"In a recent article for The Telegraph, Ambrose Evans-Pritchard set out some of the statistics that show that the U.S. economy is in really, really bad shape right now....
The US workforce has shrunk by a 1m over the past two months as discouraged jobless give up the hunt. Retail sales have fallen for the past two months. New homes sales crashed to 300,000 in May after tax credits ran out, the lowest since records began in 1963. Mortgage applications have fallen by 42pc to 13-year low since April. Paul Dales at Capital Economics said the "shadow inventory" of unsold properties has risen to 7.8m. "The double dip in housing has begun," he said.
It seems like almost everyone is using the words "double dip" these days.
It is almost as if it was already a foregone conclusion.
But the truth is that this would have just been one long economic decline if the U.S. government (and many of the other governments around the globe) had not pumped so much "stimulus" into their economies over the past several years.
Now that governments around the world are pulling back and are beginning to implement austerity measures, the "sugar rush" of the stimulus money is wearing off and the original economic decline is resuming.
All that the trillions in "stimulus" did was to give the world economy a temporary boost and get us into a whole lot more debt.
In his recent article entitled "The U.S. Is On The Edge Of A Growing Deflationary Sinkhole", Lorimer Wilson did a really good job of detailing how all of this debt has gotten us into a complete and total mess....
Capitalism cannot function unless its constantly compounding debt is serviced and/or paid down. Today, the U.S., the world’s largest debtor, can no longer pay what it owes except by rolling its debt forward and borrowing more [in] what the late economist Hyman Minsky called ponzi-financing, financing common in the final stages of mature capital systems.
The amount of outstanding U.S. debt, according to Martin D. Weiss, www.moneyandmarkets.com, has now reached levels that can never be paid off. The United States government and its agencies have, by far,
- the largest pile-up of interest-bearing debts ($15.6 trillion),
- the largest accumulation of unsecured obligations (over $60 trillion),
- the largest yearly deficit ($1.6 trillion), and
- the greatest indebtedness to the rest of the world ($4.8 trillion).
The truth is that the United States is in the early stages of a truly historic financial implosion."
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