Why will this be the mother of all recessions? Well, first you have housing plummeting, the wealth effect disappearing, and real money being lost. Then you'll have the dry-up in consumer spending, the layoffs, the market freefall and the consumer belt tightening.
Adding to this perfect storm is the sudden and frightening drop in CEO confidence, which will result in businesses rapidly drawing back spending.
"The worst recession in the past 30 years" Bill Fleckenstein told us. "The worst recession since the Great Depression" is what HP believes. With the incredible, historic and foolish amount of debt leverage utilized to inflate the housing bubble and drive recent spending, the unwinding of this position will be epic and drastic, with repercussion felt around the globe. The US isn't catching a cold - it's looking like terminal cancer I'd say.
Duck and cover.
Global business leaders are voicing concerns about deteriorating business conditions for the first time in three years, citing turbulent markets and an expected slowdown in the US.
The Goldman Sachs Confidence Index, which is based on chief executives' assessments of business conditions and regarded as a leading indicator of corporate sentiment, has declined dramatically in the third quarter after buoyant readings in the past few quarters.
Since May, economists have been concerned that inflationary pressures have been increasing, while the outlook for US growth has deteriorated.
"There has been a change in sentiment. Chief executives appear more concerned about economic uncertainty than any time in recent quarters," said Sandra Lawson, senior global economist at Goldman Sachs.
The index for the global business outlook has plunged from 71 in the second quarter to 42, well below 50, the dividing line between executives who think conditions are improving and those who believe they are worsening.
The deterioration was starkest in the US, where the index has fallen to 39, its lowest level since 2002 and well below the four-year average. The decline in Europe has also been steep, plunging from 75 in the second quarter to just 43.
August 04, 2006
Here comes an epic recession: Goldman Sachs CEO confidence index falls off a cliff
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Depth of the coming recession (or depression) will depends on Central Banks in Asia (Japan/China).
If they pull rug out US feet and stop accumulating worthless US$ and bonds - you'll have depression. When they will do it? Who knows.
Some people say that China is waiting 2009, after hosting the 2008 Olympic Games. They need to solve Taiwan's problem. Why they've been waiting so long? Technology. They're sucking US Technology through High-Tech industry transfer from US to China.
Japan? They're stick to US since America is a huge market and protects Japan and they don't need to spend hundreds of billions on defense.
USA is bankrupt. They know it, but prefer to keep things as is.
There are two ways US debt can be repaid. First - through hyperinflation. Printing money is easiest way out. That means dollar collapse and reset of all international monetary system. The second way is direct default on US bonds, refuse to pay them back.
Both scenarios are catastrophic to US economy. All countries will stop trading oil and commodities in US dollars and dollar will become an ordinary currency (like British bound). That means inflation too.
How to protect ourselves from all that mess? Be more independent from others!!! Stay healthy, grow your own food, install energy-saving devices in your home, teach kids practical skills (survival), ...
Name your action:
and buy gold
ecobuilder you are on the money!
"How to protect ourselves from all that mess? Be more independent from others!!! Stay healthy, grow your own food, install energy-saving devices in your home, teach kids practical skills (survival), ..."
But be more independent from things that are really unnecessary, corporate economy crap. But think more community based. It is hard.
I have been trying to do this for 3 years now. Have farm, pond, water supply, cattle, chickens, garden, ammo, etc. I still feel like I have a ways to go.
Recession is coming in the next 12 months. It will be a very significant one.
David
Bubble Meter Blog
We get involved in any kind of Iranian attack, or Syrian attack for that matter China is most Definitely going to bat an eye and dump thier holdings it is a no brainer. How much longer will other powers sit by and let the US commit carnige..hit them where it hurts the wallet.
But then again there is not much to hit we are already broke.
We are shooting ourselves in the foot. It's ironic; communism is our (America's) enemy. However, some communist countries who can't fight and defeat us militarily, will instead do it economically. Therefore, if we suffer economic depression, we become hungry, which will affect our ability to fight. When we face economic depression, we cannot upgrade our military equipment. Guess what will happen next.
