5 Sure Signs the U.S. Economy is Finished
By MONEY MORNING STAFF REPORTS
With the S&P 500 at all-time highs and Americans getting ready to spend more than $600 billion on Christmas, what's not to love about the "New Economy?"
According to the vast majority of Americans... plenty.
In recent CNN exit polls, 78% of Americans said they are worried about the economy, with 69% saying economic conditions are not good. Meanwhile, a full 65% believes the country is on the "wrong track."
And the fact is, the gap between high- and low-income groups is the widest it has been in 100 years and the share of U.S. consumers who call themselves middle class has never been lower.
But those aren't the only signs the economy isn't all that it's cracked up be. In fact, there are five unmistakable signs the U.S. Economy is teetering on the brink.
1. The homeownership rate continues to plummet.
According to the Census Bureau, the share of Americans who own their homes was 64.4% in the third quarter. That marked the lowest level of homeownership since the first quarter of 1995. Meanwhile, the share of first-time buyers was just 29% in September, compared to 40% historically... so much for the "American Dream."
2. Real wages have been falling for years.
Median inflation-adjusted income last year was $2,100 lower than in 2009 and $3,600 lower than in 2001. And according to recently released data from the Social Security Administration, 50% of all American workers made less than $28,031 a year, while a whopping 39% brought home less than $20,000.
3. The labor force participate rate has collapsed.
The percentage of people in the work force has dropped to 62.7%, matching the February 1978 lows. A remarkable 92.6 million people are not in the labor force.
4. The typical household is now worth 36% less.
According the Russell Sage Foundation, the inflation-adjusted net worth for the typical household was $87,992 in 2003. Ten years later, it was only $56,335, posting a 36% percent decline. It's little wonder 40% of Americans reported that their families were "just getting by" or struggling to do so.
5. The velocity of money has fallen to an all-time low.
In a healthy economy, consumers and businesses buy and sell things frequently and money changes hands very rapidly. But when an economy is sick, the rate at which money changes hands drops like a rock. Economists call this the "velocity of money," and it's fallen to lowest level ever recorded. With 76% of Americans now living paycheck to paycheck, and millions more dependent on government aid, it's easy to see why.
But the worst may be yet to come...
A well-connected Washington, D.C. insider recently issued a major warning that could dramatically affect ALL U.S. citizens, but would hit everyday Americans particularly hard.
His name is Jim Rickards and he's a financial market advisor to the Office of the Director of National Intelligence, which oversees the CIA, the NSA, and 14 other U.S. intelligence agencies.
And with his knowledge about the inner workings of the government, the economy, and the U.S. banking system, he sees some big, major changes ahead for the United States.
In fact, what he's predicting just might be the final nail in the coffin of the middle class.
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