On Thu, November 6, 2014 4:35 pm, Michael Scott wrote:
I understand the definition of a recession. I simply said it hasn't necessarily yet been avoided. We may still yet fall into recession as a direct result of the GFC.
Sure, that's quite possible. With an export-based economy our wealth is very dependent on what happens overseas, even more so that other countries. A downturn in trade and a poor internal fiscal policy could result in such a problem.
We avoided recession immediately resulting from the GFC, but the US government is still "printing money" to keep their market afloat. Interest rates are being deliberately kept low so the government can afford its debt. It won't take too much vibration in the US for confidence to go through the floor again.
"Printing money" is, in part, the means to avoid a liquidity crisis. As money is meant to represent the total capital value of an economy, it must also include a form of depreciation that is reflected in the money supply. Australia dealt with the recession very well because it combined infrastructure investment with retail expentiture. I think the worst policy in the U.S. was the dying days of the Bush administration which was simply a bail out, no strings attached. "Oh, you failed? Here have some money so you can do it again". -- Lev Lafayette, BA (Hons), GradCertTerAdEd (Murdoch), GradCertPM, MBA (Tech Mngmnt) (Chifley) mobile: 0432 255 208 RFC 1855 Netiquette Guidelines http://www.ietf.org/rfc/rfc1855.txt