<<<<< JOB DESTRUCTION NEWSLETTER  No. 2040 -- 7/22/2009 >>>>>

John Nichols, a correspondent for "The Nation", did a very thought
provoking video about unemployment and what it means for the Obama
administration. Nichols warns that if the unemployment rate continues to
rise past 13% or 14% it will be the ONLY issue for Obama. He never
mentioned specific legislation such as "Cap and Trade", health care, and
immigration, but if he is right and if our population continues to lose
jobs, we can expect those proposals to become mere side issues -- and
that's without mentioning that we are still in at least 2 wars!

See the Nichols video here:
http://www.youtube.com/watch?v=ltVzelwzlm4

I have often predicted that when the unemployment rate reaches 25% there
will be massive civil unrest that will lead to riots and violence. I base
the prediction on the history of the Great Depression and the Panic of
1873. During those tough economic times unemployment rose to the 25% level
-- and violence flared throughout the nation.

Nichols hinted that the breaking point will be 13% -- which is about 4 or 5
points above where we are right now. Could Nichols' prediction be similar
to mine but drawing on different data? Could it be that we are only 5
points away from a national breaking point?

In order to answer that question I decided to go to Shawdowstats to see
what the real unemployment rate is. Using their data is helpful in order to
correct for the way our government has systematically fudged the numbers to
make them look much better than they are.

According to Shadowstats our real unemployment rate is just under 21% if
underemployment is factored in. That number is four points less than the
25% threshold I warned about based on history. Even the conservative BLS
statistic used in the graph (link below) puts the U.S. within 10% of the
threshold.

Nichols and I use different sets of data but we both come to similar
conclusions. If Nichols is correct, all we need is a four point increase in
the official rate before there is big trouble in the nation. Nichols used
softer language than I such as his warning that people will get "agitated"
or "frightened", but he means the same thing.

We could be at the precipice of a national meltdown. At most a 5% to 10%
increase in the unemployment rate could be catastrophic.

Folks, we got a problem and it needs to get fixed real fast!


http://www.shadowstats.com/alternate_data
Inflation, Money Supply, GDP, Unemployment and the Dollar - Alternate Data
Series

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