A 1 In 100 Year Secular Economic Shift

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 |  Includes: DIA, SPY
by: Graham Summers

The facts are now becoming abundantly clear, that the forecast we've maintained for well over two years has been validated: the U.S. is in a DE-pression and both Washington and the Federal Reserve have wasted trillions of dollars.

The reality is that what's happening in the U.S. today is not a cyclical recession, but a one in 100 year, secular economic shift.

See for yourself. Here's duration of unemployment. Official recessions are marked with gray columns. Bear in mind that the Feds measure unemployment based on people looking for work, so if you stop looking, you no longer count as unemployed and this number will fall.

Even with this accounting gimmick, the average duration is still at 35 weeks.

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Here's the labor participation rate with recessions again marked by gray columns:

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Another way to look at this chart is to say that since the Tech Crash, a smaller and smaller percentage of the U.S. population has been working. Today, the same percentage of the U.S. population are working as in 1978.

Here's industrial production. I want to point out that during EVERY recovery since 1919 industrial production has quickly topped its former peak. Not this time. We've spent literally trillions of U.S. dollars on Stimulus and bailouts and production is well below the pre-crisis highs.

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Here's a close up of the last 10 years.

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Again, what's happening in the U.S. is NOT a garden-variety cyclical recession. It is a STRUCTURAL SECULAR DEPRESSION.

And those who claim we've turned a corner are going by "adjusted" AKA "massaged" data. The actual data (which is provided by the Federal Reserve and Federal Government by the way) does not support these claims at all. In fact, if anything they prove we've wasted money by not permitted the proper debt restructuring/ cleaning of house needed in the financial system.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.