Spend or be financially doomed: Idolizing the gods of consumption and stoking the fires of debt based speculation. Has the Fed crossed the line of no return?
The Federal Reserve has created the perfect environment where savers are chastised and debt based spending is glorified. Our economic engine is powered by the fires of consumption. This has been true for many decades. What is different about our current space in time is the punishment savers are taking. Many banks through savings or [...]
Federal Reserve ZIRP has essentially destroyed household income growth: Households headed by those 45 to 54 see their real household income growth drop by 16 percent from 1999.
The Federal Reserve has pursued a zero interest rate policy as a mechanism for pulling the US out of the financial crisis. Interestingly enough low rates and heavy speculation were part of the cocktail that led us into the crisis in the first place. Ben Bernanke recently mentioned a bit of concern that speculation is [...]
What does it mean to be retired in the United States? The age of disappearing pensions, dependence on Social Security, and stock market speculation.
A few days ago the stock market experienced a mini panic as someone hacked a reputable news source Twitter account and posted a sensational headline. The markets quickly reacted to this news. What was troubling is many algorithm-based trading systems are setup to scour internet information for these kinds of dramatic changes. Many of the [...]
Reinventing GDP: US GDP to be revised in July by adding “intangibles” to the tune of $500 billion. The make believe economy.
The US debt-to-GDP ratio is now quickly reaching insurmountable levels. It is interesting that a paper citing this issue is now being openly discredited as if this is reason enough to put on the rocket boosters of quantitative easing. Japan has gone so far off the deep end that they are now intervening in their [...]
US households are tapped out on debt: While US households are forced to eat austerity measures financial institutions load up on debt and purchase assets at rock bottom prices.
US households are tapped out with debt. Debt matters. Contrary to what is being spouted out over the airwaves having too much debt does cause problems. American households tipped over this point when total household debt reached annual GDP. This is a critical juncture and results in massive deleveraging. There doesn’t seem to be answer [...]
Food service workers at a record high in US economy: Record percent of Americans now employed in food services as a share of total employment coupled with peak food stamp usage.
One of biggest contributors to jobs over the last few years has come from the low-wage food service sector. A record 7.6 percent of Americans now work in food services and drinking places. Given that we have 47+ million Americans on food stamps and this figure has boomed in the last decade, it should come [...]
Where did the American worker go? 663,000 people were removed from the labor force pushing the figure to 90 million Americans not looking for work.
The employment report was very weak no matter how you sliced it. The unemployment rate fell but this was largely driven by an incredibly large number of people dropping out of the labor force. This recession has been extremely tough on US households. The recession was technically over in the summer of 2009 which seems [...]
Casino economics: How the S&P 500 endured two 50 percent dips in the 2000s and sent the middle class packing.
It took the S&P 500 about 13 years to get back to where it was in 2000. Of course the power of inflation has taken an even deeper toll on this trend. The stock market is largely a spectacle for most average Americans. It is a dramatic sideshow like going to the track and betting [...]
Debt based delusion: Fed spending far outstripping revenues, balance of trade, and business inventories decline.
One clear symbol of our new Gilded Age is that of the peaking DOW while food stamp usage is at a peak as well. Even though the DOW is only a reflection of a handful of companies, the media focuses on this as if it were a barometer of the real economy. It isn’t. Household [...]
Part-time America: How we increased our part-time for economic reasons workforce by 4 million people since the recession began. Healthcare costs encourage low wage employers to hire more part-time employees.
The rise of part-time employment in the United States is part of the low wage system that is spreading throughout the country. Part-time workers are cheaper to hire and easier to fire. You also avoid paying benefits from a healthcare system that is seeing skyrocketing costs. Prior to the economic crisis, the number of Americans [...]