The Real Deal on the Economy on 9/11

Bill Bonner, from the website www.dailyreckoning.com, has this to say about the true state of the economy on this 9/11 remembrance day.

But what does it mean when the world’s most free-market government nationalizes its largest finance industry? It means a couple things: First, that the days of “laissez-faire ”, even ersatz laissez-faire, are over. No more deregulation. No more tax cuts. No more free trade agreements. Second, that the feds are running scared. They are in retreat. The battle between a natural market correction...and an unnatural, inflationary boom...is going against them.

We were right all along – or almost right; when the dot.com bubble burst it marked the beginning of the end – the end of the bull market on Wall Street...the end of the credit expansion that began in ’82...and the peak of American power and influence in the world. The decline since then has been delayed and disguised – by a flood of new liquidity from the feds. But now, there’s no stopping it.

And it’s much worse than it would have been eight years ago...since Americans became more and more used to spending money they didn’t have; they have more debt than ever. And because the Chinese and other foreigners became more and more used to selling things to people who couldn’t pay for them; now their new apartment buildings are empty and their new factories are quiet. And now, the downturn is global...and it will be longer, and harder, than practically anyone imagines.