Comparing today’s recession/depression to the 1980 recession

Comparing today's recession/depression to the 1980 recession

"Much like today, Americans were concerned not only with high unemployment but increasing budget deficits in the early 1980s. A September 1983 Gallup poll found that three-fourths of the public agreed that the federal government's budget deficit was a great threat (42%) or some

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Why savers are getting screwed

Why savers are getting screwed

"Without the intervention of economic policymakers, interest rates would be naturally higher. That would increase the cost of borrowing for businesses and consumers, but there would be some offsetting economic benefits. Savers are getting screwed by the current monetary policy

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Geithner admits USA bankrupt to US Senate

Geithner admits USA bankrupt to US Senate

"Never in our history has Congress failed to increase the debt limit when necessary. Failure to raise the limit would precipitate a default by the United States. Default would effectively impose a significant and long-lasting tax on all Americans and all American businesses

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Real reason for electricity blackouts hitting southern US

Real reason for electricity blackouts hitting southern US

“Large oil companies have for a decade artificially shorted the gasoline market to drive up prices,” said FTCR president Jamie Court. “Oil companies know they can make more money by making less gasoline.” The following article was written by Paul Joseph Watson. He is t

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World economies on verge of currency revaluations to deal with debt

World economies on verge of currency revaluations to deal with debt

"It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning." -- Henry Ford Basically what the world central banks are doing is increasing their money by devaluin

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Is Obama the next Mugabe of Zimbabwe?

Is Obama the next Mugabe of Zimbabwe?

"America, Britain, Japan, Germany, France, Sweden, Holland, Norway, Canada and Australia make up the Fishmongers Group and their meeting on Tuesday will deliberate on the state of the inclusive government, debt relief, public finance administration and the controversial economi

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US raiding foreign countries with dollars, not soldiers

US raiding foreign countries with dollars, not soldiers

""The United States is going to China and saying: we want you to commit economic suicide, just like Japan did. We want you to follow the same thing: we want you to revalue your currency, we want you to squeeze your companies, we want you to go bankrupt,” says Michael Hudson,

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FDIC wants your retirement cash to save banks: Bloomberg

FDIC wants your retirement cash to save banks: Bloomberg

“The FDIC is constantly looking at structures where we can get the greatest opportunity to tap into capital that we have not had the success reaching through previous disposition methods,” FDIC spokeswoman Michele Heller said in an e-mailed statement. “We welcome and work

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Canadian government admits recovery never happened

Canadian government admits recovery never happened

“Not only did their stimulus fail to create the jobs of tomorrow, it also failed to protect the jobs of today,” Scott Brison, the opposition Liberal Party’s spokesman for finance issues, said by telephone. "Most of us were shaking our heads in disbelief early last year w

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How Western society is brainwashed and crumbling

How Western society is brainwashed and crumbling

"The cultural embrace of illusion, and the celebrity culture that has risen up around it, have accompanied a growing system of casino capitalism, with its complicated and unregulated deals of turning debt into magical assets, to create fictional wealth for us, and vast wealth f

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Will we see double digit interest rates from the 1980s?

Will we see double digit interest rates from the 1980s?

"And I sincerely believe, with you, that banking establishments are more dangerous than standing armies; and that the principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale." -- Thomas Jefferson Spending is

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Greenspan: credit crunch “by far the greatest financial crisis”

Greenspan: credit crunch by far the greatest financial crisis

Greenspan said that while the economy was in worse shape in the Great Depression, the recent financial crisis was potentially more harmful than that in the 1930s because “never had short-term credit literally withdrawn.” Greenspan just said that the current credit crunch

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“No laws are more basic than the laws of arithmetic: For fiscal sustainability, whatever level of spending is chosen, revenues must be sufficient to sustain that spending in the long run,” Bernanke told the commission, which was established by Obama in February to give recommendations on ways of balancing the federal budget.”

Washington needs to find ways to cut spending on major programs and raise taxes or else risk doing “great damage” to the U.S. economy, said the head of the country’s central bank Tuesday.

Ben Bernanke, chair of the U.S. Federal Reserve, said the federal government cannot close its budgetary shortfall by merely relying upon economic growth to reduce social spending and increase revenue.

Instead, the government needs to attack the deficit by reforming popular entitlement programs, such as Medicare and Social Security, and by pushing up what U.S. citizens pay the government.

“(E)ven after economic and financial conditions have returned to normal, in the absence of further policy actions, the federal budget appears set to remain on an unsustainable path.

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“(But) choices regarding Medicare, Social Security, and other spending programs cannot be made in a vacuum but must be combined with decisions about how much revenue the government will raise and how it will raise it,” Bernanke said in testimony before the National Commission on Fiscal Responsibility and Reform.

