Saturday, January 9, 2010

"Dollar Crisis" author: 2010 will bring more stimulus

It is difficult to restore debt-fueled consumption of the bubble era without access to easy credit. The breakdown of bank credit, however, reflects continued tightness. This means replacing private with public, debt-sponsored consumption for a Keynesian driven government trying to fend off another economic rollover within the context of a depression. That is, until the bond market, says no more.

Talk of an exit from the easy money policies in 2010 is entirely premature since investors will most likely see more U.S. stimulus spending next year to prop up demand.

"This current round of stimulus will begin to wear out and everything will start to weaken again, and that will require another round of stimulus, not just from the U.S. but from China as well," Duncan told Reuters.

Source: reuters.com
Keynesian: en.wikipedia.org

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