Skyrocketing Unemployment

State unemployment systems are crashing due to being overwhelmed.  Excerpts from an AP article:

ALBANY, N.Y. (AP) — Electronic unemployment filing systems have crashed in at least three states in recent days amid an unprecedented crush of thousands of newly jobless Americans seeking benefits, and other states were adjusting their systems to avoid being next.

About 4.5 million Americans are collecting jobless benefits, a 26-year high, so the Web sites and phone systems now commonly used to file for benefits are being tested like never before.

Even those that are holding up under the strain are in many cases leaving filers on the line for hours, or kissing them off with an “all circuits are busy” message. Agencies have been scrambling to hire hundreds more workers to handle the calls.

And in California:

California has seen a record number of calls to an 800 number over the last few weeks.

“During this holiday period we’ve been averaging a record of more than 2 million call attempts a day, and it took more than 20 times before people could get through to our UI call centers,” said Employment Development Department spokeswoman Patti Roberts.

That’s about twice the one-day record of call attempts set in 2004 during an earlier recession, she said.

Twice the one-day record!  Callers making 20 attempts before getting through!  Wow!  Why doesn’t it surprise me that the government can’t deal with a problem that they created.  What is our government going to do when 1 out of every 10, 9, 8, or even 7 people are unemployed and pissed off because of government inefficiency?  Those zombies will unite!  Here is what happened in Argentina after the economic collapse there.  It’s part 1 of 12 and is very good.

Do you think that this type of thing can’t happen here?  Argentina was the world’s 8th wealthiest country following WWII but due to government corruption and increasing socialism (sound familiar?) the economy collapsed. 

I can almost hear the sounds of angry mobs in the California air.

The Zombification of 2008

Here is a great post from Mish at www.globaleconomicanalysis.blogspot.com about what happened in 2008 and what to expect in 2009.  I don’t disagree with any of it.  Here are some excerpts:

2008 brought a continuation of the housing crash, massive foreclosures, rising unemployment, the collapse of Bear Stearns, the bankruptcy of Lehman, a $700 billion bailout that most citizens were against, fear mongering by Bush and Paulson to get the bailout bill passed, a ponzi scheme right under the nose of the SEC by Madoff that wiped out as much as $50 billion, hundreds of mortgage lenders imploding, and a stock market crash that was down as much as 51% finishing the year at -38.5%.

We also witnessed a credit crunch, soaring corporate bond yields, a commodities boom and crash with oil soaring to $140 then falling to $36, record low yields in treasuries, the nationalization of Fannie Mae and Freddie Mac, and a bailout of AIG that has already cost taxpayers over $100 billion. Sadly, socialism was embraced while free market principles were shot and left for dead. Worldwide, the Fiscal Insanity Virus Spread Rampantly.

Finally, 2008 was a year of the biggest ever declines in the CPI, auto sales, consumer sentiment, home sales, home prices, and treasury yields which actually went negative on a couple of occasions. The only comparable period in US history to this sequence of events was the Great Depression.

…

2008 is the year the impossible happened, the impossible being deflation. Deflation was called on this blog and a few other places but the idea was essentially mocked as impossible by the masses.

…

Themes For 2009

Looking ahead in 2009 here are some things I see as likely.

Obama will pass a stimulus package of $850+- billion but $300 billion will be “tax relief” amounting to $19 a week at most. $19 a week per household is not going to stimulate much of anything but it will add to the budget deficit. People will use that money to pay down bills, which is exactly what they should be doing with it.

The first 3-5 months are going to be extremely weak on the jobs front with 400,000 or more jobs lost each month. Obama is going to need to create 2-3 million jobs just to counteract job losses in first half of the year. There is no way he is going to create jobs that fast given implosions in state budgets and retailers.

In 2009 consumers will continue to retrench, housing will continue to decline, and as many as 100 small or regional banks will implode over falling commercial real estate prices. The Fed may arrange shotgun marriages with these banks instead of letting them go under.

He continues to get into specifics about what will happen with the stock market, the dollar, gold, inflation, etc.  I urge you to read the whole thing to know what to expect and how to prepare yourself for the continued zombification that will come.

Deflation, Zombies and You

In my last blog, Desperate Deflation Discounts, I spoke about the period of deflation that we are in, what caused it, the effects of it, what will most likely happen in the future and also mentioned the effect that our economy is having on state governments.    So what does this mean to you?  It means that you need to know what to do so that you don’t become a zombie.

