Best of the Week
Most Popular
1. Gold vs Cash in a Financial Crisis - Richard_Mills
2.Current Stock Market Rally Similarities To 1999 - Chris_Vermeulen
3.America See You On The Dark Side Of The Moon - Part2 - James_Quinn
4.Stock Market Trend Forecast Outlook for 2020 - Nadeem_Walayat
5.Who Said Stock Market Traders and Investor are Emotional Right Now? - Chris_Vermeulen
6.Gold Upswing and Lessons from Gold Tops - P_Radomski_CFA
7.Economic Tribulation is Coming, and Here is Why - Michael_Pento
8.What to Expect in Our Next Recession/Depression? - Raymond_Matison
9.The Fed Celebrates While Americans Drown in Financial Despair - John_Mauldin
10.Hi-yo Silver Away! - Richard_Mills
Last 7 days
South Korea Coronavirus WARNING - R0 4.6 Outbreak Infection Rate! - 29th Feb 20
Stock Market Trend and Elliott Wave Analysis - Video - 29th Feb 20
The Greatest Economic Depression Just Began. This Is No Drill - 29th Feb 20
Stock Market Coronavirus Deviation from Overall Outlook for 2020 - Video - 28th Feb 20
Stock Market SPX to Rise back to 3350 - 28th Feb 20
Stock Performance in the Rising Coronavirus Fever - 28th Feb 20
Stock Market SPY Breaks Below Fibonacci Bearish Trigger Level - 28th Feb 20
Will CoronaVirus Pandemic Trigger Stocks Bear Market 2020? - 28th Feb 20
Dow Long-term Trend Analysis - Coronavirus Triggering a Stocks Bear Market? - 27th Feb 20
Trump or Sanders? Both will pile up the Debt - 27th Feb 20
Oil Price Is Now More Volatile Than Bitcoin - 27th Feb 20
A Digital “Fedcoin” May Be Coming… And It Would Be Terrifying - 27th Feb 20
India's Nifty 50 Stocks: Does the Bad Jobs Outlook Spell Trouble for Stocks? - 27th Feb 20
How Crypto Currencies Are Helping Players Go Private - 27th Feb 20 -
Gold and Silver The Die Is Cast - 27th Feb 20
US Economy Permanently Addicted to Zero Interest Rates - 27th Feb 20
Has the Stock Market Waterfall Event Started Or A Buying Opportunity? - 27th Feb 20
Advantages of Enrolling in a Retirement Plan - 27th Feb 20 - LS
South Korea Coronavirus Outbreak Data Analysis Warning Rate of Infection is Exponential! - 26th Feb 20
Gold Price Long-term Trend Analysis Forecast 2020 - 26th Feb 20
Fake Markets Are on Collision Course with Reality - 26th Feb 20
Microsoft is Crushing the S&P 500, Secret Trait Of Stocks That Soar 1,000%+ - 26th Feb 20
Europe's Best Ski Resorts For The Ultimate Adventure - 26th Feb 20
Samsung Galaxy S20+ vs Galaxy S10+ Which One to Buy? - 26th Feb 20
Gold Is Taking on $1,700 amid Rising Coronavirus Fears - 26th Feb 20
Is This What Falling Through the Floor Looks Like in Stocks? - 26th Feb 20
Gold Minsky Moment Coming - 26th Feb 20
Why Every Student Should Study Economics - 26th Feb 20
Stock Market Correction Over? - 26th Feb 20
US Bond Market Yield Curve Patterns – What To Expect In 2020 - 25th Feb 20
Has Stock Market Waterfall Event Started Or A Buying Opportunity? - 25th Feb 20
Coronavirus IN Sheffield! Royal Hallamshire Hospital treating 2 infected Patients, UK - 25th Feb 20
