If you are looking for hard evidence of deleveraging–and a sobering outlook on the next 10 years, listen to Gary Shilling on Bloomberg Surveillance 9/11/09. Gary estimates that real GDP has to grow at an average of 3.3% to keep the unemployment rate stable. He is forecasting 2% real GDP growth on a business as usual basis. What does that mean for unemployment? Twenty+ percent. So Gary thinks the politicians will be creating guvm’t jobs. And is forecasting chronic deflation, low interest rates.
On Obama, “…maybe he needs to be less assertive and less sure of himself, less confident that he can wave the magic wand and solve all the problems of the world ….there’s a tendency to blame all the bad things on previous administrations … but in actual fact what happens during any one presidency is the product of multiple decades of events that went before, both political and economic…
… he should take a lower key approach – concentrate on what they are going to do about unemployment
Wise and true…
Shilling is the author of the highly recommended Deflation.
Recent Comments