Posted on 02/09/2009 1:03:57 PM PST by headsonpikes
....Dalio: Let's call it a "D-process," which is different than a recession, and the only reason that people really don't understand this process is because it happens rarely. Everybody should, at this point, try to understand the depression process by reading about the Great Depression or the Latin American debt crisis or the Japanese experience so that it becomes part of their frame of reference. Most people didn't live through any of those experiences, and what they have gotten used to is the recession dynamic, and so they are quick to presume the recession dynamic. It is very clear to me that we are in a D-process.....
(Excerpt) Read more at online.barrons.com ...
If you’re interested, for your lists.
;^)
Except unlike Japan or the Depression era of the 30’s, we have a ton of people who have been on the dole so long that they will take what they want from the rest of us.
That is even more scary.
Non-subscription link.
http://online.barrons.com/article/SB123396545910358867.html?mod=djemWR&page=sp
Nice post. Thanks.
I need to read this later
I remember the great Depression, and lt led the World into WW-II.
What Congress is doing today is not going to help.
What would work is a steep reduction in taxes — income, sales, auto, pet licenses, etc, ad infinitum.
Tough love is the one thing we have left to prevent this government induced mess from turning into WW-III.
It’s an interesting and informative interview, but Ray Dalio is talking about what is happening as a ‘process’ and referring to ‘cycles’ and not addressing what precipitated this — government intervention.
Dalio, like so many other institutional economists, is simply referring to the current economic situation — which again was CREATED by the government — as if it were merely a weather phenomenon to which we must simply adjust.
He is also not suggesting what can be done to arrest, and even reverse, this ‘process’ — reducing, if not eliminating, taxes on income, savings and investment and shifting the tax burden to consumption. The regulatory burden needs to be re-evaluated and pared down dramatically also.
Away will go most of the liquidity problems. The economy would take off like a rocket. Along with it, domestic and international confidence in the American economy in particular — and the free-enterprise system in general — will be restored.
But even too many Republicans dismiss this as “voodoo economics.” Bear in mind that it was Bush’s father who coined that term when he was running for the GOP nomination against Reagan in 1980.
It is this terror of economic freedom that is our greatest threat and what promises to make gloomy economic forecasts like this one self-fulfilling prophecies.
Thanks. I thought I’d done that.
I’m in the mining stock game, and it really does look as if only gold stocks are going to do well going fwd, just like the d*mn ‘30s!
This not be good news.
Thanks for an exceptional read. I think I’ll dip the Depression countdown clock a couple of more notches...
Whatever. Even among the worst poverty there is massive wealth. Your choice now is to sit and cry about it or get to work.
For later. Thanks Sam.
Yes he does: Massive debt write-downs from everyone down to the individual mortgage holder, or barring that, massive numbers of bankruptcies until the debt level reduces to a point where expansion can happen again. Of course, these both have problems of their own, but at least once the bad debt is flushed, the economy can start moving again.
One further note though, the real reason that we are in the state we are in is not only because of debt, but also income. If somehow incomes could magically rise (creating inflation along the way), then the debt wouldn't be much of a problem, and massive clean-outs would not have to take place. So our choices are to let people go bankrupt or write down bad debt and cause deflation along the way, or inflate the money supply like mad and have inflation take care of the debt.
Gold
Treasuries
Yen
Don't even look at stocks until 2010...
More than just a recession, not quite a depression ... It’s the Obama Repression, or O-pression for short.
Bump for later...
Debt-load is like a spring that can only be wound so tight. Deleveraging was inevitable. We have deleveraging and economic contraction happening at the same time. It’s a self-reinforcing cycle.
They’re trying to get us out of it by reshuffling debt from the private sector to the public sector. Besides being immoral as hell, it probably won’t work. Debt is still debt.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.