During the Weimar depression, it was cheaper to burn money than to purchase firewood.
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It took former President Bush nearly eleven months to admit that the country is in a recession. He emphatically stated in February 2008 that the country is not in a recession and continued to beat the same drum until December, when he rushed through a large stimulus package designed to stop the bleeding of the officially proclaimed recession – to the contrary of the wishes of most people I know and most I read about online.
A few weeks ago, Federal Reserve Chairman, Ben Bernanke stated that this recession “may last into 2010“, but that he is hopeful that the economy will trough this year and the early part of next year.
Figures released from the Department of Labor, Bureau of Labor Statistics on March 6, 2009 shows the steady rise of the U.S. unemployment rate. The official rate, utilizing the U-3 model, was 8.1% for February 2009, a jump of nearly 3% over last year and .5% higher than January.
While these may seem like relatively small numbers, the total increase of unemployed workers in February alone was 851,000, bringing the “official” number to 12.5 million people. Those areas of the economy hit the most by the downturn in the economy are manufacturing (loss of 168,000 jobs in February), construction (loss of 104,000 jobs in February), and truck transportation (down 33,000 in February).
These numbers do not point to any leveling out anytime soon. In fact, the loss of so many manufacturing and trucking jobs should be alarming. America doesn’t have much manufacturing left. We aren’t making anything and we aren’t shipping much besides the cheap goods we get from overseas. If we can’t produce anything valuable, how do we expect to rebound from this recession? The Gross Domestic Product (GDP) experienced 6.2% negative growth in the last quarter of 2008. This means we’re not making any money as a nation.
The “official” figures released by the Department of Labor do not even tell the whole story. The “real” unemployment rate, as measured by the U-6 model shows that the unemployment rate through February 2009 was 14.8%! This is because the “official” (U-3) figures do not include “discouraged” or “marginally attached” workers. The “official” rate also does not include anyone who is unemployed and hasn’t been looking for work in the past four weeks, or people looking for full-time work and were forced to take a part-time job instead.
The real rate of 14.8% reflects an increase of 5.3% over February 2008 – much higher than the official figures, which show a 2.9% increase.
The bleeding is a little more than we’ve been led to believe, just like former President Bush tried to tell us for months that we aren’t in a recession.
When we officially enter a depression, do you think Washington will tell us? Bob Chapman of TheInternationalForecaster.com states that the U.S. officially entered a depression at the beginning of February.
Washington argues that we’re not in a depression, then points to the unemployment rate. They say that the Great Depression reached levels of 25% unemployment, so our “official” rate of 8.1% shows no sign of such advanced stages of retraction in our economy.
The real numbers, as we have seen, however, are a lot more worrisome.
In fact, some have argued that, if we were to use the same methods of figuring the unemployment rate for the 1930’s as is utilized today (U-6), the numbers for the Great Depression would have been closer to 15-20% – not too far off from where we are today.
Record numbers of young adults attended colleges and universities last year, meaning that, in the next few years, we’ll have a record number of graduates looking for employment. As the overall number of individuals looking for work rises, manufacturing shuts down, and inflation from all of the bailouts and injections kicks in, we could see disastrous levels of unemployment by 2011.
I am no expert, but I do not share the optimism of Ben Bernanke and his Motley Crue in Washington, who are known pathological liars. If experts are correct in saying that this depression could be much worse than the Great Depression of the 1930’s, then we’re being sold a huge, expensive bill of bunk goods. If we believe the talking heads, we may be horribly unprepared for such a situation when it occurs.
The time to act is now. I suggest that every family gather a store of foods because if we see hyperinflation as was seen in the 1930’s or during the destruction of the Weimar Republic in Germany, our money will be worthless and won’t be able to purchase our families’ necessitities. If a loaf of bread costs a wheelbarrow full of paper money, how much could you afford to buy to feed your family? But if you buy the goods to make bread now, you can save yourself lots of money and you might even save your own life.
If you have assets and investments, think very hard about moving them into gold and silver assets. While the Fed artificially holds the gold and silver market down, we should take advantage of lower prices. Gold experts predict it will rise to over $2,000/ounce in the next year and a half – up from it’s current rate of about $925/ounce. Just ten years ago, gold was trading at $230/ounce. If you would have invested $25,000 in gold at that time, you would have made $75,000.
What other asset out there has seen such a return?
Nowhere. Everywhere in the market, investors are taking a beating. Pensions and retirement funds are being wiped out. Foreclosure rates are 30% higher this past month over last year. The housing market offers no hope for improvement. We have an estimated quadrillion in Credit Default Swaps and other derivatives which continue to toxify the economy and make every one of these stimulus bills and injections completely devoid of effect. By doing so, our politicians are piling the debt on the American people by the trillion.
This debt will be insurmountable. The nation will not be able to recover from such a burden. The country is bankrupt and other nations that bought our debt will come to collect soon. In exchange, Washington can continue to sell out our ports and infrastructuure, but this will never make up for what we owe.
America the great, home of the brave has been turned into America the hated, home of the slaves. ALL of this has been done in our names, using the tax dollars earned by the sweat of our brows and the sacrifices we make in our lives.
We can’t count on our politicians to be honest with us. They want to pacify us and keep us docile like cattle awaiting slaughter. If someone was to show us the way out of the pen, would we still stand there, huddled together, afraid to move, or would we bolt through the gate, not looking back as we run over the horizon?
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Ever wonder why it is so easy to keep cattle behind such a small enclosure?
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Filed under: Current Political News, government, politics , bailout, banking, Bernanke, bob chapman, depression, economy, Federal Reserve, finance, financial crisis, government, international forecaster, politics
