By Edward Harrison who writes the blog Credit Writedowns:
Excerpt 1:
When debt is the real issue underlying an economic downturn, the result is either Great Depression-like collapse or a period of stagnation and short business cycles as we have seen in Japan over the last two decades. This is what a modern-day depression looks like – a series of W’s where uneven economic growth is punctuated by fits of recession.
Excerpt 2:
We will go through a giant debt-restructuring, because we either have to bring debt-service payments down so they are low relative to incomes — the cash flows that are being produced to service them — or we are going to have to raise incomes by printing a lot of money.
Excerpt 3:
So where are we, then? We are in a fake recovery that could last as long as three or four years or could peter out very quickly in a double dip recession.
Me: Smart guy, really really smart guy.
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