 |
Never before in my lifetime have I seen greater dangers facing investors!
The most immediate danger stems from the cockamamie theory that the economy will suddenly bounce back in a “V-shaped” curve.
And this theory is so popular right now, it’s actually luring investors back into stocks precisely when the economy is sinking into a second great depression.
But the numbers tell the true story:
43.2 Million
This is the total number of unemployed in April, based on the U.S. Labor Department’s own stats and analysis by CNN economists.
It includes:
• 23.1 million unemployed estimated by the U.S. Labor Department as of mid-April.
• 2.3 million who have not been looking for work in the past four weeks.
• 10.9 million forced to accept part-time jobs due to unfavorable business conditions.
• Plus, another 6.9 million who have given up looking for work, but still want a job.
And that’s just April. May and June promise to be even worse, according to White House economic adviser Kevin Hassett.
27.8%
This is the true unemployment rate in April, again based on the Labor Department’s own data:
• Their “all-in” unemployment rate, which includes all categories of unemployed cited above, is 22.8%.
• They admit that the actual unemployment rate is probably about five percentage points higher than the official numbers due to an error in the way it’s calculated.
• So, the arithmetic is simple: 22.8% + 5% = 27.8%
Any unemployment rate of 25% or more means that the United States is now already in, or sinking into, a Second Great Depression.
20 Months
This is the minimum amount of time the Congressional Budget Office (CBO) estimates it will take for the official U.S. unemployment rate to recover back to near the WORST levels of the Great Recession. Specifically …
• The peak unemployment level of the Great Recession was 10%.
• The CBO says the AVERAGE jobless rate in 2021 will be 10.1%, and …
• Even at the end of 2021, it will still be 9.5%.
Worse, the CBO is referring strictly to the Labor Department’s most NARROW definition of unemployment. The all-in jobless number would be close to double that level.
Therefore, at the end of 2021, we will still be in a Great Depression.
-89%
This is how much the Dow Jones Average fell from peak to trough in the 1929-1932 bear market.
That decline was due largely to three factors:
1. A massive debt build-up and overspeculation in the 1920s,
2. Double-digit unemployment, and
3. A drastic decline in corporate profits in the early 1930s.
Is something similar possible today?
Most pundits would say “no.” In fact, much like their counterparts who cheered a post-crash rally in 1929, they’re not even talking about bear markets to begin with.
Their main argument: “The Fed is printing paper money by the trillions of dollars, and this will have a big impact.”
On gold and on Bitcoin, yes!
But no amount of Fed money pumping can reverse the same factors that drove stocks down in 1929-1932:
1. The massive debt build-up and overspeculation of the 2010s.
2. The double-digit unemployment that, according to the CBO, is now a semi-permanent fixture of the U.S. economy, and
3. The drastic decline in corporate profits that is already underway right now.
That’s why this is the best window in time to prepare for the next wave of the stock market decline.
Stand by. Our senior editors Tony Sagami, Michael Larson and others will give you explicit instructions.
Good luck and God Bless!
Martin
