Another recession coming?

[Free Trade is managed by the invisible hand.]

I was reading this article yesterday. I don't remember enough macroeconomics to have much to say about it, but I thought I'd post it here and see what your opinion is on it:

http://www.telegraph.co.uk/finance/economics/7769126/US-money-supply-plunges-at-1930s-pace-as-Obama-eyes-fresh-stimulus.html

I dont understand how the money supply can decrease with monetary policy so loose.  I mean, the fed funds red is still at 0%. 

Just because the monetary base is increasing does not mean the atemporal money supply will.

[Free Trade is managed by the invisible hand.]

I dont understand how the money supply can decrease with monetary policy so loose.  I mean, the fed funds red is still at 0%. 

Low interest rates don't mean people will borrow (or be allowed to borrow, even if they wanted to).  Interest rates were virtually nil during the Great Depression and no one could get money out the door.  It is the classic pushing-on-a-string problem.

The only way to get us out of deflation is - massive new spending.  As in several trillion per year.

are you sure it would be several trillion per year? I am thinking that if we simply passed a mini-stimulus now it would be very effective because the unemployment rate has largely bottomed out.

[Free Trade is managed by the invisible hand.]

are you sure it would be several trillion per year? I am thinking that if we simply passed a mini-stimulus now it would be very effective because the unemployment rate has largely bottomed out.

Maybe, but what's missing is trillions in private lending (if what the above posters say is true), and thus demand/consumption.  So, I think we could get away with a few trillion of quantitative easing with no inflationary pressure - in other words, just to eliminate deflation.

It is when the Left starts using quantitative words that begin with a "t" rather than a "b" that I begin to get a bit nervous. You should watch the hearings being conducted by Obama's budget commission. They are quite excellent actually, and perhaps your world might begin to get a bit more three dimensional. Perhaps. In any event, I assume that you just picked that number out of the air Opebo. Am I right? 

The budget commission hearing sometimes bank on the GDP/debt ratio used by carmen rienart? am I right? If so than i would have to disagree with the analysis because it is a conservative estimate that excludes growth. In other words if an economy is growing strong than a high GDP/debt ratio isn't a problem, and the best way to gain growth is a stimulus.

[Free Trade is managed by the invisible hand.]

The point is, with proper Keynesian balancing, demand support, and government stabilization of the economy, as well as a generous welfare state, we can minimize the need for savings, and maximize production.  Keep everything running full-tilt all the time.

Splendid. No more economic cycles, and that apparently obtains not only for the economy as a whole, but each and every actor in it. Moving right along, you still have not yet favored me with a golden mean savings percentage. What can I do to help you get out of your shell Opebo?  You know I want to help.

how can any indicator have a golden mean? For example savings are only considered excessive if it hurts consumption.

[Free Trade is managed by the invisible hand.]

The point is, with proper Keynesian balancing, demand support, and government stabilization of the economy, as well as a generous welfare state, we can minimize the need for savings, and maximize production.  Keep everything running full-tilt all the time.

Splendid. No more economic cycles, and that apparently obtains not only for the economy as a whole, but each and every actor in it. Moving right along, you still have not yet favored me with a golden mean savings percentage. What can I do to help you get out of your shell Opebo?  You know I want to help.

how can any indicator have a golden mean? For example savings are only considered excessive if it hurts consumption.

Doesn't savings "hurt" consumption by definition, since it is the antonym to consumption in this context?

I thought Opebo would put the ball back in my court by saying, well for class enemies, like yourself, of course the savings rate should be negative, and also for the poors as well because the government will just cut checks to them, but for those in the middle, perhaps x percent savings might make some sense. But he is apparently still deciding whether or not  to return the ball at all, as opposed to, in lieu thereof, importune the referee that my shot was not in the court, so the volley is over, advantage Opebo or something.

//Doesn't savings "hurt" consumption by definition, since it is the antonym to consumption in this context? //
Yes savings in general does hurt consumption,but i am sure this nation would be fine if we had a 3% savings rate instead of a 8% savings rate. I would also like to point out that it could be argued that our current national savings rate is too much of a conservative estimate. Thus the national savings rate may actually understate the real amount of savings.

[Free Trade is managed by the invisible hand.]

This thread is a good indicator of a recession coming. Basically the more posts in this thread that is made, than the more likely a recession is going to occur. This is because Recessions are a normal part of the capitalist system.

Thus how many posts until the next recession?