Dow Short-term Trend Analysis - Coronavirus Trigger a Stocks Bear Market? - 24th Feb 20
Sustained Silver Rally Coming? - 24th Feb 20
Should Investors Worry about Repo Market and Buy Gold? - 24th Feb 20
Are FANG Technology Stocks Setting Up For A Market Crash? - 24th Feb 20
Gold Above $1,600 Amid FOMC Minutes and Coronavirus Impact - 24th Feb 20
CoronaVirus Pandemic Day 76 Trend Forecast Update - Infected 540k, Minus China 1715, Deaths 4920 - 23rd Feb 20 -
Ways to Find Startup Capital - 23rd Feb 20
Stock Market Deviation from Overall Outlook for 2020 - 22nd Feb 20
The Shanghai Composite and Coronavirus: A Revealing Perspective - 22nd Feb 20
Baltic Dry, Copper, Oil, Tech and China Continue Call for Stock Market Crash Soon - 22nd Feb 20
Gold Warning – This is Not a Buying Opportunity - 22nd Feb 20
Is The Technology Sector FANG Stocks Setting Up For A Market Crash? - 22nd Feb 20
Coronavirus China Infection Statistics Analysis, Probability Forecasts 1/2 Million Infected - 21st Feb 20
Is Crude Oil Firmly on the Upswing Now? - 20th Feb 20
What Can Stop the Stocks Bull – Or At Least, Make It Pause? - 20th Feb 20
Trump and Economic News That Drive Gold, Not Just Coronavirus - 20th Feb 20
Coronavirus COVID19 UK Infection Prevention, Boosting Immune Systems, Birmingham, Sheffield - 20th Feb 20
Silver’s Valuable Insights Into the Upcoming PMs Rally - 20th Feb 20
Coronavirus Coming Storm Act Now to Protect Yourselves and Family to Survive COVID-19 Pandemic - 19th Feb 20
Future Silver Prices Will Shock People, and They’ll Kick Themselves for Not Buying Under $20… - 19th Feb 20
What Alexis Kennedy Learned from Launching Cultist Simulator - 19th Feb 20
Stock Market Potential Short-term top - 18th Feb 20
Coronavirus Fourth Turning - No One Gets Out Of Here Alive! - 18th Feb 20
The Stocks Hit Worst From the Coronavirus - 18th Feb 20
Tips on Pest Control: How to Prevent Pests and Rodents - 18th Feb 20
Buying a Custom Built Gaming PC From Overclockers.co.uk - 1. Delivery and Unboxing - 17th Feb 20
BAIDU (BIDU) Illustrates Why You Should NOT Invest in Chinese Stocks - 17th Feb 20
Financial Markets News Report: February 17, 2020 - February 21, 2020 - 17th Feb 20
NVIDIA (NVDA) GPU King For AI Mega-trend Tech Stocks Investing 2020 - 17th Feb 20
Stock Market Bubble - No One Gets Out Of Here Alive! - 17th Feb 20
British Pound GBP Trend Forecast 2020 - 16th Feb 20
SAMSUNG AI Mega-trend Tech Stocks Investing 2020 - 16th Feb 20
Ignore the Polls, the Markets Have Already Told You Who Wins in 2020 - 16th Feb 20
UK Coronavirus COVID-19 Pandemic WARNING! Sheffield, Manchester, Birmingham Outbreaks Probable - 16th Feb 20
iShares Nasdaq Biotechnology ETF IBB AI Mega-trend Tech Stocks Investing 2020 - 15th Feb 20
Gold Stocks Still Stalled - 15th Feb 20
Is The Technology Stocks Sector Setting Up For A Crash? - 15th Feb 20
UK Calm Before Corona Virus Storm - Infections Forecast into End March 2020 - 15th Feb 20

