How to Fix Our Economy
56We've seen bad times now we are going to see even worse. there are those who say I have a doomm and gloom mentality to that I say I'm just a realist.
Where are we economically?
Go try to borrow money for a house or a car. Or, try to change jobs. You will understand real soon that the world we live in is not the same one as last year at this time. Look at these numbers by Howard Davidowitz, chairman of Davidowitz & Associates:
- 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.
What do these numbers mean? The age of consumerism is over. The favorite shopping place is going to be Walmart out of necessity. Designer labels are going to be for the very rich unless the goods are made in China.
Trade wars are about to explode as are gasoline prices. OPEC is determined to break the West financially. Even now they are cutting production to drive up prices in an effort to return to 70 + dollars a barrel. That means $4.00 a gallon. The cost of goods is going to continue to escalate.
Now throw in the inflation that is going to hit within six months because the Chinese are not buying US bonds. The value of the dollar is going to decline to around thirty cents.
Yes, I did write about economic survival during a depression. And, no I don't forsee being wrong. The stimulus package being signed today is borrowed money based on worthless paper.
What does it mean to you? Inflation is going to soar. A gallon of milk will be costing $10.00 a gallon. A loaf of bead will go to five. Auto insurance will double. It is hard to imagine but people will be dumping cable service and trashing their cellphones.
We are in a new world. One full of difficulties. If the Federal government really wanted to do something they would drill for oil and pass laws limiting the price of gas and other fuels. We don't need trade protection, what we need is the means to produce products more cheaply than China or Mexico. When it is cheaper to produce goods here the companies will move their manufacturing back to the USA. Lower the corporate taxes on manufacturing, set prices on gas less than $1.00 a gallon and all my doom and gloom will be erased.
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Comments
Thanks Donna for the comment. We will never lower our labor costs to that of the Chinese or Mexicans but we can reduce the cost of manufactured goods to the point companies will come back to the USA.
Two keys to recovery
lower corporate taxes
lower fuel costs
The news is more than bleak. Even Cafferty of CNN says we are on the wrong track. The politicians are selling us down the river to get votes. Instead of saving America they are Saving the Grand Old Parties. Trillions of dollars down the drain and no way to pay for what they are spending.
Now I completely agree with you on this article and I do agree we are on the wrong track, so all of us should be prepared.
I really like Davidowitz too and I think that with Bill Gross saying today that the credit rating of the United States is in jeopardy has even the most comfortable bull shaking in his hoofs.
people losing jobs left and right and they run to unemployemnet officce to get paid and stay home 1 year and maybe in that time they gone found a job. but people getting used to get money with out working. we need to open new jobs. fix the roads,bridges,hospiatals,schools,buildings.with all whis money we give to the banks and car manufucturs we spouse to invest opening all this jobs for people losing jobs and they get paid not sitting at home ,they get paid by working.by working they knoe they got job and they gone spend money buying houses,that is very low prices.
DonnaCSmith says:
10 months ago
Produce goods cheaper than China and Mexico? Do you know anyone who wants to work for the same wages as they do in those countries?
What worries me more than having to shop at Walmart is that over the past twenty years we have been losing 6000 acres of open land a day to development. http://hubpages.com/hub/Development-and-Economic-H
The optimist in me hopes we'll come out of this with some balance.