While we are in a depression, don’t confuse that with what the market will do.

We could see 20% unemployment (U-3) and have DOW 20,000 if the dollar continues to decline. Oil, of course, would be double that too. Anything people buy to get out of the dollar would go up.

Also, don’t think a recovery (small or bubble-size) means anything more than a delay to what must come to cleanse the system of the disease it has. If the recovery is GDP rising due to government spending, then it isn’t really a recovery as it is based on debt that exceeds the growth and makes the fiscal condition of the nation even worse.

Since we couldn’t tax or grow out of this before the crisis hit, this only makes default or hyperinflation out of debt happen sooner. There can’t be a recovery without reducing deficits, debt, government spending and reforming our economic and monetary policies. While doing those things would also cause a depression, delaying them doesn’t help, just makes it worse when it comes.

What is a recovery? Only a healthy nation with a rising standard of living, the rising employment, rising investment in its businesses will signal a real recovery. Anything else is an illusion based on debt spending. We have been seeing our standard of living decline for decades even during the tech and housing bubble so this is doing nothing but making things worse as more budget will have to be used for debt service instead of improving our standard of living. The CBO projects a 400% increase in interest on public debt which would put it up there with Medicare, Social Security, and Defense as the budgets largest items. Since we are already funding about 40% of the budget with debt, you can see how that destroys our chances of recovery.

- JanPaul

Related Posts:

• Government created jobs—
• Let’s see, that passing of the crisis would be in 2020? 2030?
• The market isn’t the economy.
• Medicare is even more a problem than social security
• U.S: The entire system requires increasingly large amounts of debt to keep the pyramid scheme, er I mean our monetary system afloat.

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