The Depression Is Nearly Over

NOT!!!

The News

I heard some really great news about the U.S. economy on the news this morning.  Picture this: the perfectly groomed news-reader smiles gleefully at you from behind her desk and states “And there’s some good news on the economy, the unemployment rate is worsening at a MUCH SLOWER RATE than last month………….”.  She then goes on to tell us what great news this is and that the “economists tell us that the recession will be over by the middle of summer.”

What’s Wrong With This Picture?

The newsreader gleefully emphasized the “much slower rate” and underplayed (not a whisper, but definitely quieter and very monotone) that the unemployment rate is “WORSENING”.  In other words, there were still MORE people out of work in May than there were in April, but the RATE at which people are losing their jobs has slowed a little.

What really made me fume isn’t so much the fact that more people are losing their jobs, but that the newsreader was (probably) told to make it sound like this was GOOD, in effect pulling the wool over the eyes of the, shall we say, less than astute.

How Bad Is It REALLY?

Whether the Dow Jones is going up a bit (it’s still way down from the 14,000 it was at a few months ago) or not, this has NO BEARING on the state of the economy.  Never has and never will.  The Dow (and NASDAQ etc.) is really nothing more than a Casino for stock-traders (that’s really not much of an over-simplification).

So, you must IGNORE any figures related to the stock market because its relationship to the economy is tenuous at best.  What figures should you be looking at?  Unemployment is definitely one of them.

Unemployment

In May 2009, 345,000 jobs disappeared.  The companies employing these people either went out of business, downsized (I HATE that word) or outsourced (I hate that word too!).  Remember, this was meant to be GOOD news!

How many people in the U.S. are now out of work?  Well, the official figures will be different from the actual number because a lot of people NEVER claim unemployment benefits so don’t register and are therefore not counted.  The official figures are that 9.4% of the the U.S. workforce are claiming unemployment benefits.

What Does This Number Mean?

Percentages confuse MOST people, even CLEVER people.  Percentages have been used for many years to obfuscate the reality of things.  For example, the newsreader COULD have said “good new, the unemployment rate slowed by 67% between April and May.”.  While this would have been (approximately) true, it would have been even MORE misleading than it already was.

So, the unemployment rate is 9.4%.  This figure does NOT include part-time workers.  There are over 9 MILLON part-time workers who WANT to work full time, but can’t find full-time employment.  So, to the 9.4%, you should add part-timers and also those who aren’t registered (claiming benefits) as unemployed.

Who Else?

“You mean there are MORE?” Yes, I’m afraid so.  Unfortunately, we have a very, VERY large prison population.  In fact, in 2007, there were 7.3 MILLION people either in prison, jail (local Sheriff’s dept.) on parole, or on probation.  Let’s be generous and say that only 5 million were ACTUALLY in prison.  The U.S. has 5 percent of the WORLD’S population, but get this, they have 25% of the world’s prisoners!!!!  What???

Yep.  A much higher percentage of people are in prison in the U.S. than any other country.  The only way that these figures can make sense to me, is that there are simply a lot of people in prison for breaking laws where nobody is actually harmed in any way, otherwise the country would be in chaos and there would be blood running in the streets.

How Many Are Really Out Of Work

So, now you must add these 5 million inmates to the unemployment figures, along with the 9 MILLION part-time workers.  This takes the tally WAY up.  In all likelihood, there are about 25 million people unemployed.   Though there are a little over 300 million people in the U.S., only about half can work (once you’ve removed children, stay at home parents and the elderly etc.).  To get a closer approximation of the unemployment percentage, you simply have to calculate what percentage 25 million is of 150 million (25,000,000/150,000,000 x 100).  Therefore a much more accurate picture would be nearer 17% unemployment, nearly double what the media are telling us it is.

Moral Of This Story

Simple really, don’t trust the media!  (Or whomever gives them their “information”).  We are in a DEPRESSION, NOT a recession.  I’ve lived through 8 recessions and NONE of them were remotely like we’re now experiencing.

The other thing to learn is this; while it IS possible to talk the stock-market up or down (see: Tulips and Fish), this technique DOES NOT WORK on individual businesses; it simply doesn’t affect their profitability.  The stock-market really is little more than a place to gamble, unless of course, you have inside information and trade stocks based on it.  This is illegal, and if you don’t believe me, ask Martha Stewart!

Don’t Panic!

While this MAY seem like scaremongering, it is nothing of the kind. The world is CHANGING, that’s all.  You must simply choose to EITHER sit back and wait for everything to “get back to normal” (which it won’t) or you can CHANGE yourself (mostly what’s in your mind) to suit the way the world is going to be.

You MUST adapt yourself to be able to survive and prosper in the coming years.  Observe, read, study, learn and then APPLY what you’ve learned.  Don’t be left behind with the majority of people.

It’s the SYSTEM that has failed; the financial system MUST have a radical overhaul, because it’s now been proven that the existing one simply DOESN’T WORK.  Your task is to adapt so that you are in a position to benefit from the way things are going to be.

Luke.