Market Oracle FREE Newsletter

Coronavirus-bear-market-2020-analysis

Quantifornication and the American Spring

Politics / US Politics Apr 13, 2013 - 09:35 AM GMT

By: Richard_Mills

Politics

Ironic isn't it? A record number of people on food stamps yet new highs for stock indices. Below is an interesting question posed by Michael Snyder. The answer is very important to your future.

"If the economy is getting better, then why does poverty in America continue to grow so rapidly? Yes, the stock market has been hitting all-time highs recently, but also the number of Americans living in poverty has now reached a level not seen since the 1960s. Yes, corporate profits are at levels never seen before, but so is the number of Americans on food stamps. Yes, housing prices have started to rebound a little bit (especially in wealthy areas), but there are also more than a million public school students in America that are homeless...should we measure our economic progress by the false stock market bubble that has been inflated by Ben Bernanke's reckless money printing, or should we measure our economic progress by how the poor and the middle class are doing?" - Michael Snyder, infowars.com


CPIANUCNS - CPI

Consider:

  • U.S. labor force participation is now down to where it was in 1979 - 63.3 percent.

  • Adjusted for inflation household incomes are now back to levels last seen in the 1990s - average per capita wage is around $26,000, household median income is at $50,000.

  • Adjusted for inflation markets are lower than they were in 2000.

  • U.S. national debt is $16+ trillion.

  • The banking system backs $7.4 trillion in insured deposits with $32 billion, that's just .43 percent - when the U.S. was on the gold standard your dollar was backed 40 percent with gold. In 1987 there were over 13,000 banks, today there are 6,000. There are 50 banks with assets totaling over $20 billion, these are 'too big to fail'.

  • Student debt totals over $1 trillion. Medical care is the second fastest inflating sector after first place college tuition. Since 1985, college tuition has soared nearly 600 percent and medical care is fast approaching 400 percent. The overall Consumers Price Index (CPI) is at 200 percent.

  • The Federal Reserve's balance sheet is plus $3.2 trillion and the Fed is continuing to purchase assets at a rate of $85 billion a month.

  • Consumer sentiment is at crisis levels last seen in 2008. In August 2012, in A Pew Research survey of middle-class Americans done in August 2012, reported 42 percent of those surveyed said they were worse off than they were in 2008.

A Rasmussen survey showed that only 39 percent believed the U.S. economy would be stronger in five years - the first time that figure has ever dipped below 40 percent.

The John J. Heldrich Center for Workforce Development at Rutgers University's survey showed that more than half of those surveyed believe the U.S. economy will not fully recover for another six years, and nearly one-third said the U.S. economy will never fully recover.

  • Estimates put a return to "normal" employment deep into 2019 - and that's a best case recovery with no hiccups.

  • The largest city bankruptcy in US history was just announced for Stockton, California - population 300,000.

  • People aren't buying cars because they can afford them - U.S. cars, on average, are almost 11 years old, that's the oldest the fleets been since record keeping began. When cars get old they breakdown, costly repairs happen all too often. Unfortunately for a consumer driven economy already swirling around the bowl every dollar spent on a car purchase is one not being replaced for purchases elsewhere.

  • In the final quarter of 2012, the US economy expanded at an annual rate of 0.4 percent. The 0.4 percent growth rate for the gross domestic product (GDP) was the weakest quarterly performance in almost two years.

  • For all of 2012, the economy grew 2.2 percent, that's after a 1.8 percent increase in 2011 and a 2.4 percent advance in 2010. Since the recession ended in the summer of 2009 the economy has been expanding at sub-par rates.

  • The Congressional Budget Office (CBO) has estimated that the combination of tax increases and spending cuts (the much talked about fiscal cliff) could trim economic growth this year by 1.5 percentage points leaving just 1.5 percentage points for growth in 2013.

  • The just released (April 10th) Presidential budget calls for $580 billion in new taxes, $400 billion in health savings plus an additional $200 billion in savings from farm subsidy reductions and reforms to Federal retirement plans.

SNAP

Food stamp participation increased from about 17.2 million in fiscal year 2000 to 26 million people in July 2006. By August 2008, participation had reached an all-time (non-disaster) high of 29 million people per month.

Today roughly 15 percent (47.3 million) of Americans are on food stamps - the Supplemental Nutrition Assistance Program (SNAP).

Half of current SNAP recipients are children, and half of these ten million children live in extreme poverty, meaning family income is less than half the official poverty level.

In the 1970s, about one out of every 50 Americans was on food stamps. One in six Americans receives food stamps today.

Last year's average monthly benefit was $133 per person - Republican's are seeking $16 billion worth of cuts to the SNAP program over 10 years.

Three out of four households receiving SNAP benefits include at least one person who is working.

The ranks of America's poor have climbed to 50 million.

Dying Broke

Few Americans own any significant amount of financial wealth:

  • One of three Americans has no savings.

  • Median household income has fallen 7.3 percent since the recession officially ended in the summer of 2009. During the same period inflation has been between two and four percent.

  • From 2007 to 2010, a typical US family lost 39 percent of its wealth, in 2007, the median family net worth was $126,400, in 2010, it was $77,300.

