Optomism that comes with a new President.  Happens every time.  Not everyone has the same perception we do.

I believe a VAT tax will be installed nationally on top of all the other taxes we currently have and this will be the final push into an epic depression.

The CPI is correct.  It is probably the most inspected (by various groups) staststic in the economy.

Food will go up some, because of the nature of the production and transport.  
But food isn't going to go up so much that people will starve.  However some people just might have to not have a new car, cell phone and 300 channels of cable.

Priorities.

Looks like we get to experience a historic time in world history first hand. Let's make a good outcome for us all.

Not really.

1873

1893

and of course 1933


We are just approaching 1979 now.

If things really go to crap the .gov is certain to monkey with the numbers like they've been doing with unemployment. Pretty much Uncle Sam says you're fully employed if you work 40 hrs per week...even if you're qualified to be an engineer but your job is mopping the floor in McDonald's for the minimum wage.

Fortunately I don't drive a new car, own a new phone, or pay for TV at all.

CPI is one number they would have a hard time messing with.

http://www.bestmindsinc.com/documents/TheNextLandslide_LessonsFromAndrewCarnegie.pdf

Read it all the way to the end. It's not good.

Tagged for the reality checks.

This thread has definite potential;

FoF, checking in.

ETA: See sigline below.

I think the main culprit is BHO's "stimulus".  It has crowded out all the rest of the capital, and made borrowing more expensive for the private sector.

Just what we need too, more good money chasing bad, but on an unprecidented scale.

Yea sure they wouldn't.

http://en.wikipedia.org/wiki/Hedonic_index

That $3000 computer you bought in 1994 had a certain utility.  Today if you could buy the same utility in a computer it might cost $30.  That is a 99% decline in price.  That is a factor in CPI.  Unfortunately you can't buy a $30 computer.  They aren't made, and even if you could buy one, it has no modern utility.

You can buy a useful computer for @$600, so there's been a drop, but it's more in the 80% range, not 99%.

Cars are worse.  The $15,000 car you bought in 1994 might cost $7,500 if made today, but again it's not made.  A similar car with modern "value added" features (safety, efficiency, convenience items) might cost $20,000.  Hedonic estimates would say this item has FALLEN 50% in cost, while it in the real world it has RISEN 33%.

You often see core CPI quoted, ie CPI less food and energy.  I would prefer to see a dollar value index consisting of oil, ag. commodities, and precious metals.

An obvious student of history.  I think he read all about the Smoot-Hawley tarriff and liked the results.

Depression - Check
Cold Hard Facts to Support a looming Depression, Obama as POTUS - Check

Have a great day.

I think John is saying that this depression might eclipse all of the ones you are listing.

The .gov also does not include, children (obviously) the elderly, people in college, people who have given up looking for a job, people who are disabled (many who are not really disabled) etc, etc. The point being that all these people consume but are not counted as "unemployed". What fraction of the populace really is producing?

That might work. How about a dollar linked to ...gold?

Energy policy? Come on, cap & trade and Obama's 39 mpg cars will save the world . . .

No nukes, no drilling, . . . don't rape mother Gia

I though Bush was talking about that around 2000 or 2001 . . .

Kinda like Japan . . .

I see what you are saying. But will we have this "glut" in the future? For example, I anticipate a "glut" of GM cars near future, farther out I'm not so sure . . .

As far as cars go, I understand the United States normally scraps about 14 million cars a year.  We are currently buying cars at a 10 million a year pace.  That mismatch and the pent up demand is going to have an effect someday.  Hopefully before the asteriod hits on 12/21/12

'33 was extended about 7 years due to FDR's policies, according to analysis by some UCLA economists. We still have remaining FDR and LBJ progams to deal with (Social Security and Medicare) and Obama is piling onto that with a hoast of economic stupidity. Hecne, this time could be much worse than anything seen before.

You forgot about George W. Bush who spent more than LBJ.

Yeah, but as usual that was just Bubba-bait from Bush.  He never actually did anything about it, just like he couldn't even be bothered to rescind any of Clinton's most insane EOs, or his father's EOs, including the gun ones.

Bush was not a friend to the oilfield.  He was less of an enemy than Obama, but neither Bush nor Cheney bothered to address a whole bunch of issues that would have gotten us a hell of a lot farther than drilling in ANWR.

Agreed. Bush was no friend of ours. We went from bad to worse with Obama.

Someday within my lifetime, I'd really like to vote FOR someone rather than against someone.

First he scooped up a trillion in cash...

...then he took over Aig and had BoA and Citi wagging thier tails on command...

...now he's handed GM and Chrysler to the unions...

...and in a very short time, he's going to seize the entire US Treasury, because he's liquidating US dollars by the truckload by printing money to buy bonds..

...and some folks here think this is all a product of stupidity, instead of design.

Lesson one, stupidity cancels itself out over time. Random distribution, it's a law of nature. When a person "screws up" and ends up with ALL the money, it usually isn't an accident.

