SGM Metals: Census shows US Median Income in Recovery at Lowest Level Since 1995

In a move that would be considered by some to be an act of war, the dollars hegemony is being shattered as Russia & China offer unlimited oil but refuse payment in USD! As the Chinese currency replaces the petro dollar consequences will come swiftly!
As the petro dollar fades away the dollars value will be chopped in half or more
As the petro dollar fades away the dollars value will be chopped in half or more
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Sept. 17, 2012 - PRLog -- reports: [ The median income of American households dropped to its lowest level since 1995 last year, extending its decline during President Barack Obama’s tenure and highlighting the depth of the damage to the middle class inflicted by the recession and weak recovery.

According to annual data from the Census Bureau, median income adjusted for inflation – a closely watched measure of the financial health of average Americans – fell to $50,054 in 2011, or 1.5% below its 2010 level and 4.1% below its score when Mr. Obama took office in 2009.

In addition to the drop in overall median income, the data also showed a rise in income inequality last year. The release of the dire median figures also offers the latest reminder of the sluggishness of the recovery, marked by high unemployment and weak job creation, which is prompting Federal Reserve officials to consider a new round of monetary easing as early as Thursday.

But while the data on income will have been discouraging for Mr Obama, other elements of the report were more upbeat. For instance, the poverty rate dropped slightly, from 15.1 per cent to 15 per cent, as fewer middle-class Americans struggled so much that they had slid under the poverty threshold of about $23,000 in annual income for a family of four.

Mr. Obama is championing higher taxes on the wealthy in order to protect government spending on programs that aid the middle class as the best recipe for the country. But the census data could dent a small burst of rising confidence in the economy that has showed up in polls by Gallup and Reuters/Ipsos since last week’s Democratic convention.

“Today’s report confirms that the American dream remains out of reach for too many Americans,” said Andrea Saul, a Romney campaign spokeswoman. “While this may be the best President Obama can do, it’s not the best America can do”.

Real median household income reached its peak at $54,932 in 1999, 8.9% above its current level, under President Bill Clinton and has not been below $50,000 since 1995. Under President George W. Bush, it fell to $52,778 by 2004 before recovering to reach $54,489 in 2007 and then sliding again in 2008.]

The idea of austerity that the western world is watching happen across Europe is a frightening concept that Americans are cringing at the thought of having to adopt here if things get any worse. But let me ask you this, aren’t we experiencing a version of austerity here in America as we see incomes drop, net worths drop, tax paid for benefits & services getting cut, local govt.s making the decision to shut down parks and libraries, police departments shedding 1/2 their officers, fire departments slashing their coverage areas and on and on. Wouldn’t this be considered austerity? The politicos wouldn’t dare call it that as it would finally be what gets Americans off their couches encourages them to turn the TV off to get politically active. But for all intents and purposes, wouldn’t this be considered an austere direction that our economy has gone? Would a rose by any other name . . . . . .

Everyday when I compose the blog posts seen here I wonder to myself: “What will be the economic indicator or event that will be of enough economic significance to get American’s attention and force them to realize that we are in big trouble? What will be the event that convinces individual investors to shift from being a willing participant in the over inflated stock market and instead adopt a wealth preservation strategy in hard assets such as gold & silver to hedge against the inflationary attempts by the FED to create the recovery that has failed miserably up to this point?” Using history as my guide, I’m afraid it will be an event that is too little too late, as this is traditionally how the citizens of the land have played other major economic events in the past. The idea of a major economic crisis that does anything more than create ‘slow patches’ in the ‘business cycle’ is so foreign to US citizens that I’m afraid that blind optimism will be the undoing of our nations ability to survive this coming event with any really volume of wealth that we went into it with. Stated differently, everyone will blindly support the “inflate our way to a recovery and assume the world will not grow weary of the FEDs inflation tactics and dump the dollar in a global dollar crisis that could topple US mega banks overnight” until those very things begin to happen and that will be when the mania will begin. So for those who have the intestinal fortitude to see this possibility on the horizon and also make the arrangements to insulate their net worths from these possible scenarios playing out there are options that offer tremendous stability while having considerable profitability as well. The options are only available for those who posses the ability to see beyond the controlled recovery message that is crammed down our throats every night on the corporate news networks.

Gold & silver bullion have risen handsomely each year for the past decade while the inflationary policies of the FED were just getting warmed up and have even outperformed themselves since the FED pushed the turbo button on the printing presses when the housing crash kicked off. Mr. buffet’s arguments that gold is an antiquated asset that offers no dividends is a truly stupid argument and should be see for what it is, an attempt to talk to you like a stupid child as the merit of this statement is nil. To make the point, GOLD IS MONEY! To put this point in perspective, if you hold 10% of your liquid net worth in Mexican Pesos or British Pounds do they pay you a dividend? NO because money offers no dividends as it is simply a medium of exchange. So you see Warren Buffet is playing on your lack of investing knowledge or simply trying to bully you with a non truth assuming you will take his statement as the word of God as he is the ‘Oracle of Omaha’ after all. Why if it is a stupid asset have central banks around the world been frantically moving to reverse a multi decade trend of being net sellers of gold and scooping up metric tons of the precious metal frantically as the western central banks desperately attempt to re-inflate the credit bubbles that have replaced the real economic activity of the past two decades? Why then has George Soros and John Paulson dumped all of their US mega bank stocks so they could double down on their massive gold positions they have held closely through the supposed recovery? Why are hedge funds and pensions acquiring tons of gold as a viable replacement for very risky stocks that have traditionally comprised the majority of their holdings? BECAUSE WHAT HAS BEEN DONE UP TO THIS POINT IN THE NAME OF STABILIZING THE BANKING SYSTEM, BAILING OUT SECTORS OF THE ECONOMY, AND PROPPING UP THE STOCK MARKET WILL BRING INFLATION TO THE WORLD, BUT WHAT WILL BE DONE FROM HERE COULD BRING THE THREAT OF A GLOBAL DOLLAR PANIC & A BANKING CRISIS THAT COULD SWALLOW THE WESTERN BANKING SYSTEM IN AN INSTANT.

Should these events play out, those who hold gold will be the true winners as they will have their wealth suspended in the true reserve currency of the world and will be the victors as their holdings will be in high demand. If any outcome arises that is a multiple less in magnitude of this worst case scenario those holdings in gold & silver will function as an inflation hedge that will offset the currency devaluation that will surely rebalance the global landscape. Knowing that inflation is the least of the negative outcomes that will arise from this period of desperation, gold & silver bullion seem poised to be the only intelligent alternative as they offer true wealth preservation thanks to the intrinsic value they possess. Establish your “Inflation Insurance Policy” in physical gold & silver bullion today and begin to participate in the sound money debate as the world braces for the impact of this brave new world. Remember that it is a far better strategy to PREPARE your portfolio than to attempt to REPAIR your portfolio once the damage begins. Tick, tock.
Source:SGM Metals & The Elemental Economist
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