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Ardent Listener
Administrator
USA
4841 Posts |
 Posted - 05/02/2010 : 02:14:10
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America's Second Great Depression
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With the national debt approaching $13 trillion, no real improvements to the worst and longest recession since the Great Depression, blue chips slashing dividends for the first time in history (eg. DOW), century-old financial institutions now in bankruptcy (Lehman Brothers, Bear Stearns, Washington Mutual), trillions of dollars in bailouts, the largest year-over-year decline in GDP, state tax revenues and housing starts since the Great Depression, over 7 million foreclosures, an additional 7 million more foreclosures over the next 2 to 4 years, more than 8 million lost jobs with about 32 million Americans out of work, more than 40 million Americans on food stamps, a healthcare crisis that has not been addressed, a continuing trend of excessive inflation for food, energy and healthcare, and consumer spending coming to a halt…you can be assured of many things over the next several years:
* Several more stimulus packages (which won’t offer any permanent assistance)
* Soaring consumer loan defaults
* Soaring commercial real estate defaults
* Several million additional foreclosures
* Rapidly rising and high interest rates
* Muted real wage growth
* Declining job quality
* Lingering high unemployment for several years
* Significant downside in the U.S. stock market
* Continuation of employee benefit cuts
* Continuation of healthcare inflation with millions more medical bankruptcies
* A deepening of the entitlement crisis
* Excessive inflation over an extended period OR massive inflation that will be countered by double-digit interest rates
* A long period of muted consumer spending
* Much higher taxes (not just income, but all taxes)
* A worsening of America’s Second Great Depression, with up to two lost decades.
* World War III
At best, the U.S. will continue to experience economic malaise for well over a decade. As the nation progresses through this treacherous period, any of the small improvements will be offset by longer-term issues that are virtually impossible to overcome.
* Most of the 80 million baby boomers will never be able to fully retire. They did not have adequate retirement savings even before the economic collapse. Now they are in much worse shape. As a result, they will not only pull out of the stock market much faster as a means to survive, but they will be dead consumers.
* Most states will continue to struggle with budget gaps for many years. This will lead to even more cuts to vital programs.
* The entitlement tsunami will engulf Washington’s budget, causing a sustained period of massive deficits. This will be addressed by further cuts to benefits and premium hikes to Medicare and Medicaid.
* The massive national debt will continue to threat the solvency of the U.S. This will lead to a long period of high interest rates even after the approaching interest rate surge, expected to mount within a couple of years.
A Broad Look at the Economy
Now let’s examine some facts about the economy.
The current recession is not only the most severe since the post-war period, but is or was (according to official statements that it has ended) the longest in duration, as illustrated by the first chart.
Furthermore, the “previous” recession (which is still in progress although Washington claims it is over) registered the worst year-over-year decline in GDP in decades.
At the close of January 2010, Washington reported GDP growth of 5.7% (revised down from 5.9%) for Q4 2009. This represents the biggest increase since 2003, which coincided with the market bottom of the previous recession.
This data is unreliable and has been inflated by debt spending. I have discussed the problems with GDP previously.
But where is the economic growth?
There is none.
Real Estate
Surely by now, real estate has started to pick up, right? Have a look at housing starts.
With the Dow now over 11,000, the “establishment” is still in control of the game. While there is likely to be a bit more upside in the market for 2010, investors should be looking for position exits rather than entries.
I do not have a crystal ball, but I do know a few things for certain. Even if the market holds current levels or even rises further (which appears to be likely), once interest rates begin to rise, the market will get hit hard. As you can imagine, this has adverse implications for the bond market exclusive of any further issues.
Why do I say this?
Because rates must rise by a large amount over the next few years, if not before.
Of course there are many other things that could send the market plummeting. Rising interest rates is just one example that we know will surface for sure. How much the market declines will depend on when and by how much rates are raised.
Another thing you should bank on is that the Federal Reserve will do all that it can to mitigate the downward market momentum as a result of interest rate hikes.
Why? Because, unlike the case with the European Central Bank which is focused on preventing inflation, the Federal Reserve’s priority remains with Wall Street. But as we have seen, what’s good for Wall Street is usually bad for Main Street.
