The Economy Just Fell Off A Cliff – Brace For Impact
U.S. consumers currently owe $22 billion in overdue utility bills.
No administration in history has lied on the scale of the Biden White House. Aided and abetted by media outlets that function as Democratic Party propaganda machines, Biden and his mandarins simply deny reality and pretend all is well. It is not, and reality is about to intrude on their fantasy world in a very big way.
For months now households have been battered by soaring inflation. Grocery prices are up. Fuel costs are up. Power bills are up. Inflation is rising at levels not seen for forty years.
Consumer prices have been rising at a rate in excess of 8% for many months. The report just in for the twelve months ending in May show it is now at 8.6%. In other words, the problem is getting worse, not better.
The national average price for a gallon of gas is now $5. Grocery prices are rising weekly. American families, especially those at the lower end of the income scale, simply cannot keep up. Some 31% of households now find it somewhat or very difficult to pay for usual household expenses, according to a Census Bureau survey conducted in late April and early May. At this time last year, that figure was 25%. Nine percent of households report they sometimes or often don’t have enough to eat. Many Americans are now finding out what it feels like to live in a third-world country.
Gasoline and power bills now account for 34% of the monthly budgets for the lowest-earning consumers according to the National Energy Assistance Directors Association.
"The cost of energy is becoming unaffordable," said Mark Wolfe, executive director of NEADA. U.S. consumers currently owe $22 billion in overdue utility bills. That is double what that figure has been historically. Housing prices are going through the roof. The cost of any kind of housing is soaring. "We could have severe hardship in this country," Wolfe said. "Families' budgets are being cut. It's like they're being taxed, and there's no end in sight.
American households are increasingly simply out of money, and as a consequence, they are not buying anything that is not a necessity. The clearest possible indicator of that can be seen in the volume of container traffic coming across the Pacific from China.
The cost to move a container from Asia to a major port in North America or Europe has dropped by 23% since the beginning of this year, according to maritime research firm Drewry. No one is shipping anything. Containers are simply unfilled. The market research site FreightWaves forecasts this is just the beginning and that ocean shipping volumes will “drop off a cliff” by this summer.
The trucking industry is feeling the impact too. Spot van rates in trucking are down 31% since the beginning of this year. Even railroads are reporting a sudden drop in the volume of freight they are moving. The only things still being shipped are basic necessities like coal and raw materials.
Retailers are being hammered by the impact of all this. Target stock just fell 25%. Televisions, outdoor furniture, and kitchen appliances are sitting unsold. As a consequence, Target and other retailers are now drastically marking down prices in a desperate attempt to unload inventory. Gap is hawking $60 leggings for just $12. Target is selling televisions for 25% off and patio sets at a 52% markdown.
Credit card spending has been accelerating. Personal savings rates have continued to decline. Americans have run out of cash. They are maxing out their cards and treading water. The end result of that kind of behavior is obvious.
Credit limits will be exceeded. It will no longer be possible to charge purchases. Families will come face to face with the harsh truth. They can no longer afford the items they need to survive.
I stood in line at the grocery store the other day behind a seemingly middle-class couple as they went through a succession of credit cards attempting to pay for the groceries they needed for their family. Each was declined in turn. Finally, the woman managed to use a card to transfer money from her savings account to pay for food for the family. As they left, she turned to her husband and explained her savings account was now empty.
A few days earlier I sat at a filling station near me where the attendant pumps the gas. I overheard the conversation between the driver of a pickup truck next to me and the guy working at the station. The driver was trying to figure out how much gas he could afford to put in his truck as he thumbed through his wallet. In the end, he came up with enough to fill the tank halfway.
That man was in his mid-thirties and wearing a wedding band. His truck was filled with tools and equipment. He was a contractor of some sort, and that truck was his livelihood. At home, no doubt were a wife and children dependent on that truck operating in order for them to survive. They were perilously close to finding out they couldn’t afford to run it anymore and the lights were about to go off.
We are no longer talking about rising prices pinching. We are not talking about delaying the purchase of luxury items. We are talking about brass tacks, basic necessities, and being able to feed children around a dinner table.
Food banks are seeing an explosion in demand. Increasingly the people showing up are individuals who have never had to rely on food banks before. Many of them are now living in multigenerational family units because they have been forced to move back in together to pool resources and survive.
This is Biden’s America.
This is the result of either the most incompetent administration in history or one which is deliberately taking a wrecking ball to our nation. Either way, it is clear.
The economy just fell off a cliff. Brace for impact.