EE_
5th December 2014, 05:20 PM
The 2014 Black Friday Shopping Massacre
Submitted by Sprott Money on 12/05/2014 09:12 -0500
Jeff Nielson for Sprott Money
It is no secret to properly informed readers that the U.S. economy is mired in a Greater Depression. All claims of economic growth and a “U.S. recovery” are nothing more than a flimsy fraud. This fiction requires nothing more than lying about the rate of inflation, as all estimates of GDP are directly derived from the official rate of inflation.
US Black Friday Sales
Lying about the rate of inflation is an activity which comes more naturally to the central bankers and our corrupt governments than breathing. While soaring inflation (particularly food/housing costs) cripples the standard of living for the Working Poor and the shell-shocked remnants of the Middle Class; the Liars report near-zero inflation, and lament that inflation is now “too low”. All that is missing are the crocodile tears.
What needs to be understood here is that this Great Inflation Lie pollutes/distorts most of the economic propaganda, what these corrupt governments call “statistics”. Nowhere is this more obvious than with respect to the grossly fraudulent reporting on “retail sales” and/or “consumer spending”.
Neither of these so-called statistics is ever deflated by the rate of inflation. This was true even back in the years when our governments weren’t trying to pretend that inflation is “near-zero”.
For those readers who don’t follow the math here; all reports of sales/spending need to be “deflated” by the (real) rate of inflation, meaning that the rate of inflation must be subtracted from these (nominal) sales/spending numbers. A simple numerical example will illustrate this.
Let’s suppose that the government reports “an increase in retail sales” (measured in dollars) of 10%. But the government also previously reported a rate of inflation of 6%. Thus out of this total increase in dollars (of retail sales), the actual increase in sales was only 4% (10% – 6%). Because prices increased by 6% from one year ago; most of that increase in dollars of sales was merely the higher prices caused by inflation.
Armed with this understanding; we can now translate the lies of the Corporate media, and our corrupt governments, in this case the annual Big Lie about U.S. “Black Friday” shopping. The official propaganda acknowledges that this year’s numbers are bad, but adds (of course) that once “properly explained”, the bad news is actually good news.
Consumer spending during America’s Thanksgiving weekend dropped compared with last year, but the decline can be attributed to an improving economy and changing shopping habits, a survey found Sunday.
Now observe precisely the same information being reported by a media outlet outside of the mainstream monopoly.
Even after doling out discounts on electronics and clothes, retailers struggled to entice shoppers to Black Friday sales events, putting pressure on the industry as it heads into the final weeks of the holiday season.
US Employment
Spending tumbled by an estimated 11 percent over the weekend, the Washington-based National Retail Federation said yesterday. And more than 6 million shoppers who had been expected to hit stores never showed up…
US Debt
Doesn’t look nearly as pretty without the Corporate media’s sugar-coating, does it? But it looks much worse once we factor inflation into this equation, to produce a real estimate on 2014 Black Friday shopping.
Back in the real world, where people regularly eat food (especially in the Obese States of America); inflation is somewhere close to 10%, if not above that. Even though the nominal sales figure here is already a negative number, we still must subtract the rate of inflation from it, because this nominal number is still measuring the increase in prices from 2013.
When we subtract a realistic estimate of inflation, once we get even close to 10%, suddenly -11% becomes -20%. Black Friday shopping in the U.S. this year plummeted by 20% (or more). In the realm of economics; a year-over-year change of that magnitude is not a plunge, it is a collapse. But even this reporting is still relatively superficial.
What needs to be supplied here to put this horrific number into true focus is to add context. Specifically, we need to factor-in all of the horrible shopping years in the U.S. which have come before this. This is not some one-year horror story, this is a cumulative, gigantic collapse.
Since the Crash of ’08 – the final death-blow to an already crippled economy – there has not been a single shopping season where the “increase in sales” has been equal to the rate of inflation. Put another way; in real dollars (i.e. subtracting inflation) retail sales have fallen every year. Every year, U.S. retailers are selling less and less goods in a consumer economy.
Now, after six consecutive, cumulative bad years (and a couple of those years were also terrible); we see Black Friday shopping plummeting by an additional 20%. For much of the U.S. retail sector; retailers are now selling half as many goods as they were selling before the Crash of ’08.
