Friday, April 08, 2011


"Even though the exact causes of an economic recession are still a mystery there are numerous theories that have been put forth as to what causes an economic recession. But probably the most common thought on what causes a recession is that they are caused by events that have an economy-wide impact. Some examples of these events would be: increase in interest rates or a decline in consumer confidence.

In fact the general consensus is that a recession is primarily caused by the actions taken to control the money supply in the economy. So in the United States many economists believe that it is because of the Federal Reserve that we go into a recession. The reason for this is that in the United States it is the Federal Reserves responsibility to maintain an ideal balance between money supply, interest rates and inflation"

"Loose monetary policy (link) led to bubbles in emerging markets and US housing. So what is happening now?"
"In our opinion, the Great Recession of 2008-09 is the result of a simultaneous shock of surging energy prices and mounting credit problems (Chart 8). The crisis was precipitated by the collapse of Lehman Brothers, but it was the oil price spike that killed emerging market growth. We firmly believe that the world economy would not have contracted so sharply in 4Q08 without the tremendous oil price spike to $150/bbl that occurred in 3Q08 (Chart 9)."
"Our economists believe that a jump in oil prices to the $70-80/bbl range could start to pose some meaningful risks to economic growth in OECD countries. Meanwhile, our economists see the risks to growth in the $90-100/bbl range for EMs."

I am worried about the people in this country at risk, and if you think $4 plus for gas and $100 oil let alone $111 PLUS oil will not pose problems, think again.
Everything you buy is transported somehow, the famers use energy to produce and cultivate crops, to get them to market.....the Chinese crap that makes its way to Target and on your table, to get you to work and to play....Houston we have a problem.

Consumption of OIL is not = to the current oil shock price rally.
How can gold and silver be in a bubble if hardly anyone owns any physical?

How effective has been the current policies and ZIRP in reviving the housing market?

A weaker US $ give appearence of rising corporate profits. The FED has targeted and effectively been chief manipulator of the rising asset prices of things. However they use measures that tell YOU that "inflation is not a problem....." then how can you believe anything they say?
The focus is on the gov't to come to a budget agreement......but who gives 2 hoots.....there will be a $1.5 TRILLION deficit even if they cut $100B !! its PEANUTS they argue about.
"force you out of CASH and INTO RISKIER ASSETS...." This IS the defacto FED policy.....which IMHO is in direct conflict with their MANIFESTO DOCTRINE.

Duratek....the lonely voice of reason....

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