Posted on 09/29/2009 7:20:13 PM PDT by blam
The Coffin Shaped Economic Recovery
Sep 29, 2009 - 04:37 AM
By: Darryl_R_Schoon
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.
[snip]
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.
To hopefully prevent the collapse from reaching its catastrophic end, central bankers have now intervened far earlier and with far more credit hoping to prevent the day of reckoning, a reckoning soon to be evidenced by an historic deflationary depression that will wipe out all accumulated unpayble debts, albeit at the cost of a functioning world economy.
[snip]
Yikes, don’t let Glenn Beck see this...
I wish I hadn’t seen it: I’m in the mortgage industry.
Shovel ready “recovery.”
If you think the Dems care - you are crazy. Obama wants to be the next FDR and Mugabe.
Inflationary depression, deflationary depression. The outcome remains uncertain. But it will be bad. Coffin shaped. Or as an analyst said a couple of days ago, toilet shaped.
This guy tries to deflate Friedman’s theory on floating currencies. As far as I know, the theory is valid.
The fact that demand has shifted to buying items from other countries has kept the trade balance off-kilter for years.
When we can’t even drill for oil in the Gulf of Mexico, instead letting Mexico and others do this for us the world over, of course we are screwing ourselves over and forcing money out from our borders. This is a small example of what our regulation and misguided government have helped create. It has nothing to do with Milton’s theory being “wrong.”
It’s hard to take this guy seriously when he can’t properly see the simple stuff.
Do you see this as more of the same that evolved into the recession?
(granted equal liability should be placed on some previous borrowers and lenders... some in Congress should, minimally, be expelled)
Yes. Far better to let the failures fail and start over again with a clean slate, IMO.
The author’s gloom is impressive, but he makes little sense.
Eventually the dollar is likely to collapse, but right now it seems more likely to rally. How can that happen with Zero in the White House? That answer is above my pay grade.
The banks won't lend until they get comfortable that their capital reserves are sufficient to cover their bad debt exposure. There is still a lot of uncertainty about the ultimate magnitude of the credit write-offs. The money supply won't expand until the banks move to significantly expand their lending. When they do, we could quickly flip from a deflationary to an inflationary situation.
Milton Friedman was correct that the Fed contributed to the Great Depression by allowing the money supply to contract in the face of a credit freeze.
I will Print 2 trillion. Can you take it in Zero bills?
Did you ever post as ‘dichotomy’?
I can certainly see the “W” shaped one. Can certainly see 2012 election taking place in a horrible economy. Also can see Obama trying to slash the Gov’t budget and claiming he’s a budget hawk.
Me? No!
(Hmmm. Just realized that in about two weeks I will have been posting at FR for ten years as 'blam'.)
I don't know.
What do you want to bet on and how much?
“Milton Friedman was correct that the Fed contributed to the Great Depression by allowing the money supply to contract in the face of a credit freeze.”
Same thing happened in 1979.
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