I believe we will have a slight recovery perhaps late 2009 or early 2010.  However, baby boomers are begining to retire which will strain the economy substantially of this once great nation.   This will create room in employement but only slowly (65 year old engineer can’t be replaced by a 25 year old straight out of college) but in the interm earnings may come back to Wall Street as companies rightsize (downsize or whatever).   However,  I doubt hiring will come back nearly as quickly as I’d hope and often not at all as companies focus on increasing efficiency first.

So, unemployeement will remain high for some time.  Even if you trend out the slowness of the decline in job cuts it will take literally months for this number to flat line and probably years for it to stabalize.  Meanwhile, the government is propping up an already over leveraged society.  This is why we’re  experiencing deflation now capitalism is trying to deflate the over leveraged nature of the economy.    The government is trying to halt deflation.  They are saying capitalism is dead before they even let capitalism do what it is meant to do and deflate when a bubble has gotten to big.  This is a very dangerous policy as capitalism opperates based on human and social nature.  The government has said that what man/nature naturally does is dead and they are stepping in as the State to do what nature shouldn’t be allowed to do (deflate an over inflated bubble).   So instead of letting natural capitalism work and an overleveraged society (business, government, and persons) deflate the government is trying to get an already over spent society to spend. 

Unfortunately we may start spending again.   As we get use to the following three key things:

• The bad news
• Realize unemployment has slowed
• Realize those of us that haven’t lost our jobs are probably ok 

Then we will start to leverage up again.  When this happens WATCH OUT because the foundation has been laid for big time inflation.  Now, the inflation can’t come until the deflation stops and the deflation can’t stop until jobs stabalize  late 2009/2010 (my prediction).  When this happens we will still be at high unemployement with stagnated ecomony.  Inflation is going to hurt bad if it comes in late 2010 and then by 2011 we’ll be hit with another serious depression VERY serious in my estimation.  This is my prediction and there are others out their that I’ve read have made the same prediction so I feel I’m in good company. 

With a government that is already MASSIVELY over leveraged and and is printing money like crazy we might have some serious troubles.  This will be more likely the real financial armageddon.   Further it will be spured as baby boomers continue to massivley pull their money out of the stock market and place it in treasuries and other more secure places.   What is worse is that this does not bode well for liberty and freedom.  Pain and fear will continue to spur the oppressive regimes alreay strongly supporting our government. 

But there are even more concerns.

In recent months, senior Chinese officials have expressed concern that the U.S. financial crisis and efforts by policymakers to lower lending rates by flooding the system with cash would impair the value of its massive U.S. bond holdings.  ~MarketWatch

As people move to treasuries a strong bubble is taking place here.  Something that concerns China as our largest debt holder.  It is something that should concern us here too and baby boomers that move their monies here as well.   Without our ability to take out treasuries the government will be forced into a true monetary crisis due to the serious nature of our now HUGE need for debt to fund this government and the current State power grab.  This is part of the move why so many liberals strongly support the oppression and slavery of the successful working business class with taxes.  If they can enslave us like the Jew or Black man in the past these liberals like Obama will have somebody they can tax to force the stablization of the government.  This is when I fear that revolution will become dangerous.  An indicator of what is taking place is well documented in most financial media today.

Having cut their key rates to close to zero, the Bank of England, U.S. Federal Reserve and Bank of Japan are now buying bonds, essentially printing money to reflate their economies in a policy known as quantitative easing.

“It is clear now that the ECB has set its sights on boosting inflation,” said Brian Kelly, chief executive officer of Kanundrum Research, a commodities and macroeconomic research firm.

“The worry in the market is that central bank tools are notoriously blunt instruments,” he added. “The central banks are trying to write a book with a can of spray paint. Investors are flocking to the soundness of gold in anticipation of a messy manuscript.”

Gold is seen as the ultimate protection against inflation and a better store of wealth than paper money. ~MarketWatch

The rapid expansion of gold prices over the years and recently is an indicator of this.  The fact that gold prices have remained high in a deflationary cycle is a further indicator of the EXTREME level of expectation for inflation and economic difficulty.  Even when the mainstream media continues to be largely bullish dont be fooled.  Fact is bad news sells when it’s not about you but when it’s about the stockmarket that effects EVERYBODY it doesn’t sell.  It’s sort of a strange corallary.  Everybody likes to watch a car crash unless it is a car crashing into you or your car.

What is of big concern to me is the position our federal government is putting us in as they begin to strengthen and shore up the oppression of the successful business class of our society while they make fascist moves to control segments of our society.  Jean-Baptiste say coined the phrase “supply creates demand”.

