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Wednesday, January 12, 2011

What will lead recovery?

What will lead the US into a real recovery?

Will it be Jobs?

The government told us two years ago this would be a "Jobless Recovery" so the fact that official unemployment is still in the mid-upper 9% and genuine unemployment is closer to 18% means we shouldn't dramatically expect a rash of new hires.  The deeply evil Ben Bernanke has stated himself that it will be another Five years minimum before the nation's unemployment gets to pre-recession levels.

Can you hold out more five years?

So will it be Housing?

The government and 'experts' originally said it would be, then cowardly backed off such pronouncements.  Today, its being officially declared that while the economy is not in depression (that is debatable), the housing market is.  "Home values have fallen 26% since their peak in June 2006, worse than the 25.9-percent decline seen during the Depression years between 1928 and 1933, Zillow reported.November marked the 53rd consecutive month (4 ½ years) that home values have fallen." (CNBC)

Will it be the Markets?

Um, No.  Any recovery must involve more than dumping tons of government money at it, and despite the rise in the market, most everyday people have intelligently stayed on the sidelines, seeing this is a rigged game.  To restate from a previous blog posting, "The Fed no longer even denies that the purpose of its latest blast of bond purchases, or QE2, is to drive up Wall Street" (London Telegraph)  That's where the recent $600 billion is going, and when adding the original $900 billion. its fair to say that $1.5 Trillion dollars in taxpayer money has gone into the stock market.  

The wealthy people on Wall St who celebrated Christmas by shopping at Neiman Marcus and Tiffany's while you counted coupons at Macy's & Kohl's, thanks you...

So what will lead recovery? 

John Weinberg, director of research and senior vice president of the Federal Reserve Bank of Richmond, Va recently said it will be "Confidence" that will lead us...  

All together now-  Ha Ha.. Har Har.. Hee Hee ~    

Yes, when your entire nestegg is tied into a quickly depreciating home, you haven't found employment in 99+ weeks and not getting any more assistance, and your world is about to crash down, it is "confidence" in the system and this government that will get you and collectively all of us through the turbulence.

I do not pretend to know the answer as to what lead this nation into recovery.  It is in such a bad state fiscally, as is the rest of the global economy that there are no more simple solutions or quick fixes left if the goal is a strong vibrant economy that does not require government propping.

I do know what will lead an individual into economic recovery-- aggressive financial discipline.   That means taking stock of where you are economically and taking a slash & burn policy to non-necessities that are keeping you in debt or minimizing your savings.  It means controlling your ID; the need for instant gratification and shopping as 'therapy'  It means valuing the penny-  Going to the supermarket and buying generic because its 10cents less or buying your gas at the station selling it for $3.13 instead of $3.15.  It means taking advantage of the local library for all your books, CDs and DVD watching needs instead of spending precious money at BestBuy or Barnes & Noble.

Those who possess the skill of aggressive financial discipline will be in the best position to weather an economic storm because he/she will possess adaptivity and resolve.

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