The U.S. is on the path to hyperinflation and tyranny as capitalism, individual liberty and freedom are being destroyed. 

The good news is that we can stop the trend and reverse course.  In order to do that we need to understand what the primary causes are that are leading the nation to tyranny.

In part 1 I listed the 7 causes of tyranny that are gaining support.

These causes have been gaining support for many years, but the economic crisis has increased their momentum and created a window of opportunity for the government to push for tyrannical control of the entire economy.

3. Environmentalism – Environmentalism is perhaps the most powerful anti-industry industry in the world. 

Supported by the public’s strong desire to do something significant and good for the world, environmentalists have gained tremendous political influence in the last decade.  

In many ways the drop in Christian morality has transferred the need to do something good in relationship with God to doing something good in relationship with man. This transfer of desire to do something good and feel important, corresponds perfectly with the increased teaching of humanism in the public schools that I addressed in the previous article.

Only the results are much less effective because humanism is based on the false belief that people are capable from within themselves to turn their lives around and join the collective 'goodness' in the world.

The lack of 'goodness' found in people to protect the environment creates the need to force people to be 'good' by strong arming them with government regulations and life changing penalties. (Tyranny)

Christianity, on the other hand, teaches people their true identity which changes the way they think about the world that God created for them, resulting in a self-governed people that has no need for a massive government police system, burdening the economy with another costly government bureaucracy.

Like most people, I agree with the ideas behind environmentism, like keeping the air and water supply clean, protecting animal life, not wasting resources, etc.. 

But those good intentions need to be considered against the negative effects on the economy when creating permanent government regulations.   Many of the claims that the world is running out of energy or that CO2 is destroying the world have been unproven and questioned by the science community.  

In many cases they have been used to overhype a political agenda – like Al Gore – who makes money selling costly energy alternatives that we are forced to buy when regulation increases the cost of traditional energy sources.

Businessmen (capitalist) like Al Gore are using the political system to create competitive advantages against competing companies in order to make a profit.  I’m all for earning a profit, but using the political system to force consumers to purchase your products is what Adam Smith called ‘mercantilists’. 

Mercantilists are political entrepreneurs who gain an unfair advantage through special privileges created by government intervention.

Their profits are gained by manipulating the rules, not by producing better products at lower prices that benefit the consumer.  Consumers pay higher prices, not lower prices.

Worst of all, environmental regulations almost always cause energy prices to increase.  Energy is the lifeblood of industrial capitalism.  The higher energy prices get the more jobs we lose in manufacturing, the higher the trade deficit gets and the higher the nation debt increases.

For example, the Cap-and-Trade bill in congress a few months ago would increase the cost of energy by $1000-3000 for each family.  This is not a good idea, especially when we are facing the deepest recession in modern history.

The result is the entire nation gets poorer and more dependent on government jobs. 

Perhaps one of the best explanations of how this has happen can be found in Thomas J. Dilorenzo book, "How Capitalism Saved America".

How Capitalism Saved America: The untold history of our country   "How Capitalism Saved America"

In part 4, I’m going to continue with the causes that are gained support and are leading the nation to tyranny.

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The U.S. is on the path to hyperinflation and tyranny as capitalism, individual liberty and freedom are being destroyed. 

The good news is that we can stop the trend and reverse course.  In order to do that we need to understand what the primary causes are that are leading the nation to tyranny.

In part 1 I listed the 7 causes of tyranny that are gaining support.

These causes have been gaining support for many years, but the economic crisis has increased their momentum and created a window of opportunity for the government to push for tyrannical control of the entire economy.

1.  Humanism –  Humanism is a religion.  The humanism religion teaches that humans are our own gods and we determine our own destiny.  This is the religion that is taught in the public schools today, which has replaced Christianity in 1963 when the Bible was removed from public schools. 

Of course no one admits that humanism is taught in the public schools today, because the bible was removed in order to claim that public tax money cannot be used to teach religions.  Yet, creationism was replaced with the teaching of evolution, which is one of the foundation values of the humanistic religion. 

