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ohn Williams, who runs the popular counter government data manipulation site Shadowstats, has thrown down the gauntlet to deflationists, and in an extensive report concludes that the probability of a hyperinflationary episode in America over the next year has reached critical levels. While the debate between deflationists and (hyper)inflationists has been a long and painful one, numerous events set off in motion by the Bernanke Fed (as a direct legacy of the Greenspan multi-decade period of cheap and boundless credit) may have well cast America as the unwilling protagonist in the sequel of the failed monetary policy economic experiment better...

Niall Ferguson: The World Is In Denial, The Great Repression Lives On Joe WeisenthalDec. 14, 2009, 5:10 AM Niall Ferguson is in the media a lot, but this interview with Consuelo Mack (via Paul Kedrosky) is one of the best summations of he's views we've come across. Some of the points he gets across: * Governments and households are in denial about how the world has changed post-crisis. * Wall Street is in a worse state than prior to the crisis because now the government backstop is explicit, and because the remaining players now have a bigger oligopoly than before....

Someone has put a lot of thought into a welcome sign that may surprise you, it's in front of a homeless camp off I-25 in Colorado Springs. Its message, "Welcome to Obamaville, Colorado's fastest growing community." Despite repeated calls no one could answer the question, who put up the sign? To some homeless the sign's message says enough. Mark Limonez, a homeless man living in "tent city", says the sign doesn't make him feel good about trying to get back on his feet. "Guys are trying to work but there's not enough work out there, so they go pan handling...

When Franklin Delano Roosevelt became President in 1933, he pledged a "new deal for the nation." During his famous first 100 days, he passed a flurry of legislation and created agencies to get the ball rolling. 1933 Emergency Banking Act FDR imposed a four-day bank holiday while he put together a plan to stabilize the nation's banks. He held his first radio "fireside chat" to announce the reopening of the banks, and when they did, they were stable. 1933 Federal Emergency Relief Administration (FERA) To combat the immediate results of the depression, FDR gave $500 million to the states for...

Political success, as reflected in the recent gubernatorial races appears ever-more staked on the state of the economy. Official unemployment recently measured 10 percent, though the more-honest gauge (U-6) shows the nation running unemployment at a Depression-like 17.2 percent. In response to high unemployment numbers, Barack Obama has said, "I will not rest until all Americans who want to work can." Yet Mr. Obama's policies belie his words. In fact, what his administration is doing will ensure massive unemployment and endless economic stagnation. To understand why I make such a sweeping assertion, it is necessary to comprehend how our economy...

To his credit--and, if the bullish consensus is right, his doom--David Rosenberg is sticking by his guns. OUR THOUGHTS ON THE OUTLOOK The credit collapse and the accompanying deflation and overcapacity are going to drive the economy and financial markets in 2010. We have said repeatedly that this recession is really a depression because the recessions of the post-WWII experience were merely small backward steps in an inventory cycle but in the context of expanding credit. Whereas now, we are in a prolonged period of credit contraction, especially as it relates to households and small businesses (as we highlighted in...

With December almost done, and all the banks having already issued their rosy outlooks for 2010 (don't ask us how the trading desks are axed, but you be sure a certain sense of "contrarianism" permeates Goldman's traders), the objective third pary strategists begin chiming in. We present Rosie's 2010 outlook from Today's Breakfast with Dave piece, courtesy of Gluskin Sheff. The credit collapse and the accompanying deflation and overcapacity are going to drive the economy and financial markets in 2010. We have said repeatedly that this recession is really a depression because the recessions of the post-WWII experience were merely...

Have We Avoided The Economic Depression Many Feared? Economics / Great Depression II Dec 09, 2009 - 08:35 AM By: Mac_Slavo President Obama spoke about the economy at the Brookings Institution. “We acted to get lending flowing again, so businesses could get loans to buy equipment and ordinary Americans could get financing to buy homes and cars, to go to college, and to start or run businesses. We enacted measures to stem the tide of foreclosures in our housing market, helping responsible home owners stay in their homes and helping to stop the broader decline in home values which was...

"90% of the people believe the economic problem is in the process of being resolved and that 2010 will be significantly better, even though many admit there might be some short term set backs on the way to the recovery. Government officials, many economists, and the vast majority of market analysts are saying it is so. This writer and a very small minority say the truth is that a terrible, deflationary depression is probably starting in the coming months. Here is why people like me think this."

