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Sunday, December 2, 2012

Economic Stories of Relevance in Today's World -- December 1, 2012

Government Website For Immigrants: Come To America And Take Advantage Of Our Free Stuff - End of the American - Michael - November 19th, 2012 - A website run by the federal government (““) encourages new immigrants to the United States to apply for welfare benefits.  This website is run by the Department of Homeland Security and it says that it “is the U.S. Government’s official web portal for new immigrants.”  So your tax dollars were used to build and maintain a website that teaches immigrants how to come into this country and sponge a living off of federal welfare programs paid for by your tax dollars.  What in the world is happening to us?  Yes, we will always need some legal immigration.  We are a nation of immigrants and immigration has been very good to this country.  But at a time when there are millions upon millions of American citizens out of work and at a time when we are absolutely drowning in debt, do we really need to encourage millions more immigrants to come over and take advantage of our overloaded social welfare programs? actually encourages new immigrants to apply for food stamps, Medicaid, Medicare, Social Security, Supplemental Security Income and Temporary Assistance for Needy Families.  Of course not all immigrants are eligible for all of those programs, but if an immigrant can get over to the U.S. and just get signed up for a couple of programs they can enjoy a higher standard of living doing nothing here than they can working at a low paying job back home.  We have created a perverse system of incentives that makes it very attractive to people all over the world to do whatever they can to hitch a ride on “the gravy train” and take advantage of all of the benefits that they possibly can.  And once immigrants get on welfare, many of them never leave.  For example, one study discovered that 43 percent of all immigrants who have been in the United States for at least 20 years were still on welfare.  We can’t even take care of our own citizens, and yet more immigrants hop on to the safety net every single day.  At some point the safety net is going to break and then we won’t even be able to take care of the struggling Americans that really need it.                  When I first discovered I was absolutely floored.  In particular, the page that encourages immigrants to apply for federal welfare benefits is just shocking.  Here is the opening paragraph

MISS: PERSONAL SPENDING FALLS - Business Insider - Sam Ro - November 30, 2012 - Personal income was unchanged in October. Economists were looking for a 0.2 percent gain. Spending unexpectedly fell 0.2 percent. Economists were expecting this to be unchanged. Right away, people are blaming Hurricane Sandy. Presumably, economists took Sanday into account. So, the explanation is that the impact of Sandy has been worse than expected.In yesterday's Q3 GDP report, personal consumption was revised down sharply. Hopefully, today's disappointing spending report, which reflects the first month of Q4, isn't the beginning of a trend in the U.S. consumer.

Retailers’ November miss raises holiday stake - Sandy’s wrath trumps record Black Friday weekend sales - Market Watch - Andrea Cheng - November 29, 2012 - Despite record Black Friday weekend sales and some pockets of strength, superstorm Sandy ultimately cast a longer shadow, leading retailers from Macy’s Inc. and Nordstrom Inc. to Gap Inc. and Target Corp. to miss expectations for November.                    With eight of the top 10 selling days of the holiday season not coming until December, the November miss means retailers, which have controlled inventory better in hope of reducing profit-eroding discounts, may have to step up their game come December, analysts said.           “We are concerned that promotional intensity will pick up in December as retailers fight aggressively to make up lost sales,” said Citigroup analyst Deborah Weinswig. 

Feud at The Fed: "Horrific Consequences" for Unlimited Easing
- Activist Post - November 28, 2012 - The Fed's plan to purchase $40 billion in mortgage-backed securities and $45 billion in long-term US Treasuries every month for the foreseeable future is now creating internal feuds.                       The Federal Reserve's latest round of quantitative easing has no timetable to end or any measurable goal. Yesterday, the Dallas Fed President said this policy without limits would result in "horrific consequences".                Reuters is reporting today on these "deep divisions" at the Federal Reserve:                  No one at the privately-owned US central bank has been able to explain how spending $85 billion per month ($1.02 trillion for 2013) on these purchases will reduce unemployment and maintain dollar price stability, the only tasks the Fed is charged with.                       In fact, they don't even pretend to be achieving these duties anymore. Both Evans and Fisher agreed that fixing unemployment is more important than controlling high inflation. Therefore, they're willing to trade one for the other.

Is The Economy Already Beginning To Stumble Again? - Seeking Alpha - Sy Harding - November 30, 2012 - This week's economic reports are not encouraging.        Those reports include that the Chicago Fed's National Activity Index (CFNAI) unexpectedly fell sharply in October, its three-month moving average plunging very close to the level the Fed says it considers "an increasing likelihood that a recession has begun." Durable Goods Orders were reported to have been flat in October after an encouraging increase in September. New home sales fell 0.3% in October, and more discouraging, the previously reported sales for September were revised down by a big 5.1%. The Fed's monthly "beige book" report was that all 12 national Federal Reserve districts unexpectedly reported slowing manufacturing activity this month.                         And on Friday, the Commerce Department reported that Consumer Spending fell 0.2% in October, after rising 0.8% in September. It was the first decline in five months. Not a good omen, considering that consumer spending accounts for roughly 70% of the U.S. economy.                          Hopefully, analysts are right in saying the reports for October were significantly impacted by the effect of Hurricane Sandy, which stormed ashore in the Northeast in the final days of October. But the Commerce Department says it can't determine that, and October was pretty much over when Sandy came ashore on October 29. Its main impact will probably show up in November numbers.

