Posted by Michael A. Kamperman on September 9, 2009
Gone is any glimmer of hope that President Obama is beginning to understand that creating jobs is the key to claiming victory over the economic crisis. Tonight President Obama opened his healthcare speech by mentioning the struggling economy. While acknowledging that it would be several more months before the economy fully regains its footing, the President claimed that the risk of entering a new great depression has been avoided. He then moved on to talk about healthcare. The message I received was that he believes his economic team has done all that is necessary and no additional significant help for the economy will be coming from Washington anytime soon. The President needs a new economic team. Just yesterday we learned that consumer credit sank by a record $21 billion in July. Last Friday we learned that the official unemployment rate rose 3 tenths in one month to 9.7%. The broadest measure of unemployment rose to 16.8%. Where will the economy be in the fourth quarter when cash for clunkers and the first time home buyers $8,000 tax credit are no longer driving sales of new homes and new cars? While the tax credit expires on November 30, new homebuyers must close on the transaction by that date to receive the credit. Since it now takes up to 60 days to close on most mortgages there will therefore be few homes sales benefiting from the tax credit in the fourth quarter.
The President and his economic team have not grasped what it means to be in a deflationary depression. It is not about falling off of a cliff and having every business in America close overnight. It is about an inability to generate enough cash from income and from asset sales to service debt. As time goes by savings accounts are drained and foreclosure is the only option left. In New York City the owners of Stuyvesant Town and Peter Cooper Village, two large apartment complexes, only have enough cash to stay solvent until February. At that time they face certain default. The rental income from the apartments has dropped 25% from when the owners purchased them for $4.4 billion two years ago. This story is being repeated by both businesses and consumers in communities all across the country. Some one is going to lose a portion of the $4.4 billion loan. As a result of the losses more people will lose their jobs. Those people then default meaning other people will lose their jobs.
The President is intent on passing a signature health care plan that requires all Americans to obtain health insurance. But how can the 16.8% of Americans who are unemployed or can only find part-time work going to be able to afford to purchase health insurance? The President pledged to cut spending in other programs if the cost assumptions he put forth tonight proved to be to optimistic. The problem is the President and the Congress have not accounted for the fact that the unemployment rate in this country has doubled in the last 18 months and is still rising. The plans they are working on were put together when the economy was much healthier. Teachers are being laid off all over America despite the stimulus bill. The worst thing the President and the Congress could do is withdraw spending from other areas of the budget. The President is assuring us the healthcare plan will be paid for, but the country cannot afford to pay for it until the economy improves substantially. I agree with accomplishing many of the President’s goals on healthcare such as no life-time caps on coverage, no dropping coverage when someone gets sick, access to insurance for those who currently have pre-existing conditions, and no more free-loaders on the healthcare system. But these plans take money. The money will not exist to pay for a big new healthcare plan unless the President begins to grasp that we are in a global deflationary depression. Mr. President the number one issue in America is jobs.
Posted by Michael A. Kamperman on September 8, 2009
The Zombie Banks are suffocating the consumer. The latest data for July shows that consumer credit fell $21.6 billion in July. This is an all-time record low. Additionally, consumer credit for June was revised down with credit dropping $15.5 billion. Consumer credit includes almost all forms of secured and unsecured consumer credit, except for loans secured by real estate. The consumer is not being cautious with credit as many in the media report over and over. The consumer is being denied credit by the Zombie banks. The standards for consumers to receive a loan from a bank are getting tighter and tighter. There is no meaningful shadow banking system left to step in and provide alternative credit options to consumers. The consumer accounts for 70% of the nations GDP. Anyone thinking the U.S. economy is going to have inflation and a V-shaped recovery without consumer spending kicking in needs to have their head examined. Without access to credit, the consumer will continue to be forced to spend less and less. The reason the unemployment rate keeps rising is the consumer cannot access affordable credit to provide the spending that creates jobs.
This week Washington will continue to debate healthcare when they should be debating fixing the broken credit markets and finding jobs for the unemployed. The July credit numbers come after the Zombie banks either passed the vaunted Stress Test, or raised the amount of capital required by the Treasury. So why are the banks not lending in this zero interest rate environment? It is because the credit markets remain broken. The smoke and mirrors Wizard of Oz Stress Test trick to not look behind the curtain is a failure for the real economy. Unless real steps are taken by Washington to fix the broken credit markets the economy will remain mired in a deflationary depression.