So, central bankers are beginning to wonder if the US can pull off "another Volcker." Even Paul Volcker himself, who is still alive, doubts it. Today, too many people owe too much money and too many political favors. Put up rates to 18% today? Unthinkable. Cut 10% off government spending? Impossible. But don't worry about it. Now, we're not threatened by inflation...but by depression! It's fighting the depression that makes people worry. Smart investors and shrewd central bankers are afraid the depression-fighters will go too far...that they don't really know what they're doing. Ben Bernanke is up for re-appointment. "Bernanke...

Deflationary Economic Depression 2010, Ready Or Not Here It Comes! Economics / Great Depression II Dec 06, 2009 - 08:31 PM By: Darryl R Schoon Much has been written about the Great Depression and the present crisis. There is much that is similar and some that is not. The differences explain why events have unfolded differently. The similarities explain why the end will be the same. Deflationary depressions occur after the collapse of large speculative bubbles. The collapse of the 1920s US stock market bubble, then the largest bubble in history, caused the Great Depression of the 1930s. The collapse...

Our Annual Predictions For 2010. Good News And Bad News (Kitco)Roger WiegardDec 1 2009 1:54PM Will 2010 be a 1930 or, comparable to 1937? Is it different this time? When one nation state of a formerly high productive stature destroys itself with inflation, the untouched others can soften the blow and in time bail out the fallen one. This was Germany’s fate in the 1920’s. In our current instance, most all of the world’s economies are on their knees with some hurting worse than others. Who can help with recovery this time? There is no one. It will not be...

Federal Reserve Bank chairman Ben Bernanke, who appears at a confirmation hearing Thursday for a second term, is a renowned expert on the Great Depression of the 1930s and is driven to avoid a repeat of such devastation.

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Risk Of Double-Dip Recession Is Rising, Says Krugman Henry BlodgetDec. 3, 2009, 8:23 PM Several recent reports suggest that the recovery is faltering. See today's ISM index, for example, as well as the global PMI, continuing jobless claims, and the house-price recovery. Paul Krugman cites other disappointing news (as well as the ISM) and says that the risk of a double-dip is increasing: I’ve never been fully committed to the notion that we’re going to have a “double dip” — that the economy will slide back into recession. But it has been clear for a while that it’s a serious...

Recession, Depression, Deflation, Inflation, Collapse Or Recovery? Mac Slavo December 03, 2009 The International Forecaster, Bob Chapman, discusses The Fed’s options for 2010 and what effect their decisions will have on the economy in Potential for Fed To Hyperinflate: The following information may be the most important we have ever published. One of our Intel sources, highly placed in banking circles, tells us that on 1/1/10 all banks that have received TARP funds have been informed by the Federal Reserve that they must further restrict any commercial lending. Loans have to be 75% collateralized, 50% of which has to be...

The Rasmussen Consumer Index, which measures the economic confidence of consumers on a daily basis, fell three points on Wednesday to a four month low. At 69.0, the Consumer Index is down five points from a week ago and down seven points from a month ago. Confidence is now at the lowest level since July 24 and is up only nine points from the beginning of the year. Just 8% of adults rate the economy as good or excellent while 58% say it is in poor shape. Just 24% say the economy is getting better while 51% say it is...

Nonfarm private employment decreased 169,000 from October to November 2009 on a seasonally adjusted basis, according to the ADP National Employment Report®. The estimated change of employment from September to October was revised by 8,000, from a decline of 203,000 to a decline of 195,000. November was the eighth consecutive month during which the decline in employment was less than in the previous month. Although overall economic activity is stabilizing, employment usually trails economic activity, so it is likely to decline for at least a few more months. November’s ADP Report estimates nonfarm private employment in the service-providing sector fell...

Facing rising unemployment rates and having seen uncertain results from the stimulus bill, President Obama is hosting a "jobs summit" at the White House Thursday that will be packed with business leaders and economists supportive of White House policies but lacks a diversity of opinion, several analysts say. Missing from a partial list of attendees released by the White House are the self-proclaimed voices of business - the U.S. Chamber of Commerce and the National Federation of Independent Business - both of which have been critical of Mr. Obama's proposed health care overhaul. Confirmed attendees include liberal economists credited with...

