Corporate and Government Bailouts Will Push US into Depression

September 11, 2008 by · Leave a Comment
Filed under: Economic News 

Heck I even think 10-11% inflation is being nice. I think the 12-18% are a bit more fair and a correct reflection in the rise in prices of the most essential goods. We can not think that we are going to inflate our way from the acute economic problems that are beginning to manifest and in my opinion be masked by the current political election season that includes a new President.

We can not think that deficit spending without actual productivity growth and expansion of real goods is going to solve these problems, it is more like a band-aid that has the side effect of inflation of prices.

Article:

The end result of the global economic slowdown may be the U.S. announcing national bankruptcy as the government cannot afford the bailouts that it promised and the market will not bail out the government, Martin Hennecke, senior manager of private clients at Tyche, told CNBC on Thursday.

“We expect a depression in the United States. We expect a depression, very possibly, also in Europe,” Hennecke said on “Worldwide Exchange.”

The estimated $300 billion cost of the Fannie/Freddie bailout will probably be considered as a loss that the government will have to take, therefore passing it on to taxpayers, he explained.

“We already have $3 trillion of debt, as far as the U.S. government is concerned. These debt figures across the U.S. economy are rising very sharply.”

When the government can no longer pass the United States’ “immense debt” on to taxpayers, it will turn to the holders of U.S. dollars, leading to the eventual downfall of the currency, Hennecke said.

“Definitely, it (the dollar) is not a safe place to be invested in, as real inflation is closer to 10 or 11 percent than the actual inflation numbers given by the U.S. government,” Hennecke said on “Worldwide Exchange”.

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