From Shadowstats.com's publicly available archive comes this very sobering report on the current state of the U.S. economy. I am no economist but this report hews awfully close to my experience and observations over the last few years and indicates that our "leaders" in Washington have indeed sold us out.
DEPRESSION SPECIAL REPORT
Number 52
August 1, 2009
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Current Economic Downturn Is Worst Since Great Depression
Recession Started a Year Earlier Than Official Reckoning
Business Contraction Triggered Systemic Solvency Crisis
Not the Other Way AroundStill Heavily Gimmicked, Post-Revision GDP Shows More Realistic Numbers
Economic Crisis Is Far from Over
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OVERVIEW
U.S. Economy Is in a Multiple-Dip Depression. The grand benchmark revision of the national income accounts on July 31, 2009 confirmed that the U.S. economy is in its worst economic contraction since the first downleg of the Great Depression, which was a double-dip depression. The current economic downturn increasingly will be referred to as a depression, and it is far from over. There will be intermittent blips of new activity, such as the current cash-for-clunkers automobile giveaway program that appears to be generating a one-time spike in auto sales. Yet, this downturn will continue to deteriorate, proving to be extremely protracted, extremely deep and particularly nonresponsive to traditional stimuli.
As discussed in recent writings, the economy suffers from underlying structural problems tied to consumer income, where households cannot keep up with inflation and no longer can rely on excessive debt expansion for meeting short-falls in maintaining living standards. The structural issues are not being addressed meaningfully and cannot be addressed without a significant shift in government economic and trade policies, which under the best of circumstances still would drag out economic woes for many years.
The current depression likely will show multiple dips in business activity, as was seen during the Great Depression and in the double-dip recession of the early-1980s. I shall argue that the current downturn started at least a year earlier than the December 2007 onset proclaimed by the National Bureau of Economic Research (NBER), official arbiter of U.S. recessions. The current depression is the second dip in a multiple-dip downturn that started back in 1999, and it preceded and in fact was the proximal trigger for the systemic solvency crisis that rose to public view in August 2007. The ensuing systemic problems did not cause the slowdown in business activity, but they exacerbated it significantly.
While the current circumstance should become recognized as a "depression," worse lies ahead as the U.S. government’s long-range insolvency and current efforts at debasing the U.S. dollar trigger a hyperinflation in the next five years. Risks for the onset of a hyperinflation in the United States are particularly high during the next year. As will be discussed in the soon-to-be-updated Hyperinflation Special Report (see the existing April 2008 version for basic background), the United States would be particularly hard hit by such a circumstance. Unlike Zimbabwe, which has been able to maintain some level of functioning commerce during its hyperinflation, due to the backstop of an active black market in U.S. dollars, the United States has no such backstop. Accordingly, a U.S. hyperinflation likely would force cessation of regular commerce, triggering a great depression of a magnitude never before seen in the United States.
Read the rest of this compelling report here
LA, I think that you'd like the writings of Ambrose Evans Pritchard, very astute British journalist:
ReplyDeletehttp://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/
Plus he has an awesome name.
Tracker: Thanks for the tip. Pritchard is now in in my bookmarks and will likely be an authority in upcoming posts here.
ReplyDeleteHe's well worth reading, LA. In fact, most of the columnists at the Daily Telegraph are pretty awesome, particularly Simon Heffer.
ReplyDeleteWhat about the stimilus packages announced by government? how long would it take before we, at ground level, see the things changing? Many small and medium businesses have been hit severly by the recession and people are anxiously waiting to hear something good before they file their returns in Oct.
ReplyDeletehttp://www.princetoncryo.com