This page has been archived and commenting is disabled.
"Off The Grid" Economic Indicators – Q4 2014
Via ConvergEx's Nick Colas,
Drones are “In”; laptops are “out”. Demand for pickup trucks, guns, and used cars are all still hot, but food stamp participation is climbing once again. Sales of gold and silver coins remain weak, but the same goes for U.S. equity mutual funds. And forget worries about deflation if you like bacon cheeseburgers, which are 7% pricier to make now than a year ago. Those are some of the headline observations in our quarterly review of “Off the grid” economic indicators. Taken in total, they tell a story somewhat less sanguine than the typical government data. Confidence is returning, yes. But consider just how low it got: the top 3 Google autofills for “I want to sell my …” featured “kidney” for the first 3 quarters of this year. It was replaced in the current quarter with “Laptop”. Progress, of a sort…
Every quarter since the beginning of 2011 we have assembled a variety of “Off the grid” economic indicators. The original idea stemmed from the burst of demand for gold coins and guns during and after the Financial Crisis. After all, the typical long gun costs several hundred dollars, and even fractional ounce American Eagles are more than that. Americans clearly had money to spend, but it wasn’t going into traditional products and services. There was clearly more to the state of the U.S. consumer psyche than the headline government economic data showed.
Over the years we have collected a wide array of repeatable, large sample datasets with an eye to tracking how real people think about their economic conditions. Take, for example, the Supplemental Nutrition Assistance Program (SNAP, better known as “Food Stamps”). The U.S. Department of Agriculture releases participation data monthly – the last numbers available date from September 2014. Here’s a snapshot of what they tell us:
There are 46.5 million Americans in the SNAP program. That is 15% of the entire U.S. population. In late 2006, before the Great Recession, that number was 43% lower at 26.3 million. Government expenditures on the program currently run $5.7 billion/month or $124/person/month.
The number of people in the SNAP program makes it the largest “State” in the Union. California, by way of comparison, has just 37 million inhabitants.
The number of SNAP participants rose from March 2014 to September by over 300,000. The program grew in the wake of the last recession, but that trend had tailed off by 2012. Now, the program is growing again, even though Congress reduced its funding in late 2013.
So, riddle me this: the U.S. economy is growing, and job growth is accelerating, so why hasn’t the SNAP program seen reduced participation since March? This is a means-tested program, and despite what you read in the papers fraud is only about 2% - less than most credit card businesses, by the way. And no matter what your political leanings, I think we can all agree that having a seemingly constant 15% of the U.S. population in need of government assistance to buy food is no one’s idea of a healthy economic system or “Recovery”. No, capital markets will never move on this data. But it is still important if you want a complete picture of the U.S. economy.
Casting a broader net, we track many other such underutilized indicators. There are numerous tables and charts attached to this note, but here is a brief summary:
What’s hot: Pickup trucks, guns, and used cars. Sales of full-sized pickup trucks have been on a tear all through 2014, and November sales were up +20% from the prior year. Lower gas prices should help the momentum here, but the offset of potentially lower demand from the energy industry will be something to watch in the 2015. FBI background checks for the purchase of guns at licensed dealers totaled 18.7 million through November, and reports from retailers point to a strong enough December to make 2014 the second-ever highest year for demand behind only 2013. Used car prices from auction house Manheim show remarkable stability, at record-high levels.
What’s not: U.S. equity mutual funds, gold and silver coins. On a 6-month rolling average basis, Americans bought just $60 million in gold coins through November 2014, down from a peak of $193 million in April 2013. The same trends hold for silver: an average of $61 million now versus $115 million in early/mid 2013. Among financial assets, investors are still reducing their ownership of U.S. equity mutual funds. November 2014 saw them pull $7.3 billion in assets and there hasn’t been a +$1 billion month since March.
Google search autofills may be signaling “End of days” for the laptop. Those helpful hints that Google gives you as you type a search term are a societal “Tell”, since they represent the words others entered to finish what you are just starting. We’ve tracked searches like “I want to sell my” and “I want to buy” for several years. This time around, the logical entries hold sway: “House” and “car”, for example. One positive for the equity market: “Stock” is #2 on the “buy” list. One negative for laptop makers: their product appears for the first time on the “Sell” list. One positive for society as whole: laptops replaced “Kidney”. And one last minute Christmas gift idea: “Drone” is a top “buy” autofill for the second quarter in a row.
Consumer spending and confidence are returning to more normal levels. Gallup’s survey of daily cash spending among American households shows they now go out of pocket to the tune of $95/day, up from $60 in 2011 but still below the +$110 of 2008. And more people are quitting their jobs than being fired, by a ratio of 56-44%. That statistic correlates well with overall consumer confidence.