Got the picture.
Your hate for the US is really coming out now. I believe we are in a housing bubble, and a recession will be the result.
But you appear to be cheering on anything that causes trouble for the US, and want it to be worse? Is that why you are in the UK? (Actually the UK is a US allay, maybe you should consider North Korea)
Hey, I am sure there is a job for you at the New York Times.
Bye, I must leave the blog now.
Before his death Deng Xiaoping advised them to bide their time and prepare, and that is what they've done since '85. Their leadership thinks and plans in terms of decades, while our politicians focus on next month, or in rare cases, next year. Here are a few things to consider:
1) China now controls both sides of the Panama Canal and has troops (non uniformed) billeted nearby. It could close the canal for a decade by exploding two small underground nuclear weapons.
2) China controls several major west coast ports through a trading company
3) China has built-up enough financial leverage to seriously affect the U.S. bond market.
4) Chinese intelligence stole the designs for our most advanced nuclear warhead design (W88) and the source code to Windows 2000, the most widely used business computer operating system. Their estimated 17,000+ spies in the U.S. have cataloged every important infrastructure and military target.
5) China has trained thousands of PLA officers in assymetric warfare and could attack many vulnerable financial infrastucture and communications assets in the U.S. without ever firing a shot.
A "war" with China might be different than any conflict we've faced in the past. Our vaunted military might be completely impotent when faced with the financial and cyber attacks the Chinese could mount. What would pols in DC do?
http://tinyurl.com/gv3xb
Report: China has deployed missiles giving it second-strike capability against U.S.
along this topic of discussion
What will our politicians do about China?
1.) Since China is still in the "posturing" stage of the game, we Americans, should and must start saving and not become dependent on foreign borrowing.
2.) Live a simple (economical) lifestyle. I don't suggest that we have to use bicycles to work, like what Chinese are doing, but let's stop driving 4WD SUV's on a 2 mile trip to work, on a flat road surface.
3.) Let's do our best to have our children get college education.
4.) Let's not wasie our valuable military resources, fighting an expensive and useless war. Instead we can strengthen our defense system, against North Korea or even China, if the day comes that they don't like us anymore.
Anyone wants to add? Oh, I know, the illegal Chinese can make a good spy for us, if they want to stay here. Anything else?
The chicom economy is booming. Most of their production is consumed domestically now. They drive cars, and will soon be building interstate highways. They have very large very modern factories and plants, like the USA used to in the WW2 days.
I think they are the real enemy but not sure if they would attack us. Maybe just watch us castrate ourselves (impotent). Spain and Portugal used to be world powers. So were France and Britian. I suppose the good ole' USA will be seen as past tense in the same light. It sure feels like it and I am sick of the thought. Boomers like me have seen the best and watched it roll downhill. IMO it has been downhill since 1975 or so.
You say real wealth being lost? What happened to your idea of fiat money? If the original money was just paper and all the run up in prices was financed with printed paper then how can there be a real loss of wealth? If I deflate my currency, say call in my fiat currency and exchange it say 100:1 so that $100 become $1 new dollar is that destroying wealth or just eliminating the phycological effects of fiat money? After all we all know $1 in 1900 isn't worth a cent today and since wealth is constant it is only the illusion of wealth through controlled inflation that makes people feel wealthy and of course transfers real wealth to those who can best manipulate fiat money.
Happens every time the greedy republicans rule unilaterally. We dropped them to 20% of Congress by 1938 as payback for the Depression.
This time I hope we do some real, violent damage to them for their ignorance, bullying and arrogance.
First of all, CEO's dont mention if they are worried because of inflation or deflation (probably the first option)
Secondly, Goldman Sachs benefits from lower rates, so it isnt too surprising they release their "report" right before FED meets. They are pressuring the Fed through public mechanisms -like lots of wallstreet firms
'EPIC' I think i'll wait til the movie comes out!
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