Even during the "Great Depression" there were years that the stock
market made overall annual gains. Much like the market advances of
last year, this did not signify that the U.S. (or the rest of the
world) was out of the economic doldrums. Commodity prices and
unemployment rates remained high throughout the 1930's for the common
workingman who, incidentally, was only saved from the most basic
material plight thanks to WW2. Workers of industrialized nations
today cannot hope to be so lucky as to be saved by another world war
because the current economic conditions are far more bleak (and
warfare, for that matter, is far more unpleasant).
The stock market weakness of recent years is, however, really an
issue of only secondary importance. Although the market collapse
effected a broad section of the population, the average American is
now far more concerned about unemployment (and underemployment) which
seems to be higher than the official statistics suggest. Furthermore,
amidst this underemployment, the price of energy has increased to
uncomfortable levels. This increase in energy costs raises the price
of other basic commodities like food, electricity, and also the
transportation of everything that needs to be shipped. U.S. oil
reserves are at there lowest levels since 1975 -- a fact which is
certain to keep prices high. That the amount of easily extracted
petroleum is limited, and subject to socio-political influences, does
not suggest that there will be a pot of gold under the oil slick
rainbow. (Some interesting insights on the energy crisis can be found
at www.dieoff.com)
In addition to the energy crisis... the dollar is at its weakest
levels yet compared to the euro and other world currencies. Consumer
and national debt is at unprecedented levels -- as are bankruptcies
and foreclosures (despite the housing boom).
These latter facts in combination with the aforementioned energy
crisis will hurl the world into a deep depression. This will be a
greater depression than was experienced in the 1930's -- it will last
longer and cause hardship for more people. There will be no stopping
it's manifestation as it has already begun to manifest. All one can
do about it is get out of the way. And you'd better act fast... by
mid-year the stock markets will crash and the unemployment rate will
rise skyward.