Trends Journal Forecasts 2009 Economic Depression

“You don't have a clue what is going on
and neither do the American people because if they did,
there would be a revolution in this country.”
- Former Texas Gov. John Connally to Gerald Celente, 1992
Retail and Commercial Real Estate Collapses
One is going to be the collapse in the retail sector. It's already estimated that about 150,000 stores, retail shops, are going to close - both chain stores and smaller stores are going to close in 2009. That adds, of course, to the unemployment, but it would also add greatly to the commercial real estate glut. If you thought the sub-prime problem was bad, wait until you see this one. Commercial real estate is much more heavily leveraged than even in the sub-prime sector.

And then we look at the collapse already in the financial sector. We saw Wachovia, we saw IndyMac and Washington Mutual, Bear Stearns, Merill Lynch, Lehman Brothers - either get gobbled up or go under. And all the bond companies - names people don't know. The point being: Who is going to take up all that commercial space and business parks they have emptied?

The answer in both retail and the office space - the people who are going to take over that vacant space is nobody! You're going to see a glut of real estate that we have never seen before - ghost malls are going to be spreading around the country. So now, that's where the collapse really happens because how are these people who leveraged all this commercial real estate going to service these loans? The answer is: they are not! We're going to be moving into the Greatest Depression.

First, I want to make it clear why this is going to be worse and we're not ‘Gloom and Doomers.’ We're just looking at facts.

One of the things to remember is that most people are one job away from losing everything. It's not only the corporate greed that brought us into this. People went way beyond their means and borrowed above their heads with these things called ‘home equity loans.’ Build on that addition! Go on the vacation! Buy the SUV! Borrow for whatever it might have been. So people went way beyond their means as well. As I said, they are one pay check away from losing everything.

We're going to see massive foreclosures. They are already at record levels. They are going to continue to spread. There is no stopping this using the two tools the government has:

- Adjust interest rates, which are now down to about zero on the Fed Funds rate.

- Or print more money. But you can't print your way to prosperity!

I mentioned home equity loans. Back in the 1930s, nobody had such a thing. If you had a second mortgage, you were considered a loser. Back then, most people did not own homes. They did not have credit cards. They were not burdened with $14 trillion worth of debt! You only bought what you could afford back then.

And also back then - very important - we weren't fighting losing wars with a huge military-industrial complex that has cost us well over $2 trillion already and is building as we're sending more troops, as we're hearing now, into Afghanistan.

And back then in the 1930s - and this is the key point going back to what I said about productive capacity. When we finally got out of the Great Depression, it was the onset of World War II. We were the manufacturing giant of the world. We manufactured our way out of the Great Depression. We no longer have that manufacturing base.

So, having said that, what we're left with now is a nation of clerks. I look at these job offerings. You go into a Quick Stop gas station and they say, ‘Have a career with us.’ What kind of career?! What happens to a young person who gets out of college with a diploma?

So, you're going to have massive unemployment. You're going to have rising crime, a lot of petty crime and violent crime. It goes with the territory and people better get used to it. And local and state governments are not going to solve it by putting more police on the streets, unless the government is going to turn this into a totally fascist country.
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