Economic Stories of Relevance in Today's World -- June 1, 2014

U.S. Gasoline Consumption Plummets By Nearly 75% - Bullion Bulls Canada - Jeff Nielson - May 25, 2014 - Regular readers are familiar with my narratives on the U.S. Greater Depression, and (in particular) some of the government’s own charts which depict this economic meltdown most vividly. The collapse in the “civilian participation rate” (the number of people working in the economy) and the “velocity of money” (the heartbeat of the economy) indicate an economy which is not merely in decline, but rather is being sucked downward in a terminal (and accelerating) death-spiral.                        However, even that previously published data, and the grim analyses which accompanied it could not prepare me for the horror story contained in data passed along by an alert reader. U.S. “gasoline consumption” – as measured by the U.S. Energy Information Administration (EIA) itself – has plummeted by nearly 75%, from its all-time peak in July of 1998. A near-75% collapse in U.S. gasoline consumption has occurred in little more than 15 years.                      Before getting into an analysis of the repercussions of this data, however, it’s necessary to properly qualify the data. Obviously, even in the most-nightmarish economic Armageddon, a (relatively short-term) 75% collapse in gasoline consumption is simply not possible. Unless we were dealing with a nation whose economy had been suddenly ripped apart by civil war, or some small nation devastated by a massive earthquake or tsunami; it’s simply not possible for any economy to just disintegrate that rapidly, without there being some ultra-powerful exogenous force also at work.                         So how can this raw data, produced by the government itself, be explained? To begin with; the government chooses to measure U.S. gasoline consumption in a very odd manner: by measuring the amount of gasoline entering the domestic supply-chain rather than by measuring actual consumption at the other end of the supply-chain – i.e. “at the pump”...

Hound's Note : Check out the chart below from the article above, which goes to the point of what Mr. Nielson is trying to convey. It relates to the Velocity of Money Circulation in the United States and shows that we are in a full on Depression. Followers of this site will know that is what I have been calling it for years. We had a first leg down in 2008. The economy peaked in the middle of 2006 and began to turn down in 2007 until it fell off the cliff in 2008. Stimulus was put into the economy with the arrival of the Obama administration. You can see a slight uptick in the economy in the second quarter of 2009 that lasted until the fourth quarter of 2010. Since 2011 we have been down every quarter (to historic lows) in the measure of the velocity of money, which is the circulation of U.S. dollars... 

(Wikipedia) is the frequency at which one unit of currency is used to purchase domestically-produced goods and services within a given time period.^[3] In other words, it is the number of times one dollar is spent to buy goods and services per unit of time.^[3] If the velocity of money is increasing, then more transactions are occurring between individuals in an economy.^[3] Although once thought to be constant,^{[citation needed]} it is now understood that the velocity of money changes over time and is influenced by a variety of factors.^[4]                        When the period is understood, the velocity may be presented as a pure number; otherwise it should be given as a pure number divided by time.^{[citation needed]}




Analysts predict most employer-provided insurance will disappear as ObamaCare takes hold - Fox News - Jim Angle - May 31, 2014 - Across the political spectrum, analysts now say that 80 to 90 percent of employer-provided insurance, the mainstay of American health coverage for decades, will disappear as ObamaCare takes hold.                 The research firm S&P IQ predicts less than 10 percent of those who get insurance at work will still get it there ten years from now....                  
Former Congressional Budget Office Director Doug Holtz-Eakin said,"you could give them more, so after taxes they end up with the same and the math says you still come out ahead. And so employers have been doing this math ever since the law passed. I expect for them to get to the exits pretty quickly."                         Employers would also get rid of the headache and uncertainty of providing insurance, he noted. "Most people are not in the health insurance business they are manufacturers, exporters, they are service providers. And they would rather stick to that than worry about health insurance."                         So employers can offer more pay to workers, pay the fine and still come out ahead, while workers would still get health care.                  The only losers in all this would be the federal deficit and taxpayers, since many workers going into ObamaCare would qualify for subsidies, driving up the cost.


The Middle Class Will Die Within 30 Years Leaving "A Wealthy Elite & Sprawling Proletariat" - Zero Hedge - Tyler Durden - May 28, 2014 - If we continue down this path of ignorance, we will be left with a "tiny elite and a huge sprawling proletariat" who have no chance of "clawing their way out of a hand-to-mouth existence," is the loud and clear message from UK government advisor David Boyle. As The Telegraph reports, Boyle cautions, "we won't own our own homes, we won't be able to afford it," adding that "we cheerled the rise of property prices not realising that it would destroy, if not our own lives, but the lives of our children." His conclusion, "the middle classes have to wake up to prevent it happening and to create a political movement that will do it."

Authored by Sarah Knapton via The Telegraph,
The middle classes will die out within 30 years because of rising property prices, which will rob today's children of their dreams, an economist has warned.                  David Boyle, a government advisor and fellow of the New Economics Foundation think-tank, said that youngsters can no longer expect the same level of affluence as their parents.                      Speaking at the Hay Festival he warned that Britain will be left with a ‘tiny elite and a huge sprawling proletariat’ who have no chance of ‘clawing their way out of a hand-to-mouth existence.’                    He predicted that the average house price will reach £1.2 million by 2045, putting a home beyond the range of most people as wages fail to keep up with huge increases.                     Boyle said that the traditional middle classes will need three or four jobs just to be able to pay soaring rents. People will no longer have the space or time to pursue cultural interested.                      And he blamed bankers bonuses for artificially inflating the property market.

