Banks, government announce expectations for deeper depression
Don’t take my word for it. A deeper, more severe depression is looming. Major US banks and knowledgeable government representatives are visibly preparing for much worse to come. Bloomberg reports that Citigroup and JPMorgan Chase are hoarding cash as if another crisis were on the way. “In my 44 years in the business, I have never seen a company with remotely as much cash as this,” said Richard X. Bove, an analyst at Rochdale Securities in Lutz, Florida. JP Morgan announced it is hoarding cash to meet liabilities through “adverse conditions.”
The US Treasury Department said recommended that banks hoard cash tp prepare for an acute liquidity stress scenario event, in an official report. it did not say when that event will occur.
At the same time, the White House officially announced that more job losses will occur, increasing unemployment even beyond the current record levels. “We anticipate that we are going to continue to see some job losses in the weeks and months to come,” President Obama told the Economic Recovery Advisory Board.
According to the US Department of Agriculture, 50% of children in the US will receive food stamps. “This is a real danger sign that we as a society need to do a lot more to protect children,” according to Mark Rank, a sociologist at Washington University in St. Louis. According to a USDA report released last month, 28.4 million Americans received food stamps in an average month in 2008, and about half were younger than age 18. “The current recession is likely to generate for children in the United States the greatest level of material deprivation that we will see in our professional lifetimes,” Stanford pediatrician Dr. Paul Wise wrote. other recent research suggests that more than 40 percent of U.S. children will live in poverty or near-poverty by age 17.
US Congressman Ron Paul officially declares that the worst is yet to come. In the Forbes Magazine article, he says that “We might have up to a year or so of an economy growing just slightly above stagnation, followed by a drop in growth worse than anything we have seen in the past two years.” His analysis of the government budget and spending practices results in the prediction that we risk hyperinflation and seeing a 95% devaluation of currency every year. “Be prepared for the worst” is the articles warning.
A trader at Kitco advises that Amercians “take care of business right now” to be prepared for serious crisis in the near future. The assessment from this source is more extreme, and blunt.”The United States’ financial affairs are an empty burning hulk of disaster. There is not enough taxing power, stealing power, money and bond-printing power on this globe for these dudes to worm their way out of a major collapse. It may take some time, but its coming for sure.”
In a separate article, Forbes reports that “Unfortunately, the current crisis is caused by the same deflationary forces that caused the Great Depression.” It also discusses the mechanism of lowering salaries as a tool of the depression, “Getting workers to accept large pay cuts is extremely difficult, especially in heavily unionized industries.” Even if you still have a job, you may end up working for less, as prices rise.
Whatever you decide to believe, believe something, for a reason. If you decide you do not want to agree with the point of view I lay out here, come to your own conclusion, but do it by researching the facts.
