Were mortgage debt to shrink by even half of $4tn [for example, if homeowners crystallised the debt by defaulting], the US economy would slump

Dhaval Joshi at RAB Capital believes it is not feasible for the US economy to return to anything like "business as usual" when it has 4m more homes than it needs, when one in four homes is in negative equity, and when there is an overhang of mortgage debt worth an estimated $4tn – 30% of national output.

"On the balance of probabilities it seems that, in at least one quarter in the next three, US GDP will record a quarter-on-quarter decline. Such a development would excite talk of a 'double-dip' recession. But it should, more accurately, be interpreted as evidence of an economy in depression."

SHOOT: No one has dared use the 'D' word...until now. Of course energy prices [at a premium] have driven and will continue to drive world economies to ruin. A new system has to be derived, one that does not involve growth or fossil fuels.

clipped from www.guardian.co.uk Fears are growing for an economy carrying a 9.5% jobless rate and a predicted $4tn in excess mortgage debt A crippled housing market. Stubbornly high levels of unemployment. Falling consumer confidence. Slower growth in industrial production. No wonder Ben Bernanke, the world's most powerful central banker, appeared a worried man in his testimony to Congress about the state of the US economy last week. Bernanke's most striking observation was that the prospects for America were "unusually uncertain" – central-bank-speak for concern at the highest levels that the US was at risk of tipping back into a double-dip recession. The possibility of an investment-led recovery is not the only reason to be cheerful cited by bulls on Wall Street. This fails to convince the pessimists. They point out that despite the colossal stimulus, recovery has been weak by American standards. In the past, the labour market has recovered quickly in the early stages of upswings, with millions of new jobs created.