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Component Manufacturing dverti$er
Don’t Forget! You Saw it in the
Adverti$er
November 2018 #10232 Page #78
Lumber Briefs By Matt Layman Publisher, Layman’s Lumber Guide
A Fragile Housing Recovery Built on Credit
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any Americans are not overzealous about the moderate improvements to their lifestyle, income, and overall state of wellbeing during this economic recovery. That is being expressed by the stock market’s decline and increased recession rhetoric.
No in-depth statistical analysis is needed to see the cracks in the punch bowl. A 7th grader can deduce the obvious. Hesitancy to invest in housing is based upon the fact that current economic activity is government induced and government supported and government dependent. If that were not enough by itself, our 7th grader asks one question. How is this splurge in government spending being paid for? Is it cash in the bank? Nope. Is it tax increases? Nope. Is the government spending being financed? Yes. The U.S. National Debt is now more than $21 trillion. And, don’t forget about the windfall cash cow... tariffs. 20% duties is a back door consumer tax. The U.S. Federal government and its citizens are both spending more than they earn or collect... unsustainable. Large companies’ stock buy backs have increased YoY by 40% while capital spending has increased 10%. Companies have more money than they need to supply demand. Like our lumber market, the U.S. economy is over supplied, making it vulnerable to lower prices/ stocks. It is being kept afloat by continued government spend-and-borrow economics. Check out the data in the chart. Note the debt increases since 2000 (broken down by presidential administrations). Based upon average annual increase, Trump is doing better than Obama but almost double George “W” Bush.
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