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10.2% Unemployment Today on the Way to 33% Tomorrow

By Susan C. Walker
Fri, 06 Nov 2009 15:30:00 ET
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With one out of every 10 people not working in the United States, could it get worse? Yes, if the economy sinks into the deflationary depression that Bob Prechter forecasts in his newly revised book, Conquer the Crash: You Can Survive and Prosper in a Deflationary Depression.
The 10.2% unemployment rate announced on November 6 is the worst in 26 years. But even that number doesn't reflect the real rate of unemployment. As a Nov. 6 Associated Press story explains: "The 10.2 percent unemployment rate does not include people without jobs who have stopped looking for work or those who have settled for part-time jobs. If you counted those people, the unemployment rate would be 17.5 percent, the highest on record dating from 1994."
As bad as that unemployment level is now, the upcoming bear market and accompanying deflationary depression will make it worse, says Prechter. Wave analysis places the current downturn in what Elliotticians call a Grand Supercycle degree. As that title implies, this large-scale wave compares historically with the wave patterns and bear market of the Great Depression of the late 1920s and early 1930s. Here is Bob's analysis from early 2009 of what will happen to unemployment figures in the next few years.
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Excerpted from The Elliott Wave Theorist, January 22, 2009
"As we have long argued, because the current bear market is of one larger degree than that of 1929-1932, the depression it creates will be deeper, which in turn means that the unemployment rate will exceed that of 1933. The peak rate in 1933 was 25 percent. Therefore, unemployment in the U.S. should rise to about 33 percent at the trough of this depression. Fitting this expectation, U.S. job losses in the fourth quarter were greater than at any time since 1945, when World War II ended and defense factories shut down to re-tool. Even after this plunge, however, the 'official' unemployment rate is just 7 percent. But the true unemployment rate, as it would have been measured before the era of government support payments and statistics-fudging such as omitting the number of people who give up looking for work, is currently 17 percent. (This figure is courtesy of John Williams’ Shadow Government Statistics at http://www.shadowstats.com.) So we’re halfway there.

"Here is an excerpt from Conquer the Crash [Prechter's New York Times best-selling book, which is just out in a new edition]: 'When the bust occurs, governments won’t have the money required to service truly needy people in unfortunate circumstances.' It’s starting to happen: Agencies administering state governments’ 'unemployment benefits' are swamped and running out of money. In a depression, taking funds from healthy companies to pay people out of work is a scheme that cannot endure. Serious suffering will occur when reality strikes and governments are forced to rescind their promises to the unemployed and stop paying them."

How to Prepare Yourself and Your Family to Survive and Prosper Through Tough Times. Read Bob Prechter's Conquer the Crash, Second Edition, which now includes a vital supplement to its still-prescient original content. The second edition includes 188 NEW pages (480 pages total), expanding upon his unique deflationary argument and escorting readers through the peaks of 2005-2008. Learn more here. Order now.

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