Tag: economy

Is the Gig Economy on the Verge of Destruction?

The gig economy as we know it is on the verge of destruction. Gig work, otherwise known as freelance work, was once held up as an entry into the entrepreneurial economy for many people seeking to dip their toes in, but that economy is currently threatened by people who do not understand its vitality for freelance entrepreneurs. There is now a push, from policy makers and a few gig contractors who think it is in the best interest of gig workers and gig employers, to professionalize the gig economy.

A recent article in the Wall Street Journal interviewed gig contractors and policy makers, who explained what professionalizing the gig economy would look like if demands are met. The article describes the policies they seek to enact, which eliminate the incentives that make the gig economy attractive for those who enjoy its flexibility and freelance work options. The new mandates will undoubtedly raise business costs for employers and inadvertently shut out the people the gig economy should help: unskilled college students with little to no real work experience, retirees, stay-at-home parents, and, of course, budding entrepreneurs. Professionalizing the gig sector will bog it down with unnecessary new requirements that will destroy it.

One gig worker the Wall Street Journal interviewed said, “It is possible to transform the gig economy into a profession that is dignified for workers.” Really? Another gig delivery driver with the right idea about the gig economy told the reporter that “the flexibility and income allow him the time and funds for other pursuits, and he does not want to mess that up.” The gig economy in its current state is an oasis for regular folks who seek entrepreneurial channels to earn extra money or supplement their nine-to-five careers. The push to turn this economy into something vastly different will disemploy food delivery drivers, artists, tutors, musicians, coders, fitness coaches, construction contractors, and other gig workers.

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The Child Poverty Rate In The United States Has More Than Doubled

If you take an honest look at the numbers, the obvious conclusion is that the U.S. economy is rapidly going in the wrong direction.  Delinquency rates are soaring, sales of previously owned homes have declined by more than 32 percent over the past two years, inflation is starting to rise at a frightening pace again, large companies all over America are laying off workers, and we just witnessed the largest decline in real median household income in more than a decade.  Sadly, it is often the most vulnerable members of our society that get hit the hardest when economic times get rough.  According to the Census Bureau, the child poverty rate in the United States more than doubled from 2021 to 2022…

The U.S. poverty rate according to the Supplemental Poverty Measure (SPM) was 12.4% in 2022, a rise of 4.6 percentage points from 2021. The poverty rate for children more than doubled year over year, from 5.2% to 12.4% — a record increase.

There is no way to spin that number to make it look good.

So why did this happen?

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“We Need To See Pain… Unemployment Has To Jump 40–50%”

The moves in commodity prices have not been lost on one of our favouite bears, Jeremy Grantham. The famed British hedge fund manager spoke virtually to a conference in Sydney yesterday, where he lived up to his billing by saying that US equities were in an AI hype-driven speculative bubble, the probability of a US recession is 70% and that he would be “very careful with real estate all over the world” given that a multi-decade bull market in bonds has driven valuations to “crushingly high multiples of family income”. Grantham singled out commodities as the investment bright spot by suggesting that we now live in a “world of shortages” and that “we are not going to be rolling in commodities ever again.” “We don’t have enough metal to green the world economy… we don’t have enough lithium, cobalt, nickel or copper.”

On the same day that Grantham was speaking, property developer Tim Gurner was also giving his two cents worth at a conference across town. Gurner sparked outrage on the platform formerly known as Twitter by saying that “unemployment has to jump 40 – 50 percent in my view. We need to see pain in the economy… We need to remind people that they work for the employer, not the other way around… Tradies have definitely pulled back on productivity. They have been paid a lot to do not too much in the last few years, and we need to see that change.”

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“Bidenomics” Is A Fraud Based On Deliberately Misrepresented Stats

Economic issues are some of the most politically abused issues, often because the data politicians exploit is easy to present out of context. The vast majority of the public doesn’t spend their time immersed in the intricacies of monetary policy, unemployment stats and the processes of inflation vs deflation. They hear a soundbite on the news or social media once in a while, assume it must be true and then go on with their day.

This is how economic crisis events always seem to take the population by surprise – the establishment tells people all is well and no one questions the narrative in the face of numerous warning signs. Sometimes, the populace continues to believe that everything is fine despite the financial framework burning down around them, all because the “experts” continue to convince them that recovery is “right around the corner.”

