Economic Turmoil in 2011 - by Stephen Lendman
Wall Street predicts blue skies. Economic recovery will continue. Stocks will deliver double-digit gains. On January 14, the Wall Street Journal's Economic Forecast Survey headlined, "Economists Optimistic on Growth," expecting in 2011:
-- 3.3% GDP growth;
-- unemployment declining to 8.8%;
-- inflation contained at 1.9%;
-- crude oil at around $90 a barrel;
-- improved housing starts in a depressed market;
-- on average, 180,000 monthly jobs created;
-- no Fed interest rate hike until 2012 at the earliest;
-- continued QE II buying of $600 - $900 billion in government bonds; and
-- an overall upbeat sentiment for economic recovery and growth.
Others disagree, including long-time insider/market analyst Bob Chapman, calling current economic policy destabilizing enough to have profound future social costs. Sometime in 2011, he says conditions are "going to be nasty. The handwriting is on the wall," but no one's listening.
On January 20, the Financial Times headlined," US States Face a Fiscal Crunch," saying:
"Undue budget tightening will jeopardize recovery whether applied at the federal level or lower down....The squeeze is not upon them; the federal stimulus is fading away, and the gimmicks are all used up. For state finances, the year of reckoning has arrived, and the timing could hardly be worse."
Global European Anticipation Bulletin (GEAB) analysts are also expect hard times. On January 16, their latest economic assessment headlined, "Systemic global crisis - 2011: The ruthless year, at the crossroads of three roads of global chaos," predicting "entry into the terminal phase of the world before the crisis."
Since 2008, policies undertaken hid economic deterioration instead of resolving it. The present year "will mark the crucial moment when....palliative measures" no longer work, and "the consequences of systemic dislocation....dramatically surge(s) to the forefront."