We have exactly one ally in the fight to keep Obama from making the USD dollar worthless, squeezing out all the value and handing it to friends and allies, just like AIG, GM, Chrysler, BoA, Citibank, etc.

That's China.

If Obama devalues our treasury, he devalues their treasury as well, due to all the bonds they've bought over the years.

That's why they are selling hard dollars to buy gold, and why they ordered Obama to stop printing money last week.

That's also probably why they are slipping the leash on their pit bull, in North Korea.

They haven't started dumping US bonds, for pennies on the dollar yet, but they have stopped buying any more.

They clearly think the dollar will drop against gold, or they would be selling gold to buy dollars.

And Obama comes thru right on cue, with the solution to dilute the wealth of the US only, while giving China time to get out safely...yup...you guessed it...

Obama just TOLD us he plans to take a cut of EVERYTHING, to the tune of 5-25 percent.

I think when most peiple heard Obama said he'd re-distribute the wealth, they thought he'd tax the rich, and give a few extra bucks to the poor.

But what he really meant was that he was going to take all the US banks and give them to cronies, take all the car companies and give them to the unions, and take the entire US Treasury and give it to China, and take three quarters of every dollar you earn, instead of the half we give up to taxes now.

Obama is redistributing the wealth of EARTH, and most folks still think it's just coincidence.

First he scooped up a trillion in cash...

...then he took over Aig and had BoA and Citi wagging thier tails on command...

...now he's handed GM and Chrysler to the unions...

...and in a very short time, he's going to seize the entire US Treasury, because he's liquidating US dollars by the truckload by printing money to buy bonds..

...and some folks here think this is all a product of stupidity, instead of design.

Lesson one, stupidity cancels itself out over time. Random distribution, it's a law of nature. When a person "screws up" and ends up with ALL the money, it usually isn't an accident.

We have exactly one ally in the fight to keep Obama from making the USD dollar worthless, squeezing out all the value and handing it to friends and allies, just like AIG, GM, Chrysler, BoA, Citibank, etc.

That's China.

If Obama devalues our treasury, he devalues their treasury as well, due to all the bonds they've bought over the years.

That's why they are selling hard dollars to buy gold, and why they ordered Obama to stop printing money last week.

That's also probably why they are slipping the leash on their pit bull, in North Korea.

They haven't started dumping US bonds, for pennies on the dollar yet, but they have stopped buying any more.

They clearly think the dollar will drop against gold, or they would be selling gold to buy dollars.

And Obama comes thru right on cue, with the solution to dilute the wealth of the US only, while giving China time to get out safely...yup...you guessed it...

Obama just TOLD us he plans to take a cut of EVERYTHING, to the tune of 5-25 percent.

I think when most peiple heard Obama said he'd re-distribute the wealth, they thought he'd tax the rich, and give a few extra bucks to the poor.

But what he really meant was that he was going to take all the US banks and give them to cronies, take all the car companies and give them to the unions, and take the entire US Treasury and give it to China, and take three quarters of every dollar you earn, instead of the half we give up to taxes now.

Obama is redistributing the wealth of EARTH, like a chainsaw through balsa wood, and most folks still think it's just coincidence.

No.



What is happening, is that the Federal Reserve has bought some amount of existing bonds off the open market, in an attempt to ensure that there is still demand for new ones...



 

Ok, so the Fed is not buying bonds from itself, it is issuing bonds and them buying them back.

Whew! That's a huge difference. I feel better now.

I've been saying that for a while now.

And John will probably be wrong.  

UNLESS, we continue to elected D's in 010 and 012.  Then he very well might be right.  Our current economic problems are political related, not system related.

But we will see.

In the not to distant future we will have a national language, Chinese. China will own the US of A.
If we stopped buying items made in china we'd stop most non essential buying thus halting our economy.
Welcome to the new world.

From my memory, we'd about mid-way through 1977.

That is so friggin true...

TAG

Regarding EOs, there is a tradition of not rescinding previous EOs.  Bush mostly followed this tradition.  Obama may break the tradition, but isn't (much) so far.

Why do they have this tradition?  Because it gives the President more power.  And I expect most future presidents, Dem or GOP to follow it.

If theories were supported by "cold hard facts" they would not be theories.  Also, economics is a 'soft science' unlike say....physics.
5sub

Is this actually viable?  I mean, is that the rational view on things right now or the survivalist fantasy view?

I don't know about the job market and economy in general, but here's a great slideshow on the housing market:  http://moremortgagemeltdown.com/download/pdf/T2_Partners_presentation_on_the_mortgage_crisis.pdf

For a Cliff's Notes of the slide show, Mish Shedlock did a commentary on this Sunday, May 31. It's still on the front page with the heading - Mortgage Meltdown More Pain to Come.

Our leadership will find a way to "paper over" the financial nightmare and people will soon forget about the falseness of our monetary system. Confidence will return, our phony economy will begin to expand again. Hard to rationalize but I believe this to be a fact.

