You can choose to believe the barrage of spun government and media reports that purport to indicate that things are bottoming and that there are "green shoots" or you can do your own homework. If you choose the former you'll feel better temporarily because everyone naturally wishes for the best. You'll also get blind sided along with most everyone else. Optimism and pessimism have no place in this. Both are equal obstacles to discovering the truth and drawing conclusions as to what's to come. There has never been a more concerted effort to confuse and misrepresent. Maintaining social order and getting "Boobus Americanus" (a term coined by Doug Casey) to believe that we're merely in a severe recession that is ending is the federal government's objective. There is more to be ascertained from your own experiences and anecdotal information than the official spin. Amidst all the green shoot talk, even Americans with good credit are having their credit card lines frozen or reduced. This is unprecedented. In a country with a debt-choked, credit dependent population, ask yourself how this squares with the idea of consumer spending picking up.
For the first time in decades senior citizens will not be receiving any cost-of-living adjustments to their social security checks to which they are legally entitled. According to shadowstats.com, the true CPI inflated at 5.45% for the 12 month period July 2008 through July 2009. The BLS however officially computes the inflation rate at a negative 2.11% for the same period so, there will be no adjustment in social security payments. As the chart below shows, social security recipients have been victims of this federal larceny since the Reagan administration, although under the Clinton administration it was taken to another level entirely. The CPI index has been thoroughly corrupted and bears no resemblance to the real inflation rate. The cumulative effects of these annual understatements is that recipients' social security payments have been regularly decreasing in real, inflation adjusted terms, rather than maintaining their purchasing power as promised, notwithstanding the COLA adjustments which recipients have received.
Click here: The Associated Press: Millions face shrinking Social Security payments
Howard Davidowitz is one of the very few Wall Street analysts worth listening to.
Click here: “In the Tank Forever”: U.S. Consumers, Retailers in a : Tech Ticker, Yahoo! Finance
As I've been saying, the Fed has lost it's mojo...Click here: There's no will to fight inflation - MSN Money
A government official has made news by speaking the truth -- and a Fed governor no less! I can only imagine the admonishment he subsequently received from his brethren for straying off the reservation.
Click here: Real US unemployment rate at 16 pct: Fed official
[Note: the unemployment rate is actually even higher -- currently 20.6% according to shadowstats.com].
It is hard to contemplate what has occurred in this country in such a short period of time. On this ranking of the world's 50 safest banks, only five are in the U.S. and the first U.S. bank doesn't appear on the list until no. 32. Click here: Global Finance Magazine - WORLD'S 50 SAFEST BANKS 2009
The United States abused the privilege of possessing the world's reserve currency and we are entering an era that will no longer be dollar-centric. The dollar is now a currency to be dis-hoarded, rather than accumulated by nations with savings and trade surpluses. If not for it's possession of the world's reserve currency, living standards in the United States would have dropped long ago when the U.S. ceased being an exporting nation and government and household debt levels were still reasonable. Using highly regarded currency, the U.S. was able to export paper (dollars) to Asia -- principally China -- and swap it for imported merchandise of all sorts. Asia would then turn around and invest these dollars by purchasing interest bearing Treasury and government debt. This arrangement sustained a consumer economy in the U.S. without the United States producing any net exports of real goods. So long as our Asian bankers were satisfied with the arrangement, life appeared to be grand here in the U.S. But Asia no longer likes this arrangement. They now view the dollar as a problem. The trend accelerated with the events of the past two years but the Fed's announcement of it's "Quantitative Easing" policy has pushed it off a cliff. This means contracting foreign demand for U.S. dollar denominated debt, higher interest rates, a lower dollar, higher costs of imported goods, and the loss of financing for America's profligate and unsustainable debt driven consumption.
It also means among other things, a much higher gold price. No currency on earth has performed as well as gold over the past decade. That trend is going to accelerate and the profit potential for the precious metals and gold and silver equities is as spectacular today as their performance has been over the past number of years.
Patience and steadfastness is the key.
Jeff