  • In the U.S. ten million mortgages are underwater. Today's home prices are lower than they were during the Great Depression.

  • Roughly 10 percent of the private sector has a pension versus 60 percent in 1980.

  • The Federal Deposit Insurance Corp. (FDIC) reported more than a quarter of American households lacks access to full banking services or have no bank account while nearly 10 million U.S. households have no checking or savings accounts..

  • The White House has announced its budget proposals include a shift to a Chained CPI. This will produce a major cut in Social Security and Veterans benefits. Chained CPI can be expected to grow .25 - .30 percentage points slower than the current CPI measure. Nearly two in three recipients rely on Social Security for at least 50 percent of their income while benefits make up at least 90 percent of the income of 36 percent of seniors. The CBO has estimated that by switching to chained CPI-U the federal deficits would be reduced by $340 billion in the decade from 2014 through 2023. Of that, $127 billion would come from savings on Social Security.

  • Nearly half of American's die broke.

The Chained CPI and the CPI-U Since 2000

businessinsider.com

The class divide

The S&P 500 - an index of 500 large US companies - has finally, after a four year rally, recouped all of its losses from the 2008 global financial crisis.

The S&P 500 became the last major US index to hit a new high. The Dow Jones Industrial average has already climbed past its previous high.

The average net worth of the 400 wealthiest Americans, classified as the super rich, rose to an all-time record of $4.2 billion, up more than 13 percent from a year ago. Collectively, this group's net worth, currently at $1.7 trillion, is the equivalent of one-eighth of the entire U.S. economy.

  • The top one percent of the American population controls 42 percent of all financial wealth in the country.
  • The top 20 percent control roughly 90 percent of all stock ownership and financial wealth.
  • The bottom 80 percent of Americans control less than 10 percent of all stocks owned.
  • The bottom 80 percent of Americans hold roughly 5 to 8 percent of all financial wealth (non-housing related).

"The vast majority of Americans are not the beneficiaries of this "buoyant economy." Rather, growing numbers of people have been thrown deeper into poverty and social distress. Long-term unemployment has become entrenched. Working families are saddled with growing debt and struggle to pay for housing and other basic necessities, let alone put aside anything for retirement...

The US Federal Reserve is pumping $85 billion a month in virtually free money into the financial system, fueling the stock market boom.This is more money in a month than the $76.6 billion the federal government spent all of last year to provide SNAP benefits to 47.8 million impoverished Americans." The two sides of the US economic "recovery", wsws.org

Income inequality is the highest it's been since World War II.

The ranks of the working-age poor are at the 1960s levels that led to the national war on poverty. One in twelve Americans are jobless, and 50 million live below the poverty line. Over 47 million people, many from middle-income families, now depend on social assistance for food. And across America, 1.5 million children are in families that have lost their homes.

It's obvious the 'recovery', concentrated as it is on just the stock market, has nothing to do with most Americans reality.

Average Income by Group, 1917 to 2011

washingtonpost.com

"Since the S&P 500 first reached its current level, in March 2000, the mad money printers at the Federal Reserve have expanded their balance sheet sixfold (to $3.2 trillion from $500 billion). Yet during that stretch, economic output has grown by an average of 1.7 percent a year (the slowest since the Civil War); real business investment has crawled forward at only 0.8 percent per year; and the payroll job count has crept up at a negligible 0.1 percent annually. Real median family income growth has dropped 8 percent, and the number of full-time middle class jobs, 6 percent. The real net worth of the "bottom" 90 percent has dropped by one-fourth. The number of food stamp and disability aid recipients has more than doubled, to 59 million, about one in five Americans." David Stockman, former director of the Office of Management and Budget under President Ronald Reagan

Stock Market Longevity

"On the earnings front, my concern continues to be that investors don't seem to recognize that profit margins are more than 70% above their historical norms, nor the extent to which this surplus is the direct result of a historic (and unsustainable) deficit in the sum of government and household savings. As a result, investors seem oblivious to the likelihood of earnings disappointments, not only in coming quarters but in the next several years. We continue to expect this disappointment to amount to a contraction in earnings over the next 4 years at a rate of roughly 12% annually."