Cheeseburger, cheeseburger, cheeseburger, inflation, inflation. We know that falling crude prices has the fixed income markets worried about deflation, but bond daddies must be vegans these days. Our bacon cheeseburger index of inflation (one third each from the CPI data: beef, bacon and cheese) shows a 10% year on year price bump in the raw materials for this diner staple. Food inflation is a lingering problem for many Americans, even if it gets short shrift from policy makers.
What to make of all this? Yes, the U.S. economy is slowly recovering in that Americans are back to buying durable goods, from used cars to trucks to guns. And they feel a little more confident than they did last year, or the year before. At the same time, the comps were very easy indeed. At least we don’t need to explore selling a kidney any more. Now, it seems, ditching the laptop will do.
- 12619 reads
- Printer-friendly version
- Send to friend
- advertisements -





I want to sell my government. All serious and even ridiculous offers considered.
I wonder what sort of dipshit would take you up on that offer..
Oh wait the TBTF or jail banks already did.
The SNAP numbers are scary I think. If you take the subset of the population who have children under 18, the percentage is higher. The children are the future and majority now grow up being dependent on the government.
I'm I the only one who bothered to read this?
http://www.census.gov/content/dam/Census/library/publications/2014/demo/...
Read the second paragraph in the far column on the second page for a summary.
You compare SNAP with some of the other numbers and you have to wonder what's going on.....
I think the same. I'd bet the SNAP receipients have at least one kid on average, that makes SNAP 30% of the population and I bet it is even higher
Israel?
.
asking price about 100 trillion to cover all the shit they got us into..... lucky if we get 5 bucks though
100 trillion? Optimist...
They've already sold their souls to satan
I'm pretty confident you couldn't even pay someone to take what's left of them
OT/ BUT ON THE GRID.
News about an old friend that keeps raising its ugly head : Fukushima blues!
Apparently here is some good news. Reactor #4 has been totally discharged of its fuel rods !
http://www.lemonde.fr/energies/article/2014/12/22/a-fukushima-le-retrait...
Gallows humor has never been funnier.
I got a big mac regular meal in downtown DC for $5.50... and $0.50 was tax. So, maybe food will give us a break here too.
You really dont have to eat it.
Better than the Wookie approved school lunch.
That is not food.
Rather than look at gold purchases as 'purchases' think of them as savings.
Saving is down.
Saving is what people do with excess production. Investing is what gamblers do.
Savings were down.
US mint reports record annual sales of gold and silver coins.
disconnect? or when using April 2013 data vs nov 2014 data. typically you want a standard of measuement unless you want a different result.
ive been dontating sperm to my sock laundry for years. maybe i should start selling it.
Oh SNAP!
US debt is still expanding at a good clip.
From producing goods to producing debt.
http://www.zerohedge.com/news/2014-12-14/sales-silver-american-eagles-ri...
So, which one is it? somebody be wrong here.
Units sold v. sales revenue. Units sold is up slight v. 2013 and up more v. 2012, but the price is lower, so dollar revenue is down.
They're both right, but they're measuring different things.
Its getting tougher to buy PM's with China sucking up available supply.
One simple change in SNAP would make a huge difference in both the nutrition and health of children - remove carbonated drinks from the list of items that can be purchased with the card. You can't buy one kind of Coke with a SNAP card - why not disallow all kinds of Coke?
If you're Off The Grid (OTG), then you'll need a ton of other things first, before you'll need shiny PM coins or even before you need Guns & Ammo. Let's keep perspective and our shorts on, shall we?
For those poor souls who get easily confused by salesmen and shills, here is a basic Pareto of things you need (Top to Bottom of Prepper Totempole):
1. Shelter & HVAC
2. Water, Food, Meds, Energy & Heating
3. Consumables (TP, Cleaning products, Gasoline/Diesel, Wood/Coal...)
4. Tools & Parts for all aforementioned items.
5. Marketable Skills and/or Services, unless you're the 0.01% of Preppers who have sacks of PM.
It's called "LIVING"
6. Guns & Ammo for hunting, deterrence & protection -- to ensure preservation of 1-5.
7. Cash (to pay Taxes and 2-4)
8. PM bullion (paid in Cash), in case of Hyper-Inflation. In case of Deflation, and PM prices will keep falling, so "Cash is King".