The solution is to create a “bad bank” and clean up bank balance sheets once and for all. Then, the federal government needs to back the securitization market so banks have a place to sell their loans and recycle the cash into another loan. Finally, if Washington wants to see the economy move forward they need to open up credit to people with subprime credit scores. The moral high ground aversion to loaning to people who have been down on their luck in the last two years is killing the economy and causing large scale unemployment. Many people who said that people with subprime credit scores shouldn’t get loans last year have found themselves unemployed this year as business has dried up. We all know someone who is unemployed. Is our puritanical moral superiority worth seeing those people we know lose all of their savings, their homes, and their self-esteem? I think not. I think it is high time Washington got serious about saying the economic crisis is the biggest crisis facing the country. Then, I think both republicans and democrats need to sit down in good faith and negotiate solutions for the good of the country and not for the good of their own personal 2010 election prospects.
Posted by Michael A. Kamperman on September 4, 2009
The August 2009 unemployment rate climbed to 9.7% and the economy officially lost another 216,000 jobs. President Obama’s Administration said today that the President doesn’t consider the country to be out of recession and on the road to recovery until jobs are being created, not just saved. President Obama is correct to measure our economic performance primarily based on the unemployment rate. It is certainly the metric the American people will be using at the polls in 2010 and 2012. This is very refreshing news and offers a glimmer of hope that the President will start to take the economic crisis seriously. The Whitehouse said technical measures like a positive GDP report would not mean the economy has recovered if it is not accompanied by job growth. Meanwhile, many in the media are portraying the August unemployment report as a sign of an improving jobs picture, just because we lost fewer jobs than we lost last month. Others in the media are talking about a jobless recovery. The unemployment rate is the best measure of overall economic performance that we have. It is an oxymoron to talk about a jobless recovery.
The actual unemployment report did not contain any good news. Hours worked stayed at 33.1 hours, which means employers have not yet started bringing their part-time workers back to full-time status and are not increasing over-time. We will not see job growth until we start to see full utilization of companies existing workers. Shockingly, despite the stimulus plan being in full swing in the month of August, government jobs fell by 18,000. This is primarily attributed to layoffs of postal workers and cut backs by state and local governments. Finally, the most distressing news was that the U-6 unemployment rate has now risen to 16.8%. In the early 1980’s when the official U-3 unemployment rate hit 10.8%, an even broader measure of unemployment than U-6 topped out at 15%. The U-6 measurement is telling us we have the worst jobs picture since the 1930’s.
President Obama can at least be thankful that he will not have pictures of economically desperate people in long lines at soup kitchens. This is because our modern method of feeding hungry people is food stamps. The number of Americans receiving food stamps is now a record 35 million, up from 26.5 million in 2007. Recognition of the scope of a problem is the first step in solving it. I detected today the President’s Administration is realizing the jobs picture is much worse than they expected and the stimulus plan is simply not going to create any jobs. It was only in April that his economic team ran stress tests on the nation’s largest banks using a worst case scenario for the 2009 unemployment rate of an average of 8.9%. We are well past the worst case expectations. The President needs to tell his economic team he wants a new plan, because the current one clearly isn’t working.
Posted by Michael A. Kamperman on September 1, 2009
The official U-6 unemployment rate is 16.2%. The official U-3 unemployment rate is 9.4%. After the last unemployment report I pointed out that the Bureau of Labor Statistics made an adjustment and removed approximately 1 million people from the labor force. Had this not occurred the official U-3 unemployment rate would be 10%, and not 9.4%. It turns out the statisticians have been systematically tossing Americans out of the official labor force for the last year. The civilian non-institutional population (not-in-prison) population has risen from 233,864,000 in July of 2008 to 235,870,000 in July of 2009. Yet the BLS statisticians claim those seeking employment has fallen from 156,300,000 to 154,504,000. Basically, the population of those over the age of 16 and not in prison has risen by 2 million people and magically those seeking employment has fallen by almost 2 million. The participation rate in the labor force is now calculated to be only 59.4%, down from 62.9% at the start of 2008. Are we to believe that the significant losses in the stock and bond markets over the last 18 months have caused 2 million extra people to retire due to increases in wealth? Anecdotally we know that many people that retired in the last few years have re-entered the workforce due to wealth destruction. Without this sleight of hand the official U-3 unemployment rate would be 11%, not 9.4%. Are the American people aware of this? Are members of Congress aware of this? Is President Obama aware of this? Shouldn’t this be the lead story on the ABC, CBS, CNN, FOX, and NBC nightly news shows?