Employment Data
The latest unemployment numbers came in at 9.7% (U-3). However, as I have discussed previously, this number really does not tell the full story. There are many assumptions that serve to boost U-3 data, such as the birth/death adjustment.
It is likely that if current unemployment data was properly adjusted for this highly inaccurate assumption alone, the real U-3 would stand at over 10.3%. But of course there are many other erroneous assumptions and deletions that make this data unreliable.
Layoffs peaked during Q1 of 2009, averaging 2.5 million in each of the three months, or 119,000 each business day! Think about that number for a minute.
Does that sound to you like a recovery is in place?
What makes the employment data even worse is the fact that new hires have continued to decline since reaching a peak in late 2006. What that means is that the total number of unemployed has continued to increase, as the following charts illustrate.
In December 2007, there were 5.1 million new hires. In October 2009, there were only 4.0 million new hires, representing a decrease of 22%.
What this data does not reveal is the duration of unemployed workers. As the next chart shows, this number has skyrocketed well beyond previous highs since the inception of recorded data in the late 1960s.
The problem with being out of work for an extended period (besides the immediate financial problems it creates), is that the longer one remains out of work, the higher chance that they will have to change careers.
And it’s not likely that a career-change will lead to the same wages as the person earned in their previous career since they are starting fresh. That’s the big problem with the unemployment picture that no one seems to get. What does this mean? It simply adds more fuel to America’s long period of declining living standards.
In addition, because much of the stimulus will not be dispersed for a few years, and due to the continued trade deficit, as well as the mounting liabilities for entitlements and interest on the national debt, massive annual deficits will persist throughout the next decade. My own estimates are considerably larger.
GDP and Employment
Next, let’s have a look at the connection between employment and GDP.
In order to get the unemployment rate down by just 1%, GDP would have to grow by at least 5% by 2010. This goal is going to be virtually impossible short of a miracle, even with the massive spending by Washington.
I’ll give you some assistance here. In the BEST of scenarios, based on current spending projections, I would estimate that over the next ten years, GDP will grow by an average of 3.5%. A more realistic number might be closer to 3.0%.
Even assuming the more optimistic GDP estimate for a 5-year period, the U.S. economy would need to grow by about 5% annually for the remaining 5 years in order to bring unemployment down to around the “fully employed” level of around 5.0%.
I can tell you now this scenario is EXTREMELY unlikely, UNLESS we see many additional stimulus packages.
Using debt for additional stimulus packages will be like trading hand grenades for ballistic missiles because more debt spending will hamper the long-term growth of the economy for an extended duration.
GDP growth really doesn’t matter unless you adjust for debt-spending. The U.S. could grow by 5% for five years if Washington borrowed tens of trillions of dollars to pump into the economy. What is needed is real growth, not debt-fueled growth. Without real growth, you have an illusion, just like the growth after the dotcom bubble burst.
Even without further spending, the nation’s entitlements threaten to send America into bankruptcy within the next 20 years. This is another issue I addressed in America’s Financial Apocalypse at great length, unlike other books that only focused on the small picture.
As you can imagine by now, what this means is a lost decade at best. Fifteen years more likely, while two decades is very possible.
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All posts either by the members, moderators, and the administration of http://realcent.forumco.com are for your edification and amusement only. It is not the intent of realcent.forumco.com or its host to provide investment, medical, matrimonial, legal, security or tax advice and nothing posted here should be considered to be so. All rights reserved.
