4 Economic Bombshells Bernanke Did NOT Tell Congress Last We
Four Shocking Economic Bombshells Bernanke Did NOT Tell Congress About Last Week
Economics / Great Depression II
Jul 26, 2010 - 08:01 AM
By: Martin_D_Weiss
In his testimony before Congress last week, Ben Bernanke lifted the Fed’s skirt and gave us a glimpse of the disasters now sweeping through the U.S. economy.
But there are four bombshells he did NOT talk about:
FIRST and foremost, what’s CAUSING the economy to sink? The stock market has not yet crashed. Interest rates have not yet surged. Gasoline prices have not skyrocketed. There has been no recent debt collapse, market shock, or terrorist attack.
So what is the invisible force that’s suddenly gutting the housing market, driving consumer confidence into a sinkhole, and killing the recovery that Washington was so avidly touting just a few months ago?
Bernanke won’t say. But the answer is clear: The recovery had very little substance to begin with. Rather, it was, in essence, a mirage — a dead cat bounce bought and paid for by Washington’s massive bailouts, stimulus programs, and money printing.
Put another way, the recession never really ended. Yes, we saw some growth in GDP. And yes, thanks to that growth, some companies are still reporting better earnings — the news that spurred a rally in the stock market last week. But at the core of the economy, the fires that started the recession are still burning intensely.
SECOND, Bernanke failed to point how that …
The U.S. Housing Market Is Now LOCKED Into a Chronic, Long-Term Depression
http://www.marketoracle.co.uk/images...us-housing.gif
Housing starts — the most important measure of the housing industry — is still a disaster zone.
Beginning in January 2006, they suffered their worst plunge in recorded history — from an annual rate of 2.3 million to a meager 477,000 in April 2009. Thus …
In just three years, 79 percent of America’s largest industry, impacting more Americans than any other, was wiped away.
Then, despite a series of government agency programs to shore up the industry … plus $1.25 trillion poured in by the Fed to buy up mortgage-backed securities … plus a big tax credit for new homebuyers, housing starts perked up ever so slightly: They recovered to an annual rate of 612,000 in January of this year.
But this recovery was so small, it retraced just 7.5 percent of the prior fall. In other words,
Even after massive government efforts, and even at the highest point in their recovery this year, the housing industry recouped less than one-tenth of its historic three-year bust from 2006 to 2009.
Worse, the housing industry has now resumed its decline.
The most alarming factor: Widespread “strategic defaultsâ€