Poor Man
Survival
Self
Reliance tools for independent minded people…
A Digest of Urban Survival Resources
In trying times, too many people stop trying.
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Despite
assertions by pundits like Bill O’Reilly who believes there is no income
disparity in the US – Only vanishing jobs due to technology, there is an income
and opportunity gap. America’s mantra
used to be Equality of Opportunity, now Obama just wants to redistribute income
to make everyone equal. This formula has
never worked.
The number
one obstacle to opportunity and jobs is the government which produces so much
red tap it strangles small business…in some states, it will cost nearly $1,000
in permits, fees, and training just to operate a hot dog cart.
The Middle Class Continues to get Clobbered
Major retailers had an
absolutely dreadful start to 2014 and home sales are declining just as they did
back in 2007 before the last financial crisis. Meanwhile, the U.S.
economy continues to lose more good jobs and 20 percent of all U.S. families do not have a single member
that is employed at this point. 2014 is turning out to be eerily similar
to 2007 in so many ways, but most people are not paying attention.
The “retail apocalypse” continues to escalate, and the biggest reason for this is
the fact that middle class consumers in the U.S. are tapped out. And this
is not
just happening to a few retailers – this is
something that is happening across the board. The following is a summary
of how major U.S. retailers performed in the first quarter of 2014 that was put
together by Jim
Quinn…
Wal-Mart
Profit Plunges By $220 Million as US Store Traffic Declines by 1.4%
Target Profit Plunges by $80 Million,
16% Lower Than 2013, as Store Traffic Declines by 2.3%
Sears
Loses $358 Million in First Quarter as Comparable Store Sales at Sears Plunge by 7.8% and Sales at Kmart Plunge by 5.1%
JC
Penney Thrilled With Loss of Only $358 Million For the Quarter
Kohl’s Operating Income Plunges by 17%
as Comparable Sales Decline by 3.4%
Costco Profit Declines by $84 Million
as Comp Store Sales Only Increase by 2%
Staples Profit Plunges by 44% as Sales
Collapse and Closing Hundreds of Stores
Gap Income Drops 22% as Same Store
Sales Fall
American Eagle Profits Tumble 86%, Will
Close 150 Stores
Aeropostale Losses $77 Million as Sales
Collapse by 12%
Best Buy Sales Decline by $300 Million
as Margins Decline and Comparable Store Sales Decline by 1.3%
Macy’s Profit Flat as Comparable Store
Sales decline by 1.4%
Dollar General Profit Plummets by 40%
as Comp Store Sales Decline by 3.8%
Urban Outfitters Earnings Collapse by
20% as Sales Stagnate
McDonalds
Earnings Fall by $66 Million as US Comp Sales Fall by 1.7%
Darden Profit Collapses by 30% as Same
Restaurant Sales Plunge by 5.6% and Company Selling Red Lobster
TJX Misses Earnings Expectations
as Sales & Earnings Flat
Dick’s Misses Earnings Expectations as
Golf Store Sales Plummet
Home Depot Misses Earnings Expectations
as Customer Traffic Only Rises by 2.2%
Lowes Misses Earnings Expectations as
Customer Traffic was Flat
That is quite a
startling list.
But plummeting
retail sales are not the only sign that the U.S. middle class is really
struggling right now. Home sales have also been extremely disappointing
for quite a few months. This is how Wolf
Richter described what we have
been witnessing…
This is precisely what shouldn’t have
happened but was destined to happen: Sales of existing homes have gotten clobbered since last fall.
At first, the Fiscal Cliff and the threat of a US
government default – remember those zany times? – were blamed, then polar
vortices were blamed even while home sales in California, where the weather had
been gorgeous all winter, plunged more than elsewhere.
Then it spread to new-home sales: in
April, they dropped 4.7% from a year ago, after March’s year-over-year decline
of 4.9%, and February’s 2.8%. Not a good sign: the April hit was worse than
February’s, when it was the weather’s fault. Yet April should be the busiest month of the year (excellent brief videoby
Lee Adler on this debacle).
We have already seen that in some
markets, in California for example, sales have collapsed at the lower two-thirds of the price range, with the upper third thriving.
People who earn median incomes are increasingly priced out of the market, and
many potential first-time buyers have little chance of getting in. In San Diego, for example, sales of homes below $200,000 plunged
46% while the upper end is doing just fine.
As Richter
noted, sales of upper end homes are still doing fine in many areas.
But how long
will that be able to continue if things continue to get
even worse for the poor and the middle
class? Traditionally, the U.S. economy has
greatly depended upon consumer spending by the middle class. If that
continues to dry up, how long can we avoid falling into a recession?
Other analysts
are expressing similar concerns. For example, check out what John
Williams of shadowstats.com had to say during one recent
interview…
We’re turning down anew.
The first quarter should revise into negative territory… and I believe the
second quarter will report negative as well.
That will all happen by July 30 when
you have the annual revisions to the GDP. In reality
the economy is much weaker than that. Economic growth is overstated with the
GDP because they understate inflation, which is used in deflating the number…
The reason for this is that
the consumer is strapped… doesn’t have the liquidity to fuel the growth in
consumption.
Income… the median household
income, net of inflation, is as low as it was in 1967. The average guy is not
staying ahead of inflation…
This has been a problem now for decades…
You were able to buy consumption from the future by borrowing more money,
expanding your debt. Greenspan saw the problem was income, so he encouraged
debt expansion.
As a result –
personal consumption is more than two thirds of the economy – there’s no way
you can have positive sustainable growth in the U.S. economy without the
consumer being healthy.
The key to the
health of the middle class is having plenty of good jobs. But the U.S. economy continues to lose more
good paying jobs.
For example,
Hewlett-Packard has just announced that it plans to eliminate 16,000
more jobs in addition to the
34,000 job cuts that have already been announced.
Today, there
are 27 million more working age Americans that do not have a job
than there were in 2000, and the quality of our jobs continues to decline.
This is
absolutely destroying
the middle class. Unless the
employment situation in this country starts to turn around, there does not seem
to be much hope that the middle class will recover any time soon.
Condensed from a
post by…
Yours in freedom,
Bruce ‘the Poor Man’
Got a News Tip or Resource to Share With the Poor Man?
Send it to: PoorManSurvivor@Gmail.com
The solutions to
surviving the war on the Middle Class can be found in our new e-book.
Discover life-saving ways in which you can survive and
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Monetary System As We Know It. This is the information that your financial advisor, your
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