Economic Fortune Teller - A Look at This Coming Depression and a Huge Financial Readjustment

In November 2006 I wrote an article entitled are you ready for the coming depression. While having no economic degrees - I don't believe it took Warren Buffet to recognize the U.S. economy was and is suffering some pretty big problems. Because of this I predict we will have an economic event that will rival the great depression, if not exceed it.

Why is this? Because as I stated in my previous article people today carry far greater debt loads than did their grandparents in the great depression. Thanks to credit cards most families carry a huge burden of debt. While the United States currently strains under the meltdown of mortgage related failures pushing the country into recession, I predict it will be the knock on effect of credit card defaults that will push the world into depression no matter how much the U.S. throws at it. Throwing American families into $25,000 worth of debt to cover wall street failures will only further enslave the U.S. people. 90% of U.S. families net worth is far less than their combined personal and 'government' debt. That means years of high taxes and financial slavery coming their way. The growing number of unemployed in the U.S. has the potential to become a flood - and unemployed people can't pay their credit card bills - this will be the source of the second economic shock to the U.S. economy.

None of the presidential hopefuls will say it, and certainly George Bush doesn't want to admit he screwed up - but this is the depression the U.S. and the world has to have. The U.S. has been over consuming and under producing for too many years. Record trade deficits need to be stopped. The U.S. insatiable appetite for oil needs to be ranged in severely. A depression will achieve this - although with great pain.

The real risk is mass unemployment - 25%-30% in the great depression. If we reach this number unemployed the potential for civil disturbance is huge and expect more authoritarian governments to arise - fascist Italy, Japan and Germany arose from the great depression.

Don't watch wall street - watch the job numbers - the rise and size of unemployment will be the true key of how bad this recession/depression will get. Last time the U.S. used this spare labor to build thousands of schools, parks, and government buildings. This time the U.S. should use it to build wind farms, solar farms, mass tree planting, an environment corps.

China's growth will not save the world economy - China's growth is dependent on its huge trade surplus with the U.S. - this trade surplus is about to massively shrink with consumer demand in the U.S. being moderated by hard economic times.

This depression can be an opportunity to build or governments may again seek the easy way out and throw us once again into a world war - a war which unfortunately will make WWII look like a picnic.

We live in interesting times!

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