Humanism is the belief that we are self justification, there are no absolute truths, and right and wrong are determined by each individual’s personal values.  These are the dominate values being taught today in the public schools across the nation, values which are the principle values in the religion of humanism. 

Humanism has also become the most dominate among politicians, because it is the most politically correct and tolerant of other values or beliefs. 

Even Obama, who claims to be a Christian, said during his speech at the U.N. that his faith is in the ‘goodness’ of humans to change the world.  This is much difference from the doctrine of Christianity which teaches that faith must be put in Jesus Christ alone.

Humanism teaches that the only guiding rules are that which the government impliments. Therefore the only way to control society is by government oversight - as opposed to religious rules. As social problems arise, the government is always seen as the solution.

The teaching of humanism to the next generation is perhaps the most dangerous because it creates a growing momentum to support a tyranny. 

2. Social Justice and Economic Equality – Perhaps Friedrich Hayek tells it best when he described social justice as ‘the Trojan Horse through which totalitarianism has entered many societies in the world’.

The irony of the term ‘social justice’ is that it undermines justice by empowering governments to take money from the very people that justly earn it.  It allows the government to confiscate things from people that deserve them and give them to people that do not deserve them.

Social justice destroys the rights of individuals and their ability to earn a living with hard work and savings.  In this sense, supporting social justice is that same as supporting thieves to rob your neighbor’s house.

Social justice is implemented by central control to enforce the process of wealth redistribution and therefore its support naturally leads to greater power in a top down dictatorship form of government.   (Tyranny)

The process of implementing social justice is also in direct conflict with capitalism. Capitalism relies on the formation of large pools of capital to invest into new businesses.  Social justice attacks all pools of capital labeling them unjust. 

Therefore support of social justice is support for anti-capitalism, in which the nation can only get poorer and poorer until everyone is in poverty. 

Many contemporary Christians justify their support for social justice by their compassion for the poor and the growing rate of poverty.

However, there is no question they care, but their compassion is often tied to a political or economic ideology that is long on heart and short on wisdom. The best of intentions cannot help the poor unless channeled into actions that are supported by sound economics. 

This is why poverty has not been reduced and why these good intensions continue to fail.  Increasing the size of the State does not increase the justice of the poor. This is a lie that is so easy to get entangled into believing.

It is the State that created the injustice, as it grows it destroyed moral values, personal freedom and the foundation of economic stability.

Here is an excellent book by Ronald Nash that provides much more details.

Social Justice and the Christain Church

In part 3 I’m going to continue explaining the causes that are gained support and are leading the nation to tyranny.

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The U.S. is on the path to hyperinflation and tyranny as capitalism, individual liberty and freedom are being destroyed. 

The good news is that we can stop the trend and reverse course.  In order to do that we need to understand what the primary causes are that are leading the nation to tyranny.

I have discussed the path to hyperinflation at length in other articles, so I’m going to focus this discussion on causes that lead to tyranny. 

The tyranny that I’m talking about is a complete loss of freedom and individual liberty as the government becomes the dominate structure that controls everything from our health to our jobs to our homes to our safety to the information to consume to the religion we practice.

The result of a tyranny is that the people become slaves to the nation in which they live.

Now you may be thinking, we are not as dumb as the nations that fell into tyranny.  It’s easy to think that we are smarter than the nations that fell into the trap of tyranny or that our government structure is superior, but if you read through history the nations that fell into tyranny where some of the most advances and smartest. 

Therefore every nation needs to be on the lookout for the signs of tyranny and be aware that it is a slippery slope that is hard to detect – like boiling a frog in water – that results in tyranny. 

The reason a tyranny is hard to detect is because the social causes that support a tyranny are easily disguised in such a way that we everyone finds themselves supporting. 

Who is willing to say, they don’t support feeding the poor or housing the low income or saving the whales or teaching religion equality or government stimulus to reduce unemployment?

Nobody, yet these good intentioned ideas can be used to disguise government policies that lead to tyranny. 

