If You're Not Petrified-You Should Be!

If You’re not Petrified-You’re not listening! Watch the…


Yahoo Tech Ticker Interview at:
http://finance.yahoo.com/tech-ticker/article/248398/%22The-Worst-Is-Yet-to-Come%22-If-You%27re-Not-Petrified-You%27re-Not-Paying-Attention?tickers=%5EDJI,%5EGSPC,DDR,XLF,GM,RWR

"The Worst Is Yet to Come"
The green shoots story took a bit of hit this week between data on April retail sales, weekly jobless claims and foreclosures. But the whole concept of the economy finding its footing was "preposterous" to begin with, says Howard Davidowitz, chairman of Davidowitz & Associates.

"We're in a complete mess and the consumer is smart enough to know it," says Davidowitz, whose firm does consulting for the retail industry. "If the consumer isn't petrified, he or she is a damn fool."

Davidowitz, who is nothing if not opinionated (and colorful), paints a very grim picture: "The worst is yet to come with consumers and banks," he says. "This country is going into a 10-year decline. Living standards will never be the same."
This outlook is based on the following main points:
· With the unemployment rate rising into double digits - and that's not counting the millions of "underemployed" Americans - consumers are hitting the breaks, which is having a huge impact, given consumer spending accounts for about 70% of economic activity.
· Rising unemployment and the $8 trillion negative wealth effect of housing mean more Americans will default on not just mortgages but student loans and auto loans and credit card debt.
· More consumer loan defaults will hit banks, which are also threatened by what Davidowitz calls a "depression" in commercial real estate, noting the recent bankruptcy of General Growth Properties and distressed sales by Developers Diversified and other REITs.
The Coming Economic Collapse

If you're looking for more "no spin' analysis of what's ahead, Graham Summers has written a well-reasoned analysis in which he says "Today's essay details the ongoing collapse of the US economy with a focus on why this coming fall will prove the "worst is over" crowd wrong yet again.

"This is no recession. We are already on our way to a Depression (a GDP contraction of 10%) possibly even another Great Depression.

"One in nine Americans are currently receiving food stamps.

"Real unemployment (without birth/death seasonal nonsense and all the other Federal gimmicks) stands at 20%.

"We owe $65 trillion in liabilities.

"The US government could tax every company and every American 100% of their annual incomes AND NOT PAY THIS OFF."

The full essay is here.
http://www.gold-eagle.com/



Politics is not about what works, it's about what you can get away with.

Warren Buffett described the America of the bubble years as "Squanderville…but
America's middle class has rediscovered thrift.

There are a number of sit-down restaurant chains that cater to the middle class - Applebee's...Chili's...Ruby Tuesday and a few others. They expanded greatly during the '90s and '00s in order to meet the desires of the big spending masses. But now that the masses aren't so free and easy with their money, The New York Times reports that they are in desperate competition for remaining diners. This competition is manifesting itself as price deflation.

Applebee's offers dinner for two for only $20. Chili's advertises entrees for just $7. Ruby Tuesday's is going for a 2-for-1 deal. Buy one meal, get one free. All of them are making heavy use of discount coupons.

Governments are essentially parasites on productive activity. "That government is best which governs least", is how Jefferson put it.

But now we are in the final, fatal stage of our once great country - the political stage. In this stage, the Washington parasites take over. Government governs a lot. And governing a lot costs a lot of money.

So, governments need to find other sources of financial support. Typically, they borrow money…from China, from taxpayers…wherever they can get it from. Eventually, someone is left holding the bag.

Gathered from our subscribers and news reports. View our newest updates:
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