First of all, you need to recognize what is going to happen.  As I see it, a leading contributor of zombification is joblessness and homelessness.  We will see dramatic increases in both as this recession continues.  Official government unemployment numbers will at least reach 10% while the accurate unofficial numbers will indicate over 15%.  Homelessness will dramatically increase as foreclosures and job losses continue.  We will see more homeless families and people who are working but living out of their car.  We will see state and local governments dramatically cut back their spending and services since they are required to balance their budgets.  The federal government will dramatically increase spending on social programs.  The value of stocks will dramatically decrease.  (Note: We may see a temporary upswing in the markets until end of January or sometime in February 2009.)  Housing will continue to slump until sometime in 2012 and will most likely remain flat for sometime after.  As a result of state budget cuts, homelessness, joblessness, etc., I believe we will see civil unrest such as increased crime and riots.  We may even see a dramatic change in our political system such as the entrance of a third political party with some tangible influence.

So how do you prevent zombification from happening to you?  Here are a few tips.  Get out of the stock market unless you are a savvy investor who knows how to make money in a bear market.  Start saving and get out of debt.  Don’t buy a new house unless you recognize and are prepared for it to go down in value.  Invest in gold and silver and take physical posession of it.  In your current job, work hard and go the extra mile… in other words, be the best employee that you can.  Ultimately, you want to do everything in your power to avoid the effects of this economic disaster.  This involves obtaining a good understanding of what is the ultimate cause of this disaster and any other upcoming event that can further zombify/enslave you.

I believe that the most important things you can do is to find the truth.  Increase your knowledge about the current events in the world.  Don’t implicitly trust everything you read from the mainstream media (MSM).  It’s not that they flat out lie, it’s that what they spread represents only a certain viewpoint which doesn’t contain the whole truth.  So be diligent and open minded in your search for answers to what is going to happen and what is causing it.

In addition to your search for truth regarding world affairs, the best prevention from zombification and enslavement (for I would submit that being a zombie, in other words, not having a job or a home, is a form of slavery as you are virtually at the complete mercy of the state and have little power or recourse to affect change in your life) comes from living an honorable life.  For true power lies in the honor that is given to us by others.  And having true power leads to true freedom.  Now we obtain honor by gaining trust and respect from others by living a life of virtue.  So, if our goal is ultimate freedom, the most important thing we can be doing is to find out how to live a life of virtue and righteousness and strive to live by what we find.  And from where can we obtain this truth?  I submit that this is found by obtaining the truth about the nature of God and his will for us.  The truth relative to righteousness, godliness, virtue and love will come from the entity that is the very definition of good — God. 

This is much easier said than done.  It is probably fair to say that there is more subject matter relating to God than any other subject.  My opinion is that the place to start is with yourself.  Do an honest self evaluation to see if you really do want to know.  If so, examine yourself and find if you have a hope that you can find out.  This hope will lead to a determination to find out.  It will lead to action.  It will lead to an open mind and open heart.  It will lead you to ask God himself in humble prayer over and over until you start to receive answers little by little.

Desperate Deflation Discounts

Retailers of all kinds are desperately attempting to get rid of excess inventory reports this article from the NY Times:

An era of desperation marketing is at hand, with stores and automobile dealerships adopting virtually any tactic that might grab the attention of frightened consumers.

After one of the worst holiday seasons in decades, businesses are doing whatever they can to clear their shelves and make way for spring merchandise. Sales of 50 percent off stopped capturing the attention of customers weeks ago, so stores are layering discounts on top of discounts, and trying to lure shoppers with promises of giveaways, bulk bargains and other gimmicks.

These discounts are an indication of the terrible state of our economy.  They are happening because natural economic deflationary forces are causing a correction.  Deflation means a decrease in the supply of money and credit.  What we are witnessing now has been caused by the bursting of the recent bubbles in housing, commodities (i.e. oil) and stocks which had been artificially inflated by the dramatic increase in available money by central banks, like the Federal Reserve, and governments around the world.  Simply put, governments and central banks made money/debt very easily available to increase consumer spending to boost the economy.  Well, it worked… for a time.  You can only go into debt so much until it all comes crashing down.  We spent on TVs, cars, houses, stocks, toys, clothes, you name it!  And as a result of all of this money in our system, our houses went way up in value.  Our stocks went up in value.  And where did we get this money to spend?  We borrowed it. So our false boom was all a sham.  And now people/business don’t want to lend anymore.  People can’t borrow anymore and so they can’t spend anymore.  And that is why we are crashing in a downward deflationary spiral.

