This is how a depression seems to work. There is a catastrophic snap, followed by a lot of disbelief and ignorance that “things can’t really be this bad”. So people go about their lives at every level, believing the status quo.
The masses believe their jobs and shops and money is more secure than it is at this time. The elites believe that debt is not catastrophic because they have not seen it swallow them to date, therefore it must not in the future.
We keeps seeing fits and starts of deleveraging and it happens so slowly over such a long time, people continue to think “the worst is over”.
This depression is going to unwind for years, with a continuing parade of bad news as the world’s economy is dragged down, before this period of deleveraging is done and people can get back to hard work, investment, risk and prosperity.
There is going to be a long unwind. By the time we are done, people will think we will never see good times ever again.
Prior to Obama’s inaugeration, I predicted the economy would be on the ropes in 2012, making him a one-term wonder. I stand by that prediction. The massive debt spending by Obama may prove me wrong. He may find a new bubble to inflate, and delay the inevitable worse depression. I don’t think they can stop this. I think the Great Debt Unwind is unstoppable and we are going to see the fall-out from it for the immediate future, 5 to 10 years.
Just my ignorant worthless 2 cents as I don’t have any better raw data to work with than anybody else, and I have no formal training at this stuff. I do pride myself in having been right about this depression far more often than our supposed economic “experts” and all of their years of financial training and experience.
I mostly agree the overall picture you outlined.