People burying CASH before the DEPRESSION?

These People Are Burying Their Cash
by Anne Kadet
Thursday, November 20, 2008

The day the Dow fell 777 points, David Latham, a 45-year-old Alabama cattle farmer and electrician, was busy doing errands. Driving his Chevy pickup into Montgomery, he dropped by the hardware store, then stopped into the bank, where he withdrew $8,000 from his CD account, all in 20s. Back home, he slipped the four inch-thick bundles into a Ziploc bag, popped them into a waterproof PVC tube and set out for a remote location on his 300-acre property, where he dug a deep hole with a post digger. And then he buried his money.

Is there an American alive who hasn’t considered burying his savings—or at least stashing it in the mattress—as this financial crisis has deepened? Latham assumes the Federal Deposit Insurance Corp. will step in if his bank collapses, but he figures it might take a few weeks to get his money. Now, he says, “I can get my hands on cold, hard cash anytime I want.” But beyond that, there’s the nagging fear that the world isn’t as secure as we’d like to believe. Latham says the $8,000 is an insurance policy against, well, who knows? “I’m hedging my bets,” he says.

America’s uneasy relationship with banks has deep roots. Between the financial panic of 1837 and the Great Depression, the nation endured six widespread bank failures in which millions lost their savings. The bank runs typically started in rural areas before spreading to the cities, accounting for the lingering distrust country folks have for banks to this day. “In some ways, it really was wiser to put your money in the ground,” says Dartmouth history professor Ronald Edsforth. Given this history and the current panic, he adds, “It’s not unusual that it would resurface.”

Mitch Cohen, a family physician in the remote logging town of Elma, Wash., says his patients who grew up during the Depression have always kept savings in coffee cans buried under the porch. But in recent months, when hometown stalwart Washington Mutual went south, the younger generation caught on. Residents have taken to making treasure maps (“walk 20 paces, turn left at the tree”), which they share with a trusted friend or family member. Cohen finds it hard to argue with the impulse. He, too, snatched his cash out of WaMu before it went under. “But I moved it to a credit union,” he says. “I avoided the backyard.”

It’s not just rural folk who get the urge. Kristy Young, an accounts manager with a Texas-based credit union, recently confronted a customer who wanted to transfer $150,000 from the bank to his backyard. She pleaded with him for an hour, using arguments ranging from the technical (soundness ratings) to the practical (“If a dog digs it up, that money is gone!”). The man relented, but Young is more worried about the customers who withdrew their money silently. “I don’t put it past people to keep money in their own personal safes,” she says. Indeed, according to Doug Brush, head of business development for SentrySafe, the nation’s largest safemaker, the company’s retailers report sales of home safes increasing 20 to 40 percent in recent weeks.

Of course, there’s opportunity in every crisis. Earl Snyder, a Sarasota, Fla., home builder who first buried cash after the S&L crisis and currently tends a subterranean stash of gold coins, recently launched a Web site and eBay listing to sell an invention he calls the Midnight Gardener: a 12-by-4-inch capped, watertight PVC pipe. As his listing notes, the device is “designed by a licensed septic installer” (“That’s me!” Snyder hoots) and perfect for burying “over $4,000 in gold, silver and paper money.” Within two weeks of the launch, Snyder sold several, and he expects more sales as the crisis wears on. “Maybe instead of Chia Pets,” he says, “people will buy a Midnight Gardener for Christmas.”
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Comment: The problem with burying cash is that when they dig it up it will be worth NOTHING! BUY GOLD and SILVER to preserve your wealth! The dollar is sinking to nothing.

FINANCIAL CRISIS SHUTTING DOWN WORLD TRADE-MUST READ!

