From: Costas Lapavitsas (cl5@SOAS.AC.UK)
Date: Tue Jan 22 2008 - 11:56:55 EST
It seems to me that the USA will find very hard to avoid a recession as the savings ratio rises to something less ludicrous than what has prevailed during the last few years. The falling dollar is not enough to offset this. The problems of the banks will compound the difficulties by constraining credit. The Fed can, of course, cut interest rates, as Bernanke did today. But I doubt that this would have much of an effect considering the levels of individual indebtedness. More broadly, I believe that this is shaping up to be a major event, a regime break that sets terms for the following years. Costas -----Original Message----- From: OPE-L [mailto:OPE-L@SUS.CSUCHICO.EDU] On Behalf Of Jerry Levy Sent: 22 January 2008 14:48 To: OPE-L@SUS.CSUCHICO.EDU Subject: Re: [OPE-L] Lapavitsas on the financial crisis > The similarities with Japan are strong, though the central banks > have learnt from the Japanese experience. Hi Costas: Do you expect the that the US economy and world capitalist economy will experience deflation or stagflation in the immediate period ahead? In solidarity, Jerry
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