Don’t worry though.  Our government is “responsible” for our economy!  They were so very smart to get us into this mess that they will graciously get us out!  And just like they knew how to manage the economy during the last ten years, they will know exactly what to do to fix it!  What is their solution?  Why, spend more of course!  How are they going to get the money to spend?  Well, they can’t take from the American taxpayer anymore because we have no savings and are already heavily in debt.  So they are going to borrow MORE money!  In other words, they are going to do the same thing that got us into this mess!

So what does this mean for the future?  Well, this deflationary process is actually the cure, not the problem to our disease of debt.  But our government hates deflation because it makes it harder to pay back the massive debt that it has incurred.  So our government will attempt to borrow and spend our way out.  It will cause inflation sometime down the road which will make our money worth even less.  So just like liquidation and falling prices are a manifestation of deflation, so is consumer and corporate frugality.  This will be evidenced by the dramatic increase in job losses.

And it’s not just consumers and corporations that are going broke, but it’s also local and state governments.  Check out “44 States Face Huge Budget Shortfalls” by Michael Shedlock (Mish)

At least 44 states faced or are facing shortfalls in their budgets for this and/or next year, and severe fiscal problems are highly likely to continue into the following year as well. Combined budget gaps for the remainder of this fiscal year and state fiscal years 2010 and 2011 are estimated to total more than $350 billion.

States are currently at the mid-point of fiscal year 2009 — which started July 1 in most states — and are in the process of preparing their budgets for the next year. Over half the states had already cut spending, used reserves, or raised revenues in order to adopt a balanced budget for the current fiscal year — which started July 1 in most states. Now, their budgets have fallen out of balance again. New gaps of 42 billion (9% of state budgets) have opened up in the budgets of at least 41 states plus the District of Columbia. These budget gaps are in addition to the $48 billion shortfalls that these and other states faced as they adopted their budgets for the current fiscal year, bringing total gaps for the year to nearly 14 percent of budgets.

I can’t predict the future but there is one thing I’m sure of — we are going to see more and more people turning into zombies as they lose their jobs, lose their homes, and their pride and dignity.

Have a zombie Christmas

I was picking a friend up from the airport and she told me a story about how her pregnat sister had been tackled and a package had been ripped out of her hands that was on sale!   Shouldn’t this be a shocking and outrageous story?  Unfortunately, this isn’t even close to the worst that has happened this holiday season.  Check out this article.

In the past four days, America’s retail stores and malls have seen several shootings and the trampling to death of a man caught in a stampede of overeager shoppers.

Most people have probably heard about the story of the man trampled because of greedy, selfish people.  People are becoming more and more zombified.  The article continues:

“People are out of jobs, and they still want to do something for their families for Christmas,” he said.

The pressures facing today’s consumers, he said, might contribute to an uptick in crime and violence at stores.

Lt. Kevin Smith, the commanding officer of the police department’s public information office in Nassau County, N.Y. — where the Wal-Mart temp was trampled to death Friday — said shoppers “are trying to compensate for their lack of income by making sure that they get in and get in first. … The stores are getting a larger volume of people over a short period of time.

If trampling a man isn’t bad enough, listen to what else happened:

“We do feel the economy is a trigger for someone taking an opportunity to commit a crime that they otherwise would not think about,” said Joseph LaRocca, the vice president of loss prevention at the federation.

The federation has also acknowledged the violent incidents that left a disturbing mark this year on the weekend of Black Friday, the kickoff to the holiday shopping season when retailers traditionally are in the black, or turn a profit.

In addition to the Friday morning stampede that led to the Wal-Mart worker’s death, there was a spate of shootings: Two men shot each other to death at a Toys “R” Us store in Palm Desert, Calif., Friday; a pregnant woman was injured in a shooting at an Atlanta mall Saturday and armed robbers killed one man at an Express store in a suburban Miami mall Monday.

To conclude, let me say that my friend commented that she was afraid that if people are acting this way over a Christmas shopping, what would they do if their families were starving?  BINGO!  The zombies are coming.