Few workers confident of easy retirement - USA Today - Nanci Hellmich - May 30, 2014 - ... Only 28% of U.S. workers are "very" or "extremely" confident that they'll one day fully retire with a comfortable lifestyle; a third are "somewhat" confident.             And 19% of workers globally have high confidence levels that they'll have a comfy retirement, with the greatest percentage of people feeling that way in China (41%) and the lowest rates in France (6%) and Poland (4%), according to the survey of 16,000 workers and retirees in 15 countries in Europe, North America, South America and Asia. The survey was commissioned by the non-profit Transamerica Center for Retirement Studies and the Dutch insurance company Aegon.                 "Retirement systems vary by country, yet we all have in common an aging population and a need for people to take on more personal responsibility for long-term financial security," says Transamerica Center President Catherine Collinson. "Workers around the world face the increasing need to save, plan and self-fund a greater portion of their own retirement."...
  

GDP Report Is Far Worse Than It Looks | John Rubino

John Rubino says that no US GDP report is complete without an explanation from the Consumer Metrics Institute of how Washington is fooling us. The latest one is even scarier than usual:
There are a number of disturbing items in this report:

-- Even at first glance this is not a good report. Although the headline number itself says "stagnation," in the context of earlier reports it shows an economy in dynamic transition from lackluster growth towards outright contraction. The overall headline number is down 2.5% from the prior quarter and down 4% from the next earlier quarter. These are significant changes, with the prior quarter's trend extended and the downward slope intensifying.

-- Private commercial investment dropped substantially, led by reduced outlays for residential construction, transportation equipment and IT infrastructure.

-- The year-long 2013 cycle of inventory building has come to an end. Over an extended time period inventories are mostly a cyclical zero-sum game, with excessive growth or contraction over any period being corrected (i.e., reversed) during a subsequent period. Moving forward we should expect that inventories will continue their cyclical contraction, with negative consequences to the headline number.

This video was originally published on May 5, 2014 and re-posted with permission from http://FinancialSurvivalNetwork.com

Agenda about the City Council meeting of June 3, 2014

This Agenda is about the Hickory City Council meeting that took place on the date listed above. City council meetings are held on the first and third Tuesdays of each Month in the Council Chambers of the Julian Whitener building.

At right of this page under Main Information links is an Hickory's City Website link. If you click on that link, it takes you to our city’s website, at the left of the page you will see the Agenda's and Minutes link you need to click. This will give you a choice of PDF files to upcoming and previous meetings.

You will find historic Agenda and Minutes links. Agendas show what is on the docket for the meeting of that date. The Minutes is an actual summary of the proceedings of the meeting of that date. You can also look in the upper right hand corner of the front page of the Hickory Hound and (will soon) find the link to the past history of Hickory City Newsletters.

Here is a summary of the agenda of the meeting. There were a couple of important items that were discussed at this meeting and the details are listed further below:

Please remember that pressing Ctrl and + will magnify the text and page and pressing Ctrl and - will make the text and page smaller. This will help the readability for those with smaller screens and/or eye difficulties.

City Website has changed - Here is a link to the City of Hickory Document Center


City Council Agenda - June 3, 2014

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 The Hound's Notes:
The Budget was discussed at the last meeting. There is a 2¢ increase in the property tax rate.
Link to City Manager Berry's presentation of the proposed budget for 2014-15

The City Manager and Assistant City Manager are presenting information in what the call Citizen Briefings, below are the Power Point Presentation and two briefing that have already taken place.

Citizen Review - Power Point Presentation 
Ridgeview Citizen Review - Thoughts about the Ridgeview Citizen Review meeting
Citizens Briefing Presentation - 04/29/2014

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Invocation by Rev. Antonio Logan, Pastor Friendship Baptist Church

Consent Agenda:
A. Approval of a Resolution Supporting the Extension of North Carolina’s Historic Preservation Tax Credit Program. - The State of North Carolina currently offers tax credits for rehabilitation of historic buildings. This program offers a tax credit of up to 20 percent of rehabilitation costs of an income producing structure, which include commercial buildings and apartments. This credit can be paired with the Federal tax credit for a total tax credit of 40 percent. The State also offers a 30 percent tax credit for rehabilitation costs for non-income producing structures such as private homes. No federal tax credit is available for non-income producing structures. The State tax credits are set to sunset on December 31, 2014 if the General Assembly does not act to extend them. The Historic Preservation Commission considered the resolution at their May 27th meeting and recommends approval. Staff recommends that City Council adopt a resolution supporting the extension of North Carolina’s historic preservation tax credit program.

B. Approval to Write-off Uncollectable Accounts Totaling $280,419.79, in Accordance with North Carolina General Statutes. - North Carolina General Statutes establish all street assessments and property taxes that are over ten years old and are no longer collectable, and should be written off in conjunction with the annual audit. For the current fiscal year (FY2013-2014), there are no street assessments to be written off, but $82,153.73 in unpaid property taxes that exceeds the ten year limitation. The City of Hickory’s Accounting Division requires all other accounts that are over eighteen months in arrears be written off to comply with “Generally Accepted Accounting Principles” in order to more fairly represent financial assets of the City on the balance sheet. For the current fiscal year, this amount is $198,266.06. The Finance Division will continue to pursue collection of the debts. All eligible accounts over $50 are submitted to the North Carolina Debt Setoff Program for collection. As of May 7, 2014, the City of Hickory has collected $50,451.90 from the garnishment of North Carolina State tax refunds and North Carolina State lottery winnings during this fiscal year. Staff recommends approval to write-off uncollectable accounts for Fiscal Year
2013-2014.

