Doomsday Scenario for U.S. Economy?

Unemployment: 16.5 percent!
Total jobs lost: 16.6 million!
GDP implosion: -11.1 percent

Imagine this scenario: Official unemployment at 16.5 percent …
total jobs lost of 16.6 million — double the amount so far … and an
implosion in the entire U.S. economy bringing a whopping 11.1 percent
decline in GDP — four times worse than last year’s contraction.
And bear in mind that scenario assumes no major Wall Street meltdown.
Throw in a renewed banking panic or credit market collapse
… and it gets far, far worse!

If that sounds like doomsday science fiction, I have news for you: It’s actually
the scenario painted by two prominent economists who are among the closest to the
Obama administration — Mark Zandi, Chief Economist at Moody’s Analytics, and
Alan Blinder, former Vice Chairman of the Federal Reserve.

Their agenda was to defend Obama’s and the Federal Reserve’s aggressive interventions
in the economy — to show how bad things would have been in the past if
they had NOT come to the rescue with massive government bailouts, stimulus, and
money printing.

But their scenario also paints a vivid picture of how bad things could be in the
future when the money from the bailouts, stimulus, and money printing runs out …
which is precisely what’s beginning to happen right now!

Relapse Inevitable Because Washington Policy Makers Only Postponed
the Great Recession. They Did Nothing to Cure Its Causes!

Housing, Banking, Other Propped-up Sectors
Starting to Sink as Bailout Money Dries up!

Mike Larson

It's Bush's fault.

How much of our $13 TRILLION debt is owed to China and the Middle East oil rich countries?

What happens when they decide to not renew that debt and want their principal back?

Their history is that they will allow their people to suffer more and longer than we will if they see that doing so will gain them significant advantage. Too much debt is dangerous. No one in the world will bail out America if enough foreigners call in their loans to us. They will suffer, but we will feel we are suffering more.

As for “It’s Bush’s fault”, this Presidential cop out is getting very old very fast. If we use accept his image of the US Ecomony was driven into the ditch, then the answer is NOT to drive it over the cliff as $13 TRILLION suggests he is doing.

Does the image of Pied Piper come to mind?

Discussing or worrying about this scenario and any others like it...that seem like "a doomsday scenario"...is akin to fussing and worrying about how to rearrange the deck chairs on the Titanic!

JP-II knew and lived through the Nazis...then the Communists...and he was never worried about his beloved Poland...because he knew that it is* not* political, military, or economic power that sustains a nation...it is The Culture.

Think about that in relation to the culture of the USA...we have become a giant ATM-machine culture...we let a few...and I really mean a few...very good men and women (and their families) do all...and I really mean all the "heavy lifting" in fighting two wars for the last 9yrs and 7yrs respectively...and there is no military draft...no universal service requirement...in other words...everyone wants to make ATM-withdrawals but only a* few* are willing to make any "real personal deposits"! Meanwhile..."back here on the ranch"...we "lightweights" just press on with a lot of arguing...kicking the "issues football" back and forth...over "my agenda versus your agenda"...by "talking heads" (political and media hatchet men/women")...with no real substantive conclusions or game-plan...a zero sum game with incredibly high stakes...lives!

And when it comes to social issues like abortion, gay marriage,....and the other "non-negotiables"...when advocates for...natural law/universal or historical traditions/orthodox Christianity/Catholic moral and social teachings..."speak their Truths To Power" (the news media, TV/Hollywood, academia, medical science and the progressive political machine)...Power has no substantive answers...maybe some good willed compassion...but no substantive answers...so there is no national dialogue/civil discussion...but Power however, does respond...it crushes Truth by attacking it and silencing it...Now that is our USA Culture Today...and it will get worse becasue the Power is just that...Power...with no checks and balances...it controls them all...except civil disobedience (listen closely and you can hear this option "brewing/percolating on the stove" right now)!