Think positive. |
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Nickelless
Administrator
USA
5580 Posts |
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mascallw119
New Member
USA
18 Posts |
Posted - 05/02/2010 : 16:30:48
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| Yes, the facts do certainly show that all in all, it is a very sad state of affairs, however, what does the truth show? In short, the truth is that America is a country made up, for the the most part,of resilient men and women who thoughout its history had to face some tough and very challenging times. Because of some of the great minds and the determination to keep this nation strong, we have been able to come up with ideas that focus on solutions to flip those facts to our truth. Yes, government has it role but WE THE PEOPLE have ours too. As we reach out to each other individually and collectively for help and support, we find that some of the solutions lie within ourselves. In re-evaluating what we have been doing as well as how, we find that in some things we have been very wasteful and neglectful w(i.e. our resources, whether natural or human; our corporations in quest for bigger and bigger profits outsourced jobs like water overseas so much so that MADE IN AMERICA is just about a foreign phrase). The list could go on and on but my point is that we will get through this because the American people will not settle for anything less. The important factor to all of this is that THE LESSONS MUST BE LEARNED AND A STRONGER AMERICA MUST BE THE RESULT. We all have that responsibility individually and collectively as a nation. Right now, I believe we need to be focusing on solutions because we know already what the facts are but it is not AMERICA'S TRUTH. |
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thogey
1000+ Penny Miser Member
USA
1617 Posts |
Posted - 05/02/2010 : 16:44:20
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Welcome to Realcent!
I hope you're right mascallw119
My faith in the average American is not as strong as your's
The country is composed of a lot of weak, stupid and soft people who are still not paying attention.
We may have to go through a 'fire' to harden us up.
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Come to the new and improved realcent: http://realcent.org
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Bluegill
1000+ Penny Miser Member
USA
1964 Posts |
Posted - 05/02/2010 : 17:29:38
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quote:
Originally posted by mascallw119
Yes, the facts do certainly show that all in all, it is a very sad state of affairs, however, what does the truth show? In short, the truth is that America is a country made up, for the the most part,of resilient men and women who thoughout its history had to face some tough and very challenging times. Because of some of the great minds and the determination to keep this nation strong, we have been able to come up with ideas that focus on solutions to flip those facts to our truth. Yes, government has it role but WE THE PEOPLE have ours too. As we reach out to each other individually and collectively for help and support, we find that some of the solutions lie within ourselves. In re-evaluating what we have been doing as well as how, we find that in some things we have been very wasteful and neglectful w(i.e. our resources, whether natural or human; our corporations in quest for bigger and bigger profits outsourced jobs like water overseas so much so that MADE IN AMERICA is just about a foreign phrase). The list could go on and on but my point is that we will get through this because the American people will not settle for anything less. The important factor to all of this is that THE LESSONS MUST BE LEARNED AND A STRONGER AMERICA MUST BE THE RESULT. We all have that responsibility individually and collectively as a nation. Right now, I believe we need to be focusing on solutions because we know already what the facts are but it is not AMERICA'S TRUTH.
Sadly, the America you talk of no longer exists. Socialism, collectivism, welfare, nannyism and entitlements have been so ingrained into our way of thinking, the people's solution will always be to go to Ma Ma Government for help.
If the sheeple ever do wake up, I fear there won't be a longing for a free nation of self reliant citizens like the days of old. Instead, they will scream for even more socialism, thinking Ma Ma Government will do a better job this next time.
I hate to say it, but America really is a self inflicted lost cause. Like every empire in recorded history, it has become terminally ill and WILL die. Whether it goes the way of the Roman empire, conquered and parted out, or the way of the Spanish Empire, its borders and sovereignty intact, is yet to be seen.
And  to the forum.
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Ardent Listener
Administrator
USA
4841 Posts |
Posted - 05/02/2010 : 18:01:33
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| With God all things are possible. |
Realcent.forumco.com disclosure. Please read.
All posts either by the members, moderators, and the administration of http://realcent.forumco.com are for your edification and amusement only. It is not the intent of realcent.forumco.com or its host to provide investment, medical, matrimonial, legal, security or tax advice and nothing posted here should be considered to be so. All rights reserved.
Think positive. |
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mascallw119
New Member
USA
18 Posts |
Posted - 05/02/2010 : 18:21:18
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quote:
Originally posted by thogey
Welcome to Realcent!
I hope you're right mascallw119
My faith in the average American is not as strong as your's
The country is composed of a lot of weak, stupid and soft people who are still not paying attention.
We may have to go through a 'fire' to harden us up.
