But is there really an economic boom?
Please see the following graphs, which seem to indicate that the Obama boom consists of smoke and mirrors (hat tip to The Flying Camel; click directly on the graphs to enlarge them):
So, what do the above graphs mean for each of us and for America as a whole? According to The Flying Camel, citing Charles Hugh Smith:
Why will Christmas 2014 be the last Christmas in America? It’s simple: declining wages cannot support an ever-expanding mountain of debt.Read the entire essay HERE. Your thoughts on this topic?
The Federal Reserve has played a game for six long years of lowering the cost of debt (i.e. the rate of interest borrowers must pay), which has enabled stagnating wages to support ever heavier debt loads.
There is an endgame in sight to this financial trickery, a point of diminishing returns to lower interest rates: the Fed can’t drop rates lower than 0%. Borrowers simply can’t qualify for more debt, regardless of interest rates.
The extreme fragility of an economy based on ever-expanding mountains of debt piled on declining incomes is apparent: if the Fed can’t raise interest rates even a tiny quarter point without threatening to collapse the unstable pyramid of debt-based affluence/ consumption, what does that say about the fragility of the “growth” (supposedly running at a hot 5% annually) and “prosperity”?
Claiming that a few hundred dollars in lower gasoline costs per household will enable a desert of declining income to bloom is the equivalent of claiming that an inch of rain in Death Valley will transform the desert into a lush tropical rain forest.
Remember the lackluster Christmas of 2014 well; the endgame of expanding debt will play out as every endgame does: furious moves by central bankers will prolong checkmate but not transform the inevitable loss into a win. Media sound and fury are no substitute for rising real household wages and incomes.