Bloomberg Writes: Recession? Depression? One in Three Thinks So

A third of Americans think the U.S. economy is in a recession or a depression and only one in six think it’s growing, says a new survey that also finds “deep-seated pessimism about the medium term.”

Americans are highly critical of policymakers, unwilling to take risks with their savings, planning to reduce their indebtedness over the next year, suspicious of the stock market, and more worried about inflation than unemployment, according to the survey released today.

The National Bureau of Economic Research has declared that the U.S. pulled out of recession more than four years ago—in June 2009—but a lot of people apparently didn’t get the memo.

The survey found that 85 percent of the 1,000-plus adults worry to some degree about their financial situation, compared with 90 percent three years ago. People who say they’re worse off than they were a year ago outnumber those who say they’re better off, 28 percent to 22 percent.

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This is fairly easy to explain.  The survey above shows the true state of the US Economy. Even though the numbers shows that the US Economy has recovered significantly from the March of 2009 bottom, nothing could be further from the truth.

The recovery was fueled and financed by Credit Bubble Finance. Meaning that the US Government basically wasted about a Trillion Dollars (some claim a lot more) to prevent a complete collapse in the US Economic System.  However, the original “SIN” of massive credit expansion, cheap finance and speculation hasn’t been fixed yet. On the contrary, it has been made a lot worse.

Now the US Economy has massive imbalances that cannot be dismissed or fixed in any favorable fashion. It could only be done either through massive inflation or massive defaults. Even war is no longer a tool. 

I am sorry to say, but my timing work clearly shows that both of those things are about to happen. First, deflationary credit defaults from now till 2016 final bear market bottom (and 2018 secondary bottom), followed by accelerated inflation thereafter.

Unfortunately, in such a scenario no one wins, but it does pay to be prepared.  

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