C. Resolution – Cancellation of July 1, 2014 City Council Meeting. - Be it resolved by the City Council of the City of Hickory that the regularly scheduled City Council Meeting for July 1, 2014 be cancelled. (This meeting in July has traditionally been cancelled by the City Council.)

D. Approval of a Resolution to Declare Surplus Personal Property. - The City has a 2002 Freightliner JetVac Tanker Truck that is no longer of service to the City and request that this property be declared surplus by City Council. In accordance with G.S. 160A-270 for auction of personal property and local policy for surplus property valued above $30,000 the approval and declaration of surplus by Council is required before public auction of the item can be performed. In addition a ten day public notice will be published in the newspaper before the auction takes place. The preliminary estimated value of the tanker truck is $50,000.

E. Approval of a Resolution supporting an Application to the Local Government Commission for its Approval of a Financing Agreement for the Hickory Metro Convention Center Parking Deck. - The Hickory Metro Convention Center is owned by the City of Hickory, but operates under the Tourism Development Authority (TDA) board. The Convention Center is self-supported by event revenues and the hotel occupancy tax collected in Hickory and Conover. The six percent occupancy tax is collected by the City of Hickory and remitted back to the TDA to operate the Convention Center. In order for a local government in North Carolina to finance a project, approval is to be obtained from the Local Government Commission (LGC). The LGC requires City Council’s approval of a resolution prior to the LGC”s approval of the financing agreement application. Staff recommends Council approval of the resolution supporting an application to the LGC for the Hickory Metro Convention Center Parking Deck.

F. Approval of Service Agreement for Federal Legislative and Grant Services provided by Marlow and Company. - Marlow and Company staff provides support for the city of Hickory at the Federal level through grant writing and submittal assistance, organizing Congressional delegation visits in Washington, DC and assistance with issues that affect Hickory at the Federal level. Staff requests approval of the service contract for Marlow and Company for 2014-2015 in the amount of $3,750 per month for federal government consulting and grant writing services. This is the same price as the original contract five years ago.

G. Cemetery Deed Conveyance for Dale K. Cline, and wife, Brenda K. Cline. - Dale and Brenda Cline purchased four plots in Oakwood Cemetery on May 30, 1995. The Clines now desire to convey to themselves combining the four plots into two plots. They have expressed several reasons for this request. First, they have stated that they possibly want to have headstones placed on the unused portions of the plots. Second, they said they want to combine the plots due to their concern that the City will enforce Article X. Section 32.1 of the Code of Ordinances.

H. Budget Ordinance Amendment Number 25.
1. To budget a $250 Youth Council Grant from the State of North Carolina. The funds are for Youth Council activities.
2. To budget a total of $8,167 ($7,567 Rec. Special Activities and $600 Donations) in the Parks and Recreation Departmental Supplies line item. Funds are for the 2014 Senior Games Registration and Sponsorships.
3. To budget an $80 Library donation from the Sherman Alexie book signing in the Library Programming line item.
4. To budget a $46 Library donation from the John Hart book signing in the Library Programming line item.
5. To budget a $350 Library donation from the Friends of the Library for Adult Summer Reading prizes.
6. To budget $25,500 of Hickory Kiwanis Foundation Donations in the Parks and Recreation Improvement to Facilities Capital line item. The funds are for use in the construction of a new tree house for Zahra Baker All Children's Playground at Hickory Kiwanis Park.
7. To appropriate $7,470 of Insurance Claim to the Fire Department's Non-Asset Inventory line item. This claim is for damages to two SCBA packs that occurred on 5/2/14 when the two air packs were damaged during a mutual aid incident. The check was issued from Argonaut Great Central Insurance Company on 5/13/14 and deposited in Insurance Claim on 5/16/14.
8. To appropriate $46,263 of General Fund Balance to the Airport Aviation Rent line item. This transfer is to cover revenue losses at the Hickory Regional Airport due to the City's former FBO Operator being in default of their lease agreement on a hangar located at the Airport.
9. To appropriate $125,000 of Proceeds from Financing and budget in the TDA Parking Deck Project. This appropriation is for the design and GEO technical work.
10. To transfer a total of $34,000 of General Fund Contingency to the Unemployment Insurance line items in the Recycling, Fleet, Stormwater and Airport budgets. The transfer of funds is to cover a one-time insurance cost mandated by the State of North Carolina.
11. To transfer a total of $62,000 of General Fund Contingency to the Fuel line items in the Fire, Recycling and Residential Sanitation budgets. The transfer of funds is to cover fuel costs for the remainder of the fiscal year.
12. To adjust the Hotel Motel Occupancy Tax Revenue and Expenditure line items by $85,000 to reflect anticipated occupancy tax revenue.

