Crucially, consumer income dropped last month, energy costs are rising, savings are depleted, stock prices are down, and debt levels remain atrocious. Given the serious problems in credit markets, the banking system, corporate profits, the trade gap and credit availability, the chances of the dollar crashing seem virtually certain. These momentous problems mean the entire financial house of cards may collapse. We are talking about wiping out the wealth of America and with it a chunk of everyone's retirement assets. Because America's credit excesses insure that this is not a garden-variety recession approaching.
Layoffs are next.
This ballyhooed new technology stands to be the biggest economic disappointment in commercial history. The internet is where the bubble burst and started the downturn. The spreading of weakness points up the chronic lack of production facilities and manufacturing in an economy driven by borrowing, spending and consuming. Capital investment went into office buildings, shopping centers and entertainment complexes rather than new plants and equipment. If you drive through any major city in America you have to be impressed with the level of commercial activity.