Prepare for the Big Dipper
A report on MSN news estimates US unemployment at 20%, citing inaccuracies and bias in data collection and methods of calculating the unemployment rate in America. Ah, America, the nation where Freedom of Speech really means freedom of the rich to tell lies with impunity. It’s the nation drunk on ignorance, the land of make-believe, where Michael Jackson with his Neverland and Disney with his Disneyland were quite at home and nothing out of the ordinary.
Any reports about economic developments, positive or negative, coming out of mainstream U.S. media, need to be taken with a grain of salt. However, when you get an official unemployment rate at just under 10% (which people think is already staggeringly high), and an expert opinion claiming it is more like 20%, it’s worth a second thought. There certainly has been an ongoing trend of absolute bollocks posing as news over the past few years. The Iraq War was going to be a rip-roaring success, with soldiers greeted by cute Iraqi children in folk dress, with tears of joy, laying flowers at the curbside as American tanks rolled in. It was supposed to usher in a “new Springtime” for the US economy and peace in the Middle East. The Lehman Bros. company collapse was going to be isolated, easily patched up. The world would chuckle and move on. That is, according to all the major newspapers and news networks. Many people suspected, however, that it was complete rubbish. They were dead right.
What can be predicted from a society that lies to itself to the extent that occurs in America is the same as could be predicted of a con man. People believe him at first, but after a while the trail of destruction becomes a little too obvious, the cons too ambitious, and suddenly a few intelligent people take the time to do a bit of background reading. Soon enough, the con man is busted and the game is up.
This brings us to another issue: expiring unemployment benefits. Continuing unemployment claims fell 53,000 to 6.7 million last week, but Deutsche Bank’s chief U.S. economist Joseph LaVorgna wonders how much of this decline is due people exhausting their standard 26-week benefit. He says: “We are concerned about what will happen when a significant share of out-of-work individuals’ benefits completely expire, because this could lead consumer spending to re-weaken, hence jeopardizing a fragile recovery.”
It’s likely that unemployment is massively understated in America, as it is in most countries. No politician likes to boast about the figures, and aspiring politicians are cautious to doubt them, lest they themselves get elected and are forced to revise the figures upwards.
The usefulness of this information lies in avoiding bad investments in the short term (like shares or apartments), and planning for one’s own unemployment. A 1 in 5 figure means that any safety nets in place are likely to be already strained to breaking point. If the figure advances to 2 in 5, then the term “safety net” is not even worth remembering. At this stage, people ought to stop believing newspapers and be well on their way to preparing to hunker down for a long, cold economic winter. Survival is the name of the game now.
Industries likely to ride out the difficult times are those that provide essential services, support military infrastructure or produce food. However, for America, new opportunities are going to appear when, finally, the U.S. dollar collapses. Local manufacturing will suddenly become a good idea, but at the expense of working conditions. Belonging to the military will suddenly become an obviously bad idea. What exists now in Mexico is prehaps a foretaste of things to come for those who are North of the Border. Who knows, there may not even be a border anymore.