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Black Friday Mirage Hides U.S. Retail Depression

November 26th, 2012

Jeff Nielson: Every year it’s the same “song and dance” from the U.S. propaganda machine. Right after the “Black Friday” post-Thanksgiving shopping-orgy in the U.S.; the numbers will be twisted to supposedly show that the U.S. retail sector is strong-and-healthy. That’s immediately followed by a rousing chorus of “happy days are here again.”

Then, once the dust settles after the holiday shopping season (and few of the Sheep are paying attention), it will quietly announce another disastrous year for U.S. retailers. What is so pathetic about this sham is that not only does this song-and-dance never change, but it’s all based upon the same transparent lie.

That lie concerns inflation. All “inflation” is produced by the money-printing of bankers. Indeed the term itself originated as short-hand for “inflating the money supply”; which is precisely what all money-printing does. However, that topic has been covered previously for interested readers.

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Where inflation closely relates to retail sales is that any/all retail sales statistics are only relevant if inflation is totally stripped-out of any calculation. Reporting that consumers paid higher prices for goods tells us absolutely nothing about the health of U.S. retailers – which is the raison d’etre for this statistic.

Instead, the propaganda machine does precisely the opposite. Not only does it refuse to subtract inflation out of its “retail sales” calculation; but it refuses to even acknowledge its perversion of this statistic when it reports its data.

Here it’s important to note to readers that when I use the term “inflation” that I’m referring to actual inflation in the real world, and not the hyper-absurd U.S. “consumer price index.” One could write an entire book about how the U.S. government has systematically severed all ties between this statistic and the real world, however a single anecdote will suffice.

In the same month (this summer) that the World Bank was reporting global food prices soaring at an annualized rate of 120%, and Asian governments were meeting to discuss “the global food-price crisis”; the U.S. government proclaimed that inflation in the U.S. was (literally) 0%.

Zero percent inflation in the U.S.; 120% inflation in “the world.” You do the math.

Here another important point must be made. More than ever food-price inflation is “inflation.” Obviously for the billions of people around the world living in poverty and near-poverty, that reality has always been totally apparent. However, for the first time since the Great Depression that Truth has migrated to the West.

One in six Americans must now subsist on government “food stamps” in order to feed themselves properly(?). Tens of millions of other Americans struggle barely above that threshold. This is the inevitable result of the more-than-50% decline in wages for the Average American over the past 40 years, or (in other words) a greater-than-50% decline in their standard of living. Food-inflation is inflation.

By any conservative measurement, inflation across the West now rages somewhere between 10 – 20%. Here even the eminent John Williams of Shadowstats.com is guilty of failing to fully factor-in this reality in his own calculation of the (real) U.S. inflation rate. Mr. Williams only assigns food prices an ordinary weighting in his own inflation calculation, when (as I just explained) food-inflation must now be over-weighted in any inflation calculation.

The inflation-rate on a new Mercedes means nothing to the average person. The inflation-rate on a loaf of bread means everything. With readers now hopefully having a reasonable understanding of how inflation is currently impacting our lives, this brings us to the serial lies of the propaganda machine regarding U.S. retail sales.

Since retail sales figures include this 10 – 20% inflation (rather than stripping it out, as would be done by any reputable statistician), the arithmetic is simple. If retail sales were to be officially “flat” (i.e. a 0% increase), then this would translate into retailers selling 10 – 20% less goods – but simply at higher prices.

As of this moment, the propaganda machine is reporting that “total spending” over the “four-day Black Friday weekend” rose 13% over last year. This number is highly suspicious, given that just48 hours earlier the same media were reporting that sales on “Black Friday” itself had fallen by 1.8% from last year – at physical retail stores. Note that the surge in online sales this year doesn’t come close to offsetting the fall in sales from “foot traffic”, given that online sales still account for less than 5% of total U.S. retail sales.

Even though U.S. shoppers were lethargic on Black Friday itself (when supposedly the best of the bargains are available); we’re led to believe they went on a “spending” rampage after Black Friday. But here we see the propaganda machine moving the goal-posts. “Total spending” is not the same thing as “retail sales.”

Going to a movie, or a bar, or a restaurant over the course of a long week-end is not “retail sales.” Clearly the propaganda machine is now pumping “total spending over the Black Friday weekend” to hide another Black Friday Massacre for U.S. retailers. As noted earlier, with actual retail sales flat (at best), this means that U.S. retailers sold between 10% and 20% less goods than one year ago. But that’s only the latest in a series of horrendous numbers.

In October, U.S. retail sales fell 0.3% that month alone – and without accounting for inflation. Translate that into an annualized figure, and adjust for inflation; and in the month prior to Black Friday U.S. retail sales were plummeting lower at an annualized rate somewhere between13.6% and 23.6%.

Go a little further back and the numbers are even worse. Official retail sales fell for three consecutive months from April through June, again without adjusting for inflation. That’s an entire quarter of actual U.S. retail sales plummeting downward at a double-digit (annual) rate.

Meanwhile, in the surreal world of U.S. economic statistics; the propaganda machine itself regularly informs us that consumption is directly/indirectly responsible for 80% of U.S. GDP. With retail sales (the largest component of consumption) plummeting downward at a double-digit rate; it’s a mathematical impossibility for the U.S. economy to be generating positive GDP growth.

Of course since official U.S. GDP calculations are deflated with the same fantasy-numbers the U.S. government uses in its CPI calculation; U.S. GDP statistics are equally as accurate as U.S. inflation numbers – which is to say that they have no connection to the real world.

It must be noted that the collapse in the quantity of goods being sold by U.S. retailers is only one component of this U.S. retail depression. With wholesale costs soaring, and with U.S. consumers never having so little disposable income; profit margins for most retailers are being steadily squeezed.

Selling less and less goods each month is a terrible problem for U.S. retailers. Selling less and less goods for less and less profit is a certain road to bankruptcy.

With fewer Americans working each month, with those who are working making less than half the wages that workers earned 40 years earlier, and with consumers already loaded up to their eyeballs in personal debt; it’s no wonder that actual U.S. retail sales are plummeting downward at a depressionary rate. What is amazing is that anyone still believes the doctored numbers and absurd spin from the mainstream media.

Written By Jeff Nielson From Bullion Bulls Canada

Jeff Nielson is from Canada and is a writer/editor for Bullion Bulls Canada www.bullionbullscanada.com. He has a personal background in law and economics. Bullion Bulls  Canada provides general macro-economic and political commentary,  since the precious metals markets are among the most complex (and  misunderstood) in the world.

Bullion Bulls Canada also provides basic coverage of Canadian precious metals mining companies. Canada is the global leader in mining exploration, and Canadian-listed mining companies (on the Toronto Stock Exchange and Venture Exchange) are responsible for the majority of the world’s most-promising discoveries.


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