Despite Six Years, Triple Dip Recession

It is the question nobody ever asks. As soon as contraction happens, the whole thing switches. Central bankers turn their attention, and move the public’s, toward fighting the thing, making sure it is as shallow and short as may be necessary. Officials pay total focus to getting out of it without ever having to answer for how they got into it.

There are two parts to every recession, it does have an end but also a beginning.

On November 15, 2012, the European Union declared the impossible. The entire continental economy had sunk back into recession, the unusual double dip.

Sure, everything went wrong in 2008 but having “saved” the world from something far worse Economists at central banks had learned a lot. So they said. Why it required a crisis for them to learn anything is an offshoot of the same question no one will ask.

The message was emphasized and repeated – we won’t let it happen again. And then it did happen again, almost without pause.

European officials, once recession was declared, acted swiftly. Not in solving the mess, rather the only thing central banks may be good for is theatrics. Once the recession declaration became that formality late in 2012, the wheels spun fast. Who should they blame?

The Greeks. Just as 2008 was easily “explained” as something about irresponsible lending and borrowing in the US housing market, 2012 could be laid at the feet of Greece, Portugal, Spain, and Italy. It was PIIGS, they said, an externality against which monetary officials were near powerless to prevent the severe consequences.

German Prime Minister Angela Merkel spent that November as well as the many months which followed in wallowing malaise talking about the wisdom of Greek haircuts, debt restructuring, and little else. On the day Europe’s double-dip was confirmed, she said:

I hope the time is near when we can reach the solution that is needed. Of course we did not talk about debt haircuts, you know our view and that has not changed, nor should it.

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Disclosure: This material has been distributed for informational purposes only. It is the opinion of the author and should not be considered as investment advice or a recommendation of any ...

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Gary Anderson 8 months ago Contributor's comment

Banks are weak.