Not Like The 1930's?

Since my latest update (GD 2), I've had several readers comment that it was "too depressing" and asked if things can really get that bad again. Well, for one thing, you've got to remember that the numbers we are getting from the government now cannot be trusted. For example, according to the government, inflation is just 3.5%.These of course are phony numbers because both food and energy were removed from the calculation a few years ago. Adding these two "must haves" back to the formula gives us annual inflation of over 10%. This is what a greatly devalued dollar does to your purchasing power. And, trusting the government for an accurate accounting on just about anything is becoming increasingly difficult.

Now, this is where it gets REALLY interesting. The following chart comes from Shadowstats.com.

The unemployment rate is currently 6.5%, according to U-3 government figures. The broadest U-6 measure, which includes discouraged and marginally attached workers, is 11.8%. If you're still discouraged and jobless after 1 year, the government ignores you in its calculation. How convenient. If these workerswere to be included, the unemployment rate is currently 16%! When someone tells you our current situation isn’t close to the Great Depression because unemployment was 25% in the 30s, keep this chart in mind. We've lost 1.2 million jobs in 10 months. The U-3 rate will reach 9% by late 2009. That would be another 3.6 million job losses. These are the kind of numbers that could lead to social unrest. Our social services system and food banks will be pushed to the breaking point.

Yesterday, Bloomberg reported that the total tab for theFED/Treasury bailout is $7 trillion. They have also sued the FED to find out where all of this money has gone. In the event you didnt know this, Paulson and Bernanke will not disclose where the majority of the money is being spent.

Bernanke in talking to the House Financial Services Committee:

"Some have asked us to reveal the names of the banks that are borrowing, how much they are borrowing, what collateral they are posting. We think that's counterproductive."

Amazing isn't it. Our money is being thrown away and we aren't even allowed to see who is getting.

Finally, did you see that both AIG and Citi, both having been bailed out with our tax dollars, are still going to spend over $400 million on naming rights for sports stadiums??

You seriously cannot make this ---- up.

Market Update:

A Thanksgiving week rally may be in the cards, but since Paulson is speaking on TV again, a collapse could start with the very first word out of his mouth. Why this person still has a job I have not a clue. Just remember him as one of the primary reasons that our kids and grandkids will be paying taxes in the 60% range. 

Kip