Jonathan Christopher

U.S. Manufacturing in Freefall

The following forces are in effect:
1. Declining growth due to retiring of Baby Boom generation
2. Declining home purchases by Baby Boom generation
3. Overspending on housing due to Democratic encouraging loans to unsuitable buyers.
4. Under-regulation of bankers due to Republican and Democratic actions
5 Destruction of capital in Telecommunications, Energy, Transportation and Manufacturing due to techonological advances.
6. Irrational Depression by investors.
7. A quickly expanding money supply.

Until we address all these factors via government and the free market, we will have little or no growth, and a spread in Deflationary forces. We could, if we are not careful, end up with an "Inflationary Deflation" where rising numbers of dollars and dropping real prices BOTH occur, wreaking real devastation as inflation follows deflation sequentially. Individuals and families will be whipsawed by dropping home prices and increasing energy and food costs. Companies will be whipsawed by the declining value of their invested capital, and the rising cost of the technologically relevant replacements. Local governments will be squeezed by declining property taxes as operating costs rise.