The Great Depression

  • Benjamin Roth: The Great Depression: A Diary

    Benjamin Roth: The Great Depression: A Diary
    It's all here, times change people don't -the endless govt programs that fail to stimulate the private sector -the ups and downs of the economy, the veterans pension stimulates just as the housing credit did, until of course the money runs out -Roth is a attorney in Youngstown Ohio who kept a diary regarding the economy from 1930 until WW II breaks out, he is objective, candid, and forthright which is more than we get from Washington DC now or then highly recommended

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December 28, 2011


valentin Tristan

Image, perception! This whole world is run by both. Thinking along this line, what is the image or perception that the economists, financial industry, public companies, and the government want investors to believe this past year? The image I get is that everything is alright. Everything is getting better.
Let’s see? I know I can go to the grocery store and buy three packs of meat and the price is fifty dollars. Gas is around three dollars a gallon. Now take somebody that makes 12.50 an hour, he makes 500 dollars gross. Probably 425 take home pay. Now let’s take 50/425= 11.76%. Now 1 tank of gas to go to work, middle of the road vehicle, let’s say 22 gallons. 22*3= 66 dollars. Now take 66/425= 15.53%. That is 27.29% of a person’s take home pay on two things. No wonder the economy cannot get back to speed. When it cost more to live on and payroll does not go up then this is a losing proposition for the economy. It cost more to live on and we are getting fewer products for our money. Does anybody get it? Where are all the educated economists? Then put credit debt on top of that because the workers or not making enough to live on. The consumers are choked to death. Winni9ng recipe for the economy to go to hell every few years. Only thing is this time around the companies, so they can retain their earnings cut employees in the first round. In the second phase companies started cutting inventory. Usually this works on a normal recession because it lasts about 2 years. Consumers come back AND COMPANIES START HIRING. This is not a normal recession it has lasted for more than 2 years. So now the companies are starting to cut hours from the remaining employees that they have left. The one’s they don’t want to fire. Still they raise the prices for their products to meet earnings expectation. Who is left to buy things? Where is the Image or perception that everything is getting better?
When foreclosure stops, when consumers pay their debt down to reasonable level, when payroll goes up, when products are sold for a reasonable price compare to wages and when houses can be afforded by the majority of the people that work, then and only then will the economy come back. When you have a worker making 30 dollars an hour making a car and expect a consumer that makes 12.50 an hour buy it; there is something wrong with that equation.
Now here lays the Image or perception from the economists, financial industry, public companies, and the government. They want the DOW, S&P, NADSAQ to be up or about the same for the year 2011. They have managed that. The indexes are pretty close to where they started at the beginning of the year. The Image or perception is, look everything is getting better. We didn’t go to hell.
Now look around you and your friends. Is this the way it really looks for you. If you believe this then the market will go up for you. Remember one thing, what will happen when the government stops extending unemployment payments. This people will stop spending completely or when the government has printed so much money that the dollars becomes worthless; Is it possible. Ask Germany.
Our economy is flawed because investors expect for earnings to always go up so they can make tons of money.

valentin Tristan

I want to wish everybody a good investment year for next year.

Dennis Elam

We look forward to more of Valentine's comments on the blog this next year

thanks Valentine!

Dennis Elam

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