A recent article listed 50 economic or economic related statistics (with links to the sources) from 2011, many of which you may be familiar with, some of which you may not be.  Overall I think it is difficult to read and think about these statistics, and not reach the conclusion that that America currently is in a serious state of economic and social decline – and that given Washington politics as it is, that this is unlikely to change for the foreseeable future.  I continue to think the only thing that might result in a partial turnaround will be a further financial or other significant crisis that will force meaningful near-term and productive bi-partisan action on the part of the Democratic and Republican Congressmen and Senators.

Of the 50 statistics set out in the article, the ones that jumped out at me (some of which I have written about in past E-mail Commentaries) are:

• 48% of Americans are either considered to be ‘low income’ or are living in poverty;

• 57% of American children are living in homes considered to be ‘low income’ or are living in poverty;

• a recent survey reported 77% of U.S. small businesses don’t plan to hire more workers;

• there were more payroll jobs in the U.S. in the year 2000 than there are today.  At the same time, in the past 10 years America’s population has grown by 30 million (about 10%);

• including consideration of inflation, U.S. median household income has declined 6.8% in the past four years;

• in a poll taken earlier this year one in five employed Americans considered themselves ‘underemployed’;

• a recent survey reported that if they lost their jobs, one in three Americans wouldn’t be able to pay their mortgage or rent payment in the following month;

• as hard as this for me is believe, the article says that the current median price of a home in Detroit is U.S.$6,000 (i.e. six thousand dollars);

• 19% of American males between 25 – 34 years of age currently live with their parents;

• a study reported that 41% of all working age Americans have medical bill problems, or currently are paying off medical debt;

• another ‘hard to believe’ statistic that I think can’t auger well for:

• the average standard of living for American retirees,

• U.S. consumer spending given the ever increasing U.S. age demographic,

• broadly speaking, for the U.S. from a societal point of view, or,

• generally for the U.S. economy going forward is that

46% of all American workers are said to have less than U.S.$10,000 saved for retirement, and 29% (or 63% of those) are said to have less than U.S.$1,000 saved for retirement.  If accurate, I see this as being a huge economic and societal storm cloud hanging over the United States – with bolts of lightning and massive thunderclaps close enough to be seen and heard;

• 37% of all American households headed by a person under 35 years old have a net worth of zero, or a negative net worth;

• as I am sure you know, the U.S. Cumulative National Debt is about U.S.$15.0 trillion.  When President Obama was sworn in that amount was U.S.10.6 trillion.  That is an increase of U.S.$4.4 trillion, or 41.5% in just three years.  President Obama inherited an ‘economic and financial mess’.  Therefore, I don’t think all of that incremental National Debt can be ‘on him’ as the saying goes, but some of it has to be ‘on him’ and his Administration.

The article says the U.S. net trade deficit for 2011 currently is estimated at about U.S.$558 billion.  That is a number that makes sense to me based on my own research.  I have developed the following table that compares the growth of the U.S. Cumulative National Debt with the growth in the U.S. Net Cumulative Trade Deficit from 1971.  That is the year then President Nixon rescinded the Bretton Woods agreement that among other things effectively had ‘pegged’ the price of physical gold to the U.S.$ at U.S.$35 per ounce of gold:

*        approximate at December 31, 1971

**       approximate at December 19, 2011

Note that the Cumulative U.S. Net Trade Deficit is smaller in absolute numbers than is the U.S. Cumulative National Debt.  This skews the percentage growth numbers somewhat.  If these numbers are presented in a Chart the parallelism (albeit not perfect) between these two statistics is more obvious.

If interested, you can find the other 37 economic or economic related statistics set out in an Economic Collapse Blog article titled ’50 economic numbers from 2011 that are almost too crazy to believe’ – reading time 6 minutes.

Other Commentaries Included In Today’s Unabridged StockResearchPortal.com Daily E-mail Commentary

Fitch – Goldman and Other Downgrades!

On Thursday Fitch downgraded the credit ratings of eight major banks, and downgraded its long-term issuer-default rating for six of those.  I am including this commentary in keeping with my promise that I would report Country and Bank credit downgrades as I find them in my daily research.  For the reasons set out in this commentary I think these ongoing credit reviews and rating adjustments are important.  The banks downgraded by Fitch on Thursday included …..

Commentary reading time 4 minutes, thinking time longer.  Referenced article(s) reading time 3 minutes. This Commentary includes a suggestion that you speak with your Investment Advisor(s) with respect to its subject matter.

The Devil You Know?

I want to begin this commentary by clearly stating that the title of this commentary is not intended as a ‘slight on China’.  Rather, it is simply the first part of the old saying ‘The Devil you know is better than the Devil you don’t know’ or, stated differently, you never know the consequences of …..

Commentary reading time 3 minutes.  Referenced article(s) reading time 5 minutes.

Federal Reserve Statement!

Last Tuesday the Federal Reserve Open Market Committee released its updated U.S. economic assessment.  In its statements it said that it anticipates U.S. unemployment will continue at levels higher than it would like, that inflation will be lower than it would like it to be, and that it has significant concerns with respect to …..

Commentary reading time 2 minutes.  Referenced article(s) reading time 3 minutes.

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As investors and traders in the financial markets, I urge you to think about this – even if you conclude that the statistics quoted are overblown.