Here is the list of the top 7 things that are leading to tyranny;

1. Humanism
2. Social Justice and Economic Equality
3. Environmentalism
4. Socialism
5. Fascism
6. Misguided Pursuit of Personal Value
7. Economic Central Planning

These seven things are at the heart of the path to tyranny in the U.S. and they are all currently getting a lot of publicly support. 

In part 2 I’m going to explain these 7 leading causes of tyranny in detail to gain a better understanding of the cynical forces behind these ideas – that are supported by seemingly good intentions.

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Over spending causes true consumer demand to be very difficult to realize because the additional money causes consumers to spend in ways that they wouldn't normally spend. 

This is Part 6 of an article series which takes a look at a 7 steps to lift yourself out of the recession, no matter how deep it gets.

Adding money into the economy, like the government has been doing for many years through loose monetary policies, causes consumer spending distortions. 

Injecting money (inflation) into the economy causes these distortions in consumer spending. These distortions are the reason that many businesses are going bankrupt and many more have been bailed out.  

When the government artificially juices the economy, they increase consumer spending, but consumers spend the new money that they think they got for free on non-essential goods, like cars, entertainment, eating out, luxury items that they would have lived without if they didn't get the easy money. 

In the process consumers reduce their spending on basic essential goods and instead turn to hiring others to do many of the things that they used to do themselves like cut their lawn and clean the house. 

Malinvestments

The result is a drastic shift in spending.  Businesses that produce non-essential luxury items see a boost in sales quickly increase their investments in production.  And businesses that produce essential goods see a decrease in spending and quickly begin decreasing their investments in production. 

As expected, investors shift money to the more profitable businesses, which are based on the shift in consumer demands. But the investments are misguided because consumer demand has been misguided.

This concept is called ‘malinvestments’

Injecting money into the economy results in investments being misdirected, which eventually leads to major losses as the government stimulus money misguides producers into thinking consumer demand was higher than it really is. 

The Correction

When the easy money runs out consumer demand drops even lower than it was before the easy money was handed out, resulting is way too much supply begin produced by some businesses and not enough supply by other businesses. 

This is how the government caused and continues to cause capitalism to fail.  If governments didn't expand the money supply, investments wouldn't end up in the wrong places and businesses wouldn't need bail outs. Supply and demand would always line up. But that wouldn't be any fun for the politicians who like to play monopoly with our money.

The businesses that over-produced (cars, houses, boats, etc.) have to liquidate their supply and suffer major losses that results in bankrupties, high unemployment, recessions and depressions.

The under-producing businesses miss the opportunity to profit by not having enough products to sell. 

And consumers end up having to pay higher prices for the goods that are under-produced because of the shortage of supply. Everyone ends up with less wealth.

This is why we have too many houses, too many cars, too many shopping malls, etc.

When the boom turns into a bust, the governments answer is to increase the money supply (inflation) even fasters to get the economy back on the path to hyperinflation.

Real Consumer Demand

Ok now that you understand how ‘malinvestments’ can mislead businesses with phony consumer demand, you need to consider what true consumer demand will be after the government stops playing matchmaker with the economy - and believe me they are going to soon be forced to stop.

As I said in the previous article, consumers are going to be interested in buying essential goods like, food, water, clothing, housing, entertainment, information, education, furniture and basic household supplies.

These are the area’s in which successful businesses will be found. These are the areas to think about starting a business in today so that your business will thrive in the future.  Consumer demand is going to shift from non-essential goods and services to essential goods and services.

For example, one of the local businesses where I live that has grown the most last year, was a used clothing store.  The owner recently just opened two additional stores.

Large businesses are going to feel a lot of pain because they will not be able to react to the change in consumer demand.  It will be the small business sector that will come alive, quickly creating new products and services to meet new consumer demands.

Many businesses will continue to suffer from misguided investments that will not alllow them to hire people back. It is unlikely that the jobs they cut will be restored unless they are successful in new markets. 

