It now appears that the U.S. and global economy is facing the worst of the shocks that led to the U.S./Global recessions of 1974-75 and 1980-82 (stagflationary shocks from oil prices) together with the shocks (asset/credit bubbles gone bust) that led to the recessions of 1990-91 and 2001. The combined mix of the worst shocks that led to the last four U.S. and global recessions (1974-75, 1980-82, 1990-91, 2001) is thus quite deadly and therefore one of the reasons why this will not be a short and shallow recession (V-shaped and lasting only 6 months) in the U.S. but rather a longer, uglier and deeper one (U-shaped and lasting 12 to 18 months).

This has to be the worst shocks; this did not happen during the thirties as commodities prices were falling, also during Japans big unwind.  However, I believe that over the coming two years as the BIS suspects, we will have this shock to the system, which will eventually bring about enormous deflationary pressures...  The developing countries can no more afford this kind of shock that the OECD countries.

Every long-term indicator that I follow is decelerating; the  two important ingredients that can help the global economy, lower interest rates, and much cheaper energy costs, will not happen until you get a severe recession, and the world forgot what this looks like.

I do not think anyone under 40 even understands what the implications are.

Joseph