US recession over! (1 Viewer)
- Thread starter Chxta
- Start date
Indeed. The recession is over... and the depression has just begun.
Sure, we might have a quarter or two of positive GDP growth spurred on by pulling forward demand and government spending, but there is no growth in the real economy. Cash For Clunkers caused a spike in private consumption, but all that did was pull forward demand leaving a vacuum behind, as seen by comparing auto sales numbers from August and September. C4C was nothing more than a ploy to cause a spike in GDP. Moreover, considering the Fed continues to throw money at the system in quantitive easing and buying SDRs, they are debasing our currency. While this may be good for exports and foreign investment, it's bad news for the purchasing power of our consumers, the group that led the recession.
This is all fine and dandy, but the true measure of the economy, just like it was during the 1930's, is unemployment. The unemployment rate the Fed uses, U-3, is rising above 10% as we speak. The real unemployment rate, which actually accounts for those who have given up looking for work, is now 17% and rising. Considering this is a consumer-led and credit-led recession, and unemployment is still rising and consumer credit is still contracting because consumers can't get it, there is no real economic recovery.
So sure, we may have a couple spikes in GDP. But simply, if consumers are losing their jobs and can't find credit, the economy will continue to contract in the long run. Period.
Mish Shedlock, expert in Finance and economics, wrote this about the Fed's gameplan:
Absolutely nothing in the economy has changed. Nothing. Except for piling on more job losses, of course. And we haven't even begun to address the massive, unsustainable debts the entire nation owes to its creditors.
Sure, we might have a quarter or two of positive GDP growth spurred on by pulling forward demand and government spending, but there is no growth in the real economy. Cash For Clunkers caused a spike in private consumption, but all that did was pull forward demand leaving a vacuum behind, as seen by comparing auto sales numbers from August and September. C4C was nothing more than a ploy to cause a spike in GDP. Moreover, considering the Fed continues to throw money at the system in quantitive easing and buying SDRs, they are debasing our currency. While this may be good for exports and foreign investment, it's bad news for the purchasing power of our consumers, the group that led the recession.
This is all fine and dandy, but the true measure of the economy, just like it was during the 1930's, is unemployment. The unemployment rate the Fed uses, U-3, is rising above 10% as we speak. The real unemployment rate, which actually accounts for those who have given up looking for work, is now 17% and rising. Considering this is a consumer-led and credit-led recession, and unemployment is still rising and consumer credit is still contracting because consumers can't get it, there is no real economic recovery.
So sure, we may have a couple spikes in GDP. But simply, if consumers are losing their jobs and can't find credit, the economy will continue to contract in the long run. Period.
Mish Shedlock, expert in Finance and economics, wrote this about the Fed's gameplan:
Absolutely nothing in the economy has changed. Nothing. Except for piling on more job losses, of course. And we haven't even begun to address the massive, unsustainable debts the entire nation owes to its creditors.
Sure, U-3 is the unemployment rate for those considered to be in the labor force. If you've been out of work for over six months (IIRC), you're no longer considered to be in the labor force. Those that have given up looking for work are not considered to be part of labor force either. This is why U-3 is lower than U-6, the real unemployment rate used during the Great Depression.
Basically, it's just a government way to make things appear better. And of course, the media uses U-3 instead of U-6 because the average Joe won't know the difference.
Basically, it's just a government way to make things appear better. And of course, the media uses U-3 instead of U-6 because the average Joe won't know the difference.
Ah it's all clear now, thanks mate. No wonder they use U-3. 
Any ideas what your government is going to do next? And how can you guys actually pay the debts your nation owes to its creditors? Number is probably just too huge, I don't see any solution TBH.
Any ideas what your government is going to do next? And how can you guys actually pay the debts your nation owes to its creditors? Number is probably just too huge, I don't see any solution TBH.
Debasing the currency is what they're trying to do, though. The larger the percentage decrease in the value of our currency, the larger the decrease in the amount of debt we actually owe. But this sort of trick has NEVER worked in history, including places such as Japan during the 90's and Argentina. We actually TOLD Japan not to try to throw money at the system, and now we are doing the exact same thing.
Japan hasn't fully recovered after 20 years even despite their citizens having savings back in the day. We don't have any savings. So what we're doing is risking the death of our currency instead of taking our medicine right now. Obviously, delaying things will make it worse, just like a doctor giving an alcoholic more alcohol.
The Debt to GDP ratio is increasing exponentially, so nope, our creditors won't be paid. And yes, they know that. This is why the game of increasing government spending and consumer debt has to stop before we lose our economy and country.
