By Sol Palha (tacticalinvestor.com)
Is this economic recovery real? Well, if you base your observations on how far the
Dow has risen since the financial crisis of 2008 the answer would be a yes – but if you do just a little cursory digging you will notice that this economic recovery is nothing but a grand illusion. The following 8 factors clearly prove that this recovery is not real.
1.Copper
A leading indicator is in a death spiral so all must not be well. It is trading at multi-year low. If the economic recovery were real copper would be trending upwards.
2. The Baltic Dry Index
This leading indicator appears to be locked in a race to the bottom with copper…[It] should be trending upwards and not at multi-year lows.
3. Unemployment Numbers
The data the BLS puts out does not give you a real picture of what is going on. According to the BLS, the unemployment rate is roughly 5% but according to ShadowStats the unemployment rate was 22.9% in December of 2015.
4. Wage Stagnation
Real wages have been declining since 2000. In fact, $22.41 today has the same purchasing power an hourly salary of $4.03… [had] in 1973.
5. Student Debt
Student debt is a time bomb waiting to explode. It stands at $1.3 trillion and is growing roughly at a rate of $2,800 every second.As of June 2015, 11.5% of the debt was delinquent for at least 90 days according to Bloomberg.40 million American now are carrying some form of student loans. 70% of college students graduate with debt, and there is no guarantee of landing a job upon graduation. The department of education has stated that the by 2025 this debt is set to surge to almost $2.5 trillion.A massive default here will make the financial crisis of 2008 appear to be a walk in the park.
6. U.S. Debt
…[The U.S. is] creating new debt at a mind-boggling rate…[It is now] $19 trillion and there appears to be no end in sight- it is projected to soar to $30 trillion by 2026. The U.S is never going to be able to repay this debt…and should interest rates ever move higher, it could [even] have a hard time making payments on such a huge amount of debt. Even if rates remain low, at some point debt payments are going to start to hurt.
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