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Consumer spending tumbles while incomes stagnate, reinforce concerns about economic recovery WASHINGTON (AP) -- Flat incomes suggest more weakness ahead in consumer spending, reinforcing concerns about a ho-hum holiday shopping season and a sluggish economic recovery. "This recovery is going to be very weak. Consumers are in no position or mood to spend. Their wages are down and they can't get credit," said Sung Won Sohn, an economics professor at California State University's Smith School of Business. Concerns about the economy sparked by disappointing government data on spending and incomes sent stocks down Friday, erasing the previous day's big gains....

The decline in consumer prices this year means no raise in Social Security payments next year for the more than 57 million Americans receiving benefits. It will be the first year without a raise since automatic increases for inflation took effect in 1975. “Last year, when consumer prices spiked, largely as a result of higher gas prices, beneficiaries received a 5.8 percent [cost-of-living adjustment], the largest increase since 1982. This year, in light of the human need, we need to support President Obama’s call for us to make another $250 recovery payment for 57 million Americans,” said Michael J. Astrue,...

For the last few months I have been casting around looking for bullish data points as counterfactuals to my more bearish long-term outlook. I have found some, but not enough. If you recall, early this year, I stated that we are in depression, making the case for the ongoing downturn as a depression with a small ‘d.’ Nevertheless, I was quite optimistic about the ability of policymakers to engineer a fake recovery predicated on stimulus and asset price reflation and I certainly saw this as bullish for financial shares if not the broader stock market. But, I saw these events...

After years of selling cheap goods to debt-fuelled Western consumers, China now has $2 trillion dollars of foreign exchange reserves. That's 2,000 billion – a reserve haul no less 25 times bigger than that of the UK. BY LIAM HALLIGAN (snip) The entire non-Western world rightly sees serious inflationary pressures down the track in the US, UK and other nations where political cowardice has resulted in irresponsible money printing. (snip) ...to send the dollar into freefall. US inflation would then soar and interest rates would have to be jacked up. Even if a fast-collapsing dollar is avoided, Fed rates may...

Now that we are just about 2 years into the world financial/credit crisis, it’s time to ask what is next in one or two years. One is to ask will stagflation emerge in 2010 and after? We may be moving from a two year crisis stage to a post stage of stagflation that lasts years. There are several aspects to clarify first. First, assuming there is NOT another credit meltdown this Fall/Winter, and the USD does NOT have a big devaluation event, but rather tails down gradually, then I expect stagflation to emerge. The US and Western economy could do...

Top twelve indicators the economy is bad 12. CEO's are now playing miniature golf. 11. I got a pre-declined credit card in the mail. 10. I went to buy a toaster oven and they gave me a bank. 9. Hotwheels and Matchbox car companies are now trading higher than GM in the stock market. 8. Obama met with small businesses - GE, Pfizer, Chrysler, Citigroup and GM, to discuss the Stimulus Package. 7. McDonalds is selling the 1/4 ouncer. 6 People in Beverly Hills fired their nannies and are learning their children's names. 5. The most highly-paid job is now...

Inflation isn't caused by the actions of private citizens, but by governments, by an artificial expansion of the money supply required to support deficit spending. No private embezzlers or bank robbers in history have ever plundered people's savings on a scale comparable to the plunder perpetrated by the fiscal policies of Barack Obama.

Both the money supply and federal spending have increased at breathtaking rates over the past year, unprecedented in peacetime. The policy decisions made by the Federal Reserve Board and Congress virtually assure we will enter a period of 1970s-like stagflation. The recovery, when it comes, will combine slow economic growth, unusually long un- and underemployment, stagnating real incomes, rising interest rates and inflation. There is little that policymakers, having made colossal mistakes, can do to prevent such an outcome. However, there are steps that can be taken to shorten the period of stagflation and return to an era of robust...

While reading reactions to Stanford economist John Taylor’s op-ed in the Financial Times last week, I kept running into the phrase “deficits caused by tax cuts”; one liberal commentator after another wrote that Taylor forfeited his right to complain about the Obama administration’s trillion-dollar deficits when he called for Bush’s tax cuts to be made permanent. Some also criticized Taylor’s arithmetic, arguing that he deliberately or accidentally overstated the rate of inflation it would take to return to a pre-Obama ratio of debt-to-GDP in ten years’ time. And Paul Krugman devoted his Friday column to the subject of Taylor’s stated...