November 17, 2008 (LPAC)--Cargoes are rotting on the docks around the world, unable to be delivered, due to a lack of financing. The shipping business depends upon letters of credit: for cargoes to move, the shipper needs to know when he puts a cargo on a ship that the buyer at the other end will be able to pay for it, and this is where the banks come in. Banks provide the guarantees of payment through letters of credit and related credit lines, so that the goods upon which the world depends can move. This system has functioned for hundreds of years, but is now breaking down. Due to the collapse of the banking system, banks are increasingly reluctant or unable to issue these letters of credit, and charge significantly more for the letters that they do issue. The result is that an increasing number of shipments are sitting on the docks, in warehouses, or in the cargo holds of ships, orders are being canceled, or not even placed. The global supply chain which connects producers with consumers is breaking, and the consequences will be dire indeed.

The leading edge of this trade crisis is in bulk commodities, which have been hit with a dual whammy of plunging commodities prices and trade-finance shortages. Adding to the difficulty is that many bulk cargoes are financed in dollars, and dollars are increasingly difficult to obtain due to the demands of the multi-quadrillion-dollar derivatives market.

The world depends upon trade, especially during this age of globalization, with nations more dependent than ever upon foreign suppliers for the necessities of life. When this trade slows, people begin to die. When the wheat doesn't get exported, the mills cannot produce flour, the bakeries cannot produce breads, and the stores have no bread to sell. When the iron ore doesn't ship, no steel can be produced, which means factories begin to shut down, and so on, until the entire economy grinds to a halt.

We can live without the derivatives markets, the CDOs, and the other alphabet-soup financial gimmicks, but we cannot live without global trade, and we cannot survive if the supply chain breaks. That means we need a functioning banking system, one which can meet the needs of the population. What we have instead is a system that has failed to the point that it can no longer meet its basic responsibilities, and must be reorganized according to the principles outlined by Lyndon LaRouche.

The consequences of a collapse of the global supply chain would be catastrophic for all of mankind--death, famine, pestilence, the breakdown of civilization itself. The failure to solve this problem, whether by incompetence or deliberate intent, is genocide. The Anglo-Dutch Liberal financial system has failed, and we must abandon it in favor of an American System credit system, quickly

General Electric now in Collapse?

General Electric: Genuine Risk of Collapse?
November 17, 2008 | about stocks: GE

General Electric (GE), the legendary American institution, founded in 1878 by Thomas Edison, is in deep trouble. Its PR machine has been in constant spin mode as the company sinks deeper into despair. It is one of the few companies in the U.S. that still retains a AAA rating. Considering Moody’s and S&P’s track record, rating companies and financial instruments, that AAA rating is not worth the paper it is written on. One look at GE’s balance sheet will convince you they do not deserve a AAA rating. AAA companies do not need to take the desperate actions that GE has taken in the last few months.
The virtual crash in its stock price indicates that there is something seriously wrong with GE. The stock reached $53 at its peak in 2000. It closed below $17 this past week, the lowest level since the mid-1990s. CEO Jeffrey Immelt, who took over from icon Jack Welch in 2001, has made his mark by managing the company to a 68% decline in its stock price. You will not see anyone on CNBC take a hard look at GE’s financial statements or ask the CEO tough questions, because Mr. Immelt signs their paychecks. While shareholders have taken a bath, Mr. Immelt, a Harvard MBA, raked in $72.2 million of compensation between 2002 and 2007. A company that is known for its pay for performance mantra evidently does not hold its CEO to the same standards.
The issuing of $12 billion in common stock at $22.25 per share is an act of extreme desperation and brings into question whether GE has a lucid strategy. How can investors have confidence in a company that bought back 97 million shares for $3.1 billion at an average price of $31.69 in the first nine months of 2008, and then issued $12 billion worth of stock at $22.25 in October? Not only did they buyback $3.1 billion of stock in 2008, but they also bought back $27 billion of stock in the prior three years at an average price of $36.46. This is a twist on the old saying, buy high and sell low. If Mr. Immelt was not so focused on trying to beat short term earnings goals by wasting $30 billion of cash on share buybacks, he wouldn’t have had to beg Warren Buffett for $3 billion last month at very poor terms from GE’s perspective. A CEO is responsible for preparing their company for a worst case scenario and should never risk the company in an attempt to meet short term goals. Mr. Buffett may have made one of the few mistakes of his glorious investing career. He has lost $762 million on his investment in 1 ½ months, a return of -25%.

