Guided By Nonsense – The Data Doesn’t Add-Up
By Tyler Durden
Submitted by MN Gordon of Economic Prism (annotated by Acting-Man's Pater Tenebrarum),
Seven Year Achievement
“Read the directions and directly you will be directed in the right direction.” — Lewis Carroll
See? It’s easy Janet! Just read the directions!
U.S. consumers are at it again. After a seven year hiatus they’re once again doing what they do best. They’re buying stuff.
According to the Commerce Department, personal consumption expenditures (PCE), which is the primary measure of consumer spending on goods and services in the U.S. economy, increased $119.2 billion in April. That marks an increase of 1 percent, and is the biggest one month increase since August 2009 – nearly seven years ago. Indeed, this is quite an achievement.
The consumer, you know, is the primary engine of U.S. economic growth. Without consumption GDP doesn’t go up; rather, it goes down. Moreover, in a debt based money system, when GDP goes down the whole financial debt structure breaks down.
We don’t condone it. Certainly we’d prefer an honest hard money system where savings and investment drives growth as opposed to borrowing and spending. But our preference has no bearing on reality in this matter.
Still, given the vast array of pretense inherent to a debt based money system, when we hear that PCEs increased by the largest margin in nearly seven years, we take a keen interest. Naturally, we want to know what’s going on. Namely, we ask, where’s the money coming from?
Where’s the Money Coming From?
Middle class incomes, the last we recall, scored a big fat rotten goose egg over the last decade. By this we mean incomes haven’t gone up. To the contrary, they’ve going down.
Our understanding of this unfortunate situation isn’t based on anecdotes we overheard at the corner donut shop. Nor is it based on experiences shared by the crusty fellows casting their lines off Belmont Veterans Memorial Pier. Instead, we have hard evidence and solid proof. Specifically, we point to the distilled findings of Pew Research released earlier this month.
“The American middle class is losing ground in metropolitan areas across the country, affecting communities from Boston to Seattle and from Dallas to Milwaukee. From 2000 to 2014 the share of adults living in middle-income households fell in 203 of the 229 U.S. metropolitan areas examined in a new Pew Research Center analysis of government data. The decrease in the middle-class share was often substantial, measuring 6 percentage points or more in 53 metropolitan areas, compared with a 4-point drop nationally.”
Incomes going nowhere but down – one of the many great achievements of monetary central planning, a.k.a. Anglo-Saxon central banking socialism (via Pew Research)
So if it isn’t rising incomes that are propelling the PCE increase then what is it? According to recent findings from the New York Federal Reserve, “total household debt climbed 1.1 percent in the …read more
Source: Guided By Nonsense – The Data Doesn’t Add-Up
