Are we heading for a world wide depression worse than 1929?

The numbers are in, the month of June 2008  had  the biggest decline of the US stock market, in a month, since 1930. Are we heading for a crash in the only  sector of the US economy that was still quite healthy, even a few months ago? The Dow Jones has fallen 460 points in the last two sessions and reached its lowest point since September 2006.

A few factors are at play here to create a " perfect storm " for a bad situation to get even worse...a lot worse.

The troubles are not over for the financial sector with a possible downgrade of investment bank Morgan Stanley. Giant Merryl Lynch might have to write off  6 billion dollars of risky mortgage-backed debt.

Oil traded today at a new record ( $ 143.00 a barrel of crude) on the New-York Merchantile Exchange. The fast rise in commodities prices is slaming consumers with high cost for energy, food and all other goods. Inflation will be in the forecast and the Feds will likely have to raise interest rates. This, in return, will make money less available and pull the Stock Market even lower..

Hugh Johnson, chairman of Johnson Illington Advisors, said : " The problem is that there is not one single worry, but quite a few; high gas prices, tight credit market conditions and the contracting housing market. If you are looking for problems that face the US economy, they are everywhere."

The real question is this: In this grim context, how can we afford two wars at a price tag of 1 trillion dollar ( 650 billion for Iraq and 250 billion for Afghanistan)? Well.....the answer is; we can not afford them. They are wars on installment plan with money borrowed from China and Japan.

George W. Bush  reckless policies are bankrupting the US economy. Yet , " The Decider " is still talking of an " economical slow down ", and not even a recession. Is he completely delusional or perhaps drinking again?

One thing Americans, before casting their votes in November, should  think and worry about, in this doom & gloom economical forecast, is that Senator McCain claims  not to be an expert in the field of...... the economy.

Note: I am a French filmmaker/photojournalist based in the US since 1983. To view my photo/editorial web site go to http://www.digitalrailroad.net/Mercier

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