From Frank Barbera, yet another pessimistic (but correct) economist:

"....For now, the problem at hand remains the Housing Crisis and the Banking–Credit Crisis, but in our view, as time passes, the odds will continue to grow that all of these problems morph into an even more serious Currency Crisis. In this vein, we view the current strength in the US Dollar as ultra transitory, and opening the door for the Federal Reserve to begin its next wave of interest rate cuts aimed at supporting the banking system and Wall Street. As more defaults are seen in coming months, the Fed in our view will have little choice but to begin monetizing these problems and creating fresh doses of digital dollars, all out of thin air. For Helicopter Ben, the new Super-Duper Helo is about ready to lift off, with one mission and one mission only -- paper over all of the bad debts and keep the system from bursting at the seams. For the US Dollar, the path of least resistance will once again be a relentless slide to new lows, this time likely accompanied by rising long-term interest rates as foreign capital abandons the long ensconced patterns of mercantilism and vendor finance. The torpedo explosions now resonating throughout the bulkheads of the sinking GSE’s cannot be ignored, as the unwinding of derivative positions at these institutions could well be the trigger event to place foreign capital into full retreat. With balance sheet impairment and collapse, will follow debt downgrades and the beginning of a potential exodus – a run from US GSE Agency paper. Fingers have been plugging up the damn thus far, but the pressure behind the walls appears ready to burst. For those who think the markets have been volatile in the last few weeks, get ready, cause we believe you haven’t seen anything yet."

The real question is, how much longer is the Bush Administration going to keep lying to Americans about what is happening to our economy? Ample evidence is everywhere (except in our government's dissemination of information and forecasts) that we are in the beginning of a long and deep recession, if not worse.