consumer spending

Martin Armstrong: ‘The West Has To Learn That Marx Was Just Wrong’

The final post of last week concerned recent material from my research suggesting socialism is becoming popular among Millennials. I ended with this:

Before moving on to a different topic, I must emphasize these last two posts shouldn’t be construed as some sort of attack on Millennials, Democrats, or socialism. Rather, their purpose was to get an idea of where the country might be heading when “America’s largest generation” start flexing their collective political muscle. And what might be required for “protecting and growing self and wealth” when that happens.

I’m going to add just one more thing before departing this subject. And it’s related to getting that “idea of where the country might be heading.”

Back on November 28, 2017, economist Martin Armstrong discussed China in a post on his company’s website. The creator of the Economic Confidence Model included the following in the piece:

What makes the US economy the biggest? The American consumer and lower taxes than Europe. When you leave more money in the hands of the people, they spend it creating jobs for everyone. Europe is following Marx. They think the government is better equipped to spend other people’s money. That produces corruption, not economic growth.

As long as China keeps its tax rate low and allows the people to spend the benefits of their labour, then it will continue to rise economically and displace those in the West who are blinded by power and pursue this Hunt forever more Taxes. The West has to learn that Marx was just wrong. The strongest economic growth unfolds when people are allowed to spend their own money.

(Editor’s note: Bold added for emphasis)

Again, this post is not an attack on socialism/Marxism. But considering the track record of Marxist states in dealing with “self and wealth,” it only makes sense those serious in “protecting and growing” these things would keep a close eye on the direction the collective political mindset of America’s youth is heading. And act accordingly.

By Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

Source:

Armstrong, Martin. “Renminbi v the Dollar.” Armstrong Economics Blog. 28 Nov. 2017. (https://www.armstrongeconomics.com/international-news/china/renminbi-v-the-dollar/). 10 Dec. 2017.

Share

Tags: , , , , , ,

Peter Schiff: Coming QE 4 ‘The Lethal Round,’ ‘The Decline Of The Dollar Is Only Just Getting Started’

“Total nonfarm payroll employment increased by 126,000 in March, and the unemployment rate was unchanged at 5.5 percent, the U.S. Bureau of Labor Statistics reported today…”

-U.S. Department of Labor, Bureau of Labor Statistics, “Economic News Release,” April 3, 2015

Euro Pacific Capital CEO/Chief Global Strategist Peter Schiff is out with his latest entry on The Schiff Report YouTube video blog. On April 3, Schiff savaged the latest U.S. jobs report and told viewers:

I think that this is not a one-off fluke, and that all of a sudden we’re going to have another strong jobs report for April and May, and that all the other bad economic data is going to magically improve with the improvement in the weather…

If you’re expecting a big rebound in the second and third quarter, it’s going to have to come from the consumer spending more money he doesn’t have. So I don’t see where all this fantasy is coming from other than just sheer wishful thinking. But the Fed is going to at some point have to acknowledge that the U.S. economy is not as strong as it thought. And I can already hear the calls and the justification for more stimulus, for QE 4, whether they call it that or not, because everybody is going to agree “The problem is, that we just didn’t do enough stimulus”…

We’re going to do another round, and this is going to be the lethal round. This is going to be the overdose on QE. Because the crisis that’s coming is going to be a dollar crisis…

The decline of the dollar is only just getting started. Whether it’s going to continue next week, or it’s going to have to wait a little longer for people to figure this out. But you have this huge speculative bid that’s been in the dollar for months based on this false notion of this legitimate U.S. recovery and a Fed that’s going to be raising interest rates. We have neither. We have an illegitimate recovery. We have a bubble masquerading as a recovery. The air is already seeping out. And the Fed hasn’t even pricked it by raising rates, which is why they don’t want to raise rates, because they don’t want to accelerate the process. In fact, they’re going to do whatever they can to delay it by blowing air back into the bubble with QE 4.


“Job Growth Fades as Excuses Wear Thin”
YouTube Video

Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

(Editor’s note: Info added to “Crash Prophets” page; I am not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information presented herein)

Share

Tags: , , , , , , , ,

Federal Reserve Re-Inflating Housing Bubble To Revive Economy?

I just got done reading the following by Reuters’ Jason Lange about household wealth in America:

The net wealth of U.S. households rose in the third quarter to its highest since late 2007, providing a hopeful sign for future consumer spending.

Net financial wealth grew $1.72 trillion to $64.77 trillion, the Federal Reserve said on Thursday.