The exception to this disastrous trend has been the luxury retailers. With the Fat Cats at the top fatter than they have ever been at any time in history; life is just fine for those selling high-end, luxury goods. But the relatively strong numbers for the luxury retailers are included in all aggregate sales figures.
US Corporate Profits
This means our “-20%” estimate underestimates the shopping carnage for all non-luxury retailers in the U.S. However, we need to add even more economic context, in order to properly frame this disastrous collapse in Black Friday shopping within the overall train-wreck that is the U.S. economy.
This is an economy with permanent near-zero interest rates. In even a semi-functional economy; near-zero interest rates would produce such explosive economic growth that a government would be forced to quickly raise interest rates, as the economy would rapidly “overheat”. Six years of near-zero interest rates, and no growth is not indicative of an economy which is dying. It is conclusive proof of a dead economy.
Then we have oil prices. In the Great Gas-Guzzling Society; the one sure-fire means to trigger an immediate spurt of economic activity/growth in the U.S. was to push down oil prices (through one form of generally illegal manipulation or another). However, in 2014 we have a first in modern U.S. economic history: a plunge in gasoline prices accompanied by a plunge in economic activity. Note the recent headline:
U.S. households could save $1,100 from falling gas prices
American households had an additional $1,100 apiece put into their pockets (just in time to all go shopping), and even with all that extra cash there was a nominal plunge in spending of 11% from one year ago – and a collapse of 20+% in real dollars.
How do we know that the U.S. (consumer) economy is dead? Because the U.S. consumer is dead. And for those of us north of the border; (thanks to Harper the Destroyer) the Canadian economy is simply a sickly, surreal echo of the U.S. economy.
There is still one more piece-to-the-puzzle which needs to be added here. Regular readers will be familiar with a “prediction” (simple deduction?) made in a recent commentary:
The Next Crash in 2016
Because this orchestrated collapse is specifically designed to be timed with the U.S. election cycle; the Old World Order clearly intends to continue with its inane fiction that the U.S. economy is still “recovering”. This means that even though it is already D.O.A.; nothing can/will be done to strengthen this Corpse Economy – because to do so would mean contradicting their own propaganda.
Not only is the U.S. economy already dead, but we can be virtually certain that the corpse will be allowed to rot for nearly two more years.
http://www.zerohedge.com/news/2014-12-05/2014-black-friday-shopping-massacre
Submitted by Sprott Money on 12/05/2014 09:12 -0500
Jeff Nielson for Sprott Money
It is no secret to properly informed readers that the U.S. economy is mired in a Greater Depression. All claims of economic growth and a “U.S. recovery” are nothing more than a flimsy fraud. This fiction requires nothing more than lying about the rate of inflation, as all estimates of GDP are directly derived from the official rate of inflation.
US Black Friday Sales
Lying about the rate of inflation is an activity which comes more naturally to the central bankers and our corrupt governments than breathing. While soaring inflation (particularly food/housing costs) cripples the standard of living for the Working Poor and the shell-shocked remnants of the Middle Class; the Liars report near-zero inflation, and lament that inflation is now “too low”. All that is missing are the crocodile tears.
What needs to be understood here is that this Great Inflation Lie pollutes/distorts most of the economic propaganda, what these corrupt governments call “statistics”. Nowhere is this more obvious than with respect to the grossly fraudulent reporting on “retail sales” and/or “consumer spending”.
Neither of these so-called statistics is ever deflated by the rate of inflation. This was true even back in the years when our governments weren’t trying to pretend that inflation is “near-zero”.
For those readers who don’t follow the math here; all reports of sales/spending need to be “deflated” by the (real) rate of inflation, meaning that the rate of inflation must be subtracted from these (nominal) sales/spending numbers. A simple numerical example will illustrate this.
Let’s suppose that the government reports “an increase in retail sales” (measured in dollars) of 10%. But the government also previously reported a rate of inflation of 6%. Thus out of this total increase in dollars (of retail sales), the actual increase in sales was only 4% (10% – 6%). Because prices increased by 6% from one year ago; most of that increase in dollars of sales was merely the higher prices caused by inflation.
Armed with this understanding; we can now translate the lies of the Corporate media, and our corrupt governments, in this case the annual Big Lie about U.S. “Black Friday” shopping. The official propaganda acknowledges that this year’s numbers are bad, but adds (of course) that once “properly explained”, the bad news is actually good news.
Consumer spending during America’s Thanksgiving weekend dropped compared with last year, but the decline can be attributed to an improving economy and changing shopping habits, a survey found Sunday.