Therefore businesses that were focused on markets that thrived while consumer credit was expanding and housing prices were rising, are in desperate need of attaching new markets if they are going to survive.

That means that a lot of people are not going to be able to find a job and their best opportunity is perhaps to get a job at a new business or to create their own job by starting a business.

This is good time to start a new business based on true consumer demand, because credit is tight, savings are gone and incomes are flat.  The current consumer demand today is more dependable then is was three years ago.

So if you build a business today, you are unlikely to suffer a downturn because consumers are not likely to get a boost to consumer spending for many, many years.

In Part 7, I’m going to talk about how difficult is it to create a business and how important it is to prepare yourself to apply relentless will and vision. 

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Sometimes I get emails from readers that ask me why I’m so negative about the economy.

They say things like, “You sound like you want a depression”.  Tell me you haven’t had that thought before.

Actually, what I really want is the same as everyone else.  I want to see the economy recover, with stable growth year after year forever. 

I just have a more realistic way of thinking about how we are going to get there from where we are today.

I Hate Going to the Dentist

Some of you were lucky enough to be born with good teeth.  Not me.  I cannot even eat a candy bar without getting a cavity.  On top of that, I have a sweet tooth.

Putting off the dentist is like putting off the depression.  The longer I wait, the more damage will happen and the more it’s going to cost me to get fixed. 

I hate going to the dentist, yet I go because (my wife makes me) I know the consequences of not going are worse than if I do go. 

Just the same, I want the bad investments to clear the market as soon as possible, so that the real economic recovery can get started.

The economic disaster we face was caused by a decade of excessive spending, driven by a housing bubble, created by reckless monetary policies. 

Why would we want to go down that road again?

When I get back from a visit from the dentist, the last place on earth that I want to go is back to the dentist.  I know that junk food is the cause and if I eat more I will end up back at the dentist. 

It’s painful not to be able to eat whatever I want, just as it’s painful for us not be able to spend more money then we want.  But we must. 

We all like to find a way around the consequences of our actions.  I sometimes tell myself that if I eat small candy bars, I can avoid the dentist. 

Just like we try to look at the latest news and say the economic recovery is coming because consumer spending was up 0.5% in January. 

But it’s not going to happen.  There is no recovery.

In that same report, personal income was only up by 0.1% and savings dropped.  Consumers are broke, credit it tight and savings don’t exist.  Therefore, it is virtually impossible for consumers spending to lead to an economic recovery and consumer spending is 70% of the economy. 

I cannot even eat the small candy bars just we as a nation cannot continue spending money that we don’t have.

I am trying to bring the nation away from the cliff of economic collapse, by educating consumers to stop spending money that we don’t have. 

The more people I can get pulling the nation away from the cliff, the better our chances are that the nation does not go over the cliff.  And it doesn’t help that Obama is standing on the gas pedal.

Who Really Wants a Depression?

The question I have is; who it is that really wants a depression?

If I’m trying to avoid a depression and a sinking dollar, then what are the Wall Street economist, the government policy makers and the academic economists trying to do?

They are pushing the nation closer to the edge of the cliff, a complete economic meltdown. Why listen to them? 

The Wall Street economist naturally want to continue selling Stocks and Bonds to their customers and are willing to say anything to get more sales.

Government officials are desperately trying to paint a rosy picture of the economy in order to keep their jobs – despite the long-term consequences of their short-term disastrous (cash-for-anything) policies. 

The academic economists are busy putting together theoretical models of perpetual prosperity to show that they are valuable to society and capable of leading the nation in economic wizardry.  

I'm Only Trying to Save the World

None of the influential economic parties in our culture are telling us the truth.  They all have more incentives to be dishonest then to be honest. 

I am perhaps the only one you may know that is being completely honest with you about the state of the economy.

I may be the only economist in your corner.  All these others jokers are working for your economic destruction.

Saving the U.S. from economic collapse is saving the world from economic collapse.  Therefore, I am only trying to save the world.  Join me as we try to save the world together.

