3 charts illustrating american economy in trouble

 Unemployment is actually sky high and not 5% as the BLS would have you believe


[color-box color=”green”]According to the BLS, the unemployment rate is roughly 5%. Shadow statistics, on the other hand, states that as of Dec 2015, the unemployment rate stands at 22.9%.[/color-box]

3 charts illustrating american economy in trouble

Wage stagnation and the decimation of the Middle-Class

Real wages have been declining since 2000. In fact, $22.41 today has the same purchasing power an hourly salary of $4.03 cents hand in 1973. Median Income continues to drop; the middle-class has been decimated since the financial crisis of 2008.  This trend is going to continue for the foreseeable future.

Median household Income declining: Obama Economic recovery a sham

Another factor contributing to lower wages is corporate greed.  Corporations are using billions of dollars to buy back shares instead of investing and growing their companies. When you buy back shares you artificially boost the earnings per share metric (EPS); this is alchemy as its best.  This is done without spending money on new equipment or hiring new workers. It is fast, simple and fraudulent but the government is not prosecuting anyone so this trend will continue. We covered this recently in an article titled “share buybacks just another Wall Street Scam”

Number of households on food stamps indicates economic recovery is not real

This chart illustrates how the situation has been getting progressively worse over the years and it’s not only restricted to the recession of 2008-2009.  The number of individuals in need of government assistance to put food on the table has continued to rise during this so-called economic recovery.  When the economy is improving,  fewer individuals seek out government help and not more. This chart indicates that the situation is going from bad to worse.  When you flood the markets with money, only the very wealthy benefit as it creates an environment that punishes savers and rewards speculators.  This article titled “Oops we did it again” explains this in more detail.

Lastly, Student debt is a time bomb waiting to explode. It stands at $1.3 trillion and is growing roughly at a rate of $2,800 every second.  As of June 2015, 11.5% of the debt was delinquent for at least 90 days according to Bloomberg.  40 million American now are carrying some form of student loans. 70% of college students graduate with debt, and there is no guarantee of landing a job upon graduation.  The department of education has stated that the by 2025 this debt is set to surge to almost$2.5 trillion.  A massive default here will make the financial crisis of 2008 appear to be a walk in the park.

Negative rates will fuel the biggest Bull Market rally in History- Video 

[color-box color=”blue”]Strategy 

You need to take control of your life and not hope or expect the government or any private entity to bail you out.  This means you should live 1-2 standards below your means and put this extra money to work for you in the stock market. Look at it this way, you were going to spend this money anyway buying crap you did not need to impress people you do not like, with money you really cannot afford to spend.

However, you can improve your odds of winning, read the section titled mass psychology and contrarian investing. Additionally, subscribe to our free newsletter.    A simple strategy to use that has worked well over the decades is to make a list of companies that growing and then use strong market pullbacks to open new positions. You can also put some money into blue chip companies like COST, JNJ, MCD, etc.  [/color-box]


Other articles of interest