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Samseau Offline
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Post: #126
RE: USA heading into a depression.
http://www.zerohedge.com/news/2016-04-23...cks-coffee

It's Now Cheaper To 'Buy' A Dry Bulk Freight Tanker Than A Starbucks Coffee

[Image: 20160423_tanker1.jpg]
Quote:Goldenport, one of the last shipping companies left on the London Stock Exchange, has delisted from the market and sold off six of its remaining eight vessels for $1...

The giveaway reflects the most dismal shipping conditions in decades, caused by economic slowdown in China combined with an oversupply of vessels due to a building spree during a previous boom and the fact that "average daily hire rates have fallen below even a vessel’s daily operating expenses."

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(This post was last modified: 04-24-2016 08:07 AM by Samseau.)
04-24-2016 08:07 AM
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Post: #127
RE: USA heading into a depression.
Aw man, I've always wanted one of those.
Maybe I can find the buyer and pay him $2 for it, double his money back.

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04-24-2016 08:21 AM
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Post: #128
RE: USA heading into a depression.
True unemployment is 40%, how can a country survive with such a high number.

http://fortune.com/2015/09/14/donald-tru...rate-jobs/

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04-27-2016 09:14 AM
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Post: #129
RE: USA heading into a depression.
(04-24-2016 08:07 AM)Samseau Wrote:  http://www.zerohedge.com/news/2016-04-23...cks-coffee

It's Now Cheaper To 'Buy' A Dry Bulk Freight Tanker Than A Starbucks Coffee

[Image: 20160423_tanker1.jpg]
Quote:Goldenport, one of the last shipping companies left on the London Stock Exchange, has delisted from the market and sold off six of its remaining eight vessels for $1...

The giveaway reflects the most dismal shipping conditions in decades, caused by economic slowdown in China combined with an oversupply of vessels due to a building spree during a previous boom and the fact that "average daily hire rates have fallen below even a vessel’s daily operating expenses."


I just saw the first quarter GDP statistics for China and where Im at in NE the economy is in freefall.

Among the 4 worst performing provinces: worst was Liaoning and Jilin and Heilongjiang were also there. Huge, 50 building blocks of apartment buildings sit empty at the edge of the city. Even inside big cities in the NE, mall/office space/apartment mixed use structures that cost hundreds of millions of dollars sit nearly empty.

Total meltdown in NE china at the moment.
04-28-2016 01:35 AM
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The Beast1 Offline
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Post: #130
RE: USA heading into a depression.
(04-28-2016 01:35 AM)ball dont lie Wrote:  
(04-24-2016 08:07 AM)Samseau Wrote:  http://www.zerohedge.com/news/2016-04-23...cks-coffee

It's Now Cheaper To 'Buy' A Dry Bulk Freight Tanker Than A Starbucks Coffee

[Image: 20160423_tanker1.jpg]
Quote:Goldenport, one of the last shipping companies left on the London Stock Exchange, has delisted from the market and sold off six of its remaining eight vessels for $1...

The giveaway reflects the most dismal shipping conditions in decades, caused by economic slowdown in China combined with an oversupply of vessels due to a building spree during a previous boom and the fact that "average daily hire rates have fallen below even a vessel’s daily operating expenses."


I just saw the first quarter GDP statistics for China and where Im at in NE the economy is in freefall.

Among the 4 worst performing provinces: worst was Liaoning and Jilin and Heilongjiang were also there. Huge, 50 building blocks of apartment buildings sit empty at the edge of the city. Even inside big cities in the NE, mall/office space/apartment mixed use structures that cost hundreds of millions of dollars sit nearly empty.

Total meltdown in NE china at the moment.

BDL, do you see any sort of protests or rebellion against the government forming? Are people getting angry or just sitting around?

I'm curious what it is like on the ground there.
04-29-2016 05:24 AM
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Samseau Offline
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Post: #131
RE: USA heading into a depression.
1.458 New lows M2 Money Velocity

https://research.stlouisfed.org/fred2/series/M2V/

When does it bottom out??

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04-29-2016 06:30 PM
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Post: #132
RE: USA heading into a depression.
(04-29-2016 06:30 PM)Samseau Wrote:  1.458 New lows M2 Money Velocity

https://research.stlouisfed.org/fred2/series/M2V/

When does it bottom out??

Companies like Apple carry reserves in the $200 billion range which is then reinvested into securities of various types (and maybe even stock buybacks) and other holdings overseas. This is money which is essentially laundered out of the U.S. and disappears forever into the multinational corporate banking system.