This article is based on a similar article I read today at the Daily Reckoning. Here is there version.

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Several major indicators show the economy getting much worse, just as predicted.

First, consumer confidence just registered its lowest reading since 1983 – that is 18 years ago. 

With no new jobs being created, how could it be anything but record lows? 

A lot of people don't have jobs and are beginning to worry that it could be a long time before they do.

Second, mortgage demand just fell to its lowest point in 13 years.  With millions of foreclosures hitting the market as banks begin dumping their housing assets on the market in a last ditch to survive and government programs and low interest rates coming to an end, how could housing demand be anything but dropping?

Third, state tax receipts are still falling - for the 5th quarter in a row.  States pension funds are facing more than a 1 trillion dollar shortfall and several states are soon going to face massive program cuts and tax increases as they come to the edge of complete bankruptcy – begging the Federal government to give them more printed money.

Forth, the number of problem banks just rose 27%, with over 700 banks on the FDIC troubled list.  Banks are going to being falling like mosquitoes next to a mosquito zapper.

As we move past the eye of the storm, cover the windows and get into the basement because this storm is going to rage for a long time.

The government is against the wall and completely out of ammo, as the people are beginning to rise up (tea party rallies, polls, resent elections) and realize what a disaster the government has brought upon on. 

The only way out is for the public to stop the government spending and then retake control of the economy, completely rejecting the welfare and victim mindset that has haunted the nation for decades.

We need to start with sound money, the opposite of the funny money we have today.  Then we need to stoke the spirit of entrepreneurship by honoring the formation of wealth and promoting the free market, the only justifiable means to motivate true economic growth.

How much longer will we wait before starting the recovery?

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In the spring of last year I started a new business providing gardening services to help people plant and grow their own gardens. 

This is Part 6 of an article series that tells the story of what I learned from several businesses that I’ve started.  

It’s been a few years since I started a new business and I was quickly reminded of how much time it takes to start a new business, especially when you are busy working full time, raising a family and running two other side businesses.

I was so busy last spring that I didn’t even have time to write this article about my new business that I was starting. 

Come to think of it, I started another business a few years ago that I didn’t include in this article series either Garage Floor Finishers. Someday I will have to extent this article series with an article about that business.

Garden Planters

This article is about my 'Garden Planters' business that was an idea that I had been kicking around for several years, but had to wait for the right timing - like a deepening recession, with hyperinflation just around the corner. 

Like with other businesses I’ve started, I leveraged my marketing system, vendors and website development business to create a website and get the word out about my new business.

One of the hardest parts was trying to figure out how much business I was going to get the first year and them finding the right amount of labor to match the work.  If I started hiring people and didn’t get much work, I would be out a lot of money.  But if I didn’t have enough people hired and got a lot of work, I would be out a lot of money.

What I did to solve this problem was to have a few contractors on standby to help out if I needed them.  It turned out that I didn’t need them and that was a good thing because they are expensive. 

I ended up planting only a handful of gardens, but was overwhelmed with the number of people that wanted to talk about gardening with me.  That was something that I couldn’t have my contracted labor do. 

But the relationships that I established in these discussions were priceless because without even knowing it, I was creating a network of interested customers that are at the top of my sales channel.  Sometime, you just have to try something and take what the market give you.

I guess that’s why I think the best financial advice I have is to go after business opportunities.

This year, I will be started with my repeat customers from last year and I expect to at least double my sales.  I have also doubled by marketing strategies, from 6 ways to 12 ways of educating and sharing my services with interested customers.  I was also able to secure a college intern to help me with my marketing efforts this year.

I’m working on my marketing plan now, even though our garden planting season in mid-MN is doesn't start until about May 15th. 

Business Model Advantages/Constraints

The primary concepts that I learned from this business were;

Seasonal Businesses Are Fun - In part 1 of this article series, in which I talk about a construction business I had many years ago.  In that article I mentioned how seasonal businesses are difficult to grow.  Garden Planters is very much a seasonal business, with perhaps a 6-week season for planting gardens. 

