Originally Posted By: Matter-eater Man
 Quote:
Roubini Sees Six More Months of Recession, ‘Shallow’ Recovery
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By Eric Martin, Thomas R. Keene and Ken Prewitt

July 9 (Bloomberg) -- The U.S. recession will last six more months and be followed by a “shallow” recovery, Nouriel Roubini said.

The economy contracted by 5.5 percent in the first quarter and 6.3 percent in the fourth quarter of 2008, the most since 1958, according to data compiled by Bloomberg. The savings rate reached 6.9 percent in May, the highest since December 1993, spurring concern that consumer spending will wane.

“This is a great recession that could have ended up in a near depression,” Roubini, the New York University economist who predicted the credit crisis, said on Bloomberg Radio’s “Surveillance.” “We’re not out of the woods.”
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bloomberg.com


A shallow recovery, followed by a total collapse, when the trillions in debt can no longer be financed by foreign banks, who refuse to lend to the United States, which has borrowed far beyond its ability to repay.

When foreign banks ask higher interest rates to lend to the U.S. government (due to the increased risk of lending to the U.S.) then interest rates within the U.S. will correspondingly rise, causing another slowdown in the U.S. economy.
Combine that with rising inflation, due to the projected 2 trillion in cash that will be printed before the end of this year (i.e., "monetizing the debt".)
As that currency gradually leaves the central banks, inflation will follow.
If not hyperinflation.

The U.S. dollar will crash, and all these cheap foreign products and oil that have been cheap for so long, will suddenly become very expensive.
We could see starvation in this country. And it will be far too late to bring all those exported manufacturing jobs back to the U.S.



But hey, everything's great, right M.E.M. ?
Have another glass of Kool-Aid !