Comment: We now have 3 of the largest auto companies collapsing, banks collapsing, companies bankrupt, retail shopping way down, mass unemployment.. now GE?
When will the Government admit we are in a DEPRESSION?

MILLIONS STARVE while UN buys $23 million art with FOREIGN AID!

The U.N. Human Rights Council, frequently accused of coddling some of the world's most repressive governments, threw itself a party in Geneva Tuesday that featured the unveiling of a $23 million mural paid for in part with foreign aid funds.

In a ceremony attended by U.N. Secretary General Ban Ki-moon, Spanish artist Miquel Barcelo told the press that his 16,000-square-foot ceiling artwork reminded him of "an image of the world dripping toward the sky" — but it reminded critics of money slipping out of relief coffers.

"In Spain there's a controversy because they took money out of the foreign aid budget — took money from starving children in Africa — and spent it on colorful stalactites," said Hillel Neuer, executive director of U.N. Watch.

PAUL VOLCKER ISSUES DIRE WARNING : ECONOMIC SLUMP HAS METASTASISED

Volcker issues dire warning on slump also OPPOSES BIG 3 BAILOUT!
Paul Volcker, the former chairman of the US Federal Reserve, has warned that the economic slump has begun to metastasise after a shocking collapse in output over the past two months, threatening to overwhelm the incoming Obama administration as it struggles to restore confidence.

By Ambrose Evans-Pritchard
Last Updated: 10:39PM GMT 17 Nov 2008

"What this crisis reveals is a broken financial system like no other in my lifetime," he told a conference at Lombard Street Research in London.

"Normal monetary policy is not able to get money flowing. The trouble is that, even with all this [government] protection, the market is not moving again. The only other time we have seen the US economy drop as suddenly as this was when the Carter administration imposed credit controls, which was artificial."

His comments come as the blizzard of dire data in the US continues to crush spirits. The Empire State index of manufacturing dropped to minus 24.6 in October, the lowest ever recorded. Paul Ashworth, US economist at Capital Economics, said business spending was now going into "meltdown", compounding the collapse in consumer spending that is already under way.

Mr Volcker, an adviser to President-Elect Barack Obama and a short-list candidate for Treasury Secretary, warned that it is already too late to avoid a severe downturn even if the credit markets stabilise over coming months. "I don't think anybody thinks we're going to get through this recession in a hurry," he said.

He advised Mr Obama to tread a fine line, embarking on bold action with a "compelling economic logic" rather than scattering fiscal stimulus or resorting to a wholesale bail-out of Detroit. "He can't just throw money at the auto industry."

Mr Volcker is a towering figure in the US, praised for taming the great inflation of the late 1970s with unpopular monetary rigour. He is no friend of Alan Greenspan, who replaced him at the Fed and presided over credit excess that pushed private debt to 300pc of GDP.

"There has been leveraging in the economy beyond imagination, and nobody was saying we need to do something," he said. "There are cycles in human nature and it is up to regulators to moderate these excesses. Alan was not a big regulator."

Even so, he said the arch-culprit was the bonus system that allowed bankers to draw forward "tremendous rewards" before the disastrous consequences of their actions became clear, as well as the new means of credit alchemy that let them slice and dice mortgage debt into packages that disguised risk. READ
it HERE
WASHINGTON — Treasury Secretary Henry Paulson told Congress on Tuesday that the administration remains firmly opposed to dipping into the government's $700 billion financial bailout fund for a $25 billion rescue package for Detroit's Big Three automakers, no matter how badly they need the help.

"There are other ways" to help them, Paulson told the House Financial Services Committee as the bailout bill clung to life support on Capitol Hill.

Committee members grilled Paulson on the administration's stance that the $25 billion must come from separate legislation passed in September that Congress designed specifically to help auto manufacturers retool their factories so they can make more fuel-efficient vehicles.

The $700 billion bailout plan enacted by Congress in October and signed into law by President George W. Bush did not envision that the program would be used to help rescue nonfinancial companies, Paulson said. "I believe the auto companies fall outside of that purpose."

