The divide between rich and poor grows - Tactical Investor
Sol Palha: Financial & Economic Insights The divide between rich and poor grows

The divide between rich and poor grows

The divide between rich and poor grows

The rich are getting richer, the poor are getting poorer, and the middle class is getting screwed. Daniel Hoffman

states that the underclass (undeserving poor) now makes up 10% of the US population Full Story   This is shocking considering that the US is supposed to be a first world country. If so many people are hurting why are we fighting wars we cannot afford, policing the world and donating money to nations who do not deserve it.

The following data suggests that the situation is only going to get worse. This is by no means a comprehensive list.

The unemployment rate is officially 9.9%, but everyone knows this figure is just pure crap. The actual rate is probably in the 18%-20% ranges. Some parts of the country have rates more than 25%

The foreclosure factor;  home sales might be improving, most of the improvements are a direct result of the 8,000 credit the government offered first time home buyers.    In 2009 roughly   3 million homes were foreclosed, and www.Realtytrac.com   states that the number could increase by as much as 3.5 million in 2010.  If we add in strategic foreclosures, the outlook is probably worse.

Why you should not be Worried about A stock Market Crash might be an article that you might find interesting too.

Number of Americans on Food Stamps Soaring 

According to Reuters, roughly 40 million Americans are on food stamps, further highlighting the fact that the divide between wealthy and poor grows, and there seems to be no end in sight.

Nearly 40 million Americans received food stamps — the latest in an ever-higher string of record enrolment that dates from December 2008 and the U.S. recession, according to a government update. Full Story

The Dept of Agriculture states that 1 in 8 Americans may not be able to eat without government assistance.  Let this figure sink in, we are not talking about some third world country, we are talking about the US.    unemployed is a clear sign that things are a lot worse than they are being made to look.

Let’s also consider the fact that some jobs are never coming back. We covered this recently in the following article High unemployment levels  here to stay 

Dollar Tree, Wal-Mart, Sam’s Club and other large warehouse clubs are all booming; a sign that times are getting tough.  Again, another confirmation that the divide between wealthy and poor grows.

According to the most recent census, about 35 million Americans live in poverty

Catherine Rampell provides some great info on this topic

Stock Market Crashes opportunties for the Rich to Rob the Middle Class

More evidence that the divide between wealthy and poor grows. In December 2008, 22.9 percent of the unemployed had been out of work for at least 27 weeks. A year later, that portion rose to 39.8 percent. That translates to having about 4 percent of the total civilian work force categorised as long-term unemployed.

Chart illustrates how many weeks the average jobless person has been jobless for:

Market never recouped from the Stock Market crash of 2008-unemployment still high

The average person who was unemployed in December had been out of work for 29.1 weeks. By contrast, when the recession began two years earlier, the average unemployed person had been out of work for 16.5 weeks. Full Story

Conclusion

The divide between rich and poor grows; the underclass or the undeserving poor are growing as a class, and many of those that are being pushed into this group are individuals who formerly belonged to the middle class.  Given that unemployment is going to remain high for awhile, it appears that this trend will continue for some time.    In many cases, this could have been avoided if these individuals had chosen to live 1-2 standards below their means and put the money they saved into safe investments. For example high dividend yielding stocks or invested some of this money in bullion, high-quality technology, commodities based stocks, etc.   Instead many of these individuals chose to live a lifestyle that was several levels above what they could afford, and now sadly they are paying the price for their lack of foresight. However, it would be wrong to lump everyone into this category.

[maxbutton id=”1″]

Other interesting Articles

High unemployment levels here to stay as some jobs are never coming back (May 14)

World’s 1st Gold ATM; is this a sign of Top? (May 13)

Euro; the worst is yet to come (May 12)

Strategic mortgage defaults the next time bomb (May 11)

Health overhaul could cost 115 billion more (May 10)

Euro shock and awe package more like Shock and shake (May 10)

The necessity of losing and why it makes sense and cents (May 7)

The dangers of Quant Trading models; Dow’s 1000 point drop a prime example (May 7)