Twitter   RSS   Email  
 
Home
Admin

 How the Global Economy is Dependent on Christianity


 Why America May Never Recover From the Recession


 Save Money Homeschooling


Dow Falls to 12-Year Low, Amid a Crumbling Economy

By: Steve Johnson

2/20/2009 - 38 Comments

Yesterdays Dow closed at 7,465, lower then the last bear market crash in 2003 when the Dow closed at 7,553.

The last time the Dow closed below 7,465 was 12-years ago on Oct 27, 1997.  Looking at the graph below, this is by far the steepest crash since the Great Depression.  The forces of capitalism cannot be stopped and the stock market will eventually find a bottom, but the damage may take several years to recover from.

Graph showing last time Dow closed below 7,465.

Federal Reserve projects years of economic weakness

It could take years for the nation to fully bounce back from the massive recession, according to new projections by leaders of the Federal Reserve on Wednesday. Fed leaders agreed that unemployment will remain high for the next three years. Some members indicated that more than five to six years would be needed for the economy to converge to a longer-run growth path.

Where is the bottom?

My projection puts the stock market bottom at about 5,500, which hasn't been seem since February 1996.  The following graph is my projection. At this point, many of the banks and several large sectors of the economy will be completely wiped out. On top of that, inflation will come on strong as the trillions of dollars the Fed put into the system begins to flood the market.  

I think the stock market could get to this within the next year, while the economy will probably continue to weaken for another 3-4 years before we see and feel the bottom.  New businesses will be the key to reviving the economy and before they can really start to grow, we need the failing businesses to collapse so that their workers and capital are freed up.  This will spark a wave of new businesses that will grow the economy out of this long recession. 

The sooner we let the old business models fail and the sooner we begin to raise interest rates, the sooner the process of building new businesses can begin. But I don't expect that to happen anytime soon, perhaps not until the next President and congress.  

Copyright © 2017 PennyJobs.com. All rights reserved.

The Panic of 1907: Lessons Learned from the Market's Perfect Storm

The book is about the monetary panic in the U.S. in 1907. There was a lack of monetary liquidity and trusts and bank runs happened on top of each other. People were scared. Rich people became poor. The financial crisis gave America the FDIC and the Federal Reserve. The chronicle follows one speculator's attempt to corner the copper market, which leads to panic, the failure of banks and trusts and the impending bankruptcy of New York City. A great book with a good bit of linkage to today’s credit crunch.

Gold: The Once and Future Money

Governments and central bankers around the world today unanimously agree on the desirability of stable money, ever more so after some monetary disaster has reduced yet another economy to smoking ruins. Lewis shows how gold provides the stability needed to foster greater prosperity and productivity throughout the world. He offers an insightful look at money in all its forms, from the seventh century B.C. to the present day, explaining in straightforward layman’s terms the effects of inflation, deflation, and floating currencies along with their effect on prices, wages, taxes, and debt.

The Hyperinflation Survival Guide: Strategies for American Businesses

The Hyperinflation Survival Guide offers strategies for business managers to keep their enterprise afloat in the midst of runaway inflation. Within this succinct little book are a plethora of sensible business strategies for American businesses. If businesses are to survive they must effectively counter and minimize the ill effects of rampant inflation and/or hyperinflation. The utmost prudence is required in managing accounts receivable, inventory, and production at such a time. A sudden inflationary economic downturn may very well bring a business to its knees leading to insolvency.

Your Money or Your Life

There's a big difference between "making a living" and making a life. Do you spend more than you earn? Does making a living feel more like making a dying? Do you dislike your job but can't afford to leave it? Is money fragmenting your time, your relationships with family and friends? If so, Your Money or Your Life is for you. From this inspiring book, learn how to, get out of debt and develop savings, reorder material priorities and live well for less, resolve inner conflicts between values and lifestyles, convert problems into opportunities to learn new skill, attain a wholeness of livelihood and lifestyle, and much more.