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Friday, April 15, 2016

We don't need another election, We need another revolution

Poor Man Survival

Self Reliance tools for independent minded people…


ISSN 2161-5543

A Digest of Urban Survival Resources

Anyway, no drug, not even alcohol, causes the fundamental ills of society. If we're looking for the source of our troubles, we shouldn't test people for drugs, we should test them for stupidity, ignorance, greed and love of power.

>P. J. O'Rourke


“Let me ask America a question,” Trumps begins. “How has the ‘system’ been working out for you and your family? No wonder voters demand change.”

I, for one, am not interested in defending a system that for decades has served the interest of political parties at the expense of the people. Members of the club—the consultants, the pollsters, the politicians, the pundits and the special interests—grow rich and powerful while the American people grow poorer and more isolated.

>>Wall Street Journal OP/ED  April 14, 2016

Those that were hoping for an “economic renaissance” in the United States got some more bad news this week.  It turns out that the U.S. economy is in significantly worse shape than the experts were projecting.  Retail sales unexpectedly declined in March, total business sales have fallen again, and the inventory to sales ratio has hit the highest level since the last financial crisis.  When you add these classic recession signals to the troubling indicators [retail store closings, spike in unemployment numbers] in the U.S. economy, it paints a very disturbing picture.  Virtually all of the signs that we would expect to pop up during the early chapters of a major economic crisis have now appeared, and yet most Americans still appear to be clueless about what is happening.

 I was surprised when the government reported that retail sales had actually fallen in March.  Consumer spending is a very large part of our economy, and so if consumer spending is slowing down already that certainly does not bode well for the rest of 2016.  The following comes from highly respected author Jim Quinn

The Ivy League educated “expert” economists expected March retail sales to increase by 0.1%. They only missed by $6 billion, as retail sales FELL by 0.3%. They have fallen for three straight months. At least gasoline sales were strong, as prices have risen 22% since mid-February. That should do wonders for the finances of American households. If you exclude gasoline sales, retail sales fell by 0.4%. As the chart below reveals, the year over year change in retail sales has been at or near recessionary levels for most of 2015, and into 2016.

You can view the chart that he was referring to right here.  In addition to a decline in retail sales, total business sales have also been falling, and this is another classic recession signal.  The following comes from Wolf Richter

Total business sales fell again in February, the Commerce Department reported today. They include sales by manufacturers, retailers, and wholesalers of all sizes across the US economy. This measure is far broader than the aggregate sales by publicly traded companies, which too have been falling.

At $1.284 trillion in February, total business sales were down an estimated 0.4% from January, adjusted for seasonal and trading-day differences but not for price changes. And they were down 1.4% from the already beaten-down levels of February last year. They’re back where they’d first been in November 2012!

Yes, the stock market has been on quite a run for the past several weeks, but that temporary rebound is not based on the economic fundamentals.

The truth is that the real economy is definitely starting to slow down substantially.  If you want to break it down very simply, less stuff is being bought and sold and shipped around the country, and that tells us far more about what is coming in the months ahead than the temporary ups and downs of stock prices.

More people are

stocking up on gold

Another huge red flag is the fact that the inventory to sales ratio in the U.S. has hit the highest level that we have seen since the last financial crisis

The crucial inventory-to-sales ratio, which tracks how long unsold inventory sits around in relationship to sales, is now at a mind-bending 1.41. That’s the level the ratio spiked to in November 2008, after the Lehman bankruptcy in September had put the freeze on the economy.

Inventories represent prior sales by suppliers. When companies try to reduce their inventories, they cut their orders. Suppliers see these orders as sales. As their sales slump, suppliers adjust by cutting their own orders, thus causing the sales slump to propagate up the supply chain. They all react by cutting their expenses. And if it lasts, they’ll cut jobs. Inventory corrections have a nasty impact on the overall economy.

Because sales have slowed down, inventories are starting to pile up to alarmingly high levels.  And when companies see that business is slowing down, they start to let people go.

Challenger, Gray & Christmas is reporting that job cut announcements at major firms in the United States are up 32 percent during the first quarter of 2016 compared to the first quarter of 2015. Ford Motor announced it was shipping jobs to Mexico and Oreo Cookies is closing its US production facility as well and shipping roughly 400 jobs to Mexico.

Somehow, most of the talking heads on television don’t seem too alarmed by this.

But ordinary Americans are beginning to become alarmed about what is happening.  In fact, the percentage of Americans that believe that the U.S. economy is “getting worse” is now the highest it has been since last August

One of the more glaring examples of how strong pessimism has become is Gallup’s U.S. Economic Confidence Index. The measure gauges the difference between respondents who say the economy is improving or declining. The most recent results are not good.

Fully 59 percent say the economy is “getting worse” against just 37 percent who say it is “getting better.” That gap of 22 percentage points is the worst since August, according to Gallup, which polled 3,542 adults.

So far, it is less severe than what most of the rest of the planet is experiencing.  Japan’s GDP is officially shrinking, major banks are failing all over Europe and the same is taking place in Brazil and parts of the EU.

On a smaller scale my associates tell me they see it locally with reduced retail sales, lower online sales and even higher numbers of delinquent payments on mortgages and auto loans.

While the Republican party dithers and squabbles it is highly evident that a growing percentage of Americans are disgusted by career politicians and government as usual which are high on promises but short on promises…50 years of the same nonsensical campaign crap and all we get is a reduction in our spending power and a reduction in our freedoms is what I continue to hear…our government is broken, ruled by money and special interests without regard to the people.  However…

You can’t cure an alcoholic with more alcohol.

You can’t cure government overreach with more government.

This November, a new president-elect will make grand promises, but he or she will sit at the top of the world’s biggest bureaucracy.

Not even a president has the power to rescue our republic. Congress has failed. The Supreme Court is the great enabler.

For them, the system works. As for us? We lose more liberty every day.

As I’ve said for 25 years…

We don’t need another election, We need another revolution!


Bruce ‘the Poor Man’



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1 comment:

DAR said...

I learned a long time ago that 99% of what politicians utter is compost and not to be taken seriously - one needs to read between the lines to see what a crap hole our country has become and how the political elite have screwed us...I like your sentiment. We need to burn the bastards and start over!