Truck tonnage dropped 13% in April (apologies if already posted)

Truck tonnage drops 13% in April....

Updated:  5/27/2009 12:00:00 PM  
April Truck Tonnage Plunges 13.2%

Drop Is Biggest in 13 Years; Reading Is Lowest Since 2001

Truck tonnage decreased 13.2% in April compared with a year ago, falling to the lowest level in seven-and-a-half years, American Trucking Associations said.

The decline in the for-hire seasonally adjusted truck tonnage index was the biggest in 13 years and left tonnage at a reading of 99.2, its lowest level since November 2001.

The index fell 2.2% from March, the second consecutive month-to-month decrease, ATA said late Tuesday.

Without accounting for seasonal adjustment, the index fell 2.9% from March, while March’s tonnage level had dropped 12.2% from a year earlier.

ATA Chief Economist Bob Costello said trucking is being hit by both the recession and businesses’ efforts to decrease inventory.

“While most key economic indictors are decreasing at a slower rate, the year-over-year contractions in truck tonnage accelerated because businesses are right-sizing their inventories, which means fewer truck shipments,” Costello said.

“Until this correction is complete, freight will be tough for motor carriers,” he said in a statement.

ATA calculates the tonnage each month based on reports by its member trucking companies.

By Transport Topics

See http://www.ttnews.com/articles/basetemplate.aspx?storyid=21997

ETA you should also see the Baltic Dry-Index

ETA Rail Traffic Hits Year's Low


Rail Traffic Hits Year's Low
John D. Boyd | May 21, 2009 7:52PM GMT
The Journal of Commerce Online - News Story


Worst week this year softened by mild lift for intermodal

Despite some lift from intermodal volume, major U.S. railroads by two important measures had their worst week so far this year.

Rail carloads, which include everything from bulk materials to finished motor vehicles and the in-between factory goods that can ride in large railcars, reached just 247,258 units in the week ending May 16, said the Association of American Railroads.

That is lower than any time since the end of December, when much of the industrial economy was shutting down to wait out the financial storm and ensuing collapse in demand.

Train hauls of intermodal trailers and containers reached 188,435 units, up by nearly 7,000 from a week earlier and the highest since the Feb. 14 week.

Still, total estimated ton-miles of combined carload and intermodal freight carried by large U.S. railroads, sank to the year’s low at 26.2 billion. That was down 24.3 percent from the same point in 2008.

A number of economists, and some rail executives, have suggested that the freight market’s decline is bottoming out. The traffic figures suggest the market could move along the bottom for a while.

One notable area of weakness this year is coal volume, which hits large carriers especially hard because that is the largest cargo railroads haul.

Last year they enjoyed a brisk business in export coal demand, especially the eastern carriers hauling coal to ports to fill Europe-bound ships, but that business has fallen sharply. Meanwhile, domestic coal demand is also lighter with fewer factories powered up to make goods.

But the carload numbers have weakened recently in some other areas as well. Chemical shipments – the second-largest cargo in railcar volume –– have cooled some this month, a possible indicator of a pause in the rebound of factory activity and perhaps in line with a new round of automobile factory cuts.

Other categories linked to auto or housing industries remain weak or have weakened a bit more during May, although a few cargoes of basic construction materials show some firming.

Intermodal numbers are probably continuing to benefit from a strengthened domestic business this year, industry officials say, while ocean container traffic remains very weak as shippers face the start of the summer peak season in which they normally import boxed goods for the autumn selling season.

Contact John D. Boyd at [email protected].

See   http://www.joc.com/node/411476

That is stupid.

It either works or not.

Agree 100%.  But this is just the first phase... the "sell off" or "forced liquidation" as unsustainable debts are (attempted to be) discharged.  Of course, production also stops.. and jobs go and, eventually, those things in need will become rare.  Perhaps that will occur around the time the (fiat) money supply has been expanded exponentially.   Deflation/inflation whipsaw.

In 1990 I worked for $5 an hour and thought I was poor.

For 400 hours of labor I could buy an acre of land. For 4,000 hours of labor I could buy a home.


Today I make $20 an hour. It would take 12,500 hours of labor to buy a home. Plus another 12,500 hours of labor to pay the interest on the mortgage.

We are poorer today as a nation than in 1990 by far. We're all enslaved to nothing because of the credit bubble and I want to kill who ever is responsible for coming up with the credit bubble that enslaved me and my nation.

It's my duty and I'm mad as hell about it.

All i can say is, wow

What's coming is going to be the worst economic and political crash in our nation's history if only because the debt load (public and private) is worse and it's global, not just national. There's no bigger benevolent nation out there who can bail us out.... there ARE nations who are buying us up piece-meal, but once they've taken all the goodies, they'll dump us like a used......

so cut expenses, build up cash reserves, buy food, buy 'food acquisition tools', tools that help heat/cool the home, etc. as crazy as it is, buy some solar panels - if we go Zimbabwe poor, you won't be getting grid power at all and that generator is noisy (and runs on gasoline)....