The US economy is made up of 70 percent retail and service businesses. This means that all of the other parts of the system depend on continued growth in domestic consumption. With only 8% of jobs in manufacturing and 10% in agriculture, our country is too dependent on spending habits and, in the end, consumer debt.
If we made and sold more goods here at home and sent more to other countries, stagflation might not be as big of a problem. But as things stand right now, the stability of the whole system depends on people’s trust in the economy and their willingness to keep spending in the hopes that things will get back to normal soon.
To figure out when our system will break, we need to keep track of the average consumer’s health and worries about the future. Sad to say, our economy goes down as soon as people stop spending and start saving. That’s how the system is meant to work.
This month, when the news came out that retail sales had “increased” by 1%, the mainstream media was quick to report on it. Of course, what they don’t say is that the official rate of inflation is 9.1%, but the REAL rate is closer to 17%. Everything costs a lot more than it did a year ago, so of course, retail sales are going up.
But if we look at these numbers more closely, we should hear some alarm bells. Why did retail sales only go up 1% when the government says inflation is at 9%? The number of sales should be much higher, but it isn’t. When price inflation is at its highest level in 40 years and retail sales go up by only 1%, this is a sign of a sales crash, not a growth.
What about how people feel? Well, it has dropped 37% since last year, which shows that people are losing faith in the economy quickly and are more likely to cut their spending to protect themselves from possible financial shocks in the coming months.
What is causing this drop in customers? There are many reasons.
First, the more than $6 trillion in plandemic stimulus funds from 2020 have been spent and are no longer in people’s pockets. It’s gone, and so is the huge jump in economic activity that it caused. We are finally starting to feel the effects that are bound to happen when helicopter money stops.
This year, about 43% of all Americans are getting into debt. About 23% say they have no savings at all, while 28% say they have enough to cover expenses for three months if they lose their jobs.
Half of Americans said that inflation was the main reason they were having trouble with money, and 64% of them said they were “financially unhealthy.” In the short term, what does this mean? Far less spending.
The highest amount of credit card debt in the US was $856 billion in the fourth quarter of 2021. Since then, it has been going down, and in the first quarter of 2022, it will be $841 billion. Again, you might think that credit spending would keep going up as inflation goes up, but this is not the case.
This is another sign that people have spent all they can and can’t spend like they did a year ago.
Unemployment dropped to shockingly low levels as stores hired as many people as they could to keep up with the rush of spending caused by plandemic checks and PPP loans. As with most changes in the economy, it takes time for the system to figure out that the money is gone. This is leading up to a large number of layoffs in the last three months of 2022.
Along with a falling GDP, the last technical sign of stagflation is a rise in job losses and prices at the same time. With GDP well on its way down, the recession is pretty much here, but the Biden Administration keeps pointing to the high employment rate as proof that the economy is doing fine.
They always ignore other important things, like GDP, rising prices, rising debt, and the loss of spending power among consumers. So many jobs will be lost this year and through 2023 that it hurts to think about it, but the White House acts like it doesn’t know.
Even if Joe Biden isn’t aware of what’s going on (because his mind keeps getting worse as dementia progresses), his economic advisers are. They know exactly what is going to happen, but they don’t want the American people to know. Some people might think this is the same as treason, but we can talk about that another time.
In 2023, there will, of course, be a big drop in the economy, and people should hopefully be getting ready for what will happen.
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