Economist Nouriel Roubini says in a Financial Times op-ed more or less what I’ve been saying since last fall (he says it better than I ever could): there is not yet light at the end of the economic tunnel. The recession is not over.
Bad businesses have not been allowed to fail, bad assets remain on corporate balance sheets, and the government has propped up these failures which has merely delayed economic pain by moving it into the future.
The stock market is experiencing a sucker’s rally right now. We might even be in a depression.
I don’t understand why Roubini doesn’t address the money supply in his op-ed. As a result of the explosion in the quantity of U.S. dollars begun under the Bush administration and ramped up by the Obama administration, nasty inflation is coming, probably next year. For this reason, I suspect the outlook is even more negative than Roubini describes.