What do you think is going to happen to the dollar? Here's a hint: See what Germany was up to... oh around 1923... and then you might have some sense of what lies ahead for America if our government does not curtail it's printing and spending of American currency. (Research and graphs from the Fed included) http://conservativebrawler.blogspot.com/2009/05/death-of-dollar.html

Unemployment rate hits 8.9%

<p>Global central banks risk inflation, currency devaluation and a “big consolidation” in bond markets by pumping cash into their economies, the People’s Bank of China said in its quarterly monetary policy report.</p> <p>The Federal Reserve and the Bank of England this year started quantitative easing, or printing money to buy government bonds, a policy that the Bank of Japan pioneered to revive its economy at the start of the decade. The European Central Bank’s 22-member board, which meets tomorrow, is split on whether it should buy financial assets to tackle its recession.</p>

Amid an "inflationary depression" in the U.S., Peter Schiff, president and chief global strategist of Euro Pacific Capital, sees opportunities in the maelstrom. Facing a massive redistribution of wealth, he advises investors to act quickly and "divest U.S. dollar assets into physical precious metals, other currencies and equities outside the United States." In this exclusive interview with The Gold Report, the widely-quoted expert on money, economic theory and international investing discusses what led up to our current "phony economy" and how investors can actually profit from the crisis. The Gold Report: Peter, you were one of few people to predict...

President Barack Obama will propose raising new revenue through a greenhouse gas cap and emissions trading scheme when he unveils his first budget on Thursday, US media reported. The budget he will present assumes an emissions trading system will generate revenue by 2012, the Washington Post reported. Fifteen billion dollars of the money generated would be directed to clean-energy projects, the Post said, citing sources familiar with the document. Another 60 billion would go to tax credits for lower- and middle-income working families, and the rest to help families, small businesses and communities deal with higher energy costs, the paper...

As lawmakers and commentators debated whether President Obama's $787 billion economic stimulus package would effectively combat unemployment and stagnation, less attention was paid to whether it would help trigger something more pernicious. "I think a major inflation is a really big danger of where we stand now," John H. Cochrane, a professor of finance at the University of Chicago's Booth School of Business, told TAS. "It's going to hurt all of us. A big inflation will come with economic chaos on a scale we haven't begun to see yet." It would also hurt President Obama's political standing in a way...

Michael Medved has said that he will interview Jimmy Carter on today's show. He has consistently called Carter "The Worthless One". He has repeatedly dared Carter to come on his show. Apparently, Carter has accepted. It will occur in the second or third hour. Medved's show has just begun. It runs from 3-6 Eastern, noon-3 Pacific. Hopefully, this will come off. If you aren't near a radio, and wish to listen, click the link and then click the LISTEN LIVE button.

The fact that the most likely scenario in the global economy in 2008 is one of a negative global demand shock is the one that is priced by bond markets: if investors were really worried about a rise in US and global inflation – or about true stagflationary shocks – the yield on long term government bonds would have not fallen as sharply as it has since last summer. With US 10 year Treasury yield now well below 4% and sharply falling in the last few weeks it is hard to see a bond market that is worried about global...

On the day after an unusually important Fed policy meeting both gold and stocks severely rebuked the central bank's decision to take no action in support of the weak dollar or to curb rapidly growing inflation. Gold spiked $30, a clear message that Bernanke & Co. won't stop inflation. Stocks plunged over 200 points, an equally clear message that the Fed's cheap-dollar inflation is damaging economic growth. These market warnings are two sides of the same coin. Inflation, which is caused by excess dollar creation, is the cruelest tax of all. It is a tax on consumer and family purchasing...

Jimmy is on with Merideth and states that the state dept. never told him not to go to the Middle East. What a loser

The perceived need to have a distinct label for the supposedly strange coupling of rising prices and falling growth stems from the erroneous belief that strong economic growth causes prices to rise and weak economic growth causes them to fall. The reality is the exact opposite -- strong economic growth puts DOWNWARD pressure on prices because it involves an increase in the supply of goods and services. If monetary factors are constant while the supply of goods and services increases then the same amount of money will be 'chasing' a greater supply of 'stuff', and the average price of 'stuff'...

One of the biggest stories in recent weeks and months has been the crisis facing the banking and the financial systems. The first rumblings in the mainstream press began last summer, when news of the housing bubble appeared. Yes, news of the rise in housing prices was well known long before that; but only after many areas of the country had flat sales did it occur to most people that the prices were the result of a bubble, and not of their own financial genius. With the peak in housing prices, and the slowdown in house sales, it was interesting...

Bernanke's Recession Is Here: 11 Reasons It Will Last Till 2011 Paul B. Farrell MarketWatch ARROYO GRANDE, Calif. -- Remember that hot 1973 Stealer's Wheel song marking the end of the Nixon era? "'Cause I don't think that I can take anymore. Clowns to the left of me, jokers to the right, here I am stuck in the middle with you!" It's still a perfect metaphor. Testifying before Congress: Fed Chairman Ben Bernanke on the left. Treasury Secretary Henry Paulson on the right. The American public stuck in the middle. Last summer they assured us the subprime-credit crisis was "contained."...