- John Hussman, manager Hussman Funds, hussmanfunds.com

"Corporate profits are nothing if not mean-reverting. There are several explanations for this phenomenon; but whatever the cause, the current off-the-charts percentage of profits to GDP is highly unlikely to become an enduring feature of the New Normal. Especially not given the recent weakness across the rest of the data spectrum."

- John Mauldin, Mauldin Economics, mauldineconomics.com

Conclusion

We should we measuring our economic progress by how the poor and the middle class are doing. After all, besides the benefits being so narrowly focused, it hardly seems likely that the Fed induced stock market bubble, and off the charts corporate profits, are sustainable.

Quantifornication is the term I coined for what the Federal Reserve is selling to the world - the unrealistic, insane fiat dream that the monetary policy currently being employed by the Fed can fix the economy. It can't, you cannot fix a debt induced problem by adding more debt.

Welfares role's are going to grow, millions more will be looking for food stamps yet programs are being cut and taxes raised.

Is an American Spring coming? Certainly many of the same pressures that caused riots, civil disobedience and regime overthrow (perhaps this is why President Obama is militarizing the police and his government is buying ammunition - almost two billion hollow point bullets?) across the Arab world are beginning to build in America and for the very same reasons.

The Arab Spring had many causes, but chief among them was socio-economic turmoil - poverty, lack of adequate medical facilities and attention, low to no employment, low wages, disease, no clean drinking water, lack of shelter and shortages of food or unaffordable food can all cause socio-economic pressure to build.

"It seems to me there are very dangerous ambiguities about our democracy in its actual present condition. I wonder to what extent our ideals are now a front for organized selfishness and irresponsibility. If our affluent society ever breaks down and the facade is taken away, what are we going to have left?"

- Thomas Merton

"When you think about the largest central banks in the world, they have all moved to unlimited printing ideology. Monetary policy happens to be the only game in town. I am perplexed as to why gold is as low as it is. I don't have a great answer for you other than you should maintain a position." Kyle Bass, Hayman Capital, in a Bloomberg TV interview

"Gold is money, everything else is just credit."

- J.P. Morgan

Quantitative easing, a global currency race to worthless and a spring storm on the horizon means gold and silver bullion might be the best protection you can own and should be on all our radar screens. Are they on yours?

If not, maybe they should be.

By Richard (Rick) Mills

www.aheadoftheherd.com

rick@aheadoftheherd.com

If you're interested in learning more about the junior resource and bio-med sectors please come and visit us at www.aheadoftheherd.com

Site membership is free. No credit card or personal information is asked for.

Richard is host of Aheadoftheherd.com and invests in the junior resource sector.

His articles have been published on over 400 websites, including: Wall Street Journal, Market Oracle, SafeHaven , USAToday, National Post, Stockhouse, Lewrockwell, Pinnacledigest, Uranium Miner, Beforeitsnews, SeekingAlpha, MontrealGazette, Casey Research, 24hgold, Vancouver Sun, CBSnews, SilverBearCafe, Infomine, Huffington Post, Mineweb, 321Gold, Kitco, Gold-Eagle, The Gold/Energy Reports, Calgary Herald, Resource Investor, Mining.com, Forbes, FNArena, Uraniumseek, Financial Sense, Goldseek, Dallasnews, Vantagewire, Resourceclips and the Association of Mining Analysts.

Copyright © 2013 Richard (Rick) Mills - All Rights Reserved

Legal Notice / Disclaimer: This document is not and should not be construed as an offer to sell or the solicitation of an offer to purchase or subscribe for any investment. Richard Mills has based this document on information obtained from sources he believes to be reliable but which has not been independently verified; Richard Mills makes no guarantee, representation or warranty and accepts no responsibility or liability as to its accuracy or completeness. Expressions of opinion are those of Richard Mills only and are subject to change without notice. Richard Mills assumes no warranty, liability or guarantee for the current relevance, correctness or completeness of any information provided within this Report and will not be held liable for the consequence of reliance upon any opinion or statement contained herein or any omission. Furthermore, I, Richard Mills, assume no liability for any direct or indirect loss or damage or, in particular, for lost profit, which you may incur as a result of the use and existence of the information provided within this Report.

Richard (Rick) Mills Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules