A Quote by Paul Krugman
Consumer spending is now plunging at serious-recession rate ... even if the rescue now in train succeeds in unfreezing credit markets, the real economy has immense downward momentum. In addition to financial rescues, we need major stimulus programs.
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At the center of every recession is a serious imbalance in the economy and mirrored in the financial system. Think subprime mortgage and the Great Recession, or the technology bubble and the early 2000s recession. There are no such imbalances today.
In an economy that already has lost some momentum, one must remain alert to the possibility that greater caution and weakening asset values in financial markets could signal or precipitate an excessive softening in household and business spending.
In Germany it is good if as many people as possible join initiatives and peaceful demonstrations against the rule of the financial markets. Worshipping the unfettered freedom of global markets has brought the world to the brink of ruin. We now need social and ecological rules for the market economy.
Canada is in budgetary deficit now only because of the recession, only because of stimulus measures, and we will come out of it. We will go back into surplus position when the economy recovers. So there is no need in Canada to raise taxes.
The government can always rescue the markets or interfere with contract law whenever it deems convenient with little or no apparent cost. (Investors believe this now and, worse still, the government believes it as well. We are probably doomed to a lasting legacy of government tampering with financial markets and the economy, which is likely to create the mother of all moral hazards. The government is blissfully unaware of the wisdom of Friedrich Hayek: "The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.")
I think the biggest thing we need is to unclog the credit markets, and we may need another stimulus - if we do, it's - it should go to the lower and middle-income people.
I've never seen people as physically distraught as the Bush administration team was because of what was happening to the economy. I personally believe that the steps that President Obama took saved the economy. He doesn't get the credit he deserves for taking some very hard positions. But it was a terrible recession. So now we've dug ourselves out of it, we're standing, but we're not yet running.
The crisis in Europe has affected the U.S. economy by acting as a drag on our exports, weighing on business and consumer confidence, and pressuring U.S. financial markets and institutions.
Just being able to trade financial commodities is a serious limitation because financial commodities represent only a tiny fraction of the reality of the real commodity exposure picture. We need to be active in the underlying physical commodity markets in order to understand and make prices.
The bottom line is the best consumer protections are competitive, innovative markets that are transparent. Now, they need to be vigorously policed for force and fraud, but the agencies that do that need to be accountable.
The world economy is in a nosedive, and understanding what I call "depression economics" - the weird world you get into when even a zero interest rate isn't low enough, and a messed-up financial system is dragging down the real economy - is essential if we're going to avoid the worst.
Starting in late 2007, faced with acute financial market distress, the Federal Reserve created programs to keep credit flowing to households and businesses. The loans extended under those programs helped stabilize the financial system.
Too-easy credit and millions of bad loans made during the U.S. housing bubble paved the way for the financial calamity and Great Recession that followed. Today, by contrast, credit is too tight. Mortgage loans are particularly hard to get, creating a problem for the housing market and the broader economy.
There's no denying that a collapse in stock prices today would pose serious macroeconomic challenges for the United States. Consumer spending would slow, and the U.S. economy would become less of a magnet for foreign investors. Economic growth, which in any case has recently been at unsustainable levels, would decline somewhat. History proves, however, that a smart central bank can protect the economy and the financial sector from the nastier side effects of a stock market collapse.
Significant changes in the growth rate of money supply, even small ones, impact the financial markets first. Then, they impact changes in the real economy, usually in six to nine months, but in a range of three to 18 months. Usually in about two years in the US, they correlate with changes in the rate of inflation or deflation."
"The leads are long and variable, though the more inflation a society has experienced, history shows, the shorter the time lead will be between a change in money supply growth and the subsequent change in inflation.
With or without horse slaughter, horse rescues need our help and support. That can involve financial donations, volunteering, or even donating items like brushes and blankets. Horse rescues operate with little money, so every little thing you can do to help goes a long way.
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