Next crash will be ‘worse than the Great Depression’: experts

If you REALLY want to understand what happened in 2008 read Meltdown by Tom Woods. It’s not a tome. Quick read and common sense.

 

This is not hyperbole folks. This is entirely possible.

What drives recessions/depressions? Is it some magic economic boogeyman that somehow coordinates collective crashes in the economy? No. Are such crashes inherently built into “capitalism.” No. Capitalism, real capitalism (better defined as free enterprise) versus crony capitalism corrects but corrects by adjusting prices over time incrementally, for the most part. There are moves here and there and they happen all the time, but giant collective crashes? No, those are usually the fault of the central banking system. At least in the USA, and usually elsewhere.

It’s not that difficult a concept really. Central banks, through various means, often keep interest rates too low for too long. (They also do other stupid things.) These low rates enable the people who have access to central bank created money to PLAY and LEVERAGE and generally be unwise. Then add what the Fed did in 2008/2009 where it saved the banks that should have been crushed and it is easy to see that we are cruising for a bruising. We are getting top heavy again, and we never reckoned with 2008 entirely.

We’ve had a massive Fed driven expansion, sooner or later the market will correct for reality. Then watch, all the people who call for more government will blame the crash on “capitalism” not on the central planners in the central banks like they should.

I can see Bernie now.

(From The New York Post)

After a decade of escalating US household debt brought on by low wages and the national debt more than doubling over the same time frame, to $21 trillion, debt could soon put the brakes on this economic recovery, analysts warn.

“We think the major economies are on the cusp of this turning into the worst recession we have seen in 10 years,” said Murray Gunn, head of global research at Elliott Wave International.

Click here for the article.