Many other companies have done the same. None of this wealth directly helps the American people. The money that stays in the U.S. is just being reinvested into the equities bubble which is inflating larger and larger while the fed maintains a near zero interest cheap credit balancing act to keep the show going on.
04-29-2016 10:16 PM
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Post: #133
RE: USA heading into a depression.
All Money velocity is nominal GDP (real GDP x price level) divided by the money supply. A declining money velocity does not mean that economic activity is declining. It just means that money supply is outpacing GDP growth. GDP could still be increasing, but as long as money supply has been increasing at a faster rate, then the velocity of money will continue to decline. Normally, this would indicate a contracting economy, all things being equal. But in this case, all things aren't equal. Since 2008, the demand for dollars has gone up to new highs. Excess reserves of depository institutions with the Fed has increased by 2.4 trillion dollars since 2009, offsetting any economic increase in money supply injections during the same interval. Bank hoardings follow a crisis is to be expected, and is probably a god idea considering lack of cash was a huge contributing factor in 2008. This money not being circulated is also why inflation hasn't been an issue. Low interest rates also means that cash as a liquid asset is a better investment than it was before, which means more people are leaning to a liquid, cash based portfolio which would obviously decrease spending.

tl,dr: Decreasing money velocity is not an indicator of poor economic activity, just that liquid injections have not yielded proportional increases to output.
04-29-2016 11:12 PM
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Post: #134
RE: USA heading into a depression.
(04-29-2016 05:24 AM)The Beast1 Wrote:  
(04-28-2016 01:35 AM)ball dont lie Wrote:  
(04-24-2016 08:07 AM)Samseau Wrote:  http://www.zerohedge.com/news/2016-04-23...cks-coffee

It's Now Cheaper To 'Buy' A Dry Bulk Freight Tanker Than A Starbucks Coffee

[Image: 20160423_tanker1.jpg]
Quote:Goldenport, one of the last shipping companies left on the London Stock Exchange, has delisted from the market and sold off six of its remaining eight vessels for $1...

The giveaway reflects the most dismal shipping conditions in decades, caused by economic slowdown in China combined with an oversupply of vessels due to a building spree during a previous boom and the fact that "average daily hire rates have fallen below even a vessel’s daily operating expenses."


I just saw the first quarter GDP statistics for China and where Im at in NE the economy is in freefall.

Among the 4 worst performing provinces: worst was Liaoning and Jilin and Heilongjiang were also there. Huge, 50 building blocks of apartment buildings sit empty at the edge of the city. Even inside big cities in the NE, mall/office space/apartment mixed use structures that cost hundreds of millions of dollars sit nearly empty.

Total meltdown in NE china at the moment.

BDL, do you see any sort of protests or rebellion against the government forming? Are people getting angry or just sitting around?

I'm curious what it is like on the ground there.

Most Chinese people are clueless. When I ask them what they think about it the economic slowdown, all the empty buildings, all the half finished buildings that don't have any workers going to them even though its spring time, they stare at me like I asked them what the nature of the universe really means. Or sometimes they laugh and smile, which is the most common defense mechanism in china.

The big deal is this: for the last 10 years many people, probably in the tens of millions, were being paid to build shit that isn't useful to the economy right now. Sooner or later someone will want that office building or apartment building, still 500 million people outside the big cities in small towns and the countryside. But the bubble for building is now popped. So all those workers, construction guys, cement truck drivers, carpenters, steel workers, electricians, they are all out of work.

Its started to catch up, more and more buildings sit half finished in Liaoning, 30 buildings, each 40 stories tall, half finished at the edge of the city. Spring time but no one working.

So all those guys are now poor as hell. Hopefully they saved their money because no more work for the next decade.

I don't know what will happen but Im moving away from here. I think its going to get ugly at best and nasty with people really freaking out at worst. Im moving to south China where the economy is more or less still plugging along.
(This post was last modified: 04-30-2016 01:31 AM by ball dont lie.)
04-30-2016 01:29 AM
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Samseau Offline
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Post: #135
RE: USA heading into a depression.
(04-29-2016 11:12 PM)ovloV Wrote:  All Money velocity is nominal GDP (real GDP x price level) divided by the money supply. A declining money velocity does not mean that economic activity is declining. It just means that money supply is outpacing GDP growth. GDP could still be increasing, but as long as money supply has been increasing at a faster rate, then the velocity of money will continue to decline. Normally, this would indicate a contracting economy, all things being equal. But in this case, all things aren't equal. Since 2008, the demand for dollars has gone up to new highs. Excess reserves of depository institutions with the Fed has increased by 2.4 trillion dollars since 2009, offsetting any economic increase in money supply injections during the same interval. Bank hoardings follow a crisis is to be expected, and is probably a god idea considering lack of cash was a huge contributing factor in 2008. This money not being circulated is also why inflation hasn't been an issue. Low interest rates also means that cash as a liquid asset is a better investment than it was before, which means more people are leaning to a liquid, cash based portfolio which would obviously decrease spending.