If American people realized the official unemployment rate should be quoted as a minimum of 11%, then they would be demanding action. The kind of action we are not getting out of Washington. The unemployment crisis is particularly acute amongst people in their 20’s, many with college educations. This is why over 1 in 8 mortgages in America are 30 days or more past due. This is why the stress test designed to keep the ZOMBIE BANKS alive is a joke. This is why tax revenues at the federal, state, and local levels are collapsing.
Washington needs a wake-up call. Hello Washington, is anyone up their listening? It seems Washingtonians are more interested in esoteric theories like fiscal discipline, balancing the federal budget, moral hazard, no more bail-outs, healthcare reform, global warming, and positioning for the 2010 elections than they are about sitting down and solving the greatest economic crisis since the Great Depression. Where are our statesmen? Where are our leaders that care more about our people than they do about their own party and their own chances for re-election? We need massive quantitative easing. We need a “bad bank” to absorb the toxic assets and end the ZOMBIE status of most of our largest lenders. We need to open up credit for homes and autos to people with credit scores lower than arbitrary lines like 700. We need to give significant federal aid to our states. And we need a serious stimulus program for our people, such as lowering the age of eligibility for Social Security and Medicare. We need economic shock and awe Washington….WAKE-UP!
Posted by Michael A. Kamperman on August 31, 2009
Is Japan the canary in the coal mine? On Sunday the Japanese elections swept out the ruling LDP, who has held power since 1955. The consensus opinion is the voters are not embracing the message of the winning Democratic Party; the voters are embracing trying something else…anything else. Such change swept many ruling governments from power in the 1930’s. In the U.S. FDR seized power. In Germany it was Adolph Hitler. While in no way am I suggesting a Nazi regime is waiting in the wings, I am suggesting change is waiting in the wings. Such is the price of a debt-induced inflationary depression on the current leaders. The people know things are not going in the right direction. However, most of the people don’t know what change of direction things should be going in. They only believe it is better to try the devil they don’t know rather than keep the devil they know. The next major industrialized nation up for potential electoral change is Germany. Right now the polls believe Chancellor Angela Merkel’s ruling coalition will prevail. But this expectation has been thrown into doubt by the gains made in elections over the weekend by leftist parties. Like the policy proposals that swept Japan, the left leaning Free Democrats in Germany are the only major party to run on cutting taxes and the federal government bureaucracy. And in both Japan and Germany this platform gained votes. The economic crisis is causing social upheaval to sweep the globe, and it is prevalent in the U.S.
In the U.S. in 2007 less than 1 in 12 Americans were on food stamps. Now the number has risen to 1 in 9. In the middle of 2007 about 1 in 100 Americans with prime mortgages were 30 days delinquent. Today, the number of Americans with prime mortgages that are 30 days delinquent, or more, is approaching 1 in 10. Such devastating personal financial tragedies have consequences. In democracies these consequences are expressed at the ballot box. The economic uncertainty in the U.S. has spilled over at Town Hall meetings held by members of the House and the Senate across the U.S. What is specifically troubling is how easily the depressed and confused electorate can be drawn to ideas that are frankly dangerous to the economic health of the U.S. For example, my own Congressman Chet Edwards held a health care Town Hall meeting in Waco this weekend. Three times questioners suggested we would be better off eliminating Social Security, Medicare, and Medicaid. What panics me is not that an individual in a crowd of over a thousand would stand up and say this. What panics me is the individuals who expressed these viewpoints received standing ovations from large segments of the audience.
In no way would the U.S. be better off eliminating these programs. In fact, during times of debt-induced deflationary depressions the federal government would be wise to expand these programs. But a false fixation on balancing the budget and having fiscal discipline in times of economic crisis risk throwing the U.S. and the world into a new depression greater than the Great Depression. I hope President Obama is paying attention to the economic pain the country is feeling. If not, he will certainly go down in history as President Herbert Hoover II.
