Now and then//1929, 2009//the coming Depression. Part VI

By , October 7, 2009 7:49 pm

Now and then//1929, 2009//the coming Depression. Part VII had hoped to have the inflation (deflation) rate for September for this writing; they have not yet been published. Read part IV of this series for my thoughts on inflation in comparison with 1929 – 1934. Keep in mind that we have been deflationary since January of this year. Throughout these series I have also discussed our unemployment rate and my feelings on the process the government uses to arrive at their figure. There are a few internet sites (type in-real unemployment rate) where you can be enlightened on the “comical” process involved in determining the national unemployment rate; to lengthy to make it a part of this post; let me simply say that if the government (Bureau of Labor Statistics) used the same formula used 80 years ago (1929-the Great Depression) the actual national unemployment rate at the end of September would be 19.3% and a possible high of 20.10%. I wrote back in April of this year (when unemployment was 8.9%) that between October, 2009 and March 2010 unemployment would be at a low of 13%. Bureau of Labor Statistics is reporting the current unemployment rate at 9.8%. Was I ever off;  and not in a positive manner, I do indeed believe that the actual unemployment rate today is in fact between 17.5% and 19%. I stated also back then that some areas of the nation would be approaching 25% during this time frame. On September 4th a liberal organization wrote that the actual unemployment rate at the end of August was 16.8%. This year alone 9.1 million part-time workers which would prefer full-time jobs were not counted as unemployed and 800,000 who quit looking for jobs that aren’t there are not counted as unemployed. I have stated various times throughout these series that we have not seen the bottom and worst of our economic situation; the bottom will not come until approximately 4-7 months after “commercial real estate” bottoms out. The “commercial real estate” bust will sky rocket bank failures and a surge in the unemployment rate. Here it comes; commercial real estate office space vacancy rate hit a five year high of 16.5%, office space rents fell 8.5% in the third quarter (the steepest fall since 1995) and in New York City office rents are down 18%% over the last 12 months. The Moody/commercial property price index (price index for REITS) fell 5.1% or 39% from its October 2007 high. So far this year bank failures are ten times the average for the last 8 years. If you’ve been watching the stock market over the last six weeks or so, you would be hard pressed to accept the above as anything but “corrections” in our economic downturn and possibly accept that we have seen the bottom. I just don’t see anything coming out of this administration (politically and economically) to support an upturn in the economic state of our nation. In a few weeks I will start another series dealing with the “demise of the Dollar” and eventual degradation of our standing in the world. My current research reveals that this is in the making even as I write this. On Friday I will share some thoughts with you on the word “Stimulus”. I continue to be amazed at the “left-wing” pundits and strong supporters of Barack Obama as I see them all over the “news” and talk shows. They are still blaming Bush for everything wrong and certainly ensure that we are to understand that the current economic situation is his entire fault. Consider this: In 2000 George Bush inherited an unemployment rate of 4.0% from Bill Clinton; at the end of 2002 it had gone up to 6.0%; however, from January 2003 to December 2006 he brought it down to 4.4%. What happened at the end of 2006 was that the liberal Democrats took over the House and the Senate and here are the results: unemployment January 2007-4.6%, December 2007-4.9%, January 2008-4.9%, and December 2008-7.2%. Ten months in office and this administration has taken unemploymentnfrom a January-7.6% to an October-9.8%, I don’t give any consideration to my beliefs on the “actual” rate because the Bush administration also used the same standards for their rate.

If you like this post then please subscribe to the RSS feed.

Leave a Reply

Panorama Theme by Themocracy