Gas prices are on the rise again. In many areas of the U.S. gas prices are already hovering around $3.00 a gallon. In fact there are some areas where people are paying as much as $3.50 a gallon, and many experts are predicting that gasoline could hit $4.00 a gallon by the end of 2010. If this nonsense keeps up, how in the world is the average American family supposed to make ends meet? Not only is filling up our tanks going to cost a lot more, but the price of gasoline factors into so many other things. The U.S. economy just cannot handle a major increase in transportation costs at this point. These increasing gasoline prices come at a time when U.S. consumers are already stretched to the max.
But it isn't just gasoline prices that are going up. The price of food is really starting to rise as well. Rising demand and reduced supply drove supermarket prices for 16 basic foods up 6.2% in the first quarter of 2010.
Now, for those Americans who are independently wealthy, a large increase in gasoline and food prices might not mean much.
But for the rest of us who are trying to get our incomes to stretch as far as possible each month, it means a whole lot.
In fact, a record number of working Americans are finding that their paychecks are just not making it and are turning to government assistance programs such as food stamps just to make it.
According to the U.S. Department of Agriculture, approximately 39.4 million Americans, a new all-time record, received food stamps in January. This was up 22% from a year earlier. In fact, the number of Americans on food stamps has hit all-time records for 14 consecutive months.
New all-time records for 14 months in a row?
How in the world can anyone claim that the U.S. economy is in good shape?
And it is just not people who are out of work or who are lazy who are applying for food stamps. The truth is that a lot of hard working Americans who are doing everything they can to better themselves find themselves out of alternatives these days.
Some of those hard working Americans are readers of this site. One of them recently left a comment that is very timely....
There are people on food stamps now, that you would never think they were. For example myself, I just went on food stamps last month. I am not a welfare mom, unemployed or declaring bankruptcy, I am educated and working as hard as I can to make ends meet.
I hold a Masters degree, and a part time job. I make minimum wage and if I were scheduled 40 hours a week my pay would just cover my expenses. Problem is, with retail the number of hours changes from week to week, and it hasn’t been near 40 since Christmas. Luckily I planned ahead and put money aside if I couldn’t find a job right out of school, or if I found one and lost it with today’s economy. I have been able to cover the bills my paycheck doesn’t, but the thing is, my savings has gotten low to that.
I honestly really didn’t want to go on food stamps, I just can’t find another job. Let that be a full time position, or even another part time one. I’m applying to everything I’m qualified for, remotely qualified for, and even over qualified for. But there really are that few of jobs out there.
I haven’t really told anyone I’m on food stamps, a good portion of my old friends are still in school and don’t understand why I can’t find a “real” job. Luckily at my new job there’s a whole store of people who know exactly what I’m going through and would never think of judging me for how much I make or where I live.
There are other people too. Once at work a mother with three kids came in, she had never used food stamps before and had no idea what to do at the register. She almost came to tears trying to explain she really didn’t want to use them, but her husband lost his job, and all that was left for the family was her part time job, and she was so ashamed they had them.
People really have no idea how many of their neighbors are on food stamps.
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Millions of Americans have done everything that the system has told them to do, and now the system is letting them down.
Why?
Because the system is failing.
The middle class is slowly being squeezed out of existence, and the years ahead are going to be very painful.
Already, it is getting extremely hard to live a middle class lifestyle.
If you haven't read "It’s Impossible to Get By In the US" by Graham Summers of Phoenix Capital Research, you really need to. In his article, Summers analyzes the expenses of a typical family making the median U.S. household income of $50,300 (he was using 2008 figures). According to Summers, if a family making that much did everything right financially, they would maybe have a couple hundred bucks at the end of the month for discretionary spending. But if they overpaid for their house or had any consumer debt then according to his calculations the typical American family would be operating in the red.
The truth is that the day is fast approaching when it will not be possible for the average American family to make it from month to month.
Even now record numbers of American families are failing financially.
In March 2010, there were 158,000 bankruptcy filings. That was up 19% from March 2009's number, and it was also up 35% from February 2010's number.
Things are getting scary out there.
But if all of that wasn't bad enough, now state and local governments across the United States are either implementing or are considering substantial tax increases. State and local governments all over the U.S. are facing unprecedented shortfalls, and they are looking for new sources of revenue. But you just can't get blood out of a stone. Unfortunately, they are likely to keep finding ways to impose new taxes on us anyway.
So is there any good news?
