Silicon valley is now laying off personnel thousands at a time.
Don't expect this to be another 1929, but expect it to come in a close second. This ride is going to last for years. Of course, when the entire economic system turns into one giant ponzi scheme, the crap has got to hit the fan sooner or later. I have been posting about the coming crash for many years. In fact, when I first joined this forum, a number of people here called me chicken little. I am not going to gloat, though, just because I was right. I am going to pray that our leaders get their collective heads out of their collective asses, and try to mitigate as much of the damage as they can.
Here is the problem we face right now:
1) More layoffs means more foreclosures.
2) Fewer people buying products means more retailers, both large and small, going out of business. For example, our latest victim, Circuit City.
3) When they go under, more people are out of work, and as a result, you have more foreclosures.
4) Without people investing or renting commercial retail space, holders of those properties lose money, and some of them also go under.
5) When they go under, more people face foreclosure.
6) When people lose their jobs and homes, they don't buy cars. Fewer orders for Detroit, which lays off more people, resulting in more foreclosures, less buying of merchandise, forcing the layoffs of more people, etc. etc.
7) With banks doing less business, because more people are broke, more layoffs, resulting in more foreclosures, and even less purchasing.
8) With more people out of work, fewer people go to restaurants, night clubs, and other places of leisure, forcing them to lay off more people, resulting in more foreclosures, and less purchasing.
9) With all the vacant property, realtors are hit hard. Some of the smaller ones go out of business, and others lay off personnel, resulting in point 1) through 8) becoming ever worse.
10) With all the layoffs, more people cannot pay their credit card bills. The result is huge losses for banks and credit card companies, and less money is available to give to investors for capitalization. Investing in business dries up. The economy grinds to a complete halt.
It is a vicious circle, folks. While you are thinking that this is a relatively easy fix, and that the government can just pour money into the problem, once you take a look at the whole picture, you have to realize that the government can only do so much in the way of bailouts before the monetary system itself collapses under its own weight, which is very close to how a ponzi scheme works - Continually borrowing from Peter to pay Paul, until, like a house of cards, it all comes down around us.
We are going to be in this fix for many years to come, and when we get to the point where we can finally see the light at the end of the tunnel, we need to make damn sure that we don't EVER allow greed to reach a point where this can happen again. It is obvious that we did not learn our lesson with 1929. Let us all hope to hell we learn it with 2008.