In August of last year I announced that a recession had begun. This is a good time to revisit that article as most of the warnings have come true:

http://www.meditationexpert.com/blog/real-world/recession-or-depression-its-here-its-started

I've also stated that one of the contributing factors, amongst many, is the fact that we have no strong base of manufacturing jobs because of all the outsourcing. Why? "Free trade."   As I always say, free trade to help the consumer matters not when the consumers are all unemployed - at some level the domestic unemployment rises to a level where it's ludicrous to keep reciting the mantra of "free trade, free trade" as the salvationist cure for public welfare (because no one has money to buy goods, no matter how cheap they might be).  Somewhere I have an article on this as well…

You will see cracks developing in the free trade arena as this recession deepens, and also within 20-30 years you'll definitely see cracks develop in the US  between all its constituent parts.  Not from anything I'm doing - but from what the politicians are doing in their policy choices. Already we've seen cracks in the US world hegemony because of its dollar policies and military involvements, and we'll see more and more nations delinking from the dollar and the focus on export economies as they switch to starting to build up their own internal economies rather than export-for-hire. All because   the last several decades of economic policy errors have to have their consequences. Some of these principles I explained in my book on Kuan Tzu.

Another "silent" contributing factor to all this  (that no one has been mentioning) has been the increasing say corporations have been having in White House and Congressional affairs since the end of the Reagan era. Democrats and Republicans have converged in their economic views, and both listen to the mega-corporations who seem a more tangible presence to the politicians (and a more tangible election checkbook) than millions of individual wage earners and small businessmen in a nation. The best bank is to store money amongst the people, but in giving corporations equal say to individuals, the vast money they represent in one entity, and perks they can promise politicians, has diverted the entire legislative system to favoring the corporations over the individuals. What is best for the corporation is not necessarily best for the public when outsourcing is the norm. Now we must switch back to the local economy, local manufacturer, local farmer, local community …

Corporations, unless owned by a single individual/family with strong ethical and moral guiding principles apart from "profit maximization", focus entirely on that — making more money. Whatever makes more money is what is pursued, which means events/goals/targets that may not be good for the public but which are legal and make money. Often the methods used are untheical and illegal because money is the only goal and benchmark.  A pure profit maximiation focus means an weakened public and social fabric/sector  in the long run under such a system that no longer has checks and balances as we once did.

This is just another way of saying that the fat cats on Wall Street have been getting rich because the system over the last two decades has been slowly twisted more and more in their favor to help them make profits, but THEIR profits have little trickle down effects to your livelihood or standard of living. It helps the corporation but not the population of the country, not the wage earners, not the real substance of the country; the country is for the people, not the corporations. NAFTA is a perfect example — it destroyed US jobs. It WAS a great sucking sound, as Ross Perot correctly warned (but people laughed at him). And this is a perfect example of how the corporations are getting richer and the common man, left without a job, is suffering. It will get worse.

So the moral — put some money in cash, invest in agricultural markets (as the need for commodities is growing due to growing world demand, and food is always necessary), expect the last two quarters of 2008 to be brutal, and a trader's market of ups and downs until then. We might even see a false recovery between now and August, but the last two quarters of this year will be brutal. If President Bush and Cheney get us into Iran, as they hope to do, the situation will turn even worse, but there seems little we can do about that since even the news  organizations no longer criticize the White House or look on events with a discerning eye for the public's interest.