I. Grant Project Ordinance Number 6.
1. To decrease the Windridge Bridge replacement project design line item by $152,800 of Federal ($114,600) and State ($38,200) Revenue. The Grant Project Ordinance is replaced with Capital Project Ordinance Number 7.

New Business - Public Hearings
1. Voluntary Satellite Annexation of 1218 Bugle Lane. - Mr. Jeremiah Turbeville, and wife Tanya Turbeville have submitted a petition for the voluntary satellite annexation of .479 acres of property, located at 1218 Bugle Lane. The petitioners are requesting annexation in order to connect to the City of Hickory’s sanitary sewer system. This public hearing was advertised on May 24, 2014 in a newspaper having general circulation in the Hickory area.

2. City Manager’s FY2014-2015 Recommended Annual Budget. - Pursuant to NC General Statutes §159-12(b), a public hearing shall be held before adopting the budget ordinance. This public hearing was advertised in a newspaper having general circulation in the Hickory area on May 24, 2014. Copies of the budget ordinance were filed for public inspection in the Office of the City Clerk, Patrick Beaver Memorial Library and Ridgeview Library. The recommended budget is also posted on the City’s web page, www.hickorync.gov. Pursuant to NC General Statutes §159-13(a), the City Council is required to adopt a balanced budget before July 1, making the appropriations and levying
taxes for the budget year. The City Manager recommends adoption of the attached budget ordinance for Fiscal Year 2014-2015.

New Business - Departmental Reports:
1. Mack McLeod, Presentation of Zahra’s Tree House. - As part of the City’s fully-accessible Zahra Baker All Children’s Playground, a tree house was conceived to add tremendous value to the facility at Kiwanis Park. With the input from both local businesses and civic club, plans for a tree house structure were developed for the park. The proposed tree house will provide opportunities otherwise missed for children at the park. This particular project is a permanent upgrade for the facility and supports a long-term usage of the facility. All funds necessary to construct the tree house are private donations that have been deposited into a City of Hickory donations account. Staff recommends that Hickory Construction Company be awarded a sum of $33,000 for construction of a new tree house structure at Hickory Kiwanis Park as a complete turnkey project to include all permits and inspections.

2. Vacant Building Revitalization and Demolition Grant for Holbrook Landscaping for Property Located at 2146 Highland Avenue. - Holbrook Landscaping, LLC has applied for a Vacant Building Revitalization Grant in the amount of $30,000 to assist in the renovation of a former mill building located at 2146 Highland Avenue NE. The applicant plans to renovate the facility for use for a landscape contracting business. The applicant plans to invest approximately $230,000 in real property improvements to rehabilitate the industrial building. The Business Development Committee reviewed the application and recommends approval.

3. Citizen Briefing - The City Manager and Assistant City Manager Andrea Surratt are briefing
citizens as neighborhoods, businesses, civic and general public meetings about the City’s plan for growing jobs and population. The Manager will provide this same briefing to Council and the residents in attendance.

Economic Relevance - the Middle Class Squeeze

Marketplaces are about people and the majority of people are struggling. The Great Recession only ended for the affluent. It never ended for the middle class as defined in the post World War 2 to the Millennium era.

Excluding Obamacare, US Economy Contracted By 2% In The First Quarter - Tyler Durden - May 29, 2014 - As if the official news that the US economy is just one quarter away from an official recession (and with just one month left in the second quarter that inventory restocking better be progressing at an epic pace) but don't worry - supposedly harsh weather somehow managed to wipe out $100 billion in economic growth from the initial forecast for Q1 GDP - here is some even worse news: if one excludes the artificial stimulus to the US economy generated from the Obamacare Q1 taxpayer-subsidized scramble, which resulted in a record surge in Healthcare services spending of $40 billion in the quarter, Q1 GDP would have contracted not by 1% but by 2%!

Hound Note: Essentially what we are seeing is that GDP fell by 2% for the first quarter of 2014. That is reflective in the retail numbers we saw earlier this week. Now we are seeing a depression in middle class home sales, while wealthy homes are selling at an increased pace in most major cities. Add to this a 22% increase in the cost of food and not being able to rely on the government to be honest and you will see the mess we are in.


Housing Bubble 2 Already Collapsing for the 99% - The Testosterone Pit - May 28, 2014 -
This is precisely what shouldn’t have happened but was destined to happen: Sales of existing homes have gotten clobbered since last fall. At first, the Fiscal Cliff and the threat of a US government default – remember those zany times? – were blamed, then polar vortices were blamed even while home sales in California, where the weather had been gorgeous all winter, plunged more than elsewhere.                      Then it spread to new-home sales: in April, they dropped 4.7% from a year ago, after March's year-over-year decline of 4.9%, and February's 2.8%. Not a good sign: the April hit was worse than February's, when it was the weather’s fault. Yet April should be the busiest month of the year (excellent brief video by Lee Adler on this debacle).                        We have already seen that in some markets, in California for example, sales have collapsed at the lower two-thirds of the price range, with the upper third thriving. People who earn median incomes are increasingly priced out of the market, and many potential first-time buyers have little chance of getting in. In San Diego, for example, sales of homes below $200,000 plunged 46% while the upper end is doing just fine. But the upper end is small, and they don’t like to buy median homes [read… Housing Bubble 2 Veers Elegantly Toward Housing Bust 2]                           Yet it’s going according to the Fed’s plan. Its policies – nearly free and unlimited amounts of capital for those with access to it – have created enormous wealth in a minuscule part of the population by inflating ferocious asset bubbles, including in housing. But now electronic real-estate broker Redfin has made it official: in 2014 through April, sales of the most expensive 1% of homes have soared 21.1% year over year, while sales in the lower 99% have dropped 7.6%.                         And it wasn’t the first year. In 2013, sales of 1%-homes jumped 35.7%, while sales of the other 99% rose 10.1%. And in 2012, sales of 1%-homes rose 17.5%, while the rest of the market inched up a mere 2.9%.

