Continued from July 14, 2009
The bottom line is this — This is a credit driven recession and until these obscene debt levels are dealt with, the recession won’t end. The Obama administration is trying to solve a debt problem by creating more debt. At this point the only temporary reprieve for the United States is that the rest of the world is in worse shape than we are. However, we are on a very slippery slope. The Federal Reserve is now buying back US Debt, effectively monetizing the money supply; and, when the fed is the only buyer left, the brown stuff will hit the proverbial air moving machine.
Still not convinced this is a credit driven recession? Read more »
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Continued from July 10, 2009
Last post, I left off talking about the fact our current recession is credit driven rather than inventory driven; the “free and easy credit” made available over the past many years was one factor in getting our economy where it stands today.
But, free and easy credit in and of itself wouldn’t have been enough to avoid an impending recession so the government allowed banks to use excess leverage. The building of this credit bubble occurred simultaneously with the consumer credit bubble. It began in 1999 with the repeal of the Glass-Steagall Act. Read more »
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This 3-part blog entry is a bit of a rant but contains information I believe every American with assets should have. With the call for another stimulus package being floated this past week by an Obama advisor and now some cheerleading for the idea from some economists, it’s important that Americans with assets understand what another stimulus package and more debt might mean for the economy.
Today, on Bloomberg, a story was published featuring the opinions of Nouriel Roubini and Robert Shiller. Roubini is a New York University economics professor who in 2006 predicted the credit crisis and Shiller, a Yale University professor, is the co-creator of the national housing price index that bears his name and author of “Irrational Exuberance”. Read more »
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