That's the continuous claims for unemployment released this morning. The new claims for unemployment reached almost 500,000. This is evidence that the recession is in full tilt and, of course, the stock market is responding negatively.
The next big shoe to drop will be downward revisions in earnings as numbers coming out this Christmas season will show that buyers of consumer goods will be down as well.
All the devastation in the employment market is occurring despite the federal government having pumped hundreds of billions of dollars into the economy and provided hundreds more to backstop bad debt.
This is acting very similarly to the Great Depression is many respects, notably, it is a function of deflation with housing and now commodity prices dropping significantly. In such times, cash is king, and we are indeed seeing the value of the US dollar climbing relative to foreign currencies, gold and silver.
Another similarity to the Great Depression is the staggering unemployment as evidenced by the headline number of several million of continuous claims on unemployment.
With this number, the handwriting is on the wall: monetary policy is not enough. We need a fiscal stimulus passed by Congress, and it should be done as a Keynesian infrastructure program to re-build roads and bridges and employ more folks.
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