Here are two perspectives on the economy from two astute people, one is world trend forecaster Gerald Celente and the other is Doug Casey. Both say that we already are in a depression.

The government lies about unemployment today so many people do not see the real picture. The government says the rate of unemployment is 7.6 percent as of January and they say that this figure does not compare to the Great Depression of the 1930’s when unemployment was 20 to 30 percent. However, in reality the unemployment today is really over 15 percent if government counted all the unemployed as they did in the 1930’s. Our government today does not count those who gave up looking for work or those who are working part time because they could not find full time work. In any case, we are just starting into this depression so unemployment will go much higher. Why do they compare the employment rate at the start of this depression with the height of the depression of the 1930’s? It is nothing more than deception.

The economy is not going to be fixed by government. Government intervention will only prolong the pain and deepen the depression or bring about a worse hyper-inflationary depression. There will be no end soon to the losses incurred by the banks and the taxpayer bailouts. The banks are being forced by government to lose money on their mortgage loans so how can they then become profitable?

With unemployment rising you will see no end to new people walking away from their mortgages or just staying in their houses and not making mortgage payments because they know when they default they will be eligible for government mortgage assistance programs.

Did you know that 60 percent of mortgages that were restructured in 2008 so that people could afford the payment and stay in their homes are already in default again?

Next, the banks and loan companies are going to get clobbered on commercial real estate. When that shoe drops the crises will be as bad as the housing crises or maybe worse. Another shoe to drop will be the credit card companies, many people will not be able to pay their credit card debts. This will add many more billions to the bad debts that taxpayers will have to pick up. Government also has only just begun the bail out of insurance companies and large corporations, as the corporations lose more money these bailouts will continue.

Another crises is coming is in pension funds, another bail out will be needed for state and local governments. As we go through this depression many more hundreds of billions will have to be allotted for more unemployment benefits. There will soon be a crises in the bond market when interest rates start to rise. Not to even mention the huge shortfalls all this unemployment will bring on the government revenue side. Tax revenues will fall, social security and medicare surpluses will dry up years before the current projections. So those who think the last simultaneous package will be the end of government bailouts need to read these articles and become acquainted with reality.

Even after we get through the home and commercial real estate crises, bank failures, bank bailouts, pension fund shortfalls, corporation bailouts, insurance bailouts etc, we will still have the 5 to 10 trillion dollar additional national deficit price tag. The only way we can realistically pay even the interest on that amount of new debt is to create money out of thin air causing hyperinflation and a worse crises to follow in the future.

I do not necessary agree with every point that both of these gentlemen made but their views on the economy are sound and they are telling you what you are not being told by government.

So why do I call it a liberal depression? Because it was brought about by the liberal big government socialist polices that we have had for many decades. Both Republicans and Democrats are to blame for the monster government they created and both Republicans and Democrats are to blame for the greed that their polices fostered in the markets and in real estate. Both are to blame for trade treaties and legislation that insured that our nation would be left with mostly service jobs. They also are both to blame for working for special interest groups rather than working for the people. Both are to blame for our government spending beyond its means.

However, having said that, when the majority of one party is always on the wrong side of every economic and socialism issue and the majority of the other party is on the right side of every economic and socialism issue it becomes obvious which party is mostly responsible for bringing us this liberal depression. Now this party is almost in total control and along with the help of a few liberals who call themselves Republicans they insure that this economic folly will not be stopped. What they are doing will lead to the disaster that trend forecasters like Gerald Celente say is coming to the United States.

Even if they are wrong and we somehow get through this near term crises we are still doomed because of our future $65 trillion debt obligation that is now growing by around $5 trillion each year.

RT: Interview with Gerald Celente on 2009-02-11 04:40

Gerald Celente

In 2009 we’re going to see the worst economic collapse ever, the ‘Greatest Depression’, says Gerald Celente, U.S. trend forecaster. He believes it’s going to be very violent in the U.S., including there being a tax revolt.

RT: The fragile U.S. economy has been met with bank bailouts and stimulus plans. So what’s to come in 2009? Joining me now to answer that question is Gerald Celente, founder and director of the Trends Research Institute. Thank you for joining me.

Gerald Celente: My pleasure.

RT: How would you define the economic trend that you have forecasted for 2009?

G.C.: We’re going to see the economic collapse the likes of which the world has never seen before. It’s not only in the United States; it’s going global. At the end of 2008 we saw Christmas retail sales: women’s apparel down 23%; home furnishings and electronics off 27%; luxury items down 35%. These are Depression Era collapses. We saw major bankruptcies, such as retailers Circuit City and Linens and Things. One bankruptcy after another. Then we saw store closings. Starbucks, Home D&D Power and down the line.

The question becomes who is going to take all of the vacant retail space? Who is going to rent it? The answer is – nobody. Now we look at the financial collapse in 2008, we saw the Merrill Lynch mob go under the bed and the Lehman boys went bankrupt. You saw bond companies, brokerage firms, and banks go belly up. Who is going to rent all the vacant commercial business space that they used to occupy? The answer is – nobody. The commercial real estate collapse that’s going to happen in 2009 is going to dwarf the residential real estate collapse.

