The Leaky Bathtub Economy

Financial Sense Online ^ | 3/10/09 | Frank Barbera

[txnuke]

At the moment, only a fool would argue with the premise that the primary trend for the global economy at this time is ‘contractionary.’

‘Down -- and down hard’ is the best phrase to describe the current global economic trend. Some would argue that in this context, Deflation is the dominant theme in what we have sometimes characterized as the ‘Leaky Bathtub Economy.” Picture the global economy as the bathtub, where on the one hand we have a huge credit deflation taking place where debt is being extinguished, defaulted upon, and wealth is being destroyed at a record rate.

[txnuke]

Bottom line: "...the contractionary economic ocean liner still needs more time to turn, or put another way, the leaky bath tub has in all likelihood not yet been repaired."

[Diana in Wisconsin]