3 charts you need to see

Here’s the story of our current  economy in 3 charts.

The chart below shows how American incomes have been flatlinining for 2 generations and have recently actually begun to decline.  I thought all the “growth” that we were chasing was supposed to result in us getting more wealthy….but I guess not.

The chart below shows oil prices over the last 5 years.  Oil has just crossed the $90 barrel line.  This during the deepest recession in 75 years.   If it’s this expensive in bad times, what will happen if the economy were to “recover”?

The chart below shows the price of food. You know, that basic “commodity” that we all have to have.  Unlike plasma tv’s – but they are cool too. See how the cost of  food tracks the price of oil?  Not good if you like to eat. This increase in food prices is in just 6 years.  (Ah, but The Economist says that this will simply mean that people will plant more food and all will be well soon.)

So there you have it.  Flat wages for two generations and with little chance that they will actually increase in the future.  Oil, on which our entire economy depends  is increasing in price at a rapid pace.  That pace is causing the price of food to follow suit.   For us, these three charts represent stagflation:  rising prices without an offsetting increase in wages.  For other countries the last two are symbols of classic inflation.   Wages are likely to rise in those countries, meaning that goods will get more expensive.  Consumer goods will certainly become more expensive here, relative to our wages and devalued dollar.

Bottom line:  does the consumer driven economy, epitomized by the sprawl landscape, survive?  I don’t think it is likely.  The costs just become too great.  (and this is without factoring in climate change)  Do you have an alternative theory?

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