There are numerous incentives for government officials and mainstream economists to mislead the citizenry with tales of imminent prosperity in the midst of instability. Primarily, the goal is to keep the middle-class population as docile as possible so that they don’t revolt until it’s too late (the middle class being predominantly conservative, and the greatest threat to any corrupt regime). Understand that economics is the root of power, and economic perception is the key to influencing the masses.

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Cash-Strapped Consumers Resort To “Dumpster Dining” To Save On Grocery Bill

Despite the Biden administration’s cheerleading that “Bidenomics” is the economic savior of the middle class — most Americans will disagree there has been an economic revival amid the worst inflation storm in a generation that has sent negative real-wage growth negative for more than two years, forcing consumers to deplete personal savings and rack up record amounts of credit-card debt in a high-interest rate environment.

We have shown many households are in rough financial shape. Dollar Tree executives confirmed weeks ago that mid/low-tier consumers are trading down from other more expensive retailers to their stores for groceries. This means Walmart has become too expensive for some consumers.

Even before we noted “Consumers Trade Down From Walmart, Dollar Tree Becomes Supermarket For The Working Poor,” we found a trend on TikTok that showed an increasing number of Americans in March were resorting to dollar stores for groceries to save money. We tilted that note “Dollar Tree Dinners”: TikToker Goes Viral After Showing People How To Cook For $35 A Week.

Last week, we were the first to point out that Google searches for “pawn shop near me” just erupted to record highs, indicating that consumers are in rough shape.

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Government Job Numbers Make No Sense

The Bureau of Labor Statistic (BLS) released new jobs data on Friday. According to the report, seasonally adjusted total nonfarm jobs rose 339,000 jobs in May, well above forecasts. The unemployment rate rose slightly from 3.4 percent to 3.7 percent (month over month).

Headlines in the mainstream media declared the headline employment data to be evidence of very strong job growth and economic success. According to Politico, the latest jobs numbers are evidence of a “remarkable resilience of President Joe Biden’s economy” and NPR declared the job market to be “sizzling hot.” 

Yet, May appears to be yet another month in which it seems nearly every economic indicator except the payroll jobs data points to an economic slowdown. The Philadelphia Fed’s manufacturing index is in recession territory. The Empire State Manufacturing Survey is, too. The Leading Indicators index keeps looking worse. The yield curve points to recession. Even Federal Reserve staffers, who generally take an implausibly rosy view of the economy, predict recession in 2023. Individual bankruptcy filings were up 23 percent in May. Temp jobs were down, year-over-year, which often indicates approaching recession. 

So how do we square all this with yet another jobs report that claims to tell us that the job market is the best it’s been in decades? 

Well, a lot of the jobs data isn’t actually very good.

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Drug And Food Shortages Are Here, And They Will Get A Lot Worse…

Once the pandemic subsided, global supply chains were supposed to return to normal.  But now “hundreds of drugs” are in short supply in the United States, and even CNN is admitting that we are in the midst of “the worst food crisis in modern history”.  As I did research for this article, I was stunned by what I discovered.  Things are worse than I realized.  I knew that a lot of drugs were in short supply, but it turns out that there have been shortages of many of our most basic antibiotics since last October, and now Pfizer is telling us that several types of penicillin will completely run out later this year…

Pfizer will run out of several doses of penicillin, which treat syphilis, strep throat, and other infections, later this year as shortages ripple across the US supply chain.

The company anticipates running out of the children’s dose of the syphilis drug Bicillin L-A by the end of June, according to a letter Pfizer posted Tuesday on the Food and Drug Administration’s website. The company says it’s prioritizing production of larger doses of Bicillin L-A, which is recommended for pregnant people with syphilis because it is the only drug that can pass through the placenta and also treat the fetus.

A different Pfizer penicillin, Bicillin C-R that treats other bacterial infections but not syphilis, is expected to run out in the third quarter, which ends Sept. 30. Pfizer’s penicillin has been in shortage since April.

Of course there are growing shortages of many other commonly used drugs.

For example, one recent survey discovered that most cancer centers in the U.S. “are reporting shortages of commonly used chemotherapy drugs”…

A recent survey found that a majority of cancer centers are reporting shortages of commonly used chemotherapy drugs used to treat a wide variety of cancers.