tl,dr: Decreasing money velocity is not an indicator of poor economic activity, just that liquid injections have not yielded proportional increases to output.

False. The monetary base has not increased since 2014, yet has velocity has continued to decline. This means GDP Growth has not increased but money supply has tremendously. The printed money just isn't being spent in the USA.

This makes sense when we see inflation was raging in emerging markets like China while money velocity was declining in the USA, so we know that the money being printed was being spent just not in the USA.

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(This post was last modified: 04-30-2016 05:52 PM by Samseau.)
04-30-2016 05:51 PM
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Post: #136
RE: USA heading into a depression.
(04-30-2016 05:51 PM)Samseau Wrote:  
(04-29-2016 11:12 PM)ovloV Wrote:  All Money velocity is nominal GDP (real GDP x price level) divided by the money supply. A declining money velocity does not mean that economic activity is declining. It just means that money supply is outpacing GDP growth. GDP could still be increasing, but as long as money supply has been increasing at a faster rate, then the velocity of money will continue to decline. Normally, this would indicate a contracting economy, all things being equal. But in this case, all things aren't equal. Since 2008, the demand for dollars has gone up to new highs. Excess reserves of depository institutions with the Fed has increased by 2.4 trillion dollars since 2009, offsetting any economic increase in money supply injections during the same interval. Bank hoardings follow a crisis is to be expected, and is probably a god idea considering lack of cash was a huge contributing factor in 2008. This money not being circulated is also why inflation hasn't been an issue. Low interest rates also means that cash as a liquid asset is a better investment than it was before, which means more people are leaning to a liquid, cash based portfolio which would obviously decrease spending.

tl,dr: Decreasing money velocity is not an indicator of poor economic activity, just that liquid injections have not yielded proportional increases to output.

False. The monetary base has not increased since 2014, yet has velocity has continued to decline. This means GDP Growth has not increased but money supply has tremendously. The printed money just isn't being spent in the USA.

This makes sense when we see inflation was raging in emerging markets like China while money velocity was declining in the USA, so we know that the money being printed was being spent just not in the USA.

That's the Monetary base, not M2, which has been and is still increasing (I don't know how to embed graphs). The monetary base includes reserve balances (which banks are hoarding) and M2 does not. You can't point to M2 velocity as an indicator of gloom and doom then use monetary base to back it up.

Also, China only has an inflation rate of < 3%, so I don't really know what raging inflation you're referencing.

Additionally, I'm not even sure if exported dollars are included in M2, M1 explicitly does not count currency held by foreign banks and institutions, but I don't know if M2 includes it or not, I'll need to check that.
04-30-2016 08:57 PM
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Post: #137
RE: USA heading into a depression.
(04-30-2016 08:57 PM)ovloV Wrote:  Also, China only has an inflation rate of < 3%, so I don't really know what raging inflation you're referencing.

In my daily life prices have increased much more than 3% on things such as milk, eggs, restaurants, bowling, etc.
05-01-2016 08:51 AM
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ovloV Offline
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Post: #138
RE: USA heading into a depression.
Not to sound like an ass, but one persons anecdotal, probably nonempirical experience in one city is not overly relevant.
05-01-2016 10:18 AM
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Samseau Offline
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Post: #139
RE: USA heading into a depression.
(04-30-2016 08:57 PM)ovloV Wrote:  
(04-30-2016 05:51 PM)Samseau Wrote:  
(04-29-2016 11:12 PM)ovloV Wrote:  All Money velocity is nominal GDP (real GDP x price level) divided by the money supply. A declining money velocity does not mean that economic activity is declining. It just means that money supply is outpacing GDP growth. GDP could still be increasing, but as long as money supply has been increasing at a faster rate, then the velocity of money will continue to decline. Normally, this would indicate a contracting economy, all things being equal. But in this case, all things aren't equal. Since 2008, the demand for dollars has gone up to new highs. Excess reserves of depository institutions with the Fed has increased by 2.4 trillion dollars since 2009, offsetting any economic increase in money supply injections during the same interval. Bank hoardings follow a crisis is to be expected, and is probably a god idea considering lack of cash was a huge contributing factor in 2008. This money not being circulated is also why inflation hasn't been an issue. Low interest rates also means that cash as a liquid asset is a better investment than it was before, which means more people are leaning to a liquid, cash based portfolio which would obviously decrease spending.

tl,dr: Decreasing money velocity is not an indicator of poor economic activity, just that liquid injections have not yielded proportional increases to output.

