Things look good, they say: I say Depression ahead

By , July 15, 2009 5:54 pm

Things look good, they say: I say Depression ahead//15 Jun 2009   I wrote yesterday that I would continue this line of thinking next week; it cannot wait until next week. Here is what I heard from various sources throughout the week: Labor department, the FED, Wall Street analyses, various economic experts throughout the TV news and talk shows and of course the political pundits that will say anything to make this White House look good.1.                   Yield on 10-year note up 20 percentage points: that’s good2.                  Gold went up for the first time in six weeks: that’s good3.                  Mortgage applications up for 2 or 3 weeks going: that’s good4.                  Stock Market  recovering some losses and actually up 2 % as of Monday: that’s good5.                  Report that the CPI is up .07% in Jun, higher than expected: that’s good?My question mark there is because inflation also rose in Jun by 1.8%, double what expected. Some out there are beginning to softly speak of the possibility that this “Bust” is close to the bottom and another “Bubble” is just around the corner; and some of these economic analysts I have followed for years and like their line of thinking; however I believe they are all wrong this time. I am sticking to what I wrote back January, in May, in June and yesterday, and that is, we are bracing for a Depression unlike anything in 200 years. This “Real Estate/Credit Markets” bust is not over until commercial real estate takes a plunge and some 90-160 banks fail(conservative figure). This commercial real estate and bank failures will add to the unemployment woes. Our Nation is going deeper in debt and just tripled the budget; and we haven’t even added the cost of Universal Health Care and the Energy Bill. All of these combined with the hundreds of billions in bailout for companies which will fail regardless will certainly create inflation. I fully accept that there various models for identifying “inflation” and certainly this White House will use a formula or model advantageous to their agenda; however, the bottom line on identifying inflation is the “decreased buying power” of the dollar.All of this is not even the worst case scenario, there is something coming that will have us wishing for the days of inflation. I’m talking about deflation and I will express my thoughts on this next week and share with you some historical data that has me convinced of the coming depression.

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