The Federal Reserve on Wednesday 18/2009 sharply downgraded its projections for the country's economic performance this year, predicting the economy will actually shrink and unemployment will rise higher.

Under the new projections, the unemployment rate will rise to between 8.5 and 8.8 percent this year.

Unemployment will keep climbing and remain "substantially" higher than normal at the end of 2011.

It is scary but it is true that American housing mortgage trouble, financial market crisis & huge unemployment is hurting the overall consumers. People cannot pay their mortgage, credit payments, and student loans & there is record numbers of personal bankruptcies, Banks & big corporation going bankrupt.

If you owe the bank $100 that’s your problem. If you owe the bank $100 million, that’s the bank’s problem. — J.P. Getty

According to Howard Davidowitz chairman of Davidowitz & Associates "the worst is yet to come," Howard Davidowitz, believes American's standard of living will change permanently because of the following factors:

• An $8 trillion negative wealth effect from declining home values.
• A $10 trillion negative wealth effect from weakened capital markets.
• A $14 trillion consumer debt load amid "exploding unemployment", leading to "exploding bankruptcies."
As a result, American economy is in a major recession or worst may be an actual depression. People will be buying less electronics, less jewelry, less toys no designer clothes and less of every thing else, people will be mostly making ends meet for just survival.

Be glad that you’re greedy; the national economy would collapse if you weren’t. — Mignon McLaughlin

People are so scared that they started to save pennies plus they are buying less & cheaper groceries, are buying bigger value packs & are not buying brand names. Sales in America are down for not only luxury items but for Wal marts is the largest retail stores in America & their prices are the lowest therefore their sales are up. Other retail stores are filling for bankruptcies.
In the past average American’s were able to borrow to buy houses, cars & send children’s to good schools. But that is no longer the case American people have to send their children to public schools, buy a cheaper car or used car or not buy a car just use public transportation, live in an apartment not a house.
Howard Davidowitz believes this is the only way that will save us therefore, we should start saving.The government is borrowing more & wants the consumers to borrow more too but consumers now understand & instead of borrowing more they are cutting down on their expenses & started saving, which is good for the near future.

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The only thing money gives you is the freedom of not worrying about money. Johnny Carson

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