Still No Recession - And if We Avoid One - Give Bernanke a Nobel Prize?

[kickboxers]

Rome didn't fall overnight.

Years of war and political corruption bought down the empire.

Quote from Champion:

Some people on ET need to get real. If they don't yet get around in intelligent circles, at least they should surface from their neanderthal melodrama expecting USA or world disaster. Isn't here now and isn't going happen. There is no gigantic 'black swan' economic catastrophy, now or in the next few years.

 

[kickboxers]

Years of moral corruption in America.

Drugs etc....is rampant in the country. no morals...all crime everywhere.

including crime wall street..spreading like a disease. took decades to spread..and than the walls collapse one day.

Quote from Champion:

Some people on ET need to get real. If they don't yet get around in intelligent circles, at least they should surface from their neanderthal melodrama expecting USA or world disaster. Isn't here now and isn't going happen. There is no gigantic 'black swan' economic catastrophy, now or in the next few years.

 

[makloda]

Quote from achilles28:
Way higher. That means 1% GDP growth is really negative 2 to 3% GDP after real inflation is factored.

So basically we've been in a recession since 1990 using the 'real' inflation data? Or maybe even since 1980? And then before 1980 it was the 70s stagflation, so I guess the last decade of actual economic growth must have been the 60s?

 

[achilles28]

Quote from makloda:

So basically we've been in a recession since 1990 using the 'real' inflation data? Or maybe even since 1980? And then before 1980 it was the 70s stagflation, so I guess the last decade of actual economic growth must have been the 60s?

If you want to think that, be my guest.

When was the last time Oil was at 140$?? Hmmm....

If you look close, 1980's CPI is used to calculate current-day at 9%. Bit of a red herring there, Macky,

 

[slider123456]

Quote from bwolinsky:

Slider, you speak for a lot of people on here, and what you're saying is nothing new. Here's a question, and I guess anyone who has the same sentiment could respond too: what good does it do to speak about an economy like that that is still growing, albeit slowly?

Don't you think you're just talking yourself into bad times? It seems if you keep saying there's a recession, when I guarantee it will never pass muster as one, that you'll be right eventually when we do have one.

Michigan is the only state with a declining economy, and that's all on the crap Detroit makes, but this doesn't speak for the shift into an even more service based economy.

I would say that not a recession but a depression or hyper-inflation is most likely in the cards for within 5-20 years with more and more economic uncertainty in the meantime which is what I mean by beginning of the end. The resourcefulness of policy makers and citizens will determine how long it takes. The fed has 2 choices either lower interests and watch the U.S. dollar crumble as confidence is undermined or raise interest rates strengthening the dollar and over time increasing confidence. The first choice will keep unemployment from skyrocketing but will cause a mass panic, as people realize the buying power of the dollar is less than the day before, leading to the biggest bank run ever as people dump dollars for real goods that will hold there value such as gold oil etc. Interest rates lower than inflation will also cause banks to stop lending as there loan repayment will be worth less than the loan given. If this happens the American economy will be destroyed as we know it in no short order. The second, higher interest rate, will increase confidence in the dollar and lead to high unemployment as money dries up and the economy will eventually self correct albeit with a lower quality of life than before.


The economic problem of today is very fundamental and has not changed since goldsmiths lent their "money" out in Europe. I think the easiest to explain this problem is using the world as an example. Say that in the worlds first year of lending money it lent out 5 million dollars at %5 interest. A year goes by and 1 milion and 50 thousand is owed but there is only a million to pay it back so a loan for 50 thousand would be needed to pay it back. This is never apparent though because money is continually lent out and each subsequent wave of loans pays the previous loans minus the defaults. Within the world though this process plays out like 3 card monty with countries that are importing more than they export funding the country that exports more than it imports causing the latter country to balance this deficiency, caused by interest, and the former country to go broke meanwhile the debt of the entire world continues to rise minus the defaults. This is one of the reasons that the hours a person has to work for the same quality of life has risen for the last 50 years the only reason it is not worse is because of manufacturing efficiencies such as the assembly line. This basically boils down to what could be called relative economics where the country that produces the most and consumes the least wins. America could still pull out of this financial crisis but it would entail longer work hours with less consumption resulting in more exports than imports as long as there is another country economically healthy enough to buy the exports.

The other cause is a variation of the first where there is not enough money in the country to buy the goods produced and inevitably has the same "solutions" which is either foreign debt or income through exportation to make up the difference. These 2 reasons lead me to believe that the failing of the economy is not a matter of if but when and were also in no small part the cause of the great depression.