Three straight negative quarters in GDP growth
Economist Keith Hazelton at the Oklahoma Bankers Association accurately forecast today’s official first-quarter estimate that the U.S. Gross Domestic Product is on pace to decline 6.1 percent this year. That’s significantly worse than a consensus prediction from economists.
So this time it is different – a balance-sheet recession, a debt-deleveraging deflationary downturn really not witnessed since the 1930s. More bedrock of economic and investment dogma crushed into gravel and swept away by the raging torrents of cause and effect.
Cause: too much debt/leverage created during “The Great Moderation” allowing the world to pre-consume years’ worth of future goods and services. Effect: massive voluntary and involuntary unwinding of said debt/leverage resulting in a dearth of future years’ consumption as global supply and demand are re-set to lower levels, an equilibrium is reached and the process begins anew.
Did you catch that awesome alliteration? “Debt-deleveraging deflationary downtown…”
Don Mecoy
Business Writer
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