Read What I See

     A depression is an extreme recession in which there is an abnormal increase in unemployment, restrictions of credit, diminishing output and investment, large number of bankruptcies a reduction in trade and price deflation or hyperinflation.  Hello out here, are you paying attention? Is this the world that we are living in or are we pretending that we do not see all of the signs?

Follow up:

     Politicians are good at digging into the dictionary and thesaurus to find the proper words in order to ease public outrage for their failures.  If we are in a recession, they get a C or D grade, if we are in a depression the public will give them an F.  What our elected officials are doing with the public is similar to a child altering his report card after getting an F.  When the parents find out the true grade they will be disappointed, when they see that he also lied they will be angry.

     Economic upheavals used to be referred to as “panics”.  During the panic of 1907 and before the founding of the Federal Reserve, the bankers interfere to save the day in order to save themselves.  During the panic of 2008, the Federal Reserve saved the day to save the bankers, and many would agree that in reality they are one.

     The panic of Black Tuesday which brought about the market crash of October 29, 1929 is viewed as the beginning of the Great Depression.  At the time, Hoover was still in state of denial and commented on the economy, “Conditions are fundamentally sound”.  Denial is present in our current economic crisis as the “conditions are fundamentally sound” rhetoric is the best lie politicians can come up with.  There isn’t much difference between Hoover’s approach and today’s politicians. Our nation was in a depression for two years, it wasn’t until 1931 that Hoover finally conceded and began referring to the economic situation as “The Great Depression”.  The Obama administration is offering the same appeasing outlook Hoover offered in 1929.  During the presidential campaign, John McCain made this comment on the day that Lehman Brothers declared bankruptcy.

     The current recession started on December of 2007 and we saw it been concealed for one year.  It is all in the wording and the timing for soothing public sentiment and mood.  Even so, when the recession was officially declared on December of 2008, the Dow took a beating of 680 points in a single day.  Are there any bets on what the stock market would do if a depression is officially declared?  No one in government or Wall Street is going to start a panic by calling our economic situation a depression even if it is.

     The beginning of a depression could have been signaled by the panic of October 2008.  That was a critical time in which many members of Congress were coerced into passing the emergency funding on TARP.  They were told that if the bill did not pass our economy would collapse and martial law would be declared.  Most people did not catch up on this but by visiting those links; you can see the videos on YouTube.

     There is an excellent quote by Harry Truman that explains it in a much simpler way a depression, “It’s a recession when your neighbor loses his job; it’s a depression when you lose yours”.  Based on his quote we already have fifteen million Americans plus their families living in a depression.  If we add to it the number of people that are underemployed then the figure becomes 26 million plus their families.  Are you for the first time concerned that you may lose your job?  Are you holding Federal, State or municipal bonds that are being downgraded?  Has your 401k lost 40% of its value?  Has your home lost 30% of its value?  Do you owe on your home more than it is worth?  Did you rely on you line of credit to pay debts but now it has been canceled?  Are you unable to sell your land, boat or car because there are no buyers?  Have you or about to default on some of your debt?  If these living conditions is not a depression then what is.

     There is plenty of encouraging news published that would indicate an economic recovery but the good news never go far past the headlines.  The truth is that there is no good news in honest economic indicators.  We are heading at a rapid pace in a direction opposite to what most politicians want us to believe and most of our citizens are already living in a depression.  The only thing that no one knows yet is how much worse it will get and how long it will last.

This is all getting too familiar