Trends Research founder Gerald Celente joins Goldseek Radio September 5, 2009 to discuss unemployment, the economy, the Great Recession Depression and a host of other issues.
(Interview follows excerpts and comments below)
The effective unemployment rate is about 19% right now when you add in people that no longer have jobs and can’t find any -Â they’ve given up looking, or they have part-time jobs and want full-time. It’s not going to hit home because of the cover-up. When the cover is unfolded and it’s pulled back, then the real pain will strike the [head].
Gerald Celente seems to be spot on with the ‘cover up’ analogy here. Go out and talk to 50 regular Americans, and I would venture to guess that a majority will tell you that we are in recovery mode, most citing the stock market and government bailouts as their underlying reasons for believing this. In reality, the fundamental economic numbers paint a grim picture, with unemployment estimated to continue to rise well into 2010. Reality will hit hard for most Americans who will be ill prepared to handle a situation where their primary (job) and secondary (credit) income streams disappear.
And for those who think that getting a job now is as easy as getting one in the tech booms of the late 1990’s, think again. Gerald Celente points out when many people refuse to believe until, that is, they actually have to hit the street looking for a new gig:
They’re not going to find a job. And what about all these kids getting out of college with a mountain debt that they’ve taken on to get a diploma that’s as worthless as a piece of toilet paper. They’re not going to be able to do anything with this thing. Oh, you got a degree in business administration? Whoopee Do. How about a job at Sports Authority, but only part-time so you don’t have to get any benefits.
The problems are escalating and building upon eachother. And, what kind of jobs are being created? Let’s look at the facts. Hey, you want a good job as a home health aid? We can get you one. You one stock shelves at Walmart till one in the morning? There’s a job for you.
As Karl Denninger at the Market Ticker has pointed out recently, there is no way to service the debt we’ve taken on as we continue to lose jobs, lower wages and reduce work hours. People will simply not have the means to pay off their credit card debt, car loans and mortgages. We are a consumer driven economy which will not survive without the consumer. Gerald Celente points out that absent boost in productive capacity in the United States, the Greatest Depression will continue.
Gerald Celente on Goldseek Part 1 of 2:
Gerald Celente on Goldseek Part 2 of 2:
Full Two Hour Interview with Eric Coffin, Gerald Celente, Bob Chapman, Chris Waltzek at GoldSeek
Once the holiday shopping season is well underway, I believe there will be a sudden realization of how bad the situation really is when people don’t flock to the stores in droves this year.
AS, I totally agree. If we don’t see an equities crash this fall, my guess would be late January, early Feb — once the Q4 retail numbers hit. It’s going to be a disaster. My wife and I are already setting budgets for Christmas now (same with halloween). No craziness this year. We’re going to conserve cash as much as possible.
Oh yeah…this X-Mas is going to be quite interesting…
Obviously, I don’t know what’s going to happen – but I think it’s going to be pretty ugly.
I’m single, so I set my own budget…BUT I have three siblings, two of them with spouses and kids…and we’ve already talked about it. Sure, we’ll try to make it nice for my nieces and nephews (the oldest will be five years old by then), but we’re talking about keeping it VERY frugal for the adults – basically anything we buy for each other is going to basically be limited fo legit necessities.
We are indeed living in interesting times…
…or is it that we are now living in “normal” times…and the past 10-20 years was just a mirage?
The FFT guy at http://www.forecastfortomorrow.com was called crazy when all this started but he has been spot on with all of it.
Insane…get ready for a winter of horrors he reckons… when the derivatives fail lookout…. go run for the hills.
Now that the incentive to buy a new car has ended and the $8,000 tax credit to buy a home ends November 30th, it will be interesting to see the economic statistics for December 2009, January, and February 2010. Â
I just read an article that insiders are selling their company stocks at a high level like never before.  Maybe it is because they realize that the economy may not improve in the near future.  Our Christmas budget will be 50% less than last year.   Â
In highschool I  started reading essays in austrian economics, fundamental analysis, and technical analyses relating to the market. I realized in in 2006 the financial markets cash flow and deviation of assets and liabilities/ lowered owner equity concerned me. People thought we were going to the moon and I told them, “What goes up must come down”. In early 2007 I heard about hundreds of trillions in credit default swaps on financialsense.com . Well, I looked up that ponzi/shell game and it is terrifying to think of the impact if that system collapsed at once. I am so worried about my ability to pay for school because most of my aid is federal grants and state funds. I hope I will be able to graduate in 2011, but the fundamentals are telling me hyper inflation will hit mid 2010.
WiseInvestor, while inflation is certainly a concern, I think deflation is also a possibility… In fact, we may start seeing deflated prices in not just real estate, but college tuition, as well. I recently read an article (sorry no link) that discussed the y/o/y admissions rate at colleges, and that the numbers are down. I am also hearing more and more about difficulty in acquiring student loans as was typical in the late 90’s early 2000’s. The only way universities are going to stay in business is if they make education more affordable, so on the one hand i can see the forces of deflation at play here.
I am not so much concered with inflaiton in asset and consumer prices anymore. I am now more concerned with a currency crisis which some may call hyperinflation. It would look like a hyperinflationary scenario if, say, the USD dropped to 40 on the USD index and continued to deteriorate. This was definitely be bad for savers and consumers. But, perhaps it would not be so bad for those who have already drawn down their credit lines. If you have an existing student loan of $20,000 and the USD gets slammed and loses 50% of its value, your loan payoff, in real terms, just got reduced!
The problem, of course, is that our economy will likely be in shambles in a scenario like this and therefore, jobs will be sparce. So even though your loan may be 50% less in real terms, you may not have a job to pay it off! (Speaking in broad terms — you may very well be highly skilled and score a sweet gig after college).