WHY THIS FEELS LIKE A DEPRESSION FOR MOST PEOPLE

For the average American family, the US economy has been in recession since 2000, with the Greater Depression arriving in 2008. The working age population has grown by 40 million since 2000, with only 12 million jobs added over that time frame. Of those, 10 million were in the government controlled health, education, social services (HES) sectors, with millions of good paying manufacturing jobs destroyed, replaced by a couple million low paying services jobs. As David Stockman points out, Bernanke and the vested interests he serves continue to spew disingenuous propaganda  to cover up the fact average American households continue to experience depression-like conditions. When your real household income is lower than it was in 1989, while your basic living costs for food, energy, transportation, rent, housing, healthcare, taxes, and education have skyrocketed, you just might be experiencing a depression.

For the average American family, the US economy 

has been in recession since

2000 

with the Greater Depression arriving in 

2008. 

 This outrageous assumption flies in the face of all reasonableness, facts, and truth. In 1937, even with women not working outside the home and very few people living past 65 years old, the participation rate was 75%. 

Today, with the majority of women capable and willing to work and older Americans working well into their 60s, the BLS actually expects a critical thinking person to believe the participation rate is only 62.4%, the lowest since 1977.

 

It’s a pure and simple despicable lie. The true participation rate should exceed the rate in 1937, based on the facts. Using the 75% participation rate today, yields a true unemployment rate of 21%, not the preposterous 5.1% shoveled by the bullshit artists at the BLS. 

The 21% rate ties very closely to the figure arrived at by John Williams at Shadowstats. An unbiased assessment of the facts reveals unemployment numbers and people on government assistance numbers that match or exceed those of the Great Depression.

DYI Comments:  There are many conditions such as regulations, taxes, government spending, taxation, central bank policies etc. that will determine the performance for economic growth.

OIL

THE DRIVER OF ECONOMIC GROWTH

The major reason average Americans experienced recession conditions since 2000 is the ever increasing price of oil.  Everything we do in our society surrounds oil.  Cars, trucks, trains, jets, our roads are asphalt(oil based), fertilizers which are oil based, plastics etc.  The list is endless.  When oil prices begin moving up it has a depressant effect on our overall economic performance.  This also includes the stock market as well.

DYI OIL INDICATOR

10/1/15
Updated Monthly

Oil Prices: 

9/30/14.....$92.78

9/28/15...$47.16   

DOWN 49%

(oil prices approximately one year earlier due to weekends & holidays)
ANS West Coast prices   

 OIL INDICATOR POSITIVE

Oil prices are well known for their volatility in the short term, longer term due to dwindling reserves energy prices are in a secular bull market.  Technologies such as fracking will extend the life of oil fields but major new discoveries arrive at a snails pace far slower than the world's growth.  

As long as prices rise in a slow and orderly pace our economy can adjust to those changes, however if prices spike (international tensions, war etc.) high energy costs behave as a massive deflationary tax. This will send our economy tumbling down and very possibly the U.S. stock market.

If oil prices rise greater than 75% from one year-earlier level, investors at that time should shift their portfolio geared towards deflationary times.  This would be oil indicator as negative.

If oil prices rise from one year-earlier less than 10% or drop then the inflationary play is in effect; a positive for economic growth along with possible higher stock prices.

Where to find one year-earlier oil prices?  Alaska Department of Revenue    

Oil indicator positive                 
20%  REIT's
20%  Energy
20%  P.M.'s
40%  Small Caps
  0%  Lt. Gov't Bonds

Oil indicator negative
  5%  REIT's
10%  Energy
10%  P.M's
10%  Small Caps
65%  Lt. Gov't Bonds

Vanguard Funds

REIT's
REIT Index Admiral  VGSLX

Energy
Energy Fund  VGENX

Precious Metals (P.M.'s)
Precious Metals and Mining Fund  VGPMX

Small Caps
Small Cap Value Index Admiral  VSIAX

Long Term Government Bonds
Long-Term Government Bond Index Admiral  VLGSX

DYI Continues:  Despite the massive overvaluation of both the stock and corporate (especially junk) bond markets the major reason they have been able to defy gravity oil prices have dropped.  This drop in prices is geo-political and not caused by economic contraction.  This is the major reason stock and bond prices have done so well despite excessive valuations.  Over time (1st quarter 2016) this stimulus effect will wear off; stock and corporate bond prices will begin to feel the pull of regressing back to the mean.

DYI