(snip)"The US recession is now pretty obvious. The collapse of all the housing-related indexes is very important because this is our main industry aside from our military complex. All the other systems depend on the housing and military industrial complex. If one or the other contracts, the entire economy contracts. True, we export more if we use dollars as the denomination to track this trade. But this is inflationary dollars so any rise in export value has to be taken with a huge grain of salt. Namely, we should look at VOLUME rather than monetary value.
Thanks to the Europeans having a stronger currency than the yen, yuan and dollar, the top three economic powers are flooding Europe with trade goods. But this won't fix our own internal economy. For the US has sold many of its export businesses to the Europeans! So even if they have a trade reversal, this is simply many Europeans importing cheap-labor stuff from the US. They, not us, still profit. And this is often ignored.
The PROFITS from manufacturing and production are just as important as trade! And ignored at our peril which is why it is ignored, of course. Meanwhile, the race to the bottom continues. Europe is being wracked by riotous workers demanding to hang onto 150 years of labor relations gains while we all slide towards Asian-style poverty within the working class. Inflation is hammering the workers of Europe while the need to kill inflation in Japan has led to the increasing destruction of working families there. Suicide, harsh living conditions and a drop in births that is most amazing, the country literally dying right before our eyes, this is our collective fates if we follow the free-trade/monetarist economic model.
< The Sunday Telegraph has learned that advisers to Alistair Darling, the Chancellor, are working on plans that would allow all or part of the £25bn lifeline that has already been extended to Northern Rock by the Bank of England to continue indefinitely.
Although European Union rules block the bank from receiving state aid beyond February 17, lawyers are drafting documents that could change the status of the funding to "restructuring aid". This would allow the Bank of England to continue providing funding to Northern Rock - and aid any takeover of the bank. >
Both the US and England's banking systems continue to collapse. England had the same real estate bubble the US had and the origin was the same. The Bank of Japan flooded the world's banking systems with their awful carry trade loans. This gigantic expansion of debt had to be attached to something so it was loaded onto real estate and buy-ins, buy-outs in the business world. Far from building factories or expanding economic systems that would strengthen the economy, most of this was spent frivolously. Indeed, the minute a business was bought out with these Japanese loans, they would FIRE people and SHRINK facilities! So the more they did this, the more things contracted and here we are, in a recession. Who would have imagined this? HAHAHA.
< In 1929, days after the stockmarket crash, the Harvard Economic Society reassured its subscribers: “A severe depression is outside the range of probability”. In a survey in March 2001, 95% of American economists said there would not be a recession, even though one had already started. Today, most economists do not forecast a recession in America, but the profession's pitiful forecasting record offers little comfort. Our latest assessment (see article) suggests that the United States may well be heading for recession.
Granted, GDP grew by a robust 3.9%, at an annual rate, in the third quarter. Granted also, revisions may well push this figure up. But that was the past. More timely signs suggest that the economy could stall in this quarter. By early next year, output and jobs could be shrinking. The main cause is the imploding housing market. Experts said that house prices could never fall nationwide. But fall they have, by 5% in the past 12 months. Residential investment has collapsed, but a glut of unsold homes means that prices have much further to drop. Americans' spending is likely to be dented much more by a fall in house prices than it was in 2001 by the stockmarket's collapse. With house prices lower and credit conditions tighter as a result of the subprime crisis, households can no longer borrow against capital gains to support their spending. >
Finally, a sensible article from the Brits. Thank you, kind sirs. Only one big, big gripe: this contraction isn't due to the housing bubble popping. Note that after the bubble popped in 2005, the economy GREW rapidly! Indeed, as soon as the Bank of Japan funds couldn't flow to US housing debt markets, it went to England, to Spain, to all of Europe. Drove everyone into debt. Meanwhile, here, Wall Street shot up, not down!
Since the market not only didn't suffer when the housing bubble burst, it benefited from this for more than a year. The funds flowed like a gushing oil well into businesses, commercial real estate and FX trading. We had a huge bubble right after the housing bubble popped.
No, this recession is due to high energy prices and workers laid off when the major businesses went on this binge of putting huge mountains of debts on top of any and every business they could find. And in classic fashion, they also built huge office towers all over the planet WHILE FIRING OFFICE WORKERS or demanding pay cuts from them!
So, what is causing this recession again? Eh? "(snip)
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