America screwed up.
Liz Sonders of Schwab was just on TV and said that this government only knows how to move money from column A to column B…. take from some and give to others. Tax some and spend on others. This administration does not know how to increase tax revenues by increasing the growth of the economy. The real growth to the economy is less than 1%. That cannot sustain the new people who enter the job market each month …. 175,000 or close to 2 million per year. Job growth for the last 4 years was 5 million while 8 million new people entered the job market. That was 3 million too few jobs created just to keep pace.
The government cannot increase taxes or cut spending to cure the deficit. It must create a better economy to create more tax revenues while it cuts spending.
The DOW was 13,300 at the time of the Nov 6 election. 10 year treasury notes provided a 1.5% interest rate. 49 million people were classified as in poverty (16% of America). 47 million were on food stamps. And the unemployment rate was 7.9%.
Today, the labor department reported that 439,000 new applicants filed for unemployment in just the last week. That is a jump of almost 78.000 from the week before it. The previous week was also adjusted upwards from 355,000 to 372,000. That number needs to be below 300,000 to actually lower the unemployment rate. While the White House says the jump is because of huricane Sandy, inspection shows that the jump was because of adjustments to the previous numbers (the 7.8% unemployment rate in September was a lie) and because of increased unemployment across America. The unemployment filings in New York after Sandy actually decreased. Sandy did not affect jobs in NY. Instead, thousands in the auto industry, manufacturing, and construction were suddenly counted as laid off in Ohio and Pennsylvania and many other states right after the election.
As said by me a month ago, the unemployment rate is higher than what the Labor Department is recording. Interest rates were being held abnormally low to help Obama for the election. And interest payments on debt will increase deficits and debt no matter what the USA tries to do.
The USA is in a recession. Western Europe is in a recession. Japan is in a recession. All countries that had low birth rates for the last 20 years are in recessions. Obama is blaming it on hurricane Sandy. He still takes no responsibility. FEMA is worse now than it was with Katrina. Benghazi is a mystery about why the White House did not deploy help to the embassy and why it lied about a spontaneous riot. And the media hid all of this from America for the 2 weeks before the election to help Obama.
Since the election, the prices in the stock market have fallen 6%. That means that 6% of the money supply has been removed from the economy, so the Fed is considering implementing QE4 which will add more to the deficit, more to debt, and deflate the dollar more. That will be more of the same as per the last 4 years.
Interest rates were kept too abnormally low. People who live on the interest from their savings are being killed. Their savings are being eaten away because of the low interest rates.
One year from this election, on Nov 6, 2013, look hard at the numbers:
1. interest rates will be higher.
2. therefore, housing sales will be lower.
3. and stock prices will be lower.
4. the unemployment rate will be higher.
5. GDP growth will be less than the 4% needed to recover from this recession.
6. Home values will be lower.
7. The deficit and debt will be higher.
8. Average income per household after taxes will be less.
9. Total taxes per household (local, state, and federal) will have increased.
10. Healthcare costs and insurance will have increased.
11. Closures of small businesses will again outnumber the new ones that are opened just as they have for the last 4 years.
12. More people will be in poverty and on food stamps.
America screwed up in the 2012 election. Hold on to your money.
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