The Time To Pay The Piper Is Coming!

Like Monty Pelerin said in a recent article, I too am tired of writing about the on-coming economic disaster and I worry that you, dear readers, grow weary of my rants. I am not a trained economist. I have no special talents in that arena. However, I am an engineer, which is a way of saying that I am comfortable with numbers. Numbers talk to me and the numbers I’m seeing are saying that disaster is on the way. I agree with Pelerin when he said about the coming disaster:

 The disaster will be of such importance that one cannot overemphasize it or warn too often about it. It will be a disaster of unprecedented scale.

Despite what our President and his spoke persons and the MSM and Wall Street say about an improving economy, the numbers I see tell a different story. Pelerin linked an article by Michael Snyder that lis 83 disturbing factoids the economy. Let me share just a few of them:

#1 Most people that hear this statistic do not believe that it is actually true, but right now an all-time record 102 million working age Americans do not have a job.  That number has risen by about 27 million since the year 2000.

#4 The Bank for International Settlements says that total public and private debt levels around the globe are now 30 percent higher than they were back during the financial crisis of 2008.

#7 The six largest banks in the United States (JPMorgan Chase, Bank of America, Citigroup, Wells Fargo, Goldman Sachs and Morgan Stanley) have collectively gotten 37 percent larger over the past five years.

#21 The U.S. government has spent an astounding 3.7 trillion dollars on welfare programs over the past five years.

#23 According to Consumer Reports, the number of children in the United States taking antipsychotic drugs has nearly tripled over the past 15 years.

#27 According to the U.S. Census Bureau, median household income in the United States has fallen for five years in a row.

#28 The rate of homeownership in the United States has fallen for eight years in a row.

#32 In November 2000, 64.3 percent of all working age Americans had a job.  When Barack Obama first entered the White House, 60.6 percent of all working age Americans had a job.  Today, only 58.6 percent of all working age Americans have a job.

#44 Middle-wage jobs accounted for 60 percent of the jobs lost during the last recession, but they have accounted for only 22 percent of the jobs created since then.

#60 The number of Americans on food stamps has grown from 17 million in the year 2000 to more than 47 million today.

#67 The number of Americans on Social Security Disability now exceeds the entire population of Greece, and the number of Americans on food stamps now exceeds the entire population of Spain.

Can anyone read those numbers and trends and say with a straight face that we are living in a recovery? There are, of course, many more numbers that are telling us that the economy is set to collapse. We could talk about the ever-increasing national debt or the escalating student loan debt or the sub-prime auto loans piling up or the housing market. But, America is a consumer nation fed by debt. Consumer spending accounts for 70% of our GDP. Christmas spending in November and December of each year accounts for 20% to 40% of annual retail sales for most retailers. So, how are the retailers doing? The Burning Platform has the answer:

If ever a chart provided unequivocal proof the economic recovery storyline is a fraud, the one below is the smoking gun. November and December retail sales account for 20% to 40% of annual retail sales for most retailers. The number of visits to retail stores has plummeted by 50% since 2010. Please note this was during a supposed economic recovery. Also note consumer spending accounts for 70% of GDP. Also note credit card debt outstanding is 7% lower than its level in 2010 and 16% below its peak in 2008. Retailers like J.C. Penney, Best Buy, Sears, Radio Shack and Barnes & Noble continue to report appalling sales and profit results, along with listings of store closings. Even the heavyweights like Wal-Mart and Target continue to report negative comp store sales. How can the government and mainstream media be reporting an economic recovery when the industry that accounts for 70% of GDP is in free fall? The answer is that 99% of America has not had an economic recovery. Only Bernanke’s 1% owner class have benefited from his QE/ZIRP induced stock market levitation.

The entire economic recovery storyline is a sham built upon easy money funneled by the Fed to the Too Big To Trust Wall Street banks so they can use their HFT supercomputers to drive the stock market higher, buy up the millions of homes they foreclosed upon to artificially drive up home prices, and generate profits through rigging commodity, currency, and bond markets, while reducing loan loss reserves because they are free to value their toxic assets at anything they please – compliments of the spineless nerds at the FASB. GDP has been artificially propped up by the Federal government through the magic of EBT cards, SSDI for the depressed and downtrodden, never ending extensions of unemployment benefits, billions in student loans to University of Phoenix prodigies, and subprime auto loans to deadbeats from the Government Motors financing arm – Ally Financial (85% owned by you the taxpayer). The country is being kept afloat on an ocean of debt and delusional belief in the power of central bankers to steer this ship through a sea of icebergs just below the surface.

The absolute collapse in retail visitor counts is the warning siren that this country is about to collide with the reality Americans have run out of time, money, jobs, and illusions. The most amazingly delusional aspect to the chart above is retailers continued to add 44 million square feet in 2013 to the almost 15 billion existing square feet of retail space in the U.S. That is approximately 47 square feet of retail space for every person in America. Retail CEOs are not the brightest bulbs in the sale bin, as exhibited by the CEO of Target and his gross malfeasance in protecting his customers’ personal financial information. Of course, the 44 million square feet added in 2013 is down 85% from the annual increases from 2000 through 2008. The exponential growth model, built upon a never ending flow of consumer credit and an endless supply of cheap fuel, has reached its limit of growth. The titans of Wall Street and their puppets in Washington D.C. have wrung every drop of faux wealth from the dying middle class. There are nothing left but withering carcasses and bleached bones.

So, dear readers, do you see why I feel the need to keep sounding the alarm? The central bankers have been using every trick in their book to keep reality at bay; but reality will not be denied. Sooner or later the Piper (Reality) always receives his due. This time will be no different.

Well, that’s what I’m thinking. What are your thoughts?