Should we be in the middle of a depression/recession right now?

Question

Over the years the government has been messing with the interest rates and gold is at an all time high lately. The last time I saw this was during the Carter years.

Gold prices typically go up during a recession/depression.

Will this catch up to us eventually?

Will we have to pay the piper somewhere down the road?

Answer 1

Well-- no we shouldn't. A depression/recession is predicated on the fact that GDP falls for a given amount of time. GDP is still growing.

Gold going up was mainly on speculation and the fact that for a while there all commoditees were going up (due to demand and speculation).

Interest rates are controlled by the fed via setting key rates and contorlling the money supply.

What IS going to hurt us bad is the ever growing national debt. Not the same as the deficit-- but that continues a well.

Answer 2

I wouldn't be particularly concerned with the price of gold as I would be with the mounting national debt and the growing income divide. The growing income divide can be illustrated by the ratio of tax revenue growth to GDP growth. While the right argues that tax revenues are growing, they fail to mention that median income is stagnant. This means that over 50% of all households are no better off than they were a year ago, and many actually have seen their incomes decrease. While GDP is growing, this type of growth cannot be sustained over the long haul as it erodes the consumer spending base (re-read my median income argument). This was proven with the 60's and 80's tax cuts and their eventual impact on the economy. The national debt and budget deficits will put upward pressure on long term interest rates, which will really slow down the housing markets and capital goods purchases, also having a detrimental impact on the economy. For one of the posters above me, the Fed doesn't control LT interest rates, the bond markets do. The fed influences the short term rates.

Answer 3

That's correct. The stock market fluctuations are a poor indicator of the state of the economy. Your own buying power is a much better one.

We are due for monster inflation because of war profiteering, deficit spending, debt and gross mismanagement in general. It will of course be blamed on the few people who made a little money on the housing market, the working man and the Democrats.

Answer 4

The Fed adjusts the interest rate to keep inflation low, as it has been doing for the past 25 years or so.

Gold price is determined by speculation and fluctuates according to the demands of investors.

Two separate things.

Answer 5

also rising debts (both government and personal) are also a sign a depression may be on the way... and inflation (if you have insurance, especially health, you've seen plenty of inflation)

but who really knows...

I think the war has pumped billions into the economy, which I think has helped a lot... and the tax cuts helped too... but those aren't permanent fixes... only patches...

I guess we'll see what happens..

Answer 6

Michigan is in a depression, the Bush doctrine isn't working here. If it wasn't for feeding the war machine and running up the national debt in the process the whole country would feel the pain.

Answer 7

Have you checked out debt lately? Big depresion in future it will make the 1930's seem like Disney. You won't need to ask.

Answer 8

don't worry kids. to prevent a recession i'll just give more tax cuts for my billionaire friends.

i would give some to jeff skillling but he's locked up right now.

Answer 9

When Dems get full run, tax hikes will allow them the money they need to investigate why tax hikes are needed.

Answer 10

OF COURSE, DON'T WE ALWAYS?