Posted by Michael A. Kamperman on August 26, 2009
The media has hyped the recent GDP data out of France, Germany, and Japan and has declared their economies emerged out of recession in the second quarter and returned to growth. In July which is the start of the third quarter, Japan’s exports fell 1.3% from June. Exports in July fell 36.5% from year earlier levels and imports fell 40.8%. Should we really declare an export dependent economy exporting less than 2/3 of what they exported the year before as out of recession and growing? How weak is domestic demand in Japan if imports have fallen 40.8%? In July exports from Japan to the U.S. fell 39.5%. Now how is the U.S. economy on the verge of recovery if our imports from Japan are down nearly 40%? The clear answer is both Japan and the U.S. are still mired in a deflationary depression. If a V-shaped recovery is on the way, then it must have started in August because it certainly didn’t start in July.
But what really caught my eye from Japan’s report was that Japanese exports to China dropped 26.5% from a year earlier. Many economists expect China to play a major part in pulling the world out of the global economic crisis. These analysts point to China’s 7.9% growth rate in the second quarter as a sign their stimulus plan is working. I’m sorry, but an economy that is truly growing 7.9% per year does not have a 26.5% drop in imports from one of its largest trading partners. While China is not doing as badly as Japan or the U.S., in many ways the numbers out of China are more disturbing. China initiated an aggressive stimulus plan that is the largest in the world as a percentage of GDP. China’s stimulus plan has been front-end loaded, whereas the dysfunctional U.S. plan has been back-end loaded. China has also opened the lending spigot. Whereas total lending from U.S. banks has been negative the last few months, China’s banks have increased their loans by over one trillion dollars already this year. Shouldn’t China be showing growing imports based on all of the stimulus spending and lending in their economy?
China calculates their GDP data based on production and not on final demand. As long as products are produced they are counted in the GDP data even if they are simply placed in a warehouse for storage. The drop in imports is indicative of declining demand in China. Most likely China has been over-producing relative to real demand to maintain its growth rates. If this is so, then China will not need to increase production when real demand returns. If demand doesn’t return, then China has placed itself in a position whereby it will need to sharply curtail production. Perhaps the lack or internal demand in China is the reason China’s electricity consumption is down. It also explains the reason the Chinese economy is now experiencing deflation. In the Great Depression there was a sharp leg down in the economy, followed by a temporary flattening period, followed by a second sharp leg down in the economy. Another leg down in the global economy could originate with a loss of faith that China can actually pull itself out of the global deflationary depression, no less the rest of us.
Posted by Michael A. Kamperman on August 23, 2009
Christina Romer, the chairperson of President Obama’s Council of Economic Advisers, says “Deficits do matter.” “No one believes that more than the president.” First we lost the Fed this week and now we lose the President. For those wondering how to interpret these comments let me translate. Ms. Romer is saying the President cares more about satisfying the bond vigilantes in China and on Wall Street than he does about whether or not the average American keeps their job or their home. First the Fed thinks keeping Zombie Banks that don’t go under, but don’t lend either, will eventually work even though it didn’t work in Japan. Now the President is assuring the balanced budget hawks the federal government is prepared to either raise taxes or slash spending in the middle of the greatest downturn since The Great Depression. Perhaps he can channel the ghosts of Herbert Hoover and FDR to find out that if they had a chance to do it all over again the last thing they would have done is worry about the deficits until the economy was strong enough to stand on its own. We are still hemorrhaging jobs and we have significant deflation. Washington needs a real stimulus plan, needs to fix the broken credit markets, and needs to print a lot more money. But it is obvious that this will not be happening anytime soon. Hence, the “Great Unraveling” will continue unabated.
The “Great Unraveling” is simply the process of the economic dominoes falling into each other one by one. A person loses their job, loses their home, and quits spending money at the local clothing store and restaurant. The local clothing store and restaurant go out of business and the owners default on their mortgages. These dominoes will continue to fall into each other until something stops them. In the Great Depression the domino stopper was World War II. In the Panic of 1873 the domino stopper was time. In the Japanese Lost Decade the dominos have not stopped falling into each other even though their crisis started 20 years ago. Do you know a family member or close friend without a job? Is there a home in your neighborhood that is vacant? Do you see local businesses closing their doors? These are the economic dominos that represent the “Great Unraveling.” That is what a debt-induced deflationary depression is all about. Those trapped in post World War II inflationary boom bust cycle thinking erroneously believe that the dominos will reverse on their on. They won’t.