Our “Make It Look Good” Economy Has Failed - Washington's Blog -  May 29, 2014 - Charles Hugh Smith -  The essence of the U.S. economy is make it look good: never mind quality or long-term consequences, just make it look good today, this week, this month, this quarter: make the pink slime look like meat, make the company look profitable, make the low-quality product look good enough to close the sale, make the unemployment rate low enough to justify re-electing the toadies currently in power, make the body count of bad guys look good, and on and on–just makes the numbers look good now, the future will take care of itself...



U.S. Food Inflation Running at 22% - Breitbart - Chriss W. Street - May 26, 2014 - After five years of the federal government telling the public that despite a $3.5 trillion increase in monetary expansion, the inflation rate is below +2%, the Department of Agriculture (DOA) just warned the American public that the consumer price index for food is up by 10% this year.                           The DOA tried to blame food inflation on the drought conditions in California, but last year’s drought was worse and food prices fell by -6%. The real problem is Federal Reserve monetary stimulus is stimulating inflation. I reported in "Food Price Inflation Scares the Fed” two months ago that commodity food costs were exploding on the upside. Given the lag in commodity costs impacting prices on grocery store shelves, annual U.S. food inflation is now running at +22% and rising.

The real culprit for food inflation is the $940 billion of additional monetary stimulus from the United States Federal Reserve’s quantitative easing over the last twelve months. Inflation has been in hibernation for a long time, but it is wide awake now....

Thoughts about the Ridgeview Citizen Review meeting

Disappointing to see how few people in the Ridgeview community showed up for the "Citizen Review" that occurred on Tuesday. If they don't care about their community, then why should anyone else? Let's go back and look at how few people in Ridgeview have even bothered to vote in Hickory City elections, but will show up to vote in the national elections. That is the reason why Ridgeview falls behind, because they have chosen to be politically irrelevant... and they will continue to get what they want.

The majority of people who attended were ministers from inside and outside the Ridgeview community. They all seemed very enthusiastic about what has been presented so far. The ministers in the area that I have seen are very much hooked up with the Hickory Inc. structure. I interpreted what they were saying as that they were all in and going to work with the city and help sell this to their congregations.

There are still no specifics as to the 3Ps -- projects, priorities, and price. City Manager Berry has said that the City Council will prioritize the projects and the Bond Referendum will be broad and refer to categories such as "Business Park" and "Transportation" with monetary values attached to each, but the City Council will be the entity that decides on the projects and the priorities.

Last week the Mayor talked about the tipping point in this community and the reason why we need to act. I've told you and shown you that we are past the tipping point. Maybe we aren't past the tipping point for the Council, the local Powers that Be, or the upper echelons of Hickory City Staff. These people are in the upper 10% of wealth holders in this community. They cannot fully relate to the negative economic momentum that the people at lower income levels have dealt with.

Citizen Review - Power Point Presentation


Just The Facts about Hickory's Loss of the Younger Demographic: Mr. Berry is showing graphs that were available five years ago that show the job losses and the devastating losses in the younger demographics that we have seen in this community over the past decade. Also factor into this that we have the lowest Per Capita Income of any major Metro area in the State of North Carolina. The encouraging sign is that the local Powers that Be are starting to freak out about the signs. The signs have been there for years, but I guess they have finally come to the realization that we have structural problems in this community and this downturn is not part of a normal economic cycle.

Hickory Area Population Remains at a Standstill. There are at least 4,000 fewer (January 2013 numbers) people living in Catawba County today than were here in 2009. We know that the eastern part of the county (Sherrills Ford and West Denver) has grown, because of it's accessibility to Charlotte. So, if the area there has grown by 4,000 or 5,000 people, then what does that mean for western Catawba County? It means that we have lost several thousand people here and it will soon be reflected in the numbers. We are beyond the tipping point. 

The 1764 Business Park project is the type of economic investment we need to see. Mr. Berry talked about this business park being located at Robinson and Robinwood Roads over in the Startown Road area near CVCC and the Mall area. This type of Commerce Center can bring good paying jobs. These types of jobs can help with the underemployment issues we have been facing in this community.

If we are going to see the younger demographics come back into the community, then we are going to have to see these good paying productive jobs come to the community. The demographic structure of the community is not going to change because young people move here to be servants for Octogenarians. There is no money in that, but for a few doctors, some nurses, and a few administrators. They are going to move here if they can find stability and a career path created by complex industries.

The two main infrastructure project concepts that have been talked about are the Mainstreet Linear Park and the Lake Greenway at Geitner Park. The development at Geitner Park is already moving forward thanks to Bob Lackey and it is notable because we are seeing true public private development. The Mainstreet Linear park is pie in the sky. It is basically a $27 million dollar (the price mentioned late last year) sidewalk to connect Union Square to what has been defined before as the Wingfoot District and then up to Lenoir-Rhyne. There is already a sidewalk there and people use it all the time. It just seems that we are once again throwing Hickory Tax Dollars to the same ole group of people.

