“The boom years are over,” says Bill Bonner. Of course, this is what Bill has been saying all along in The Daily Reckoning. Now that’s the day of financial reckoning has come to pass, however, Bill is feeling a sense of dread. That’s because, as bad as things are right now, they look like they’re about to get worse…

This from today’s Daily Reckoning:

The boom in construction has been over for nearly two years…

The boom in the financial sector ended about 12 months ago…

The boom in the aviation industry died when oil went over $100…

The boom in commodities was killed when oil went under $100…

The boom in retail seems to have come to a halt more recently. This will be the first quarter in many years with declining consumer spending… The boom in consumer borrowing seems to have come to an end, too…

Yes, dear reader, what MUST happen, DOES happen. But it usually happens when you don’t expect it… or in a way that surprises you. The big surprise has been the violence of the correction when it finally got going.

“Day of Reckoning,” the Telegraph called it.

But we should be happy. Not only is the mainstream media picking up our themes, now both sides of our Trade of the Decade are working. Yesterday, the Dow went down another 189 points. Gold went up $29.

But instead of joy and satisfaction, we feel a sense of dread. It’s all very well to have a few kruggerands and gold louies stashed somewhere… but you can never have enough of them to brighten up a darkened world.

As an insurance policy against a financial catastrophe, gold still works – perhaps better than anything. But who wants his house to burn down so he can collect the fire insurance?

[Editor’s note: You can download your free report “Buying Gold Coins for Financial Profit & Protection” here.]

Guess how much Americans have lost so far from the stock market decline? Almost $5 trillion. Stocks are down about 33% from their ’07 peak – resulting in the destruction of wealth on an unprecedented scale.

Add to that the loss of wealth in the domestic property market, and you can’t help but wonder… how do people keep going? The Wall Street Journal reports that one in six homeowners is “under water” – with more mortgage than house.

“About 75.5 million U.S. households own the homes they live in. After a housing slump that has pushed values down 30% in some areas, roughly 12 million households, or 16%, owe more than their homes are worth, according to Moody’s Economy.com.”

And house prices are still going down.

Yes, that is something that MUST happen too – house prices have to go do to the point where people can buy them. The average house must be affordable to the average homeowner. And since incomes haven’t gone up in the last 8 years, we can presume that housing prices shouldn’t have gone up either.

So, we ask… how much more do houses have to fall before they are back to where they were 8 years ago… or merely to the multiple of income that buyers can afford? The answer… according to the numbers we’ve seen…is about 20%.

That suggests that we are only about half way through this housing decline. It further suggests that when it is over one out of every three homeowners could be in serious trouble. He may not be under water, but he will definitely be up to his neck.

And now it gets worse.

Because practically every businessman in America is waking up this morning thinking about how he can cut costs. His sales are going down. What choice does he have? He has to cut his payroll. And so, he begins making a list… which employees are essential to his business… which are not. Overtime is cut. Part-time workers are scaled back. Full time workers are let go. He knows the woman in the mailroom is a waste of money, but she’s nice to look at. The fellow running the advertising is an idiot, but he can’t stop advertising, can he? And how ‘bout that driver…he seems to disappear for half the day; he’s never where he’s supposed to be… yes, he’ll be fired immediately…

And then, the world’s lights grow dimmer.

Source: The Boom Years Are Over