At the same time, he testified, "I think it would be not a good thing, it would be something to be avoided, having one of the auto companies fail, particularly during this period of time."

Paulson said that solving the financial problems of the automakers should be done in a way "that leads to long-term sustainable viability" for the industry.

Auto executives, backed by leading Democrats, insist they need another $25 billion in emergency bridge loans _ on top of the $25 billion already approved and being administered by the Energy Department _ to avert a collapse of one or more of their companies. That would bring the total federal help for the industry to $50 billion this year.

Paulson cited this Energy Department program several times. "I urge you to modify that" to help automakers, he said.

Bailout for GM is COLLAPSING!

WASHINGTON (AP) - Prospects dimmed Monday for enactment of a $25 billion bailout for the faltering auto industry before year's end, as congressional Democrats and the Bush administration seemed headed for a stalemate. Help for Detroit's Big Three, which have been battered by the economic meltdown that has choked their sales and frozen their credit, is falling victim to a partisan fight over where the money should come from.

Senate Democrats said they would press ahead with their plan to carve out a portion of the $700 billion Wall Street bailout to pay for the loans, but aides in both parties and lobbyists tracking the plan acknowledged they did not currently have the votes to do so. The White House and congressional Republicans insist that the automaker bailout money instead come from redirecting a separate $25 billion loan program approved by Congress to help the industry develop more fuel-efficient vehicles. READ ENTIRE ARTICLE HERE

Complete COLLAPSE of the Banking SYSTEM?Millions UNEMPLOYED!

HEADLINES:CITIBANK LAYING OF 53,000 more to follow? READ IT HERE


From the British TELEGRAPH: (snippets)
But this week, I saw a picture in a newspaper which really did tell the story.

It was an aerial shot of Hong Kong harbour. Rank upon rank of merchant ships stretched away across the water. Normally such scenes are displays of might, but this was one of impotence. The ships were idle. They could not load up because the cargoes on the dockside lacked the necessary letters of credit. You could see world trade coming to a standstill.
Today, we are in a financial crisis, and we cannot produce the medicine because we still do not know the source or spread of the disease. People who, 18 months ago, seemed to be the strongest men the world had ever seen, now turn out to be sick unto death.

And because banking, like the circulation of the blood, affects the whole system, you can expect almost anyone to come down with the plague. Construction, shipping, restaurants, cars, telecoms, even, I confidently predict, lawyers - any trade might succumb at any time.
The consequences are already bad enough. They could be truly terrible. There could be a complete collapse of the banking system, many millions unemployed, a return to barter, "self-sufficiency" (a Green word meaning poverty), extremist riots, looting. It seems an odd thing to say to our joke-free Prime Minister, but please, Mr Brown, get serious. READ THE ENTIRE ARTICLE HERE

CHINA closes 67,000 FACTORIES-GM cost for bailout? 200 BILLION!

Courtesy of the NY TIMES:

China Stats:
GDP: 9.74%
Inflation: 6.43%
Unemployment: 4%*
Markets: -64.92%
Gallon of gas: $3.48
Interest Rates: 6.66%
The slowdown in exports contributed to the closing of at least 67,000 factories across China in the first half of the year, according to government statistics. Labor disputes and protests over lost back wages have surged, igniting fear in local officials. I sat in disbelief reading today’s Shenzhen local paper stating that Some 9,000 of the 45,000 factories in the cities of Guangzhou, Dongguan and Shenzhen are expected to close down in the next three months according to the Dongguan City Association of Enterprises with Foreign Investment estimates. Those closures would see up to 2.7 million jobs cut as overseas demand for consumer goods and clothes fades, that’s more than 50,000+ a day if you believe official figures, which I do not, and I believe number is actually higher.
http://www.bloomberg.com/apps/news?pid=20601087&sid=a0Ee7HIsw7Ao&refer=home

Nov. 15 (Bloomberg) -- General Motors Corp., burning through cash as sales slump, would cost the government as much as $200 billion should the biggest U.S. automaker be forced to liquidate, a forecasting firm estimated.