Make no mistake, most people aren't against infrastructure improvements. What they want to see are tangible benefits and mechanisms of accountability and fairness to ensure that we don't throw good money after bad in an effort that only benefits a few people. Every one of these cities that the Council has been to and touted have "Business Improvement District" Taxes for their Downtown areas. Why are Hickory citizens from the outskirts of town supposed to continue supporting Union Square through tax dollars, when about five people own the vast majority of property surrounding Union Square?

I've heard it bandied about by the oldsters here that support the proposed bond referendum that they are planting trees that they may never get a chance to sit under. Some of us view it as that you are writing checks that others are going to have to cover for you and there may not be money to cover those checks when the bills come due... but ain't that Amerika.

A marketplace is all about people. I have also heard the notion of marketing Hickory as a small town. Folks, that is what got us here. That was exactly what they were pushing in the early 2000s, when the goose got cooked. I don't like the idea of a Quaint Hickory. I want to see a Hustling-Bustling Hickory like we were 20 years ago. Hustling and Bustling people in a contemporary reality. That is what leads to growth.

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Steve Ivester and Harry Hipps have talked about developing clusters around our existing industries. Any economic development we see should center around development of Cluster Industries in our area. Harry gets it right in what he writes below:

Harry Hipps speaks about The Gallup-Healthways Survey

20140527 - Inspiring Spaces - Ridgeview Citizen Review

City Manager Mick Berry speaks about the Inspiring Spaces program and the proposed upcoming bond referendum. I'm not going to comment tonight. If you have any comments send them to hickoryhound@gmail.com

I will give my thoughts tomorrow. I'd like to hear what some of you think and I will be speaking with my go to guys as usual.

Citizen Review - Power Point Presentation

Economic Relevance - Retail Deathtrap

Hound Notes: This is what happens when you destroy the middle class and thus the market place.

RETAIL DEATH RATTLE GROWS LOUDER - The Burning Platform - May 25, 2014

Retail store results for the 1st quarter of 2014 have been rolling in over the last week. It seems the hideous government reported retail sales results over the last six months are being confirmed by the dying bricks and mortar mega-chains. In case you missed the corporate mainstream media not reporting the facts and doing their usual positive spin, here are the absolutely dreadful headlines:

Wal-Mart Profit Plunges By $220 Million as US Store Traffic Declines by 1.4%

Target Profit Plunges by $80 Million, 16% Lower Than 2013, as Store Traffic Declines by 2.3%

Sears Loses $358 Million in First Quarter as Comparable Store Sales at Sears Plunge by 7.8% and Sales at Kmart Plunge by 5.1%

JC Penney Thrilled With Loss of Only $358 Million For the Quarter

Kohl’s Operating Income Plunges by 17% as Comparable Sales Decline by 3.4%

Costco Profit Declines by $84 Million as Comp Store Sales Only Increase by 2%

Staples Profit Plunges by 44% as Sales Collapse and Closing Hundreds of Stores

Gap Income Drops 22% as Same Store Sales Fall

American Eagle Profits Tumble 86%, Will Close 150 Stores

Aeropostale Losses $77 Million as Sales Collapse by 12%

Best Buy Sales Decline by $300 Million as Margins Decline and Comparable Store Sales Decline by 1.3%

Macy’s Profit Flat as Comparable Store Sales decline by 1.4%

Dollar General Profit Plummets by 40% as Comp Store Sales Decline by 3.8%

Urban Outfitters Earnings Collapse by 20% as Sales Stagnate

McDonalds Earnings Fall by $66 Million as US Comp Sales Fall by 1.7%

Darden Profit Collapses by 30% as Same Restaurant Sales Plunge by 5.6% and Company Selling Red Lobster

TJX Misses Earnings Expectations as Sales & Earnings Flat

Dick’s Misses Earnings Expectations as Golf Store Sales Plummet

Home Depot Misses Earnings Expectations as Customer Traffic Only Rises by 2.2%

Lowes Misses Earnings Expectations as Customer Traffic was Flat

Economic Stories of Relevance in Today's World -- May 25, 2014

The Solution To Record Meat Prices: The Return Of Pink Slime - Zero Hedge - Tyler Durden - Mat 25, 2014 - According to the USDA, reported by Reuters, conditions in California could have "large and lasting effects on U.S. fruit, vegetable, dairy and egg prices," as the most populous U.S. state struggles through what officials are calling a catastrophic drought. Alas, the USDA had nothing to say about the Fed's unprecedented desire to reflate the US economy which is still suffering from the catastrophic depression which started nearly 7 years ago.
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The consumer price index (CPI) for U.S. beef and veal is up almost 10 percent so far in 2014, reflecting the fastest increase in retail beef prices since the end of 2003. Prices, even after adjusting for inflation, are at record highs.                          "The drought in Texas and Oklahoma has worsened somewhat in the last month, providing further complications to the beef production industry," USDA said.                    Beef and veal prices for the whole of 2014 are now forecast to increase by 5.5 percent to 6.5 percent, a sharp advance from last month's forecast for a 3 to 4 percent rise. Pork prices are set to rise by 3 percent to 4 percent, up from a 2 to 3 percent advance expected a month ago.                       The USDA said overall U.S. food price inflation for 2014, including food bought at grocery stores and food bought at restaurants, would rise by 2.5 percent to 3.5 percent in 2014.                      That is up from 2013, when retail food prices were almost flat, but in line with historical norms and unchanged from April's forecast.                          "The food-at-home CPI has already increased more in the first four months of 2014 then it did in all of 2013," USDA noted. At-home spending accounts for about 60 percent of the U.S. food CPI.

