Why the Economic Recovery is Fraudulent and Doomed

Posted on January 21, 2015 by Michael Minkoff

Much has been made of the recent “economic recovery,” especially by Democrats touting the effectiveness of Obama’s policies, both here and abroad. But one pundit doesn’t see it that way, and his voice is vastly under-represented in this discussion:

He [William White, the economic analyst who correctly predicted the Great Recession] deplores the rush to QE as an “unthinking fashion”. Those who argue that the US and the UK are growing faster than Europe because they carried out QE early are confusing “correlation with causality”. The Anglo-Saxon pioneers have yet to pay the price. “It ain’t over until the fat lady sings. There are serious side-effects building up and we don’t know what will happen when they try to reverse what they have done.”

The painful irony is that central banks may have brought about exactly what they most feared by trying to keep growth buoyant at all costs, he argues, and not allowing productivity gains to drive down prices gently as occurred in episodes of the 19th century. “They have created so much debt that they may have turned a good deflation into a bad deflation after all.”

In other words, recovery through Quantitative Easing has been a short-term fix with devastating long-term consequences. White said that this practice is effectively “stealing growth from the future.” Once the US and the UK started devaluing their own currencies, other countries were largely forced into the same practice in order to “compete.” What has resulted is a global economic crisis that is quickly reaching its inevitable outcome. It will probably be the case that the feces hits the fan just in time for Obama to bow out in the next election. And I’m sure that president, whoever the poor man or woman is, will take the blame for the meltdown, just as Herbert Hoover did in his turn. Obama will take all the credit for the recovery, Republicans will likely take the blame for both depressions, and we’ll continue on our unmerry way.

What can be done to stem the tide? Not much. Any action that could begin to address our ballooning debt would cause short-term economic constriction. Like with any addiction, the initial withdrawals will seem worse than the addiction at first. And it is unlikely our short-sighted country will be willing to stick it out.

Source:http://lastresistance.com/9703/economic-recovery-fraudulent-doomed/
Read more at http://lastresistance.com/9703/economic-recovery-fraudulent-doomed/#qMAxHIlfkQvAE6Xp.99

Comments

By last count over the past few years, the Federal Reserve increased the money supply by 450%.  Unless they can “claw back” some of this or cut federal spending in half as I recommend, we will pay for this using currency debasement with 10% inflation for the next 45 years.

Norb Leahy, Dunwoody GA Tea Party Leader