‘This is not a recession. This is a Depression’ – Denninger

by | Oct 9, 2009 | Headline News, Karl Denninger | 5 comments

Do you LOVE America?


    Contrarian economic analyst Karl Denninger, of The Market Ticker, argues that we are not in a recovery, as the mainstream media and Obama administration would like us to believe, nor are we in a recession. We are in a depression. And, the scary thing? Karl Denninger utilizes basic mathematics and a common sense approach to analyzing the economy to come to this conclusion. Yes – an economic analyst that uses REAL MATH, not the fuzzy math the government has been using.

    If Mr. Denninger can do it, why can’t all of the brain power at CNBC or the experts in the Obama administration see what is really going on. Perhaps they can see it, but don’t want to tell the American people. It is an election year in 2010, afterall. Or, perhaps there is an even more sinister plot, though we’ll save our conspiracy theories for another time and let the reader use his imagination.

    In his October 8, 2009 article Bernanke Under Fire: Grayson / Paul, Karl Denninger outlines why he believes this is in fact a depression. Some of these are excerpted below, but we highly recommend reading the full article, as the core article is not solely about the depression, but moreso about the mistakes committed by The Fed and government that got us here, and some solutions to clean out the system.

    Government created this Depression just as Government created the Depression of the 1930s by refusing to do its job of regulation.  75% of the people in the 1930s had jobs.  75% of people have jobs now.  If you truly believe that unemployment is 9.something percent, you’re delusional.  If you believe it is the 16.x percent that is recorded in “U-6” you are likewise delusional as neither counts those who have given up trying to find work.  Take a trip to Detroit, Michigan.  It is not that different from any other major city today.  If your perspective is limited to the Beltway of Washington DC or the sheltered parts of America where it all appears ok you need to get out more often.  I have, I lived in the Detroit area in the 1970s and 1980s, and I have never – ever – seen anything like what happened at Cobo Hall as described in that article before today in America.  Anywhere.

    This Depression was caused by the same thing all others in modern times have been: banks lending unsecured beyond excess reserves.  That is, banks lending in a speculative rather than secured manner. That is the primary sin. It is that simple. It has always been the primary sin that has led to this result, and it is the primary sin this time as well. This must end, now and forever, if we are to both stop this lunacy and prevent it from ever happening again.

    The government cannot make up for the contraction in private credit.  All the government is doing is risking its own insolvency.  We cannot run trillion dollar+ deficits – Depression or no Depression.  We cannot continue to take bad debt onto the balance sheet of Treasury or The Fed and we cannot make unsound FHA (and now USDA!) real estate loans.  WE CANNOT LIE OUR WAY OUT OF THIS.  Despite the fact that Washington DC politicians are known for lying whenever their lips are moving, mathematics never lies and always catches up with you – without exception.

    Read the full article here…


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      1. Karl Denninger?  In one of his rants he claimed that a huge chunk of WTC Building 1 or 2 (he didn’t specify which) blasted into WTC 7, causing it to collapse.  That’s the guy you want everyone to trust?

        This was my response (one of them) to his ignorant claim:

        ” Here ya go:

        WTC-7 was such a nice, symmetrical collapse.  Could/would you please show me the damage it sustained from that chunk of whatever it was that somehow landed on it from either WTC 1 or 2 (or possibly both) over a city block away?  If it did land on it, what forces propelled it that far?  Watch that video and notice the penthouse collapse first…then the rest of the building.  You are beyond belief Karl, and you tipped your hand big-time with that article. 

        If your readership doesn’t start to diminish from this point forward, then your audience is truly comprised of “golden jackasses”.

        Look at the North Tower…do you see the core columns still standing inside the smoke and dust?  What brought them down Karl?  Notice that NOTHING ever tips over…everything always comes straight down!

        Oh yes…the plane in Pennsylvania…did you, or anyone else, ever discover any wreckage?  Just a hole in the ground Karl…where was the wrekage…the bodies?  Wreckage was discovered over an 8 mile area…but how did it get there? 

        Beyond belief Mr Denninger…beyond belief!

        Jerry Bolduc”

        Look at the quality of that video…do you suppose that the videographer was all set up to record the event?  Did he/she sit there all day waiting for the collapse of WTC 7?  Give me a break…draw your own conclusions about Denninger.

      2. I, for one, don’t believe WTC 7 collapsed of natural causes.

        Do you have a link to that Denninger article/post regarding WTC 7? I would be interested in reading it.

        Nonetheless, Denninger seems pretty solid on his economic assessment.

        It does trouble me, on some level, that many of those who believe there is some sort of grand conspiracy with the economy, financial institutions, etc. refrain from entertaining the possibility that there are cover ups elsewhere…

      3. Mac, me too. Since the credit markets “froze” in Aug 2007 I have stumbled upon my own conspiracy theories that perhaps some of the biggest ones are all related. Presidents Lincoln, Jackson, JFK, the Fed, 9/11, and Iraq all seem to be related, if you follow the trails. I know this is a little off topic here, but I wonder if anyone else out there sees this.

      4. I watched a cool little video yesterday (lost the link) that discussed the invasion of Iraq from a US Dollar standpoint. I had read about it before, but this vid was quite convincing in regards to the motivation for the invasion of Iraq… It could have been about freeing the people of Iraq from the dictatorial grip of Hussein (Saddam, not the other one), or perhaps about acquiring oil assets… Or, perhaps it was about sending a message — Don’t EFF with the US Dollar… oil is paid for in dollars, not Euros. Saddam broke the unwritten rule and paid the price. Couple this theory with the way he was executed, and one must begin to wonder WTF was going on there. Looked like a pretty clear message being sent to other “rogues” around the world, if you ask me.

        Our new, updated web site may have a section for conspiracy theorists as well, because there does seem to be a tie in here, even if it is empirical.

      5. Ahh yes. Here is the video. Definitely worth watching: http://www.youtube.com/watch?v=EEpp9E6aJGw

        No so much for the ‘predictions’ of war with Iran, but for the overview of the USD and what happens when you f%ck with it.

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