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In my opinion, most people and government organizations are still in denial about the economic future of the U.S. The economic performance of the next 10 years will be far worse than anything in the past 30 years and could even be worse than the Great Depression of the 1930s.
Almost monthly, for the past 10 months, one of my friends or colleagues has said something like: "The market surely can't get any worse." Soon thereafter, the market reached another new low.
The creation of value and wealth has been much lower during the past eight years (since the Internet bubble burst). And very recently, the change in GDP (goods and services produced by the USA) is far worse than at any time during the past 30 years.
This chart shows the -6% change in GDP during the fourth quarter of 2008, by far the worst performance in the past 30 years. The only other time we've had two negative quarters in a row was in 1990.
As a businessman, my forecast is that the first and second quarters of 2009 will be much worse than fourth quarter 2008. Demand for my company's product is significantly reduced. To respond, we have dramatically scaled back on capital investments ... millions of dollars globally. The delay in investing these millions of dollars for new tooling, new buildings and new products means that sales at many of our suppliers will be reduced. They will be forced into layoffs or severe cost cutting tactics as we have been. This effect will further reduce spending at restaurants, durable goods, travel, etc.
The stock market, a barometer of investor sentiment, has already registered this. Look at the performance of the Dow Jones in this same period.
The market has lost 50 percent of its value since late 2007. This has never happened in the recent past. In fact, during the 'big recession' and stagflation of 1990 and 1991 (see first graph), the market declined only 20 percent!
Another serious indicator, and one which is very well publicized, is the amount of credit outstanding in the U.S. Today more than 300 percent of the GDP is in loans in the form of mortgages and credit card debt. The last time we had this was 1928  and 1929, just before the Great Depression.
Clearly, this is nothing like a recession we are entering. This is more like a depression. During the depressions of 1840 and of 1930, we saw the market decline by 80 to 90 percent. It took the market more than 25 years to recover to its 'going in' value. In my opinion, 2008 was the beginning of such a period. This graph below shows the crash of 1929:
Unfortunately, in my opinion, this is a good indication of what we're heading for now.
Kyle Gilley is a quality director for one of the world's largest tire companies. He has lived in the USA, France and Germany, and now resides in Thailand. He has engineering and MBA degrees and has invested in the stock market for over 30 years.
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