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Food Stamps and The Government’s Last Put
Food Stamps and The Government’s Last Put
Courtesy of Lee Adler of the Wall Street Examiner
I hope you are enjoying a fine summer weekend (if you are in the northern hemisphere)! I was on the road for most of the past week and have a lot of catching up to do. The Treasury and Fed reports and market updates will all be posted this weekend, but I wanted to take a quick break to share a few thoughts with you first.
The government published food stamp data for May this week. There’s nothing here that you don’t already know. The news on this has been bad since 2007. But you may not have seen this chart before. There’s something interesting in it that may be another signal that the market may be beginning to reflect not only a financial crash, but an economic one that has been under way since May. It could mean that what we saw last week in the stock market may just be a prelude to the main event, a main event that could last for months.
Total food stamp recipients rose by 1.1 million in May. That represented a dramatic acceleration from the recent rate. Enough QE2 had trickled down from December to April to slow the growth rate of people entering the program to about 100,000 per month. The last time we saw an acceleration of this magnitude was in September 2008. That was at the beginning of the 2008 crash in the stock market and economy.
This rise in food stamp use confirms the evidence I have been tracking in the Professional Edition Treasury udpates showing a sharp drop in government withholding tax receipts in May suggesting the return of the recession that had been hidden by the government’s propping of the markets and economy. I had repeatedly warned Professional Edition subscribers that once the propping stopped, the markets would collapse, and that once government stimulus payments were withdrawn the economy would return to contraction. In recent weeks I have reported in the Treasury updates and have mentioned on our Radio Free Wall Street podcasts that it appeared that the economy had suddenly gone into free fall beginning in May. This data on the food stamp program tends to confirm that.
It also suggests that the US economy has been in a 4 year, uninterrupted decline with more and more people falling into poverty each month since May of 2007. Nearly 20 million new recipients have entered the program since then. That’s about 6% of the US population. Another way of looking at it is that 1.5% of the American people have been falling into poverty each year.
The suggestion in this sudden acceleration of the decline is that things are about to get much worse for the economy and the financial markets and, in particular, more and more Americans who lose their jobs and find it increasingly difficult to find work. It is a heartbreaking situation, and one that government is seemingly powerless to combat. If low taxes, increased government spending and massive Fed money printing all in concert have failed to stem the tide, what’s next? Based on my research into the primary drivers of market liquidity, I don’t believe that with the markets at these levels, investors have even begun to recognize the answer to that question. We are on the verge of something historic and cataclysmic.
*****
Our Radio Free Wall Street podcast recorded Friday, is free and available to all listeners. I make one of these available on a free basis once every 2 or 3 weeks. We post these podcasts 2-3 times per week. Each is typically around 12-15 minutes in length. This one was a little longer. Click here to download and listen now.
I hope that you have done your utmost to prepare for the crises and critical challenges that lie immediately ahead. If you are not already a subscriber, there’s no better time than now. Click here to try WSE’s Professional Edition risk free for 30 days!
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Ahhh Pardon me. ... As of Sunday morning, 10:30; zero hedge unreachable through DNS, only access is URL 188.126.66.67/home
Tyler -please fix ASAP ... May have to reload DNS server
Crumbles
"If low taxes, increased government spending and massive Fed money printing all in concert have failed to stem the tide, what’s next?"
What low taxes? Please send them my way.
low taxes on those with the most wealth (low taxes on those with no wealth, and no ability to pay don't count even though the wealthiest like to statistically hide behind 'all those who don't pay IRS')
In point of fact, given the bailouts, there is actually NEGATIVE 'taxation' of financial racketeers.
Apparently, to your credit, you do not fall in the racketeer category.
Just like the rest of the crooks trade agreements kill our job market as they send workers overseas. I did watch New Balance on TV last night and he was correct. He is going to stay in the US and support his people. Buy New Balance all and support him. He was miffed and was talking about how much lower the labor cost was in Vietnam and Korea. Man the sheeple will believe anything to get a cheap product.
@GCT
I gave you #2. Anything we can do to keep manufacturing here has got to be taken seriously now. I will buy New Balance exclusively for my family now. If people don't see where this globalization shit has taken us their heads are too far up their arse to ever wake up.
We need to become a united, self reliant people. This would take a leader like Ghandi who is selfless and wise. The chances of this happening are slim. Instead of food stamps we need soup lines, cheaper and a harsher reality. Every school cafeteria could serve the purpose. And a piece of fruit to take with you for breakfast.
How is that "tax cuts create jobs" meme working out for ya?
Well I know it is a quaint idea but the hope that a society can have a healthy free private economy that is not totally overwhelmed by the tyranny of state. You know where collective decisions evolve from a market where free choice and independence have inputs. I know that is so "Old School" and Austrian. I mean we really need super committees, politburos, czars, central banks, and a police state to really get things done. To all the socialist and marxist out there fuck you.
Yeah, well, it's a shame that any possible beneficial effect of the mythical tax cuts was greatly outweighed by job and economy destroying actions by nearly every front of the forces of government.
Experts..Fukushima 'off-scale' lethal radiation level infers hundreds of millions dying.
""Fukushima nuclear power plant radiation recordings of external gamma radiation have been so high this week, they went off scale said veteran nuclear expert Arnie Gunderson on Thursday after the famous physicist, Dr. Chris Busby told the Japanese people this week that radioactive air contamination there now is 300 times that of Chernobyl and 1000 times the atomic bomb peak in 1963, possibly inferring that hundreds of millions of people are now dying from Fukushima radiation, including people in the United States.....""
http://seenoevilspeaknoevilhearnoevil.blogspot.com/2011/08/experts-fukus...
OT: hilarious 2 min video
LIfe is upside down....
http://www.youtube.com/watch?v=W0Uju3tYS2s
Anyone who has money left to pay for your services, already knows that stuff.
WTF. The President just announced that his solution to getting the American economy running again was to get four new trade agreements signed and to increase spending on unemployment!! What kind of ding-a-ling is this guy?
...and your solution is? Nay-saying is easy.
Lay out your plan to stave off Armageddon, sparky.
Where can we find the tax collection data for the year? Is it really up against 2010 comps?
<<Deleted drunken 'tard speculation>>
"..a financial crash, but an economic one that has been under way since May."
Which year? 1970? 1981?
"Enough QE2 had trickled down.."
Qué?
the riot abatement program works really well.
No, it's the Churches feeding the people keeping order.
No, the scale in that plot is inversed.
Well at least the oceans receded based on the absorbancy of a skittle shitting unicorn.
Hope & Change. We are in a depression and the kenyan is an islamic Chavez/Mugabe.