Economic Recession

A lot of talk by experts and government officials: 'the recession is receding', ít bottomed out', 'the rebound has started'.... We must be care full, non of the above and a lot of other claims are TRUE. The fundamentals that made the world economy to collapse was started by the total failure of the US economy; due to mismanagement by private sector managers and the failure of administrators to stop them and to regulate. Same old remedies are not going to work. Today's remedies are just souped up old ones. The fundamentals are not addressed. The other serious new dimension is the pumping of lots of money to resuscitate a dying economy. The remedy will have its own short term effect, too much medicine will give false signs of recovery, but will have its side effects. After a while the economy will be immune to cash injections, thus what do we have? Nothing! What about the side effects, a new toxic hyper inflation, lack of confidence in economic recovery, uncheckable decline. THE MAGIC WILL STOPS WORKING.

The Dow Jones will hover around mid 8000! the danger is when it slides again between end of July and mid September. By then we will be out of magic potion! That is very frightening. A new economic order, a new set of rules, a new regulatory mood and regime is needed. Sorry we have not yet started.

Salaam

World Economy 2

Seems still we are in same postion. Governor Federal Bank has again asked for more funds to pump to the market. Printing more money! and no results of stablizing the market. We are running short of ideas.

U.S.A & E.U: Suggestions to New Economic Policies

Like any magician the Treasuries and Central Banks of the western economies and followed by the rest of the world can not stop the price declines of the stocks; because their remedies are late and ineffectual. It is the same medicine used since 1929, 'The Keynesian theories of macro economic management' which can not cure present decline, even though for seventy years this worked. Like old medicine maybe it never cured only alleviated the symptoms and pushed the effects to lower levels, just to come back some time later in a more potent form. These recurrences are what we call recessions and depressions which were never fully understood after Keynes. Defiantly, pushing billions of dollars in different formats and labels will not solve the issues and the slide can not be arrested. We are so close to the bottom falling we must be very carefull not to waste any more on old failed stop gap policies.

Very much possible we expect BLACK FRIDAY OR MONDAY this week or latest next week. If this happens we will go to very uncharted territories and very dangerous. We need to look at new options for the US and EU countries such as: 

Closing the exchange houses for a month!

During this month stabilize the credit market and get funds moving in.

Also stop any foreclosures for three month.

The Governments must participate fully in the management of the bailed banks.

The economists should study how to set totally new guidelines during this THREE MONTHS.

djirdeh