Fed's Yellen sees dynamics similar to Depression

[UpInArms]

Source: Reuters

KOHALA COAST, Hawaii (Reuters) - The United States is not facing a downturn as deep as the Great Depression, but many of the current dynamics are similar, driving the need for "urgent, aggressive action" to stop a deepening recession, a top Federal Reserve policy-maker said on Friday.

The dynamics of the financial markets as well as the global nature of the current downturn both have similarities to the depression of the 1930s, Janet Yellen, president of the San Francisco Federal Reserve Bank, told reporters after a speech to the 128th Assembly for Bank Directors meeting on the Kohala Coast of Hawaii.

"The economy is in the midst of a downward spiral, and that calls for strong policy responses," Yellen said. "Government policies to restore confidence, create jobs by boosting the demand for goods and services, and improve the functioning of our financial system represent our main hope of avoiding a very severe economic contraction."

<snip>

Yellen, speaking on the same day the government announced the biggest job losses in 34 years, said now is not the time to dither or debate endlessly on the shape of fiscal stimulus.

"It is critical that decisions on these matters be made on a timely basis," she said.

<snip>

Yellen said consumer spending had been stopped in its tracks as American households have hunkered down and acted to boost their savings in response to spiraling unemployment and a "staggering" $10 trillion loss of household wealth.

Read more: http://www.reuters.com/article/ousiv/idUSTRE5156GW20090207?sp=true

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don't ever forget to lay the blame for this squarely where it belongs:

REPUBLICANS AND BUSH

in either order

[kirby]

1. In this depressed time, all the Bank Directors flew to Hawaii?

The 'Assembly for Bank Directors' vacationing in Hawaii for their conference. How telling.

[WorseBeforeBetter]

2. Really. Why not a Motel 6 with a conference room...

somewhere in the middle of the country? Then rotate to the coasts, then back to the middle until crisis averted (ha ha).

(Edit: In response to #1, but too lazy to correct it...)

[BumRushDaShow]

3. Hawaiian junket in the middle of the winter by the Bank Directors

and Fed Governors. Way to go with leading by example during the high-priced season and in the middle of a depression!!!!!

:sarcasm:

[rocktivity]

4. Candidate for this year's "You Call This NEWS?" award

ANYONE who's taken a history class can see dynamics similar to the Great Depression!

x(
rocknation

[bemildred]

5. Whoa! No shit?

Like the middle class has maxed out their credit cards and now they are losing their jobs? Who could have predicted this?
:sarcasm: