A lot more painful than the last time around.........................

The greater part of humanity is too much harassed and fatigued by the struggle with want, to rally itself for a new and sterner struggle with error. 

                                                                                                               Friedrich Schiller 

If the economy falls back into recession, as many economists are now warning, the bloodletting could be a lot more painful than the last time around.

Given the tumult of the Great Recession, this may be hard to believe. But the economy is much weaker than it was at the outset of the last recession in December 2007, with most major measures of economic health — including jobs, incomes, output and industrial production — worse today than they were back then. And growth has been so weak that almost no ground has been recouped, even though a recovery technically started in June 2009. THE RECOVERY WAS NOTHING BUT MANUFACTURED AND MANIPULATED BULLSHIT! YOU HAD TO BE STUPID TO BELIEVE IT WOULD RESULT IN ANYTHING POSITIVE THAT WOULD LAST.

It would be disastrous if we entered into a recession at this stage, given that we haven't yet made up for the last recession.

With fewer jobs and fewer hours logged, there is less income for households to spend, creating a huge obstacle for a consumer-driven economy.

Adjusted for inflation, personal income is down 4 percent, not counting payments from the government for things like unemployment benefits. Income levels are low, and moving in the wrong direction: private wage and salary income actually fell in June, the last month for which data was available.

Consumer spending, along with housing, usually drives a recovery. But with incomes so weak, spending is only barely where it was when the recession began. 

And with construction nearly nonexistent and home prices down 24 percent since December 2007, the country does not have a buffer in housing to fall back on.

Of all the major economic indicators, industrial production — as tracked by the Federal Reserve — is by far the worst off. The Fed's index of this activity is nearly 8 percent below its level in December 2007.

Likewise, and perhaps most worrisome, is the track record for the country's overall output. According to newly revised data from the Commerce Department, the economy is smaller today than it was when the recession began, despite (or rather, because of) the feeble growth in the last couple of years.

Unlike during the first downturn, there would be few policy remedies available if the economy were to revert back into recession.

Interest rates cannot be pushed down further — they are already at zero. The Fed has already flooded the financial markets with money by buying billions in mortgage securities and Treasury bonds.

There are only so many times the Fed can pull this same rabbit out of its hat.

In the financial crisis 2008 , when markets were freezing up, the first response of corporations was, I've got to get some cash. The fastest way to get cash is to not have a weekly payroll, so that's why we saw such big layoffs. Corporation will watch out for number one, not our economy.

Investors the world over are still reeling from last Thursday's massive plunge in the US equity markets, in which the major indices all gave up more than 4 percent. It was the worst day for the US stock market since December 2008.

None of this should surprise those conversant with Austrian economics. The "fundamentals" of the economy have been and remain awful because the government and Federal Reserve are consistently doing the wrong things. The apparent recovery, fueled by Bernanke's sheer money creation, has been bogus all along. 

Just about everyone except Chicago School economists now recognizes, after the fact, that the United States obviously went through a tech and dot-com bubble in the late 1990s and then a housing bubble a few years later. Is it really so difficult to understand that trillions in government budget deficits over the past few years, coupled with unprecedented inflation by the central bank, have set the economy up for yet another crash?

No matter how many pundits and famous economists declare otherwise, Bernanke did not save the day with his interventions. He has simply postponed the day of reckoning yet again, and we can expect the final crisis to be much worse than the mere collapse of a few major investment banks.

I have been warning that this "recovery" has been bogus all along. I told you so does not begin to cover what I would like to say to all of the idiots that call themselves financial professionals.

WE ARE GOING DOWN AGAIN AND GOING DOWN HARD WITH NOTHING TO SAVE US THIS TIME!