Dateline: Warsaw, Poland
How do you know the economy is bad? When you can’t use hardbodies to sell sex to coeds. More on that in a moment…
The mainstream media loves oh-so-much to talk about the American “economic recovery” underway in the United States.
After all, Barack Obama has gotten “unemployment rates” down to below 7%. On paper, it all looks like a big reason to celebrate.
Of course, from six thousand miles away, I know – and you know – that it’s all total rubbish.
If you’re been looking for a job as a bartender or a stocker at the grocery store, the last few months have been very kind to you. Because those are the kind of jobs being created in the American “economic recovery”.
And now, even job prospects in those fields are looking grim as the weak fundamentals of the US economy continue to come to light.
One of the key indicators that explains why there is no economic recovery is the “shadow statistic” U-6 unemployment rate. A recent poll of financial media consumers shows that 80% of them believe THIS is the real indicator of US economic health, and it’s not good.
The U-6 unemployment figures measure the number of “total unemployed, plus all marginally attached workers plus total employed part time for economic reasons, as a percent of all civilian labor force plus all marginally attached workers.”
In other words, not just fathers of three who get a job slinging pizzas to fill the gap while they look for something that pays the bills.
And in March, the U-6 unemployment figures increased, to 12.7%. Meanwhile, U-6 figures have been rather volatile over the last year, and the decrease in U-6 unemployment has been far less ambitious than in the “headline” unemployment figures the government so gleefully churns out, and their media cronies so eagerly report to you.
Since when have the people who are held responsible for economic problems (such as unemployment) responsible for gathering economic statistics?
Only in Big Government.
All you have to do is look past the propaganda statistics that paint a rosy picture of economic recovery and look to the darker headlines.
For one thing, the fact that the consensus estimate on the headline unemployment rate was missed the last two months.
Or the fact that Citi, which already failed a recent stress test, is in for more woes as it prepares to miss profits forecasts as it shells out over $1 billion to pay off investors for missteps in mortgage-backed securities.
Oh, and if you hold Citi stock, don’t expect to see a dividend increase any time soon. The Federal Reserve stepped in to quash the company’s plans to throw off income to shareholders. Hope you have a US bank account paying 0.2% interest to cover for that.
However, one of the most damning death knells for the US “economy recovery” lately is a disturbing story about major retailers closing THOUSANDS of stores across The Land of the Free.
Retailers, which have provided seasonal jobs to help stave off high unemployment in the past, are swimming in red ink. As Peter Schiff told our audience at my Passport to Freedom conference this past January, no one in the US is buying anything. The retail picture in the US is dire.
Peter talked about walking into a Gap store that had marked one pair of shorts down five times – to all of $6. How does a store make any money doing that?
It’s simple: they don’t.
For example, Staples just announced plans to close 225 stores by 2015. When I was in the US several months ago, I found myself in more than one Staples store leading up to our conference, and the place was always dead. A rip-roaring economy built on fake fundamentals may have propped office supply stores up during the bubble, but they can’t run from a horrible business model now.
Likewise, Office Depot, which purchased third-place competitor Office Max last year, is expected to announce a large round of store closings soon.
Remember Radio Shack? I almost feel bad for that store. Their marketing plans never seem to hit the mark, and it shows. They’re closing more than 1,000 of their 4,000 stores this year, after profits fell nearly 20%. One quarter of the entire chains’ stores – gone.
Over at the mall, Abercrombie and Fitch is shuttering 225 stores, as well as pulling the plug on its entire Aussie-inspired Gilly Hicks chain. When you can’t sell soft-core porn and topless girls in tight jeans to 16-year-olds, you’ve got a problem.
What about book retailers? You’ll remember that Borders shuttered all operations several years ago, and now Barnes and Noble is slowly following in its path. Barnes and Nobles takes up some of the largest spaces at malls across the United States, and they’re closing 218 stores – one-third of their total – in the next year. Their iconic New York flagship is already toast.
JCPenney is closing stores and firing 2,000 employes, while Sears and Kmart plan to padlock the door on 500 of their stores. Toys ‘R’ Us is dumping 100 stores. And New York icon Loehmann’s went out of business entirely.
Supermarkets aren’t in good shape. Alberton’s and Safeway are each expected to cut stores as a private equity fund now owns each of them and can’t tolerate the tiny margins they produce. Sweetbay, a regional grocery chain, will wrap up its 50 store closings later this year, including exiting the Tampa market entirely.
In Chicago, Safeway closed 72 Dominick’s stores in Chicago last year. I spent a few days in Chicago earlier and it was the talk of the town. In Southern California, Ralph’s will close 15 stores with great haste, they recently announced.
Finally, you’d think people in a growing “economy recovery” would at least go out to eat once in awhile. Casual dining dollars got crushed in the recession, but apparently aren’t coming back with said “recovery”.
In fact, Red Lobster’s parent company Darden Restaurants recently had to issue a press release assuring investors the whole chain wasn’t going under. They plan to spin the thing off into its own company so they can pare off stores to a new buyer. If one of the world’s largest restaurant operators can’t help but lose money on a brand everyone knows, the country is in trouble.
You may also recall that Sbarro and Quizno’s recently filed for bankruptcy. Where I used to live in the United States, all but one Quizno’s store shut down in a matter of about one year. One store remains for a population of almost five million people; that trend will roll out nationwide as many of the chains’ 2,100 stores are likely on the chopping block. Ditto with Sbarro’s, which expects to close a few hundred locations.
That’s thousands of stores in total, a devastating blow to the alleged “economic recovery” underway. Drive by your recent strip mall in almost any city in the United States and see the mass devastation caused by the ongoing recession.
If things were so great, people would be deploying capital and opening new retail outlets… just as they were during the bubble years.
But no matter what Barack Obama wants to tell you, things are not getting better in The Land of the Free.
And the minute the Federal Reserve decides to taper with any level of seriousness, the whole rug will be pulled out from under the stock market, too.
If you’re an investor or have any kind of cash, you need to read the writing on the wall and understand that there is no recovery underway. Your wealth is not safe inside US borders.
If you’re an entrepreneur, your avenues for starting a successful business in the United States look more and more slim. Gone are the days when anyone could open a yoga studio and see people file in. If venerable brands like Sears can’t make it work with all of their systems in place, just how will you – no matter how talented you are?
Most importantly, get ready for the wealth redistributionists to come out swinging against capitalism as the cause of all of the latest problems. They will be sure to blame greedy capitalist pigs for not paying workers enough and not hiring more workers. Then they’ll try and get Big Government to pass higher minimum wage laws and other restrictive regulations that make doing business in the United States even more impossible.
Deep down, even the government lap dogs know there is no economic recovery, and they’ll be more than happy to blame you, and take YOUR money to “fix” things.