While I’m usually an upbeat and positive person, I’ll warn you that today’s issue is gloomy.
Buried in yesterday’s news stories, which were dominated by a possible default by Greece on its debt, was a report from the U.S. Census Bureau on data that most Americans will find depressing.
The data are downright scary…
According to the Census Bureau, in 2010 the number of Americans living in poverty hit a 52-year high. In fact, 15.1% of the population lives in poverty—46.2 million people.
The 2010 median household income in the United States dropped 2.3% to $49,445. About 49.9 million people in America lack health insurance.
If these numbers don’t sound like a depression, I don’t what does. The President wants to create jobs with his new $477-billion America Jobs Bill. He hasn’t told us exactly how he’s going to pay for it, but we know it will likely mean higher taxes. On the other side of the coin, the Republican-dominated Congress does not want to raise taxes and they say the government has already spent billions to spur the economy and it hasn’t worked.
It’s a story that is becoming too familiar: American politicians debate and debate, while Americans sink more and more into poverty.
In Israel, on September 3, 2011, over 400,000 Israelis took to the streets in a social protest against the government’s lack of progress on the economy… and jobs. I’m truly surprised these protests haven’t started in America yet—but they may not be far away from happening here, too.
Michael’s Personal Notes:
Another month, another $134.2 billion…
Yes, last month, the federal government had a shortfall of $134.2 billion between what it takes in and what it spends. So far in its current fiscal year, the U.S. deficit is $1.23 trillion, and the government has one more month in its current fiscal year (ends September 30).
The world seems to be focused on the debt issues in Europe. Dear reader, they pale in comparison to America’s debt crisis. The government pegs the official national debt at about $14.5 trillion. Including off-balance sheet items like Social Security and Medicare, the number is around $211 trillion (Source: Laurence Kotlikoff, Boston University).
Our debt crisis is real; it’s out of control. Those U.S. Treasuries—why risk buying them? U.S. dollars—how can they not keep falling in value against other world currencies? Precious metals and gold prices—how can they not rise further?
Where the Market Stands: Where it’s Headed:
The Dow Jones Industrial Average opens this morning down four percent for 2011. I continue to believe that we are in a bear market rally in stocks that started on March 9, 2009. While the rally is long in the tooth and tired, my opinion is that this bear market rally has further upside potential.
What He Said:
The year “2000 was a turning point of consumer confidence in high tech stocks. 2006 will be remembered as the turning point of consumer confidence in the housing market. That means more for-sale signs going up, longer time periods to sell homes, bloated for-sale inventory and eventually lower prices for homes. But this time, the turnaround in consumer confidence will have a bigger impact on the economy. Hold onto your seats, this is going to be a nail biter.” Michael Lombardi in PROFIT CONFIDENTIAL, August 24, 2006. Michael started talking about and predicting the financial catastrophe we began experiencing in 2008 long before anyone else.