While often wrong, Bernanke is right about the recession. It’s almost over. But a depression is about to replace it.
There has been much discussion about this recovery, whether it will be a “U”, “V” or a “W” shaped recovery. The answer is none of the above. It is going to be “C -shaped” recovery, but not as in the letter “C” but as in coffin.
It would be a miracle if trillions of dollars of debt could be wiped out with one stock market crash and be succeeded by a new bull market driven by another large offering of credit by the Fed.
But such a central bank-engineered miracle today is impossible. Capitalism’s natural cycles derive from central banker’s unnatural infusion of credit into previously free markets. The subsequent distortion causes market demand to expand (which everybody loves) only to be followed by the inevitable contraction—which everybody hates.
Usually, central banks wait until previous levels of excess credit have been absorbed in an economic downturn before embarking on a fresh round of credit creation. This time, however, it is different.
This time, the cumulative buildup of debt over previous cycles where contractions were cut short to minimize economic pain and attendant political consequences is now so large that any contraction is sufficient to bring down the extraordinary backlog of debt built up over previous cycles.
The current contraction is more than sufficient to do so as it is more severe than any downturn since the 1930s; and despite the frantic attempts of central banks to contain the cumulative forces unleashed by previous cycles of credit and debt, the enormous but fragile paper-based economy built by central bankers’ paper money is now collapsing.
LINK HERE
Another Analyst: We Are in a Toilet-Shaped Recovery
LINK HERE
Very good article and scary! The link in the article "the event" is also very informative of things to come.
ReplyDeleteThe event if anyone cares to read it.
ReplyDeletewww.financialsense.com/fsu/editorials/2009/0921.html
I finally did it.
ReplyDeleteI used an american dollar bill to wipe my butt.
It felt good.
I'm already planning on escalating the denomination used for such, savoring the pleasantry of it each time.
A 5, then a 10, a yuppie coupon (20 for you sub-100k/yr types) , a 50 , a 100
I calculate with sudden massive hyperinflation I may be able to wipe my butt with a 1 trillion dollar Treasury note by 2012.
Hack, hack...Sorry, I'm Coughin'
ReplyDeleteGet it COFFIN - COUGHING! Hee hee
Which ever the shape of recovery will take , at least the EA has admitted there will be recovery. The key is wealth and your balance sheet. The recent housing report undeniably showed that house prices has increased and that brought back billions back in the balance of households and Banks, also the stock market rally brought back trillions in our balance sheet. The point is Banks still holding mortgage back securities will see their position improving and people with mortgage will have less reason to default.
ReplyDeleteIt is true that the housing market has been artificially propped up but don't forget that there was a report showing that a lot of foreigners (mainly Chinese) wants to buy properties in the US and they will jump in very soon as prices has bottomed and that will keep prices going up.
The US debt level is not a worry, we still have our AAA rating and that will not change. The US $ is still the world reserve currency and if anyone wants to change that, its going to take years and years and in the meantime, our economy would have fully recovered (V, U, W or coffin). As for inflation, the Fed is in full control and they have started to pull out some of the stimulus and if they keep doing it smoothly, there will be no hyperinflation.
Bottom line is whichever shape V, U, W or Coffin there will be recovery (if its not already happening).....
LMAO at anon above! whahahahahahahaha!
ReplyDelete6:48. Yes there will be a recovery. When China takes over all North American's resources and enslave the poster above. They will use you as the butler in your "new housing recovery", purchased by the new World Currency. You could then use a wheel barrel of US currency to warm your ass in the shed that they put you in. Thats called a coffin shaped recovery because you will be in one when you try and fight for the 1 useless right you have left. The right to bear arms. Stupid poster.
ReplyDeleteLMAO at anon above! whahahahahahahaha!
ReplyDeleteAmerica is finished. The rest of the world will recover eventually, but America is about to reap what she has sown.
ReplyDeleteAnony 9:40, sorry to give you the bad news but America is alive and well and will remain so for a very very very long time. This crisis is just a small breeze and we are sailing through it without any problem.
ReplyDeleteThe only part of America that is in trouble is the very small 10% of Americans who are unemployed because they are stupid Lazy people who wants everything for free and not work. Other than that, the 90% Americans are doing perfect, they are working hard, pay their bills and credit card without any problem.
You must be realy stupid to think that 10% unemployment and just a few trillion $ debt will finish America.
10% unemployment, mental midget? Where did you get this figure, from mainstream news? Try 19%. A few trillion in debt? Is over 100 Trillion just a few trillion? If the US takes in 2 trillion and spends 4 trillion a year, how long will it take them to pay off just 1 TRILLION? A trillion years? Have you been living under a rock?
ReplyDeleteAnony 11:10 I think you are the one living under a Rock with fear that every is going to collapse. Even if unemployment is 19%, that still leave a majority of 81% American working hard for their country and has caused the economy to recover. I bet you are amongst those unemployed who would not even bother to look for a job and expect the rest of the 81% to support. All you are good for is spreading doom and gloom and now you are fustrated because its not working.
ReplyDeleteTruth is you are afraid that the current economic recovery will give you no excuse for remaining unemployed.
If it does not crash before the end of the year I'm going to have to get a job.
ReplyDeleteIf the recovery keeps going I could have a job by the end of the year.
@11:20
ReplyDeleteHow much does the propaganda ministry pay to spread disinformation? Is that amount enough for a good living in your country? PS don't save in $$. LOL.
The economy is not going to recover as the basic underlying problems that have caused this recession/depression have not been fixed. Obviously troll guy is a troll feeding BS information upon people that know better.
ReplyDeleteAmerica is finished, that's the writing on the wall. America has exported nothing but death and mayhem for years while the general populace has sat around doing nothing never once troubling their conscious with troublesome thoughts.
America is about to reap what she has sown. She has sown murder, destruction and general lawlessness. She will reap a hundred fold of what she has sown.
+1
ReplyDelete