Jun 23 2017

The canary in the asset bubble is popping: $3.8 trillion bubble that you are probably not aware of.

The death of retail as we know it is real.  People are shifting their buying habits online in a fast and furious way.  The only retail outlets that seem to be thriving are dollar stores but they are thriving because many Americans are living paycheck to paycheck and online shopping is too expensive for some.  So it should come as no surprise that the way things were once done is being upended again by technology.  Giants like Amazon and Wal-Mart are cannibalizing entire industries.  Back in 2012 Amazon had less than 10 million Prime subscribers.  Today it is over 80 million.  So the big bubble that is now imploding is that in commercial real estate.  There is $3.8 trillion in commercial real estate loans outstanding and the bubble in this market couldn’t be peaking at a worse time.

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Jun 15 2017

The Inflation Nightmare: How inflation is slowly consuming your income since 2000. The four horsemen of inflation include college tuition, medical care, housing, and stagnant wages.

Inflation has a slow destructive impact on your purchasing power.  Most people don’t think twice about inflation.  They just assume that the price of goods will go up because that is the way it has always been.  Yet that is not true.  The type of inflation we are seeing is debt supported inflation which has made the cost of normally affordable goods inaccessible for most Americans.  It has also been a big reason for why retail is getting severely hit.  Yet where does most of your money go?  For most households it is housing and most Americans are too broke to afford a home.  For younger Americans the biggest expense is college tuition.  And inflation in tuition has gone completely out of control because debt has been disconnect from ability to pay (does this bring back memories of the housing bubble?).  There is an inflation nightmare going on and you only have to look back to 2000.

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Jun 11 2017

Psychologically damaged baby boomers blame Millennials for all of the perceived ills in the economy including destroying dozens of industries.

The headlines continue to rail against young Americans as if they are the primary cause for many industries going under.  Forget about the fact that companies like Amazon have shifted the way all Americans shop.  The headlines blaming young Americans are getting to the point of ridiculousness.  Baby boomers hold 50 percent of all wealth in the US.  The young  group that is usually blamed for all of the economic ills only holds 4 percent of told wealth.  So how can these stories continue?  Well it appears that many older Americans are simply full of fear and live their lives based on emotional perceptions rather than facts.  The reality is many baby boomers are psychologically damaged and see fear everywhere even though they have been the wealthiest cohort the world has ever seen.

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Jun 4 2017

Those not in the labor force grew by 608,000 last month to 95 million: We’ve added more than 16 million people to this shadow army of non-workers over the last decade.

Another month and the army of “not in the labor force” Americans continues to grow in record fashion.  So of course, the employment rate looks fantastic when you yank out 95 million people from your analysis.  Last month a stunning 608,000 people were added to the not in the labor force category.  Sure, some of this is accounted from old Americans hitting retirement age but definitely not to this outsized level.  The labor force figures don’t really shed a great light on the employment situation in the United States.  For example, you also have millions of young Americans working in low paying jobs but are burdened by extremely high student debt.  Is it a problem that we added 608,000 people to the not in the labor force category?

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May 29 2017

The dollar store economy: Dollar General openings account for 80 percent of new stores in the US and largest occupation in US is in retail

The death of retail is a very real thing.  Amazon and other online retailers are simply shifting the way people shop in dramatic fashion.  Yet you have to realize that Amazon does have a minimum buy for free shipping and not everything is rock bottom cheap.  Also, food is still marked up on Amazon so if you are on a tight budget this will not work.  So what are Americans to do?  Many are opting to shop at rock bottom priced stores like Dollar General.  Really cheap items and food.  The basics.  What is telling is that Dollar General, the king of dollar stores accounted for a stunning 80 percent of new store openings in the US.  While other retail outlets are dropping like flies Dollar General is growing to fit a new niche:  the millions of broke Americans that still need food and need cheap goods.

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