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Richard Duncan names the current depression the "New Depression"
Howard Richman, 2/24/2011

In a February 22 commentary (The Great Depression and the New Depression) that appeared in The Daily Reckoning, Richard Duncan, who had predicted the current depression years before it began, compared the two depressions. Here is a selection:

A worldwide economic depression began in 2008. This New Depression was caused by the same factors as the Great Depression and followed exactly the same pattern. Thus far, however, the New Depression has been milder than the Great Depression because the policy response this time has been completely different....

In both instances, a great economic boom was brought about by an explosion of credit creation; and in both instances the boom turned to bust when that credit could not be repaid. At that point, a systemic crisis brought down the international banking system. Immediately thereafter international trade collapsed.

He does not think that the depression is over:

Thus far, these measures have greatly mitigated the pain of the New Depression. However, the policies introduced to date have not resolved the causes of this crisis or even targeted them. Moreover, government resources, while vast, are finite. Government spending will not be able to carry the economy forever. Policymakers must aim to do more than simply perpetuate the existing global economic disequilibrium. So far, there is little indication they understand the origins of the crisis, much less how to permanently end it.

Duncan may be dismayed by the failure of the G-20 ministers meeting last weekend. They were supposed to adopt measures that would eventually lead to balanced world trade. But China vetoed the adoption of any such measures.

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