Week after week I attempt to make sense of the fact that most people recognize that we are on the wrong path financially as a country and the talking heads on TV telling all of us how “rich” we are and how strong the economy is. I have to imagine that this is how it must have been in the old USSR prior to its collapse in the early 1990s. Pravda (their version of our mainstream propaganda ministry) told everyone how “great” things were. I imagine that suicides, drug use and alcoholism all rose there because people were hearing that all was great, but they were not seeing it. This probably led to feelings of inferiority and a sense of helplessness.
These are the same things that are happening here today as many watch the financial game shows and many must wonder why THEY are being left behind when everyone else is supposedly doing so well.
If only these people could look behind the curtain, they would see the truth. The economy has been collapsing for years and is picking up steam- not just here but globally.
The Bureau of Labor Statistics just came out and basically admitted that the jobs numbers are fake- basically just like all of the rest of the numbers to keep the masses as clueless as possible.
If anyone doubts what I am writing here I will give some solid examples of why the economy is collapsing and that we are being lied to on a grand scale.
If the economy WAS strong, we would expect to see jobs growing and wages rising. We would expect to see companies hiring and adding to inventory. We would expect to see the velocity of money (how fast cash changes hands- a barometer of economic activity) high. We would expect transportation companies to be flying high and earning record profits. We would expect orders for new goods to be rising. We would expect to see retailers opening new stores and reporting great earnings. We would expect that the general attitude of people would be optimism. We would expect that people would be paying down debt so when the next period of stagnation arrives, they would have something to fall back on. We would also expect people to be saving.
What we actually see …
There is a report that says jobs are growing (BLS) but what they don’t say is that GOOD jobs are falling off of a cliff and part-time jobs are rising. Two part-time jobs are counted as two jobs created. Even with this trickery the numbers reported are faked to make it look better than it actually is. Every month for the past 2 years the BLS has had to do a downward revision on the “reported numbers”. As a matter of fact, the BLS just announced that payrolls between January and March of 2023 will be 306,000 less than reported but could be much lower when fully revised in 2024. Another way to manipulate the numbers are with the birth/ death rate model (Guess of how many people started new businesses) which, in my opinion, is FAR outdated because when it was constructed the economy was growing, resilient and the debt was nowhere near where it is today. The conditions for starting a business have been deteriorating for decades but now we have hit a major speedbump. Financing is becoming FAR more difficult, and affordability is FAR worse because of rising interest rates.
While wages may be rising for some, the majority are falling FAR behind because of inflation. It has been 16 straight months of DECLINING wages when factoring in inflation. Yellow, one of the largest freight carriers in the USA just went bankrupt. While I continue to see many trucks on the road the loads are shrinking. This is really no surprise as the New York and Philadelphia Manufacturing indexes are falling. The New York Fed’s Business Leaders Survey stands a -24.3, which according to the NY Fed means conditions are worse than normal. A headline on Zerohedge is “Philly Fed Services Survey Screams Stagflation- Orders Drop as Prices Pop”.
In July of 2023 durable orders crashed by the most since COVID. (Zerohedge)
Retail stores are closing at a record pace. Corporate bankruptcies are surging higher as more companies have gone out of business so far in 2023 than in all of 2022.
So far, in 2023 over 400 corporations have gone bankrupt. This is DOUBLE the amount from 2022. Many of these bankruptcies are in iconic names like Bed Bath and Beyond, Party City, AVAYA, SVB Financial, Serta Simmons, etc. Keep in mind that the first loser in a default is the common stock shareholder. I am sure there are many zombie companies out there that will be exposed in the near future.
Another ominous sign comes from the Mortgage Bankers Association which announced that the 30-year mortgage rate increased 15 basis points to 7.31%. This led to a 28-year low in home purchase applications as home affordability is worse now than at any time in memory.
In the supposedly “richest” country we have a majority of households living paycheck to paycheck. We have a majority that can’t come up with $400.00 in an emergency without credit. We have 25.5% of our population on Medicaid which means they have NO ASSETS. (USDebtClock.org)
As we are hurtling towards $33 TRILLION in debts (on the books) our deficits are climbing as spending is increasing while tax receipts are falling.
Most of this spending is being done to mask the collapsing economy. So far, it appears to be working because most people don’t have anywhere near enough concern for how bad our finances here are. Just because we have avoided a collapse of our dollar so far doesn’t mean it won’t happen. In many instances it starts out like what we are seeing now. It is obvious we are losing purchasing power but then at some point people catch on and the collapse can be sudden like in Weimar Germany and other places.
Too bad for us the rest of the world appears to see it and are actively de-dollarizing as we speak.
In my opinion, the path we are on leads to a collapse of our currency and economy. To think that the usual outcomes we have seen in the past will continue to work is unlikely. Personally, I believe that as the debt-based system collapses people and nations will be demanding hard assets in return, or a currency that is backed by something more than a promise to repay. This is already underway in the global south as the BRICS summit is taking place right now. (Aug. 22-24) and many, including Russian President Putin has called for using national currencies in trade. Actually, President Putin called for de-dollarization in his opening remarks.
The writing appears to be on the wall.
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