Mutant Rat Epidemic spreading Economic Black Plague, Part II

Thursday, September 23, 2010
By Paul Martin

By: D Sherman Okst
Market Oracle
Sep 23, 2010

Brief Recap of : “Mutant Rat Epidemic Spreading Economic Black Plague – Part I”

The Slave-Release Program: For 227 days of every year Americans are slaves to the Public Debt Rat. So much for the the 13th Amendment or the Civil War of 1861-1865.

The “Part-Time Abolition Release Program” makes up the other 138 days of the year during which time the “American worker” tries hard to fend for him/herself and his or her families.

At best, it is a “Quasi Part-Time Abolition Release Program” for the Corporatocracy Rat and the Globalization Rat have blasted our wages back four decades. We “compete” against someone making two bucks a day. Being an unpaid slave for 227 days and earning 1973 in wages for remaining 138 days birthed the 2 “income” family. Well, for those who didn’t divorce over money problems.

“Quasi Abolition“ because most consumers became slaves to the Bank & Credit Card Rats in order to bridge the gap between what they take in and what they need to survive.

I can’t do a piece about bridging the gap without emphasizing Jim Quinn’s fine (circa 2008) work. What I’ve dubbed the “Strabucks Effect”. He took the time to do what most economists have yet to do. Jim figured out where the consumers were getting their money from, given they only had 138 days of the year with 1973 wages to work with. Quinn found the answer: Credit, HELOC’s to be specific. For example: In 2008 Americans borrowed 9 billion dollars from their home equity loans to go buy four dollar coffees at Starbucks. After the housing crash, Starbucks closed 900 stores. The Starbucks bean-counters understood the Greenspan-Bernanke bubble and where their consumers went to get spending money. In the middle of Jim’s article he shows that consumers borrowed $2,206,000,000,000.00 (2.2 trillion) annually and used it to consume, thus fueling the economy. (I invite you to read it, Jim is one of my favorite authors).

The Rest…HERE

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