JRBH

Why It's Going to Be a Long Recession

and by the way, the sky is falling!

The Deflation/Inflation/Stagnation Debate

While raising rates directly into a weakening housing sector, Mr Bernanke and the wizards of Wall Street [who got us into the current trap] kept asserting that a housing slowdown would not effect the general economy which is somewhat akin to saying that liver cancer is not a threat to ones general well being. I certainly do not know what, if anything , can be done to escape without some sort of discomfort. But I do know this, homebuilders have been in depression for nearly two years now, homeowners have seen their biggest asset in freefall and all sectors are suffering and will only suffer worse until this condition is corrected. Today, the clear enemy is continuing deflation. Raising the cost of money and reducing its supply in this type of environment was tried once before by Mr. Hoover. The definition of insanity is doing the same thing and expecting different results.