The worst nightmare forecast by economic specialists over the previous years has come true: new research by economic gurus in the United States of America has revealed a bleak scenario: the United States’ economy is in a state of depression. Yes, it is the Double Dip, a roller-coaster ride to economic catastrophe and it has arrived. To come: massive debt default, the failure of entire nations and widespread starvation in the western world.
The research referring to the works of a number of leading economists (David Rosenberg, Fred Harrison, Arthur Laffer, Nobel Prizewinner Paul Krugman, Robin Griffiths) is revealed in the article by US based analyst and writer, Terrence Aym*. And it makes terrifying reading.
While these leading economists represent different views from opposite ends of the political spectrums both in the USA and the UK, on one thing they agree: the decade ahead is going to get worse.
David Rosenberg states categorically that the United States’ economy has entered another Great Depression, the beginning of the double dip much referred to in recent years, following the shocking revelation in July that the US real estate market has collapsed 27% compared with July 2009.
British economist Fred Harrison explains that property speculation around the globe was responsible for the boom and bust waves ripping through the world economy and claims that tax reforms could have avoided the crisis. What he predicts now is a decade-long depression fuelled by “a massive contraction in demand” resulting in a 45 trillion-dollar debt default and unemployment rates of 25% in the USA and UK. Worse still, Harrison predicts the failure of entire nations and “something unseen for hundreds of years could appear again: wholesale starvation of peoples in some Western countries”.
Harrison, we remember, was dubbed by Spectator Business in 2008 “the canary in the housing mine”… “Nostradamus could scarcely have been more accurate”.
According to the research in Terrence Aym’s article, US economists Arthur Laffer and Nobel Prizewinner Paul Krugman agree with Harrison and foresee higher unemployment, more foreclosures, more failed businesses, a worsening credit crisis and housing slump in the USA.
Laffer, advisor to President Reagan, a member of the US Economic Policy Advisory Board, predicts a “very big fall” for the US economy in early 2011, translated into falling corporate profits and a probable collapse of the Stock Market as massive tax hikes begin to bite when existing legislation runs out.
Krugman agrees: a Second Great Depression is underway now and tomorrow, there will be tens of millions of people caught in long-term endemic unemployment in the USA. Robin Griffiths, strategist at Cazenove Capital, concurs: “The world has entered significant financial depression” while claiming ominously “a double dip is inevitable and imminent”, as he draws parallels with the US M3 money supply today and between 1929/1933.
Ladies and Gentlemen, the double dip has arrived.
*Top economists : The second Great depression has arrived