US Stocks and economy starts plunge in the third wave – a Dow below 7,000 and GDP growth of –3.5% will lead to a depression
Sam Adelton
Jun. 26, 2008

Spiking oil price, faltering real estate, stagnating main stream economy, low business and consumer confidence, and massive meltdown in the banking and mortgage sector marks the start of a third wave of economic collapse in the United States.

This time Europe and Japan are also in the downtrend. Asia is reeling from hyperinflation. India and China face the first wave of down in their cycle of great depression.

Stock market is in relentless retreat and the Dow will soon challenge the base in 10,000. Things are outright nasty behind the scene.

The oil price spike has created the background for the nastiest depression in the US economy ever since the declaration of independence.

The 100 year banking cycle topped out in 2006 creating the scenarios for massive bank failure and total financial meltdown worldwide.

It is estimated that by 2012, most major US banks will fail one way or the other. The Fed like Bear Strerns will bail some out. Some will be facing outright run on the bank.

FDIC can support only three large bank failures in US. The problem is that close to 300 smaller regional banks will fail first. That will take out the cushion of support from Fed and FDIC to support further large bank failures.

Wall Street tumbled Thursday as oil prices jumped and downgrades of brokerage and automotive stocks gave investors little incentive to buy. Analyst comments on GM sent automaker's shares to their lowest level in more than 30 years, while Citigroup fell to a 10-year low after an analyst placed a "sell" rating on the stock.

This kind of news will be common now on. The biggest question is – where is the end of this distress. Most likely it will continue till 2020 with a financial meltdown by the end of December 2012.

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