- US prices fall most since 1955
- Hong Kong suffers record contraction
- Europe in deepest recession since World War II
Here's the gist of it. Based on the worldwide economic indicators, things are not bouncing back as everybody previously hoped. The economy is contracting, not just in America, but around the world, and that's bad news, not just for Americans but for everybody. Couple that with the increased reports of layoffs and cutbacks, and what we have here is the beginnings of a long term economic decline. America is not in a recession. It's not even in a deep recession. The United States of America is in the precursor early days to the worst economic depression in our nation's history. We're talking worse than the Great Depression of the 1930s, worse than the post Civil War depression in the American South, worse than anything Americans have ever seen, and we're completely unprepared for it.
Why is this a depression? Why are things only going to get worse? Let me give you a little lesson in Economics 101. The economy is overbuilt, the commercial infrastructure is overbuilt, and there are way too many loans out there. What does that mean? It means when people stop buying things the commercial sector collapses. Strip malls and shopping malls go vacant. Banks stop giving out business loans. Commercial landlords go bankrupt. People start losing their jobs left and right. That's the other shoe to drop. You see with all of these layoffs and cutbacks going on in the manufacturing sector, more and more people are losing their jobs, and that means more and more people have less money to spend. Give it about another three to six months, and what we could be looking at is a total loss of the entire commercial sector. Now let's compound that with what's going on with the government. The government just passed two economic stimulus packages, one under Bush, the other under Obama. Each one with an actual price tag greater than $1 trillion. The government doesn't have this money, so it has to print it, which means the world is about to be flooded with U.S. dollars. Usually when economies slow down, prices go down in conjunction, and we do see that happening right now. However, once these trillions of freshly printed U.S. dollars start to get circulated in the worldwide economy, their value is going to go down, which means consumer prices will start to go up again, putting more goods and services out of the reach of Americans having to tighten their belts due to cutbacks and layoffs. Then you have two other factors contributing to this. The first is the national debt, which now tops $11 trillion. That's more money than exists in the whole world. There is no way the United States can continue to finance this debt for a prolonged period of time. Finally, there is production. The United States is mainly a service oriented economy, which means we don't produce hardly anything anymore. The federal government is gambling that if it just prints a lot of money and spends it, we can spend our way out of this recession/depression. Not so. You can't print money based on nothing, and spend it, hoping to improve the economy. You don't spend your way out of a recession. You produce your way out of a recession, by making things and putting them out on the market. Americans don't do that anymore. Almost everything we buy now comes from China, Taiwan, Japan and Europe.
So the moral to the story here folks is that we're in BIG trouble, and there really is no quick fix. We're about to get hammered with some really bad economic news in the next three to six months (from today's date 5/18/2009), and Americans are completely unprepared for it. If you're wondering what you can do to prepare yourself, probably some of the best advice I can give you is as follows...
- Don't spend a penny more than you have to over the next few years.
- Make sure you have enough CA$H in your home to survive about a month should the banks close.
- Get some non-perishable food items ready for disruption in the food distribution industry.
- Start thinking about getting yourself involved in a job that people will always need no matter how bad the economy gets.
- Pray, and get plugged into your local Church community. You may end up needing them soon.
- Start thinking about ways to save money and become more self sufficient.
- If you have the means, perhaps consider making a vegetable garden on your property.
- Take reasonable measures to protect yourself and your assets.
- Buy precious medals - silver may be safer than gold, as governments often seize gold when they get into economic trouble.
- DO NOT participate in any protest or demonstration that may possibly turn violent.