Feeling rich through debt: Modern banking has replaced real economic prosperity with massive levels of debt. Housing affordability reaches multi-decade highs while household incomes retreat to 1990s levels.
One of the biggest headlines right now is how the housing market is pulling the entire market up. Housing prices are soaring while the stock market is making record highs. Yet a large portion of the housing run-up is being caused by easy money that has been created by the Federal Reserve. Banks are out-bidding [...]
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 [...]
Who’s afraid of a little bit of inflation? How low interest rates hide the real price of housing, college tuition, and cars.
Inflation is like the proverbial story of a frog in hot water. Drop a frog in boiling water, it jumps right out. Drop a frog in regular water but slowly raise the heat, and it will slowly boil into oblivion. Inflation has a subtle way of destroying purchasing power. Unless incomes are rising, which they [...]
European economy struggles under debt and staggering unemployment: EU unemployment at record while nations pile into massive levels of debt. Inflation censorship.
The European Union is the largest economy in the world combining the collective buying and selling power of multiple countries. If you’re biggest customer is having troubles, it is expected that the world would be concerned. Not so with the stock market. The EU is currently sitting at a high in respect to their unemployment [...]
An economy of peak food stamp usage, peak Dow, and peak Debt: What does it say about our economy that at the same time the Dow Jones hits a peak, we have the highest percentage of Americans on food stamps?
It is a dichotomy that speaks to the current state of our economy. Food stamp usage has peaked at the very same time that the Dow Jones Industrial Average is setting new highs. Of course, the Dow is setting new nominal highs but still has a way to go to catch up to the eroding [...]
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 [...]
What European Recovery? Unemployment at record high and debt only keeps reaching more unsustainable levels. Italy’s Debt to GDP crosses 125 percent.
I never understood why so many people bought into the notion that the European Union was recovering. If recovery means that a handful of well-connected bankers are bailed out with financial smoke and mirrors instead of facing reality while placing crushing austerity on the public, then yes, maybe a recovery is what was experienced. As [...]
Crossing the debt Rubicon. Does debt even matter? Over $5 trillion in Federal debt now held by international and foreign investors.
In most economic literature there seems to be a tipping point at which a nation enters a precarious state in which too much debt has been taken on. A typical point occurs when a country hits a point where annual GDP is surpassed by total outstanding debt. We recently crossed that threshold. Another long-term trend [...]
Young riding out recession by going into debt for college: Millennial unemployment jumps by two percent.
As the animal spirits of the economy rage wild, there are still difficult challenges ahead for younger Americans. While the stock market is up highlighting corporate euphoria, many companies are doing this with 4 million fewer workers. So the economic recovery is not evenly distributed and they rarely are. Yet younger Americans are still facing [...]
Inflation unchained: US dollar down 23 percent from 2000, Tuition up 72 percent, and home values up 44 percent. Incomes adjusting for inflation are back to 1990s levels.
It is hard to believe that people in the US are still denying the obvious impact of inflation. The slow erosion of purchasing power has occurred for many decades now. What people tend to forget in a completely fiat based system is that the Fed can print as much money as it likes. And they [...]