http://news.bbc.co.uk/2/hi/business/8066037.stm 13:24 GMT, Sunday, 24 May 2009 14:24 UK World Bank warns of social unrest The head of the World Bank has warned that the global economic crisis could lead to serious social upheaval. Robert Zoellick has warned of the destabilising effects of unemployment "If we do no take measures, there is a risk of a serious human and social crisis with very serious political implications," Robert Zoellick said. He pointed to Eastern Europe, which faces the "tricky situation" of fast-shrinking economies and protests. Mr Zoellick suggested governments should start preparing for high levels of unemployment. "In my opinion, in this context, nobody really knows what is going to happen and the best one can do is be ready for any eventuality," Mr Zoellick said in an interview with Spain's El Pais newspaper. "There is also what I call the 'X-factor', that one can not foresee," such as the recent outbreak of swine flu, he said. "Latin America has remained reasonably stable, even if Mexico and Central America are under pressure because they rely a lot on the North American market," Mr Zoellick added. It was reported last week that Mexico's economy shrank by 8.2% in the first three months of this year compared with a year earlier. Mexico sends 80% of its exports to the US. Other economies in Eastern Europe have registered double-digit declines in GDP, such as Latvia and Estonia, while the retiring Bank of England rate-setter David Blanchflower has said at least one million more people in the UK will lose their jobs. The World Bank has previously warned of a "human catastrophe" in the world's poorest countries unless more is done to tackle the global economic crisis. It said an extra 53 million people are at risk of extreme poverty.
[snip] "There is also what I call the 'X-factor', that one can not foresee," such as the recent outbreak of swine flu, he said." The numbers are sobering with a static snapshot observation. X-F Scenarios projected forward are heart stopping.
I've been warning of steadily higher trending unemployment as the biggest danger to the U.S. and global economy for nearly a year, while others derided me for obsessing over what they called 'a lagging indicator.' Their choosing to do so implied they viewed global economic events in the traditional context of the normal business cycle. Newsflash: What we are now seeing is not the playing out of the normal business cycle, neither here, nor abroad. It really is different this time with MASSIVE overcapacity of production and a literal sea of unwanted and unneeded goods and services - so much so, companies making/providing them are having trouble procuring storage space or clearing inventory/capacity at any price. Official unemployment in the U.S. is now 8.9% - does anyone here doubt the real rate is closer to 14%, or that we won't officially hit 12% by the end of the summer? I would be surprised if the official U.S. unemployment rate is not 15% within a year.
I was flipping through the Chicago Tribune the other day, came across the classifieds and it was four pages -- as in 1, 2, 3, 4. This included the section for nurses. Not long ago there was a massive shortage of nurses. What happened? The nursing section alone was more than 4 pages. Phew -- glad I'm not looking for a job.