The other hand, seasonal businesses are a lot of fun in that you don’t have to do that same work all year round. 

This is important for a person like me with a high energy level that gets bored very quickly.  Seasonal businesses can also be very financial rewarding because there are fewer established competitors.  

Seasonal business can also be stretched with additional services. For example, I have already added garden irrigation which is primarily used in the middle of the summer versus the beginning planting season.  I could add garden cleanup at the end of the summer to stretch the season of business even further.

The Perception of Being an Expert – I have discovered that one of the keys to this business is the perception that I am an expert gardener.  Once I made this discovery, I used it to market my business by marketing myself as an expert with vase experience in gardening and planting.

Anyone can plant a garden, but few know how to do it effectively and efficiently that produces a large harvest.

Reaching expert status means that my customers are not paying for my ability to till a garden, but they are paying for my knowledge about gardening.  And that means they are willing to pay a higher price for the value of my knowledge then for the labor services that I provide.

Sometimes the perception of being an expert is primarily based on being first to the market, as with personal finance blogging.

Being First to Market - When starting a business, you have to have everything figured out and then you need to quickly find a way to position yourself with a competitive advantage so that your competitors cannot quickly duplicate your business and drive down the revenue that you need to remain high for at least a few years until you get established.

I have learned about this the hard way in several of my other business, and this business has no legal way for me to create a competitive advantage – accept I appear to be the first one to the market. This also allows me to market my business as the ONLY business in my area that offers garden planting services.  I’ve read several books that argue both for and against being first to market. 

In this case, when the perception of being an expert is very important, I believe being first to the market was very important.  But I think being first will only give me about 3-5 years to build a network of happy customers to carry the business into the future as the novelty of being first to the market wears thin and other experts become just as knowledgeable as me.

Conclusion

The deepening recession and the increase in the price of food are creating a lot of interest in gardening.  This interest is in turn causing a lot of interest in products and services relating to gardening.

Getting this business started last year, ahead of customer demand was a key initiative that takes experience and vision for the economy. 

My ongoing research in business trends and economic development gave me the insight I needed to see this trend coming.  When starting a new business, you either need to get lucky or have very good business trend research.

But now that my business is running, I have no way of protecting it from competition other than being first to market and building a local network of happy customers. 

That means anyone (including you) could start a gardening service in your area.  If you are struggling to find a job this summer, go for it, start your own gardening service.  I wish you well.

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Several months ago, I wrote an article about my investment strategy for 2010.

In the article, I explain how I plan to double my money twice this year even as the stock market collapses.

My strategy was to short the market during the crash, which will also pull down the prices of precious metals. Then after the crash I will move back into gold mining stocks and enjoy the rebound.

If everything goes as planned, I would double my money during the stock market crash and then double my money again when the prices of gold rebound. 

Yesterday, Robert Kiyosaki posted and article on his yahoo personal finance blog in which he basically said the same thing that I have been saying.

Here is a quote;

“If the dead cat bounce dies and the Dow drops to 5,000 in 2010, as I predict, then the price of gold and silver may die with the dead cat of the Dow, as investors cling to cash. The next question you need to answer is, “If the Dow dies and the price of gold and silver drop, what should you invest in at the bottom…stocks, gold and silver, or cash?”“

The only difference is that I don’t think the Dow will drop below 5500, which is key because you need to know when to sell your short of the Dow.  If you sell to soon, you could lose the money that you made and if you wait too long you could miss the rebound in gold.

After six months of watching the market and the governments monetary policies failures, I am even more convinced of this investment strategy than I was when I first wrote about it.

My 401k

The only problem is my 401k, which I also recently wrote about.  My 401k money is trapped.  There is no option to short the market or move to cash. 

I cannot short the market and I cannot sell my natural resources mutual fund (which contains previous metals and oil) because I don’t have any other options that are not going to drop with a stock market collapse.

I cannot move to foreign stocks because when the market sinks, all domestic and international stocks will also drop.  And I cannot move to bonds because China and the rest of the world will continue to sell US bonds. 

