So it happened.
In my predictions in Financial Crisis – It’s Not Over Until It’s Over I was wrong by pinpointing 8/1/2010 as the crest of our economic troubles. The economic tsunami came exactly 1 year later.
I think it is because I have mistaken Mars for a trigger of the events. As I’ve said in my article The Moon, the trigger was the lunar eclipse that came on the darkest day of last year – the winter solstice. It fell on those sensitive degrees, marked by planetary war on American Venus that I have described in Financial Crisis article.
This lunar eclipse made things darker and bigger. Not only our economy has trembled, but the political debacle over debt-ceiling marked the crisis of our government as well.
Our country is in the free fall, just like financial markets, because our government was found to be absolutely inept.
Here I’d like to cite from an article I found on the internet today:
“Economics professor Bradford Delong, from the University of California-Berkeley, says the damage done through the six months of wrangling over the debt ceiling, which analysts note has been lifted 78 times since 1960 and 49 times under Republican presidents, was a distraction the US could ill afford.
Writing in the Australian Financial Review, Professor Delong decries the neglect of all the “useful policies that might have been debated and enacted, but were not”, citing climate change initiatives, policies to boost employment, education and healthcare financing, plus improvements to America’s “decaying infrastructure”. These policies, he believes, would help improve the economy in the long run and bring down unemployment that, according to the US Bureau of Statistics, is at a high of 9.2 per cent. Looming large also was the loss of standing as “conductor of the international economic orchestra”, Professor Delong wrote, warning that if the US can no longer be relied upon as the arbiter of global governance, then the world needs to develop “other institutions for global management” – and fast.”
Well, Chinese are already issuing warnings of dollar devaluation, acting as the financial cop of the world – the title previously reserved for the U.S. government.
We are sliding from our perch of super-power to the “also has been” super fast, and there are not enough grown-ups on the Capitol Hill to save us. I think I was overly optimistic in all my predictions. I think I should revise them as follows:
a) the U.S. is going to be marred in prolonged depression, with real unemployment (counting those who are no longer eligible for benefits) at about 30%. The wage and property deflation are going to make 90% of the population to be so poor as living hand-to-mouth. Meanwhile, groceries, gas and transit costs are going to grow at 10% – 20% inflation rates.
The economy is going to contract until 2014, when it may begin to show some growth again.
The majority of the population will remain poor for many years to come though, as policies and competition over jobs would wipe out unions and, with them, the remnants of the middle class. In other words, we are no longer going to be the consumer society, with 70% of economy depending on consumption.
b) The crime and civil unrest would become much more evident for many years to come.
c) Politics would continue to make our government more and more disfunctional
d) The good news is we are likely to stop making wars abroad
e) Europe is not likely to be spared either. Once Germany is going to find itself unable to carry the rest of the European states, European Union is likely to disintegrate back into miriad of states, and so will the euro.
f) Chinese economy will faulter as well, as dollar and euro falls, but it will survive and will take the super-power title
g)Russia, Canada, Australia, Brazil and India will fair much better, getting stronger over the next decade, while the U.S. and Europe are going to struggle to survive.
h) Africa, Afghanistan and Middle East are going to continue to be the worst places to live in, maintaining the global terror threat.
In other words, it sucks, and whatever Obama or the next administration is going to do is going to be too little too late.
Posts Tagged ‘dollar’
AMERICAN ECONOMY S.O.S.
Posted by Ella Moss on August 9, 2011
Posted in American economy, astrology, economy, FINANCES, global economy, labor market, politics, predictions, Uncategorized | Tagged: Africa, astrological predictions, astrology, Capitol Hill, China, civil unrest, crime, dollar, economy, euro, Europe, financial crisis, global economy, government, great depression, India, mars, money, Moon, Obama, Pluto in Capricorn, politics, predictions, recession, terror, unemployment, war, worry | Leave a Comment »
SHRINKING DOLLARS
Posted by Ella Moss on June 25, 2010
A few days ago a friend of mine confided that she did not have a raise in 10 years, and now her company is cutting her hours.
My friend is a physical therapist.
I am an owner of a tiny business in a completely different field. My income is neither wages nor salary. It is the net profit from my business. Yet I have the same predicament. My income remained flat for 12 years.
When I was single, living in a posh building in a posh part of town and paying $900 in monthly rent, which included utilities, that was a pretty good income, and I was certainly a middle class girl.
Moreover, my income increased steadily through the nineties, and I was certain of a decent future for myself.
I was so certain, in fact, that I did not bother to save for a rainy day.
I did whole a lot of traveling, skiing, and other fun things.
Then I got married, had a kid, moved to a cheaper part of town where I got an apartment twice as big for monthly rent just a bit higher than my previous digs.
My income remained the same because my subcontractors kept raising their rates but my clients began to cheapen out. Excuses were understandable: we did have a recession in 2000, then in 2001 (“9/11″), then in 2003, etc.
I probably could get out of my shell and get more clients to increase my income, but my kid and failing marriage kept me busy.
