“Worst Still Ahead for Economic and Systemic-Solvency Crises”
“The U.S. economy continues in its longest and deepest downturn since the early 1930s, the first downleg of the Great Depression. This structural contraction already shows characteristics of a depression. Particularly protracted and deep, it will remain unresponsive to traditional economic stimuli. Given the historical and current extreme fiscal malfeasance of the U.S. government, and an accommodative Federal Reserve intent on debasing the U.S. dollar, a hyperinflationary great depression looms. Elements of such are at high risk of unfolding in the year ahead.
Coincident with the economic crisis—but also related to the structural issues driving the economic contraction—a systemic-solvency crisis has unfolded during the last two years that has triggered extraordinary liquidity actions by the Federal Reserve and U.S. Treasury, in conjunction with extreme efforts at fiscal economic stimulus, all aimed at preventing an outright collapse of the banking system and the economy. Indications of a current contraction in domestic liquidity suggest these actions have not had their desired impact. Instead, the systemic-solvency crisis appears to be intensifying anew.” Read more.
John Williams
Committee for Monetary Research & Education Annual Fall Dinner, October 15, 2009.
Image by Salvatore Vuono / FreeDigitalPhotos.net.