False. The monetary base has not increased since 2014, yet has velocity has continued to decline. This means GDP Growth has not increased but money supply has tremendously. The printed money just isn't being spent in the USA.

This makes sense when we see inflation was raging in emerging markets like China while money velocity was declining in the USA, so we know that the money being printed was being spent just not in the USA.

That's the Monetary base, not M2, which has been and is still increasing (I don't know how to embed graphs). The monetary base includes reserve balances (which banks are hoarding) and M2 does not. You can't point to M2 velocity as an indicator of gloom and doom then use monetary base to back it up.

Also, China only has an inflation rate of < 3%, so I don't really know what raging inflation you're referencing.

Additionally, I'm not even sure if exported dollars are included in M2, M1 explicitly does not count currency held by foreign banks and institutions, but I don't know if M2 includes it or not, I'll need to check that.

Whoops, you're correct that the BASE isn't used to calculate the M2 Velocity, but even when we measure the M2 Velocity against M2 Supply we still find Velocity decreasing more than money supply increases alone can explain.

Code:
M2 Velocity

Peak: 2.21 1997 Q3
Low: 1.92 2003 Q2

86.88% as big
13.12 % decline

M2 Money Stock

High: Nov 17 1997 3,993.1
Low: Jul 28, 2003 6,013.7

150.6% increase

Measuring from top to bottom of the dot com bubble era, we see that even though the money supply increased by 150%, velocity only decreased 13.12%. GDP was still increasing somewhat so velocity did not take too much of a hit.

Code:
M2 Velocity

High: 2006 2.035 Q2
Low: 2009 1.712 Q2

84.13% as big
15.87% decline

M2 Money Supply

High: Jul 31 2006 6,843.6
Low: Jul 13 2009 8,392.5

122.63% increase

During the 2008 crash, money supply went up less than it did during the dot com bubble, and yet the velocity dropped 2% more than it did during the dot com bubble.

Code:
M2 Velocity

High: 2010 1.746 Q3
Low: 2016 1.458 Q1

83.51% as big
16.49% decline

M2 Money Stock

High: Dec 13 2010 8,767.9
Low: Mar 28 2016 12,640.7

144.17% increase

During the last 6 years of the "recovery" money supply increased almost as much as it did during the dot com bubble, yet velocity has decreased 3% more than it did during the dot come bubble.

So, we can see that the US Economy has become structurally weaker since 2008, and the increases in M2 supply cannot alone explain the ever decreasing velocity. Therefore, velocity shows the weakness of the US economy not properly measured by GDP or Labor Force Participation rate alone can.

Sources:

https://research.stlouisfed.org/fred2/series/M2V/
https://research.stlouisfed.org/fred2/series/M2

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05-02-2016 03:34 PM
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Post: #140
RE: USA heading into a depression.
Quote:So, we can see that the US Economy has become structurally weaker since 2008, and the increases in M2 supply cannot alone explain the ever decreasing velocity. Therefore, velocity shows the weakness of the US economy not properly measured by GDP or Labor Force Participation rate alone can.

Sources:

https://research.stlouisfed.org/fred2/series/M2V/
https://research.stlouisfed.org/fred2/series/M2

Can you elaborate on exactly what you mean? Money velocity is just nominal GDP divided money supply. There's no other factors taken into account when determining MV. Declining MV just means that injected money is not effectively growing GDP. This could almost be completely explained by low interest rates making liquid money a better investment than it has been previously, which would result in decreased lending. Which would make sense because interest rates are lower than they were after the dotcom bubble, and they have been lower for longer.
05-02-2016 07:00 PM
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Post: #141
RE: USA heading into a depression.

