Big Media headlines today are full of Great Depression comparisons. But Martin Hutchinson thinks that might be exaggerating the current downturn. He expects a ‘double-dip’ recession similar to that of the early 80s. Still, Martin says we’re looking at five years before we dig ourselves out of this economic hole.

Big banks don’t trust each other in the post-Bear Stearns market, and lending across the financial system is drying up.

This tighter credit environment is hitting money supply. Last month, money supply actually shrank - it grew at under the rate of inflation.

Charles Delvalle at Investor’s Daily Edge says this means investors should now expect deflation to hit asset prices.

This echoes Bill Bonner’s recent warnings about the risks of a coming deflationary slump in the U.S…

The Daily Reckoning’s Bill Bonner says Americans are going to have to get used to a lower standard of living. After living beyond their means for so long, they will have to leave beneath their means to survive the correction.

U.S. companies were hit with the largest annual jump in wholesale prices in 27 years during July. Housing starts dropped to their lowest level in 17 years. The indicators are that ruinous stagflation is tightening its grip on the U.S. economy for the first time in decades, says Jennifer Yousfi in Money Morning…

Treasury Bills are not the safe investment people think. With the 10-year yield below the rate of inflation, T-Bills are now a bet that recent price increases won’t last.

They are basically a leveraged bet against inflation, says Bill. And as oil and food prices drop, this may be a good bet. Then again, it may not be

Either way, professional and amateur investors seem to agree on one thing: Stocks are a bad bet right now…

A hectic week on the economic calendar is highlighted by the initial look at second quarter gross domestic product (GDP). Remember, a recession is defined as two consecutive quarters of negative growth, so doomsayers have targeted this week’s release as confirmation of their pessimism.

With all the worries about the US financial system, the home mortgage market, and the rescues that might be necessary to save both, the federal budget deficit hasn’t received a lot of press lately.

The deficit is going to hit the $400-billion level in fiscal 2008. But expect it to rise to the $1-trillion level as early as fiscal 2009, says Martin Hutchinson in Money Morning.

How can investors best position themselves? Two ways. Buy non-dollar denominated foreign bonds. Or buy a fund that shorts Treasury bond futures…

For all their talk about change, the ultimate irony in today’s markets is that Washington is so afflicted with legislative gridlock that the “Beltway Boys” couldn’t “change” the channel on their flat-screen televisions.

After hitting a seven-week low yesterday, crude oil prices began to rise today.

Crude oil for September delivery rose $1.14 to $125.58 a barrel at the 2:30 p.m. close of floor trading on the Nymex.

Much of the recent drop in oil prices is due to the rally in financials, says Byron King. But the black goo is still double the price it was two years ago. Worse still, the US is now coping with chronic inflation. Precious metals are the best way to your savings and purchasing power…

The Bureau of Labor Statistics (BLS) has reported that the Producer Price Index (PPI) for finished goods increased 1.8 percent in June. But these are “seasonally adjusted” figures, says The Mogambo Guru. The un-adjusted figures - the raw data - tells a different story. They reveal prices jumped 9.2 percent for the same period…