08/01/11 Paris, France – It’s a deal!
As expected…the papers are announcing that the Repubs and Demos have made an historic deal. With the solemnity and gravitas that the occasion calls for, they have come together, after great and profound debate, to join hands…
E Pluribus Unum, they said… We may have different ideas on the subject, but when it comes to the interests of the whole country, we can nevertheless work as one body, with one heart, and one digestive system…
…and so they crossed aisles…and clenched hands…and slapped backs…
…and the brightest and best…the leading statesmen, leading scholars, leading orators and rhetoricians of the world’s greatest hegemon, all came together at the last minute…
…and agreed to continue debasing the currency and credit of the United States of America.
Hallelujah.. Hallelujah… We are saved!
All over the world, shouts of Hosannah go up…along with stock prices.
And the US economy sinks…
“Great Recession Even Deeper than Thought,” says a headline at MarketWatch.
Than WHO thought? Not our Dear Readers. We knew there was no recovery…and that what we’re dealing with is a correction of epoch scope and power. The article continues…
WASHINGTON (MarketWatch) — The U.S. recession was even deeper than previously thought, a new government report showed on Friday.
As part of an annual revision of data on U.S. gross domestic product, the Commerce Department said that the economy contracted by 5.1% between the fourth quarter of 2007 and the second quarter of 2009, more than the 4.1% previously estimated.
It ranks as the most severe recession in the post-World War II era. As a result of the revision, GDP is now still below the pre-recession peak, economists said.
Before the revision, it was hard to square an unemployment rate above 9% with the economy’s growth rate.
Under the revised data, the U.S. economy declined 0.3% in 2008, weaker than the prior estimate of a flat reading.
The contraction in GDP for 2009 was revised to 3.5%, much weaker than the previous estimate of a 2.6% decline.
The real story is worse than that. Almost all the “growth” since ’07 has not been growth at all…but just the result of US government transfer payments. The private sector – which is where real wealth is created – continues to sink.
Also, we know we’re in a powerful correction. But we still don’t know exactly what this correction is correcting. Stay tuned…
Regards,
Bill Bonner,
for The Daily Reckoning
Bill Bonner
Since founding Agora Inc. in 1979, Bill Bonner has found success and garnered camaraderie in numerous communities and industries. A man of many talents, his entrepreneurial savvy, unique writings, philanthropic undertakings, and preservationist activities have all been recognized and awarded by some of America's most respected authorities. Along with Addison Wiggin, his friend and colleague, Bill has written two New York Times best-selling books, Financial Reckoning Day and Empire of Debt. Both works have been critically acclaimed internationally. With political journalist Lila Rajiva, he wrote his third New York Times best-selling book, Mobs, Messiahs and Markets, which offers concrete advice on how to avoid the public spectacle of modern finance. Since 1999, Bill has been a daily contributor and the driving force behind The Daily Reckoning. Dice Have No Memory: Big Bets & Bad Economics from Paris to the Pampas, the newest book from Bill Bonner, is the definitive compendium of Bill’s daily reckonings from more than a decade: 1999-2010.
The Daily Reckoning is your premier source for making sense of the news Washington and Wall Street generate. Each business day, The Daily Reckoning calls on its stable of world-class writers and thinkers to show you how to get ahead.
Start your 100% FREE subscription to The Daily Reckoning today and you’ll get a free research report, “How to Survive the Fall of Social Security.” Simply enter your email address below to get your free report and join over 495,000 worldwide Daily Reckoning subscribers!
We Respect Your Privacy and We will
Never Share or Sell Your Email Address
.. and they worked tirelessly for a flawed multi trillion $ agreement, all for the benefit of the American people ..
indeed .. STAY TUNED!!
It seems to me that this whole economy problem hinges on “what is the cost of extracting oil from oil shale and tar sands?” Obviously, the bad economy is because we are at ‘peak supply’ of easy, cheap oil. So, we ameteurs need to know, “how much energy equivalent (expressed in barrels of oil) does it take now take to extract one barrel of useful oil from tar sands and oil shale?” (because there’s lots of that)
“Also, we know we’re in a powerful correction. But we still don’t know exactly what this correction is correcting.”
there is no correction. it’s really very simple.
1) the debt dollar pyramid scheme is at its limit. it is beginning to implode. it’s simple math.
2) we are in demographic decline. fewer working citizens means less wealth. more non-citizen permanent supportees means less wealth. less work available means less wealth. more retirees means less wealth.
that’s it.
Now that they have kicked the can down the road once again, perhaps it’s time to kick their cans out of Washington.
Okay Bonner, I’m going to help you out on this Great Correction thing, but I feel you know what is being corrected, but are requiring your readers to do some thinking on their own as you always do.
Misinvestment malinvestment, or whatever you want to call it. The market is punishing all the unproductive sectors of the Zombie Economy. Our Empire, of course, is the most costly because then the entire world gets to defraud the system, which causes even more bad investment. This keeps $ from the productive sectors you so correctly point out that create wealth.
The Zombie Economy then has to be financed by debt. Even Larry Summers has to know this can’t go on long.
From 4/1/01 to 4/1/11 AR lost 72,100 manufacturing jobs. The State is the largest employer followed by Wally, the FED and Tyson. Two of the world’s largest corporations cannot employ more people in this very small state than the GOV? Seriously? Why does this tiny state need so many employees here and Wally doesn’t?