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Gluskin Sheff chief economist Dave Rosenberg calls what's ongoing "a modern day depression," saying:
A Depression, "simply put, is a very long period of economic malaise and when the economy fails to respond in any meaningful or lasting way to government stimulus programs," or what passes for them with benefits mostly to corporate favorites and super-rich elites.
It's defined by a "series of rolling recessions and modest recoveries over a multi-year period of general economic stagnation as the excesses from the prior asset and credit bubble(s) are completely wrung out of the system."
Using a baseball metaphor, Rosenberg says we're "in the third inning of this current debt deleveraging ball game."
In other words, after three tough years, many more lie ahead for ordinary working households suffering most.
"You know you're in a depression when interest rates go to zero and there is no revival in credit-sensitive spending."
How can there be with banks hoarding nearly $2 trillion in cash. A classic "liquidity trap" occurs when private sector lending dries up.
Depressions usually follow bursting asset bubbles, especially housing ones. Before his August 2007 death, economist Kurt Richebacher warned about them in a 2004 commentary titled, "Property Bubbles: Beware of Property Bubbles."
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