I'm afraid my best option is to stay in natural resources and ride the market down and then back up again. The longer the market crash is delayed, the closer we move to hyperinflation which will drive up the prices of natural resources. 

So the longer the market crash is delayed, the higher that natural resources are going to increase after the market crash.  

The price of oil could easily double its current price shortly after a market crash and a sell off of the dollar, therefore I could still enjoy doubling my money once by staying invested in natural resources.

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It may not feel like a depression to everyone because of the many businesses that are being carried along by government spending programs, but believe me we are already in a depression.

I’ll let the mainstream media continue to try to describe our economic recovery that the politicians are raging about, while I focus on the depression that is at hand.

"Millions of Unemployed Face Years Without Jobs," says The New York Times.

You may wonder what kind of an economic expansion we have with rising GDP and low inflation, yet a failure to produce jobs.  The answer is a depression.

The primary reason that the public doesn’t realize that we are in a depression is because the last time we had a depression we has people standing in lines to get a bowl of soup or selling things on the street corner.

“In the '30s, there was no public safety net. No unemployment compensation...no severance packages...and no government welfare. People didn't give up looking for a job; they had no alternative. They kept looking until they found something. Either you were working...or you were jobless. If we reported the numbers the same way they did in the '30s...the number would already be up near Great Depression levels...at about 15% to 18% joblessness.”

This depression is just as real as the depression we faced in the 30’s. 

Perhaps the worst part about a depression is that they take a long period of adjustment, unlike a recession that is usually less than a year.

The longevity of a depression is going to turn job hunting into career transformation, as old jobs never come back and new skills are needed to transition into new jobs.

This doesn’t happen overnight, no matter how much money the Fed pours into the economy.

In fact government money just prolongs the transition and distorts consumer demands causing failing businesses to remain in operation much longer than they should.

Men Hit Hard By the Depression

“For men...this is clearly a Depression...no, it's worse. Not only are they unemployed. They're going to stay unemployed for a long time. Because it takes times for a depression to do its work. And when it is over - maybe five or ten years...or 20 years ahead - not only won't they find their old jobs again...they may never work again. And they won't have wives or families either.”

Jobs in information and services that employ more women than men are doing much better than construction and manufacturing that typically employ a higher percent of men. 

This is not good for men.  If you are a young man, it will be difficult to get married without a good job and if you’re the sole breadwinner for your family you will be under a lot of stress to get back to work. 

Perhaps the good position to be in right now is to be already married to a woman with a high paying job. (Like my neighbor who is a union electrician and has been laid off for two years.  He goes fishing everyday when I go to work.) Of course if your financial contribution is very important to your wife, you could end up out on the street. 

The dollar is eventually going to sink because of the trillions that the Fed has printed and has been adding to the market for the last decades. But, before that happens the dollar could strengthen as the rest of the world looks to be going through its own debt problems. 

The sinking dollar will cause exports to increase and that will trigger growth in manufacturing and transportation, which will provide many jobs for men. 

So in a strange way, the more the government inflates the dollar the faster the dollar will sink and the sooner men can find new jobs. 

Another way for this to happen, is if China un-pegs their currency to the dollar, which our nation has been trying to get them to do for many years.  This will cause the dollar to sink and demand for our exports to increase. 

But this will also cause massive inflation.  Which would you rather have, a job with massive inflation or no job and low inflation?

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If the near future, the economy is going to cause consumers to change many of their decisions to purchase goods and services, and the successful businesses will cater to their new needs.

This is Part 5 of an article series which takes a look at a 7 steps to lift yourself out of the recession, no matter how deep it gets.

The question is who is going to have the vision to start building a business today that will be in high demand in a few years?

When the phony economy 2.0 that I explained in Part 1 falls apart, consumers will still need to eat, sleep, buy clothing and many other things. 

No Jobs In Sight

They will also need jobs to purchase these things.  The reason unemployment remains high is because the governments bailouts and stimulus packages are keeping prices at inflated levels and not allowing the deleveraging process to lower prices.