That left household wealth $1.2 trillion short of where it stood in the fourth quarter of 2007, just as the economy was sinking into a severe recession. Wealth peaked at $67.3 trillion in the third quarter of that year.

Rising home prices helped drive the increase in the latest quarter. The value of real estate owned by households rose about $300 billion, the Fed said. Stock holdings climbed by about $520 billion.

Increases in wealth could make consumers feel more comfortable spending their money. Many economists think consumers spend a few cents of every dollar they gain in wealth.

(Editor’s note: Italics added for emphasis)

Seeing this reminded me of something “crash prophet” Peter Schiff said back in September about the Fed trying to re-inflate the housing bubble through QE3 in an attempt to revive the floundering U.S. economy. I wrote on September 18:

In his September 14 entry on the The Schiff Report YouTube video blog, Schiff, who correctly-predicted the bursting of the U.S. housing bubble and 2008 global economic crisis, explained to viewers what QE3 was really about:

This is the plan that Ben Bernanke has. Ben Bernanke’s plan to revive the U.S. economy, and create jobs, is to inflate another housing bubble. That’s it. That’s what the Fed’s got. That’s what it came up with. As if the last housing bubble worked out so well for the economy, that the Fed wants an encore…

How is another housing bubble going to solve anything. Now one thing that Ben Bernanke hasn’t figured out yet- it ain’t gonna work. No matter how much he tries, no matter how much air he blows in to that housing market, he’s not going to reflate that bubble. There are simply too many holes in it, and there is no precedent for relating a busted bubble. More likely, all that cheap money is going to go someplace else…

The housing Pollyannas are definitely back, as you’ll read about in a Friday post.

But is housing back?

Stay tuned…

Source:

Lange, Jason. “U.S. household wealth rises to near 2007 high.” Reuters. 6 Dec. 2012. (http://news.yahoo.com/household-wealth-increases-64-77-trillion-172821521–sector.html). 6 Dec. 2012.

Share

Tags: , , , , , , , , ,

Survey: Almost A Quarter Of Americans Have Less Than $100 Saved Up For An Emergency

Saw the following on the local evening news the other day. From a September 25 press release from Chicago-based CashNetUSA, an online leader in payday loan services:

Americans are facing a drought of rainy day funds to handle unexpected emergencies. Twenty-three percent of Americans have less than $100 in savings to cover an emergency expense if it happened today while forty-six percent report having less than $800, according to a new national survey conducted by online lender CashNetUSA.com. The findings reflect the growing percentage of individuals with varying socio-economic backgrounds living paycheck to paycheck.

Fifty-five percent of Americans surveyed with children under the age of 18 report having less than $800 to handle an emergency. Individuals living in the Northeastern and Western regions are more likely to have $800 or more in savings (at 60 percent respectively) while 31 percent of those living in the North Central region have less than $100.

(Editor’s note: Italics added for emphasis)

Sounds to me like Joe Six-Pack might be “tapped-out.”

And yet, some people still foolishly pin their hopes on Main Street spending us back to economic prosperity in the near future.

You can read the entire press release and results of the national survey on the CashNetUSA website here.

Share

Tags: , ,

Senate Democrats Push Bill Freezing Student Loan Interest Rates, Risk Alienating Small Business

Student loans. Sure- they suck. I had them. I wouldn’t have been able to attend college and graduate school without them (Dad: “You’re on your own once you graduate high school.”). And I finally got done paying them off recently.

These days, student loan debt is getting a lot of media exposure. Even CNBC talked about the problem this morning. Kelly Evans wrote on the CNBC website:

Here’s what we do know about student loan debt: it’s roughly $1 trillion in size, greater than either auto or credit-card debt and second only to mortgage debt in the U.S.

Borrowers in their 30s today owe $28,500, on average. The debt burden has soared just as — and partly because — the recession hit, so younger graduates carrying the highest balances are hit with the double whammy of a weak job market (that still isn’t showing any sign of rapid improvement).

And this all comes as globalization and technological change have upended once-reliable career paths, wiped out many mid-level professional jobs and leave low-paying fields in health, food and beverage services, and retail as among the fastest growing job markets over the next decade.

Oh, and consider that student loan debt remains one of the most difficult types to forgive or discharge in bankruptcy, in part because the federal government (i.e. taxpayers) made or guaranteed 80 percent of all outstanding student loan debt as of last year. And finally, that once loans in deferral or forbearance are excluded, the delinquency rate on student loan debt was an estimated 27 percent as of the third quarter of 2011, according to a study by the New York Fed.