WASHINGTON (AP) -- It's a toxic economic mix the nation hasn't seen in three decades: Prices are speeding upward at the fastest pace in a quarter century, even as the economy loses steam. Economists call the disease "stagflation," and they're worried it might be coming back.

Data fuel fears of US stagflation By Krishna Guha in Washington and Daniel Pimlott and Michael Mackenzie in New York Published: February 20 2008 15:32 | Last updated: February 21 2008 01:13 Federal Reserve policymakers have cut their forecasts for growth this year but marked up their estimates for inflation, the central bank revealed on Wednesday. The new Fed forecasts came as data showed prices rose at an unexpectedly rapid pace in January, raising fears that the US was experiencing at least a temporary bout of stagflation. Both the headline rate of inflation and the underlying core rate – which...

The economy may be headed into the tank, but don't break out the leisure suits and Blue Nun just yet. Hundred-dollar oil prices, creeping inflation in food and other commodities, gold behaving the way it did in 1979--could we be in for a repeat of stagflation? The toxic combination of rapidly increasing prices and weak economic output made the 1970s a dreary decade. Predictably, pessimists are now coming forth with parallels between those years and 2008. Here's a contrary theory, one that says stagflation is no more likely than a revival of disco and bell-bottom pants. MONEY SUPPLY: In the...

After perusing the blizzard of U.S. economic data that we've gotten this week, you could easily—and quite plausibly—draw this megaconclusion: The Federal Reserve will cut interest rates again, inflation is under control, and while the economy is weakening, it won't slip into recession. Here is the evidence: 1) Yes, the housing market is still dreadful. New-home sales in August hit their lowest point in seven years and are down 21 percent from a year ago. But don't forget that housing is less than 5 percent of the total economy. It's not the whole ballgame. 2) Employment remains amazingly resilient. Initial...

A question that seems to be on everybody's mind these days turns out to be: Is George Bush the worst President in American history? But how do you judge? Is he the most morally disgusting? The worst mangler of the English language? Ever since the atom bomb was dropped, we've had a whole string of bozos who cannot pronounce the word "nuclear." How much should that count against them? Is John Tyler, our tenth President, a candidate for worst President? Some people who have never heard of this guy have heard of the campaign slogan "Tippecanoe and Tyler, Too." Well,...

For an event that would turn a page in American history, former president Jimmy Carter has agreed in principle to host former Iranian president Mohammad Khatami for talks during his visit to the United States starting this week. Carter's term as president was dominated by the rupture in relations after the 1979 Iranian revolution and the takeover of the U.S. Embassy in Tehran, where 52 Americans were held hostage for 444 days until the day he left office. Iranians made the overture for the meeting, and the Carter Center in Atlanta is working on the possible timing, said Phil Wise,...

Former US president Jimmy Carter lashed out at British Prime Minister Tony Blair for being "so compliant and subservient" to the Bush administration in Washington. "I have been surprised and extremely disappointed with Tony Blair's behaviour," Carter told the Sunday Telegraph newspaper as he promoted his new book "Faith and Freedom." "I think that, more than any other person in the world, the prime minister could have had a moderating influence on Washington, and he has not," said the 81-year-old former head of state. He faulted Blair for not having been a constraint on US President George W. Bush's decision...

Former US president Jimmy Carter speaks with DER SPIEGEL about the danger posed to American values by George W. Bush, the difficult situation in the Middle East and Cuba's ailing Fidel Castro. SPIEGEL: Mr. Carter, in your new book you write that only the American people can ensure that the US government returns to the country's old moral principles. Are you suggesting that the current US administration of George W. Bush of acting immorally? Carter: There's no doubt that this administration has made a radical and unpressured departure from the basic policies of all previous administrations including those of both...

Twenty-five years ago this weekend, Ronald Reagan signed the Economic Recovery Tax Act. The bill cut personal income tax rates by 25% across the board, indexed tax brackets for inflation and reduced the corporate income tax rate. The anniversary is worth commemorating as a seminal moment that continues to influence policy for the better in the U.S., and around the globe. The achievement of Reaganomics can only be fully understood by recalling the miserable state of affairs a quarter-century ago. Newsweek summarized the national mood when it wrote in 1981 that Reagan "inherits the most dangerous economic crisis since Franklin...