A GM collapse would mean ``more aid to specific states like Michigan, Ohio, and Indiana, and more money into unemployment and extended benefits,'' Nariman Behravesh, chief economist at IHS Global Insight Inc. in Lexington, Massachusetts, said yesterday in an interview.

Behravesh's projection of $100 billion to $200 billion in costs dwarfs the $25 billion industry bailout plan that will be debated in Congress next week to prop up Detroit-based GM, Ford Motor Co. and Chrysler LLC. The drain on taxpayers from a rescue or a GM failure is a central issue for U.S. lawmakers. General Motors also pleaded Monday for a billion-euro credit guarantee from the German government to help its Opel subsidiary.


BUSH: "US could have had a depression *greater* than the Great Depression" Admitted this to the press, on live TV, in his own words, after the G-20 economic summit today. Shocked The statement has only been briefly mentioned in the news, why?

Food Riots,Tax Rebellions, Dollar Collapse by 2012

Food Riots, Tax Rebellions By 2012...Trend forecaster, renowned for being accurate in the past, says

The man who predicted the 1987 stock market crash and the fall of the Soviet Union is now forecasting revolution in America, food riots and tax rebellions - all within four years, while cautioning that putting food on the table will be a more pressing concern than buying Christmas gifts by 2012.

Gerald Celente, the CEO of Trends Research Institute, is renowned for his accuracy in predicting future world and economic events, which will send a chill down your spine considering what he told Fox News this week.

Celente says that by 2012 America will become an undeveloped nation, that there will be a revolution marked by food riots, squatter rebellions, tax revolts and job marches, and that holidays will be more about obtaining food, not gifts.

"We're going to see the end of the retail Christmas....we're going to see a fundamental shift take place....putting food on the table is going to be more important that putting gifts under the Christmas tree," said Celente, adding that the situation would be "worse than the great depression".

"America's going to go through a transition the likes of which no one is prepared for," said Celente, noting that people's refusal to acknowledge that America was even in a recession highlights how big a problem denial is in being ready for the true scale of the crisis.

Celente, who successfully predicted the 1997 Asian Currency Crisis, the subprime mortgage collapse and the massive devaluation of the U.S. dollar, told UPI in November last year that the following year would be known as "The Panic of 2008," adding that "giants (would) tumble to their deaths," which is exactly what we have witnessed with the collapse of Lehman Brothers, Bear Stearns and others. He also said that the dollar would eventually be devalued by as much as 90 per cent.

The consequence of what we have seen unfold this year would lead to a lowering in living standards, Celente predicted a year ago, which is also being borne out by plummeting retail sales figures.

The prospect of revolution was a concept echoed by a British Ministry of Defence report last year, which predicted that within 30 years, the growing gap between the super rich and the middle class, along with an urban underclass threatening social order would mean, "The world's middle classes might unite, using access to knowledge, resources and skills to shape transnational processes in their own class interest," and that, "The middle classes could become a revolutionary class."

In a separate recent interview, Celente went further on the subject of revolution in America.

"There will be a revolution in this country," he said. "It’s not going to come yet, but it’s going to come down the line and we’re going to see a third party and this was the catalyst for it: the takeover of Washington, D. C., in broad daylight by Wall Street in this bloodless coup. And it will happen as conditions continue to worsen."

"The first thing to do is organize with tax revolts. That’s going to be the big one because people can’t afford to pay more school tax, property tax, any kind of tax. You’re going to start seeing those kinds of protests start to develop."

"It’s going to be very bleak. Very sad. And there is going to be a lot of homeless, the likes of which we have never seen before. Tent cities are already sprouting up around the country and we’re going to see many more."

"We’re going to start seeing huge areas of vacant real estate and squatters living in them as well. It’s going to be a picture the likes of which Americans are not going to be used to. It’s going to come as a shock and with it, there’s going to be a lot of crime. And the crime is going to be a lot worse than it was before because in the last 1929 Depression, people’s minds weren’t wrecked on all these modern drugs – over-the-counter drugs, or crystal meth or whatever it might be. So, you have a huge underclass of very desperate people with their minds chemically blown beyond anybody’s comprehension."