The Social Cost of GMOs — Paul Craig Roberts - May 22, 2014 -
Monsanto has reduced the measured cost of food production by producing genetically modified seeds that result in plants that are pest and herbicide resistant. The result is increased yields and lower measured costs of production. However, there is evidence that the social or external costs of this approach to farming more than offsets the lower measured cost. For example, there are toxic affects on microorganisms in the soil, a decline in soil fertility and nutritional value of food, and animal and human infertility.
When Purdue University plant pathologist and soil microbiologist Don Huber pointed out these unintended consequences of GMOs, other scientists were hesitant to support him, because their careers are dependent on research grants from agribusiness. In other words, Monsanto essentially controls the research on its own products. http://articles.mercola.com/sites/articles/archive/2014/05/18/gmo-foods-inflammation.aspx?e_cid=20140518Z1_SNL_Art_1&utm_source=snl&utm_medium=email&utm_content=art1&utm_campaign=20140518Z1&et_cid=DM45056&et_rid=524903968
In his book, Genetic Roulette, Jeffrey M. Smith writes: “Genetically modified (GM) foods are inherently unsafe, and current safety assessments are not competent to protect us from or even identify most dangers.” The evidence is piling up against such foods; yet the US government is so totally owned by Monsanto that labeling cannot be required.
Pesticides damage birds and bees. Some years ago we learned that ingestion of pesticides by birds was bringing some species near to extinction. If we lose bees, we lose honey and the most important pollinating agent. The rapid decline in bee populations have several causes. Among them are the pesticides sulfoxaflor and thiamethoxam produced by Dow and Syngenta. http://earthjustice.org/features/the-case-of-the-vanishing-honey-bee?utm_source=crm&utm_content=button Dow is lobbying the Environmental Protection Agency to permit sulfoxaflor residues on food, and Syngenta wants to be able to spray alfalfa with many times the currently allowed amount of thiamethoxam.
http://salsa3.salsalabs.com/o/50865/p/dia/action3/common/public/?action_KEY=13999
As the regulators are more or less in the industry’s pocket, the companies will likely succeed in their efforts to further contaminate the food of people and animals. The profits of Monsanto, Dow, and Syngenta are higher, because many of the costs associated with the production and use of their products are imposed on third parties and on life itself.
Many countries have put restrictions on GMO foods. Lawmakers in Russia equate genetically engineered foods to terrorist acts and want to impose criminal penalties. http://rt.com/news/159188-russia-gmo-terrorist-bill/ The French parliament has approved a ban on GMO cultivation in France. http://www.reuters.com/article/2014/05/05/france-gmo-idUSL6N0NR2MZ20140505 However, Washington lobbies foreign governments on behalf of its agribusiness and chemical donors. Dick Cheney used his two terms as vice president to staff up the environmental agencies with corporate friendly executives. Just as the political appointees at the SEC would not let SEC prosecutors bring cases against the big banks, environmental regulators have a difficult time protecting the environment and food supply from contamination. The way Washington works is that the regulators protect those they are supposed to regulate in exchange for big jobs when they leave government. The economist, George Stigler, made this clear several decades ago.
The public favors labeling of genetically engineered food, but Monsanto and the Grocery Manufacturers Association have so far been successful in preventing it. On May 8 the governor of Vermont signed a bill passed by the state legislature that requires labeling. Monsanto’s response is to sue the state of Vermont.



Many U.S. families report feeling strapped - CBS Moneywatch - Alain Sherter - May 22, 2014 - Roughly half of all American families who define themselves as middle class say they are just getting by, struggling financially or feel poor, according to a new study by Allianz. The financial firm, which polled more than 4,500 households with annual incomes of at least $50,000, also found that more than 40 percent of respondents report living paycheck-to-paycheck.                   "The economy is picking up, but it doesn't seem to be trickling down to American families," said Katie Libbe, vice president of consumer insights with Allianz Life, a unit of the company that offers retirement products and services.                           If the sluggish economy is chiefly responsible for that hardship, how families are structured also appears to affect their relationship to money and finances. Less than a fifth of U.S. households today consist of married, heterosexual couples with kids, down from roughly 40 percent in 1970, according to the U.S. Census Bureau, while non-traditional family arrangements are increasingly the norm.
Other findings from the study:

• 36 percent of modern families have collected unemployment benefits, versus 21 percent of traditional households
• 35 percent of modern families have unexpectedly lost a main source of income, compared with 23 percent of traditional households
• 22 percent of modern families and 11 percent of traditional households have declared bankruptcy
• 25 percent of modern families and 20 percent of traditional ones aren't saving any money

