Guest Post: Why Unemployment Is About To Surge

Tyler Durden's picture

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spiral_eyes's picture

recovery, bitchez.

the mad hatter's picture

interesting... recessions were happening every 10 years until the recent one which occured 8 years after the .com crash + 9/11. the next one will happen 2012, about 10 years after 9/11 and only 4 years after the most recent one. Is it just me or are recessions becoming so frequent that they'll become a depression soon?

cossack55's picture

New term........  re-recession.  You will never hear the D word.

spiral_eyes's picture

You don't hear the words "kondratieff wave" much either.

tekhneek's picture

Wow.

Thank you.

Seriously.

CClarity's picture

Class warfare => WWIII  The tweets and flash mobs will become armed and dangerous.  The police and military will not report to the wealthy - unless they are personally paid fortunes to be their mercenaries.  People will soon stop anesthetizing themselves watching Idol, Dancing with Stars, and Kardashians as they realize the "institutions" are against them.  Government entities, schools, hospitals, main stream entertainment and corporations.  That's when the little people will become really scary to the 1% elite.  Their money won't "work" anymore.  Stores may close, fiat money may not be accepted, and buildings will burn.

AnAnonymous's picture

Class warfare => WWIII The tweets and flash mobs will become armed and dangerous. The police and military will not report to the wealthy - unless they are personally paid fortunes to be their mercenaries.

------------------------------------------------------------------------

No, no. It wont happen like that.

US citizens are expansionists and have shown in no way a capacity to deal in other ways than classical expansionist ways.

Several stages in an expansion process:

first, expansion provides with more input stolen from an exterior. That is the good days of expansion. Expansionists fight for a better tomorrow.

Second, expansion into an exterior comes to a halt. It is no longer possible to expand because no room in the exterior is left to expand into.

Game changer. From that day, expansionists no longer fight for a better tomorrow but to avoid a worse tomorrow as any withdrawal from the pool takes from them.

It is what is happening in Libya. Libya was included in the US turf but showed signs of withdrawing. Libyans had to be pushed into line again.

Now for security. As an expansion process draws to its end, the cost for security is rising. Police, military and all will have a great time to ignite unrest as it will mean more wealth transfered to them.

Because at one point in the game, when expansionists have saturated their exterior, they are facing reality: the only place they can expand on is the interior (self looting)

One hint: the golden rule. It states limits to budget deficit and automatic procedure to deal with it. But it does not state priority of funding.

Now let's apply it to security enforcement and flash mobs:

The State can no longer overspend its budget. By Constitution, it has to stay under the limit.

Cut down job programs, prevention programs etc... Affected people go on loot.

Next budget discussion: higher cost for security to be taken on. Under the golden rule constraint, where to take the money from? Not from security, impossible, the needs are hitting the face.

From jobs programs, prevention programs, health programs etc... Consequence: affected people flash mob.

Wash, rince, repeat.

Welcome to the US world order. Nobody in the power apparatus has to fear about security forces (Military, the Police etc) loyalty as the situation is going to be highly favourable to them.

These people are going to live in a context where legally, they will be allowed to plunder, transfer wealth from anyone who is not involved in job security.

And taking from US citizens is much more rewarding than stealing from a third worlder living on a three USD budget per day. Much more.

Have a happy life in this US driven world.

rocker's picture

 It's called "The Great Recession" now.     Next Up:  "The Greatest Depression".  

nyse's picture

I knew him back when he was called "The Pretty Good Recession".

propflow's picture

nah next is a leveraged recession etf DOA.USA

 

propflow's picture

nah next is a leveraged recession etf DOA.USA

 

See in the pink's picture

I thought it was now being referred to as the "Great Collapse..."

AldousHuxley's picture

Need more pawns then that. Plus all pawns are happy watching delusions on TV and wants to give the king a tax cut.

dwdollar's picture

Nice.  It reminds me of the slow motion train wreck we find ourselves in.  Anyone with an IQ above room temperature already knows the outcome, but few are willing to admit it.  So...  we all play it out like the ending is going to magically change or something.

Chuck Bone's picture

The recessions are simply an effect of the popping of asset bubbles due to malinvestment. The continued use of credit to pull forward capital, resources, and demand has been exponentially increasing. As one bubble pops and another is blown by the clowns at the Federal Reserve (nevermind that the problem was too much housing debt, we need more debt, now!) the debt load multiplies. 

While no one can be sure when the scale finally (and violently) tips, we are beginning to see the signs. Recessions are more frequent. Employment growth is unable to keep up with population growth. Unused capital accumulates as the labor to use it is increasingly sourced offshore. And recently, the government finds itself forced to cut back on deficit spending.

That last one is important. GDP = C + I + G + NX, when G decreases so does GDP. When GDP decreases so do incomes, and thus tax revenues. When tax revenues decrease, government finds it has to cut back even more. This is the multiplier effect. While Keynesians love to point out this effect while government spending is increasing, no one dares speak of it when considering the effects of government cutbacks.

As we continue to fight too much bad debt with more debt, there are diminishing returns to our efforts. In addition, the inevitable damage (ie hit to GDP) that must occur at the point of unwind increases at a greater rate. What would have been a 5% hit to GDP in 2007 may be 10% in 2011. 

