Trader Mark submits:Let me preface this post with two ideas. First, a double dip recession is a very rare thing. Outside of the late 70s-early 80s situation, we have not had one in many decades. Second, I don't think we really ever came out of the Great Recession. If you pump an economy up with $3-4 trillion you can make any economic figure jump and sing its praises. The equivalent of what the U.S. and indeed global governments and central banks have done is simply pump the patient with oodles of morphine. If we did a census every 15 months, cash for clunkers every 12 months, housing bribery nonstop (step up and get yer free $8000!), unemployment checks forever, non payment of mortgages by a significant class of households, and a $800B stimulus every 9 months, along with keeping interest rates at zero forever... well I suppose we'd never have a recession. And, as epic as the stimulative plan that was enacted in the U.S., the Chinese did something even bigger in their economy [ Feb 16 2009: Is China Pulling an Alan Greenspan?], and effectively they have been the world's driver the past 18 months. So, to call what is coming down the pike a "double dip" would be in a way very misleading. It's all going to be one huge dip, interrupted by a string of quarters benefiting from a Chinese tsunami of money plus ripping away any benefit from domestic savers while loading future generations with much more debt. All to push off what is inevitable.Complete Story »
