Wednesday, December 29, 2010

Rich gets Richer and the Poor?

Rich gets Richer and the Poor? Well, you figure out yourselves. Here is an interesting Graph even my 5 year old can deduce.

It is extremely important for us to understand this graph especially at this time of the economic crises. There is a GREAT disparity between the Rich and the Poor and everyone else in between. The Rich are getting extremely Richer and the Poor are getting (slaughtered) worse. Our Govt. who favors the Richest of Rich among every one else is on a debt. destruction mission. All the private debt. (mostly from Rich) is being converted to Public debt. Fannie, Freddie, Sally Mae etc are examples.

From WashingtonPost,

The income gap between the richest and poorest Americans grew last year to its widest amount on record as young adults and children in particular struggled to stay afloat in the recession. The top-earning 20% of Americans - those making more than $100,000 each year - received 49.4% of all income generated in the U.S., compared with the 3.4% earned by those below the poverty line, according to newly released Census figures. That ratio of 14.5-to-1 was an increase from 13.6 in 2008 and nearly double a low of 7.69 in 1968.

A different measure, the international Gini index, found U.S. income inequality at its highest level since the Census Bureau began tracking household income in 1967. The U.S. also has the greatest disparity among Western industrialized nations.
Now, We know that a strong "economy" is created by the "consumer". If the Poor are getting poorer, where is the buying power. The Rich can only spend so much (Jay Leno can only buy so many cars and Oprah can only have so many houses) and when they know that the poor don't have enough money to spend they don't have very many incentives to invest in production/manufacturing. Catch 22? Ya, I know.

Our Govt. for Now, can keep printing money out of thin air and create the artificial demand for everything, the treasuries, bonds, funds & Stocks but eventually there is exhaustion waiting for our Govt. in the near future where the Supply and Demand will balance out, naturally. "Naturally" is the priceless keyword here. Without any interference. Clear Example of JAPAN, they are still not out of their economic problems. We aren't doing anything different than them to solve our problems.

It really disgusts me to see the Stock Market keep going into green day in and day is 12/29/2010 where 19 out of 21 trading days the indices has seen green especially when most of the indicators are suggesting terribly overbought numbers. Consumer Confidence dropped, Average Home Prices dropped, Employment numbers (always skewed) are at pretty high levels (U6 at almost 20%) The Bastards are holding the stock markets for their private gains. Rich gets Richer and the Poor gets slaughtered.

Black Swan waiting to the neighborhood near you. Wall Street.

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