The United States is being battered by six economic nightmares, a disharmonic convergence that could soon plunge America back into a Great Recession — or worse:
1. America's economic recovery has ended. The Commerce Department reported last week that economic growth has plummeted from a 3 percent growth rate to a far-worse-than-predicted 2.2 percent, so slow that the economy is almost sure to stall. With 7.2 percent real world inflation eating up any improvement, our real economic growth is now negative 5 percent as the economy tips into a downward death spiral. Stick a fork in it. The recovery is done.
|The election of Francois Hollande as French president spells the end to the German-French austerity agreement.
2. Unemployment is getting worse, despite government numbers cooked up to make things appear slightly better in this re-election year by removing from jobless rolls another 522,000 people who have despaired of finding work. In all, 29.7 million Americans (including 53 percent of recent college graduates) are unemployed or underemployed, including the one of every five men aged 25-54 who has no job.
Had the executive branch's Bureau of Labor Statistics not manipulated how jobs are counted, today's official unemployment rate would be 10.9 percent, and the proportion of those unemployed plus underemployed would be higher than 18 percent.
Even the 115,000 jobs the Obama administration claims were created in April turn out to be mostly in simple retail, restaurant hamburger flipping, and bars — possibly because the president's failed economic policies have driven America to drink and get fat. This is honest work, but not the high-productivity jobs America needs to build a healthy economic recovery.
3. Factory orders just posted their biggest decline in three years.
It's no wonder that in April Stanford University Economics Professor Edward Lazear described our situation as “the worst economic recovery in history,” then days later revised his analysis, declaring that “this is not a recovery at all.”
4. Housing prices continue to fall for the sixth straight month, pulling down American savings and dreams as they descend. Yale University economist Dr. Robert Shiller, whose Case-Shiller Index is the standard for analyzing home prices, said days ago that property values “might not recover in our lifetime.”
No economic recovery has ever happened in American history without a recovery in home prices.
Dr. Shiller, in a down moment days ago, declared that our world is now in a state of “late Great Depression.”
5. Disposable income is sinking, down by hundreds of dollars a year from January 2009, when President Barack Obama was inaugurated, to February 2012, according to the most recent data from the St. Louis Federal Reserve Bank. Disposable income has fallen while prices keep rising by 7.2 percent or more each year.
More than 70 percent of America's Gross Domestic Product has come from spending. But as disposable income falls, such spending must come from more individual borrowing. And as if on cue, giant banks bailed out by taxpayers again are once again showering America's mailboxes with easy credit card offers with teaser rates and devastating interest rates for those unable to repay what they borrow. Why shouldn't we enjoy the same spending-beyond-our-means fun as our politicians?
6. Europe is now headed into an economic collapse likely to take us down with it. The election last weekend of socialist Francois Hollande as French president spells the end to the German-French austerity agreement that was propping up the European Union's currency, the Euro. In German voting, Chancellor Angela Merkel's center-right coalition government lost a state election in Schleswig-Holstein.
European office-holders of all parties will now tilt more leftward, away from thrift and towards higher taxes on business and the rich, inflationary paper money printing and spending, and economic eclipse. American taxpayers will be expected to pay trillions to stave off Europe's bankruptcy —or risk going down with these lands many of our ancestors fled.
President Obama might take comfort from the victory of a fellow leftist in France.
Or he might recognize that economically-stressed French voters rejected flamboyant centrist incumbent Nicolas Sarkozy in favor of a bland, unexciting alternative candidate nicknamed “Mr. Normal” who, in outward personality, if not ideology, resembles Republican Mitt Romney. This might be a bad omen for Mr. Obama's re-election.
Lowell Ponte is co-author, with Craig R. Smith, of "Crashing the Dollar: How to Survive a Global Currency Collapse"; "The Inflation Deception: Six Ways Government Tricks Us . . . And Seven Ways to Stop It"; and "Re-Making Money: Ways to Restore America's Optimistic Golden Age." For a limited time, you can get a free copy of "The Inflation Deception" by calling 800-630-1494. Read more reports from Lowell Ponte — Click Here Now.
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