2008,Why the recession stage might be behind us?

Recession worries might soon be behind us, not because of economic growth but instead, the Federal Reserve actions are now holding strong. An inflationary cycle has push all economic indicators up, giving wall street new hope and worried investors back to the markets.
In every economic recession the Federal Reserve has acted exactly the same, ease lending rates and force new credit into the financial system. Their latest actions of increasing new credit to banks, issuing $30 Billion in credit to finance the Bear Sterns buyout and Congress’s economic stimulus package of $150 Billion will soon make its way into the economy and into the pockets of Americans eager to become consumers once again.
A brief history below of economic recessions shows huge increases in money supply during or shortly after a recession. The boom bust cycle is evidently clear and made more available by the increase in credit. One thing is for sure, this short boom which will likely last 4-5 years will then come bust again as they same system faces economic troubles.
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Increasing the money supply is what works great for the short term economy. The market floods with new credit that has the same value of old dollars, but as prices rise to meet more credit the market again falls into recession.
At this point it seems that we’ve bought off another recession in favor of more inflation. This downturn will likely go down much like 2001-2002 tech bubble and be written off as merely a housing bust rather than a correction of the overall economy. In fact, this bust is due to credit issued during previous recessions and future monetary policy will compound to the same effects; recession every 4-6 years with a huge inflationary period following.
The US Dollar also has the benefit of being the world’s reserve currency for oil purchases. In agreements made in 1972-74, legislators worked a deal with Saudi Arabia to make the dollar the only currency that can be traded for oil. In return, the United States offered military protection for Saudi Arabia, giving it the backing it needed in a troubled Middle East. This helped limit the damage to the dollar after Nixon resolved the gold standard completely and faith in the USD dropped to a new low.
The US Dollar is still the most accepted currency for oil purchases, almost all OPEC nations are in favor of using the currency although Iran has insisted that the board trade dollars for Euros, hoping to rid itself of inflation troubles of the US Dollar. Today many nations hold US dollars for the express purpose of buying oil, if this were to change, the world economy would sell dollars in favor of Euros, sending inflation through the roof. This petrodollar keeps a stranglehold on inflation. Nations accept dollars willingly, knowing that they can be traded for oil. This keeps inflation artificially low as nations keep these dollars in reserve, not to be bought or sold for anything but oil. China holds the largest sum of US currency, more than $1 Trillion. If this amount were to be released, the money supply would grow by nearly 20% overnight, sending inflation through the roof.
And while we might have evaded recession for now, future social program payouts top $50 Trillion. Social Security and guaranteed health care are valued at $50 Trillion, an exorbitant sum which will some day have to be paid. This would call for $50 Trillion more of inflation, raising the money supply by another 1000%. That’s something to be worried about.
A market correction is inevitable regardless of the current situation. Eventually the trillions held by foreign countries will be sold, driving inflation through the roof and dropping the value of the Dollar. While we might have dodged a bullet for the next few years, the next bust is likely to be exponentially greater than anything we could see today. A small message needs to get to the Fed: Let what will happen, happen.
2008