This is odd:
Just to demonstrate how bad it really is, my wife, who is probably smarter than I am, doesn’t understand where the idea that we have low unemployment comes from. She’s insisting that, of course, there are people all over the country who are out of work, so why shouldn’t they think we’re in a recession. When I explained that unemployment has been well under 5% for several years now, she didn’t get that at all. There’s absolutely no way it could be that low. She’s been snookered by the press.
Nothing surprises me about what people believe anymore. Doesn’t 33% of the population believe that 9/11 was an inside job?
I wonder if the poll asked them their primary news source? Wanna bet it wasn’t Fox?
It’s an old saying: there are lies, damn lies, and statistics. IMHO, we never truly recovered from the late 90s recession.
People think there’s a recession because their expenses are growing faster than their check, and have been for a while. We’re in the effect stage of paying for an import economy with credit, and it hurts. Rather than take the recession we needed in the late 90s, the Fed tried to push the string. They created the stock market bubble, the housing/debt bubble, and (in the process) trillions of dollars of new money. (M2 grew $1.2 trillion from 2005 to 2007, and the private M3 estimates have M3 growing at 10% a year in 06 and 07.) That new money makes our old money worth a lot less.
Now, Wal-Mart’s prices are going up 20-30%, and gas has gone from low $2s to high $2s and $3s. Even if you can trust the Labor Department’s unemployment numbers (and there are a lot of groups like Shadowstats who show that that’s unwise), that doesn’t mean that when the rubber hits the road, people are hurting.
That said, the media doesn’t want to talk about the solution (quit inflating, work, quit buying & driving, and pay off your debt) either, since that cheeses off the sponsors.
“that doesn’t mean that when the rubber hits the road, people aren’t hurting”
Sorry about that.
I don’t know about a recession, but I will say that it seems to cost me a helluva lot more to just live than it did 5 years ago. But I wouldn’t call that a recession, just the current middle-class curse.
p.s. I think we can thank Osama for that, another fact not passed on by the MSM.
I’ve got an internet acquaintance who has been writing about our coming economic problems for some time. I’ve spent some time looking into some of this (which prolly puts me miles ahead of the average American), but I don’t pretend for a minute to understand all this. From his latest…
…We have two
unique problems here. First, we have the dead-ended
USTreasury inflation held as foreign central bank reserves.
These treasuries were always going to be redeemed at some
point, and it appears that the flow out of hibernation has
begun. This is highly inflationary for the domestic
Second, we have the sub-prime crisis with widespread
defaults, and more to come, leaving all Asset Backed
Commercial Paper, Collateralized Debt, Mortgage and Loan
Obligations un-valuable because there is no market to mark
them to. Both the debt and underlying value evaporation is
highly deflationary as the money created by those loans
We have simultaneous inflation and deflation. There is
central bank treasury redemption alongside US banks that
won’t lend to each other because they don’t trust the junk
paper being offered as collateral because it has lost value
and confidence. The money markets are not working.
So, what’s the Fed going to do? I wrote earlier that I had
reason to suspect the Fed was taking in junk paper and then
feeding T-Bills into the money markets to restore liquidity
and confidence. The problem still remains that there’s no
window for the hedge funds to perform the swap. However,
what if they’re monetizing the USTreasury reserves held by
foreign central banks (inflationary) and plan to feed them
to the Super SIV fund in exchange for all their junk paper
(deflationary)? The Super SIV Fund would then be able to
liquify the junk paper held by the hedge funds. That
restores liquidity and confidence to the money markets by
injecting highly tradable treasuries in place of junk.
The swap out would temporarily solve two problems at once by
eliminating the hyper-inflationary impact of mass treasury
redemption’s while shoring up the money markets with
tradable securities. On a macro scale it will put the
USDollar under pressure because of the Fed’s monetization,
but would be counteracted by deflation as the junk paper is
sent to monetary hell.
It could actually work for awhile.
Oops. Sorry for the poor formatting. Everything down to “It could actually work for awhile” is my friend’s writing, not mine.