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What Recovery? Unemployment at 25-Year High

Good point, Wayne. I'd go a bit farther and say high unemployment might be the norm in the coming decade.

No Chance of a 'V' Recovery

I hate to say it, but the 'h' recovery (above) appears likely, from where I am sitting, anyway.

Bull in a China Shop

Love the title of this article, by the way. :)

Bull in a China Shop

"The FOMC will leave the federal funds rate at zero to 0.25%, which to me questions the Fed’s confidence..." As it does mine. It can explain our rally, but is not a green shoot.

"It’s the nature of 'The Great Credit Crunch' continuing through 2011." Agreed. This is no ordinary, simple recession.

Good News: Dollar Headed Down

No nation has ever devalued it's way to prosperity...except China, I guess. By the way, isn't a falling dollar akin to inflation? I don't see the Fed tightening anytime soon.

Couple continued Fed easing and an assortment of other factors, like huge government debt, unemployment, etc., and one can see we haven't recovered. The markets are rallying, but a recovery? Ah, not yet.

I'll call a recovery when the dollar does...and does so not as a safe haven.

U.S. Dollar Still Center Stage

I haven't had my coffee yet this morning, but yes...once property prices start rising, again, they will become good investments, especially if each acre has a gold mine on it. LOL. I guess that's the idea, to induce inflation so everything offers a higher price down the road, except a savings account.

If this amero thing is real and kicks off, the loony will be rolled into it along with the Mexican peso. I don't know about you, but I cannot see the Mexican peso doing either currency any good. The loony has some good fundamentals to help an amero retain some value.

But, as for the dollar, yea, it may fluctuate downward a bit, then maybe back up. If inflation is a monetary policy, and I believe it is, then this stubborn deflation cycle should work wonders reducing the number of dollars floating around the globe. It already has, actually, despite the Fed's printing. It will also reduce the amount of other currencies, but the dollar is most plentiful and used to settle almost all contracts. It should benefit most from deflation.

Okay, coffee is here...

U.S. Dollar Still Center Stage

Al, the same pressures are apparently true for all currencies relying on US imports. Stronger currencies, less imports. (Also, less consumer credit and high unemployment, less imports.) So, exporting nations might feel the need to inflate their currency to keep export prices competitive. This is the currency war that might cause a collapse of all fiats if the US dollar fails. I assert the world's major currencies are linked through US consumption and trade and a weak dollar is not good for anyone, including the venerable euro.

U.S. Dollar Still Center Stage

Sound production and fundamentals, by the way, it appears Obama is in favor of by pushing to train scientist and engineers beginning in a better equiped public school system. For some reason, he meets with a lot of resistance to that push. It dumbfounds me, sort of.

U.S. Dollar Still Center Stage

I'd argue metals are a good investment, too. But, I am counting on deflation to revive the dollar (as it will other currencies in excess, too.) But more importantly, I am praying sound economic fundamentals will return and give the dollar meaning, again. I am not giving up on the dollar, it may be the one currency laying at the top of the heap of collapsed currencies. What hurts is the dollar carry trade, for now and for some time to come. That's scary.

U.S. Dollar Still Center Stage

Debasing the dollar to such an extent to prop up equities is a sure sign we're in a lot of trouble. When equities are not worth a given value of their own merit, putting them at 'fire sale' (dollar devalued) prices is the solution? Maybe a share in AIG will buy a big mac soon enough.

I have a fear this recovery is tenuous at best and will likely be short lived, especially with unemployment still very high and consumer credit tight. I fear our crisis is, really, far from over. I also realize I could be wrong, I am not clairvoyant, but I just don't believe we're back to sound fundamentals.

The dollar may well be doomed as a reserve currency, and SDR may be the future. If that happens, remember all currencies are fiat and all fiat currencies fail. And to some extent, all are dependent on the (doomed) dollar and will likely be affected adversely, too. Some may not even survive a dollar collapse.

So, is the euro or the pound ready to meet the challenge of playing a larger role as a reserve? Can they sustain the pending trade deficits with China and inflationary pressures as well as the dollar does, or did?

Come on deflation, work your magic on the dollar...rid us of the excessive debt and revive our propensity to save.

Consumer Credit Sees Record Plunge: Need Another Indicator?

Oh, Dave, I'd like to get your take on this. I read in another thread the Fed is debasing the dollar to validate stock prices. Hows that for an economic fundamental? LOL My goodness, if that is half true...we're so screwed.

I'll say it again, this thing is bigger than most evening news watchers care to know. I just don't feel it's over, especially when the head of the ECB visits Zimbabwe, when credit lines fall, and an assortment of other reasons...like gold and oil volatility and dollar woes...QE, you name it...such drastic measures should speak the the seriousness we're in. I just don't think a few green shoots and short term government stimulus are gonna pull us from this nose dive...not just yet.

Consumer Credit Sees Record Plunge: Need Another Indicator?

On Sep 10 02:25 PM Dave Wrixon wrote:

> You are sort of right and at the same time completely wrong.

Dave, I guess I do expect the government to step in when spending and job losses kill demand for goods and services. Call me old school. But they really are kind of in charge of our public primary school system.

I guess if you're gonna have an immense federal reserve banking system and it's associated financial institutions flooding the world with liquidity. The government might have to step in when the whole thing comes tumbling down. Pouring in money...tax money, unfortunately, is how one saves such a system irregardless of whether or not we like it...which we don't. But, that's the system we have and that's how it gets rescued, I'm afraid...through government intervention...details aside. (Though I favor collapse, in theory...in practice so many common folk would be hurt.)

As for Joe Six Pack and his work ethic and wages, well, we could do pages on that. But, let's focus on credit, I'll try to remain on topic this time. Broadly speaking, the American consumer has fueled the global economy with those credit cards we received in the mail during the 80's. Those days are over, thank goodness...so a slump in consumer credit is expected. I strongly suspect it will never regain the levels it once enjoyed and the global economy will grudge along at a slower, more sustainable pace of growth.

Since credit levels should remain deflated for some decades to come, cash should carry a heavier load. So, what to do about inflation..debasing the dollar? Inflation vs savings interest in liquid assets is another evil, the propensity to save is wiped clean. This is one reason I favor this period of deflation, not for business sake...but for Joe's. But, that's another story for another day.

I am of the camp excessive consumer credit is evil, anyway, so...I am happy to see if plummet. This credit crisis has brought home a few roosters to roost and opened more than a few eyes. Yes, I agree it will be decades before we can fully recover. The trick is, how will we recover? More of the same synthetic wealth built upon the backs of working Americans paying off debt or through real production, savings, and real wealth? I dislike the term "wealth effect." Its misleading. I'd rather be actually wealthy with a currency capable of holding onto it. But, that requires a different banking system and currency standard, as you probably know.

By the way, I reported my own previous last post to the site managers...it was a bad day rant and nothing more. They removed it. I think what I said was true, just said badly...

Consumer Credit Sees Record Plunge: Need Another Indicator?

I apologize for my rant, and being off topic...<sigh> Just tired....

Is a Crash Impending?

It ain't over...despite green shoots, a slight uptick in Europe, and what anyone says.

seekingalpha.com/artic...

Bernanke Being Rewarded for Failure

What the country needs is NO Fed chairman...no Fed.