Thank you so much for welcoming me and your quote about going through the fire is basically just what is happening to us right now. Again, thanks for the welcome. |
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mascallw119
New Member
USA
18 Posts |
Posted - 05/02/2010 : 18:25:52
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quote:
Originally posted by Bluegill
quote:
Originally posted by mascallw119
Yes, the facts do certainly show that all in all, it is a very sad state of affairs, however, what does the truth show? In short, the truth is that America is a country made up, for the the most part,of resilient men and women who thoughout its history had to face some tough and very challenging times. Because of some of the great minds and the determination to keep this nation strong, we have been able to come up with ideas that focus on solutions to flip those facts to our truth. Yes, government has it role but WE THE PEOPLE have ours too. As we reach out to each other individually and collectively for help and support, we find that some of the solutions lie within ourselves. In re-evaluating what we have been doing as well as how, we find that in some things we have been very wasteful and neglectful w(i.e. our resources, whether natural or human; our corporations in quest for bigger and bigger profits outsourced jobs like water overseas so much so that MADE IN AMERICA is just about a foreign phrase). The list could go on and on but my point is that we will get through this because the American people will not settle for anything less. The important factor to all of this is that THE LESSONS MUST BE LEARNED AND A STRONGER AMERICA MUST BE THE RESULT. We all have that responsibility individually and collectively as a nation. Right now, I believe we need to be focusing on solutions because we know already what the facts are but it is not AMERICA'S TRUTH.
Sadly, the America you talk of no longer exists. Socialism, collectivism, welfare, nannyism and entitlements have been so ingrained into our way of thinking, the people's solution will always be to go to Ma Ma Government for help.
If the sheeple ever do wake up, I fear there won't be a longing for a free nation of self reliant citizens like the days of old. Instead, they will scream for even more socialism, thinking Ma Ma Government will do a better job this next time.
I hate to say it, but America really is a self inflicted lost cause. Like every empire in recorded history, it has become terminally ill and WILL die. Whether it goes the way of the Roman empire, conquered and parted out, or the way of the Spanish Empire, its borders and sovereignty intact, is yet to be seen.
And to the forum.
Thank you for welcoming me. Don't give up Bluegill because there is some medicine out there that works....mind you, it is going to taste real nasty but we are going to have to take it to get better. Thanks again for the welcome. |
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mascallw119
New Member
USA
18 Posts |
Posted - 05/02/2010 : 18:31:00
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quote:
Originally posted by Ardent Listener
With God all things are possible.
Jamie, thank you for the post and yes, because all things are possible with God, we are going to have to PUSH in prayer:
P = Pray
U = Until
S = Something
H = Happens
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thogey
1000+ Penny Miser Member
USA
1617 Posts |
Posted - 05/02/2010 : 18:36:34
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quote:
Originally posted by mascallw119
quote:
Originally posted by Ardent Listener
With God all things are possible.
Jamie, thank you for the post and yes, because all things are possible with God, we are going to have to PUSH in prayer:
P = Pray
U = Until
S = Something
H = Happens
Nice!
But along with prayer we must 'do'.
There is definitely a battle goin on. We may not see it, but it's happening. It will continue until it's over. |
Come to the new and improved realcent: http://realcent.org
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mascallw119
New Member
USA
18 Posts |
Posted - 05/02/2010 : 18:43:55
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quote:
Originally posted by thogey
quote:
Originally posted by mascallw119
quote:
Originally posted by Ardent Listener
With God all things are possible.
Jamie, thank you for the post and yes, because all things are possible with God, we are going to have to PUSH in prayer:
P = Pray
U = Until
S = Something
H = Happens
Nice!
But along with prayer we must 'do'.
There is definitely a battle goin on. We may not see it, but it's happening. It will continue until it's over.
Yes, you are absolutely right, along with prayer we must do because faith without works is dead. |
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Neckro
1000+ Penny Miser Member
Saudi Arabia
2080 Posts |
Posted - 05/02/2010 : 19:03:54
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| lol |
Trolling is an art. |
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cptindy
Penny Hoarding Member
572 Posts |
Posted - 05/02/2010 : 20:43:26
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I felt similarly not long ago that we as a people have accomplished so much with so little and will yet again overcome. But, as time has passed and my research increased it has dawned on me that we are not our forefathers. Hell, we are not even our Grand Parents generation. I find it sad but true that we as a people put way to much "faith" into our beliefs. This is not an attack on religion but on the mere "faith" that seems to underline our common perception.
