Pity those of you who are unfortunate to notice the signs of the looming recession, perhaps The Greatest Depression ever recorded; just try reading through the lines to see what the “Experts” and the Administration are saying. Then listen to what the Economists are saying, better yet, Watch what the Economists are Doing. Finally, make a trip to the grocery store and make sure to stop for some gas on your way. A Gallon of Milk, $5.00, a Loaf of Bread $4.50, Peanut butter $4.00, Jelly $4.00, Gallon of Gas $4.49.
Now let’s think of the Mortgage Payment, the Car Payment, the Utilities, and let’s not forget good old Insurance; Home Insurance, Car Insurance and Most Important Health Insurance. At some point you might need some R&R “Entertainment”, clothing etc!!
From the above list of expenses, one has to be making at least $5,000 per month to survive this looming recession. Of course this depends on the size of the mortgage. Every indicator tells of the looming dark days ahead of us. Just like we can foretell the potential damage that a hurricane at sea can do, there is every indication that this is going to be the worst recession ever recorded.
We will all be eating Depression cake; the type of cake that was commonly made during the Great Depression. The ingredients of depression cake had relatively little or no milk, sugar, and eggs because they were either expensive or hard to get at that time.
“The problems facing the banks are much more serious than anyone cares to openly discuss. The banking system is over-extended and under-capitalized. The Fed has provided more than $400 billion in repos since the August meltdown, and yet, the troubles persist. The Treasury Dept has joined with Citigroup, Bank of America and JP Morgan Chase in an attempt to repackage bad debts and sell them to wary investors via “Super conduit” mega fund. The desperation is palpable and these latest shenanigans are only adding to rising stock market jitters.” Mike Whitney
While some might argue that inflation is inconsistent with recession, I find it hard to justify that argument in this current market. Clearly the cost of goods has gone up tremendously, but the income has remained stagnant. The rise in the cost of living should be directly proportional to the rise in income! When there exists a noticeable difference in this function, then one can rest assured that an unpleasant economic readjustment is on the way.
When assessing the U.S economy, one can't help but ponder; why the Chinese economy is appreciating at the same rate ours is depreciating!! It's given that we have shifted our manufacturing capacity to China, effectively transforming the U.S.A from the manufacturing leader it once was, to a substandard tertiary and service oriented nation. The greater imbalance is apparent from the difference in volume of the Chinese imports we get each year versus those we export. We are inundated with cheap Chinese imports, most of which do not meet our safety standards, from food to tobacco, from toys to pharmaceuticals. We have literally put ourselves out of business because the few remaining American manufacturing facilities can't compete with the Chinese sweatshops. The American consumers are now addicted to Chinese cheap goods.
I support capitalism, but at some point, the Government has to come in and rescue the people. The Government should have done something about the greedy banks that scammed people into thinking they could afford homes that were way out of their league. Now millions of hardworking Americans are being foreclosed on, their dreams shattered, their lifelong savings depleted, their investments reduced to monumental debts. The banks should not be viewed as victims rather as the masterminds to this criminal enterprise for orchestrating and originating exotic loans which were clearly phony and unsubstantiated. This in turn drove up demand hence the price of homes, and mortgages; now with all the loans resetting over and over again, the scammed home owners find themselves in an unmitigated disaster. No one should have that feeling, let alone here in America. Could some of these banks have ties with mighty China? The same China that has declared war on our manufacturing sector, effectively eroding our middle class? In the coming days, I will post figures to support these arguments. In the meantime, why don't you ask yourself these questions:
What led to the 2008 US Stock Market Crash? What Led to This New Great Depression? What will the Government do to Bail Out The People? What Safeguards will Congress Implement to Prevent this from Ever Happening again? I pray and hope it’s not too late for us.
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