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Strategies & Market Trends : Mish's Global Economic Trend Analysis
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To: Little Joe who wrote (94286)2/16/2009 12:27:23 PM
From: Sunny Jim  Read Replies (2) of 116555
 
Little Joe,
One thing that the graph tells me is that you don't come out of depressions until private debt loads come down. Everyone says that WWII got us out of the depression which it true but it is also somewhat coincidental. The private debt load was trending down nicely in 1940 and would have set the stage for recovery on it's own. The war helped it a bit, but more importantly provided employment.

If you look at our current situation, I would maintain that we don't have a chance of coming out of this depression until private debt loads come down to substantially less than 100% of GDP, and with GDP poised to fall off a cliff, that's a Herculean undertaking. We've got a long way to go and our politicians are trying to get credit flowing again?????? Historians are going to look back at these debt laden spending packages and puzzle over what we were thinking.
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