Unfortunately this phrase is very misinterpreted. Say is not telling us that when you supply something that demand will arise and consume it. In the case of exploding toilet paper, what demand will exist? There will be none. What Say is telling us is that if you supply something, you now become a demander of all other products in an economy. Say is telling us that our consumption comes from our production; our ability to demand comes from our ability to supply. This phrase outlines the very fundamental nature of trade.

via “Long-Term Bear Markets, Say’s Law, and the Bailout Frenzy” by Travis Steward, FSU Editorial 05/01/2009.

Supply occurs when members of society produce something of value.   Because to produce something of VALUE (that being the key word) they demand other goods.  As the government takes over banks, autos, health care, energy and now disgustingly credit cards and says what society will create they risk forcing us to create something of lesser value or no value (when it’s government beaurcratic paperwork or tax paperwork).  For example, I surely wouldn’t buy a Fiat.  Or they will force loans to be made that don’t have value because of the customers inability to pay.  They’ll push green energy policies that create further bubbles like in Spain.  It is a dangerous path to walk down.  Not only is it dangerous they’re doing it in a dangerous method with absolutely grotesque spending. 

Meanwhile the government is stress test testing our banks which I wrote about previously.   We’ve already suffered a collapse nearly as bad as the Great Depression and the government is testing our banks to see how much worse they can handle.  Nearly half the banks faild this test and most raise further capital which is another way of saying sell their debt and convert it to equity.   Who is holding these big banks debt? The government.  Now the government get’s more stock in the bank as their debt is converted into equity (covert nationalization).    What ELSE does that mean?  Half the banks will fail if things get worse!  But think about what I documented about the stress tests.   They used a 25 to 1 stress liquidity ratio.  During the Great Depression the ratio was more like 12 to 1 and I think things could get worse this time around maybe even 8 or 6 to 1.    Therefore, they made the test twice as easy as the most severe situation in our history which we’ve almost already nearly repeated and are now struggling to recover from.  If inflation comes, if the job market hasn’t recovered, if treasury bubble burst (no more debt), who will bail out the still overleveraged banks, business and individuals of course nobody.  Then who will pay taxes, who will bailout a government with a popped treasury market?  However, not only will nobody be able to be bailed out when the treasury bubble bursts the government will need to be bailed out.   This will be done through further oppression then the current oppressive policies Obama is now taking.

With regard to the way the tax burden is distributed across income cohorts, it is increasingly concentrated on upper-income taxpayers. Federal statistics show that the top-earning 25 percent of income taxpayers paid 73 percent of all federal income taxes in 1980. By 1988, that percentage had increased to nearly 78 percent. By 2000, after the Clinton tax hike, it hit 84 percent. And by 2006, the last year for which the data has been compiled, the top 25 percent of income taxpayers shouldered just over 86 percent of the federal income tax burden.

And Obama doesn’t plan to ease that burden—or so one might infer from the next $1.4 trillion over 10 years tax increase that was included as part of the budget he sent to Capitol Hill. To put it another way, the Obama budget included $3.61 in tax increases for every dollar of so-called tax cuts.  ~ US News

He (Obama) has shifted the tax burden off the middle class and back onto the wealthiest of Americans who can certainly afford it.

Not much different then the slavers of old or the Nazi’s of more recent memory.   

It’s not socialist to try and bully business into doing the right thing by Americans.

Nope, but it is facist, especially when the bullying is meant to enable the oppression of a particular class of society.  Remember it is the rich today that are slowly being oppressed.  Remember they can afford to get up and leave when it get’s to bad.  Who will be the next group to be targeted for oppressions by the likes of these liberals?  Will he next choose a religious group that is ok to oppress, maybe an ethnic group, or maybe a new category?

The subject of every State ought to contribute towards the support of the government, as nearly as possible, in proportion to their respective abilities; that is, in proportion to the revenue which they respectively enjoy under the protection of the State.

They use this to say the successful should be oppressed based on their ability to be oppressed. Like slavers use to say of black slaves being made for the fields or the poor because of their inability or lack of intelligence which keeps them from rising above their current class. The successful are better able to endure oppression therefore they are who we should oppress. Interesting argument, very Marxist, and still very immoral in my opinion but each to their own.

I don’t think Adam Smith was a proponent of a progressive income tax as they try to say one should take the time and effort to read all of Wealth of Nations. I acknowledge the importance and need for taxation as Adam Smith did and I don’t think we should set up a system where those that can’t pay taxes should be oppressed either with debtor’s prisons and all that nonsense like at the time Adam Smith lived.

“In all cases, a direct tax upon the wages of labour must, in the long run, occasion both a greater reduction in the rent of land, and a greater rise in the price of manufactured goods, than would have followed from a proper assessment of a sum equal to the produce of the tax, partly upon the rent of land, and partly upon consumable commodities.”

