RECOVERY? WHAT RECOVERY

In February 2010, total U.S. industrial production rose +1.7% year over year according to the Federal Reserve.
While there was continued expansion, production growth fell from Q4 2009's +6.6% rate and Q3 2009's +6.4% growth. Still, overall industrial production kept growing in February.
But... diving into a breakdown of different products by market shows that some U.S. industries have already experienced sharp reversals of fortune.
As shown below, U.S. industrial production contracted sharply in February (orange bars) for Home Electronics, Appliances & Furniture, Paper Products, and Industrial Business Equipment. This came after strong growth in Q4 (blue bars). Thus for some the recovery already feels like it's over.

Business Insider

This tells me that even after billions of dollars of debt have been created and injected into this economy the best we could do is rebuild inventories. The items that are selling are those which we have to have just to get by. The items that would indicate some sort of future surge in hiring such as business supplies and business equipment are falling. Further, it looks as though the big ticket items such as appliances and home electronics are falling, too. My guess is that this is because there is no longer much in the way of credit available to the consumer to buy these things and they wouldn't buy even if there was. Too many are unemployed and most that still have jobs are not that certain of their future.

So how can an economy that's GDP was 70% consumer driven be recovering with these sorts of realities?

ANOTHER SIGN ON THE ROAD TO COLLAPSE

"The bond market is saying that it’s safer to lend to Warren Buffett than Barack Obama.

Two-year notes sold by the billionaire’s Berkshire Hathaway Inc. in February yield 3.5 basis points less than Treasuries of similar maturity, according to data compiled by Bloomberg. Procter & Gamble Co., Johnson & Johnson and Lowe’s Cos. debt also traded at lower yields in recent weeks, a situation former Lehman Brothers Holdings Inc. chief fixed-income strategist Jack Malvey calls an “exceedingly rare” event in the history of the bond market."
Bloomberg

This means that interest rates are going to start heading up. Couple this with all the money we've been printing and todays post from Swarm USA showing that every dollar of new debt (printing money) is taking forty five cents off the GDP, and it is becoming increasingly clear that our time before we collapse has grown short.

You see, as Karl Denninger at Market ticker explains, we are in a death spiral. As interest rates on our bonds go up we will have to print more money to service the debt. The more money we print the greater the impact on our GDP, which of course will have a negative impact on our creditworthiness, forcing interest rates higher.

The only way out is to reset the system, a task that our government does not have the stomach for because it would cost the wealthy players in the system too much money and damage the politicians. Not to mention just generally suck for the rest of us. But, if we do it in a controlled manner we can come out of it, maybe. We may be past the point of no return.

However, to do nothing, as we are doing now, will certainly result in the greatest depression and civil unrest; along with the potential destruction of our system of government.

Whichever way it goes, life as we have known it is in it's last days. Get ready, the time is short!

HANGOVERS SUCK

Let's see; 70% of the American economy is built on consumer spending and cheap, available credit was the driving force. So how can we have a recovery when that credit is either no longer available or the people no longer will use it?

"Most Americans can’t envision a marketplace with no credit cards. Many are now having to adjust to the new economic realities in the economy. Yet the fact that less revolving credit is in the market tells us consumers are pulling back on using their credit cards or banks are simply issuing less credit. In the end, middle class Americans simply cannot spend like they once did. Many are now realizing that they will have to save to purchase items and that isn’t necessarily bad. But with stagnant wages many are finding it hard to save and with no credit card access, dealing with realities that haven’t hit this country for a generation seems as surreal as believing that plastic is money."
My Budget 360