Worried? Americans should be.

(Editor’s note: Italics added for emphasis)

In an economy that’s powered by consumer spending, too much student loan debt cripples consumption by these younger Americans.

And now, for one or reason or another, the calls are growing for a student loan bailout or some kind of relief. And Democrats in the U.S. Senate are responding. Alan Fram of the Associated Press wrote this morning:

Senate Democrats are ready with an election-year bill preventing interest rates from rising for millions of college students with federal loans. Republicans are already balking at the way Democrats would cover its $5.9 billion price tag: boosting payroll taxes on the owners of some privately held firms.

Democrats unveiled their bill late Tuesday, a measure that would prevent today’s 3.4 percent interest rates on subsidized Stafford loans for low- and middle-income students from doubling automatically on July 1. The interest rate freeze, which would help 7.4 million people, would last for a year…

Republicans trained their fire on Democrats’ plan to finance the bill by making it harder for owners of smaller, privately owned companies called S corporations to avoid paying Social Security and Medicare payroll taxes on some of their income.

The proposal would apply to such companies with incomes exceeding $250,000 and whose revenues come mostly from the work of three or fewer owners. The higher payroll taxes would also be required for some law firms, doctors’ practices and other professional services partnerships.

(Editor’s notes: Italics added for emphasis)

According to Fram, Senate Democratic aides said the legislation would pay for itself with around $6 billion in extra Medicare taxes collected from these private companies over the next decade.

I think I understand what the Democrats are trying to accomplish here:

• Continue their election year political strategy of populism
• Re-energize young Americans to support Barack Obama’s re-election bid in November
• Tap into some much-needed funds for Social Security and Medicare
• Actually help these indebted former students

On the flip-side, I anticipate the legislation might not only alienate even more small business owners from the Obama administration and Democratic Party, but- if signed into law- could make them reconsider hiring additional personnel down the road due to these new payroll taxes. With Tax Doomsday already fast-approaching, such a tax hit is bound to fuel even more uncertainty among small business owners going forward.

As small businesses have generated 65 percent of net new jobs over the past 17 years, young Americans might have to get used to those “low-paying fields in health, food and beverage services, and retail” for some time longer.

Sources:

Evans, Kelly. “Student Loans: The Next Bailout?” CNBC. 25 Apr. 2012. (http://www.cnbc.com/id/47171658). 25 Apr. 2012.

Fram, Alan. “Senate Dems ready bill freezing student loan costs.” Associated Press. 25 Apr. 2012. (http://www.google.com/hostednews/ap/article/ALeqM5i9q8K9wbLi6abkUrpA3py8xODJ2A?docId=91f7fd59392946d8b7206a044381f4c3). 25 Apr. 2012.

Share

Tags: , , , , , , , , , , , , , , , , , , , ,

Peter Schiff: ‘We Are Setting Ourselves Up For The Next Big Crisis’

Peter Schiff, President and Chief Global Strategist of Euro Pacific Capital, recently discussed the growing chatter about a U.S. economic recovery in a March 18, 2012, entry on The Schiff Report YouTube video blog. In “Don’t believe the hype — the U.S. economy is not recovering, it’s getting sicker,” Schiff told viewers:

Well, the truth is, if the economy really were recovering along the lines that the Fed suggests, they wouldn’t have extended their commitment to keep interest rates at 0 through late 2014. If the economy were improving, why would the Fed have to keep it on life support? Again, the Fed knows the economy is not improving, it knows it’s a phony recovery that’s contingent on low interest rates, and that’s why it is keeping them there. But it’s not going to be able to keep them there.

He added later on in the video segment:

The data points that we’ve been getting do not point to an improving U.S. economy. We are not resolving any of the imbalances that underlie our economy. The structural imbalances that led to the housing bubble, that led to the financial crisis, are being exacerbated, not alleviated. Everything the Fed has done, everything the government has done, is making our economy worse, not better. And the data points show that. Again, sure, temporarily, when you’re inflating a bubble, you can create some phony jobs, you can create some excess consumer spending, and government spending. You can create the appearance of prosperity. But all you have to do is look beneath the surface, and you can see that the real economy is not prosperous, it is in decay, it is deteriorating, and we are setting ourselves up for the next big crisis. And that’s the crisis that the Fed is not even concerned about, is not even worried about, nobody is talking about it, but we’re talking about it here.