Electric bills expected to rise with closing of coal-fired plants - AP through Tulsa World News - May 25, 2014 - Electricity prices are probably on their way up across much of the U.S. as coal-fired plants, the dominant source of cheap power, shut down in response to environmental regulations and economic forces.                New and tighter pollution rules and tough competition from cleaner sources such as natural gas, wind and solar will lead to the closings of dozens of coal-burning plants across 20 states over the next three years.                          And many of those that stay open will need expensive retrofits.                         Because of these and other factors, the Energy Department predicts retail power prices will rise 4 percent on average this year, the biggest increase since 2008. By 2020, prices are expected to climb an additional 13 percent, a forecast that does not include the costs of coming environmental rules.                 The Obama administration, state governments and industry are struggling to balance this push for a cleaner environment with the need to keep the grid reliable and prevent prices from rocketing too much higher.                       "We're facing a set of questions that are new to the industry," says Clair Moeller, who oversees transmission and technology for the Midcontinent Independent System Operator, which coordinates much of the electric grid between Minnesota and Louisiana.                       Coal is the workhorse of the U.S. power system. It is used to produce 40 percent of the nation's electricity, more than any other fuel. Because it is cheap and abundant and can be stored on power plant grounds, it helps keep prices stable and power flowing even when demand spikes.                        Natural gas, which accounts for 26 percent of the nation's electricity, has dropped in price and become more plentiful because of the frackingboom. But its price is on the rise again, and it is still generally more expensive to produce electricity with gas than with coal. Also, gas isn't stored at power plants because the cost is prohibitive. That means it is subject to shortages and soaring prices.                             During the brutally cold and snowy winter that just ended, utilities in several states struggled to secure natural gas because so much was also needed to heat homes. Some utilities couldn't run gas-fired plants at all, and power prices soared 1,000 percent in some regions.


Sears reports wider loss, may close more stores - USA TODAY - David Carrig - May 22, 2014 -
Sears Holdings reported a wider loss in the first quarter as the retailer continued to struggle to turnaround its business.                   Sears CEO Edward Lampert said the company may also close more stores this year in addition to the 80 locations now being closed.                 The parent company of Kmart and Sears said it lost $402 million, or $3.79 per share, for the period ended May 3. That compares with a loss of $279 million, or $2.63 per share, in the same period a year ago
Excluding certain items, the retailer lost $2.24 per share. That was worse than the loss of $1.91 a share expected by analysts, according to FactSet.                        Revenue fell 6.8% to $7.88 billion, which was better than the $7.72 billion analysts expected.



Target has lost its cheap, chic edge - USA TODAY - Hadley Malcolm - May 21, 2014 - Target may have been knocked down by a huge holiday season data breach last year, but its most recent quarterly earnings report and continuing replacement of top management show the retailer has other, bigger problems to address.                         Target's Canadian expansion has suffered from poorly managed inventory planning and a lack of understanding of the Canadian market. Meanwhile, merchandise even in U.S. stores has lost its gotta-have-it quality, and foot traffic had been slowly declining, even before the breach happened...                       In the first quarter, Target's net earnings fell 16% to $418 million, or 66 cents a share, compared with $498 million in the same period last year, the company announced Wednesday. Sales increased 2.1% over last year to about $17 billion. Earnings related to U.S. stores decreased 13.5% to about $1.1 billion from about $1.2 billion last year.                       For the year, Target cut its estimated earnings per share to between $3.60 and $3.90 compared with prior guidance of $3.85 to $4.15. Brian Yarbrough, an analyst with Edward Jones, suspects that's because the chain plans to be highly promotional to try to get customers back in stores, which will eat into profit margins.


Chattanooga's super-fast publicly owned Internet - CNN Money - James O'Toole - May 20, 2014 - Chattanooga, Tenn., may not be the first place that springs to mind when it comes to cutting-edge technology. But thanks to its ultra-high-speed Internet, the city has established itself as a center for innovation -- and an encouraging example for those frustrated with slow speeds and high costs from private broadband providers.                        Chattanooga rolled out a fiber-optic network a few years ago that now offers speeds of up to 1000 Megabits per second, or 1 gigabit, for just $70 a month. A cheaper 100 Megabit plan costs $58 per month. Even the slower plan is still light-years ahead of the average U.S. connection speed, which stood at 9.8 megabits per second as of late last year, according to Akamai Technologies...                           The city had to contend with lawsuits from Comcast and local cable operators as it worked to get the network up and running. But aided by an $111 million stimulus grant from the Department of Energy, the service was up and running by September 2009. The EPB currently has around 5,000 business customers along with 57,540 households, which have access to "triple play" bundles of video, phone and Internet service just like they would from a private provider.                        "Deploying a network for telecommunications is not fundamentally different from deploying a network for power," said Benoit Felten, a broadband expert with Diffraction Analysis. "Chattanooga is the prime example of that, and it's absolutely worked."                              The Federal Communications Commission recognizes the potential of muncipality-run broadband, saying earlier this year that it will push for the repeal of state and local laws supported by the cable industry that make it harder for cities to set up their own networks.                          Chattanooga officials say the network has helped spark a burgeoning local tech scene and the relocation of a number of businesses, drawn by both the fast Internet and the reliability offered by the smart grid.                            Hunter Lindsay, regional director of IT services firm Claris Networks, said the 85-person company moved its data-center operations from Knoxville to Chattanooga "just because of the network."

Economic Relevance - Inflation in commoditoes + Deflation in property = the Great Reset - The Hickory Hound - May 23, 2014