Late last year forecasters said the economic downturn would be bad for the first half of 2009 but by July we would see recovery. Then in January predictions were for a grim 2009 but a quick recovery in 2010. But last night Wall Street tumbled (again) and the Australian dollar sank in sympathy.

In Japan the 1990’s are known as “the lost decade”. Economic policy and deteriorated confidence led to ten years with no economic growth. The country was at a standstill.

Take a walk around your town. Take notice of the “For Lease” signs. Notice the businesses having sales of 50% off or more. Many of those closing down? Look for construction sites at a standstill. What about houses for sale? Any of those under the instructions of the mortgagee? Stop for a coffee and read the newspaper. In the USA in January over 600,000 jobs were lost. That’s one month alone. Companies are closing. Retirement savings are lost. Squatters are occupying million dollar homes. Twenty million migrant workers in China are unemployed and are back in the countryside with nothing to do.

I believe we are at the start of a lost decade. It will take that long to return to the heady economy we enjoyed just one year ago. Shops will sit vacant. Construction sites will overgrow. The newly unemployed will become an army of part-time workers scrambling to make due. And governments will spend and spend.

It is a sad, scary and sobering thought. That’s not a speed bump ahead - it’s a brick wall.