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05-06-2016 09:03 PM
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Post: #142
RE: USA heading into a depression.
Famous veteran investor Stan Druckenmiller lays out the case on the approaching bubble, over 200K views:

http://www.zerohedge.com/news/2016-05-07...esentation

Very good read:

Quote:The obsession with short-term stimuli contrasts with the structural reform mindset back in the early 80s. Volcker was willing to sacrifice near term pain to rid the economy of inflation and drive reform. The turbulence he engineered led to a productivity boom, a surge in real growth, and a 25 year bull market. The myopia of today’s central bankers is leading to the opposite, reckless behavior at the government and corporate level. Five years ago, one could have argued it was in search of “escape velocity.” But the sub-par economic growth we are experiencing in the 8th year of a radical monetary experiment and in Japan after more than 20 years has blown that theory out of the water. And smoothing growth over a cycle should not be confused with consistently attempting to borrow consumption from the future. The Fed has no end game. The Fed’s objective seems to be getting by another 6 months without a 20% decline in the S&P and avoiding a recession over the near term. In doing so, they are enabling the opposite of needed reform and increasing, not lowering, the odds of the economic tail risk they are trying to avoid. At the government level, the impeding of market signals has allowed politicians to continue to ignore badly needed entitlement and tax reform.

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05-10-2016 06:57 PM
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Post: #143
RE: USA heading into a depression.
All the fed no interest rate money printing stimulus in the world can't hide this reality..

The middle class is being actively dismantled while wealth inequality grows to obscene rates.

https://next.ft.com/content/695bfa18-179...z48OITKm6q

Quote:More than four-fifths of America’s metropolitan areas have seen household incomes decline this century, according to new research that exposes the politically charged reality of middle-class decline at the heart of this year’s presidential election.

The research on urban centres that are home to three-quarters of the US population shows that median household incomes, adjusted for the cost of living in the area, grew in just 39 out of 229 metro areas between 1999 and 2014.

The figures, prepared by the non-partisan Pew Research Center and shared with the Financial Times, cast light on the drivers of the economic discontent that have fuelled the rise of Donald Trump, the likely Republican nominee, and Bernie Sanders, the challenger to Democratic frontrunner Hillary Clinton.

Both men’s campaigns have tapped into deep-seated concerns among middle class voters on the right and the left. Pew’s research illuminates one source of that anxiety and raises questions about even some of America’s most celebrated economic success stories.

They reveal a steady erosion of the middle class across the map of America, with 203 out of the 229 metro areas experiencing a decline in the share of their populations that are middle income. At the same time, 172 metro areas saw increases in the share of their population that is upper-income, and 160 saw a rising lower-income share.

“We find the shrinking of the American middle class was a pervasive local phenomenon from 2000 to 2014,” said Rakesh Kochhar at Pew. “In that sense American communities share common ground — they are reflecting the national trend.”

Middle-income Americans are defined by Pew as adults who earn two-thirds to double the national median, adjusted for household size.

The drivers of the middle-class squeeze vary from city to city, but some of the steepest income declines were seen in cities hit by industrial job losses in recent decades. Springfield, Ohio, saw incomes fall 27 per cent over the period, while the Detroit-Warren-Dearborn area of Michigan recorded an 18 per cent drop in incomes. Nationwide the number of manufacturing jobs shrank 29 per cent during the current century.
US Middle Class

Oil towns in Texas and other states that experienced fracking booms saw some of the strongest growth in income — but those stories have suffered a major blow more recently with the commodity-price slide.

Even in cities celebrated for their economic reinvention as new centres of the so-called knowledge economy such as Raleigh, North Carolina, and Austin, Texas, the Pew research found median incomes falling and a shrinking middle class.

The area around Denver, Colorado, has attracted more than 600,000 new people since the turn of the century and almost 40 per cent of the population now wield university degrees. But adjusted for inflation the median income for a household of three fell from almost $83,500 in 1999 to just under $76,000 in 2014.

"We have created as many jobs as we lost, but many of the jobs replacing those are ones that pay less
Warren Copeland, Springfield mayor"

The winners in terms of upward income mobility, measured by changes in the share of the population who were upper, middle and lower income, include oil cities such as Odessa and Midland, Texas, and the prosperous tourist destination of Barnstable Town, Massachusetts.


America’s Middle-class Meltdown

"Immigration activists holding an American flag rally outside the U.S. Supreme Court as justices hear arguments in a challenge by 26 states over the constitutionality of President Barack Obama's executive action to defer deportation of certain immigrant children and parents who are in the country illegally in Washington April 18, 2016. REUTERS/Joshua Roberts"

The US middle class has shrunk to just half the population for the first time in at least four decades, as the forces of technological change and globalisation drive a wedge between the winners and losers in a splintering US society.

