3%. Of course, the World Bank is just catching up to reality as China reported a staggering 11.9% annualized growth rate last quarter.

China has been able to avoid the subprime mess that's plaguing the U.S. right now. A full 83% of China's homes were purchased with cash.

China's retail sales expanded at the fastest rate in more than three years. In August, retail sales rose 17.1% over the same period last year, and they were up by 16.4% on a year-to-date basis.

One rule for successful investing for the next decade is "Get long whatever the Chinese are buying," advises Dr. Sagami. One of those things is certainly high-end status symbols:

• China bought 12% of the world's luxury goods last year.
• It is now the third-largest luxury-goods-consuming country.

Through the first seven months of 2007, China's imports of luxury consumer goods skyrocketed 27.6% year-over-year, reaching US$4.85 billion. That's almost $5 billion being spent on luxury cars, designer clothes, fashion accessories and jewelry.

"Sure, some U.S. companies are doing very well in China. However, don't overlook the trendy European names, either. Reason: Chinese yuppies are just as label conscious as American yuppies," advises Mr. Sagami.