BENEFITS ARE DISAPPEARING

Reuters
"NEW YORK (Reuters) - The number of U.S. workers filing new claims for jobless benefits rose roughly as expected last week, but the data was distorted by an unusual pattern of layoffs in the automotive industry.
KEY POINTS: * Initial claims for state unemployment insurance rose by 30,000 to a seasonally adjusted 554,000 in the week ended July 18, the Labor Department said on Thursday. * Analysts polled by Reuters had expected claims to increase to 550,000 from a previously reported 522,000."
The Australian
"The number of US workers filing new claims for state jobless benefits began climbing back up last week, confirming that dramatic declines reported earlier this month weren't necessarily signs of an economic revival. Initial claims for jobless benefits rose by 30,000 to 554,000 on a seasonally adjusted basis in the week ended July 18, the Labour Department said.
The weak labour market and tighter credit markets are bound to weigh on home sales and hinder efforts to stem foreclosures."
PBR
"As many as one hundred thousand people will run out of unemployment benefits this year, according to the state's Unemployment Insurance Agency."
Public Opinion Online
"People whose unemployment benefits have expired must wait for the state Senate to pass legislation extending their benefits another seven weeks.
This past week, 110 people in Franklin County and 160 in Cumberland County exhausted their jobless benefits, according to the Pennsylvania Department of Labor and Industry. Their average weekly benefit is $309.
Pennsylvanians out of work currently can qualify for as many as 72 weeks of benefits. Benefits for about 20,000 expired before this week."

So, I could go on with this for quite a long time. The country is facing a HUGE problem that I don't see being addressed. A big group of people, those that were caught in the first wave of layoffs, are beginning to see their state unemployment benefits expire. Most of these people are living on the money supplied to them by the state and have no other source of income. In most cases these people had skills that are not really marketable outside of the industry that they worked in or have skills for which there is no demand. In a number of cases, these people exhausted what little savings they had waiting for their benefits to begin. They have no safety net left and will be, for all intents and purposes, destitute when their checks stop coming in.

In all honesty, most states cannot extend these benefits any further because the states are either on the verge of bankruptcy or bankrupt. To make matters worse, as the number of unemployed continues to grow, there will be more filings for the benefits that can no longer be paid.

The states will be forced to turn to the Federal Government for a bailout. This will cause the Fed to issue more freshly printed, constantly devaluing currency. It will also give the Fed the opportunity that it needs to seize more power form the states. This money will have plenty of strings attached to it.

As the number of families that are barely hanging on cross the line to destitution another effect will be the drastic downturn in consumer spending. Credit cards have tightened up to the point that most people will have no credit available to them and no cash to spend on anything but the absolute essentials, maybe not even that. This will cause more businesses to lay off workers due to lack of demand for their product which will of course put more pressure on the states for unemployment benefits which they can no longer afford.

70% of our GDP is created through consumer spending. As we watch the markets go up, up, up one has to wonder; is anyone stupid enough to believe all of this "green shoot" BS? This bullish attitude cannot be based on any rational economic reasoning. How can any sort of sustainable recovery be occurring when the consumers don't spend? Statistics show that most people are paying down debt, not increasing it. The only way this can happen is through a cessation of all nonessential spending. This will be good for the country in the long term, but as far as stimulating some sort of miracle recovery, it ain't gonna happen.

Karl Denninger at Market Ticker has this to say:

"But consumers have "pulled forward" demand using credit for the last 20 years. This practice accelerated right into the maw of this recession; indeed, it was the reason for the recession, when credit outstanding and its debt service caught up to and surpassed earnings power. That is what began the chain of defaults that started with subprime and has spread through the economy (and which isn't over, by the way, since we've been hiding so many of them.)"

In other words, if we wanted it, chances are we already bought it, thus removing additional demand for nonessential items from the market place. Demand, which is absolutely essential to our recovery, does not exist, and will not in any appreciable form, for the foreseeable future.
The big boys are playing a game with our money right now, trying to induce us into investing in a market that cannot be sustained. Don't do it! We've got a long way to go before we see any real growth in our economy.