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Friday, July 24, 2009

This is not a recession, it's a depression!

07/23/09 Vancouver, British Columbia

The depression deepens.

“These are not layoffs…they’re permanent job losses,” said Barry Ritholtz yesterday morning in his presentation at the Agora Financial Investment Symposium in Vancouver. “These people are not going back to work anytime soon.”

That is the difference between a recession and a depression. In a recession people get laid off…and then they are called back to work when things go back to normal. But in a depression, they are let go permanently. They exhaust their unemployment benefits and become desperate. They must find new employment in new industries. Because things cannot go back to normal; normal is played out.

“In the period, 2001 -2007,” our old friend Mark Faber reminded us in his speech on Tuesday, “the Fed managed to do something that had never before been done – create a worldwide bubble in just about everything. Stocks, bonds, art, oil, housing – you name it; it went up. The only thing that didn’t go up was the dollar.”

How did the Fed pull off such a remarkable achievement?

-- from "A Worldwide Bubble in Everything" by Bill Bonner


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