Poverty Sweeps the Country as Great Depression II Takes Hold.

October 22, 2012 Poverty Sweeps the Country as Great Depression II Takes Hold: The poverty rate in the U.S. continues to get worse. The map above reflects the change in the percentage of people living in poverty. The worst states were Florida followed by Nevada. The south-eastern and far western portions of the U.S. were hit the hardest.

The nation’s poverty rate rose to 15.1% in 2010, the highest level since 1993. That’s about 46 million Americans living in poverty, which is the most in 50 years. Over 50 million Americans are on food stamps.

Consumers aren’t spending and prices aren’t rising (yet). However, that’s just what you’d expect as Great Depression II takes over the country. The economy is contracting, and as it contracts, it squeezes jobs, incomes, spending and prices.

A depression is a very long period of economic contraction. The economy failed to respond, in any meaningful or lasting way, to government stimulus programs. The U.S. is experiencing a series of rolling recessions and modest recoveries over a multi-year period of general economic stagnation, as the excesses from the prior asset and credit bubble are completely wrung out of the system.

The income of the typical American family — long the envy of much of the world — has dropped for the third year in a row and is now roughly where it was in 1996, adjusted for inflation. The gains of the boom of the 2000s have been wiped out. Household income is down over 7%, from its 1999 peak.

That’s why the 10-year T-note yield has fallen to the lowest level since right after WWII. That the yield is down to 2% speaks volumes because the last time we were at these levels was back in December 2008 when the downturn was two months old. A period like the one we have endured over the past six months, when bank shares are off 30% and the 10- year note yield is down 130 basis points (1.3%), has never in the past foreshadowed anything very good coming down the pike. If market rates are at Japanese levels, or at 1930s levels, then it’s time to start calling this for what it is: A modern-day Great Depression II.

Now, finally, almost everyone realizes that this is not a recession- recovery situation. Something else is going on, and it well get much worse!

The DOW was down over 200 points on October 19, 2012 (Friday). Companies don’t add sales or profits in a contraction. Gold is at $1,721.60 an ounce and Crude Oil is at $90.60 per barrel. Everything is rocketing downward (except gold). Existing home sales slide to 15- year lows and new home sales to record lows, despite the fact that mortgage rates have tumbled to their lowest levels in modern history. There is no economic model that would tell you that declining mortgage rates should lead to lower home sales.

After all the monetary, fiscal and bailout stimulus, the economy should be roaring ahead, as would be the case if the economy were coming out of a normal garden-variety recession. The fact that there has been no sustained response to all these efforts by the government to turn things around is testament to the view that this is not a traditional recession at all, but Great Depression II.

The Master of Disaster

About wfoster2011

Disaster researcher and current financial and economic news and events: Accidents, economics, financial, news, nature, volcanoes, floods, earthquakes, fires; airplane, ship & train wrecks; tornadoes, mine cave-ins, hurricanes, pestilence, blizzards, storms, tzuami's, explosions, pollution, famine; heat & cold waves; nuclear accidents, drought, stampedes and general. Futures trader using high volume and open interest futures markets. Also, a financial, weather and mundane astrologer with over 30 years of experience. Three University degrees from California State University Northridge: BS - Accounting MS - Busines Administration BA - Psychology Served in the U. S. Army as an Armored Platoon Leader in the 5th Battalion, 68th Armored Regiment, 8th Infantry Division (Retired). Have published three books and 36 articles available for sale through my blog: Commodology - Secret of Soyobeans (Financial Astrology) Timing is the Key (Financial Astrology) Scum City, a fiction novel (no longer available, under contract to major publisher) Currently resident of Las Vegas, NV, USA
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2 Responses to Poverty Sweeps the Country as Great Depression II Takes Hold.

  1. Pingback: » Poverty Sweeps the Country as Great Depression II Takes Hold. | Chaos Sweeps Away the World We Know! The Disaster, current events & Catastrophe Blog. Forecasts for 2012 to 2020. Read tomorrows news today! Plus current economic, commodities, st

  2. --Rick says:

    Great story…thanks for the information.

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