Is The Dollar Doomed?

There is no durable recovery that can come so long as debt expands faster than GDP does.  The math simply does not permit it.

In 1930 there was a tremendous stock market bounce, and everyone and their brother thought that The Depression had been avoided as a consequence of looser money and recovery of asset values.  Indeed, I am hearing echoes of President Hoover and James Davis in my head these days..... 

May 1, 1930
“While the crash only took place six months ago, I am convinced we have now passed the worst and with continued unity of effort we shall rapidly recover. There is one certainty of the future of a people of the resources, intelligence and character of the people of the United States – that is, prosperity.” – President Hoover

June 29, 1930
“The worst is over without a doubt.” – James J. Davis, Secretary of Labor.

June 9, 1931
“The depression has ended.” – Dr. Julius Klein, Assistant Secretary of Commerce.

Uh huh.  The government tried to shield borrowers and lenders from having to take their medicine in 1930 too.

The result was a Depression that lasted until we entered WWII in 1941.  The Depression was not exited despite more than a decade of attempts from our government as the government never forced those who had gone bust to take their medicine and thus allow creative destruction to run its course - instead they interfered at every turn (even to the point of burning fields and shooting cattle!) and as a consequence until we were faced with a war that killed a large percentage of the workforce and destroyed massive amounts of material, thereby forcing full employment and realignment of industry,