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John Williams som driver Shadowstats.com har nyligen (25:e januari) kommit ut med sin rapport betitlad Hyperinflation 2012 som ersätter tidigare upplaga från 2011. Jag föreslår att ni går över till Shadowstats och läser rapporten om ni är intresserad av en sann pessimists utsikter. Jag skriver ”pessimist” för att det inte är några optimistiska utsikter han delar med sig. Även om man snarare kan kalla han för realist så låter jag er avgöra vad hans text står för genom att lägga mig på den nedre skalan och skriver därför pessimist.

Det som jag finner intressant och som man själv funderat på är när en recession övergår till depression i allmän mening. John Williams har sin egen definition av dessa begrepp klar som, om inte annat, kan vara en fingervisning om vad vi egentligen befinner oss i inom en snar framtid:

A couple of decades back, I tried to tie down the definitional differences between a recession, depression and a great depression with the Bureau of Economic Analysis (BEA), the National Bureau of Economic Research (NBER) and a number of private economists. I found that there was no consensus on the matter, where popular usage of the term “depression” had taken on the meaning of a severe recession, so I set some definitions that the various parties (neither formally nor officially) thought were within reason.

If you look at the plot of the level of economic activity during a downturn, you will see something that looks like a bowl, with activity recessing on the downside and recovering on the upside. The term used to describe this bowl-shaped circumstance before World War II was “depression,” while the downside portion of the cycle was called “recession,” and the upside was called “recovery.” Before World War II, all downturns simply were referred to as depressions. In the wake of the Great Depression of the 1930s, however, a euphemism was sought for describing future economic contractions, so as to avoid evoking memories of that earlier, financially painful time.

Accordingly, a post-World War II downturn was called “recession.” Officially, now, the deepest post-World War II recession was from December 2007 through June 2009, with a peak-to-trough contraction in the inflation-adjusted quarterly GDP activity level of 5.1% (revised from the 4.1% in place as of the prior hyperinflation report). That was worse than the 3.7% contraction from August 1957 through April 1958, which involved a steel strike, and a 3.2% contraction in the November 1973 to March 1975, which more commonly is viewed as the worst post-World War II recession prior to 2007. The 2007 recession also has been declared the longest since the first down-leg of the Great Depression. I’ll contend, though, that the 2007 downturn is ongoing and that it still is much deeper than has been indicated officially (see Chapter 4—Current Economic and Inflation Conditions in the United States). Here are the definitions:

Recession: Two or more consecutive quarters of contracting real (inflation-adjusted) GDP, where the downturn is not triggered by an exogenous factor such as a truckers’ strike. The NBER, which is the official arbiter of when the United States economy is in recession, attempts to refine its timing calls, on a monthly basis, through the use of economic series such as payroll employment and industrial production, and it no longer relies on the two quarters of contracting GDP rule.

Depression: A recession, where the peak-to-trough contraction in real growth exceeds 10%.

Great Depression: A depression, where the peak-to-trough contraction in real growth exceeds 25%.

On the basis of the preceding, there has been the one Great Depression, in the 1930s. Most of the economic contractions before that would be classified as depressions. All business downturns since World War II—as officially reported —have been recessions. Using a somewhat narrower “great depression” definition of a contraction in excess of 20% (instead of 25%), the depression of 1837 to 1843 would be considered “great,” as would be the war-time production shut-down in 1945.

As explored in Chapter 4—Current Economic and Inflation Conditions in the United States, the current downturn would qualify as a “depression” per the above definitions, and it should evolve into a “great depression,” as normal commercial activity grinds to a halt in a hyperinflation. Nonetheless, the term “Great Recession” has entered the popular lexicon for the current downturn. Given the financial pain that will be attributed to the Great Recession—if that terminology holds—those naming future such events likely will be looking to come up with a different descriptor for a “recession” in the post-collapse period.