9. Insurance Policy called "Paper Assets" (stocks, bonds and other debe instruments), in the "offchance" (99.9%) that the world does not blow up, and life does go on after some troubling times. In which case you don't want to come out as the poor hermit. If you hate risk and Murphy's Laws, you have to have this insurance policy also. Or you're a stubborn, foolish person, a mule.
10. Friends, Allies and Community.
Now, getting back to everyone's fave topic, GOLD...
Seeing that PM is way down on the Totem-pole, people will and SHOULD stock up on things with higher priority, if and when they have Spare Cash. The last 2 years have taught us that even PM is not "a store of value", if it lost 35-50% of said "value". It's more like an Insurance Policy, and a person needs only so much "insurance".
If PM coins become something that we'll need for months or years, it means that the world has slid back to the 1800s, and that is not something I'd look forward to or foresee happening. And I'm careful to avoid projecting any romantic (and BS) notions about the 1800s, as some here are happy to do, since EVERY generation in world history romanticizes some era from their past as being 'superior' to their prevailing era. Not going for that Red Herring.
p.s. Beware of Fools, Morons and Shills -- for they too have an Agenda, which is not compatible with yours. Even it it's not readily apparent, due its superficial and familiar appeal. What's far more useful, is for you to make an Excel Spreadsheet (for fun & clarity) and allocate a Dollar amount and percentage to each of these categories. This forces you to make sane and rational decisions, rather than succumb to propaganda, BS or worse.
Everything in moderation. I cringe when I hear about people maxing out their credit cards on precious metals because they are "guaranteed" to go up.
"What to make of all this? Yes, the U.S. economy is slowly recovering in that Americans are back to buying durable goods, from used cars to trucks to guns.
And they feel a little more confident than they did last year, or the year before."
What kind of dirty crack is this guy smoking? Really? The US economy is NOT slowly recovering! This is the farthest thing from the truth. The fact of th ematter is that the US economy is systematically being destroyed!
There ought to be a flushable version of this silly, pointless article.
Maybe everyone here should grab their fave beverage and a snack and re - watch Fight Club the film !
money currency metals whatever ya call it are the slave masters chains ... I don't care what you say or how many times you red arrow me all you "money grovelers" can't think outside the "box" no matter how much ya bitch about the economy the drop in wages the hieight of un-employment the gov feeding the FSA it all boils down to the same tired story "You want it all to crash and burn" yeah yeah and then what?? I'll tell ya what the same assholes will be sitting at the top with a whole new fiat slavery system with more oppression more moral degradation plain and simple more of the same only amplified X 10. There is no productivity among the human population NONE... building shitty homes at outrageous fiat prices is not productivity... manufacturing whirly gigs and shiny trinkets with plasma screens is not productivity... machines pressing saw dust into furniture is not productivity. Quality of life has been measured for years on end by the junk you "own" when clearly the junk "owns" you. There are no craftsmen no skilled labour no artists no musicians nor even worthwhile entertainers the entire culture is a slug moving slowly towards it's own destruction. Only till people see that thier "money" is merely a way to obtain a service or good that they cannot barter for all else is folly. "monies" have replaced all forms of productivity and critical thinking and left in it's wake blind souless shmucks ruled by a minority of men who know that the "money" means NOTHING all that fake paper and shiny shit has made them the true masters of us all. All of this non-productivity has created nothing but a population of useless eaters zombies wandering around spending their "money" on junk that owns them. Spoiled ignorant and blind thats your human race no matter the color ... keep worshipping that shiny and paper just tighening that noose already around your necks. There is no salvation of this system or any other current "monetary Idea" and for that fact no real salvation of the human race face the reallity of it folks ....on a long enough timeline the survival rate for evryone drops to ZERO...and the timeline is getting shorter just look at the carnage "we humans" have brought upon ourselves and the world in less than a microscopic 200 +/- years... quality of life has not improved at all it's all white wash smoke and mirrors lipstick on the pig we call humanity no wonder the fucking genocidal morons hate us and their plan of whacking the population on a global scale just keeps moving along war after war after war ...If anyone cares truly for themselves and the human race then youd be looking alot further into whats going on rather than crying about how "rich or better off " you're going to be with cash or metals when the shit show melts down... more people are dying daily then being born thus game as planned... war profits are not based in "monies" they're based on the remaining slave population when the numbers become managable then the masters profit... until then "we" are a liability and a "costly" one.
https://www.youtube.com/watch?v=S10Aotp_tvo start here then read the talmud and the mountains of docs the 2% (the jews) fuck money and fuck rothchild
When I type "I want to sell my" into Google, the first autofill choice is "daughter into slavery". Not quite sure what to make of that economic indicator...
would make for a good country song, if there ever was such a thing