Long story short...just like the Titanic...the USA is disaster waiting to happen (actually it is happening in living color right in front of our eyes)...the USA is simply...a dinosaur looking for a time to die! The only Hope is that our Sovereign God who does whatever He wills, and no one can stop Him...has other plans of continued prosperity for the USA and its people...but even if He does, it won't be pretty and it won't be a walk in the park!

Other than that...lets have a nice day!

Pax Christi

Just wait till the currency crises! You can not print and print and print to stimulate an economy while trying to manage its allocation of resources, plain and simple.

Oh brother. Yeah, we’re all going to die or spend our lives in tents. A member of Wall Street made a statement about executive bonuses. Regarding the financial meltdown which they caused, he said we shouldn’t turn the other cheek. However, putting a limit on executive bonuses was going a little bit overboard. Perhaps, one could argue, that the economies of small tropical countries depend on Wall Street bonuses.

While Wall Street creates nothing and only gets rich off of our money, the fear mongers in the media want to keep the public afraid. Meanwhile, Ford and Chrysler add jobs. GM buys a credit company so that those with low credit scores can still get a car. European banks have just completed their stress tests. And Canada and Australia have seen an “unexpected” rise in employment.

In Detroit, two homes near the Masonic Temple were purchased for big bucks, with the property owners having to sign secrecy deals. A rundown hotel was leased for 2 million. The Detroit Medical Center deal is on the verge of going through. The government threw a few dollars at a light rail project in Detroit, with the rest of the money coming from private investors. A half billion dollars will go to improving Henry Ford Hospital, including buying nearby land. Lear Corporation provided 5 million dollars to improve a park in the inner city.

The broke City of Detroit came up with over 6 million to buy the MGM Grand and turn it into a Police Headquarters.

The sky is not falling :slight_smile:

God bless,
Ed

The higher the unemployment the closer to clyclic aggregate demand deficiency.

I hope for the sake of individual Americans and the country as a whole that you will get a competent leader next election.

But I thought EVERYTHING was Bush’s fault, in perpetuity. :wink:

You express my sentiments very well!

[quote="Lancer, post:4, topic:207973"]
Discussing or worrying about this scenario and any others like it...that seem like "a doomsday scenario"...is akin to fussing and worrying about how to rearrange the deck chairs on the Titanic!

JP-II knew and lived through the Nazis...then the Communists...and he was never worried about his beloved Poland...because he knew that it is* not* political, military, or economic power that sustains a nation...it is The Culture.

Think about that in relation to the culture of the USA...we have become a giant ATM-machine culture...we let a few...and I really mean a few...very good men and women (and their families) do all...and I really mean all the "heavy lifting" in fighting two wars for the last 9yrs and 7yrs respectively...and there is no military draft...no universal service requirement...in other words...everyone wants to make ATM-withdrawals but only a* few* are willing to make any "real personal deposits"! Meanwhile..."back here on the ranch"...we "lightweights" just press on with a lot of arguing...kicking the "issues football" back and forth...over "my agenda versus your agenda"...by "talking heads" (political and media hatchet men/women")...with no real substantive conclusions or game-plan...a zero sum game with incredibly high stakes...lives!

And when it comes to social issues like abortion, gay marriage,....and the other "non-negotiables"...when advocates for...natural law/universal or historical traditions/orthodox Christianity/Catholic moral and social teachings..."speak their Truths To Power" (the news media, TV/Hollywood, academia, medical science and the progressive political machine)...Power has no substantive answers...maybe some good willed compassion...but no substantive answers...so there is no national dialogue/civil discussion...but Power however, does respond...it crushes Truth by attacking it and silencing it...Now that is our USA Culture Today...and it will get worse becasue the Power is just that...Power...with no checks and balances...it controls them all...except civil disobedience (listen closely and you can hear this option "brewing/percolating on the stove" right now)!

Long story short...just like the Titanic...the USA is disaster waiting to happen (actually it is happening in living color right in front of our eyes)...the USA is simply...a dinosaur looking for a time to die! The only Hope is that our Sovereign God who does whatever He wills, and no one can stop Him...has other plans of continued prosperity for the USA and its people...but even if He does, it won't be pretty and it won't be a walk in the park!

