SOS: Distress Signals from the American Economy in Trouble

Red Flags Ahead: Unpacking Concerns about the Fully American Economy in Trouble

Warning Signs: Trouble for the American Economy

Updated May 30, 2023

Utilizing a historical backdrop to reinforce this assertion, we find that little has shifted since our initial declaration years ago. The Baltic Dry Index is a steadfast economic gauge, yet it has consistently fallen short of revisiting its past peaks. This index, known as a pivotal leading indicator, unequivocally signals that without the infusion of liquidity, the Fed has undertaken since the 2009 financial crisis, we could have been mired in a severe recession.

Sustaining this economy’s vitality hinges on a continuous influx of funds. Although the Fed has momentarily halted its financial injections, it’s inevitable that they will curtail rate hikes, considering our annual interest payments already exceed a staggering 1 trillion USD.

Baltic dry Index 2023

According to the BLS, the unemployment rate is roughly 5%. Shadow statistics, on the other hand, state that as of Dec 2015, the unemployment rate stands at 22.9%

3 charts illustrating american economy in trouble

The American Economy and the Issue of Wage Stagnation

Real wages have been declining since 2000. In fact, $22.41 today has the same purchasing power as 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 in 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 use 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 at 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 that 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

Assessing the Progress: Is the American Economy on the Upswing?

This chart vividly portrays the ongoing deterioration of the situation across the years, extending beyond solely the recession of 2008-2009. The count of individuals reliant on government aid to secure basic sustenance has consistently risen throughout this so-called economic recovery period. Contrary to the expected trend of fewer people seeking government assistance as the economy improves, this chart signifies a transition from unfavourable circumstances to even more dire conditions. Injecting the markets with surplus money disproportionately benefits the exceedingly affluent, establishing an atmosphere that penalizes savers while favouring speculators.

Lastly, the looming issue of student debt represents a ticking time bomb. This debt currently stands at $1.3 trillion and is expanding at an alarming pace of approximately $2,800 per second. As of June 2015, Bloomberg data indicated that 11.5% of this debt had remained overdue for at least 90 days. An alarming 40 million Americans now bear some form of student loan, with 70% of college students graduating while burdened by debt and no assurance of securing employment upon graduation. According to the Department of Education, by 2025, this debt is projected to surge to nearly $2.5 trillion. A substantial default in this domain could potentially dwarf the impact of the 2008 financial crisis, rendering it comparably mild.

Insights and Observations: Random Notes on the Markets – September 2019

It requires minimal effort to succumb to panic, yielding no rewards whatsoever. Those who react with panic in the face of challenges ultimately reap the consequences they have earned. This has even less than zero value in the market context, given that the masses consistently sell when the market hits its lowest point and buy when it peaks. On the contrary, individuals who exhibit astute behaviour by refraining from panic stand to gain substantial rewards. This pattern has persisted for millennia and is unlikely to change for another millennium.

In the realm of markets, there are no definitive laws or fixed regulations, except for the necessity to possess the skill to adapt to various situations. Emotions play a significant role, and chaos ensues when emotions spiral out of control. This is why the masses often engage in stampede-like behaviour when markets experience a downturn, and conversely, they eagerly jump in when a bubble is on the verge of bursting. Despite centuries passing since the Tulip Bubble, little has evolved in this regard.

Taking command of one’s life is imperative, without relying on the government or any private entity for rescue. This entails living within 1-2 standards below your means and channelling the surplus funds into the stock market. Consider it from this perspective: You would inevitably spend this money on unnecessary purchases aimed at impressing people you don’t truly value with money you can’t genuinely afford to pay.

Other articles of interest 

Market Psychology is the Study of the insane way the crowd follows the leader

Market Psychology is the Study of the Mass Mindset

Market Psychology is the Study of the Herd: its Impact on Investing March 25, 2024  Introduction Embark on a sophisticated ...
Simplicity: Tax Lien Investing for Dummies

Simplicity: Tax Lien Investing for Dummies: Simplified Success in Property Stakes

Mar 19, 2024 Introduction to Tax Lien Investing: Simplifying the Complex When investing, simplicity often belies the sophistication of a ...
Yellow Journalism Examples: a story of never ending deceit

Unmasking Deceit: Examples of Yellow Journalism

Editor: Vladimir Bajic | Tactical Investor  Deceptive Tactics:  Examples of Yellow Journalism Updated March 18, 2024 In the modern era, ...
how to get more rich

Crafting Wealth: The Buy Borrow Die Strategy Unveiled

The Art of Buy Borrow Die Strategy: Maximizing Wealth Through Tax Efficiency. March 17, 2024 Introduction: Embark upon the Machiavellian ...
Mob Rule: Understand It & Win The Stock Market Game

Deciphering Mob Rule: Winning the Stock Market Game

The Perils of Mob Rule: Unveiling the Power of Individuality March 16,  2024 The time for change is today, for ...
People Who Make Money Investing in the Stock Market Quizlet

People Who Make Money Investing in the Stock Market Quizlet

People Who Make Money Investing in the Stock Market Quizlet: Unveiling the Secrets March 16, 2024 Investing in the stock ...
In which situation would a savings account be the best investment to earn interest: when the masses are euphoric

In which situation would a savings account be the best investment to earn interest

In which situation would a savings account be the best investment to earn interest? During Euphoric Times March 15, 2024 ...
rational thinking needs a quiet and calm mind

Rational Thinking: Logic vs Ignorance in Thought Process

  Clear Thinking: Rational Logic vs Irrationality in Thought Process March 15, 2024 Introduction Rational thinking involves utilizing our cognitive ...
Mob Mentality Psychology

Mob Mentality Psychology: Turning Negativity into Opportunity

 Mob Mentality Psychology: Why Misery Loves Company Updated  March 15, 2024 Misery loves company, And stupidity adores it & Sum's ...
The Premier Best Stocks for Selling Covered Calls Revealed

Elite Investors’ Picks: The Premier Best Stocks for Selling Covered Calls Revealed

Mar 14, 2024 Elite Investors' Picks: The Premier Best Stocks for Selling Covered Calls Revealed In the grand chessboard of ...
investing for dummies 2023

Investing for Dummies 2023: Navigating the Market with Confidence and Savvy

Mar 14, 2024 Investing can often seem like an intricate dance between opportunity and risk, a game where the rules ...
Unlocking Tomorrow: TQQQ Stock Price Forecast Reveals the Future

TQQQ Stock Price Forecast for Smart Investors

We'll examine this topic through the lens of events in 2020, concluding with our current perspective as of March 2024 ...
Savvy Tactics of the Successful Investor

Beat the Herd: Trend-Savvy Tactics of the Successful Investor

Mar 13, 2024 Mastering the Market: Secrets of the Successful Investor Revealed Intro: The Core Principles of a Successful Investor ...
How To Beat Inflation: The insidious tax

How to Beat Inflation: Conquering the Silent Killer Tax

When you see a worthy person, endeavor to emulate him. When you see an unworthy person, then examine your inner ...
What is Mob Psychology: its a hive mentality that leads to destruction in the stock market

What is Mob Psychology: Unleashing It’s Potential

Fear not what you know; fear what you know not. Sol Palha What Is Mob Psychology? Understanding the Dynamics of ...