In the previous installments of this series, we discussed the hidden and often unspoken crisis brewing within the employment market, as well as in personal debt. The primary consequence being a collapse in overall consumer demand, something which we are at this very moment witnessing in the macro-picture of the fiscal situation around the world. Lack of real production and lack of sustainable employment options result in a lack of savings, an over-dependency on debt and welfare, the destruction of grass-roots entrepreneurship, a conflated and disingenuous representation of gross domestic product, and ultimately an economic system devoid of structural integrity — a hollow shell of a system, vulnerable to even the slightest shocks.
For those who follow the endless soap opera of domestic politics, the biggest storyo the weekend, if so far unsubstantiated, is the Post's report that the person behind Hillary Clinton's shocking e-mail story leak, is none other than Obama's personal advisor, Valeire Jarrett. "Obama senior adviser Valerie Jarrett leaked to the press details of Hillary Clinton’s use of a private e-mail address during her time as secretary of state."
In the first part of this article series, we discussed the true state of global demand, along with the unstable situation within numerous indicators from exports to retail. Swiftly falling global demand for raw materials as well as consumer goods is an undeniable reality. This is a distinct problem in terms of the U.S., which has been, up until recently, the primary consumption driver for much of the world. As we will show, U.S. demand is about to fall even further into the abyss as real unemployment and personal debt take their toll.
There is a tremendous denial by analysts and economists currently of the deteriorating economic underpinnings.
With all deference to Dr. Richard Fisher, the surging dollar is not good for either the economy or ultimately a stronger labor market. This is particularly the case when the dollar is only stronger because the rest of the world is on the brink of recession and or deflation. The negative impact of a surging dollar in a weak economic environment will more than likely outweigh any positive inputs for the U.S. consumer. Time will tell, but the evidence is mounting that the we are likely closer to the end of the current economic cycle than the beginning.
There was a point in 2010 when American capitalism might have had an opportunity to heal itself and commence on a long march toward sustainable growth and real wealth gains. But the monetary politburo would have none of it - keeping the pedal to the metal until this very moment... and the rest is history. The Fed and the other central banks around the world have fomented a new and even more virulent and dangerous financial bubble.
Dear Federal Reserve, we have just solved the biggest riddle that your "smartest economist PhDs in the room" have been unable to figure out for the past year...
Yellen has created a narrative about the US economy, especially the (un)employment rate, and with the narrative is now firmly in place, Yellen and her stooges can claim they have no choice but to hike In short, Janet Yellen will go down into history as the person responsible for what may be the biggest economic crash ever, or at least delivering the final punch of the way into it, a crash that will make the rich banks even much richer. And there is not one iota of coincidence in there. Yellen works for those banks. The Fed only ever held investors’ hands because that worked out well for Wall Street. And now that’s over. Y’all are on the same side of the same trade, and there’s no profit for Wall Street that way.
How can the government be telling us that we are nearly at “full employment” when so many people can’t find work? Could it be possible that the government numbers are misleading? It is our contention that the official “unemployment rate” has become so politicized and so manipulated that it is essentially meaningless at this point.
The consequence will not be eternal virtual prosperity, but rather a wrecked accounting system for the operations of civilized human life. We’ve stepped across the event horizon of that consequence, but we just don’t know it yet. Our bet is that we start feeling the effects sooner rather than later; and when it is finally felt, all the Kardashian videos in this universe and a trillion universes like it will not avail to distract us...
Suddenly everywhere you look, one after another, a story is making its way into the main stream press (albeit a trickle but that’s a tidal wave in comparison) that we may be, in fact; experiencing a “bubble” in stock prices. Even those who still believe in unicorns and rainbows (cue CNBC) are finding it harder and harder to hold onto the magic. Anyone with just a smidgen of common sense knows what’s being presented as “a miracle of economic intervention” has been nothing more than a grand escapade only made possible through the use of monetary smoke and mirrors.
The US population grew from February 2008 to February 2015 by 16.8 million persons, or a 5.5% increase in total population, and on a net basis, not a single one of those 16.8 million persons got a FT (full time) job… while a net 2.7 million were lucky enough to get a (or multiple) PT (part time) job.
We are happy to report that in February, the US economy added a recovery-validating 58,700 waiters and bartenders, the highest monthly increase in this minimum wage category in 18 months.
A month ago we asked if the "BLS Forget To Count Thousands Of Energy Job Losses" when as we showed, the BLS reported that only 1,900 jobs were lost in the entire oil and gas extraction space, which was a vast underestimation of what is taking place in reality, when compared to not only corporate layoff announcements, but what Challenger had reported was going on in the shale patch, when it calculated that some 21,300 jobs were lost in January in just the energy sector. Today we ask again: did the BLS once more forget to add the now tens of thousands of jobs lost in the US energy sector? We ask because the divergence is getting, frankly, ridiculous.
The three biggest single-category jobs added in February (because Professional services includes numerous occupations), were also the three lowest quality, lowest paying ones:
Leisure and Hospitality, added 66K jobs
Education and Health added 54K
Retail trade added 32K
Together these three job categories accounted for 152K jobs, or more than half the total February job gains. They also represent the lowest paid jobs in the US.