I really can't explain this better than Karl Denninger, but one thing I can say is that we must face reality. The financial reality for the US is that we're in a deflationary credit cycle that must be allowed to unwind. Continued borrowing and stimulus is false growth that increases the gap between what we're producing (labor, income) and debt. This is leading up to a catastrophic collapse. I've said this before on my previous posts and I'll say it again for those who think the economy is improving because Geither said so and Goldman Sach's/JP Morgan cartel is cycling flash trading/inside trading that pushes the dow ever higher. Unemployment is ugly folks, retail sales are NOT improving, and once the tax credit for homebuyers ends the real estate will continue to deteriorate. Meanwhile, the US dollar index continues to decline in sync with equity markets which is readily making oil more and more expensive. The last thing we need right now is for fuel prices to soar when so many people are unemployed, and BTW, the 9.7% is not an accurate statistic - many of my followers already know this, but if you didn't know the U3 method shows 16.7% (the same method used in the 30's). Defaults (credit card collapse) and foreclosures are at incredible levels right now, and more will only bring further demise to the labor market and consumption. Why is it we can't see the signs?
Anyway....here's Denninger.
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