Monday, August 9, 2010

The Fed is looking to downgrade the US economic outlook. They are always of the bleeding edge.

One question I have is at what point will the media start referring to the “economic downturn” as a depression. And at what point will we turn to the people who understand how we got here and potentially know the way out?

The economic team at the White House is discredited. We, the people need to completely understand this, despite the fact that the White House will refuse to the bitter end to do so, or say so in public.

It is a hard psychological pill to swallow to realize that the world view that you have held your whole life, and the one that helped you rise to power, is wrong. Bernanke, Geitner, Larry Summers, and company rose to prominence on top of bubble economics. Now the surface tension on the global bubble is gone, and the only answer to this challenge is to re-inflate, but if only they could.

The universe has a funny way of correcting imbalances. Trees, as it is said, don’t grow to the sky. Now a forest can regenerate itself if it is allowed to. But the Fed and Treasury have refused to let the old trees fall, to allow the occasional brush fire of recession to burn through the underbrush and remove the dead wood of the economy.

We now have a completely unhealthy economic tinderbox on our hands.

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Nick Sorrentino is the Editor of The Liberty and Economics Review and CEO of Exelorix.com a social media management company.