Seeds of a rapid boom bust depression are being sown

The next boom / bust cycle is already in the cards.  Our wizards of smart politicians in Washington D.C. have insured that with a tanker load of fiat issued scrit paper money.  So what is my prediction? It goes like this

1. Next year … 2009 will be a very slow year for business.  More bank failures.
2. Some time in 2010 probably late in the year the economy will start to pick up
3. mid 2011 the economy will pick up steam.  It will start a powerful wave of inflation ( just as the politicians want! )  This wave of buying will beget more buying as people race to buy in as momentum takes everything higher.  You won’t have any actual more value in your hand for your assets.  You will just have cash that is worth less because of the inflation.
4. The consumer will die out promptly …….more quickly than even this time round in 2008.
5. The next bust will be even bigger.  The government will have less power to affect outcomes.  Foreign nations twice burnt will swear off investing in the USA
6.  The amplitude of the swings have been getting bigger each time we cycle through.  
7. Quite possibly the next downturn will be a depression because of the increasing amplitude.  This will happen because of 2 factors. #1 is that people’s spending power will be decreased. Savings having been devalued so by passage of time with severe inflation.  #2 Interpersonal trust will be so corroded from the debasement of the currency.  People will feel this on an unconscious level because of the corrosion of value of savings / currency
8. The politicians of the left will like it because we’ll all be reduced to feeding out of the palm of their hand. A mere whimper on their part and  you will be left to starve on your own for not being an upright socialist.

Washington politicians can put up with anything except the possibility of losing power.  And you keep electing so many of the same ones over and over.