"When CNN wants to know about the Top Trends, we ask Gerald Celente."
— CNN Headline News

"A network of 25 experts whose range of specialties would rival many university faculties."
— The Economist

"Gerald Celente has a knack for getting the zeitgeist right."
— USA Today

"There’s not a better trend forecaster than Gerald Celente. The man knows what he’s talking about."
- CNBC

"Those who take their predictions seriously ... consider the Trends Research Institute."
— The Wall Street Journal

"Gerald Celente is always ahead of the curve on trends and uncannily on the mark ... he's one of the most accurate forecasters around."
— The Atlanta Journal-Constitution

"Mr. Celente tracks the world’s social, economic and business trends for corporate clients."
— The New York Times

"Mr. Celente is a very intelligent guy. We are able to learn about trends from an authority."
— 48 Hours, CBS News

"Gerald Celente has a solid track record. He has predicted everything from the 1987 stock market crash and the demise of the Soviet Union to green marketing and corporate downsizing."
— The Detroit News

"Gerald Celente forecast the 1987 stock market crash, ‘green marketing,’ and the boom in gourmet coffees."
— Chicago Tribune

"The Trends Research Institute is the Standard and Poors of Popular Culture."
— The Los Angeles Times

"If Nostradamus were alive today, he'd have a hard time keeping up with Gerald Celente."
— New York Post

So there you have it - hardly a nutjob conspiracy theorist blowhard now is he? The price of not heeding his warnings will be far greater than the cost of preparing for the future now. Storable food and gold are two good places to make a start.

UNBELIEVABLE number of LAYOFFS! Unemployment for THOUSANDS!

The government reported more grim news about the economy Friday, saying employers cut 240,000 jobs in October - bringing the year's total job losses to nearly 1.2 million.
CHECK OUT THE LATEST JOB LOSSES IN THE LAST MONTH:
Mayor of Chicago: Prepare For Mass Layoffs; “It’s Going to Be a Very Frightening Economy”
November 13th, 2008
Mayor Richard M. Daley says the economic woes in Chicago will get much worse, and more local workers could soon be getting pink slips.
Citi Firing 60,000, Chairman May Still Lose Job
Queen Elizabeth 2 is finished, no more sailing
Electrolux announces layoffs at Webster City plant 99 laid off
ADT lays off 380 in Omaha, Neb., call center
Cessna announces it will layoff 500 workers in Wichita
Yum Brands Cutting Hundreds Of Jobs
Applied Material announced plans to cut 1,800 jobs by the end of fiscal 2009.
QVC to cut 900 jobs, mostly in Pennsylvania
The University of Texas Medical Branch in Galveston will lay off 3800 people
Canwest Global Communications is eliminating approximately 560 jobs ( Canada)
Fort Smith furniture factory announces 250 layoffs ( founded 1946)
British firm JCB to cut nearly 400 jobs
US Steel lays off 677 workers in US, Canada
Eclipse ( Makes Jets) workers sent home without pay ( on the verge of bankruptcy)
Ozarks Boat Maker Layoffs (100 laid off)
Sun Microsystems Inc. said Friday it will cut 5,000 to 6,000 jobs
4,000 jobs go in a day as recession bites in ENGLAND
Zeeland-based Herman Miller Inc. said Tuesday it plans to eliminate 400 to 650 workers
Shipping company Horizon Lines of Charlotte plans to eliminate about 70 jobs
Following layoffs in FLORIDA:
Auto Trader.com Inc. is laying off 69 workers at 3451 Technological Ave. in Orlando by Feb. 23, 2009.

Coca-Cola Enterprises Inc. is laying off 33 workers at 521 Lake Kathy Drive in Brandon on Dec. 31.

Continental American Corp. is laying off 45 workers at 4600 SW 34th St. in Orlando on Dec. 31.

Florida Made Door Co. is laying off 80 workers at 13700 Virginia Ave. in Astatula by Jan. 1, 2009.

