COMING: THE ECONOMIC "W"

By DICK MORRIS & EILEEN MCGANN

What will be our economic trajectory? How will we do as we come out of the recession of 2008-2009? There are those foolish optimists who predict a "V" shaped recovery - the swift crash will be followed by a buoyant surge. Others, more sober, believe in a "U" - the crash will gradually ease and slowly be followed by gradually increasing growth. Pessimists see an "L" - the crash will be followed by a long period of stagnation and no growth. I believe a "W" is more likely. Foreign stimulus (e.g. China) will rekindle export markets for American manufacturing and government lending will start the housing industry. But consumer demand, which accounts for 70% of America's growth, will continue to be stagnant in the face of high unemployment and lingering fears. The rebound will be short-lived and followed by a further downturn, the second part of the "W". But this second dip will be accentuated by inflation. We will face, not the stagflation of the 70s, but depressflation, negative growth and high inflation simultaneously. Unfortunately, the policies that would cure one condition will only..... READ MORE.