It is a cliché that if we do not study the past we are condemned to repeat it. Almost equally certain, however, is that if there are lessons to be learned from an historical episode, the political class will draw all the wrong ones – and often deliberately so. Far from viewing the past as a potential source of wisdom and insight, political regimes have a habit of employing history as an ideological weapon, to be distorted and manipulated in the service of present-day ambitions. That’s what Winston Churchill meant when he described the history of the Soviet Union as...

And if this is a recovery, it's the worst recovery of all time. David Rosenberg -- who has been getting into fights with other pundits left and right -- digs in and argues that what we're really looking at is a depression. MORE ON THE DEPRESSION Last week, we received some classic guffaws when we responded to whether or not the recession has ended with this: “We’re not convinced, but even if it is statistically over, the depression is ongoing”. We were reprimanded by former Fed Governor Mishkin for breeding “fear”. The eyes were rolling among the Squawk Box crew...

With state unemployment at 12.5 percent, its highest rate in 60-plus years, you’d think the last thing the California Air Resources Board and Gov. Arnold Schwarzenegger would be doing is crowing about new regulations that are certain to kill jobs. But that’s just what happened this week when the air board issued the parameters for its “cap and trade” system under which companies would buy and sell allowances for the emissions that contribute to global warming.

One was a middle-aged man who refused to get into the shower. The other was a teenager who was afraid to get out. The man, Leonard, a writer living outside Chicago, found himself completely unable to wash himself or brush his teeth. The teenager, Ross, growing up in a suburb of New York, had become so terrified of germs that he would regularly shower for seven hours. Each received a diagnosis of severe obsessive-compulsive disorder, or O.C.D., and for years neither felt comfortable enough to leave the house. But leave they eventually did, traveling in desperation to a hospital in...

The history of the dollar is one marked by a dominance unrivaled in history. Following the Bretton Woods Agreement of 1944, which established the dollar as the global reserve currency, Americans have enjoyed an era of unprecedented wealth and prominence. The impressive growth in America could not have occurred without a stable dollar. Stable currencies are the unheralded but undeniable foundation of any vibrant economy. Stable currencies allow for longer term transactions and help instill confidence in the public, which is critical, since the value of any fiat currency is ultimately a function of public confidence. That being said, there...

It is a cliché that if we do not study the past we are condemned to repeat it. Almost equally certain, however, is that if there are lessons to be learned from an historical episode, the political class will draw all the wrong ones — and often deliberately so. Far from viewing the past as a potential source of wisdom and insight, political regimes have a habit of employing history as an ideological weapon, to be distorted and manipulated in the service of present-day ambitions. That's what Winston Churchill meant when he described the history of the Soviet Union as...

<p>Beyond fiscal stimulus and government bailouts, the economic recovery that appears under way may be based on little more than self-fulfilling prophecy.</p> <p>Consider this possibility: after all these months, people start to think it’s time for the recession to end. The very thought begins to renew confidence, and some people start spending again — in turn, generating visible signs of recovery. This may seem absurd, and is rarely mentioned as an explanation for mass behavior late in a recession, but economic theorists have long been fascinated by such a possibility.</p>

25 Reasons We Will Not Have a Depression Kimball Corson November 20, 2009 One particularly vitriolic reader of my last article on The Distorted Shape of the Recovering Economy seemed to think I was predicting a doomsday scenario. I was not at all. Richard Duncan’s tentatively predicted Fall of Rome scenario is a true doomsday scenario, not mine. My focus of late has been much more on the need for transparency and candor from our government on TARP I and II and the stimulus program results, as well as, more importantly, on getting the stimulus infrastructure program facilitated, expanded and...

We're In The Money

As the economy drifts listlessly going into this holiday season, thoughts of sugar-plumbed call options and zombie companies (Fannie Mae (FNM), Freddie Mac (FRE), and Citibank (C)) are dancing in the heads of day traders, fund managers and CNBC. Hooray, hooray, everything is OK! Well, not quite. While Wall Street is feasting on the greatest secular bear market bounce in history, Main Street is experiencing persistent and formidable economic famine, the likes of which, have not been seen the Great Depression – which recorded the second greatest secular bear market bounce in history.

