Basket Cases – Falling Apart

March 2, 2010

By Al Doyle

One of the world's major currencies - the British pound - is "a basket case", according to well-known investment advisor Jim Rogers.

As reported by the Digital Times, Rogers declared that the pound could be on the brink of collapse. If such a catastrophe were to take place, it could kick off a "global economic disintegration" by the end of 2010. Recent upticks in stock markets around the world were described as a "false bounce" created by heavy government and central bank intervention.

"But it can't last," Rogers warned. "We've been applying temporary stick plasters, but not cures. Later this year, we'll start to see the real recession, with more Lehman-style disasters and a fallout which won't stop until the underlying malaise is genuinely cured."

One number has been growing in the current economic climate. The number of new and potential ghost towns is on the rise.

Ravenswood, West Virginia is a prime example of the phenomenon. The isolated community of 4000 is a one-industry town dependent on aluminum refining and fabrication. Ravenswood's aluminum plants now have 1000 workers on the payroll as compared to 1650 a year ago.The complex is for sale, and no one is discounting the possibility of the entire operation closing for good.

What little economic diversification that could be found in Georgetown, South Carolina disappeared when the town's steel mill closed in 2009. The local paper mill is now the largest private employer, and demand for its products is declining.

Workers at another paper mill town - Madawaska, Maine - voted to take an 8.5 percent pay cut to help keep their struggling employer operating. Located on the Canadian border, isolated Madawaska offers few job opportunities outside of the forest products and logging fields.

There are 64,500 fewer jobs in the Birmingham, Alabama metropolitan area as compared to 2007. That number represents one out of every eight employment opportunities.

"The recession essentially worked off about a decade's worth of jobs," according to John Norris of Oakworth Capital Bank in Birmingham.

Even highly qualified workers with a track record of success in their fields can't find new positions. Bernard Lockhart went through two layoffs in less than two years. The former sales manager and event planner has been unemployed for two years.

Melanie Davis was laid off from her former position as vice president of communications for the Birmingham Area Chamber of Commerce in July 2009. Six years with the Chamber and seven years as a local TV journalist gives Davis the kind of contacts that few job seekers possess, but it hasn't helped Davis find work.