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Economy Plummet In 3,2,1…

In case you were wondering when the brand new economic failure would settle in… well, wonder no more! The most recent reports show that it has already begun since January. So, to all those thinking all the “fuss” about a new financial crisis in 2013 is just fear mongering… here`s some bad news: the FACTS prove not only that it`s going to happen this year…. but that it`s already happening and it`s only getting worse.

Unfortunately, these people don`t read this site unless it`s by accidents. I know the MFSP community is made of concerned Americans, who are very aware of the realities of our times and try their best to protect their families against the looming crisis. On the other hand, most Americans are completely ignorant to these events and here`s the best example of their ignorance:

U.S. Incomes Fall

source: online.wsj.com

A decline in incomes was expected in January, but the estimated numbers were wrong. According to WSJ, personal incomes dropped 3.6% in January, as the Commerce Department said Friday. However, economists surveyed by Dow Jones Newswires expected a 2.5% decline. This marks the most dramatic decline since January 1993.

Now, what`s troubling is not the income plummet itself. The fact that numbers are bigger than expected is not all that surprising. In December, the monthly income was unusually high, because companies preferred to pay out early dividends to avoid 2013 upcoming tax hikes. A lot of $billion companies, such as Wal-Mart, Oracle, and Costco Wholesale Corp chose to pay dividends to their shareholders at the end of 2012 and not wait until 2013 and pay more on taxes. Therefore, when you compare January 2013 to December 2012, it`s absolutely natural for the numbers to be bigger than estimated. So the problem doesn`t necessarily lie here, but in what`s to happen in the next three to four months. And by that, I`m referring mainly to consumer behaviour.

Consumer behaviour

source: rt.com

What did Americans do when a chunk of their paychecks suddenly vanished? “Households responded to this hit to income by reducing their savings, rather than by reducing their purchases, Paul Dales of Capital Economics said in a written analysis of the report.” (www.csmonitor.com)

In January, the spending rate rose 0.2%, while the personal-savings rate dropped to 2.4% from 6.4% in December. That`s the lowest rate since November 2007. I don`t what you think of this, but I think this is completely irresponsible, especially since…

Inflation is soaring!

Inflation

source: telegraph.co.uk

You don`t need to be an economists to see how obvious it is. Prices are the best indicator and judging by the amount we spend just on groceries or on gas, inflation feels as real as it gets. But people don`t seem to learn their lesson. Remember 2008, when the crisis was just about to burst, and Americans were spending much more than they actually HAD? You`d think the crisis taught them to cherish saving more than irrational spending…

Well, here we are in 2013 and, after a so-called “slow, yet steady economic growth”, as our government lies in official numbers, Americans have easily adopted their old bad habits again. Even now, barely half of the population has more money in their savings account then they owe in credit card debt. (rt.com)

And you know what`s worse? The government thinks it`s a good sign. Consumer spending accounts for ⅔ of the U.S. economy, so let people shop like crazy and get the economy back on its feet! But what happens when they don`t spend their OWN money? What happens when their savings get lower (like it`s already started to), while their debt gets higher? It`s the same vicious circle that got us into the 2008 crisis in the first place. So, for God`s sake, for once in your lives, learn something from past mistakes (especially since they`re so recent!) and stop trying to push the economy forward in a toxic manner.

 

 By Alec Deacon

 

2 Responses to Economy Plummet In 3,2,1…

  • Got your site URL from Steve Quayle. Had never been nor read here before...like what I read! Yep! we're heading STRAIGHT for the REAL CLIFF...bunch of lemmings! Now, think on this:

    #1] AUSTERITY is the ONLY LEGITIMATE method of cutting the spending spree we've been on for 50+ yrs.

    #2] Legitimate concern for the good of all, would demand that the "cutting" be done in such a manner as to maintain a National ability to "help the NEEDY"...and would, therefore, be focused on cutting out Government waste - [contracts, Military, boroughcrats, Politicians's "kickbacks", international bribery payoffs, etc.).

    #3]Illegitimate ("Pollitized") concern, will refuse to cut the "entitlements", but massively cut the Military, innovations funding, and infrastructure expenditures.

    As, (I'm SURE) you realize, this present regime -- OOPS! I mean dictatorship -- OOPS! I MEANT to say "Socialist Corporation", intends to push, shove, intimidate, threaten, and incarcerate, until the G.P. are so cowered that, they'll simply whimper "yes'sa mars! Yes'sa!" at what ever "they" dictate...BUT!

    Then...there's that pesky 3% that remember Concord! BUT!

    That's another angle that this ("B.O., da stink's uh D.C.") is willingly (hoping) to be able to play, because, with a strong enough "push back", that will give "da stink'a" "plausible deniability" to declare "M.L." AND!

    THAT will stimulate a National "push back" from our 5 ethnic groupings: #1] blacks {esply. "The Nation of Islam" (the best trained, equipped, and prepared Militia in America), #2] the Muslims, (the 2nd best), #3] the Asians, #4] the Latinos, (primarily illegals), and #5] the Whites.

    And, (if you give THAT scenario some prayer-filled thought), you MIGHT realize why Yugoslavia's meltdown (1990's) was SOOOO significant to the present methodologies being applied here and now.

    And, (if you're familiar enough with THAT scenario), then you know what B.O.'s stink'in agenda is -- utter destitution of the UNITED States, into the DISSOLVED States of America! And, if you know THIS...you KNOW what to prepare for!

    May the Lord bless you, and keep you, (and yours), and make HIS face to shine upon you!

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  • I agree Alec that this is what got us into this position 5 years ago. People spending money they didn't have nor could afford. On top of it they were buying homes for amounts that were way above their true market value and when everything collapsed they were stuck paying high mortgages they could no longer afford because so many lost their high paying jobs.

    I guess it never amazes me anymore that people do not learn from their mistakes. We just keep right on spending money we don't have because we think things are better for a moment. I know that consumer spending is an important of our economy, but we have to learn to be smarter about our expenditures. Maybe our government should learn from overspending too.

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