Nothing fundamental has changed in the economy since a year ago when Lehman Brothers went under. Savings rates have increased, but Americans are so deeply in debt, they are still nowhere near the level of savings necessary for actual capital accumulation to take place. Unemployment is increasing, the government is engaged in massive inflation of the money supply, and there are simply no resources that can be pulled from a hat that will get Americans investing in production or spending on consumption. So, we are left with an economy that is essentially the same as it was when the financial panic hit and when the recession started way back during the fourth quarter of 2007.
The recent uptick is only a result of inflationary money flooding the economy through the stimulus plans.
Economist William White agrees.
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