No, not really.
The United States is heading for a complete economic collapse and everyone is going to feel the pain one way or another.
Just make sure that you and your family are as prepared as possible for the years ahead.
"The way to crush the bourgeoisie is to grind them between the millstones of taxation and inflation."
-Vladimir Lenin
Another fine piece…thank you.
This article hits the nail on the head. Many people I come across is completley unaware about the coming collpase. They either tell me to shut up or they say “say something positive and let me drink it away”. Now, the harsh truth is coming out and I have been mentally prepared for this for years. My mind is strong and is ready for the economic collpase. I have a feeling that many people will lash out and I will try my best to not be near them. I am concerned about citizens of this country and my family.
You quote: “…But if they overpaid for their house…”.
It’s worth noting that during bubbles people are always overpaying for the underlying commodity (tulips, tech stocks, metals, real-estate). According to this logic, EVERYONE has been overpaying for their houses over the last 10-15 years. But everyone jumped on board anyway, because we’ve been told that owning your own home was the quickest way to build wealth. What a load of bull. The quickest way to build wealth is so save and invest and live below your means.
Since graduation everyone has chided me for not purchasing a home, I continue to rent. I’m “putting money in another man’s pocket” as they put it. But the truth is: I’ve never cared about house upkeep, property taxes, I even negotiate on utilities. Doing this keeps my general overhead very low (much lower then if I were to buy even a cheap house). The second benefit is that it keeps me very flexible. Layoffs? not nearly as much of a worry because I don’t have a collosal debt to care about. Anyone who’s purchased a home knows that the house becomes their primary expense. You have to insure it against calamity (which can be really high in some places), you have to replace appliances, and you have to care about your gynormeous debt obligation. Everyone I know who owns a home can’t afford to get laid off, those who don’t own….can much easier weather the storm. In the event that everyone gets laid off (like a recession), you won’t even be able to find buyers for your home. Having equity in your home is a silly concept. It’s only when you sell your home and you get more then you owe that you can say it had positive value.
Good article, but I didn’t see the magic phrase anywhere, that phrase being “Peak Oil.” Were it not for Peak Oil, America could have possibly made it through this economic crisis and kicked the can representing the ultimate day of reckoning down the road another couple of decades. Given that Peak Oil is here now and has been with us since 2005, a couple of more years is probably more likely.
It sucks gas prices are gonna go up but it doesn’t really affect me. I just won’t drive. They raised the cigarette tax I stopped smoking, I live a very dormant lifestyle and I will keep doing it.
As for all the unemployed their gonna have a tough time but will find away to deal with it.
That Vladimir Lenin quote cinches it. Do you know who Lenin and the Bolshies were funded by?
Wall Street. J.P. Morgan, Guaranty Trust, the international bankster firms on Wall Street, the heritage of Andrew Carnegie.
They also supported and funded Mussolini and Hitler.
Monopoly men and the financial elite love brutal dictators because they wage war against and demand fealty from the lower classes, including the middle class.
Marx and Lenin hated the middle class, called them the bourgeoisie.
The hereditary elite, the international bankster cartel hate the middle class too and that’s why they secretly funded the commies and the socialists.
It’ all about breaking the middle class. It has been the same song and dance for centuries now.
Nothing happening right now is accidental. If you watch CNBC and the financial shows, you are told it was greed on Wall Street, it was ineptitude, malfeasance, stupidity.
It’s none of that. It is an ongoing effort to usher in a return to feudalism, a state of affairs where you grovel and pay homage to the elite. I know this sounds strange, but they like to see you in misery. Because they are mostly hereditary sociopaths, even psychopaths.
So, if they hate us so much, why did they let us get strong, have a middle class, a modicum of wealth?
Because the needed us to build an industrial base, modern science, technology. All of it was moved offshore to Asian and third world slave gulags over the last 20 or so years.
Now it is time for us to become a “level playing field,” that is to say a slave gulag.
How to fight back? Get rid of EVERYBODY in elected office, even the local dog catcher.
Elect only people who will uphold and follow the Constitution.
Once Congress is free of corporate and bankster whores and hirelings, move on the Federal Reserve. Dismantle it. Round up the economic criminals and put them on trial for treason.
Sweep out all the Goldman Sachs and Wall Street cronies out of the Treasury. Stop printing funny money and bring back the gold standard. Don’t let the bastards ever, EVER get near the money supply again.