Other than that...lets have a nice day!

Pax Christi

[/quote]

Thanks! You have eyes that can see. God will destroy us just as surely as He destroyed all of the nations before us that thought that they did not need God. God has not started the 10 chastisements YET. However, we are doing a very good job of commiting suicide on an international scale. I pray for Mary's peace plan.

Obama Economy SINKING!
by Martin Weiss

As White House Budget Director, Peter Orszag helped unleash a $3 trillion tsunami of red ink on the U.S. economy.

Orszag handed in his resignation and quietly slipped out of Washington in June.

As head of Obama’s Council of Economic Advisors, Christina Romer publicly swore on a stack of Bibles that the White House’s unprecedented spending spree would keep unemployment under 8%.

Now, with unemployment at nearly 10% and the U.S. drowning in new debt, Romer is skulking away, leaving a trail of monumental fiscal carnage behind her.

She just resigned yesterday, one day before this morning’s abominable Labor Department report on the job market — a net LOSS of 131,000 jobs in July!

This is sad and serious: The Obama economy is sinking and key members of his team are abandoning ship.

Source: www.calculatedriskblog.com
Consider this: After all prior economic recessions since 1948, jobs invariably bounced back. Some recoveries were slower. Some were faster. But there always was a recovery.

When the economy was losing jobs, the losses were far deeper than in any prior recession. Then, when the economy was supposedly gaining jobs, those gains were far weaker than in any prior recession. And now, the economy is losing jobs AGAIN!

Doomsday? It sounds like the early '80’s to me. It took 8 years of the Regan administration to clean up the mess left by Carter. He never blamed the bad economy on Carter, though, he just did what he had to do to fix it. Unlike some other presidents.

The Dismal Jobs Picture — and the Fed’s Misguided Medicine
by Mike Larson

Can we just stop sugarcoating the issue? Dispense with the happy talk? Instead, let’s cut to the chase here: This job market sucks. Plain and simple.

By this stage in a true economic recovery, the country would be creating hundreds of thousands of jobs — month in and month out. But we aren’t. Not by a long shot!

According to the Labor Department, we’ve added an average of less than 100,000 private jobs (meaning, ex-Census hiring) a month so far in 2010. The markets will get a look at the official July figures around the same time you receive this e-mail. But I doubt it’ll show much improvement.

After all, the ADP Employer Services report out Wednesday showed yet another paltry month of job creation — just 42,000 after an even more pathetic 19,000 in June. Considering we lost a whopping 8.4 million jobs during the first phase of the recession, at this pace it would take ALMOST 17 YEARS to get back to where we were before the recession!

Moreover, the outplacement firm Challenger, Gray & Christmas said companies announced roughly 41,700 layoffs in July. That was up 6 percent from June and the third month in a row of gains

The philosophy of socialism is failure (Winston Churchill). However, socialists always blame someone else for their failure! The creed of socialism is ignorance (Winston Churchill). Therefore, the ignorant believe the socialists.

Yes, President Reagan was a Christian and a gentlemen! Clinton and Obama are just the opposite. Any man, especially Clinton and Obama, who supports abortion does not have my trust and I do not claim him as my president.

Chrysler adding jobs to its Sterling Heights plant. GM will have 4500 dealers by the end of this year, 400 more than originally planned.

When assessors were purposely overvaluing homes a few years back, people just looked the other way.

Wall Street created Credit Default Swaps and is saying, “The recovery will be slow until the housing market begins to recover.” What? They just forgot to pay attention a few years back?

God bless,
Ed

Monday, August 9, 2010
*Why All the Double-Dip Talk Is Pure B.S. ... *
by Larry Edelson

If the recent slew of bad economic news coming out of the U.S. hasn't convinced you that the economy stinks, then it's time to wake up and smell the coffee. Because ...

All the recent talk about a double-dip recession is nothing more than pure B.S.

Why? Because the U.S. economy ...

