The US is on full recession alert after firms made their deepest staff cuts in almost five years in February.

The net loss of 63,000 jobs last month is widely expected to to influence the Fed’s thinking on further rate cuts to ’stimulate’ the US economy.

“Double-digit inflation is on the way, says Marc Lichtefeld. “At least according to John Roque of Natexis Bleichroeder.”

“Roque points out that since 1947, every time the PPI eclipsed 7%, it didn’t stop until it hit at least 10%. The highest level was 19.5% in 1974. And as you can see from the chart, when inflation climbs above 7%, it tends to stay there for a while. In the late 1970s/early 1980s, the PPI was greater than 7% for more than three-and-a-half years”

“The smart money is betting that Bernanke will again this month.” says Bill Bonner, “not only that, but traders are looking for a big cut – 75 basis points.

“Bernanke insists the economy is not well and needs the kind of medicine the Fed usually dispenses. But remember, the Fed is not exactly a U.S. government agency – as if that would be any comfort. It is a cartel of big banks, which regularly conspires to set the price of credit at a level that is agreeable to its members.”