I am Pretty Worried...and Actually, You Should Be Too...

This morning on CNBC, former Reagan Chief of OMB David Stockman was discussing why the stock market was going to fall, just like the Chinese stock market has in the last few weeks.

I agree with Stockman.

"But I would like to add that low interest rates have led to debt financing of overproduction in many industries but especially mining which includes oil, and retail where stores have borrowed heavily to build inventory on government and media promises that the economy was improving when it wasn't.( Look for Sears and JC Penny to go bottom up...Best Buy? Walmart shut stores?)

The media hype and government misrepresentations have also led to increases in margin buying which makes any downturn much more severe.

GDP for instance was revised down in each of the previous three years in order to make the current GDP appear to grow.( Blame the damn government on this) This lie concerning the state of the economy to prop up a failed president and a failed administration continues,( and the GOP held Congress is to be blamed too.) and it will lead to much destruction of wealth as corporate revenue and earnings continue to fall and as bankruptcies in the Texas/ N. Dakota oil patch, mining,( You want to see a disaster, look at the coal mines, they are all broke) and retail sector arising from dropping prices accelerate.

This is the same scenario that existed in the farm sector in the 1920's where debt financed overproduction led to rapid decline in food prices.

Farmers could not make enough money to pay back their loans causing thousands of banks to fail. Assets including stocks were sold to pay debt and raise liquidity leading to the 80% decline in the 1929 stock market crash.

The same is happening now in the Oil, mining and retail sectors and it will lead to bank failures and a collapse in equity prices. This scenario is described in the book "God and Wealth The Rise and Fall of Nations"(Nicholas Georgalis.) The economic similarities are remarkably the same then and now and the results will be the same. ( 1929)"

Then, this morning, it was reported that 93, 770,000 Americans are NOT in the work force. The biggest in the history of America. This is basically 1/3 of all adults of working age, out of work....this doesn't include retired folks, or folks, who have just given up looking for a job.

Folks, I am concerned. Very concerned about the economy. I watch the business channels every damn day....and I can't see what is propping up the economy? Look, I can't see why food prices are so high? We are getting rooked there. The corn, wheat, markets are in free fall. ( they're up today, but long term, they're down)