In my last column I wrote that humanity is in transition from one Age to another and that the global financial collapse is a painful part of that transition.  This occurs during any major historical transition period.  In addition I wrote:

“There are four words that keep coming back to me as I view the landscape of what lies ahead in 2009 and beyond.  They are contraction, cleansing, reorganization and transformation.  It is these four words to keep in mind as you read the forecasts here and look around you”

I repeat that because most of the economic predictions below are about contraction and cleansing.  However I am not a pessimist as I believe that we are in a process of reorganization that can lead to transformation.  Please keep that in mind as you read on.

The U.S. economy has been in a recession for close to a year, with the fourth quarter being one of the worst quarters on record.  During this fourth quarter the global economy joined the U.S.  When all the numbers come in for this quarter they will show a major contraction probably in the range of 4-7%.  In a column in mid-October, I wrote:

“We will witness one of the worst holiday retail seasons in history on a year to year comparison basis.  People who feel that they have no control over the performance of their investments will realize that the only control they have is in the area of spending which they will …

In my columns of forecasts for 2008 I made clear and distinct predictions about debt, the housing market and the stock market.

Debt

On January 1 I wrote:

“The key economic word for 2007 and even more so for 2008 will be “debt”.  It is debt that is the true economic issue for the individual, the company, the state, the country, the world.  How all of these economic entities deal with debt will be one of the two key economic issues we will face in the coming years.  Energy of course is the other.”

On    in a subsequent detailed column on debt, I followed this up with:

“The four debts referred to here are personal, corporate, city and state and federal.  All of them feel as though they are beginning to come home to roost and the outlook, if not faced and dealt with, will come together with dire consequences.”

Well, this wasn’t too difficult to predict given the sub-prime mess that started to surface a year ago.  It is clear that the mortgage debt problem in the U.S. is unprecedented and is tied to the collapse of the housing industry discussed later in this column.  It now seems to millions of Americans that a disproportionate amount of household spending is going toward either debt or energy. This is the pain that individuals are feeling.  It is what is being covered with wall to wall media coverage.  This mortgage problem will test the perception of soundness of the financial system.  The system will survive, …

Debt is one of the primary underpinnings of the economic turbulence we are now experiencing.  In the last 50 years debt has gone from something occasional to something universal, embraced and now endemic. Borrow against the future to pay for today.  Debt, debt, debt, debt is like the drip, drip, drip, drip of a faucet that slowing fills up a sink and overflows.  The four debts referred to here are personal, corporate, city and state and federal.  All of them feel as though they are beginning to come home to roost and the outlook, if not faced and dealt with, will come together with dire consequences.

Personal or consumer debt is a relatively recent phenomenon.  Diners Club launched the first widely used credit card in 1950.  Before that, consumers paid cash or made a down payment and had a short term low interest payment.  The idea of the Diners Club card and then seven years later the American Express card was to allow people who entertain or travel to not have to carry large amounts of cash.  It was expected that bills would be paid in full every month.    Up until this point, consumers bought goods when they had the money to pay for them.  Now of course people buy things with cards as they often don’t have money to pay for them.  Immediate gratification in a materialistic society that bombards consumers with literally hundreds and thousands of advertising messages a day.

Companies have long used credit and debt to build enterprises …

Happy New Year to all of you that are regular readers of this blog and to those of you who might be coming to it the first time.  May 2008 be a happy year for everyone.  I can promise that it will be another year of upheaval and change, probably exceeding 2007 in that regard.  I will submit to you my annual predictions, both general and specific, for the year within the next two weeks.  Right now I would like to take a quick look at several late in the year developments of 2007 that provide indication as to where we are going and what will lay ahead for us in 2008. 

As I have stated here several times, a fundamental aspect of being a futurist is to look for patterns to discern the dynamics that will shape our collective future.  Events, inventions, social, cultural and economic developments, trailblazing efforts by individuals and small groups, when looked at collectively can reveal underlying patterns and trends, both macro and micro.  Here are some notable developments that point into our future, some of which will be looked at in greater detail in future columns.

Writers’ Strike

The writers’ strike in the entertainment business is now two months old. Its’ length, the animosity it has engendered and the immediate consequences of it are significant.  It has within it the seeds of structural and permanent change in the entertainment business. The annual …

The Bush Administration has always made me think of George Orwell and his novel “1984” from the point of view of language.  While all politicians and all administrations I can remember have been somewhat loose with language and the truth, the current administration has realized the vision of Orwell in that language means nothing and is to be used to manipulate the citizens of the country.

What makes me think of this once again?  The Bush EPA blocking California and 16 other states from enforcing states laws to protect the environment and their citizens. EPA stands for Environmental Protection Agency, yet the Bush EPA has nothing to do with protecting the environment and everything to do with turf battles and giving in to special interests.  As we all know, the Bush administration has shown no respect for the environment and has shown a total absence of leadership in the area of CO2 emissions.  It actually fought and lost a court case where the court ruled that the EPA does have jurisdiction over the issue of green house emissions.  Who does the Bush EPA protect?  Not the environment.

The signing into law of the energy bill last week allowed the Bush EPA to deny California and the other states from enforcing laws that have more stringent regulations regarding CO2 emissions and automotive fleet MPG.  The emissions standards California adopted in 2004, which were never approved by the federal government, would force automakers to cut greenhouse gas emission by 30 percent by 2016.  If …