Monday, June 6, 2011

Decline and fall of the American empire

QUOTE: "America clocked up a record last week. The latest drop in house prices meant that the cost of real estate has fallen by 33% since the peak – even bigger than the 31% slide seen when John Steinbeck was writing The Grapes of Wrath.  Unemployment has not returned to Great Depression levels but at 9.1% of the workforce it is still at levels that will have nerves jangling in the White House. The last president to be re-elected with unemployment above 7.2% was Franklin Delano Roosevelt. The US is a country with serious problems. Getting on for one in six depend on government food stamps to ensure they have enough to eat. The budget, which was in surplus little more than a decade ago, now has a deficit of Greek-style proportions. There is policy paralysis in Washington."

It's unfortunate that the various government agencies releasing economic statistics are fudging the numbers and massaging the data (compare how unemployment is calculated now vs. 30+ years ago as one example) as it's difficult to see how bad things really are.  Which is probably the point.  My concern (and one many of my listeners have shared with me) is that this means if/when things really do collapse it is going to be a systemic shock.  People have been hearing from the media "It's not that bad, things are getting better" but if the economy continues off a cliff people are not going to be ready for that eventuality because they've been told not to worry.  As always, all you can do is try to educate those you love, prep for the worst, and hope that things don't get as bad as many fear they might.

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