Really? When did that happen? If it is so, most likely it is a temporary situation.
The first article is from the Telegraph.co.uk which strangly I am finding more and more that it is the place to get accurate news about the US.
I will not reprint the whole thing here
Similar concerns have been raised by David Rosenberg, chief strategist at Gluskin Sheff, who said that over the four weeks up to August 24, bank credit shrank at an "epic" 9pc annual pace, the M2 money supply shrank at 12.2pc and M1 shrank at 6.5pc.
"For the first time in the post-WW2 [Second World War] era, we have deflation in credit, wages and rents and, from our lens, this is a toxic brew," he said.
It is unclear why the US Federal Reserve has allowed this to occur.
Then they go on to state;
"The current drive to make banks less leveraged and safer is having the
perverse consequence of destroying money balances," he said. "It
strengthens the deflationary forces in the world economy. That increases the
risks of a double-dip recession in 2010."
The fed and congress have misregualted the banks and allowed then to be way over leveraged. They are attempting to correct this, as they should. However this causes deflation and China starts rasing hell when that happens because they own so much of our debt. So it put us in a tough situation.
http://www.ft.com/cms/s/0/e6dd31f0-a133-11de-a88d-00144feabdc0.html
In another article William White that predicted the subprime meltdown and got in Greenspan's face over it in 2003 predicts "double dip inflation" and prolonged stagnation.
The only thing that would really surprise me is a rapid and sustainable recovery from the position we’re in.
The article goes on to state:
Worldwide, central banks have pumped thousands of billions of dollars of new money into the financial system over the past two years in an effort to prevent a depression. Meanwhile, governments have gone to similar extremes, taking on vast sums of debt to prop up industries from banking to car making.
These measures may already be inflating a bubble in asset prices, from equities to commodities, he said, and there was a small risk that inflation would get out of control over the medium term if central banks miss-time their “exit strategies”.
Quite simply put, we can't keep on doing what caused the problem and expect those actions to solve the problem. We have a group of Ego maniac in our government that refuse to listen to people that are out of the status quo. We are in trouble folks.