“Don’t believe the hype — the U.S economy is not recovering, it’s getting sicker.”
YouTube Video

The host of The Peter Schiff Show also talked about inflation:

But even the government’s numbers- the headline number- was up 4/10 of 1 percent, which would annualize out to an annual rate of 5 percent, over 5 percent inflation. I think the true rate of inflation is more double that 5 percent level. Closer to 10 percent.

And Schiff, who’s also the CEO of Euro Pacific Precious Metals, also shared his views on different assets. From the video:

But the market that is on the verge of collapse is the bond market and the dollar. And in order to prevent that from happening, the Fed is going to print a lot of money, and that will put a floor beneath asset prices. But it will basically put a rocket ship [chuckling] beneath gold prices, and it will sink the dollar.

(Editor’s notes: I am not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information presented herein; info added to “Crash Prophets” page)

Share

Tags: , , , , , , , ,

Peter Schiff: Fed Money Printing Driving Up Prices

Recently, the mainstream media, economists, and the financial community have been applauding the performance of the U.S. economy- pointing to rising asset prices as evidence of a recovery. However, others argue these increases are due to the Federal Reserve printing boat-loads of money. Speaking to CNBC on February 17, investor and financial commentator Jim Rogers said:

You now have the Bank of England, the Bank of Japan, the Federal Reserve printing money.

And just this Monday, Peter Schiff, the CEO/Chief Global Strategist of Euro Pacific Capital and CEO of Euro Pacific Precious Metals, also spoke to CNBC and said the U.S. central bank is on a printing binge, thereby driving up prices on all sorts of things. Schiff explained:

The stock market is probably going to go up. But then so is the price in gas, so is the price of food. The question is, why are prices rising? Why is everything getting more expensive? And it’s because the Fed is printing so much money. This is all the result of inflation. Bob Pisani alluded earlier, talking about, “Well, the economy is strengthening- look at the stock market.” The stock market has got nothing to do with the economy. The economy is a disaster. As a result, the Fed is printing all this money. And so the stock prices are going up. But then so are the oil prices, and food prices. Everything is going to go up if you print enough money, because what’s happening is you’re destroying the value of the money. And where you see that, is that assets are more expensive because you’re paying for them with depreciated currency.

When Street Signs co-anchor Amanda Drury’s claimed that recent data pointed to an improving economy, Schiff replied:

No. They don’t. These are the same data points we had during the housing bubble. All we’re doing is looking at how much money we’re spending. We’re buying more stuff. The government is spending a lot of money. Consumers are spending money. Where are they getting it? We’re borrowing it. We’re going into debt. The debt is growing much faster than the GDP. We have a disaster waiting to happen when interest rates rise. They will rise eventually. The Fed is trying to keep them down indefinitely- but they can’t do that. The reason the Fed is still on hold at zero is because they know the minute they let interest rates go up, this whole phony economy they’ve inflated is going to come toppling down.

Sources:

Boyle, Catherine. “Jim Rogers: Don’t Pay Governments Much Attention.” CNBC. 17 Feb. 2012. (http://www.cnbc.com/id/46425613). 28 Feb. 2012.

“Dow 17,000 by 2013.” CNBC. 27 Feb. 2012. (http://video.cnbc.com/gallery/?video=3000075553). 29 Feb. 2012.

Share

Tags: , , , ,

Survival And Prosperity
Est. 2010, Chicagoland, USA
Christopher E. Hill, Editor

Successor to Boom2Bust.com
"The Most Hated Blog On Wall Street"
(Memorial Day Weekend 2007-2010)

Happy New Year

PLEASE RATE this blog HERE,
and PLEASE VOTE for the blog below:



Thank you very, very much!
Advertising Disclosure here.
ANY CHARACTER HERE
Emergency Foods Local vendor (Forest Park, IL). Review coming soon.
ANY CHARACTER HERE
Legacy Food Storage Review coming soon
ANY CHARACTER HERE
MyPatriotSupply.com reviewed HERE
ANY CHARACTER HERE
Buy Gold And Silver Coins BGASC reviewed HERE
ANY CHARACTER HERE
BulletSafe reviewed HERE
ANY CHARACTER HERE
BullionVault BullionVault.com reviewed HERE
ANY CHARACTER HERE
This project dedicated to St. Jude
Patron Saint of Desperate Situations

Categories

 

Archives