We're Depressed

It's a little off-topic, but check out this interview with Robert Prechter -- the 2001 recession has not ended and we are in the early stages of a depression. This is not the first time I've heard this and makes me think that even if house prices tumble 50% or more in the near future, do I really want to hold any debt at all and buy a house on the cheap? Or do I "wait for the bread lines"?

Some choice quotes:

""But I think there is one big myth out there in terms of the 2001 recession, that is that it ended. If you look at the manufacturing jobs in this economy, they continue to collapse. There’s been no recovery to speak of. Three million jobs have been lost in the manufacturing area. We can’t survive as a producing country just doing each other’s laundry, providing services for each other. So I think this recession is worse. I think actually we started a depression in 2000 and 2001, but people don’t recognize that we’re in a depression because we’re not in the bottom. They say, “I don’t see any bread lines.” Well, as soon as you see the bread lines, it’s the low. That’s when you want to start buying stocks, commodities and precious metals and everything else because then the deflation will be over. But we are in the very early stages of a depression, and the country is basically falling apart. What hasn’t fallen apart yet is the optimism, the confidence and the dream world that people are in, but that is going to happen.""

"JIM: Let’s talk about the consequences of Conquer The Crash. The conclusion was that the U.S. would enter into a deflationary depression. That has not happened. Why?"

"BOB: Well, I think we are in it. We are in a depression. We haven’t begun deflation yet, that’s true, but you can also see a lot of signs that it is extremely difficult for manufacturers and other people selling their goods and services to do anything about it. Car prices keep going lower because of the competition from abroad. There’s a lot of what I call deflationary psychology because there are people who can barely make ends meet, and the reason they are surviving is something you alluded to earlier: So many foreigners are buying our bonds that people are borrowing their way into survival. Obviously that can’t go on forever."