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“When I use the phrase 25 year depression, it sounds extreme but it’s not. We had a 30 year depression in the United States from about 1870 to 1900…The Great Depression lasted from about 1929 to 1940. The U.S. is in a depression today.”
Well, it’s been in the works for decades, and it’s finally happening in slow motion but will be harried in the next few years. You have been warned to sell your mortgaged homes and pay down your debt. If you have not done any of these, you will suffer the consequences.
“The Fed doesn’t know what they’re doing – don’t ever think that they know what they’re doing. You can print all of the money that you want, but if people are not borrowing it, if they’re not spending it, then you’re economy is collapsing even with money printing.”
Inflation is not good in an economy that is behaving normally, but our economy is not behaving normally for years. Unemployment has been high for 6 years. The current 6.2% figure doesn’t count the millions if discouraged people who have stopped looking for a job and there are STILL more people looking for work than there are job openings. When this guy says we need more inflation, he’s not talking about 10-14% like we saw in the 70′s. He’s talking about 4-5%, or what would usually be considered the higher end of normal. That level of inflation would have a number of benefits in our CURRENT situation (which is not normal):
As we have warned you before, get rid of your loans, guys and gals, because we are going into a high interest rate period. Very high. It will be the equivalent of going into the double digit interest rates we had in the 80s where many people threw their house keys at the bank and we had record numbers of bankruptcies.
In Britain, at least, the central bankers are telling us interest rates will be increased by five fold in JUST the next 3 years. In many other Western nations this is also the case as they will be likely following suit as the US tapers off the “economic stimulus” that has been feeding the drunk US economy for many years.
Don’t believe this information? Watch the first video below. You can only ignore reality for so long before it hits you in the head.
We recommend not enabling the bankers by taking out mortgages (interestingly, French word for “death pledge”) or taking out any personal loans. If you have a mortgage, sell your house right away and begin renting a house, apartment, room, or whatever will help you live economically for the tough times ahead. When interest rates rise, it will impact every sector of the economy including housing construction down to your basic telephone support representative as employers will be facing higher interest rates on their loans. This is all the cause and effect of economies wrought with artificially low interest rates that stimulate false investment and risk taking.
Two issues here:
One is while going from fairly high rates to low rates will work well, going from historically low rates to slightly even lower rates can’t do much more. Also we’ve been at very low rates now for a long time so the positive effect is likely gone by now.
The other issue is the low rates for so long really has only benefited those at the top and will continue to do so because they are most in the position to take advantage of low rates and have money to invest in stocks. Stocks and some collectibles benefit simply because with artificial low rates there isn’t much else you can put money and hope for any kind of return.
The artificial low rates have benefitted the top and the big banks but hurt middle America. After 6 years of this and no progress to speak of for the vast majority of people, maybe a new strategy is in order. Maybe higher rates would encourage savers and provide income to retireds and increase the amount of money passed down to the heirs. Maybe business would expand if we had real wage growth to spend. A little inflation would go a long way for the middle but not the banks.
- World headed for second recession, or double-dip depression“When the Great Depression started after it [market crash of 1929], it’s thought that politicians actually started the Great Depression by putting through too many rules and regulations…” — CBC’s...
- Shock: Obama admits US headed for mega depression“.. people could lose confidence in the U.S. economy in a way that could actually lead to a double-dip recession,” he said. Interest rates are market driven. The Fed is...
- Canada is world’s largest sub-prime lender“Reading the newspapers these days, you have to wonder whether Canada was on another planet when the global credit crisis hit.” — Murray Dobbin All the news reports from Canadian...
- Jim Rogers: Fed understates inflation“If the world economy gets better, commodities are going to go up in price because there are shortages. If the world economy does not get better, you should own commodities,...
- Banks With 20% Unpaid Loans at 18-Year High Amid Recovery DoubtBy Bloomberg News The number of U.S. lenders that can’t collect on at least 20 percent of their loans hit an 18-year high, signaling that more bank failures and losses...
- Economy Caught in Depression, Not Recession: Rosenberg“Positive gross domestic product readings and other mildly hopeful signs are masking an ugly truth: The US economy is in a 1930s-style Depression, Gluskin Sheff economist David Rosenberg said Tuesday....
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