Rent of land is much like a capital gains tax and consumable commodities is not income. Further, Mr. Smith said that…

“The necessaries of life occasion the great expense of the poor. They find it difficult to get food, and the greater part of their little revenue is spent in getting it. The luxuries and vanities of life occasion the principal expense of the rich, and a magnificent house embellishes and sets off to the best advantage all the other luxuries and vanities which they possess. A tax upon house-rents, therefore, would in general fall heaviest upon the rich; and in this sort of inequality there would not, perhaps, be anything very unreasonable. It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion.”

Again, nothing about taxes on income and even further something more then a proportion of their revenue a consumption tax perhaps???

“Every tax ought to be so contrived as both to take out and to keep out of the pockets of the people as little as possible, over and above what it brings into the public treasury of the State.”

“As little as possible” being the key point here. Our upper marginal income tax rate is near 50%. To me this is not a marginal amount. I don’t think anybody would think of 50% as being as little as possible in fact 50% is half. I don’t know who thinks half is a little amount. If I say I’m only going to take a sip of your drink and then I drink half did I take a sip? Nope.

Based alone on the wisdom of Adam Smith (without bringing anything else into the debate) I do not agree that oppression “simply put” should be based on “those who can better afford to pay to support the government”. I think oppression is wrong. The wealthy have less to protect then the poor because the wealthy have means to avoid and escape from things such as hurricane’s, war, and disease. The poor are in greater need of protection as they lack the means for protection.

Don’t get me wrong, I like paying for government roads, military, police, and for protection with contracts and the such. I don’t like paying for social “security”, medicare, child tax credits, public schools, and other such nonsense.

Here is the novel idea. What about paying taxes based on use which is something Adam Smith advocated as well. That is novel…paying for what you need or use. Not taxes based on ability but taxes based on use and need, that is not oppression but freedom of choice. I may be young and I might not think much before I write or talk but I’ve been around and done alot in my 20+ years to know the truth. Oppression regardless of the type is still oppression whether based on ability to endure it or any other form. Do not be fooled by Republican’s and Democrat’s that make this argument.

But wait is oppression to terse a term to use?

I don’t think so. Oppression is a very accurate use for what is going on and what is being said in the debate. Oppression is oppression regardless of whether it is supported by the majority or not. Just like oppression is oppression even if it is on the backs of those that can endure.

“Just because your friends want to jump off a bridge doesn’t mean you should jump off a bridge.”

That is a saying my parents taught me when I’d try to say that my friends were allowed to do something and I didn’t think it was fair I wasn’t. Just because the majority says do something doesn’t make it right to do. It’s called “tyranny of the majority” to use the words of our founding fathers and just because one think it is ok to oppress somebody because of their ability and now because the majority says it’s ok doesn’t make it any more moral.

Take for example the U.S. revolution. The majority of England didn’t agree with the English colony’s. I suppose those of Obama’s ilk and mentality disagree with what Washington and Adams and Jefferson did then because they were against the majority. Well, each to their own. Personally, I admire those men and their mentality.

But wait I’ve never lived under oppression! I disagree 100% that I have never lived under oppression. I haven’t lived under Nazi oppression or Islamic oppression or outright communist oppression your right their. However, when a young guy like myself trying to raise 4 little kids has to write a check to the government on April 15th after they’d already withheld thousands I am economically oppressed. What benefit did I get from the 10s of thousands I paid in taxes? Bailout Wall Street, bailout Chrysler, pay for a joke of a public school for my kids (whom I educate at home in my free time anyways), pay for somebodies health care (while we shell out 4 grand for my wifes latest c-section) yeah that’s fair, pay for somebodies food stamps, pay for some illegal immigrants drivers license, donate some money internationally to support abortion, bailout those that paid to much for their homes while I live in a 1,200 sq ft house for 6 because I live debt free, get a little use of roads (even though the state is raising the tolls here) and some military protection from terrorists (until we get attacked again). The government limits my freedom of choice. For me it is to a point of being oppressive. And when I see Obama’s tax increases I know more oppression is on the way.

It’s great that their are those out their that have the freedom to comment about oppressing people because that is blatently what your saying. I just wish they wouldn’t be shy about it. Don’t try to hide behind the majority or peoples ability or the fact it’s economic oppression and not religious oppression/or racial oppression. After all Obama and his plans have a 60%+ approval rate the majority can’t be wrong, right?

“Get those rich successful people. Raise the taxes on the top % of wage earners. Down with the successful.” Don’t be shy! Don’t be such cowards that you have to hide your true beliefs behind the “majority” or because people have the ability it’s not oppression.