The fortunes of Springfield, Ohio, reflect the impact of lost manufacturing jobs, a trend that was under way before the period studied. The area hosts a major truck assembly plant owned by Navistar that recently boosted its investment in the area, but the facility still employs thousands fewer workers than at its employment height, local officials say.

Today the biggest employers included a call-centre, said Springfield mayor Warren Copeland. “We have created as many jobs as we lost, but many of the jobs replacing those are ones that pay less,” he said. Springfield has been recovering since the recession, he added, but the task now is to attract better-paying jobs by retaining college graduates and boosting local education.

[Image: a_gini_ratio_us_households_families_individuals.png]

Wealth inequality keeps making new legs up every few decades and middle class income continues to stagnate and fall.

Good times.
05-11-2016 07:01 PM
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Post: #144
RE: USA heading into a depression.
It's very simple, really. Without bringing back manufacturing, the US economy is completely fucked. Every year of running a massive trade deficit is tantamount to a huge wealth transfer out of the country, and this has been going on for decades. It is no surprise that that the economy is literally disintegrating before our eyes, and frankly, the only thing holding the entire thing together is the dollar fiat. Without dollar hegemony, a nation with an economy built on Walmart greeters, nurses and finance parasites would not enjoy our current standard of living, even fallen as it is.

For now, the world continues to take our IOUs and give us tangible shit in return, allowing us to keep the charade on pace. One of two things is going to happen first: we will bring the manufacturing back and start making the tangible shit in-house again, or dollar hegemony will end, the IOUs will be laughed at, and we will have no way to acquire the tangible shit we need, plunging us into third world poverty. With Trump, the first is at least possible. Without him, we are fucked, and the only question is how long we have before dollar hegemony goes kaput.
05-11-2016 07:54 PM
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Post: #145
RE: USA heading into a depression.
http://www.ft.com/intl/cms/s/0/695bfa18-...5575e.html

Quote:More than four-fifths of America’s metropolitan areas have seen household incomes decline this century, according to new research that exposes the politically charged reality of middle-class decline at the heart of this year’s presidential election.
The research on urban centres that are home to three-quarters of the US population shows that median household incomes, adjusted for the cost of living in the area, grew in just 39 out of 229 metro areas between 1999 and 2014.

The figures, prepared by the non-partisan Pew Research Center and shared with the Financial Times, cast light on the drivers of the economic discontent that have fuelled the rise of Donald Trump, the likely Republican nominee, and Bernie Sanders, the challenger to Democratic frontrunner Hillary Clinton.

Both men’s campaigns have tapped into deep-seated concerns among middle class voters on the right and the left. Pew’s research illuminates one source of that anxiety and raises questions about even some of America’s most celebrated economic success stories.

They reveal a steady erosion of the middle class across the map of America, with 203 out of the 229 metro areas experiencing a decline in the share of their populations that are middle income. At the same time, 172 metro areas saw increases in the share of their population that is upper-income, and 160 saw a rising lower-income share.

“We find the shrinking of the American middle class was a pervasive local phenomenon from 2000 to 2014,” said Rakesh Kochhar at Pew. “In that sense American communities share common ground — they are reflecting the national trend.”

Middle-income Americans are defined by Pew as adults who earn two-thirds to double the national median, adjusted for household size.

The drivers of the middle-class squeeze vary from city to city, but some of the steepest income declines were seen in cities hit by industrial job losses in recent decades. Springfield, Ohio, saw incomes fall 27 per cent over the period, while the Detroit-Warren-Dearborn area of Michigan recorded an 18 per cent drop in incomes. Nationwide the number of manufacturing jobs shrank 29 per cent during the current century.

[Image: 8e7b939a-1791-11e6-9d98-00386a18e39d.img]

Quote:Oil towns in Texas and other states that experienced fracking booms saw some of the strongest growth in income — but those stories have suffered a major blow more recently with the commodity-price slide.

Even in cities celebrated for their economic reinvention as new centres of the so-called knowledge economy such as Raleigh, North Carolina, and Austin, Texas, the Pew research found median incomes falling and a shrinking middle class.

The area around Denver, Colorado, has attracted more than 600,000 new people since the turn of the century and almost 40 per cent of the population now wield university degrees. But adjusted for inflation the median income for a household of three fell from almost $83,500 in 1999 to just under $76,000 in 2014.

The winners in terms of upward income mobility, measured by changes in the share of the population who were upper, middle and lower income, include oil cities such as Odessa and Midland, Texas, and the prosperous tourist destination of Barnstable Town, Massachusetts.