Much of the current shortage stems from the temporary closure of a drug manufacturing facility in India that happened after the Food and Drug Administration (FDA) found issues in the plant’s quality control.

After I first read that, I immediately had one burning question come to mind.

Why in the world are we having our chemotherapy drugs manufactured in India?

Once the war between the U.S. and China starts, it is going to be exceedingly difficult to get things shipped across the Pacific.

So what are we going to do then?

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Commodity Prices Debunk The “Blame Ukraine” Excuse For Inflation

Most politicians have used the “Ukraine invasion card” to justify the massive inflationary burst in 2021-2023.

It does not matter if inflation was already elevated prior to the war.

Supply chain disruptions, demand recovery, wage growth… Many excuses were used to justify inflation, except the only one that can make aggregate prices rise in unison, which is the creation of more units of currency well above demand.

Inflationists will blame inflation on anything and everything except the only thing that makes all prices, which are measured in monetary units, rise at the same: Money supply growth rising faster than real economic output.

Supply chain disruption and commodity inflation are caused by monetary expansion: More units of currency going to relatively scarce assets. Profits, wages, or commodities are not causes of inflation, but consequences. The unit used to measure prices is weakened by massive increase of its supply. It is as if I sell apples measured in glasses of milk, and suddenly the issuer of milk puts hundreds of gallons more in the market. My apples will cost more glasses of milk to adjust to the reality of the new unit of measure.

Long-term inflation expectations have risen to 3%, the highest level in twelve years. Furthermore, according to the Bureau of Labor Statistics, in April the Consumer Price Index increased 0.4 percent, seasonally adjusted (SA), and rose 4.9 percent over the past 12 months, not seasonally adjusted (NSA). The index for all items less food and energy increased 0.4 percent in April (SA); up 5.5 percent over the year (NSA). However, commodities have plummeted in the past year.

Crude oil (WTI) is down 38% in the past year, trading below pre-Ukraine invasion level. Gasoil (-44%), gasoline (-40%), heating oil (-44%), natural gas (Henry Hub -74% and NBP -65%) have all plummeted to pre-war levels.

Even wheat is down 30% from a year before June 4th, 2023. The FAO Food Price Index has also corrected to a two-year low in May.

Why do commodities plummet in the middle of the China recovery and elevated demand growth and tight supply? Monetary factors again. The massive rate hikes and the subsequent monetary contraction have impacted the internationally quoted prices of goods all over the world. It is more expensive to purchase storage, finance margin calls, hire tankers and start long positions.

If commodities and the Ukraine war were to blame for inflation, why is the consumer price index remain so elevated? Money supply growth is plummeting but not enough to revert the price expansion of 2020-2023 and, in fact, global money supply has not fallen lower than $101 trillion, according to Bloomberg. That is a significant drop in money supply from its highs, and one that justifies the rapid decline in headline inflation, but not enough to revert the price increases for consumers.

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Three Lies They’re Telling You About The Debt Ceiling

Negotiations over increasing the federal debt ceiling continue in Washington. As has occurred several times over the past twenty years, Republicans and Democrats are presently using increases in the debt ceiling as a bargaining chip in negotiating how federal tax dollars will be spent.

Most of this is theater. We know how these negotiations always end: the debt ceiling is always increased, massive amounts of new federal debt are incurred, and federal spending continues its upward spiral. In fact, since the last time we endured a major debate over the debt ceiling—back in 2013—the national debt has nearly doubled, soaring from $16.7 trillion ten years ago to $32 trillion in 2023. Over that same period, federal spending has increased more than 80 percent from $3.4 trillion in fiscal year 2013 to $6.2 trillion in fiscal year 2022. 

So here we are again with policymakers essentially discussing how long it will take for the national debt and federal budget to double again. As far as Washington is concerned, that’s all fine. The debt ceiling will rise sizably. We know this because what really matters—as far as DC policymakers are concerned—is that the taxpayer gravy train never stops. Equally important is that the federal government not default on any of its massive debt to ensure continued access to cheap debt—and thus massive amounts of deficit spending—now and forever. 

To take this narrative at face value, however, we have to buy into some big myths that policymakers are quite enthusiastic about repeating.

These lies persist because the regime needs to convince the voters and the taxpayers that no matter what happens, no major changes to the tax-and-spend status quo can ever be allowed to occur.

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