President Bush has pursued an "erroneous policy" that has fostered violence in the Middle East, said former President Jimmy Carter, who brokered the historic Camp David Accords between Israel and Egypt. "In my opinion, maybe the worst ally Israel has had in Washington has been the George W. Bush administration, which hasn't worked to bring a permanent peace to Israel," Carter said Friday during a stop in West Michigan. Carter and his wife, Rosalynn, were here as part of a fundraiser for their son, Jack Carter, who is seeking a U.S. Senate seat in Nevada. The $500-a-person event, attended by...

We Need Fewer Secrets By Jimmy Carter Monday, July 3, 2006; A21 The U.S. Freedom of Information Act (FOIA) turns 40 tomorrow, the day we celebrate our independence. But this anniversary will not be a day of celebration for the right to information in our country. Our government leaders have become increasingly obsessed with secrecy. Obstructionist policies and deficient practices have ensured that many important public documents and official actions remain hidden from our view. The events in our nation today -- war, civil rights violations, spiraling energy costs, campaign finance and lobbyist scandals -- dictate the growing need and...

For education and discussion only. Not for commercial use. China probably will surpass the U.S. as the world's largest exporter of manufactured goods this year, propelled by its embrace of advanced technology, a study by a U.S. industry group says. "The rapid growth of Chinese manufactured exports, with an increasingly high-tech orientation, presents a major challenge to U.S. competitiveness,'' said the report by Ernest Preeg, a senior fellow at the Manufacturers Alliance in Arlington, Virginia, an association that represents companies such as Caterpillar Inc. and Motorola Inc. In 2001 China exported half the amount of factory goods the U.S. did....

For education and discussion only. Not for commercial use. Majority surveyed believe growth will be less than economists predict (Crain's) — A National Assn. of Manufacturers survey of its members found they expect the U.S. economy to grow more slowly this year than what many economists predict. A majority of those surveyed foresee growth in the U.S. gross domestic product of less than 2.9% in 2006, the association said. The NAM's own economist predicts the economy will grow 3.3% this year, said Hank Cox, an association spokesman. Economists' consensus estimates have recently stood at 3.4%. The survey was sent last...

For education and discussion only. Not for commercial use. Little Rock - Hundreds of people are out of work Tuesday night after a major announcement at the Levi Strauss company. The company's Little Rock distribution plant will be closing its doors as early as August. The move will put 340 people out of work. The plant is located just south of Little Rock off Interstate 530 along the Pratt Road Exit. Levi Strauss closed down the plant because company officials said it already has three major distribution plants in North America and this one was no longer necessary. Little rock...

The other night Jimmy Carter popped up on the Larry King show, live via satellite, standing in a ski lodge and wearing a fur-lined outdoorsman jacket as though he'd just come in from felling a spruce. He was publicizing an upcoming auction in which he would sell the furniture he'd been making. Also his wine. This may have come to many viewers as a surprise: There is Jimmy Carter Wine. The former president didn't say how he made it, but you know what it's probably called: peanut noir. Also he plans to sell his paintings. "My paintings," he told King,...

Jimmy Carter has been trying to build a legacy recently by trying to make people forget his presidency. What is Carter's real legacy? Let's see: The Real Jimmy Carter by Steven F. Hayward The Nobel Prize is just the beginning: Jimmy Carter is enjoying a new day in the sun, with left-wing historians taking a "fresh look" at his disastrous presidency and trying to bamboozle Americans into thinking that it was actually successful. This ongoing Saint Jimmy campaign would be laughable if it weren't part of a larger strategy to whitewash the records of failed Democrats and justify Carter's outsize...

For education and discussion only. Not for commercial use. Inspired by a reader who sent a list of once American corporations who's profits are no longer funneled to the hard-working American employee, I investigated the subject. The clip that landed on my desk was from "America is Selling Out," published in The American Conservative, December, 2005. As I digested, emotionally charged from the publication's Web site at www.economyincrisis.org, I agreed with some of the information, discarded the sensational propaganda and extrapolated my take on the issues' raw facts. From what I've experienced and witnessed first-hand, I consider the current state...

In a previous commentary, I discussed three macroeconomic scenarios that could affect the markets in general and long-term bonds in particular. These are just three of many possible scenarios that may happen in the future. I did not assign any probability to the scenarios but only showed things that occurred in the past and that, in some different form, may re-emerge in the future. In this article I would like to look at another possible scenario that some readers suggested: stagflation and a sustained boom in commodity prices. Stagflation is a recurring topic when the economy is growing slowly or...

"In the last 5 years there's been a dramatic and disturbing and radical change in the values of this country," Carter said. For example, he says peace is an American value, not pre-emptive war: "we don't wait until our country is threatened," Carter said, "we publicly announced our new policy is to attack a county, invade a country, bomb a county."

