Article by Reginald Kaigler
There is no wizard. No one can predict the market. I certainly can't. For 2009, I predicted GDP would drop over 6%, the market would crash to 5,000 and unemployment would surpass 8%. I was wrong about everything except unemployment. I didn't calculate how government spending would push the GDP up. I didn't count on the government stimulus and bailouts propping up the financial collapses (e.g. AIG and Bank of America). In the year 2009, I learned that I was capable of many times, but predicting the stock market was not one of them.
As we move into the second half of 2010, I will focus on the things that have served me well so far: the fundamentals. We now have a record 40.8 million people on food stamps. That number is projected to surpass 43 million in 2011. The official unemployment rate is hovering around 9.5%, but when you include discouraged workers and part-time workers who need full-time work, the percentage of unemployment hovers around 16.5%. For the first time in history, Social Security is costing the government more in expenditures than it's tax revenue.
We have millions of college graduates who are unemployed and living with their parents, the largest demographic block (the baby boomers) are not longer spending on big debt items and the overall economic forces are pointing in the same direction: DOWN.
I am not an economist. I am not an investment adviser. I am not trying to sell you a get-rich-quick-scheme. I am just a regular guy who is looking at the writing on the wall. I'm looking at a shrinking middle class, record deficits, incompetent political leadership, two unnecessary occupations in the middle east, a financial system with trillions of dollars of debt and an inevitable economic collapse. What does this mean? The average American will become improvised as America's social, political and economic systems crumble. It also means that this will be a period of great prosperity for those who see the opportunities. Many people will gain fortunate from this economic nightmare. It will be a new season for all of us.
I think we'll have a deep depression that begins with a deflationary period and becomes inflationary. Just a guess. I could be wrong. But I think this depression will last for at a decade. This economic downturn will not be the end of the world. It will simply pave a way for us to create a new paradigm. I see a technological revolution in medicine and transportation that could change life on this planet as we know it. I still don't think that we've come close to reaching the full potential of the Internet, maglev trains, nano technology and alternative energies. There will be gloom and doom, but someday there will also be another boom. Good times will come, but first we must endure the coming winter.
Anyway, that's what I see.
What do you see?
Middle Class Shrinking
Jobs Picture Worsens With 131,000 Losses; 9.5% Rate
New claims for jobless benefits rise to 479K
Food stamp use hit record 40.8m in May
Social Security in the red this year
I see another dip starting in september or october.
ReplyDeleteIm basing this on the fact on how the double dip worked in the early 80's and the timing of when the stimulus package spending hit during the "recovery". Im also looking at some of the other economic indicators. I think September or october were going to enter another recession. Until then we are still expanding/stagnating.
I've been hanging around Internet boards and groups devoted to topics like peak oil and survivalism for years. Everyone seems to predict economic chaos and societal collapse in the very near future. Yet, year after year those dire predictions fail to come true.
ReplyDeleteI've always maintained that extreme economic hard times, which will include very high energy & food inflation, is coming. Not tomorrow, but sometime within the next decade.
Many of the experts that I respect and that have solid track records as analysts are predicting that the worst of what is to come will hit us sometime between 2014 and 2016, and could last as long as twenty years. In many countries, including the USA, this could also lead to political instability.
This is both bad news (things are going to get much, much worse) and good news (we still have some time to prepare for it, perhaps as much as another five or six years).
So, my belief is in a slow collapse over time, rather than a sudden collapse soon.
(Check out my blog at timothygamble.blogspot.com for more of how I am preparing.)
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ReplyDeleteHuman nature being what it is... it will take a calamity to spur it in another direction. I'm thinking things will continue to erode at a barely perceivable pace before eventually - due to natural, man made or sheer insustainability of what we have going now - the "Oh crap moment" arrives.
ReplyDeleteUnfortunately at that point it is too late to change course and the cards will fall where they will. Perhaps there are those ready to pounce on the opportunity to seize power, control and/or wealth. Perhaps not and those that survive will have the opportunity to reinvent society.
My crystal ball in on the fritz. No real answers, just hoping I have the diversity of skills and resources to stay in the game at the next level.