Posted on 12/19/2012 6:06:07 AM PST by blam
GUNDLACH: 'The Real Killer Will Be The Next Recession, And There Will Be One'
Sam Ro
Dec. 18, 2012, 5:37 PM
Bond god Jeff Gundlach was on Bloomberg Television's "Market Makers" with Erik Schatzker and Stephanie Ruhle.
Among other things, Gundlach is concerned about the prospect of another recession, which he thinks will happen thanks to spending cuts and tax hikes.
We got out of the last recession thanks to the government racking up debt. The next time around, Gundlach thinks that type of fiscal policy won't be tolerated.
Here's Gundlach:
The real killer is going to be the next recession. And there will be one. The policymakers are trying hard to have it both ways…Ultimately as you address the fiscal situation, you're going to run the risk of a recession. When the next recession comes, it's going to be a real killer because what exactly is going to be the policy response. It will be policies in terms of raising taxes and cutting spending that help to bring on the next recession I think, so I don't think it's very plausible that you're going to just turn around and go back to the old method of pumping up the economy with debt…Next recession comes. So the next recession probably is going to be somewhat cleansing, which means that you're going to see things repriced lower.
(snip)
(Excerpt) Read more at businessinsider.com ...
The next recession is the depression.
translation: So much of the private sector is now feeding on the umbilical cord of Government spending that fiscal reform will most certainly cause a recession.
“thanks to spending cuts”
...spending cuts?!
“””The real killer is going to be the next recession. “”
The CURRENT recession ain’t so great, either.
Government is spending counterfeit money which is debasing the accumulated wealth of citizens.
spending cuts = obama asking for another TRILLION in “stimulus” and only getting $500 BILLION
That equates to a cut of $500 BILLION
ask any democrat
ask John Boehner
The whole interview is great. Gundlach, Einhorn and Bass are fantastic investors in this era. People need to pay attention to what these guys say.
“It will be policies in terms of raising taxes and cutting spending that help to bring on the next recession I think, so I don’t think it’s very plausible that you’re going to just turn around and go back to the old method of pumping up the economy with debt…”
This is the cost of “austerity”. These two items will place huge headwinds on the economy and will send us into recession. Just look at Greece and Spain and Italy. The answer is not to stifle the economy but to put pro-growth policies on the table. But Obama, Boehner, et al do not understand that the only way out of this mess is economic growth. What they are all looking to do will shut it down.
Bookmark.
Good stuff here. the Fiscal Cliff discussion is a joke:
On fiscal cliff talks:
“Something is going to get done, it looks like, between John Boehner who has now blinked a little bit going with the million dollar tax bracket and the president going with the $400,000 tax bracket. They’re getting close, but this is all just a big circus really. We have a $3.6 trillion spending going on at the federal government and they’re taking in $2.3 trillion dollars. So the shortfall is $1.3 trillion and what we are talking about with the million dollar increase is about $20 billion of revenue that would be brought in. At the $400,000, you’re talking about maybe $35 billion. So this is just masking a huge fiscal issue. The issue isn’t the fiscal cliff. The issue is the fiscal crisis that the United States has been looking at for the past several years and this is sort of a down payment on finally some fiscal reform.”
Exactly so. We are going to have inflation followed by a deflationary depression and its going to be a beauty. Just keep buying food.
IMO, It will just postpone the crash for a little while.
We are now and we have been in a depression and the EU has finally admitted that they have been in one also. We will too... one day.
LLS
“So much of the private sector is now feeding on the umbilical cord of Government...”
Its called Fascism. And historically, the “Problem” with Fascism...is that carelessly allowing Government and Private interests co-mingle...is that the Private tend to acquire so much influence over the Government, that when the People finally get tired of the repeated raping the Private interests provide through Government power ...its gets violent.
“Gundlach is concerned about the prospect of another recession, which he thinks will happen thanks to spending cuts.....”
When he says “spending cuts,” he’s referring to the “Unicorns that dwell in the Leprechaun Forest.”
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