Being at a loose end today, I thought it deserved a rejoinder:
Jack Maturin on April 09, 2010 at 11:26 AM
First we had an Internet bubble, funded by artificially-low central bank interest rates and indirect money printing, fed via 'open-market' operations.
When this bubble burst, the central banks bailed it out with a housing bubble, once again fed with even lower artificial interest rates and much more indirect money printing, fed via 'open-market' operations.
When this bubble burst, the central banks bailed it out with a government bubble, once again fed with virtually zero-rated artificial interest rates, supplemented by direct money printing, and the purchase of government debt with this directly printed money, to lower this effective interest rate into negative territory.
When this government bubble bursts (and it's going to), there will be no more bailouts and the bubble party will finally be over, after 40 years of developmental genesis since Richard Nixon ripped up the last vestiges of the global gold standard in 1971.
For every £1 of taxation it takes in, the British government is currently spending £1.30, with the difference being made up from borrowing and money printing.
Considering the amount they have borrowed, printed, and spent, it is amazing how little the economy has 'grown'. Every borrowed pound is having less and less effect on 'growing' the economy, even according to the government's own doctored GDP statistics, measured in diluted pounds. (We can see this dilutive effect directly in the rapidly rising price of petrol.)
It will soon reach a point where borrowed and printed pounds spent by the government will have absolutely no 'growth' effect on the economy.
That will mark the bursting point of the government bubble. From that point on, the only way is down. Expect much higher interest rates to combat the generated price inflation. Or hyperinflation if these higher interest rates are not instituted.
Then expect massive cuts in government spending because the taxation party will be over, the borrowing party will be over, and there will be a hyperinflation-generated revolution if they keep the printing party going.
When this government bubble bursts, there will be no-one available to bail it out, so Telegraph readers should be prepared.
Strangely, this is a terrible election for the Conservatives to win. Because if they do, when the government bubble bursts, Gordon Brown and his ilk will claim it is everything to do with David Cameron and nothing to do with them. This will be the greatest lie in history, but it will still fool most of the people, alas.
In short, this depression has only just begun. This proclaimed 'ending' of its first recession merely marks the end of the beginning.