Pew found that many of the metro areas with relatively low median incomes — below $60,000 — were in the southern half of the US and California. The higher end of the income spectrum — where incomes were greater than $70,000, included areas on both coasts, including Seattle-Tacoma-Bellevue in Washington state and Boston-Cambridge-Newton, in Massachusetts.

The fortunes of Springfield, Ohio, reflect the impact of lost manufacturing jobs, a trend that was under way before the period studied. The area hosts a major truck assembly plant owned by Navistar that recently boosted its investment in the area, but the facility still employs thousands fewer workers than at its employment height, local officials say.

Today the biggest employers included a call-centre, said Springfield mayor Warren Copeland. “We have created as many jobs as we lost, but many of the jobs replacing those are ones that pay less,” he said. Springfield has been recovering since the recession, he added, but the task now is to attract better-paying jobs by retaining college graduates and boosting local education.

Well well, the shirking middle class is carefully analyzed by the Pew Research center according to median incomes and surprise! The American Middle Class has shrunk to below 50% of the population for the first time in over 4 decades. This perfectly matches what the dropping M2 Velocity rates tell us.

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05-12-2016 02:09 AM
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Post: #146
RE: USA heading into a depression.
Marketwatch putting up their own article about this wonderful phenomenon of the endangered and dying American middle class.

http://www.marketwatch.com/story/america...nk=sfmw_tw


Quote:The share of adults living in middle-income households fell in 88% of U.S. metropolitan areas — that is, 203 of 229 areas — between 2000 and 2014, according to an analysis of government data released Wednesday by the Pew Research Center, a nonprofit, nonpartisan think tank in Washington, D.C. The decrease in the middle-class share was also often substantial, measuring 6 percentage points or more in 53 metropolitan areas, compared with a 4-point drop nationally.

This erosion of the middle class coincided with a fall in household incomes in most metropolitan areas. “The median income of U.S. households in 2014 stood at 8% less than in 1999, a reminder that the economy has yet to fully recover from the effects of the Great Recession,” the report noted. Median incomes fell in 190 of the 229 metropolitan areas. (The report encompassed 229 of 381 metropolitan areas as defined by the federal government, the maximum number of areas that could be identified in the Census Bureau data, and accounted for 76% of the U.S. population in 2014.)


Quote:Plus, incomes are stagnating. Overall, the percentage (rather than the actual number) of middle-class Americans has been shrinking. The share of Americans who are part of middle-income households has plunged to 51% in 2013 from 61% in 1970, separate Pew data released last year found. And from 1990 to 2013, the share of adult Caucasians and Asian-Americans living in middle-income households decreased the most of any ethnic groups, from 58% to 53% for Caucasians and from 56% to 50% for Asians. The decline was less pronounced among Hispanics (from 48% to 47%) or African-Americans (from 47% to 45%).

Remember what I said about multiculturalism bringing everyone down to the lowest common denominator. This is what you see in effect. This is what "equality" means..reducing the middle class to nothing and everyone back to developing world status by flooding cities with cheap and exploitable labor while the rich grow richer and the elites live behind gated communities. Welcome to latin america.


The coup de grace:

Quote:America’s middle class has lost nearly 30% of its wealth over the last four decades. The shrinking of the middle class has reached the point where it may no longer be the economic majority in the U.S. More households make up the middle class than 40 years ago, yet they comprise a smaller share of overall wealth. In early 2015, there were 120.8 million adults in middle-income households versus 70.3 million in lower-income and 51 million in upper-income households, according to Pew. “The hollowing of the American middle class has proceeded steadily for more than four decades since 1971,” researchers Richard Fry and Rakesh Kochhar wrote.


When there is a tiny disempowered middle class left get ready for more fuckery than every when it comes to politics.
05-12-2016 09:20 AM
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Post: #147
RE: USA heading into a depression.
Inflation has been a red herring for some time now. It's really about deflation. A deflationary spiral.

Quote:A deflationary spiral is when a period of decreasing prices (deflation) leads to a situation whereby the economy cannot recover, which compounds over time leading to even lower prices in a vicious cycle.

Deflation occurs when the general price levels decline, as opposed to inflation which is when general prices levels rise. When deflation occurs, central banks and monetary authorities can enact expansionary monetary policies to spur demand and economic growth. If monetary policy efforts fail, however, due to greater than anticipated weakness in the economy or because target interest rates are already zero or close to zero, a deflationary spiral may occur even with an expansionary monetary policy in place.