Force corporations to sign community charters in order to do business in your city or town. That’s how it was before the monopoly men took over in the 1800s.
Produce locally, buy locally. Get rid of the disease known as globalism.
Bring all the troops home. They simply support the globalists, the bankers and their profitable wars concocted under false pretense.
Our founders hated and feared standing armies. Dismantle the Pentagon, bring back state militias. We don’t need a large and astronomically expensive military. There is no Soviet threat, nobody will invade us (the Cold War was a bankster scheme as well).
What did that Japanese general say (forget his name) after they invaded Pearl Harbor? There is an Americans behind every blade of grass with a rifle. Even the Chinese would be crazy to invade us.
War is a bankster scam. Get rid of it. Sane and rational people prefer to trade not fight. It is the elite that always start the wars, not the people, not the small business man.
I don’t know if we will or can do any of this. If we don’t, we’re doomed.
If we allow them to completely collapse the economy, there will be social chaos and violence. After that, all bets are off.
Kissinger was right when he said that when things get bad enough people will be demanding a military dictatorship. Hunger and want always trumps liberty and sanity.
We don’t have much time. Maybe three or four years at the most, possibly ten, although I doubt it.
We need to act yesterday.
The average price for a gallon of gasoline could reach $4 by the end of summer as outlined in the article. This has more to do with the rampant trading in crude oil futures than some vast government conspiracy.
Speculators are betting that demand will increase as the world economy recovers. The Obama administration does not have a clue on what makes the markets tick and only reacts to any criticisms by blaming the previous president.
The proposed cap and trade legislation is doomed from the start since that could cause gas prices to go to $7 per gallon when fully implemented.
Meanwhile back at the ranch in Terry, Montana watching the developments it looks to me like an instant replay of 2008. Get ready for a rocky ride.
You can read my viewpoints on the petroleum industry and forecast for gasoline prices at:
http://www.4vqp.com/ourconsultants/thegasguy.html
Bob “the Gas Guy” van der Valk
One reason the price of gas goes up is speculation. We also have the problem that our energy companies, even if they find oil and gas in the U.S, don’t have to keep it in the U.S. Did you know that Alaska oil goes to Japan? If Congress cared about the country, they would have done something about it.
“The price of food is really starting to rise as well. Rising demand and reduced supply drove supermarket prices for 16 basic foods up 6.2% in the first quarter of 2010.”
It’s only going to get worse because our nation’s population is poised to explode to about 450 million by 2050. That means that the demand for food (and energy resources) will have increased relative to the supply of high quality farm and grazing land needed for growing food and grazing animals.
Sadly, most Americans, including Americans who protest global labor arbitrage, are completely unaware of this issue–the issue of population growth and its numerous negative consequences. The media almost never mentions it and our politicians will never mention it. Addressing population growth implies having to address two other issues–immigration (we need end it almost completely) and abortion (by encouraging abortion for unplanned pregnancies and amongst the poor, we combat population explosion). However, just because potential means of addressing the problem are unpalatable does not mean that the problem will just magically go away.
big oil became addicted to massive profits the last time it was at $4/gal
watch for more record profits as they bleed you dry
Frank: Read about Malthus, it’s been a long time since people said our food supply would not sustain our population, further research and engineering have thus far been able to always prove them wrong. I agree there’s a population growth problem, but that’s mostly for the underdeveloped countries to figure out…most western nations are growing via immigration vs. reproduction.
nader: read Bob’s posting, it’s more educated. If you sell a commodity for more then you paid for it then you’d get profit too. If the world really wants it and you sell it for 5X what you paid for it, then you’d reap a record profit too. They made the risk in the billions of dollars worth of infrastructure, they yield a reward when everyone either overconsumes or overpanics. Quit with the sour grapes.
Baby Boomer…I have no words…get a clue before putting the fingers to the keyboard
tyler: right idea.
Hi, I live in Romania, a country in Eastern Europe. Our GDP is 11.000 USD per capita. My wages is 700 USD a month (witch is a good one). The gasoline here is 5.5 USD per gallon (yes, this is true, you mai check it). How can I manage? Simple, I have a Fiat (the company who owns Chrysler)with a 1.3 liter engine. Welcome to the future. It seems to me that the Americans lived for a very long time above their means. A bit like Greeks. Or more like Gthe Greeks. Well, the afterparty hangover is a bitch. And the Americans are better then anybody to regroup themselves. Because we need a strong United States.