Simon Johnson, former chief economist at the International Monetary Fund, said that “we are now looking straight into the face of a great depression”.

Greece faces the threat of bankruptcy within weeks after the EU said Wednesday night it would not provide any more funding to the beleaguered country unless it agreed to support the euro bail-out.

The Greek government is expected to be unable to pay wages for state workers and pensions next month without a planned injection of pounds 8?billion of EU cash.

George Papandreou, the Greek prime minister, met his French and German counterparts ahead of today’s G20 summit of world leaders.

Mr Papandreou has called a referendum on whether the Greek public supports the bail-out. The decision has plunged the rescue into turmoil.

David Cameron said that the world was facing a “financial storm” as Greece may now be forced out of the single currency.

Simon Johnson, former chief economist at the International Monetary Fund, said that “we are now looking straight into the face of a great depression”. Source (1) The Telegraph

Well, imagine that. There’s a recession and nobody knew aside from the unemployed, the newly unemployed, the world stock markets, the major jump in everything from soup to gold with more jumps on the way.

Everyone is announcing increases to something, somewhere but it has nothing to do with blue collar workers or their wages. Does anyone stop and consider that these increases and idiotic spending sprees have to come to an end as the Great Wall of Non Sustainability is fast approaching. This isn’t a guess, it’s coming a lot faster than our political boy wonders have assumed but yet they continue to throw money around without so much as a care as to who is going to pay the bill when it comes due. Interest rates are held ridiculously low; want to know why ?

The American, Canadian and most any other country you want to look at couldn’t afford a normal interest rate of 8 percent. Everyone wants everything but the credit cards are maxed out and it’s time to figure out how to get our financial houses in order before the house of cards folds in on us.

Why do analysts always talk about our economy like we’re just a bunch of pin-balls in a game with absolutely no control over which way we bounce?

Maybe it’s all just an illusion. Read this quote from the 1928 book Propaganda.

“The conscious and intelligent manipulation of the organized habits and opinions of the masses is an important element in democratic society. Those who manipulate this unseen mechanism of society constitute an invisible government which is the true ruling power of our country.” ~ Edward Bernays

I think our economic recovery will hinge on one of two things. Either the financial news starts instilling a bit of confidence in our economy, or people “take to the streets” and corporate America starts thinking for themselves.

The “better than expected” jobs and sales reports coming in lately, despite all the fear and pessimism being propagated in the markets, seem to indicate a lead to the the later.

We’re now into contraction of our world economy – however you want to define it with economist approved terms – due to resource scarcity. Most likely scenario predicted is extreme volatility resulting in short periods of growth followed by contraction, but resulting in net contraction. To extend the use the recent terminology: multiple dip recessions followed by depression.

The US economy is dead in the water for at least 10 if not 15 years.The rest of the world will wean itself away from dependence on their economy.There will be some pain globally but not as much as the pending revolution and possible splitting up of the US OF A

References:

(1) The Telegraph

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