Mish reports that one in nine people are on food stamps. Government assistance per family has doubled in the last 12 months to $17,000 per year. That’s 16.9% of personal income from the government! Amounts to $2 trillion per year. We can’t keep this up, consumers can’t keep their head above water…they’re gonna roll over…
Swamp Report used to think worrying about how much income was controlled by the wealthy was not consistent with freedom and was a disincentive to the American dream through hard work. But, when this many Americans owe their souls to the “company store” of the very rich, their seems little room for other than collapse, even the rich will suffer. Too few people are free any more, they’re are all enslaved to debt and consumption…and the lenders (indirectly) are the top decile of earners that are depicted in this chart from Emmanuel Saez’s homepage. As the chart shows, we are beyond where we were in 1929…
“A MetLife study released last week found that 50% of Americans said they have only a one-month cushion — roughly two paychecks — or less before they would be unable to fully meet their financial obligations if they were to lose their jobs. More disturbing is that 28% said they could not make ends meet for longer than two weeks without their jobs.”
Mike quotes Britt Beemer, chief executive of America’s Research Group:
“American consumers are hunkered down, bracing for a depression…The dramatic drops in shopping levels have no match in our database in the last 30 years.”
To the rhetorical question: is this setting up hyperinflation?, Mike responds:
“No, this madness is nowhere close to causing hyperinflation. You do not get hyperinflation with this much consumer and corporate debt when unemployment is soaring globally, overcapacity is rampant, and wages are falling. Please see Fiat World Mathematical Model for more details.”