A. Never emerged from a recession. Period.

Quite to the contrary, in reality ...

B. **The economy is already in a depression. **The problem is that no one wants to admit it. Certainly not in Washington. Not on Wall Street either. And, unfortunately, not even on Main Street.

But the fact of the matter is that in real terms, the U.S. economy has already contracted more than it did during the Great Depression.

I'll prove it to you in a minute. But before I do, here are a few simple facts that also show you that the economy is either rivaling the depths of the 1930s, or is already in worse shape ...

First, *the true unemployment rate in this country is at least 22%. Not the 9.5% mythical figure Washington is reporting. *

You see, Washington plays with the unemployment number. The figure they report every month is what they call the "official" unemployment rate. But it includes only those ages 16 or older who are not currently employed, but are able and available to work, and "actively seeking work."

The problem: Washington conveniently leaves out people who are working part-time, people whose hours have been dramatically cut, and "discouraged" workers — those who are ready, willing and able to work — but have essentially given up looking for a job because they can't find one.

Add these workers into the mix and you have an unemployment rate of 22.7% — more than double the so-called official number and almost as bad as the Great Depression of the 1930s.

And that's just a nationwide average. In places like Detroit, Los Angeles, Allentown, Pa. and other urban areas, the real unemployment rate is as high as 40%, far worse than during the Great Depression.

If you include part-time and "discouraged" workers, the actual national unemployment rate is 22.7% — almost as bad as the Great Depression.

Second, from its 1925 peak, the median home price in the U.S. fell 12.57% into a bottom in 1932. Compare that to the 31% decline since the property peak in 2007.

Third, *in 1929, total U.S. debt as a percent of GDP stood at roughly 290%. Today, it's approaching 380%, and growing. *

Put another way, it now takes $3.80 to produce $1 of GDP, compared to $2.90 during the Great Depression. I don't know about you, but to me, that's not real economic growth. It's debt-riddled growth.

Moreover, when debt is growing so rapidly, there is simply no way the economy can produce the same amount of unencumbered goods and services than it did just a decade ago.

Fourth, U.S. high-yield corporate bond default rates last year hit their highest level since the Great Depression. And although they've come down a bit since then, there's no doubt in my mind that corporate bond default rates are going to surge dramatically higher in the months ahead.

Fifth, *total corporate and personal bankruptcy filings each year in the U.S. are now more than double the number of filings that occurred during the entire decade of the Great Depression. *

Sure, bankruptcy laws have changed dramatically, making it far easier for individual and corporations to stave off creditors, with far less stigma. But is that a good thing? Or does it merely make things look better on the surface?

Either way, I repeat, we're talking *bankruptcy filings in a single year that are now more than double the filings that occurred in the entire Great Depression. *

Best Wishes,

Larry

Now, for the real proof the economy is already in a Depression.

Back in the 1930s — and all the way through 1971 — the U.S. monetary system was on a gold standard. In 1933, for instance, $1 of GDP was equal to 1/35 of an ounce of gold.

In 1971, it was equal to about 1/42 of an ounce of gold. Then, Richard Nixon severed the link between the dollar and gold once and for all.

Don't get me wrong. I do not advocate a gold standard. Never have, never will. But you simply must understand that *just because the world is no longer functioning on a gold standard — doesn't mean you cannot — or should not measure values in terms of gold. *

As a matter of fact, you should. Measuring values in terms of an asset that represents the real value of money is the only real way to measure anything today. That's even truer these days than ever before because paper currencies are so fickle and volatile in nature.

So now, let's take a look at our country's GDP in terms of the amount of gold it can buy.

And let's do a simple comparison of 1932, the depths of the Great Depression ... with 1971, just before the gold standard was abolished ... the year 2000, the peak of the tech bubble ... the year 2007, the real estate peak ... and the latest GDP data.

Let's see what's really happening — in terms of how much gold the country's GDP can purchase at those different points in time.

Here's the summary, and a chart to go along with it ...

