Jan 31, 2013
Anglo-American Economies Contract Again
We’ve noted for years that the U.S. – and the entire globe – faces a another leg down.
Last week, we pointed out that Britain was in a triple dip, with its economy contracting .4 percent in the fourth quarter of 2012, and that the British economy is now worse than during the Great Depression.
Today, the U.S. confirmed that the economy contracted in the fourth quarter of 2012.
For those who are just waking up from their mainstream media-induced stupor, let’s take it from the top …
What Do Economic Indicators Say?
We’ve repeatedly pointed out that there are many indicators which show that the last 5 years have beenworse than the Great Depression of the 1930s, including:
Mark McHugh reports:
Velocity of money is the frequency with which a unit of money is spent on new goods and services. It is a far better indicator of economic activity than GDP, consumer prices, the stock market, or sales of men’s underwear (which Greenspan was fond of ogling). In a healthy economy, the same dollar is collected as payment and subsequently spent many times over. In a depression, the velocity of money goes catatonic. Velocity of money is calculated by simply dividing GDP by a given money supply. This VoM chart using monetary base should end any discussion of what ”this” is and whether or not anybody should be using the word “recovery” with a straight face:
In just four short years, our “enlightened” policy-makers have slowed money velocity to depths never seen in the Great Depression.
Indeed, the number of Americans relying on government assistance to obtain basic food may be higher now that during the Great Depression. The only reason we don’t see “soup lines” like we did in the 30s is because of the massive food stamp program.
And while apologists for government and bank policy point to unemployment as being better than during the 1930s, even that claim is debatable.
What Do Economists Say?
Indeed, many economists agree that this could be worse than the Great Depression, including:
- Fed Chairman Ben Bernanke
- Former Fed Chairman Paul Volcker
- Economics scholar and former Federal Reserve Governor Frederic Mishkin
- Nobel prize winning economist Joseph Stiglitz
- Nobel prize winning economist Paul Krugman
- Former Goldman Sachs chairman John Whitehead
- Investment advisor, risk expert and “Black Swan” author Nassim Nicholas Taleb
- Well-known PhD economist Marc Faber
- Morgan Stanley’s UK equity strategist Graham Secker
- Former chief credit officer at Fannie Mae Edward J. Pinto
- Billionaire investor George Soros
- Senior British minister Ed Balls
Bad Policy Has Us Stuck
We are stuck in a depression because the government has done all of the wrong things, and has failed to address the core problems.
Instead of bringing in new legs, we keep on recycling the same old re-treads who caused the problem in the first place.
This isn’t an issue of left versus right … it’s corruption and bad policies which help the super-elite but are causing a depression for the vast majority of the people.
This article was posted: Thursday, January 31, 2013 at 12:34 pm