Saturday, November 20, 2010

Very Low Inflation and High Unemployment can spell Impending Depression

Since Very low inflation combined with high unemployment is very unusual it is one of the signs of an impending deflationary cycle which also often leads to either an extreme recession, second recession or an outright Depression.

So, the only weapon left because of a Gridlocked Congress just like in 1994 is the Fed trying to Buy Treasuries. If the Fed doesn't buy Treasuries with the Congress Gridlocked, A FULL ON Great Depression number 2 is a sure bet. Because there is nothing else to stop it that I can see on the Horizon. And even though the Republicans will try to Blame Obama for it, you and I who are better informed will know in our hearts it was the Republicans who only wanted to Bring Down Obama at all costs to the nation. And long term if they succeed they will have to look at all the deaths and destroyed lives of the next 20 years that their actions now will cause if they succeed in stopping the Fed now.

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