The people out there that believe that the U.S. economy is
experiencing a permanent recovery and that very bright days are ahead
for us should have their heads examined. Unfortunately, what we are
going through right now is simply just a period of "hopetimism" between
two financial crashes. Things may seem relatively stable right now, but
it won't last long. The truth is that the financial crisis of 2008 was
just a warm up act for the economic horror show that is coming. Nothing really got fixed after the crash of 2008. We are living in the
biggest debt bubble in the history of the world, and it has gotten even
bigger since then. The "too big to fail" banks are larger now than they
have ever been. Americans continue to run up credit card balances like
there is no tomorrow. Tens of thousands of manufacturing facilities
and millions of jobs continue to leave the country. We continue to
consume far more than we produce and we continue to become poorer as a
nation. None of the problems that caused the crisis of 2008 have been
solved and we are even weaker financially than we were back then. So
why in the world are so many people so optimistic about the economy
right now?
Just take a look at the chart posted below. It shows the growth of
total debt in the United States. During the financial crisis of 2008
there was a little "hiccup", but the truth is that not much deleveraging
really took place at all. And since the recession "ended", total
credit market debt has gone on to even greater heights....