m&m has been a bit quite for a while and now we are going to bury this in the summer hole.

Double dip Recession

You can run a search on "double dip" here on m&m using this link. What you will find is that I and we at m&m always believed that we are heading for a double dip recession. It more and more looks like we were, unfortunately, right.

The main reason to believe a double dip recession would be unavoidable is (was) based on the figures and an outlook to the future. I talked about the certainty of a recession in 2007 because it is what happens. After a boom comes a recession - as certain is few things in life.
When we were heading into the recession in late 2007 / 2008 we slowly understood the immense size of the debt build up. Well, we had been warned of the trillions piling up for years - especially in the US and in Britain. And there was the deluded, unchecked spending sprees in places from Ireland to Greece - crash landing a deceived population.

With such large debt everywhere and governments trying to cushion the harsh landing on borrowed money and time - it became clear that we will not recover easily and that this softening the blow was the start for the double dip.

Sure, the double-dip will not be the same everywhere. Some larger countries and economies like Germany and France will be hit less, though, no one is out of the woods on this.

The big Crunch .. or not?

... building up even more?

Good question, and there is a simple answer. It might be building up a little more, but then it will burst. This is as certain as the outcome of life.

All and every bubble in the world's economic history has burst. To know exactly when that will be is difficult to predict.

There are several reasons why this is going to happen. One is the phenomena of truth. The truth will always come out. Bubbles build up over time fuelled by economic progress and eventually this upwards trend is only sustained by money chasing the opportunities that have long gone.

Just as on the roller coaster on the right the economy will go down a bit more again before we will see modest improvements.

This prognosis can be underlined with a lot of statistics and bankers "science" - but it is also common sense and the milkman, the butcher and the baker down the road can tell you that (if you still have them). Otherwise you can take out a subscription for the FT (Financial Times) or the Times as provided for now by Rupert. The bottom line will be the same.

House prices in the countries with strong historic real estate equity growth (UK, US, Canada) will remain flat for a while to fall back in line with the more logical rate of doubling the value every 10 years which suggests an annual average increase of well below 10% - far more realistic than 25% on equity.

.... bright. When will we get better economical weather?

The truth is no one knows. That is the bad news.

The good news is it will get better. How do we know? Well it has been like this for millennia - for thousands of years and it is human nature.

Russian economy expands by 4.2% in Jan.-June as recovery continues apace - MOSCOW -- Russian economic output expanded 4.2 percent in the January-June period as the country emerged from its biggest downturn in a decade, the government said Monday. [BN-Net Economy News]