Why The Economy Could Take A Long Time to Recover and How Your Assets May Be Affected

I’ve argued for a long time that the economic climate we currently find ourselves in resulted from too much debt, making this ‘recession’ a credit driven recession rather than the more typical inventory driven recession. Incidentally, the last rather severe credit driven recession we experienced was in the 1930’s.

Here are the simple facts:

· The economic ‘expansion’ of the last decade wasn’t expansion at all. Instead, due to the creativity of Wall Street and major banks, we simply borrowed against future production by creating additional debt. In other words, we spent money we didn’t have to such an extent that much of the accumulated debt will likely never be paid. (See chart below) Read more »