The Recession is here (officially)

Well, it's here. That's not really a surprise. The question still lingering now is "How long?" How long will the deflation last before inflation comes back? And how wicked will the inflation be? If the inflation doesn't come back, when do they officially declare a Depression? And how long will that last? Perhaps you'll find me overly gloomy again, but I actually expect the guys in this video will prove to be too optimistic. Yes, I know it sounds nuts, but I think they're being really optimistic. Quite.

Here's some of why I think that: consumers' credit limits will soon be lowered massively. Yes, your credit card will quite likely soon betray you. Right at the moment when people are going to loose work and try to max out their credit cards to compensate, it won't be there. This will accelerate many current trends, most likely including deflationary pressures. I'd also expect at least one major bank to fail within six months. (My money is on Citigroup (AKA Citi), as they have been the most egregious predatory lenders among the big guys and they are almost certainly far more overleveraged than their competitors. My only first-hand experience with them was going to one of their creepy Primerica recruitment sessions once, though I thought it was all crap after about half an hour. I gather that's about the moral level of the whole thing, which points to the coming problem. Truly, it's a company that should never have been allowed to come into existence in the first place.)

In the end, I think everyone will have to acknowledge that all of this is a fruit of deregulation, particularly the deregulation of credit . . . Really, all forms of leverage in general. Here's hoping something like Senator Durbin's anti-usury bill from earlier this year actually gains some traction!!!!!! It's sorely needed!!!!