JPMorgan Chase is laying off 93 workers at 4919 Memorial Highway, 1st floor, in Tampa by Dec. 20.

Kmart Corp. is laying off 50 workers at 8191 S. Tamiami Trail in Sarasota by Jan. 18, 2009

Luhrs Corp. is laying off 169 workers at 255 Diesel Road in St. Augustine on Jan. 1, 2009.

NuAir Manufacturing is laying off 126 workers at 8105 Anderson Road in Tampa by Dec. 18.

Publishers Circulation Fulfillment Inc. is laying off 105 workers at 3351-B McLemore Drive in Pensacola on Dec. 19.

Raymond Building Supply is laying off 62 workers at 4000 N.W. 119th Drive in Jasper on Dec. 1.

Sears Holdings Corp. is laying off 89 workers at 9500 9th St. North in St. Petersburg on Jan. 11, 2009.

Britain and INDIA on the BRINK OF A MELTDOWN!

The fortunes of India's wealthiest have been slashed by more than 60 percent due to the global financial crisis which has sharply pulled down stock markets, according to a new rich list.

Unemployment is already 4 million if you include the additional 2 million claiming disability benefit

Ken Clarke warns Britain is on the brink of 'meltdown'
Kenneth Clarke, the former Conservative Chancellor, has warned the economy is on the brink of "meltdown" and unemployment could reach three million.

By Rupert Neate and Robert Miller
Last Updated: 6:35PM GMT 12 Nov 2008

Mr Clarke, 68, said the British economy is headed for a "catastrophic crisis" that will be "far worse than anything that has occurred in my lifetime".
"There will be a very serious recession next year," he said in an interview with Telegraph TV. "I think the big problem in 2009 will be the catastrophic fall in consumer spending demand, spending in shops will get worse."
Mr Clarke, who as Chancellor of the Exchequer between 1993 and 1997 led Britain's recovery from Black Wednesday, called for a temporary cut in VAT to boost spending.
Speaking as the Office of National Statistics revealed unemployment has reached an 11-year high of 1.82m, Mr Clarke said the number of jobless could soon reach three million.
"It is going to go up a long way... whether we will get back to three million again is one of those slightly morbid questions I really don't know the answer to. But it could get pretty big," he said. Rising unemployment will have a "devastating effect" on families and lead to more people being unable to pay their mortgages, he said.
The former Chancellor said Gordon Brown has received undue credit for his role in attempting to shore up the global economy. "The idea that Gordon has saved the world is not true," he said. "We still have a major, major crisis in this country and... public finances are in a terrible mess".
Mr Clarke said the larger than expected 1.5 percentage point cut in the base rate was a good move, but cautioned that it would not end the crisis. "We had a big cut in interest rates, about which there was a wholly exaggerated expectation, in the short term it will have modest effects, if any. Long-term it will begin to have effects.
"We are not yet in a state where we can be absolutely certain we are not going to have something close to meltdown next year", he said. "You do have to see what can be done with taxes."
He cautioned that Britain has "mounting debt, which is unsustainable" but said policymakers should bear in mind the effect a "full-blown depression will have on public finances". Looking forward to the Pre-Budget Report he said any fiscal stimulus package would have to work in both the national interest and contribute to worldwide efforts to stabilise the global economy.
Mr Clarke said the public can see the Prime Minister has got more "confident" in his economic judgement, but said he imagines the Treasury is being "driven crazy by the wild way" in which he and his advisers spark speculation about the way the Government intends to combat the financial crisis.
According to Mr Clarke, public respect for banks, which are "hated institutions" at the best of times, has collapsed. He was also "very concerned" that the Government could make the crisis worse by forcing banks into "lending that they cannot afford".
"When I hear these stories of the Chancellor being presumably ordered by the Prime Minister to get the banks in and waving newspaper headlines at them I think that is no way of making policy," he said.

