Update 1: Act surprised - Rasmussen Consumer Confidence Index lowest in 2 years. We thought by now the all of the "green shoots" would have turned into giant sequoias. We speculate Dr. Deficit needed them to print more fiat.
Update 2: Hundreds scramble for Dallas rental vouchers (aka section 8). Is there such a thing as a "4th world nation"?
Anyone who wishes to see what occurs on a fundamental level during an empire's decline, should take a day trip around New Jersey or New York.
You should begin your journey in the capitol of New Jersey, Trenton (or Washington D.C.). We suggest you spend a few minutes
Yes, the great wealth gap - a clear indicator of a nation in decline. As the middle class is decimated, the wealthy take all the chips. Marc Faber recently made the observation while attending a convention in Los Angelos, that he has never seen more Ferraris, Aston Martins, Lamborghinis and Porsches in one place at any time in recent memory. He went on to say roughly, this wealth discrepancy is always an indication a financial collapse is imminent. He is correct.
Ready? Today's retail sales and food sales data shows a 0.1% (+/- 0.5% margin of error) monthly increase and an 8.1% yearly increase. Sounds good on the surface, no? It's another reason to rally "the markets," and increase those ludicrous 2H11 GDP estimates even more, right? Green shoots abound!
Allow us to remove the smoke from the burning fiat - those "green shoots" have been chopped down and turned into paper pulp for the endless fiat. You see, retail sales are, as you already know, calculated in dollar terms, not unit sales. This means during times of inflation (we have 9%-11% in the U.S.) retail sales should always be up. They should also always be up when the M1 money supply is up 12% year-over-year(!) The Fed is giving the "economy" full gas pedal to the metal, and yet the car is slowing to a halt. Oops.
Further, this data also includes gasoline sales which were up (again, in cash terms) 24% YoY. Considering gas prices were up almost 91% YoY, there's a big gap to fill. You do the math. It goes without saying what would explain that discrepancy. Dr. Deficit, you didn't expect the millions of unemployed Americans to go out and start driving around for pleasure in their big SUV's, did you?
Notice the direct correlation to the other metrics:
- Food stamp recipients are at all time high and the numbers continue to skyrocket(!)
- Real time unemployment (read: the U6 + the officially unaccounted) is pushing 24%(!)
- Duration of unemployment is at an all time high of 40 weeks(!)
- Labor force participation rates are at a 30 year low and declining rapidly(!)
And the list goes on and on. What does this tell you?
We can literally go on for hours about the failed economic policy in this country and around the world (and hope someday, someone invites us to speak on this topic). We have been constantly highlighting the fact that stocks are based on whether or not Dr. Deficit will print more fiat. That's all. Fundamentals mean nothing. There is no such thing as "organic" company growth. The only "growth" comes from the inflationary pressure of the money supply and the amount of hype Goldman is willing to put into the selling of an IPO (read: LNKD with an absurd P/E ratio of 1200x. They just have not found enough suckers willing to bite this sour bait) How long can this last? Not much longer, as the death spiral accelerates exponentially near the end. Always has, always will.
We do have to give credit to the spin
We find it more than ironic that Moody's has place the U.S. on
Of course, they already downgraded the U.S. last November because of QE2, so they have finally begun to see the light
In other news, Greece's FM just said there is no "danger of default." Our readers, who we have trained to read between the lines and sniff out steamy bull droppings know that this means Greece is moving one step closer to defaulting. Along with the entire EU.
Then again, once this monster Typhoon levels Fukushima reactor 4 SFP, will a default really matter? Ron Paul doesn't seem to think so.