“U.S. President Barack Obama’s administration has driven the U.S. deficit to record levels — estimated by the nonpartisan Congressional Budget Office (CBO) to be $1.35 trillion in 2010 — as Washington spent large amounts of borrowed cash in an effort to prevent the recession of 2008 and 2009 from becoming an all-out depression.” Source: Kelowna

This is how things will probably turn out in the next couple decades: taxes will be increased even more on the working class and the benefits that they receive will be slashed, but the top earners? They won’t be touched. People making millions will get, at best, a meaningless tax raise, corporations will still pay little or nothing, especially when they off-shore, and the erosion of “The American Dream” will continue. The sad part is that most people know by now the statistic that the top 1% has more wealth than the bottom 95% of the population combined, but we’ll still let them do it to us. What a difference in the world where in the days of Truman and such taxes on the rich were at 90%+ (and they still lived extremely well and the economy didn’t implode) but now they’re at an all time low. The people who buy into this radical capitalism, supply side nonsense which has lead us to this point have absolutely no regard for facts or reason.

In the same vein, if the economy were structured in a true free market capacity, there would be no central bank or government to distort the market to make the necessary to tax the top earners in society. Indeed, according to the Austrian school of economics, having richer people in society and a blessing because the more money (real money; not the fiat monetary system we have today) kept in a bank earning interest and being loaned out, this gives poorer people more incentive to create business with lower and lower interest rates (if they need loans). This works out because the more money a bank has (supply), the more demand for money goes up and the lower the interest rate usually is (all things being equal).

” From all outward appearances, it seems that a grim chapter in U.S. economic history has come to an end. Newsweek magazine declares that “America is Back,” government statistics indicate revival, and our stock market has put in a rally for the record books (by rate of ascent, not highs – we are still more than 25% below the 2007 peak).

And yet, despite massive federal stimuli and subsidies, American unemployment clings stubbornly to the 10 per cent level, with the “underemployment” rate closer to 20 per cent. The IMF does not appear to buy into Washington’s optimism; it projects a “double dip” contraction by the second half of this year. With so much conflicting sentiment, it is difficult for investors to know whether the cup is half-empty or half-full.

usa tower of babel will fall

On a technical basis, stock market gains of 50 per cent or more in a twelve month period should indicate dangerous downside potential. On the other hand, the markets of early 2009 had priced in the likelihood of financial Armageddon. The meltdown did not happen, so traders and brave investors have been quickly buying up the deeply discounted equities.

However, many remain suspicious, believing that the catastrophe had been postponed rather than overcome. The vast bulk of investment funds are sitting on the sidelines, invested in fixed income despite historically low interest rates. Investors have also sought safety in gold, driving its price to above $1,000 an ounce or about half its inflation-adjusted peak price in 1980. ” Source: Peter Schiff

Related posts:

  1. Canadian real estate taking drastic downturn: Baker, Turner“The economist who received an award for being the first to sound the alarm on the U.S. housing bubble, is warning the same could happen in Canada if we aren’t...
  2. Canadian Interest rates set to rise in 2011: EconomistAs predicted by many economists like Peter Schiff, central bank interest rates around the world are beginning to rise, or are predicted to rise in a controlled manner in about...
  3. Consumer spending is not indicative of recovering economy“While the sources for the supposed increases in U.S. consumer spending are murky at best, the amount of consumer spending in and of itself is not a determinant of whether...
  4. Mortgage, real estate taking another hit across North AmericaAll the news reports from US and Canadian real estate associations touting that the housing “recession has ended” is just about as worthless as the hot air coming out of...
  5. Kotlikoff: Let’s get real, the US is bankrupt“Prof. Kotlikoff says: “The IMF is saying that, to close this fiscal gap [by taxation], would require an immediate and permanent doubling of our personal income taxes, our corporate taxes...
  6. US government budget deficit hits 60 year high of $1.4 trillionThe US budget deficit is expected to hit a record 1.4 trillion dollars in 2009, some 950 billion dollars greater than the shortfall recorded last year, the Congressional Budget Office...

This entry was posted on Tuesday, April 27th, 2010 at 10:26 pm and is filed under North America. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

3 Comments

  1. April 29, 2010 @ 9:39 pm


    Given that the USA has just printed vast amounts of fiat money to supposedly “fix” the economic woes, and given that the $12T debt will have to be paid off (debatable if it ever will be) by our childrens children, one can but wonder how they believe we’re on the road to recovery ?
    Wishful thinking at best – the US economy is built on credit , poor credit control and enormous waste, and now it’s time to pay the piper. Stuffing fiat money under the foundations of a crumbling economic house won’t save it – it will just delay the inevitable collapse, and that’s the reality of the situation.
    Round 2 of the great collapse is about to start methinks…

    Posted by Rodney Scott McLagan
  2. April 29, 2010 @ 9:43 pm


    You are right. USA makes practically nothing so there’s nothing to back up their currency. It is rotten inside but has a shiny veneer. I’ve lived in Asian countries and have seen what the USA looked like 50 years ago — vibrant, prosperous.

    Posted by Jason
  3. May 7, 2010 @ 1:37 am


    Of course there will be a facade of Green Shoots after a USD 4 Trillion stimulus package for the “Too Big to Fail Bums”. The Public must be chasing Wall Street all over again. I only pray the know when to bail out of it. The truth is they are all junk bonds and the public by participating in the hubris are telling the Government: “This is the Garbage we want.” In the end Main Street will have to suffer the consequences of supporting a defective system. There is no such thing as something for nothing. Oh ! I just hope the people think: S & P Stocks way ahead of Real Economy: http://bit.ly/9lUE1V

    Posted by David Jeremiah

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