Harry…I’ll be interested to see what you think of Obama, Bernanke et al in a couple of years. This mess wasn’t created overnight and it won’t play out overnight either.

Thanks ever so much

http://market-ticker.denninger.net/archives/1216-Intel-Too-Much,-Too-Far,-Too-Fast.html

The Chinese knew exactly what they were doing when they lent us all that money they knew we couldn’t repay. Read Sun Tzu.

A small majority of the population is affected by mortgage mistakes but 9 out of 10 people in this country are not only gainfully employed but living a life others dream of.

Obama, Bernanke et al. have turned this around quickly. I know it doesn’t jibe with your doomsday scenario but that’s reality, kids.

Debt Acts as a Brake on the Monetary Engine
Quarterly Review and Outlook
By Van R. Hoisington & Lacy H. Hunt, Ph.D.
http://www.investorsinsight.com/blogs/john_mauldins_outside_the_box/archive/2009/07/13/debt-and-deflation.aspx

The entire report is a heck of good read…
A few excerpts:

“…even if Fed actions could shift the aggregate demand curve outward, which it cannot do under present circumstances, inflation would still be a long way down the road. Thus, theory and current evidence clearly point to deflation as the overwhelming economic risk”

“Presently, the federal government is increasing spending that in the end may actually retard economic activity, and is also proposing tax increases that will further restrain private sector growth. This policy mix is the same approach that failed in the U.S. from 1929 to 1941 and also failed in Japan over the past two decades, a subject we addressed in our April letter. In other words, fiscal policy is executing a program that is 180 degrees opposite from what it should be to stimulate the economy. How is it possible to get an inflationary cocktail out of deflationary ingredients?”

“The preferred way to answer the business cycle question of expansion versus contraction is to examine the four variables most integral to the economy’s performance: employment, production, personal income, and sales. For these variables to be consistent over time the income and sales must be adjusted for inflation and personal income must exclude government transfer payments”

“Recessions end when the National Bureau of Economic Research (NBER), the official arbiter of such matters, says they end. But sometimes economic conditions suggest that the NBER miscalculated. Economic recovery occurs when these four indicators turn higher at about the same time. If the NBER’s cycle turning dates are aligned with these four indicators they have validity. Regardless of the NBER’s opinion, if the four indicators are not rising, a normal recovery will not occur. This seemingly esoteric point has important implications for the stock market.”

“The combination of an extremely overleveraged economy, ineffectual monetary policy and misdirected fiscal policy initiatives suggests that the U.S. economy faces a long difficult struggle. While depleted inventories and the buildup of pent-up demand may produce intermittent spurts of growth, these brief episodes are not likely to be sustained. In several years, real GDP may be no higher than its current levels. However, since the population will continue to grow, per capita GDP will decline; thus, the standard of living will diminish as unemployment rises. These conditions will produce a deflationary environment similar to the Japanese condition.”