RT: You use the Great Depression as an analogy, as a comparison. During the Great Depression unemployment was 25%. Now it has increased, it’s I think over 7.2. Is that number going to get much, much bigger?

G.C.: We have to look at the real number. There are two sets of books that the government keeps. When they measure up unemployment they don’t add in the people who are no longer looking for jobs because they have become discouraged since they cannot find employment after looking so long. And they don’t include part-time workers. When you put that number into it, the number is 13.7%. And that’s a government number. And this is just beginning. And again, current events form future trends.

G.C.: I’m not exaggerating, the facts are there. I have a saying: when people lose everything and they have nothing to lose, they lose it. You’re going to see people saying, off with their heads. There’s going to be another revolution in this country.

RT: When will this revolution that you have forecasted in your Trends journal happen and what will ignite it?

G.C.: It’s going to be a tax revolt. We’re going to start seeing a tax revolt in the United States. People are one job away from losing everything. We’re seeing more and more closures, people are being laid off. People are stretched to the limits. And what do they do in New York State? Some130 new taxes are being proposed, they’re raising sales taxes. There’s going to be a tax revolt in this country from property taxes first and school taxes second. That’s what we’re going to see start to happen.

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“Doug Casey on 2009” by Doug Casey. FSO Editorial 02/11/2009

Doug Casey on 2009:
Another Year of Shock and Awe
Casey Research | February 11, 2009

In their annual forecast edition, the editors of BIG GOLD asked Casey Research Chairman and contrarian investor Doug Casey to provide his predictions and thoughts on issues everyone’s thinking about these days. Read what he has to say on the economy, deficits, inflation, and gold…

My reaction is that the people in the government are totally out of control. A poker player would say the government is “on tilt,” placing wild, desperate bets in the hope of getting rescued by good luck.

The things they’re doing are not only unproductive, they’re the exact opposite of what should be done. The country got into this mess by living beyond its means for more than a generation. That’s the message from the debt that’s burdening so many individuals; debt is proof that you’re living above your means. The solution is for people to significantly reduce their standard of living for a while and start building capital. That’s what saving is about, producing more than you consume. The government creating funny money – money out of nothing – doesn’t fix anything. All it does is prolong the problem and make it worse by destroying the currency.

Over several generations, huge distortions and misallocations of capital have been cranked into the economy, inviting levels of consumption that are unsustainable. In fact, Americans refer to themselves as consumers. That’s degrading and ridiculous. You should be first and foremost a producer, and a consumer only as a consequence.

In any event, the government is going to destroy the currency, which will be a mega-disaster. And they’re making the depression worse by holding interest rates at artificially low levels, which discourages savings – the exact opposite of what’s needed. They’re trying to prop up a bankrupt system. And, at this point, it’s not just economically bankrupt, but morally and intellectually bankrupt. What they should be doing is recognize that they’re bankrupt and then start rebuilding. But they’re not, so it’s going to be a disaster.

My patented answer, when asked what it will be like, is that this is going to be so bad, it will be worse than even I think it’s going to be. I think all the surprises are going to be on the downside; don’t expect friendly aliens to land on the roof of the White House and present the government with a magic solution. We’re still very early in this thing. It’s not going to just blow away like other post-war recessions. One reason that it’s going to get worse is that the biggest shoe has yet to drop… interest rates are now at all-time lows, and the bond market is much, much bigger than the stock market. What’s inevitable is much higher interest rates. And when they go up, that will be the final nail in the coffins of the stock and real estate markets, and it will wipe out a huge amount of capital in the bond market. And higher interest rates will bring on more bankruptcies.

The bankruptcies will be painful, but a good thing, incidentally. We can’t hope to see the bottom until interest rates go high enough to encourage people to save. The way you become wealthy is by producing more than you consume, not consuming more than you produce.

It’s very hard to predict the timing on these things. The financial markets and the economy itself are going up and down like an elevator with a lunatic at the controls. My feeling is that the fate of the dollar is sealed. People forget that there are 6 or 8 trillion dollars – who knows how many – outside of the United States, and they’re hot potatoes. Foreigners are going to recognize that the dollar is an unbacked smiley-face token of a bankrupt government. My advice is to get out of dollars. In fact, take advantage of the ultra-low interest rates; borrow as many dollars as you can long-term and at a fixed rate and put the money into something tangible, because the dollar is going to reach its intrinsic value

This isn’t a recession, it’s a depression. A depression is a period when most people’s standard of living falls significantly. It can also be defined as a time when distortions and misallocations of capital are liquidated, as well as a time when the business cycle climaxes. We don’t have time here, unfortunately, to explore all that in detail. But this is the real thing. And it’s going to drag on much longer than most people think. It will be called the Greater Depression, and it’s likely the most serious thing to happen to the country since its founding. And not just from an economic point of view, but political, sociological, and military.

For a number of reasons, wars usually occur in tough economic times. Governments always like to find foreigners to blame for their problems, and that includes other countries blaming the U.S. In the end, I wouldn’t be surprised to see violence, tax revolt, or even parts of the country trying to secede. I don’t think I can adequately emphasize how serious this thing is likely to get. Nothing is certain, but it seems to me the odds are very, very high for an absolutely world-class disaster.

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