Wednesday, 26 September 2007

The Second Great Depression

In fact, the parallels between our present situation and the period preceding the Great Depression are striking. Just as massive debt was accumulating in the market from the purchase of stocks “on margin”, so too, mortgage debt between 2000 and 2006 soared from $4.8 trillion to $9.5 trillion. In both cases the “wealth effect” spawned a spending spree which looked like growth but was really the steady, insidious expansion of debt ...
By Mike Whitney

It's a big call to be expecting a second great depression, but there are some extremely serious problems facing the US economy. It does not seem possible that things will continue along as they have been and that we are in for a soft landing as many pundits are predicting.

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