Recession Easing....Depression Just Starting!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
In the next 12 months...America is likely going to shutter 5000 car dealerships. If each dealership averages 50 employees accross sales, service, management and finance.....we are looking at 250 thousand employees just from closing those businesses. In addition, the manufacturers are likely going to shed at least 100K employees through this reorganization process including ending Pontiac and other brands. If you figure there are about 5 supplier workers for each assembly worker, we are likely looking at another 500K workers.
In other words, the current restructuring of the auto companies is likely going to cut approximately 1 million jobs over the next 12 months.
Assume that those workers had an average income of approximately 40K per year.....we are looking at lost income of $40,000,000,000(Forty Billion dollars). Just the loss of purchasing power on the economy will be enormous to retailers, restaurants and not to mention the loss of tax revenues to the Federal, State and Local governments.
I am not sure many of you understand the implication of BOTH imports and exports declining by 1/3 in Q1......there are not many businesses in America that can remain in business for too long with a 33% decline in sales......if conditions simply remain static and DO NOT deteriorate much further....we are likely to see millions, maybe tens of millions, of additional workers lose their jobs as a result of their employers going bankrupt at CURRENT revenue levels.
However, making a bad situation even worse is the high leverage that our system has been infected with over the past eight years....many families, businesses, cities, counties, and states have doubled their outstanding debt in recently. Now that revenues are evaporating.....Alstrynomics estimates that at least 70% of America will likely go bankrupt in the next 12 to 24 months due to the high leveraged economy that Japan never had going into its lost decade.
At this point, there is really little any of us can do to change things other than prepare......
Pay Down Debt.
And Buy Some Metals as a Hedge if you are so inclined.
Expect another half a million Americans to lose their jobs this week and file for unemployment for the first time as reported tomorrow. It is likely the April real unemployment rate will rise above 17%when the Department of Labor reports next Friday.
We should start to see the frequency of bankruptcies and foreclosures continue to rise as fewer and fewer can service debt obligations as revenues evaporate. None of this should come to a surprise as Alstrynomics predicted this concentric contraction well over a year ago and has been blogging consistently ever since.
Again, when the numbers are released tomorrow morning, we will likley see reported another half a million Americans losing their jobs in a week and filing for unemployment.
Until the debt is purged from the system, the balloon will continue to shrivel. It is what it is and that's the facts Jack......too bad Timmy and Benny are telling you guys to prepare......but they are sure taking care of their buddies.
Never Fear when Alstrynomics is here.........please prepare.