The World According to J.C. "Tedious" doesn't begin to describe the new book by America's worst ex-president. BY BRET STEPHENS Jimmy Carter's 20th book is a tedious meditation about the appropriate uses of moral values in political life--as wisely and humbly exemplified by Himself--and of their misuses under the current Bush administration. But tedious isn't quite the right word here, because it suggests mere boredom while Mr. Carter's prose manages to be irritating as well. Is there an English-language equivalent to the German Rechthaberei, which loosely translates as the state of thinking and behaving as if you're in the right...

Watching the Economy Crumble Paul Craig Roberts Wednesday, Aug. 10, 2005 The United States continues its descent into the Third World, but you would never know it from news reports of the Bureau of Labor Statistics' July payroll jobs release. The media give a bare-bones jobs report that is misleading. The public heard that 207,000 jobs were created in July. If not a reassuring figure, at least it is not a disturbing one. On the surface, things look to be pretty much OK. It is when you look into the composition of these jobs that the concern arises. Of the...

The United States continues its descent into the Third World, but you would never know it from news reports of the Bureau of Labor Statistics' July payroll jobs release. The media give a bare-bones jobs report that is misleading. The public heard that 207,000 jobs were created in July. If not a reassuring figure, at least it is not a disturbing one. On the surface, things look to be pretty much OK. It is when you look into the composition of these jobs that the concern arises. Of the new jobs, 26,000 (about 13 percent) are tax-supported government jobs. That...

The June payroll jobs report did not receive much attention due to the July 4 holiday, but the depressing 21st century job performance of the U.S. economy continues unabated. Only 144,000 private sector jobs were created, each one of which was in domestic services. Fifty-six thousand jobs were created in professional and business services, about half of which are in administrative and waste services. Thirty-eight thousand jobs were created in education and health services, almost all of which are in health care and social assistance. Nineteen thousand jobs were created in leisure and hospitality, almost all of which are waitresses...

For education and discussion only. Not for commercial use. EMPORIA, Kan. - Days after merging with a rival, the owners of a Kansas radiator plant said Monday the factory will close in September and leave 130 people unemployed. The Modine Manufacturing Co. plant opened in Emporia in 1973 to build sheet-metal radiators for Ford Motor Co. On Friday, Modine's aftermarket division merged with Transpro Inc., a Connecticut-based competitor, to form Proliance International Inc. The merger will move production to two existing plants in Mexico, and the Emporia facility will be sold. Two regional plants and branch distribution centers in Denver...

For education and discussion only. Not for commercial use. Proponents of so-called "free" trade agreements like the North American Free Trade Agreement (NAFTA), which I opposed, have long promised endless riches for U.S. workers, farmers, businesses and economy. They've been wrong on all counts. Failed U.S. trade policies have led to the export of millions of high-paying American jobs; decline in U.S. living standards; soaring trade deficits; and a significant erosion of U.S. sovereignty to international trade bureaucrats. Despite this unbroken record of failure, the House is expected to vote before August on an agreement the Bush administration negotiated to...

For education and discussion only. Not for commercial use. As data gathered in the real world of international rivalry continues to show an expanding U.S. trade deficit that will likely hit $700 billion this year (up from $617 billion last year), a great wailing is heard from the Defenders of Free Trade. Their libertarian economic faith is immune to facts, either from present observation or historical experience. That's what makes it a secular religion. Nothing better reveals its reliance on superstition and ignorance than how readily its adherents resort to falsehoods to defend its dogma. Consider two recent columns that...

For education and discussion only. Not for commercial use. GRAND RAPIDS, Mich. - Steelcase Inc. announced Monday that it will cut 600 jobs over the next two years as it shuts down its remaining manufacturing operations in the city and consolidates work at other plants. The furniture maker said it will vacate the remaining factories at its sprawling Grand Rapids campus. Much of the work from the chair and panel plants will be moved to plants in Kent County's Gaines Township and Kentwood. About 30 jobs will move to Steelcase's plant in Mexico, The Grand Rapids Press reported. One hundred...

For education and discussion only. Not for commercial use. It is difficult to decide whether the trade figures for 2004 or the Bush Administration's reaction to them indicate the greater danger to the American economy and nation. Last year's trade deficit hit $617.7 billion -- surpassing the record 2003 deficit by 24 percent. The deficit in goods was even higher, at $666.2 billion. The imbalance increased as a share of the economy to 5.3 percent of gross domestic product, up from 4.5 percent in 2003. This is a situation usually associated with underdeveloped countries on the brink of financial collapse....