Consider that we will enter September with more people unemployed than at anytime since the crisis began. Consider that we will enter September with more people delinquent on their mortgages than at time since the crisis began. Consider that those that lost their homes already and those that have been out of work for more than a year are not counted in these statistics. Consider that state and local governments enter September with lower spending levels and higher taxes than they entered last September. Consider that most for profit and non-profit institutions enter September with small budgets than they entered last September. We enter September weaker, not stronger. The consumer has shown no signs of opening their wallet, except for those with clunkers to unload. Homebuyers are scarce, except for first time homebuyers taking advantage of the $8,000 tax credit. To balance the budget the federal government has to end the few kernels of stimulus spending that have actually been working. However, I would like to suggest a budget cut that will have overwhelming bipartisan support amongst the American people. Until the unemployment rate is back under 8% as promised, let the President, every senior member of his Administration, and every member of Congress take a 50% pay-cut. We need to see an end to the “let them eat cake” policies Washington is sending us.
Posted by Michael A. Kamperman on August 21, 2009
Over 1 in 8 mortgages in America are now 30 days or more past due. The Mortgage Bankers Association has reported that 13.2% of all mortgages are more than 30 days past due, which means people owe two or more payments. So who are these people? Mainly they are parents with children who are still living at home who are not wealthy. While exact data is not available, it is reasonable to assume that perhaps up to 1 in 5 families with children living at home and classified as lower to upper middle class are delinquent on their mortgage. How is this possible if only 1 in 8 people are delinquent on their mortgages? Well, currently about 66% of all households own a single family home. About 83% of married couples own a home. Most of the truly poor people in America do not own a home, although recently some did. Many of the non-poor married couples who do not own a home consist of those recently married for the first time still renting and those near the end of life who are living in assisted living situations. Most of the others are so mobile they do not purchase a home, or they live in natural rent areas like New York City. Basically, it is the dream of most middle class married couples to purchase a home. The data that 1 in 8 mortgages are delinquent is for all mortgages, whether they were made last month or 29 years and 11 months ago. The vast majority of mortgages owed by people who have been in their homes for 15 or more years are not delinquent. Most of the married couples who have been in their homes for 15 or more years have seen their children grow up, move out, and in some cases move back in. Basically, the vast majority of troubled mortgages are to people who have been in their homes for less than 15 years. Most middle class families with children living at home have been in their homes for less than 15 years.
Yet middle class families with children are not only reeling from significant price depreciation on their properties. They are also reeling from suffering a disproportionate blow from the unemployment crisis. Most employers that have laid off workers have based their decisions on seniority. Therefore, job losses are much higher amongst people in their 20’s and 30’s than it is for those in their 40’s and 50’s on average. So the crisis is not only most acute amongst families with all ages of children living at home, but especially amongst families with younger children.
Sadly, Washington seems oblivious to the crisis. Today Ben Bernanke, who was our last and best hope to give the economy the jolt it so desperately needs, predicted the economy would soon return to growth. Apparently Fed Chair Bernanke is too focused on Wall Street and not nearly focused enough on Main Street. How will a world economy that is dependent on the spending patterns of U.S. households with children return to growth when 1 in 5 of these households are struggling to hold on? What kind of consumer confidence can exist in middle class families not affected by the crisis when all of them know a close personal friend or family member that has lost their job? At this point we are back to President Obama, who desperately wants to be re-elected in 2012, as our last best hope. If I were him I would refinance every existing mortgage in America at 4% without an appraisal, a credit check, a new title policy, or a verification of income. And for those people that are delinquent I would simply add the delinquent payments to the mortgage balance and give them a chance to start over. All of the money for existing mortgages is already out the door and in one way or another the American taxpayer is already on the hook for over 80% of all mortgages. We don’t need change we can believe in, we need leadership we can believe in.
Posted by Michael A. Kamperman on August 20, 2009
Many economists are predicting positive growth for the U.S. economy in the third quarter of this year. Others are saying the recession has already ended and the economy is now recovering. The weekly jobless claims report is indicating those believing the economy is in a state of recovery are clinging to faith, not facts. The latest weekly jobless claims number rose to 576,000 and the 4 week moving average is back up to 570,000. This means the economy is still shedding jobs. Some economic commentators are claiming that as soon as the weekly jobless claims fall below 500,000 the economy will start creating jobs. We are so used to seeing horrible numbers that we now think really bad numbers are good. Weekly jobless claims in the high 400,000 range will still mean the economy is losing jobs, just less slowly than it is now. For perspective, consider that the peak in weekly jobless claims in the recession in the early 1990’s topped out at 509,000 in March of 1991, the only week reported at over 500,000. Yet the unemployment rate rose from 5.2% in May of 1990 to 7.8% in June of 1992. Unemployment rose 2.6% over a 2 ½ year period at a time when weekly jobless claims were averaging over 130,000 less than they have in the month of August. In the recession of the early 2000’s, weekly jobless claims reached a peak of 517,000 in September of 2001, and averaged over 140,000 less than the month of August. Again, the unemployment rate rose by over 2.4% in a 2/12 year period from 3.9% to 6.3%.
