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Friday, March 26, 2010

Here Is Where We Are Now

Approximately 30 Million Americans are either unemployed, under-employed, or have given up looking for work. That equals roughly one fifth of the entire work force.

These people, and others who are worried about losing their jobs, are cutting back on their expenditures. Consumer expenditures usually account for 70% of the Gross Domestic Product. Two of our long time favorite restaurants have closed. It is a tough time to be in the restaurant business, or any other small business.

Large corporations are sitting on huge cash reserves. They don't need to borrow from anyone. Productivity is at an all time high because they have reduced employment and maintained production with a reduced work force.

Small businesses are teetering on bankruptcy, or simply shutting down. A survey earlier in March indicated the 80% of all small businesses think they will be out of business within nine months if orders don't improve. The other 20% say they will be out of business sooner.

Eleven million U.S. households are currently under water with their mortgages. That means that if they lose their jobs they can't move to find a new job.

The little bump in GDP lately was solely the result of replacing inventories which were run down during the worst of the recession. Without new sales, the GDP will return to shrinking.

The Federal Reserve Bank has flooded the economy with money. It won't take much to set of raging inflation.

The administration is shouting that the Recession is over. Don't believe it for a minute.

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