Christmas Season Will Answer Recession Debate.

Some stores are already preparing 50% off or more sales with advertisements stating they will open their doors at 5:00 a.m. or earlier to try and build shopping frenzy. To be sure, there will be scenes on all local newscasts of droves of holiday shoppers piling into stores but the mass entrance of shoppers won’t tell the tale. The question of whether or not those crowds buy enough, including bigger ticket items is how a store will know if it will have a profitable year

The news on the consumer front belies the words being mouthed by the President that our economy is strong and healthy. We are told core inflation is well below 4% but the numbers exclude food and energy. Food and energy of course are two areas where inflation has had catastrophic increases. They also are two categories which the American middle class cannot just ignore. Most of us can walk away from new appliances or clothing or other durable goods. We can’t walk away from the bills to heat our homes or drive our cars to work or feed our families. To exclude these key factors from an actual statistic shows just how phony information fed to us by our government has become.

The gasoline crisis alone can destroy our economy if it hasn’t already. The Washington Post has reported that Americans are paying an astronomical $4 to $5 billion dollars a day more in oil prices over just five years ago. This year alone a $2 trillion dollars increase over 2002 will be taken out of the mainstream spending pattern to pay major oil companies and major oil producing countries for the fuels we need to stumble on in our lives. And the government tells us things are just fine?

Most large retailers have sophisticated systems to track sales and have reports available for every store at any given moment of the day. The reports logged by such giants as Wal-Mart show just how damaged our middle class has become. Wal-Mart records show that sales are fluctuating heavily from day to day, with increases after the 15^th and 30^th of each month, dwindling as the days move towards the next pay cycle. The reports show that the middle class, historically paid in mid-month and month’s end, are living more and more from paycheck to paycheck than ever before.

For several years, the credit card boom, balanced these cash flow problems but as consumer debt has reached epidemic proportions, credit card balances have been used up or the debt burden has finally reached a stage where consumers know they can’t borrow any more money at 19% to 35% per annum.

The housing market, collapsing over the sub prime mortgage fiasco, is already showing ancillary effects in other industries. Lumber yards, door and window manufacturers, plumbing and electrical companies all are cutting back as new home sales grind to a halt.

Laborers and tradesmen have seen hours cut or have been laid off but we are told the jobless rate is well below 5%. We have more than 5% of this country in jails or on welfare roles so you know how phony that statistic is.

The signs are everywhere that we are standing on the brink of a major recession that could damage for years the middle class in this country but there are no concerns coming out of Washington. Instead we are told that things are just fine. I beg to differ.

This Christmas season, we will find out if I’m wrong in my assessment and just an alarmist spewing bull. If I’m right it will show either Washington is filled with incredibly dumb people or liars.

I hope I’m wrong. The alternative realities are not very palatable.