None Dare Call It Recession
I used this title a bit whimsically. To me, it sounds like the title a 1960s-era documentary on some hideous threat like an alien invasion or a
hidden conspiracy to take over the government. In this case, I believe the economy is stalling out, yet none of our leaders dares to say that a
recession may be underway again. Reading Fed Chairman Ben Bernanke’s careful remarks in a recent speech gave me the sense that he is beating around
the bush because he is afraid to tell us the truth.
Here is an example of carefully-parsed words Chairman Bernanke used to allude to another recession in his speech at Jackson Hole, Wyoming on August
26th [emphasis added]:
…the financial crisis and the subsequent slow recovery have caused some to question whether the United States, notwithstanding its long-term record
of vigorous economic growth, might not now be facing a prolonged period of stagnation, regardless of its public policy choices. Might not the very
slow pace of economic expansion of the past few years, not only in the United States but also in a number of other advanced economies, morph into
something far more long-lasting?
Something more long-lasting like another recession perhaps? I realize Bernanke has to be careful with words, but at some point the rest of us need to
pay attention to the real message, which is that the economy is not doing well and we could be facing the word that none dare say: recession.
Clearly, none of us wants another recession so soon after the last one ended, if it actually did end that is. Nonetheless, we cannot run from the
truth either. So, let’s explore whether we are or are not sliding back into recession.
Just thought I would post this article as a heads up for ATS reading. Thought it was quite interesting and though not a wide range of indicators are
cited, provides a pretty good treatment of the situation, and fair to say, clearly not fear mongering.
I wonder what the economic conditions were like back in the recessions of the early 80s more broadly and globally, and what interest rates were set
during that time. I’m aware that many parts of the globe were also experiencing recession at the time, but I wonder how healthy the global economy
was back then compared to now. There was no eurozone debt crisis, or banking crisis, or coming off the back of one of the worst financial crisis since
the 1930s. There was a good recovery once the recession ended up until the next recession of the early 90s.
I say this as I contemplate the broader economic conditions and perils in the world economy today. Did they resort to the massive bail outs, monetary
easing, ZIRP and other stimulus measures in previous recessions like our policy leaders and politicians have since 2008? If not, then it begs how well
this so called recovery is going to trend let alone continue, and where it will head once options are exhausted, and further deterioration sets in.
Unemployment levels remain high and economies among the developed world continue to deteriorate. Even the robust Australian economy is reporting
slower growth, job losses and rising unemployment levels now. And it is beginning to alarm politicians despite what they say.
I know this because where I work in my Department, we have an area that specialises in economics, and the manager spoke with our group yesterday,
stating that things are not looking good when digging deeper beneath the surface. He said if you had asked him just a couple of weeks ago, he would of
had a very different and far more optimistic opinion to the one he had formed in mind just in recent weeks with some of the fast developing
deteriorating indicators in the Australian economy. He suggested there may well be a GFC Mark II but stated, that regardless of this possibility, we
need to remain positive. Fair enough, his job is not to sell false hopes to investors or the general public, but investigate, report and provide
ministerial advice on economic trends and policies. Was quite interesting hearing him speak in this manner, and he also cited global economic trends
being a challenge to the Australian economy, as it will be for developed economies around the world.
edit on 29-8-2011 by surrealist because: (no reason given)