The big news of the day is that Ben Bernanke is growing skeptical of monetary policy, which is totally logical given that he seems to be grasping the the unique, deleveraging nature of the recession.
In a nutshell: When households are shedding debt, making debt cheaper does basically nothing.
But what is deleveraging, and what does it really mean?
This chart from CFR sums it up pretty nicely. For the first time ever, total household debt has shrunk, even as the economy has notionally "recovered."
Even if it were just flat, that would make this recession wildly abnormal, and as you can see it's actually going down.
Follow Joe Weisenthal on Twitter.
Ask Joe A Question > x
To embed this post, copy the code below and paste into your website or blog.
View the original article here
This post was made using the Auto Blogging Software from WebMagnates.org This line will not appear when posts are made after activating the software to full version.
