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I visited a mall this morning and a large sale at the Auckland Showgrounds and couldn’t believe how few people were about.

I mean the shops were deserted and the sale, which had CD’s and books for $5, I expected to be heaving with people seeking cheap Xmas gifts.

Now as you know I am an eternal optimist, however I also try and make intelligent decisions based on good quality information.

So I have been doing a lot of research recently and trying to become familiar with macro economics and global trends etc. to try and make sense of what is going on currently. The bad news just keeps on coming so I have really focused on getting schooled up.

As a Christian I am also very interested in the USA because according to the Bible they are not a major power in the last days. Their demise must come, is it starting now kind of thing.

There are a lot of extreme views regarding the US economy and the current crisis so finding the “reality zone” is quite a challenge.

However there are some things I am beginning to see that have a ring of truth about them.

1. Our current “global economy” is a very recent event. 50 years ago governments worried about their own country and that was about it. So our management of global economics is in its infancy and many would say is a big “experiment”.

2. We have built this global economy on a premise of continuing expansion. NOW this is a critical point and as I researched it the implications of it really blow ones mind.

We base all of our measuring systems and results on a percentage increase in growth. Whether it’s GDP, population, profitability, the rich list, everything is measured by how much it is expanding.

So one could reach a very reasonable conclusion that our entire economic system has been built upon, and therefore critically relies upon, continued expansion.

Now if that is true, and I’m not saying it is necessarily, then what happens to that system when the expansion ceases, like right now??

Well a very reasonable answer is that it will implode completely. A bit like Mr Madoff’s pyramid scheme our sharemarket, our financial structures, in fact just about everything related to economics, is all worked out on acceptable levels of growth or expansion.

Recently the international news has been full of the fact that if China’s growth gets below 6% that will be a disaster for NZ and the USA.

Why?? Well simply because we have all planned on their growth to create adequate demand for our products. We have no scenario at all for a zero growth world.

The US car bail out announced today will save a lot of jobs and make the world relax for 2 minutes but it ignores an undeniable fact. The US car industry is no longer competitive and needs to collapse and then reinvent itself to be sustainable in a zero growth environment with competition form Asia.

Some very sound, sophisticated, intelligent researchers have been predicting the current situation for 5 years or more, some of them even ten years ago said we would get to where we are now because it was 100% inevitable, and the long term prognosis catastrophic.

So, like me, do some homework, decide for yourself what you think might really be going on and let’s together make sure we stay safe as investors, kiwi’s and families.

By far the best place to start I have found is HERE

Take some time and watch the whole thing. IF that’s too hard chapter 3 on exponential growth is compulsory, then you’ll want to watch the rest

Stay Safe ~ Dean Letfus @ www.MassiveAction.co.nz