Mrcauser’s Weblog

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We need time……

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Too soon to be in recovery but happy talk makes politicians look good. And get reelected. Broke dicks need time to pay down debts and reestablish credit. Still remains to be seen if we climb out of this mess and reignite the boom.

But that’s been the history so far. Expect the printing presses to crank up another round and start the merry go around again. Until the next crash makes this one look like a popcorn fart, lol.

What Bernanke doesn’t understand about deflation | Steve Keen’s Debtwatch

Bernanke’s recent Jackson Hole speech didn’t contain one reference to the key force driving the American economy right now: private sector deleveraging. The reason the US economy is not recovering from this crisis is because all sectors of American society took on too much debt during the false boom of the last two decades, and they are now busily getting themselves out of debt any way they can.

Debt reduction is now the real story of the American economy, just as real story behind the apparent free lunch of the last two decades was rising debt. The secret that has completely eluded Bernanke is that aggregate demand is the sum of GDP plus the change in debt. So when debt is rising demand exceeds what it could be on the basis of earned incomes alone, and when debt is falling the opposite happens.

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Written by mrcauser

August 29, 2010 at 4:52 pm

Posted in Uncategorized

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