Now observe precisely the same information being reported by a media outlet outside of the mainstream monopoly.
Even after doling out discounts on electronics and clothes, retailers struggled to entice shoppers to Black Friday sales events, putting pressure on the industry as it heads into the final weeks of the holiday season.
US Employment
Spending tumbled by an estimated 11 percent over the weekend, the Washington-based National Retail Federation said yesterday. And more than 6 million shoppers who had been expected to hit stores never showed up…
US Debt
Doesn’t look nearly as pretty without the Corporate media’s sugar-coating, does it? But it looks much worse once we factor inflation into this equation, to produce a real estimate on 2014 Black Friday shopping.
Back in the real world, where people regularly eat food (especially in the Obese States of America); inflation is somewhere close to 10%, if not above that. Even though the nominal sales figure here is already a negative number, we still must subtract the rate of inflation from it, because this nominal number is still measuring the increase in prices from 2013.
When we subtract a realistic estimate of inflation, once we get even close to 10%, suddenly -11% becomes -20%. Black Friday shopping in the U.S. this year plummeted by 20% (or more). In the realm of economics; a year-over-year change of that magnitude is not a plunge, it is a collapse. But even this reporting is still relatively superficial.
What needs to be supplied here to put this horrific number into true focus is to add context. Specifically, we need to factor-in all of the horrible shopping years in the U.S. which have come before this. This is not some one-year horror story, this is a cumulative, gigantic collapse.
Since the Crash of ’08 – the final death-blow to an already crippled economy – there has not been a single shopping season where the “increase in sales” has been equal to the rate of inflation. Put another way; in real dollars (i.e. subtracting inflation) retail sales have fallen every year. Every year, U.S. retailers are selling less and less goods in a consumer economy.
Now, after six consecutive, cumulative bad years (and a couple of those years were also terrible); we see Black Friday shopping plummeting by an additional 20%. For much of the U.S. retail sector; retailers are now selling half as many goods as they were selling before the Crash of ’08.
The exception to this disastrous trend has been the luxury retailers. With the Fat Cats at the top fatter than they have ever been at any time in history; life is just fine for those selling high-end, luxury goods. But the relatively strong numbers for the luxury retailers are included in all aggregate sales figures.
US Corporate Profits
This means our “-20%” estimate underestimates the shopping carnage for all non-luxury retailers in the U.S. However, we need to add even more economic context, in order to properly frame this disastrous collapse in Black Friday shopping within the overall train-wreck that is the U.S. economy.
This is an economy with permanent near-zero interest rates. In even a semi-functional economy; near-zero interest rates would produce such explosive economic growth that a government would be forced to quickly raise interest rates, as the economy would rapidly “overheat”. Six years of near-zero interest rates, and no growth is not indicative of an economy which is dying. It is conclusive proof of a dead economy.
Then we have oil prices. In the Great Gas-Guzzling Society; the one sure-fire means to trigger an immediate spurt of economic activity/growth in the U.S. was to push down oil prices (through one form of generally illegal manipulation or another). However, in 2014 we have a first in modern U.S. economic history: a plunge in gasoline prices accompanied by a plunge in economic activity. Note the recent headline:
U.S. households could save $1,100 from falling gas prices
American households had an additional $1,100 apiece put into their pockets (just in time to all go shopping), and even with all that extra cash there was a nominal plunge in spending of 11% from one year ago – and a collapse of 20+% in real dollars.
How do we know that the U.S. (consumer) economy is dead? Because the U.S. consumer is dead. And for those of us north of the border; (thanks to Harper the Destroyer) the Canadian economy is simply a sickly, surreal echo of the U.S. economy.
There is still one more piece-to-the-puzzle which needs to be added here. Regular readers will be familiar with a “prediction” (simple deduction?) made in a recent commentary:
The Next Crash in 2016
Because this orchestrated collapse is specifically designed to be timed with the U.S. election cycle; the Old World Order clearly intends to continue with its inane fiction that the U.S. economy is still “recovering”. This means that even though it is already D.O.A.; nothing can/will be done to strengthen this Corpse Economy – because to do so would mean contradicting their own propaganda.
Not only is the U.S. economy already dead, but we can be virtually certain that the corpse will be allowed to rot for nearly two more years.
http://www.zerohedge.com/news/2014-12-05/2014-black-friday-shopping-massacre