That means that wages need to remain at inflated levels or perhaps need to increase in order to continue paying bills and account for rising inflation.  But keeping wages at inflated levels causes unemployment to remain high. 

This is all because of the government stimulus packages that are trying to stop the deleveraging process from taking place.

If the government allowed prices to fall, people could go back to work for half their previous wages and still be able to afford to live, and if people could afford to work for much lower wages businesses could afford to hire them again. 

But until the phony economy 2.0 collapses and the government stops trying to inflation its way back to prosperity, we are not going to see this happen and unemployment will remain very high. 

After ‘Phony Economy 2.0’ Collapses

The failed government policies are showing their true colors and people are not happy.  As a result, major policy changes have begun and will continue for several years.

The change in government policies away from easy money and inflation will allow the economy to face the recession that is desperately needed to clear the market of the decade of credit expansion and consumer debt that has not been paid for.

After much needed government policy changes, the economy will begin to re-employ the labor force at much lower wages.  The economy will look much different then it does today in which true consumer demand will be much more measurable and predictable. 

This is unlike consumer demand in the past which was primarily driven by government programs and the expansion of credit. Consumer demand is going to be solely driven by the wages of consumer - as it should be.

Perhaps the most difficult time will be the transition from old jobs to new jobs.  As consumer demand begins to create new trends, new businesses will be formed to meet those demands. Those new businesses will in turn create new careers for millions of people. 

The tricky part is perserving the majority of your wealth during the transition.

The Future Economy

The future economy will consist of much lower real wages in terms of inflation and at the same time will be suffering from massive inflation from the trillions that the government poured into the economy in the last two years of failed stimulus packages.

Consumers are primarily going to be interested in buying essential goods like, food, water, clothing, housing, entertainment, information, education, furniture and basic household supplies.

These are the area’s in which successful businesses will be found. These are the areas to think about starting a business in today so that your business will thrive in the future.  Consumer demand is going to shift from non-essential goods and services to essential goods and services.

This process is already taking place as many of the businesses that produce or sell non-essential goods are going out of business by the droves - while some of them are being temporarily preserved by the government.

Imagine Yourself Working at or Owning a New Business in the Future

Which sector of the economy will you be working in?  Perhaps you could start a clothing repair business or a training center that offers short classes to people looking for new skills or perhaps you could create a custom furniture business or a gardening business to help people grow more of their own food. 

There are endless possibilities of new businesses that will thrive in the new economy, the question is, are you going to start one of them or wait for someone else to start one and work for them?

It is with this clear vision of the future of the economy that you can start building a business today with bold confidence that customers will soon be coming and when they do you will be ready for them.

Even if you are not interested in owning your own business, I suggest that you consider setting up the foundation of a small business as a backup plan. 

You could start your business as a hobby and slowly start adding customers.  If you get laid off or your wages get cut, you would have the foundation setup and a small customer base already in place.

This gives you the option of either returning to find another job or focusing on your small business for income.  A small business could be your insurance policy – reducing your risk of a financial hardship.

Of course, the best insurance policy against a financial hardship is a large savings account with no debts – but that is unlikely in the US.

Savings Rate and Exports

The economic uncertainty, loss of wealth and the increase in demand to fund new businesses will all increase the demand for real savings.  This will also help drive up interest rates.

And the savings rate in the U.S. will finally start to increase after decades of decreasing.  This will also temporarily reduce consumer spending to a much more normal rate - which is a good thing for the long-term growth of the economy.

Exports will also need to increase until we return to a positive monthly trade deficit.  This will drive a lot of jobs, from production to transportation to shipping. 

The engine for growth in the next decade will likely have to come from an increase in manufacturing goods for both domestic consumption and exports to pay for the goods that we import, especially oil.

In Part 6 of this article series, I’m going to discuss how to start a business based on true demand, which is very difficult to realize with all the money that’s currently being created and spent in the economy.

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