I am convinced we have now passed through the worst -- and with continued unity of effort we shall rapidly recover. There has been no significant bank or industrial failure. That danger, too, is safely behind us." - Herbert Hoover, President of the United States, May 1, 1930
"irregular and conflicting movements of business should soon give way to a sustained recovery" - HES June 28th 1930
``The risk that the economy has entered a substantial downturn appears to have diminished over the past month or so'' - Federal Reserve Chariman Ben Bernanke June 9th, 2008
The quote was from that Bloomberg story. Fed Chariman Ben Bernanke spoke at the Boston Fed conference with more posturing for rate hikes. I do not know what planet he is living on but the risks to the economy have not diminished an iota. Things are getting eerily similar to the Depression. For those who know market history would know the Fed in the summer of 1930 (I think July) raised interest rates. Could we be setting up for a repeat? I still do not believe a depression is on a horizon but I think this is growing evidence for a serious recession. We essentially almost have to have one. I will repeat, you have to pay the piper. There is no free lunch. Serious recession or inflation. Which one? I still think recession is a long term less costly answer despite the pain many will feel.
This may just be a big game of chicken. Who blinks first? The Fed or the dollar and oil? The Fed is obviously hoping the latter.