YOUR MONEY

When will the’ D’ word be used?

Britain is about to start it’s 3^rd recession in the last 5 years, according to the British Office of National Statistics reprinted in an article in the G&M, January 26, 2013, B8, entitled “Britain braces for triple –dip”.  If not for the flood of cash that went into last summer’s London Olympics, it is quite likely Britain would have had FIVE consecutive quarters of ‘negative growth’.

Japan has been on a roller coaster of frequent recessions since the housing bubble burst in the early 1990s and the phrase ‘lost decade’ is now three decades long!  Despite massive government cash priming the economy -- through infrastructure programs, earthquake and tsunami rebuilding, giving Japanese company money at close to 0% interest for over a decade – Japan still has ongoing deflation!

Brazil is, according to last week reports, into STAGFLATION, with inflation running above 6% and growth just above ZERO.

And as for Europe and the EU, as pointed out in an earlier blog, the entire EU has been in ongoing negative growth since 2008 except for Germany!

The United States is also in deep economic trouble with massive government debt (at all 3 levels: federal ,  state and municipal levels) and minimal growth!

So when is someone going to use the ‘D’ word?   You know, DEPRESSION!!!

Will we need to wait for historians to give us this ‘insight’ or hindsight some 10 years in the future, in some history or economics textbook?

 

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Stagflation – relatively high inflation compared to domestic economic growth – as currently in Brazil – will be the real challenge in the near future.