The Recession Is Over, Unemployment Expected To Rise
Almost a year after the historic collapse of Lehman Brother, Fed Chairman Dr. Ben Bernanke announced that the worst recession since 1930 is finally over!
However, this is only from a “technical perspective”, and unemployment for 15 million Americans (officially 9.7%) will continue, if not get worse. In fact, it may stay this way for nearly 4 more years according to other economists.
So what does this mean? The operation was a success but the patient still died!
Apparently pumping a trillion dollars in to the economy will create a technical expansion even if the net benefit to society is negative. What happens when the government pulls the plug on throwing money at the ecnomy? Won’t the GDP decline again, pushing us back in to a double dip recession?
And what happens if our lenders make this decision for us? Supposing China and Japan no longer want to buy our 30 years bonds at a measley 3 or 4%. What if the interest rates go up to 8%? Will we be able to afford $1 trillion dollars a year in interest payments? Will we start issuing notes for the interest payments? Nah, we’ll just devalue the currency and let inflation help us out of this mess. Either that or the government stimulus will continue indefinitely, aka monetary policy Zimbabwe-style! Oh wait, isn’t that the same thing?
If you found this post helpful, consider donating to my coffee fund!![[del.icio.us]](http://images.del.icio.us/static/img/delicious.small.gif){kind=small}
- Another Case For Gold Today's post is an excerpt from What If Stocks Were Priced In Gold? posted at Experience Is Everything. While the post is incredibly interesting it is rather long. The portion I've quoted explains why gold will likely outperform the dollar and stocks over the next few years. It follows that......
- How Trade Tariffs Hurt The Economy Since I'm not smart enough to explain how trade tariffs work (or even spell tarrifs), I'll just shameless quote Christopher Hancock from The Penny Sleuth.We believe trading partners are better off specializing in the good in which they are the low-opportunity cost producer. We believe restrictions on trade decrease the......
-
Buffett Finally Admits the Dollar is Doomed! Finally Warren Buffett said what I've been harping on about for two years. In his NYT op-ed piece titled "The Greenback Effect" he admited that the government is setting us up for massive inflation and destruction of the US Dollar. This fiscal year, though, the deficit will rise to about......
Related Websites
- There's no winning Dollar Value vs Foreign Currencies Trade Surplus / Deficit Interest Rates Tax Rates Unemployment Rate Inflation Did I miss anything? I don't know if there's a 'general happiness' index available, but if there were, I'd add it to the list. What is this list? It's the data we follow......
- MonaVie's Money-Losing Scheme to Solve the Recession / Layoffs Over the weekend a lot news about MonaVie came across my virtual desk. That's quite unusual, weekends tend to be a quiet time for news. For those curious what MonaVie is I asked if MonaVie is a scam more than 3 years ago. I was surprised that company was selling......
- Liberty Head Silver Dollars money -> Coins-US -> Dollars Liberty Head silver dollars have been referred to in many different ways over the years. First they were called Buzzard Dollars, because no one really liked the original design of the rather scrawny eagle on the back. The large, heavy coins were also referred......
[All content is copyright of Living Off Dividends & Passive Income]
September 15th, 2009 at 2:31 pm
I saw Jim Rogers on Bloomberg the other night and he was saying the debt hasn’t been fixed instead just shifted to the government. I’m afraid he is probably right eventually with his predictions but on the TARP repayments, haven’t they started a trend of paying the government back? If somehow the economy can stay fairly flat I don’t think it will be as bad as Rogers pictures it… soon atleast….
September 17th, 2009 at 5:33 pm
I’m a big fan of Jim Rogers! Him and Peter Schiff are who I look to for economic common sense. As far as I’m concerned, the Federal Reserve created the housing bubble (read “Meltdown” by Tom Woods. I hardly give Bernanke much credit for anything he says. Recession over? Please. I think things are going to get much worse here for a number of reasons (the dollar, debt, etc.) and I’m not going to let someone like Bernanke claim “his plan worked” and give him credit for it.