10 Reasons to Believe That We're in a Depression by: Marvin Clark November 19, 2009 As the economy drifts listlessly going into this holiday season, thoughts of sugar-plumbed call options and zombie companies (Fannie Mae (FNM), Freddie Mac (FRE), and Citibank (C)) are dancing in the heads of day traders, fund managers and CNBC. Hooray, hooray, everything is OK! Well, not quite. While Wall Street is feasting on the greatest secular bear market bounce in history, Main Street is experiencing persistent and formidable economic famine, the likes of which, have not been seen the Great Depression – which recorded the...

The Effectiveness Of Fiscal And Monetary Stimulus In Depressions Miguel Almunia Agustín S. Bénétrix Barry Eichengreen Kevin H. O’Rourke Gisela Rua 18 November 2009 There is one important source of information on the effectiveness of monetary and fiscal stimulus in an environment of near-zero interest rates, dysfunctional banking systems and heightened risk aversion that has not been fully exploited: the 1930s. This column gathers data on growth, budgets and central bank policy rates for 27 countries covering the period 1925-39 and shows that where fiscal policy was tried, it was effective. The debate over the effectiveness of stimulus rages on...

A study by researchers at the University of Bergen, Norway, and the Institute of Psychiatry (IoP) at King's College London has found that depression is as much of a risk factor for mortality as smoking. Utilising a unique link between a survey of over 60,000 people and a comprehensive mortality database, the researchers found that over the four years following the survey, the mortality risk was increased to a similar extent in people who were depressed as in people who were smokers...

Brad DeLong has long argued against the fears that we could head into something like the Great Depression. But now the UC Berkeley economist has turned a bit bearish on the economy. From DeLong: For 2 1/4 years now I have been saying that there is no chance of a repeat of the Great Depression or anything like it -- that we know what to do and how to do it and will do it if things turn south. I don't think I can say that anymore. In my estimation the chances of another big downward shock to the U.S....

1931 January -- Texas congressman Wright Patman introduces legislation authorizing immediate payment of "bonus" funds to veterans of World War I. The "bonus bill" had been passed in 1924. It allotted bonuses, in the form of "adjusted service certificates," equaling $1 a day for each day of service in the U.S., and $1.25 for each day overseas. President Hoover was against payment of these funds, saying it would cost the Treasury $4 billion. February -- "Food riots" begin to break out in parts of the U.S. In Minneapolis, several hundred men and women smashed the windows of a grocery market...

CNN) -- A goalkeeper for the German national soccer team apparently killed himself by stepping in front of a train, just months after he and his wife adopted a daughter, police said Wednesday. Robert Enke, 32, was captain of the German top-division soccer club Hannover 96 and had played in eight games for his national team. He was widely expected to be the German team's keeper in the 2010 World Cup. "Preliminary police investigations indicate a suicide," Hannover 96 spokesman Stefan Wittke said. Enke died about 6:25 p.m. Tuesday. His wife Teresa said he left a suicide note. She said...

Stock Market Investors Needn’t Fear A Double-Dip Economic Recession Nov 09, 2009 - 05:56 AM By: Money_Morning Jon D. Markman writes: A new report contains some very good news for investors: Double-dip recessions are very rare. That means that a drop back into recessionary conditions looks less and less likely even as unemployment creeps higher and has crossed the 10% threshold for the first time in a quarter century. After reviewing U.S. economic history all the way back to the 1850s, Deutsche Bank AG (NYSE: DB) economists found that double-dip recessions are exceedingly rare: There have only been three episodes...

Celente says we are going into a manufactured depression and in America we will call it obamageddon.

There were, once upon a time, usury laws that generally held any interest rate greater than 10% was illegal. The Federal Reserve under Paul Volcker believed that interest rates needed to be raised to insane levels to stop the runaway inflation, which was the first stone that hit the water sending the shock waves that we are having to pay for today. Once the usury laws were altered so the Fed could fight inflation, it set in motion the doubling of household debt, not to mention the national debt. At 8%, the principle is doubled through interest in less than...

Markets, be they stocks, emerging markets or commodities, have rallied too far, too fast because the global economy will experience an anemic recovery rather than the hoped-for V-shaped recovery, New York University economist Nouriel Roubini said on Wednesday. Roubini, who became famous for predicting the unraveling of the housing market and the credit crisis, said that the current "party" can continue for another six months. But it will eventually end badly, he warned, as much of the rise in asset prices since March is yet another bubble created by a huge pool of global liquidity. "I'd argue that rally has...

