Alstrynomics leads the way......
January 24, 2009
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Over a year ago.....Alstrynomics was warning you about the pending explosion in unemployment.
As we look back at what has transpired over the past couple years we see the following:
Auto sales DOWN 40%.
New Home Sales DOWN over 66%.
Japansese Exports DOWN over 35%.
Steel Production at one of Japan's key producers DOWN over 40%.
What is amazing about these numbers is that they are absolute. After having conversations with a number of individuals in the past few weeks......a few trends are becoming very clear.
Travel will be REDUCED dramatically in 2009.
Salaries will be FROZEN or REDUCED in 2009.
Bankruptcies will EXPLODE in 2009.
Vacancy rates will be double digits in 2009.
The most misleading statistic will be the REPORTED unemployment rate. We learned from the NYTimes that only 270K people were counted as unemployed but over 600K dropped out of the workforce due to extent of time looking for a job. That means that almost 3X as many people who would have been considered unemployed are now no longer counted.
Extrapolating it to its reasonable conclusion....that means if we used traditional methond of counting unemployed....we would be well into the double digits right now probably approaching 15%.
Again, based on industry after industry shrinking by 30, 40, and 50%. Nobody should be surprised by a 25-30% unemployment reading BEFORE the end of the year.
Under Obama new tax plan, 52% of Americans will not pay any income tax. That means the burden of tax responsibilty will be focused on fewer and fewer. The problem is that those fewer are now making less so even they will be paying less taxes. Government will simply not be able to generate enough revenues to make up for Americans losing their jobs. As a matter of fact, despite what Obama is saying, jobs will likely have to be cut by government at EVERY level.
Fools used to make fun of the Alstrynomic projections....now even the recession resistent sectors are cutting jobs by the thousands day after day......round and round she goes.....where she stops nobody knows.......but at this point we are not even close.
For those of you Fools that think the government is printing money....you are dead right.....for those of you that think TOTAL money supply is growing......you don't know how to count TOTAL money. M1, M2 and M3 is only a small fraction of TOTAL money. I know what they taught you in school, but your professors missed a lot. That is why I developed Alstrynomics. There is a much larger percentage of money that is never counted in those figures that is evaporating at a much faster rate than the government is printing.
As soon as government printing starts to exceed money evaporation, Alstrynomics will make an INFLATION projection......until then it is DEFLATION as far as the eye can see.
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