Stimulus checks spur incomes and spending but $140 oil is creating massive dislocation in the economy heading towards depression
Alan Hersey
Jun. 28, 2008

American received the stimulus checks last month. U.S. incomes, spending and savings got a huge boost from economic-stimulus checks last month. But the stock market, the financial sector and the investment banks are telling a very grim story about the future of the economy.

The gas price at the pump is causing in an implosion in the economy. People are changing their life styles. They are scared to go out anymore because of the gas price. Small businesses are contracting back into the owner’s basement so that no commuting is involved. The office space vacancy rate will skyrocket in the next several months.

A structural contraction in the economy last happened during the days of great depression. The concept ‘it is better not to start any new venture’ can be the killer for economic growth.

Structural economic contraction does not stop easily. It leads into deflation and eventually depression. Eventually as the US economy is depressed, the rest of the world will be in worse shame. As US will close it door to open trade, other economies especially that in Asia will collapse.

Federal Reserve is talking about raising interest. They are wrong again. They will soon push rates from 2% to 0% just like in Japan. In the mean time dollar will collapse, gold and other precious metals will skyrocket. Stock market will have the worst time in its history.

Stimulus checks spur incomes and spending but $140 oil is creating massive dislocation in the economy heading towards depression
Alan Hersey
American received the stimulus checks last month. U.S. incomes, spending and savings got a huge boost from economic-stimulus checks last month.
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