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Walmart Is Today's Economic Canary In The Coal Mine
Once upon a time, canaries were kept in cages in coal mines. If the canary died it signaled to the miners a dangerous buildup of lethal gases such as carbon monoxide that could kill humans as well. It meant it was time to get out before it was too late.
Today’s economic canary in the coal mine appears to be Walmart.
All over the country Walmart’s are closing. At least eight locations will close this year, including all the stores in Portland, Oregon.
The company’s CEO has made the reason for the closures pretty clear – shoplifting.
Walmart CEO Doug McMillon said Tuesday, “Theft is an issue. It’s higher than what it has historically been.” McMillon had previously made clear that losses due to shoplifting might force Walmart to begin to close stores.
Certainly, part of the blame for escalating shoplifting rates lies with jurisdictions that have opted to go soft on crime and prosecution of those arrested. This epidemic of shoplifting signals something else, however, something much more fundamental.
People are stealing because they have to. They are out of money. The economy is tanking, and they are up against a wall.
In New York City, theft of food is so out of control that owners of grocery stores are contemplating locking up food the way that high-end items are locked up today. Store owners have formed a group called Protective Action to Protect Our Stores to pressure the city for action to stop shoplifting.
The National Retail Foundation is estimating that it lost $94.5 billion last year due to “shrink” — an industry term that means lost inventory which is being blamed primarily on shoplifting, according to the Wall Street Journal.
Walmart is only one of a number of companies closing stores across America. Bed Bath and Beyond is closing 150 stores. Target, Walgreens, and CVS are also among the national chains shuttering multiple locations.
Store closures are not the only indicators of financial collapse. As of the end of 2022, more than 6% of auto loans in the country were delinquent. When Joe Biden took office that rate was somewhere between 2 and 3%.
Auto dealers have reported an alarming increase in the number of customers who trade in their vehicles with negative equity of $10,000.
"As trade-in values begin to cool, each month more and more consumers will find themselves falling from positive to negative equity.
"Unless American car shoppers break their habit of buying again too soon, we'll see the negative equity tide continue to rise," Ivan Drury, director of insights at auto-market researcher Edmunds, said.
This isn’t happening because Americans don’t understand the negative impact of losing money trading in a car. It is happening because those Americans can no longer afford their car payments.
Approximately two out of every 13 individuals are making monthly car payments of $1,000 or more. The average loan rate for new car loans just hit a 13-year high.
"Because these car loans are generally unaffordable at the outset, that means that every month, borrowers are getting closer to the financial edge," said Kathleen Engel, a law professor at Suffolk University.
Americans are hanging on by the skin of their teeth. Safety nets are gone. Sixty-eight percent of Americans believe they could not cover their living expenses for a single month if they lost their jobs. The majority of Americans do not have enough money on hand to cover a single unexpected expense of $1000.
The top reason cited by individuals polled is inflation.
Out of cash and out of options, Americans are turning to credit cards.
According to the Kobeisi Letter:
“The U.S. Now Has: 1. Record $16.5 trillion in household debt 2. Record $11.9 trillion in mortgages 3. Record $1.6 trillion in auto loans 4. Record $986 billion in credit card debt Total mortgage debt is now more than double the 2006 peak. Meanwhile, 36% of Americans have more credit card debt than savings with balances rising at the fastest pace since 1999. This is all while mortgage rates just hit 7.1% and credit card debt rates hit a record 24.9%.”
This is not just happening. It is the direct result of actions taken by the Biden administration. It has waged war on the fossil fuel industry and driven energy costs through the roof. That impact has rippled throughout the entire economy. Everything is more expensive because it is more expensive to produce and ship everything.
The Biden administration has also embarked on ruinous levels of spending, all of which is paid for by artificially inflating the money supply—more money in circulation with less value. Costs spiral out of control.
Biden and his minions pretend none of this is happening. They are aided and abetted by their lackeys in the state propaganda machine that masquerades as MSNBC, CNN, and their ilk. None of that changes reality. Americans are out of options.
The air is getting thick. Walmart – the canary in the coal mine – is showing us how close we are to disaster. Time for action before store closures today turn into famine and unrest tomorrow.
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