Was the Great Recession Just a Precursor to an Even Worse Downturn?
Rick Davis at Consumer Metrics is out with his latest numbers on the economy. They show no end in sight to the current leg of the downturn. This view is compatible with those monitoring the slow to no growth M2 money supply.
It should be noted that when Rick mentions “consumer demand” in his report he is really referring to demand for durable goods (This is what his numbers measure). And “durable goods” in my book should be classified as capital goods. A decline in this area of the economy is thus consistent with Austrian Business Cycle Theory.
It should also be noted that Rick in this report breaks down the Great Recession into its various phases and classifies the subprime crisis as just an early indication of the crisis that then changed its form.
This coincides with my thinking about the Great Recession. As I wrote to my private clients earlier this year: