We are somewhat concerned by the report of the Bureau of Economic Analysis which showed that Real Gross Domestic Product decreased in the 3rd quarter by -0.3%.

It is our firm belief, collectively, that the figure is a warning of great tribulations ahead for our national economy, and indeed, that of the world.

The third quarter ended in the beginnings of an economic depression and recession, as we’ve previously written in this website. However, much of that quarter was spent in a pre-crisis period for about two out of three months.

We believe fourth quarter results, not expected until late January portent a much more serious nature of this crisis. Unemployment figures will show marked rise, and consumer spending is likely to remain critically low, with adverse effects on retail, hospitality, travel and other sectors.

Financial markets are also expected to suffer, as investors, particularly the small investors, flee to safer and more secure holdings. In a period where ‘cash is king’, even the price of gold has dropped for lack of buyers.

The economy is heading towards at least a 0.75, if not a full percentage point drop in GDP as the consequence of tight credit impacts the Main Street business sector and filters its way up towards the DOW Industrials.

The lack of lending, which we wrote about almost a year ago, has dire concomitant consequence on GDP. As companies cannot obtain loans, they’re forced to lay off workers and management alike. This forces the hands of those individuals, who are unemployed to default on their obligations. We further believe that because no new companies can obtain funding to replace those which failed, stores and offices will remain closed, further eroding the property value base from which this crisis started.

As jobs are lost, and those in receipt of unemployment cannot find work, the number of bankrutpcies will rise.