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Food Stamps Economics : Inthon

Never discussed on CNBC is the fact that more people than ever before are requesting food stamps.  Bloomberg reports that 33.8 million people in the US are receiving food stamps.

Given that the US has a population of just over 300 million, this means over 1 out of every 10 Americans are currently getting food stamps from the government.

Keep in mind, Obama has acknowledged unemployment will “tick up” over the next several months.

Other economic facts:

  • California is unable to pay its bills and is paying with IOUs
  • Unemployment shows no signs of slowing down
  • Global wage competition for jobs means fewer well-paying jobs
  • City/State governments are at the brink of insolvency
  • Credit has dried up and consumer spending is dead

Now, what happens if:

  • There is a terrorist attack
  • There is a large natural disaster
  • There is a refusal to buy US Treasuries
  • There is a viral outbreak

Do you really think the economy can survive and still generate 8% returns per year?  Do you really believe this is just another run of the mill recession and that we are immune from a Depression?  Why?

Takeaway:  The rally from March – July has been based on nothing but speculation and groundless optimism that the “bottom is in”.  If you have your 401(k) in stocks, please be advised that your upside is e-x-t-r-e-m-e-l-y limited!  If you’ve been lucky enough to have cash invested through this rally from April, now is the time to get out.

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