Down and Down She Goes, Where She Stops, Nobody Knows

The numbers are pouring in daily: shipping is down, trucking is down, exports are down, imports are down. Typically these numbers show declines on the order of 10 to 20 percent year over year. Is it naive to suppose that the U.S. economy has declined 10% or so over the last year? Apparently, as the U.S. Government reports that the U.S. economy actually grew by 1.3% in 2008.

Frankly, we just don't believe that number. Mr. John Williams at www.shadowstats.com is reporting a 4% decline in U.S. GDP in 2008, which seems more realistic.

In any case, the decline is accelerating. The fourth quarter GDP numbers would have come in worse if there hadn't been an inventory buildup. As inventories are worked off in the face of collapsing demand, production will fall further.

The 2007 Depression is a new bird for everyone. Nothing quite like it has ever happened before. The last Depression (1929-1939) occurred with a vastly different set of social and economic parameters, and is not really a prototype for current events.

No one can present a formula for making it through the 2007 Depression. Survivors will be relying on improvisatory skills. It will be an era of living by your wits.