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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!

recession next exitHowever, 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?

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2 Responses to “The Recession Is Over, Unemployment Expected To Rise”

  1. 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….

  2. 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.

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