Sunday, October 9, 2011

Double-dip recession

I hate this expression, because it gives the impression that we actually got out of the recession that started in 2007, but it has become so common, search engines and searchers being what they are, that I decided to use it. The fact is that for many, the economic downturn is a depression, plain and simple. There was never any upturn to pay attention to, certainly not one that generated jobs.

What caught my attention, beyond the constant stream of speculation amongst the investment community about the financial markets taking another nosedive giving up hope of economic recovery, is news from Reuters that private money are now seeking to protect their assets rather than invest in the hope of  profit. The news is a few days old, but is still worth highlighting. Those with the most hope have now lost it. They may come back later on in the hope of a new, self-fulling prophesy of upswing, but it will fall back again unless there is economic substance on which to build a recovery.

What Europe should realise now is that this depression is going to extend for a great deal longer until the boils of debt in European banking are lanced and the wounds dried and healed. Things will have to get worse before they get better. If they don't, they should look to Japan, which never took on its problems and has suffered for decades as a result.

Europe can't want that.

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