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Monday, February 9, 2009

This isn't your typical recession...

Below is a graph of number of job losses per month, for this "recession" as compared to 1990 and 2001 recessions. It is a startling picture. Yea, we have more people now than 1990, but not enough to really dent these images. And these images DON'T count the illegal immigrant explosion who can't find work.
From WebSurfinMurf's Financial Blog

The above was taken from this post at .gov (click) See Mish (click) for more commentary.
Click here for more cheery job graphs.

Combine this with some Federal reserve graphs, and hopefully you can appreciate why I am panicking early into resources. Click on pictures for better views, and click here for source.

Federal reserve graph of the increase in monetary base.
From WebSurfinMurf's Financial Blog


Total "borrowing" from Federal Reserve..

From WebSurfinMurf's Financial Blog

Don't worry, "deposits" are up at Fed. This graph is very misleading, institutions are borrowing from fed, then depositing to get "interest" payments from fed greater than the borrow, yielding free cash from the government.

From WebSurfinMurf's Financial Blog

The important take away is, this downturn is MUCH worse than the public media is discussing. Click to read what Brittan had to say about their state of affairs last year, as independent confirmation.

And even the BEST optimists are now saying recovery in 2010, not 2009. I am assuming a 5 year recession, if not longer. (10-15 years?) But it all depends if losses are recognized vs continue to hide through public taking on debt.

How did it get this bad you may ask? Well, during 80s through start of the 90s, the government "devalued" (borrowed/printed) its way into prosperity. During the 90's, under Clinton, the dollar APPRECIATED and the economy ramped up. During Bush, the economy devalued the dollar to new lows, artificially creating the Stock market boom.

What we are seeing now is the artificial inflation that occurred under Bush popping, and the dollar "appreciating" (deflation).

So now the government is trying to REPEAT what Bush did, but stating it will end differently this time. Do you believe?

See graph from "Gary" of the Smart Money Tracker below (PAID SERVICE, GET IT!, tell him I sent ya) In his email, he discussed a wide variety of topics on Jan 22nd. The purple line shows valuation of S&P 500, the Black line the USD valuation. This graph shows to me shows that the last 7 year "boom" was a farce. Reality must come back, and congress can't re-create the 2001-2007 boom through repeat spending and expect a different outcome. That is why I believe a Great Depression worse than 1930's is our future if we try to spend our way out.

From WebSurfinMurf's Financial Blog


UPDATED: 2/10/09
Watch this video from 2:20 on youtube. The extrapolation out from 550B to 5.5T run on the banks is not valid, since, you can't say the electronic run on the banks would have kept up at that pace.

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