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Thursday, November 12, 2009

Yes ... We're in a Complete and Utter Mess ...

"Reality is merely an illusion, albeit a very persistent one." - Albert Einstein

I read the following late last night, in a local Michigan newspaper ...

"California’s state finances are awful, but Michigan is among nine other states that aren’t far behind the Golden State in economic trauma, according to a new study.

The shock waves of the domestic auto industry’s decline, home foreclosures and persistent state deficits could last for decades" - Detroit Free Press

It is refreshing that finally, the serious state of affairs here in Michigan is being acknowledged by someone in the mainstream media. Finally.

I talked about that ... what ... 5 months ago? I talked about the dangers of the suffering auto industry and the damage that resultant "economic population migrations" bring to an area ... what ... 6 months ago?

Of course, within that same newspaper, I had to really sift and search in order to find anything resembling the actualities that we are dealing with on a daily basis. It was hidden amongst such gems as "Fewer homes unsold in Detroit area" and I really loved this one "When Global Entrepreneurship Week kicks off Monday, Michigan will lead the nation with the most activities planned, a positive sign"

And yes. It is that serious here in Michigan. All of the nasty details that arise during economic population migrations; such as a rise in the crime rates, are occurring. Business activity is down across the board, and the only solution that ones keep parroting is to raise taxes on a population where the official unemployment, is already at 14.8%. I would estimate that the real unemployment rate, is more than likely around 23%.

As I mentioned in a "tweet" this morning, I live in a nicer area of my county in Michigan. No, I do not live in, or near Detroit. Regardless, the house behind us a few years ago was going for about $275,000.00. It's a nice home, new siding, great garage, 2 1/2 stories in addition to a basement. I know, because I've been somewhat interested in purchasing the home. But I knew the housing market was going to blow up, so I waited. That same house then dropped to $158,000.00 about 15 months ago. "Dream on" I thought to myself. The housing mess was in full swing. A few months back, they tried dropping the price to $69,000.00. It still would not sell.

It was just listed as a HUD home.

Yeah, you gotta love living in Michigan at the moment. The worst part of all of this? Is the fact that Michigan is a beautiful place to live.

But at least I can smile in that my conscience is clear. And it is yet another example of the mainstream media lagging far behind the intelligence that can be garnered from the new media to be found out there on the net. I am by no means alone in what I try to accomplish in educating others to economic realities. As my "Favorite Links" section demonstrates ... from bloggers to financial websites there is a host of new media to be found; where the reality of the current situation can be discussed, debated, and faced objectively.

Of course, it's still confusing world we live in. The deflation in asset prices was swallowed, almost whole, by the Federal Reserves various purchasing programs. We are facing a recession in the midst of a deflationary trap, while at the same time, finding ourselves concerned about currency inflation with the U.S. Dollar now funding the mother of all carry trades.

But at least there are those who are facing reality, rather than burying their head in the sand and saying "It'll all go away. It'll all go away."

* * *

Note: This is not an investment or trading recommendation. The losses in trading can be very real, and depending on the investment vehicle, can exceed your initial investment. I am not a licensed trading or investment adviser, or financial planner. But I do have over 13 years of experience in trading and investing in these markets. The Challenge accounts are run for the education of other traders who should make their own decisions based off their own research, and tolerance for risk.

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