The Federal Reserve has posted some data that shows the extent of economic decline in the second quarter. Here are some key numbers, as reported by Reuters.

• Household wealth fell by $1.5 trillion in the second quarter to $53.5 trillion. This sharply lower than the $64.2 trillion at the end of 2007.
• Stock losses amounted to $14.9 trillion, a drop of $1.95 trillion.

Three pieces of information stood out today. The first is that one in seven people lived in poverty last year according the US Census. That is nearly 44 million people. The Census describes these people as members of four person families that make less than $22,000 a year.

Two other pieces of data that showed the economic dreams of many American is eroding were RealtyTrac reported foreclosures hit an all time high since the housing crisis began. In July the figure rose to 95,465. Also in the housing sector, Fannie Mae research reported that while a majority of Americans (67%) continue to believe that buying a home is a safe investment, this fell 16 points since 2003. The market may have gotten the impression from these pieces of news that the recession is not over.

Today's Closing Bell numbers:

Dow Jones 10,594.83 +22.10 (0.21%)
S&P 500 1,124.66 -0.41 (-0.04%)
Nasdaq 2,303.25 +1.93 (0.08%)

Have you ever asked yourself? "is there a spirit of poverty? If you go to Japan the answer is: "yes." If you drive to the Bimbo Gami shrine in the mountains about a four hour drive from Tokyo, you will come face to face with the "god of poverty." The god of poverty is a wooden statue believed to be that of a a thin, filthy man who represents the "state of poverty."

So, you are here along with about 500 other people and you want to chase poverty out of your life. You walk up to the statue and beat it several times with a bat, then you kick it as hard as you can and throw beans at it to drive away negative spirits and bad luck.

I have a deep concern that we have now entered uncharted economic territory. Economists are scouring their history books and charts for precedence but they may not find anything there because our current situation probably last occurred before there was good data and perhaps never at the global scale we are witnessing today.

There is no widget application available that will help you solve this on your Apple Inc (NASDAQ: AAPL) iPhone, nor can International Business Machines (NYSE: IBM) help you with its most advanced computers.

In our world of ever increasing expectations for immediate gratification, you will be frustrated trying to figure out a safe path for the journey ahead without great patience and fortitude.

This is the first of what I hope will be an educational and informative dialogue exploring what I think may be a real possibility that we are destined to suffer through a period of both deflation and inflation at the same time. Issues that are troubling and confusing on Wall Street, Main Street and in Washington, DC.

"We are poor."

That's exactly how numerous Chinese in the southern Henan Province start conversations according to today's New York Times article about China: "Lives of Grinding Poverty, Untouched by China's Boom."

While the article contents that China has, more so than any other country, moved people out of poverty, there are still 300 million poor in China.

We've seen a booming Chinese stock market. The iShares FTSE/Xinhua China 25 Index (NYSE: FXI), a popular index of the 25 largest Chinese companies available to foreign investors, was up over 60% in 2007. While we've seen a strong pullback, Beijing is hosting the 2008 Olympics and continued focus and interest on China as an international investment destination should continue as a rising middle class in China spends on consumer products, travel, and electronics.