Merrills CEO calling for a Major Great Depression

Merrill’s CEO John Thain at a conference yesterday:

“Right now, the US economy is contracting very rapidly. We are looking at a period of global slowdown. This is not like 1987 or 1998 or 2001. The contraction going on is bigger than that. We will, in fact, look back to the 1929 period to see the kind of slow-down we’re seeing now.“
Best Buy’s CEO on today’s earnings call:

“Since mid-September, rapid, seismic changes in consumer behavior have created the most difficult climate we’ve ever seen. Best Buy simply can’t adjust fast enough to maintain our earnings momentum for this year.”

And how ’bout this from former Goldman Sachs chairman John Whitehead:

I think [this slump will] be worse than the depression. We’re talking about reducing the credit of the United States of America, which is the backbone of the economic system. … I see nothing but large increases in the deficit, all of which are serving to decrease the credit standing of America. … I just want to get people thinking about this, and to realize this is a road to disaster. I’ve always been a positive person and optimistic, but I don’t see a solution here.

Contrast this with the guests on CNBC who are still finding excuses to buy stocks. Folks, they’re telling you stocks are cheap because they’re asset managers: They get paid based on the amount of capital they have under management. If you’re not invested in stocks, they don’t have jobs.

Consumer spending makes up 70% of the economy. “Rapid, seismic changes in consumer behavior” mean GDP will contract, significantly.

The collective earnings of the S&P 500 companies will be about $60 next year. Put a 10x multiple on that and you get an index value of 600. That means the market has, at least, another 30% to fall. I wouldn’t go anywhere near stocks now. They are not cheap relative to earnings.

World Wide Depression in the Works!

Anyone who believes a Depression is not on its way is.....dreaming

Global Panic Spreads

The largest debt bubble in the history of mankind is on the verge of deflating and collapsing as world leaders and central bankers fly around the globe to one crisis meeting after another. No sooner is one panic quelled or some hasty band-aid fix slapped into place to stop a financial collapse, then another breaks out somewhere else. The bad news just keeps on coming;

ICELAND...Bankrupt...Oct.2008 nationalises banks; turns to International Monetary Fund for help.
BALTIC DRY INDEX...Down 90%... a leading indicator of shipping rates & global trade.
JAPAN (NIKKEI)...Down 81%... from all time high of 38,957 on December 29th 1989.
RUSSIA (RTS & MICEX)...Down 77%... exchanges shut down several days to stem panic.
CHINA (SSE)...Down 72%... from all time high of 6,029 0n October 16th 2007.
KOREA (KSE)...Down 68%... from high in May 2007.
ARGENTINA (MERVAL)...Down 64%... moves to take over $30 billion in private pension funds.
INDIA (BSE)...Down 60%... since January 2008.
TURKEY (ISE)...Down 59%... from high in November 2007.
HONG KONG (HANG SENG)...Down 55%... past 12 months.
ITALY...Down 53%... past 12 months.
BRAZIL (BOVESPA)...Down 52%... from May 2008 peak. Trading suspended 5 times in 3 weeks.
FRANCE (CAC)...Down 50%... from June 2007.
GERMANY (DAX)...Down 50%... year to date.
GREAT BRITAIN (FTSE)...Down 47%...from all time high of 6,930; now “officially” in recession.
MEXICO (IPC)...Down 47%...since June this year.
AUSTRALIA (ASX)...Down 45%... from all time high of 6,829 on November 1st 2007.
U.S.A (DJIA)... Down 46%... to 8154 on Oct.10th 2008 from 14,198 on Oct.11th 2007. Interesting that the American market (where this crisis all began) is down less than so many others...but not surprising really with the U.S. Fed prepared to monetise as much debt as necessary to avert a Financial Armageddon.
OIL...Down 54%... after peaking at $139 in June 2008. OPEC Nations hastily cut supply.
COPPER...Down 50% from July 2008 high.
NICKEL...Down 62% year to date.
GOLD...Down 26% +... from high of $1,010 on March 17th 2008.

The statistics speak for themselves. The world is undoubtedly experiencing what Alan “I made a mistake” Greenspan described as a “once in a century event”... thanks a lot for that Mr. Greenspan.