Another day and another Orwellian economic report from the BEA which is then spun by the corporate mainstream media as a positive development. So it goes.
It seems the American consumer is spending like a drunken sailor again. It must be that new 20 hour a week job at Popeye’s that has them opening their wallets again. Consumer spending SURGED by 0.8% in September. That is an annualized rate of about 10%. Surely this means the recovery is taking off. Well let’s look at the actual numbers. Here is the link:
These are my observations:
- Consumers increased their personal outlays by $93 billion in September. The MSM considers this a good thing. It certainly doesn’t matter that this surge was caused by people paying 20% more to fill up their SUVs and 10% more to fill up their grocery basket. Essentially, the increase in spending is being forced upon the public by Ben Bernanke and his inflationary QE to infinity and Obama’s saber rattling on behalf of Israel.
- In a truly revealing statistic, that will absolutely not be reported on CNBC, personal outlays for interest skyrocketed at an annual rate of 12% in September. It has risen at an annual rate of 26% since June. Don’t we have the lowest interest rates in history? For the slow witted (aka any anchor on CNBC) I’ll explain what is happening. The country went into recession in June. Consumers have no savings whatsoever. They are now surviving on their credit cards and paying 15% interest on their ever increasing balances. This is why interest outlays are soaring.
- This is completely confirmed by the plunge in Savings rate to a ridiculously low 3.3%. When you spend more than you make, your savings dwindles.
- Now we get to the income side. Personal income grew by only $48 billion, about half as much as spending. Yeah, that’s sustainable. You’ll be happy to know that $13 billion of this increase was from government transfers. That’s right – 27% of the increase in “personal income” came from the government handing out your tax dollars to other people. Is that really income?
- Now to the figure that makes my blood boil. Interest income reached a new post crisis low of $975 billion in September. It is at the same level it was in 2005. This is the money paid to senior citizens and savers. This figure was $1.422 trillion in August 2008. Please think about this for a second. Ben Bernanke through his ZIRP has stolen $447 billion out of the pockets of senior citizens and handed it to Wall Street bankers. He should be strung up from a lampost.
- In the meantime dividend income reached a new post-crisis high of $743 billion. Mitt Romney and his ilk in the .01% are doing just fine thank you, while senior citizens are deciding which brand of cat food tastes best.
- Lastly, the fact that CNBC will also not be reporting – REAL DISPOSABLE INCOME IS DECLINING!!!! It has fallen two months in a row and is at the exact same level as it was in May. Bennie says inflation is well contained, but reality says something different. Keep in mind, this is even using the fake government CPI calculation. Real disposable income is plunging.
When you review this report using critical thinking skills you understand how badly you are getting screwed. We have been in a recession since June, and this data confirms it.