"On net, the past few months have seen some notable improvements,Mr.
Bernanke said in his semiannual report to the House Financial Services
Committee. The pace will pick up next year and accelerate in 2011, he said,
but unemployment will remain high, damping down inflation for two more
years." (NYT, 22 July 09)
Bernanke is now beginning to get the same sort of adulation that Greenspan
used to get when he was Fed chief. Do we ever learn to take their
statements with more than a pinch of salt? Only two months ago Bernanke
was saying that things will stabilize this autumn and accelerate in early
2010. Now it's 2011. By autumn he'll be talking of 2012.
Fact is that there's still far too much debt (personal and corporate) that
the banks have yet to recover or to write off. We're into a classic
deflation now I suspect. It's going to be several years before anything
resembling normality starts shaping up. The economists I've learned to
respect over the past few years are all saying the same thing. As George
Yeo said in his speech to Cambridge University recently (on its 800th
anniversary), the global economy will be a different place when we do
finally emerge.
Keith Hudson
Keith Hudson, Bath, England, <www.evolutionary-economics.org>,
<<http://www.amazon.com/dp/1906557020/>http://www.amazon.com/dp/1906557020<http://www.amazon.com/dp/1906557020/>/> _______________________________________________
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