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Dec 6th, 2017
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Joined: Aug 2008
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- The graphs are drawn month-by-month. A Tale of Two DepressionsWorld Industrial Output, Now vs Then ![[Linked Image from voxeu.org]](http://www.voxeu.org/files/image/depression_fig1.gif) World Stock Markets, Now vs Then ![[Linked Image from voxeu.org]](http://www.voxeu.org/files/image/depression_fig2.gif) The Volume of World Trade, Now vs Then ![[Linked Image from voxeu.org]](http://www.voxeu.org/files/image/depression_fig3.gif)
Last edited by numan; 04/11/09 05:04 PM.
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- Decouple the world from the dollarIt is clear that this is no ordinary recession....
While an emphasis on reviving banks and an injection of public spending are both important, the trouble is that neither one directly addresses the main source of global deflation, which is that global imbalances are no longer being recycled effectively. Because US households and banks are now bankrupt, the United States has lost much of its capacity to absorb and recycle foreign trade surpluses. That, in a nutshell, is the driving force behind the global deflationary trend.
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... this would involve figuring out a way to draw a wedge between the global dollars accumulated in foreign reserves and the domestic dollars that the US will be creating at a much faster clip. That way, the world economy can reinflate at the same time, since everyone would be able to devalue in relation to a stable monetary standard....
The real question is whether there will be the political will to carry out these proposals. Will the United States have the wisdom to decouple the world economy from the dollar?
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- Yuan trade move 'far reaching'The Chinese government's decision this month to let exporters in a small number of cities settle their overseas trade in yuan rather than in US dollars has far-reaching implications, according to economists, even though the immediate impact is minimal.
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China's move to extend use of the yuan comes as concern grows that increased US government spending to halt the financial crisis will reduce the value of the US dollar. That could reduce the amount of money earned by Chinese exporters if the yuan were to strengthen against the US currency. It could also reduce the value of US Treasuries held by the Chinese government.
It is estimated that of China's US$1.95 trillion in foreign exchange reserves at the end of last year, the largest in the world, 70% is invested in US dollar-denominated assets. Increased use of the yuan in international trade could help reduce countries' use of US dollars.
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- CREDIT BUBBLE BULLETIN
The greatest costI'll try to explain my belief that dangerous Ponzi finance dynamics are in play with the current course of policymaking. First, I view panicked policymakers as seeing no alternative than to try to sustain the current (deeply maladjusted) economic structure. A more natural course of economic adjustment - from finance and consumption-driven bubble economy to a more balanced system - was going to be much too painful to endure. So a massive government inflation was commenced in desperation - with the grandiose objective of revitalizing securities markets, housing prices, and the overall US economy. I just don't see how this reflation goes much beyond stoking a susceptible artificial recovery.
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...it's the massive inflation of non-productive credit that ensures the unavoidable crisis of confidence. Can the underlying economic structure service the mounting debt load or, instead, is it the massively inflating debt load that is sustaining a vulnerable economy? And it is in this vein that I fear the government finance bubble is on track to destroy the creditworthiness of the entire economy. And this Ponzi dynamic is the greatest cost to what I fear is a continuation of unsound policymaking.
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WASHINGTON—After nearly four months of frank, honest, and open dialogue about the failing economy, a weary U.S. populace announced this week that it is once again ready to be lied to about the current state of the financial system.
Tired of hearing the grim truth about their economic future, Americans demanded that the bald-faced lies resume immediately, particularly whenever politicians feel the need to divulge another terrifying problem with Wall Street, the housing market, or any one of a hundred other ticking time bombs everyone was better off not knowing about.
In addition, citizens are requesting that the phrase, "It will only get worse before it gets better," be permanently replaced with, "Things are going great. Enjoy yourselves."
The final war will be between Pavlov's dog and Schroedinger's cat. --Robert Anton Wilson
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Probably the best thing that could happen would be some kind of sex scandal in Washington. Would have to be pretty big, though... bigger than Clinton or Edwards ... The nation is already hardened to news. You can see it here on RR... It''s just too exhausting. We've turned to the mundane things of everyday life. Where the intensity of the forums were politics and finsnce even as recently as a month ago, most of the current discussions are about anything but. I'm guessing that people are tired of fighting, and hoping for some reasonable solutions, and have given over to accepting, and trying to make the best of a bad deal. The idea that there could be a groundswell of outrage that might result in political change is not valid. The public has gone into shock and doesn't want to hear any more. It has rubbed off on me. I have come to the point that I really don't care about housing, credit, or even whether the unemployment rate goes to 15%. It's my neighbor who is affected, and he doesn't care enough to even read his newspaper. For the first time in years, I've lost interest in caring about what happens to others. I'm ok, my bride is ok, we owe no one, can pay our bills, and look to be reasonably secure for the present. Now, I find myself able to watch Hannity listen to Rush Limbaugh or to Savage... (still can't abide Ann, though). It's kinda like reading history... even though the history hasn't yet been written. I'll leave with a single question... One that I've posed at least 5 times in the past several months... One that no one here has thought important enough to answer. "Name one honest man or woman in the three branches." No answer. The 545 have won! 
Last edited by itstarted; 05/05/09 03:02 PM.
Life is Good!
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I'll leave with a single question... One that I've posed at least 5 times in the past several months... One that no one here has thought important enough to answer. "Name one honest man or woman in the three branches." No answer. The 545 have won! Do any of us really know any of the 545 well enough to answer the questions without speculating? 
Contrarian, extraordinaire
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Pooh-Bah
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"Name one honest man or woman in the three branches." If you mean honest by commonly accepted standards, or truthful, that would of course be Ron Paul.:-) Yours, Issodhos P.s. If you're feeling down, give a few bucks to the local Area Food Bank. It will perk you up.
"When all has been said that can be said, and all has been done that can be done, there will be poetry";-) -- Issodhos
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If you mean honest by commonly accepted standards, or truthful, that would of course be Ron Paul.:-) Not sure I totally agree with his views, but I'd agree that he's as close as anyone I've seen. I kinda Like Kucinich too. As far as SCOTUS, I don't know enough, so maybe I should reduce the 545 5o 536. I'm still having an internal debate on the Presidential position. On the one side, I see gawd awful decisions, but then wonder how anyone could stand pat on morality, and expect to get anything done. Am so happy to see ANY movement toward change, that I'd hate to stop the pragmatism that for the first time in many years offers some hope.
Life is Good!
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- Recession 'shape' points downWe've heard a lot of talk about the shape of this "recession", especially for the United States. The optimists think it will be V-shaped and that we are even now seeing the bounce upward toward growth again. Those somewhat more in tune with the deeply worrying fundamentals think it will be U-shaped, and they think we've probably hit the bottom, or nearly so, but we have some months to go before growth begins again. Then there are the pessimists, who insist on being called realists, who think it will be L-shaped, with America's economy stagnating perhaps for an entire decade, or even more after it reaches the bottom of this recession.
Finally, there are those relative handful of so-called "prophets of gloom and doom", who continue to advise that this isn't merely a severe recession, but is rather the opening phase of a full-blown crisis, a financial/economic collapse centered in the US in which the severe recession is merely one of many repercussions to come.
They predict the crisis will be shaped like a series of steps going downward - in effect, a series of collapses with deceptive plateaus in between, with economic growth returning very slowly and painfully in the US and the UK several years off from today. They insist that we haven't even remotely seen the bottom yet, but have only experienced the first few steps downward so far, and that there are several more to come. They also warn that the worst for the US and the UK, by far, is yet to come.
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