Hungry For The Holidays: 20 Facts About Hunger In America That Will Blow Your Mind - The Economic Collapse Blog - Michael - November 26th, 2012 - All over America there are millions of people that will be missing meals and going hungry this holiday season.  Even as much of the country indulges in the yearly ritual of unbridled consumerism that we refer to as "the holiday season", more families in the United States than ever before will be dealing with not having enough food to eat.  Food stamp use is at an all-time high.  Demand at food banks is at an all-time high.  They keep telling us that we are in an "economic recovery" and yet the middle class continues to shrink and the number of Americans living in poverty just continues to grow.  We are witnessing unprecedented hunger in America, and this especially seems tragic during the holidays.  Much of the country is partying as if the good times will never stop, but families that are living from one meal to the next are facing a completely different reality.  How do you tell your children that there isn't going to be any food to eat for dinner?  How do you explain to them that other families have plenty to eat but you don't?  Sadly, many food banks are overstretched at this point.  All over the nation, food pantries have actually had to turn people away because of the overwhelming demand.  And more Americans used food stamps to buy their Thanksgiving dinners this year than ever before.  This is a problem that is not going away any time soon, and when the next major economic downturn strikes the problem of hunger in America is going to get even worse.                   For many Americans, hunger has become a way of life.  Families that don't have enough money are often faced with some absolutely heartbreaking choices.  Just check out what one Maine official that works with the Emergency Food Assistance Program recently had to say...

The 12 biggest companies paying workers the least
- Wall St. 24/ through USA Today - Execs making millions, employees making minimum wage.

ObamaCare Fallout: Walmart Ends Insurance For New Hires
- Breitbart - John Nolte - December 1, 2012 - By making the fine for not providing health care cheaper than providing health care, this was always the plan: to encourage employers to send us to the government.                  Remember how Obama's big ObamaCare sell was, "You get to keep the health insurance you have"?                  It was all a lie, a hustle, a con, a ruse…              But now it's the law of the land … forever.

Study: American Households Hit 43-Year Low In Net Worth - CBS News DC - November 30, 2012 - The median net worth of American households has dropped to a 43-year low as the lower and middle classes appear poorer and less stable than they have been since 1969.                  According to a recent study by New York University economics professor Edward N. Wolff, median net worth is at the decades-low figure of $57,000 (in 2010 dollars). And as the numbers in his study reflect, the situation only appears worse when all the statistics are taken as a whole.              According to Wolff, between 1983 and 2010, the percentage of households with less than $10,000 in assets (using constant 1995 dollars) rose from 29.7 percent to 37.1 percent. The “less than $10,000″ figure includes the numerous households that have no assets at all, or “negative assets,” which is otherwise known as “debt.”                       Over that same period of time, the wealthiest 1 percent of American households increased their average wealth by 71 percent.                         As noted by Daily Finance, from 1983 to 2010 the share of total wealth held by the richest 10 percent of American households increased from 68.2 percent to 76.7 percent. Meanwhile, all the rest of Americans lost financial ground.                An August Pew Research Center study found that many in the middle-class are divided on how they believe his gap widened.                      Fully 85 percent of self-described middle-class adults say it is more difficult now than it was a decade ago for middle-class people to maintain their standard of living. Of those who feel this way, 62 percent say “a lot” of the blame lies with Congress, while 54 percent say the same about banks and financial institutions, 47 percent about large corporations, 44 percent about the Bush administration, 39 percent about foreign competition and 34 percent about the Obama administration.                        Just 8 percent put “a lot” of blame on the middle class itself.                   “This downbeat take on their economic situation comes at the end of a decade in which, for the first time since the end of World War II, mean family incomes declined for Americans in all income tiers,” the Pew Report stated. “But the middle-income tier—defined in this Pew Research analysis as all adults whose annual household income is two-thirds to double the national median —is the only one that also shrunk in size, a trend that has continued over the past four decades.”                      Wolff’s focus on total wealth not only measures how much money a household brings in, but also the amount it accumulates. This latter number is very significant — economically secure households are generally more comfortable spending their disposable income, and are less likely to become a drag on the social safety net.

John Williams: 
Current President and Congress is the One That Will See Hyperinflation - November 29, 2012

Part 1

Part 2

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