The Economic Downturn might last TWENTY (20!) YEARS (Analysis)

[$5 submissions]

Interestingly enough, the current economic downturn that has caused lots of joblessness and misery the world over is mirroring some historic factors that suggest it might last a whopping 2 decades!

Source: http://www.nationalreview.com/articl...n-matthew-lynn

The question is whether we are going to witness another two-decade slump like the one that followed the 1873 crash.

Unfortunately, it is starting to look as if we might. The U.K. is already experiencing its longest depression since records began: The current downturn has lasted longer than the slump of the 1930s. Europe is heading for a deep depression next year as the austerity regime that will be needed for the euro to survive starts to bite. The U.S. will struggle to grow significantly. We are used to short, sharp recessions, because those were what we experienced for most of the 20th century. But it is now more than three years since the crash of 2008, and things are getting worse, not better.

[glamourmodels]

I have to say that while I do hope Ron Paul is elected president, there is a part of me that would laugh my ass off if he is not elected and all these imbeciles loose their life savings which is a certainty should he not become President. Most people on this board, or the citizenry in general have absolutely no clue how close America is to completely imploding financially and subsequently the rest of the world with it due to contagion. Ron Paul is the only one that is willing to even begin to address the core issues so I find it comical that so many people consider it fun to blast the one guy that genuinely has their best interests at heart. These guys on here cant stop whining and bitching about the tube sites, but a year or two from now they will all be reminiscing about the glory days of 2011 and how "good" they had it.

Fucking hilarious.

[loreen]

Originally Posted by $5 submissions

a whopping 20 decades!

20 decades = 200 years

[$5 submissions]

Originally Posted by loreen

20 decades = 200 years

SORRY, 2 Decades

[$5 submissions]

Check the items in BOLD

When the markets blew up in 2008, policymakers rushed to make comparisons with the 1930s. True, that was a terrible depression, but one that was over quite quickly. The Great Depression was caused by a sudden collapse of demand and shrinking money supply. Now, as then, policymakers assumed that if the government expanded its deficits and central banks printed lots of money, that would fix the problem. It hasn?t, and it should be clear by now that it isn?t going to.

Why not? Because what we are really dealing with is a structural depression. In reality, the global economy is facing not one crisis, but three.

There is a debt crisis. The developed world has been building up debts on a spectacular scale for three decades. According to McKinsey data, global debt now stands at $158 trillion; that is up from $77 trillion in 2000. Put another way, global debt amounts to 266 percent of global GDP now, compared with 216 percent a decade ago. While economists used to think that debt was largely neutral ? on the grounds that once person?s borrowing is another person?s loan ? we are now discovering that borrowing on that scale is unsustainable.

Then there is a currency crisis. For most of the post-WWII period, the dollar was the anchor of the global economic system. That worked when the U.S. was the overwhelmingly dominant economy. It doesn?t work anymore. The dollar is now down to 60 percent of reserves, as central banks diversify away from a currency falling in value. At some point we will come up with a new core currency ? perhaps the Chinese renminbi, perhaps gold. But until we do, there will be more chaos ahead.

And finally, there is the euro, perhaps the most dysfunctional monetary system ever created. Welding together the currencies of 17 very different economies, without any kind of fiscal union to compensate for the differences between them, was always a high-risk experiment. By now we can surely agree that it has failed. The euro was meant to promote faster growth and greater stability. It has become instead a cause of depression and volatility. Until it is dismembered, there is little chance of the global economy?s returning to stability.

[brassmonkey]

ok thanx 4 the 411

[djroof]

true words...

[raymor]

Possibly. I think the pent up demand is going to cause certain improvements over the next year or two. An example is that because of the recession people have been holding on to cars, computers, etc. rather than buying new ones. You can't keep driving the same car forever, though. Eventually new cars will have to be purchased.

Whether or not this pent up demand and growth gets us back on track or it makes things suck slightly less depends on if governments and others become more responsible. So long as the US government is spending 50% more than revenue that's obviously crushing to the economy. If we can get debt and over spending under control, normal market forces will spur growth.

The danger is that as pent up demand causes some growth this year, people interpret that as meaning that massive deficit spending is ok and the voters allow it to continue. That would put us on a path to absolute collapse as the country becomes unable to shoulder the burden of trillions in interest to be paid every year.

[DWB]

A recovery is just around the corner.

Any time now.... any time...

;-)

[Rochard]

People seem to think this is a two or four year problem, and are bitching that Obama boy hasn't fixed it yet. If it was that easy to fix, why didn't Bush fix it before he left office?

The last time this happened we were faced with a World War and the largest mobilization the world has seen. We couldn't build boats, planes, and tanks quick enough.

On top of all of this, computers are killing the job market - Because of all of the automation it takes less employees in the work place to get this done. Department stores no longer need people to track what's going out the door - It's instantly tracked and replacements are orders before you've left the parking lot... And will be sent out by truck automatically that night. They've got this shit down to a science.

Read about Japan and the lost decade....

[$5 submissions]

Interestingly enough, a nice chunk of the hedge funds are doing fine.

[Jarmusch]

Originally Posted by loreen

20 decades = 200 years

That's not very optimistic.