The jobs picture in the month of August is much worse than it was during any month in the previous two recessions. All we are witnessing is a slower rate of decline, not growth. The positive GDP reports out of France, Germany, and Japan for the second quarter of 2009 were based on declining imports boosting the “net exports” calculation. If other large economies are buying less rather than more how can growth resume around the globe? The answer is it cannot. As long as credit is tight the job losses will continue.
What we need is a strong focus from Washington on a program that will create jobs. It doesn’t make sense to debate whether tax cuts or stimulus spending is the best method. What we need to debate is the current stimulus plan is not working. It is not creating jobs; it is not saving nearly enough jobs. It is better to be weaving down the road in the right direction than to be heading in the wrong direction. Right now Washington is asleep at the wheel and needs to wake-up. While it is true that economic growth precedes job growth, it is not true that economic growth occurs when job losses are still mounting. History says weekly jobless claims that are averaging 570,000 are a strong indicator we are still losing a substantial amount of jobs.
Posted by Michael A. Kamperman on August 18, 2009
Many describe the state of our current economic malaise as The Great Recession. Others have used more dire terms like The Second Great Depression, The New Great Depression, or The Great Depression 2.0. But these labels are simply attempts to measure the severity of the global economic collapse to compare it to past economic crisis. Since the economy has not yet recovered, no one can say with certainty how deep the global economic contraction will ultimately be. It is no secret I am firmly in the New Great Depression camp. But I have been thinking we need a new term that describes what the economy is going through, rather than one that just measures how low we ultimately go. Therefore, I am coining the phrase “The Great Unraveling” to describe the economic calamity we are living through. By understanding what we are experiencing it can help people calculate on their own how much further we may have to fall before we reach bottom. The misnomer The Great Recession has many analysts getting out their charts of previous recessions in attempts to predict when this so called recession will end. However, what we are experiencing is not similar to any of the post World War II inflationary era recessions.
“The Great Unraveling” is a term that describes the process the global economy is now working through. This process will continue until it has run its course and the untangling and unraveling of a global economy that has relied on too much debt is completed. Excessive mortgage lending in the U.S and most of the rest of the developed world led to a significant rise in real estate prices. For example, pedestrian 1,000 square foot apartments in New York (Manhattan), London, Paris, and Tokyo started selling for over $1 million and 2,000 square foot 30 year old ranch houses in Southern California that were not near the beach began selling for over $500,000, despite the fact the houses were located in middle class neighborhoods. When there weren’t enough legitimate borrowers left to keep the bubble going, the standards for mortgage lending fell all the way to outright fraud with no money down loans for the purchase of these properties given to unemployed people with bad credit. When the credit rating agencies stamped over 90% of pools of these loans AAA they killed the shadow banking system that supplied almost 75% of the nations credit needs. Hence, our economy is left without the ability to use the house as an ATM machine. The economy will continue to contract as long as the consumer is forced to restore their balance sheet and their access to credit remains tight. We are living through the greatest unwinding of a bubble since the Dutch Tulip bubble. Most of the imbalances of the global economy will be brought back into balance before economic growth resumes.
Proof that debt is still unwinding came from a recent federal government report that loan balances at the 22 largest recipients of TARP funds fell by $45 billion in the month of June. The money supply is still contracting. It took 20 years after the oft forgotten debt induced Panic of 1873 for the global economies to resume strong growth in the 1890’s. It took the start of World War II to catapult the global economies out of the Great Depression of the 1930’s 10 years after it began. If we continue to adopt the Washington strategy of watchful waiting it could take 10 to 20 years before the debt induced deflationary depression we have entered finishes unraveling on its own. It could take longer and civil society could begin to come apart at the seams in the interim. I remain an advocate of shock and awe quantitative easing to stop the otherwise inevitable Great debt Unraveling in its tracks.
