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Tuesday, November 10, 2009

Prediction Of More Bad To Come

I don't like being the bearer of bad news but I believe their is more bad news down the road for our ailing economy and the people of this country.  While the attitude of many - in places so high that it makes your nose bleed - is to report what I call "feel good" news.  News and reports that will make you think things are better and if you hear it enough you will begin to believe it.  Our government has been using this tactic for years now.

What I believe is in the best interest of the American people is the truth.  With the truth people can plan accordingly.  With false hopes of betterment, they might do things they will later regret.  The tendency is to spend more if you believe things are better and going to be even better.  If we have so called, bottomed out, then yahoo, let's spend again.

Spending in and of itself is not bad for the economy and can help in a recovery effort.  What is bad is that most spending does not occur with cash.  Spending is done with credit.  It is certainly enticing to obligate one's self to a future payment if that person is led to believe that they will be able to meet this future obligation.  Isn't that what got us into this mess to begin with? 

You cannot have a recover by spending more on credit.  You can't solve an economic crisis where everyone is over extended on credit by the use of more credit.

Therefore, it is vital that we know the truth.

"More Rough Times Ahead" was published in late September by RIS Media/ 
Despite recent signs of improvement, more rough times are ahead for the U.S. economy, according to several prominent experts in real estate and the economy who attended a recent forum at the Nixon Presidential Library.
Keep in mind that this was done well over a month ago but with the exception the indication that car sales increased (due to the cash for clunkers stimulous)  the other facts are still viable.
“You look at the numbers and everything points to the fact that we not only have bottomed, but things seem to be improving,” said Christopher Thornberg of Beacon Economics, citing increases in durable goods orders, exports and auto sales. He added, “When you think about the problems we’ve been through and what government has done, in many ways, they have, in fact, stabilized the economy. But you know what? They haven’t actually solved the underlying problems in the economy.”

Yes, the underlying problems of the economy.  Rising unemployment now up over 10%, increasing foreclosures, increasing credit card defaults and increasing commercial real estate defaults and new housing starts at its lowest level in decades are all underlying problems.

Until you have productivity, employment levels back to our previous averages and cash - not credit - flowing in our economy, there can be no recovery.

Obama promised us a stimulus that would provide millions and millions of dollars to repari our badly needed infrastructure.  He in fact said  that there are projects ready to go but for the lack of funding.  That sure was a great idea that certainly would have helped the economy rebound.  But, I have not seen any infrastructure work being performed on these "ready to go" projects.  Where did the funding go? 

While all of the panelists agreed that the economy will rebound in another two or three years, several pointed to tough economic conditions in the interim

Two or three years, not the 2010 recovery everyone seems to be talking about.  I now you can put 10 different economists into a room and get 10 different opinions. Affter all who can reallyl predict the future?  But the one thing we can do is look at the facts logically, analyze these facts logically and come to a logical conclusion - things are not going to get better for a while so prepare yourselves.

To date the only recovery I have seen is on Wall Street.  The reason for that as simple as I said above.  It takes cash to create a recover and Wall Street certainly got all of it.  I say, if that same amount of money were put out on the street, the infrastructure work begun, those and other jobs created, small business allowed to survive (unlike the "too big to fail" guys) we would begin to see an up tick.

Don't get the wool pulled over your eyes.  That has been happening all to much in our country for years.  The true figures of unemployment which takes into account those underemployed and off of the unemployment benefit roles total over 20%.  Ask the question, how can you have a jobless recovery that is meaningful?

Open your eyes adn see the reality of the real situation.  Take actions to allow your survival and take vocal action to change the way our system works.  Let's bring it back so that it works for the people not the "too big to fail" banksters.

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