The first dip in the current economic depression in the USA was led by the collapse in residential real estate. That has not come back, and it has led to continuing economic weakness. There was and is oversupply in every sector of the US economy, which is no longer being held up by the credit and housing bubbles. Now the oversupply begins to be undeniable, even to the people who went into debt to create it. Here is what it looks like for one segment of the economy: retail chains announcing store closures all over the country.
Every one of those stores represents at least a few, possibly as many as a few dozen people who will be out of work and making less contribution to the economy, leading to lower GDP numbers. Note that this is happening AFTER you spent a $Trillion in a vain Keynesian attempt to "stimulate" an economy which was in need of a major correction.
It's a cycle, and we are still on the ugly side of it. Expect things to get worse before they get better. Look for "unexpectedly" bad economic reports from everyone except Mish and a select few analysts like him.
No comments:
Post a Comment
I will review your comments prior to publishing them. Almost all comments are approved and published within a day or two. When you post a comment, Please bear in mind that you are addressing me personally. To be clear: I generally prefer clarity to agreement. Make your point, but be nice about it and don't annoy me, and you will likely see your comments published here.
Comment Moderation Statement