Scary Specter Of '30s-Style Economic Depression Commodities / Gold & Silver Stocks Nov 04, 2009 - 02:24 AM By: The_Gold_Report Jay Taylor, who publishes Gold, Energy & Technology Stocks and hosts his "Turning Hard Times into Good Times" radio program each week, is hoping and praying for deflation to help the U.S. heal its wounds and find its way back to prosperity. He has reasons to think the dollar might bounce back, too. Nevertheless, Jay reminds The Gold Report readers about frightening parallels to the 1930s and doesn't dismiss the possibility of a hyperinflation that renders the U.S. dollar about...

Is Debt-Deflation Economic Depression Just Beginning? Economics / Great Depression II Nov 02, 2009 - 03:12 AM By: Mike_Shedlock Last Thursday I received an email from David Meier, Associate Advisor at the MotleyFool concerning Debt-Deflation. David asked if I had any comments on his article Debt-deflation: Just the beginning? Here is a partial listing: The debate rages on. Is inflation or deflation the bigger threat? There are lots of people -- lots of smart people -- on both sides of the debate and they present lots of good arguments. One thing that I have not seen -- and maybe I...

Eighty years ago this week, the stock market crashed. Although it was more a symptom of the economy's underlying problems than a cause of the Great Depression, it is still considered the day the worst economic crisis in American history began. I've always been curious about the Great Depression. In fact, I think I decided to study economics because of it. As a child, I remember asking father about its causes, and he told me that there wasn't enough money for people to spend. I asked where the money went, thinking that vast amounts of currency and coin couldn't have...

The new economic statistics put growth at a healthy 3.5% for the third quarter. We should be dancing in the streets. No one is, because no one has any faith in these numbers. ... No one thinks we're entering a new age of abundance. No one thinks it will ever be the same as before 2008. * * * The biggest threat to America right now is not government spending, huge deficits, foreign ownership of our debt, world terrorism, two wars, potential epidemics or nuts with nukes. The biggest long-term threat is that people are becoming and have become disheartened,...

Green shoots are blossoming, Obama is smiling and somewhere Bernanke is patting himself on the back. Folks, I am pleased to announce that things are looking very rosy and judging by the crooks traders driving the stock market it would appear they agree. BEA's report confirms the speculation well at least the headline that so many idiots economists on TV have predicted, things are getting better; GDP increased at an annual rate of 3.5 percent. Time to put that 401K back to work and buy another house. Let's look at the report: Real federal government consumption expenditures and gross investment...

The Associated Press noted last week that the federal deficit reached a record $1.42 trillion for the fiscal year that ended September 30. Up until now, most of the mainstream media have either ignored the exploding deficits or declared them a good thing, since they were supposed to lift us out of the recession. But now that the full figures have come in even some Obama-friendly media stalwarts are struck by their enormity. This awakening is heartening. The AP report does a good job of putting the deficit number against some other figures to give a sense of scale. The...

Remember last spring, when many Republican governors balked at accepting Stimulus funds? Governors such as Rick Perry and Bobby Jindal sounded the alarm that these funds came with many unpalatable strings attached. Well, it hasn't taken long for the chickens to come home to roost, as Rev. Wright would say. The United States, thanks to the policies of the Obama Administration, officially is in the midst of the longest recession since 1933 according to the National Bureau of Economic Reserach. While the federal government can deficit spend in unheard of amounts, the states cannot. Because of the continuing high unemployment...

<p>When the nation's gross domestic product comes out Thursday morning, it'll show the first quarterly improvement since the April, May, June period of 2008.</p> <p>But I dare you to try telling your family or acquaintances that the recession is over.</p> <p>So, what's going on?</p>

Eighty years ago this Thursday, the Great Depression began. While the great stock market crash of 1929 actually began on Oct. 24, it was the fourth day of the crash, Oct. 29, 1929, now known as Black Tuesday, that confirmed the severity of the four-day decline and alerted the world to the fact that not all was well with the U.S. economy. Those who appreciate historical rhythm will probably be aware that the most intense part of the subsequent depression was the four years from 1930 through 1933 that Milton Friedman described as the Great Contraction. Although 1929 marked the...

Tent cities in Sacramento, CA.

It is well known that during the nation’s gale-force recession, many older Americans who dreamed of retirement continued to work, often because their 401(k)’s had plunged in value. In fact, there are more Americans 65 and older in the job market today than at any time in history, 6.6 million, compared with 4.1 million in 2001