When you borrow you just trade future consumption for present consumption. Thus, in the future you must consume less than what is produced. This is a fact. This is the future.

Ungaro's picture

You make too much sense for this thread, Chuck. Here still too many delude themselves that the gummint can fix anything, that Dr. BS Bernanke will pull a rabbit out of his hat or that the new jobs bill BHO hatched on Martha's Barnyard will "create" new jobs. That kind of naïvité is charmingly laughable.

slyhill's picture

WTF are you talking about?

jerry_theking_lawler's picture

he has 'flipped' his top.....he has ZH confused with CNBS.....

RockyRacoon's picture

He thought he was on the Yahoo boards.   Poor thing must be getting old and addled.

Hell, 2 people gave him a thumbs-up.  We gotta find those other two fast!

See in the pink's picture

It's not his fault; it was a bug in that "chatbot management software" they're rolling out in Fort Meade...

ZippyDooDah's picture

Oh right, that "deluded" ZH crowd!  Wow, what a retard.

Kayman's picture

When tax revenues decrease, government finds it has to cut back even more. This is the multiplier effect.

The other multiplier effect: Everyone that receives a government  paycheck requires the private sector to be working since public sector employees and politicians, in effect, pay zero taxes.  All of their income is someone elses taxes.

Zero Govt's picture

the only Bull Market we're going to see in this Depression is rising unemployment ...should hit 50% in Europe, Japan and America around 2016 - 2017

that's when the 'Multiplier Effect' should be alot of fun ...how does the Govt fund unemployment checks, food stamps, social security, healthcare and all the other promised wonderous protections that State Socialism offers when the unemployed begin to out-number the employed?

Maybe one day the penny will drop amongst the wider, unemployed, public that their 'protector' was actually a parasite feeding on society, destroying/consuming its productive wealth and destroying jobs. Govt is not the solution, Govt is the problem... how many times must that be repeated before it sinks in?????   

TexasAggie's picture

So what are the odds that the economists that determine we are in a recession will identify one between now and Nov 6, 2012? They won't use the dreaded "D" word.  They are in love with the demorats.

AldousHuxley's picture

So who is this policy good for? Who benefits most from pulling future consumption?

 

The status quo of elites who are in position of power to profit.....Jewish banking elite knows future Jews won't study or work as hard as did the holocaust survivors and non-zionistas will take over, so they are taking all they can out of US.

 

sgt_doom's picture

Mad Hatter, it's just you!

No, just kidding, but some of the following comments here, like:

"The recessions are simply an effect of the popping of asset bubbles due to malinvestment."

Are gobbleydigookers attempting to sound as if they can find their own vaginas, so let us not bother with them, please.

The situation is that they, the banksters (primarily JPMorgan Chase, Goldman Sachs, Morgan Stanley, Citi and BofA, together with Blackstone Group, KKR, Citadel, etc.) sold hundreds of trillions of worthless securitized financial instruments, generally speaking, credit derivatives, in thousands of categories (items based up items, items based upon indexes, etc., ad infinitum) so it will be many, many years while the effect of their actual worhtlessness is felt --- meaning debt deflation for some twenty years or more.

We are awesomely screwed, unless you are filthy rich.

New_Meat's picture

_doom:

"We are awesomely screwed, unless you are filthy rich."

--- er --- I'm with you on the first part, WE are massively screwed.  Don't know anyone of sufficiently filth to get through it, though.

- Ned

EINSILVERGUY's picture

This is the the accelerated boom and bust effect which the FED is responsible for. The Big one has not hit yet

EINSILVERGUY's picture

This is the the accelerated boom and bust effect which the FED is responsible for. The Big one has not hit yet

EINSILVERGUY's picture

This is the the accelerated boom and bust effect which the FED is responsible for. The Big one has not hit yet

Grifter's picture

I apologize for the thread hijack, but I felt it was (sorta) relevant to the theme of the post, MVP Healthcare in NYS seeking to jack rates 8% for large biz (more than 50 employees) & 17% for small biz (less than 50 employees):

http://www.whec.com/news/stories/S2264819.shtml?cat=566

My employer is over 50HC, so we only have an 8% hike to look forward to.  Yay.

Chuck Walla's picture

Laser like focus - Bitchez!

yabyum's picture

Spare change!  Is it me are there a ton of more corner beggars out there?

Kayman's picture

Stay away from my corner !

Frankie Carbone's picture

Can any of you bitchez front me a bag of hopium?

Falcon15's picture

Man, alls I gots left is skittles bags and unicorn poo on mah house.

RSloane's picture

I'm having a difficult time prioritizing what I should be depressed about first.

New_Meat's picture

Depression-Nyet.

Awareness and preparation -- C'est La Guerre.

Don't cha' know.

- Ned

macholatte's picture

 

I was a peripheral visionary. I could see the future, but only way off to the side.
Steven Wright

I am Jobe's picture

I drink to forget this crap now. I used to be sober. I guess drinking is healthy and makes you pass out which is relief from thia crap.

Hulk's picture

Rampant fraud and corruption is a good place to start...

krispkritter's picture

The gubermint say you can't use that word! You are 'repressed', and are thus in recovery. In which case prioritization is mainly on what prescription drugs to take and TV shows to watch first. There, all better.