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Gallup recently released their monthly unemployment report and it appears as if we are continuing our slow but steady increase in joblessness throughout America. According to Gallup, unemployment was up to 10.3% at the end of February, 2011, a slight increase from January's high of 9.8 percent. What's more, underemployment surged to just under 20% and the percentage of part-time workers who want full time work worsened considerably since the beginning of 2011. These trends are corroborated by ShadowStats.com, a website dedicated to evaluating government economic reporting and revealing the biases and flaws (lies?) in their computational methodologies. According to ShadowStats, the real unemployment rate in America is just under 25%.
That's right, one in four persons in the US is out of work, has given up on finding work, or is underemployed. If you have spent anytime at all in the industrial states of north America, or the central-state counties of California, you realize very quickly that these statistics may themselves be under reported.
So it was with a fair amount of confusion and downright whiplash that I received a CNN Newsflash on my iPhone yesterday morning making the exciting claim that "Unemployment is down in the United States and jobs are up for February." Rejoice my friends...we are out of the woods, claims CNN.
WTF?
Corporate control and manipulation of the Mainstream Media aside, I find it increasingly baffling to hear pundits and so-called experts make the repeated claims that the United States has pulled out of the recession and is back on the road to recovery. Such claims not only defy our own experiences, but they are downright insulting to a thinking person. Do they believe we are that credulous? And while I completely understand that the economy is as much psychological as rational -- an argument widely used to justify false reporting of economic indicators in order to 'convince' consumers that all is well and motivate them into spending again, a self-fulfilling prophecy as it were -- I still think we should man-up and have the courage to call a kettle a kettle when we see it. The economy is not getting better, its getting worse and any thinking person that is willing to take ten minutes a day to do some basic research will realize, quite disturbingly, that those green shoots people keep talking about are poisonous thistles.
We need to stop believing what the paid pundits are telling us and start using our own eyes. The view may shock you. Here are just a few things you will see (and by no means an exhaustive list of indicators you should be aware of)...
1) The price of oil is going back up and we are feeling the pinch at the gas stations. As of Friday, March 4, the price of oil was above $104 dollars, the highest its been since September of 2008. And depending upon what happens in the Middle East, the price of oil could hit record highs, rocking the global economy as people lose what discretionary dollars they have remaining (because they are spending it on gas) and stop all non-essential consumption (re: spending). When people stop spending, the economy contracts. We saw this in 2008 and we will likely see it again. The difference is this time we are already in a recession; When the economy contracts in the midst of an existing recession, things get really bad.
2) The price of food is going up...way up, and you are feeling the squeeze at the grocery store. Corn, wheat, soybean, cotton, sugar and many other staples of agriculture (and life) have witnessed staggering increases in price in the last 12 months, in many cases doubling and even tripling in value. To those of us with a little money, these price increases are simply more insult to injury, and will diminish our capacity to consume other goods (contracting the economy even worse); to the 3.2 billion people across the planet that live on the equivalent of less than $2 dollars a day, these price hikes will be devastating. Remember, desperate people (read: hungry people) do desperate things. Enter revolution.
Don't forget that the typical meal you eat in the US travels on average 2000 miles to get to you, plus requires tremendous amounts of fuel to plant, fertilize, harvest, produce and ship. High oil plus high food prices will create a self-perpetuating feedback loop of increases on top of increases, and will likely spell economic disaster.
3) The United States Federal Debt, if you include unfunded liabilities -- promissory notes that you are committed to paying in the future, such as Social Security, Medicare, Medicaid, etc. -- is currently in the tens of trillions of dollars, and depending upon who is doing the analysis, could top the 100 trillion mark in a matter of years. That's right -- 100 trillion. In light of this staggering and mind boggling figure, it's downright laughable to watch Congress as they currently bicker over the so-called Republican deficit reduction plan because no amount of reduction in current spending can ever hope to make an impact on the national debt. Indeed, every citizen of the United States could be taxed 100% of income and we wouldn't make a dent on the debt. The cost to service the interest on the debt alone represents a huge chunk of the GNP...a bad sign and according to one Harvard History Professor, an indicator that US economic hegemony is a thing of the past. In fact, I think his word was "Collapse."
[This short list only addresses those trends that hit close to home. A more thorough and sobering examination into our current economy would also have to explore Quantitative Easing and the Fed's monetary policy of print, print, print; the emergence of an American Plutocracy and corporate cartelism; stagnant American wages and the off shoring of American manufacturing jobs; the crumbling housing market; the devaluation of the dollar and its slow demise as the world's reserve currency; manipulation of the precious metals market; Wall Street racketeering and the emergence of so-called Quants as the darlings of the age of exploitation; and more. But we'll save those for another day...]
There is a simple maxim that comes to mind as one reflects on these data: That which can't go on forever, won't.
An ever-increasing debt assumes an ever-increasing economy; you have to have an expanding economy to continue to support an expanding debt. You Have To. Unfortunately, by almost any standard, our economy is shrinking (or at best stagnating), in spite of CNN's happy face prognostications.
So here is the bitter pill that eventually all of us will have to swallow: The combination of a shrinking economy and explosive debt is catastrophe. Period. We are talking about an Economic Collapse of epic proportions. When will this happen? Nobody knows...but chance favors the prepared mind...
Bottoms up.
Don't Be Scared. Be Prepared.