Then in the fall of 2007 I finally became a single mom, and 2 months later the FINANCIAL CRISIS hit me (my business is closely related to the insurance industry so I’ve experienced the crisis long before the rest of America did).
In 2008, my income went down significantly. So now I had no choice and got out of my shell, and got myself many more clients. I have also reduced rates of my subcontractors.
Yet my income did not jump. It simply went back to the pre-crisis level, because I had to cut my rates also. Everyone is in the bind.
I am not even talking about payment time-table that is now 4 times as long. Before the crisis, if a company took 2 months or longer to pay, I was on their case already. Now I don’t even bother with inquiries till 4 months past due.
It is my flat income that gets me, because my life is twice as expensive now. My rent now is $1510/mo, plus utilities that are twice what they used to be in 2000. My ground phone line that I use for fax only is also twice of what it used to be in 2000. So is my transportation expense, internet, my cell phones, etc.
My monthly grocery bill has grown now more than twice, even though my son and I eat much less than my ex (it used to be that half of my monthly grocery budget went to his propitiation).
In other words, it takes now twice the amount of dollars to cover living expenses, and they say there is no inflation.
There is no inflation, because our incomes have deflated.
It used to be that incomes would grow almost at the same rate as inflation of overall prices. It was called inflation, and was supposed to be a bad thing for economy.
Now I miss inflation. Because the value of my dollar has shrank 50% or more, but I don’t have more paper in my wallet to make up the lost value. My paper income remains flat, but the real income has shrank.
I am no longer a middle class girl, I am a working poor one, and my future looks pretty bleak. I have no extra dollar to save, I have no pension coming, and as an entrepreneur I have no other safety nets like unemployment benefits, which my ex is enjoying now.
Instead, I am working 3 times as much as I used to, and spend so much more just to get the same shrinking dollar.
I would not be writing about it, if it was just my predicament. I am writing about it, because 90% of Americans are in this shrinking boat.
Even the super-rich (like Warren Buffet or Bill Gates) have lost some dollar value thanks to real estate and stock market deflation. I am sure though that they are offsetting their rising living expense by paying less those who work for them or do business with them.
The simply rich (like Donald Trump) may actually feel much poorer because they lost just as much on stock market, real estate, Bernie Madoff and their leverage in reducing cost of business / living is not as great.
The upper middle class is now, for most part, is what middle class used to be, for the same reason.
Middle class… What middle class? Unless you are a civil servant, you would no longer fit that category. I bet your 401K keeps you awake at night.
There are so many things that went wrong for the dollar that there are not enough fingers on a hand to point them all out: derivatives, run-away credit, the cost of oil, global labor market…
Honestly, it is the global labor market that is the main culprit in stagnation of American income. But that is 10,000lbs gorilla in the room that no one is talking about. Trust me, immigration is the least of our problem. It is competition with the guys safely in their native third world countries that is doing us in. No one is talking about it on CNN, because business is happy with reduced labor costs. Except that most businesspeople don’t realize yet that spending their dollars in China or Africa shrinks consumption in America, which, inevitably, leads to their profit remaining flat too despite the reduced labor costs.
Simple economy101: wealth is produced where goods are produced.
The great minds who decided to open the labor market in 1990s must have thought as follows:
As other countries get richer, there are going to be more markets for American goods, so America would get richer too.
They did not take in consideration, however, that American production would not be able to compete with cheaper labor costs elsewhere and would shut down, impoverishing our country for the sake of China, Uganda and so on.
The only reason we did not feel the pinch right away was the inflated real estate market that was still producing local wealth. With wind taken out of real estate, we are finally facing reality.
And, since Obama Administration was not able to push through another emergency unemployment benefits bill, we soon are going to see the third world reality right here at home.
These changes cannot really be amended anymore. With the advent of the internet, Jinny of American wealth has completely left the bottle and cannot be re-captured. We are looking at the dawn of new world, where Russia (the richest country in natural resources), China (the richest country in labor resources) and India (the richest country in intellectual resources) are going to compete for new super-power title (my money is on China, since it is much more organized); the U.S., Europe, Canada, Australia and Brazil are going to be the second world, and the rest remain in the 3rd place. The jury is out on Arab countries rich with oil. If the green economy takes hold, they are going to be pushed back into the third world. They may also simply kill themselves with suicide bombers, expanded Taliban, etc.
SO, PLEASE, AMERICA, BUY AMERICAN PRODUCTS AND USE LOCAL SERVICES!
But, then, again, who can afford American products now when American dollar has shrunk so much…
Well, I am griping now, yet I know there is going to be more to gripe about a month from now… Read my previous article on that.
Posted in American economy, economy, FINANCES, global economy, labor market, personal finance, predictions, Uncategorized | Tagged: 401K, American economy, Bill Gates, Brazil, budget, business, China, deflation, dollar, Donald Trump, economy, economy solutions, Europe, expense, financial crisis, global economy, immigration, income, India, inflation, labor market, living expense, money, Obama, Obama Administration, predictions, Russia, savings, suicide bombers, supeer-power, unemployment, unemployment benefits, value, Warren Buffet, wealth, worry | 5 Comments »
