US Recession Warning!

I cringe every time I hear pundits say that the economy is strong, stronger than ever. Not because I think they're lying, but because I KNOW they're wrong. I know I'm not the only former upper middle class individual who's struggling, and like so many others, I look around and wonder, why is there so many suffering financially if the economy is so great?

Either the experts are not experts, or they're hyping the economy to keep consumer confidence up. Either way, they are blind if they can't see the handwriting on the wall. After reading this post, I'm certain you'll see it too.

THE US WILL BE IN A RECESSION BY THE SECOND QUARTER OF 2008.

Now here are the factors that a rank amateur like me can see, that the experts don't see, at least not collectively. Different economists see SOME of the different pieces, but here is the complete roadmap.

1. This will be a dismal holiday shopping season and we know this will affect corporate earnings and payroll (no big revelation here)
   
   1. Painful gas prices will pinch consumer disposable income
      
   2. Painful gas prices will increase merchant cost, which will be passed to already pinched consumers
      
   3. The dismal exchange rate of the dollar will further increase merchant cost of merchandise
      
2. This will lead to a Wall Street sell off, which will panic both corporations and employees.
   
3. Employees will be rightfully panicked because this will lead to widespread layoffs
   
4. Employees who remain employed will be paying more for their employer sponsored health plans (they're learning this now, which will further depress holiday spending)
   
5. Layoffs in the retail and financial sector will lead the way
   
6. The already depressed entertainment market will be further depressed as the writers' strike continues, pickets will slow this sector
   
7. Mass instability in the Middle East (Pakistan and Iran) will cause holiday travel, particularly air travel to be slower than expected
   

 

All these factors will contribute to the US being in recession by the second quarter of 2008, but the single BIGGEST contributor to the recession will be foreclosed families FINALLY being removed from their homes. You see, it takes approximately three to six months and in some instances up to a year, for someone to actually have to LEAVE their home following foreclosure. During all these months of foreclosure, homeowners don't have to pay their mortgages and that money, while devastating the financial and credit markets, are currently being invested back into Consumer Staples and other retail items. As these families move from their homes and have to move into rental properties, that excess income that they had from not having a mortgage will evaporate. This will be the final nail in the coffin of the US economy.

 

Don't be fooled by smoke and mirrors, the economy is NOT strong, this will not be a soft landing, it will be a crash landing with mass economic casualties, mark my words.