The reality is we live in a world where those that have the aggressive attitude to accomplish, do in deed reach their intended goals. Once attained higher demands are placed upon themselves and greed and power persevere. "Faith" is never an optional play in the playbook among those with goals. Hard work and planing overcome complacency and "faith". I appreciate everyone and their beliefs, this is not a slight against that at all. It is the common assumption that those in power have our "collective well being" in mind. They don't, well if they do it is not in the top priorities. It would be an after thought of appeasement to calm any slightly ambitious nature of the few questions asked.
This is why we have the state of affairs today! Way to much "faith" in our elected officials as we complain about petty indifference's amongst ourselves. We allow good idea's to become media pulpits and swing right back to the status quo.
This Nation will never return to the way it was or it's intended foundation. The mere influx of people with different beliefs will never stand for it and today's agenda will not allow it. It is "day's gone by".
In the history that I have read it is always an individual that goes against the grain and sets forth an agenda to his unique vision. We do not have a person like that now or on the horizon. We would also not allow someone to dictate in that fashion. Great leaders never have a majority census when making strategic moves as their vision is their own and not to be understood by a democratic vote.
We have reached a point of no return. We will flood our country with misshaped ideals in a hope to appease the masses while those that control reap monetary riches until they choke on their own gluttony. At which point those that have been the "feed" will rise and care not of our individual rights as we have trampled and looked the other way for generations. Many cultures and people across the globe have been left in our wake as we stumble forward on a few individuals control and quest for dominance. As we may not have intended to be so cold it is not seen that way by those that feel the sting of our complacency. To stand by and do nothing is just as bad as pulling the trigger period. We have allowed this nation to run a muck and flip flop from cause to cause without having a care other than our own individual lives. I don't feel it is done with malice yet it is still done everyday. Actions or in this case inaction's speak louder than words.
We will go through fire so to speak. Although at the end of that journey is not a return to the past. There will be no "awakening". There will be a new playing field in which new leaders will be born. Our children and their children will be at the helm and maybe if we are lucky a future society of balance and understanding of humankind will prevail. But do not think that we will ever have the America that once was.
We are all just dust in the wind my friends.
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"It is the nature of the human species to reject what is true but unpleasant and to embrace what is obviously false but comforting"
" The average man doesn't want to be free. He wants to be safe."
H.L. Mencken
http://silver-news-today.com/ |
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Ardent Listener
Administrator
USA
4841 Posts |
Posted - 05/03/2010 : 09:41:13
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quote:
Originally posted by mascallw119
quote:
Originally posted by thogey
quote:
Originally posted by mascallw119
quote:
Originally posted by Ardent Listener
With God all things are possible.
Jamie, thank you for the post and yes, because all things are possible with God, we are going to have to PUSH in prayer:
P = Pray
U = Until
S = Something
H = Happens
Nice!
But along with prayer we must 'do'.
There is definitely a battle goin on. We may not see it, but it's happening. It will continue until it's over.
Yes, you are absolutely right, along with prayer we must do because faith without works is dead.
 Then let's work together with faith. |
Realcent.forumco.com disclosure. Please read.
All posts either by the members, moderators, and the administration of http://realcent.forumco.com are for your edification and amusement only. It is not the intent of realcent.forumco.com or its host to provide investment, medical, matrimonial, legal, security or tax advice and nothing posted here should be considered to be so. All rights reserved.
Think positive. |
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Investin Cents
Penny Pincher Member
USA
129 Posts |
Posted - 05/04/2010 : 11:25:40
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| Well said, cptindy! |
Most recent book I've read: "Meltdown" by Thomas E. Woods Jr. Current book: "I.O.U.: Why Everyone Owes Everyone & No One Can Pay" by John Lanchester |
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Second Great Depression
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