An article in the Economic Collapse Blog yesterday is titled ‘Child Poverty In America Is Absolutely EXPLODING – 16 Shocking Statistics That Will Break Your Heart’.  It will take you about 6 minutes to read this article.  The first part of the article recites U.S. child poverty related statistics that if at all accurate, are shocking.  All statistics are linked to what I take to be supporting references.  These statistics include:

• 22% of American children are said to have ‘lived in poverty’ in 2010;
• over 35% and 33% of U.S. Black and Hispanic children are said to be living in poverty respectively;
• 7 million U.S. children are said not to be covered by Health Insurance;
• it is projected that by the time they are 18, about one-half of all U.S. children will at some point in their lives have been on food stamps; and,
• more than 20 million U.S. children rely on school meal programs to keep from going hungry.  In this regard you may have seen NBC news coverage on Monday evening where it was said that many children who were provided with meals by their schools (this was in a southern state) would have nothing to eat until they returned to school the next day.

The second part of the article is simply another dissertation on the unhappy state of the U.S. unemployment situation, with the link being made to that and U.S. Child Poverty.

If you read these e-mails you will know my concern about current youth unemployment in America and generally elsewhere.  Think of the implications of a large number America’s children living in poverty today in the contexts of education opportunities (or lack thereof), societal differentiation issues where young people of different means and social status co-mingle as they advance through youth to puberty to adulthood, potential escalated crime rates with already reducing police forces in some areas, and jails and rehabilitation centers already overflowing, etc.  Also think of the possible consequences of the exercise by parents of what are hereditary and primary ‘parenting instincts’, and where those parenting instincts may lead in the context of societal disruptions, adult crime, etc.

About three years ago in one of these commentaries I related the story of being in New York City cab with a smart 35 year old cab driver who I asked  whether the crime rate in New York was escalating.  His comment: “At this point not really, but if things get worse economically people have to do what people have to do to survive”.  I suggest you do not discount what that young cab driver said, particularly if things economic worsen from here.  Should such economic worsening occur, I think that cab driver has to be right in what he said.

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Last Thursday, December 8, I included in my e-mail a commentary titled ‘And So It Goes – New Arms Race?’ – reading time 3 minutes.  In that commentary in the context of possible issues initiated by Iran around the Strait of Hormuz I referenced:

“the importance of the Strait of Hormuz to Middle East oil supply to international markets (about 20% of daily world oil supplies pass through that Strait which lies along Iran’s southern coast)”.

It turns out that my thoughts of one week ago may be proving to be more predictive than I would like.  An article yesterday in the U.K. Daily Mailis titled ‘If the world wants to make the region insecure, we will make the world insecure: Iran threatens to shut Strait of Hormuz with military
exercise’ – reading time 6 minutes.  As I am sure you are aware, the first rumour on Tuesday was that Iran had closed the Strait of Hormuz, and the price of oil went up in an hour by U.S.$3 per barrel to above U.S.$101.  That price rise ended when it was clarified that what had been said by Paraviz Sarvari, a member of Iran’s National Security Council.  Mr. Sarvari apparently said that Iran was planning to hold a military maneuver on ‘how to close the Strait of Homez’.

Various articles suggest that as little as 20% and as much as 40% of the world’s oil passes through the Strait of Hormuz.  Irrespective of what percentage is correct, no one denies that the Strait of Hormuz is the world’s most important oil transportation seaway.  The Strait, which is between Iran and Oman, is 4 miles wide.  U.S. Warships patrol the area to ensure safe passage of the oil shipped through it.

Aside from reporting on Mr. Sarvari’s statement, the balance of the article is devoted to discussing:

• the circumstances around the American Drone that crashed in Iran on December 4, and which the Iranians are now apparently talking about ‘reverse engineering’, and,

• matters arising out of recent U.S. Congressional Hearings where American witnesses are reported as saying that they favoured carrying out covert actions against a unit of Iran’s revolutionary force.

Rightly or wrongly, I see these latter two things as unfortunate extensions of ‘business as usual’.  I think the Strait of Hormuz commentary is a quite different and potentially extremely important one.  It is one I will be following very closely.

If you are interested in reading more about the Strait of Hormuz issue, you might read ‘Iran proves why the West is playing with fire as it scares oil markets into a frenzy’ – reading time 2 minutes.  That article was published yesterday by Commodity Online.

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The word ‘systemic’ means ‘pertaining to a system’.  That is, in the case of Eurozone banks an event or series of events that will affect not just one bank, but the entire system of banks that make up the Eurozone banking fraternity – with (my view) spillover to non-Eurozone banks who conduct interactive banking activity with those Eurozone banks.

An article Tuesday in the German newspaper, Spiegel, is titled ‘The (European Banks) Crisis Has Reached a Systemic Level’ – reading time 5 minutes – reports on a European Banks stress test that was reported last week to have found capital shortfall in the banks tested of about 115 billion Euros.  In the fall of 2008 Europe was the first geography that pushed a change to the accounting mark-to-market rules, and put that change in place.

As you no doubt know from reading these commentaries, I believe the 2008-2009 changes made to the mark-to-market rules in both Europe and the United States likely have resulted in the ‘book’ or ‘accounting’ shareholders’ equities of many U.S. and European banks currently being overstated relative to what they would have been if the mark-to-market rules had not been changed.  If I am correct in this, last week’s ‘stress test’ European Banks capital shortfall will ultimately prove to be understated.  That is, the capital shortfall will prove to be greater than 115 billion Euros.  If that proves to be the case, it ought to follow that the European Banks and their spillover effect on other world banks will be even more worrisome than many currently believe.

Something to think about.

Visit Stock Research Portal for stock market data, analysis, and research on over 1,600 Mining, Oil and Gas Companies listed on the Toronto and Venture Exchanges. See our Legal Disclaimer.

Possibly Related Posts:

• Greek Eurozone Exit Consequences?
• Q1 2012 Europe and Eurozone GDP!
• An Accident Waiting to Happen, or ‘Ever Closer To The Cliff’!
• After Spain, is Italy Next?
• Spain and Spanish Bank Dilemma!