The Facade Crumbles, by Robert Gore | STRAIGHT LINE LOGIC

Posted by straightlinelogic 8 years, 8 months ago to Economics
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The foundation of the so-called recovery since 2009 has been quicksand: huge increases in public debt; moving private debt onto public balance sheets; central bank monetization of that debt, and artificially low interest rates—to mask the true cost to governments of their debt and promote economic activity and rising asset markets. Now the whole ugly edifice is sinking, but the belief persists that it can be stopped by pouring in more quicksand! If that belief was delusional before, to retain it after the events of the last few months is psychosis unhinged from reality.

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SOURCE URL: http://straightlinelogic.com/2015/07/11/the-facade-crumbles-by-robert-gore/


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  • Posted by CircuitGuy 8 years, 8 months ago
    In late June you made a positive prediction that the Fed won't tighten policy before the end of the year.

    What is the prediction this post? You mention contracting GDP and deflation. Do you have sepecifc GDP and deflation target in a specific time? If you don't accept the official statistics, what about other indicators like sales of bellwethers like CAT, Alcooa, and UPS?
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    • Posted by 8 years, 8 months ago
      A recession is imminent, if it has not already arrived. My prediction, I believe, was the Fed would not tighten in September. I'll stick with it. It would not surprise me if they didn't tighten in December, either. Whether they do or not will have negligible effect on the real economy, which is headed down. I am also on the look out for cascading financial dislocations, far larger than those experienced so far. To this point, everything's followed according to the debt deflation script I've laid out the last year. If anything, I may be a little early, but I don't think I'm going to be wrong.
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