robertmandrake.com

Berkshire profits were down 62% in 2008. The stock market tumbled, the housing market fell of a cliff and in the final months of the year, millions of jobs were lost. That was the good news.

The bad news is that the worst is yet to come. 2009, 2010, and 2011 will be the worst years of our great Republic and the nation will be tested beyond its limits and will be pushed past the brink and into a deep, dark place that has never been experienced by this great country.

The country is losing more than 600,000 jobs each and every month, and the job loss growth is accelerating… so, each and every month the number of job losses is rising and as the number of employed continues to shrink, the percentage of the work force that loses their job each and every month rises since the number of people working continues to get smaller and smaller, yet the number of people losing their job stays the same or keeps rising. The economy crashed in the fourth quarter of 2008 due to several factors including a sub-prime crash, a stock market crash, and a credit freeze that has taken buying power out of the economy. What is strikingly missing is job losses.

THE NEXT LEG DOWN is going to come from JOB LOSSES. When a family loses their job, their income shrinks down and discretionary spending money is completely eliminated. If a family has any left over money, they save it. The American economic growth engine is based completely on discretionary spending. All the boom economy years have been funded by massive increases in discretionary spending such as eating out, travel, home improvement, retail, etc. and the jobs that come with such a boom further the expansion. Unfortunately, if this boom is built on some sort of funny money like a massive internet tech stock market bubble, or a real estate bubble, or an incredible credit card binge… the house of cards will come crashing down eventually, and will cause a reverse snowball effect that will contract the economy faster and faster and faster until an all out depression is achieved.

Job losses are going to cause an incredible slowdown in the economy… slowdown… slowdown… yes, I am talking about a visible slowdown from these levels… meaning, if you think its bad now, then imagine when six months from now, someone refers to the last six months as a slow down and a shrinking of the economy… imagine what that is going to be like. Seven to eight million jobs will be lost this year.

More to come…

Mandrake