In 1932, our country's GDP was worth 2.8 billion ounces of gold.

In 1971, it was worth 27.74 billion ounces of gold. Put another way, our country's GDP was almost ten times what it was in 1932.

In 2000, our country's GDP would purchase 34.54 billion ounces of gold.

At year-end 2007, it was worth only 16.87 billion ounces of gold.

As of March 31, 2010, our country's GDP would purchase a mere 13.08 billion ounces of gold.

That's a 22.47% decline in three years, since the peak of the housing bubble ... and a whopping 62.13% decline since the end of the year 2000.

If that's not a contraction, if that's not a depression in real terms,
I don't know what is.

Of course, almost everyone will argue with me about the above analysis, their main objection being: I'm just viewing the economy in terms of gold, and that the contraction I speak of is merely because the price of gold has gone through the roof.

But I ask you the following questions, and I'll let you answer them ...

If gold isn't real money, then what is? Paper money?

If so, then why does paper money — in almost all cases — buy you less than it did a couple of years ago ... five years ago ... ten years ago ... fifty years ago?

Why does a barrel of oil cost nearly eight times more than it did just ten years ago, when in gold terms, the price of oil is the same?

For the economy's current GDP to equal the same gold purchasing power it had in the year 2000 — 34.54 billion ounces of gold — the price of gold would have to plummet by more than 64.5%.

What are the chances that's going to happen, when the Federal Reserve recently stated it would print as much as $5 trillion more in funny money to try and turn the economy around, by papering over the mess?

Folks, the U.S. economy is already in a depression. Deep in a depression. And as I said at the outset, almost no one realizes it.

Hopefully, you do. And hopefully, you're taking the steps necessary to protect your wealth, so that it does not suffer the same devastating losses in real terms.

And further, so that you have a solid plan to profit from what almost no one else recognizes.

Best wishes,

Larry

GM will have 4500 dealers by the end of the year, 400 more than planned.

Alcoa profits beat analysts’ estimates:

bloomberg.com/news/2010-07-12/alcoa-eps-from-continuing-operations-13-cents-beating-analysts-estimates.html

Apple profit, sales jump after iPad and iPhone 4 debut

businessweek.com/news/2010-07-20/apple-profit-sales-jump-after-ipad-iphone-4-debut.html

I will not die without an iPad or iPhone. And the average consumer does not buy aluminum by the ton.

The Democrats need to stay in power which is why they and the other football team will argue about the jobs bill or jobs package and credit for small business package until the end of September. Then the sun will come up tomorrow in October. Meanwhile, businesses are cutting workers to get in some last minute profits.

I really doubt Wall Street is going to pack their bags and move to China.

God bless,
Ed

How so? Serious question. Buying land?

The problem is we ignore reality and replace it with wishful thinking. How many times have you heard or read that “the Recovery started but it will take a long time”?
The fact is that we were duped into thinking we could “sit out” the Recession pain by simply borrowing funds to “tide us over” the economic gap and "Are we genius or what?"
But, it didn’t work, did it?
Two facts: First, at the end of WWII we were the only surviving industrial nation, we had the world markets begging for our products. That is not true this time!
Second, From the bankers to the small town elected officials, everyone took all they could. The small town of Bell paid Millions, that’s right, Millions to their crooked elected leaders
-and knew nothing about it.
Pensions in California for state workers exceed $100,000 per year, forever.
Now, with all this burden, and a lot more, can our economy survive?
Part II Depression is Unavoidable!
We have priced our industry out of competition. We actually NEED a Depression to bring salaries, prices AND taxes in line with a viable economy. Who wants to go first? NOBODY!
So, we have to do it the hard, long and painful way.
For example, Oakland bus drivers skip work and let the city sink into a disaster because they want more money. Not less, but MORE money. Are they ready for the economic adjustement needed for our economy to survive? Not for a long, long, time! :mad:

DISCLAIMER: The views and opinions expressed in these forums do not necessarily reflect those of Catholic Answers. For official apologetics resources please visit www.catholic.com.