Read more: Deflationary Spiral Definition | Investopedia http://www.investopedia.com/terms/d/defl...z48SVQaFFN

There is no organic demand anywhere. The average American has little to no money to invest to begin with. Major expenditure is in staples. Consumption is evident in the dramatic drop in consumer product leader stocks.

The middle class is shrinking. Inflation was really a problem of the past when America actually had a real economy.

To sum it all up: Consumption is shrinking. Debt is increasing. The ability to pay back such debt is decreasing. Money printing increases but it has nowhere to go but into easy to borrow cash and institutional and corporate buyback of assets to prop up the illusion of economic progress.

Japan's central bank and the European CB all came out with public statements stating full intent to buy private company assets and indices to prop up their markets. That is a huge red flag.

Things are fucked beyond repair when a governments are printing money and facilitating unlimited borrowing (negative to zero interest rates) to buy private assets you know it's at the precipice.
05-12-2016 11:25 AM
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Post: #148
RE: USA heading into a depression.
No, inflation is still a very real possibility given the extreme amounts of money printing. But more to the point, inflation and deflation aren't mutually exclusive, look up the term biflation.

Poverty can come from both directions.

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05-12-2016 11:55 AM
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Post: #149
RE: USA heading into a depression.
(05-12-2016 11:25 AM)El Chinito loco Wrote:  Inflation has been a red herring for some time now. It's really about deflation. A deflationary spiral.

Quote:A deflationary spiral is when a period of decreasing prices (deflation) leads to a situation whereby the economy cannot recover, which compounds over time leading to even lower prices in a vicious cycle.

Deflation occurs when the general price levels decline, as opposed to inflation which is when general prices levels rise. When deflation occurs, central banks and monetary authorities can enact expansionary monetary policies to spur demand and economic growth. If monetary policy efforts fail, however, due to greater than anticipated weakness in the economy or because target interest rates are already zero or close to zero, a deflationary spiral may occur even with an expansionary monetary policy in place.

Read more: Deflationary Spiral Definition | Investopedia http://www.investopedia.com/terms/d/defl...z48SVQaFFN

There is no organic demand anywhere. The average American has little to no money to invest to begin with. Major expenditure is in staples. Consumption is evident in the dramatic drop in consumer product leader stocks.

The middle class is shrinking. Inflation was really a problem of the past when America actually had a real economy.

To sum it all up: Consumption is shrinking. Debt is increasing. The ability to pay back such debt is decreasing. Money printing increases but it has nowhere to go but into easy to borrow cash and institutional and corporate buyback of assets to prop up the illusion of economic progress.

Japan's central bank and the European CB all came out with public statements stating full intent to buy private company assets and indices to prop up their markets. That is a huge red flag.

Things are fucked beyond repair when a governments are printing money and facilitating unlimited borrowing (negative to zero interest rates) to buy private assets you know it's at the precipice.

In fact, it's not simply Americans who have no money to spend. The entire world has been stripped of aggregate demand by decades of labor arbitrage and resulting shrinking wages.

Think of it this way. Before offshoring took off, there was certain purchasing power in the world, concentrated primarily in the United States and Europe. Consumers in those regions earned wages high enough to support the purchase of goods at a certain price level.

But it was not good enough for the globalists. In a bid to squeeze out every last possible bit of profit, they started to offshore production to Asia for export back to consumers in the West. The only reason to produce the stuff in China & Company was to be able to pay workers a fraction of what they earned in the West. But by the same token, this meant that the new sweatshop slaves in Asia were not earning enough money to afford the very goods their factories produced.

So who now has the money to buy all this shit? Nobody. People in the West have lost their well paid jobs due to offshoring. Those jobs were re-created in the East, but at a fraction of the original earning power. In other words, tens (or hundreds) of millions of [purchasing power generating jobs] have simply vanished from the world as a result of labor arbitrage.

This was masked by massive consumer debt accumulation during the Clinton and Bush years. After the 2008 collapse, they've tried keeping the charade going by even more massive government debt accumulation and of course quantitative easing, with ever diminishing returns. The demand just isn't there to buy all this shit at the current price point, because they destroyed that demand with their labor arbitrage. Hence the deflationary pressures. The end is near, it seems.
(This post was last modified: 05-12-2016 10:57 PM by Fast Eddie.)
05-12-2016 10:54 PM
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Post: #150
RE: USA heading into a depression.
Samseau post some Care Bear movies to even us out.

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05-12-2016 11:21 PM
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