EBT means “Electronic Benefits Transfer”. This card has replaced “food stamps”. The following quotes tell the story:
“And so we’re still seeing that midnight shopping in our stores when that EBT card, it’s like a debit card, when it is ready and it is funded, there are people who are in the store at midnight because they know it turns on. And they have shopped from like 10:45 to midnight and they’re waiting for that card and then our lines open up. And we’ve had some of our busiest hours at midnight.” — Rosalind Brewer, Executive Vice-President, Wal-Mart
“I think the most telling indicator for us that economic weakness and employment is the key issue driving soft volumes, is the fact that we continue to see, as – in contrast to the historical norms, we continue to see volume pick up heavily at the beginning of each month, and then steadily erode through the month, being particularly soft in the last week to 10 days of the month. That just tells us that people are running out of money.” — Gregg Engles, CEO, Dean Foods
Last week, I went into Sam’s Club to pick up a few items. I was amazed that in the middle of the week and around lunch time, the place was packed. Lines were long and carts were full. A lady with her adult son and granddaughter were ahead of me. You could not get one more grocery item in her cart, it was stacked high. When she paid, I found out why… the EBT cards. Yes, the adult son paid for part of the items with his card, she paid for the rest with hers. There was a small amount due, probably items that did not meet the EBT criteria. She pulled out cash to pay the difference.
Yesterday, I saw a couple at the local Homeland store using their EBT card and try to “double dip” with coupons. The cashier explained the policy to them against using more than one coupon per household for a particular item. This man did not appear to need an EBT card, neither did his wife.
Transfer payments have passed the 51% relationship versus the American working force. We now have more people receiving government assistance than we have workers.
Shadowstats.com’s John Williams states:
“Now into the second-half of 2014, the broad outlook for a hyperinflationary great depression—beginning this year—has not changed, but it has evolved, with various details continuing to fall into place, such as the renewed downturn in domestic economic activity.”
Here is how the American Entitlement Bubble is currently staying afloat:
1. U.S. Treasury issues new debt
2. Federal Reserve creates money out of thin air and buys a net 88% of the new debt.
3. EBT Cards are loaded each month with borrowed money from #1.
4. People go to Walmart and other stores to buy food and pharmaceuticals.
5. Those large corporations report positive earnings and their stock prices stay up.
6. Workers’ income tax receipts pay on the outstanding debt and other government services.
7. Financial news media report stable earnings by those large corporations in #5.
8. The Dow Jones Averages hit new highs thus creating a “Wealth Effect” for those with stocks in their portfolios… “All is okay”.
9. The CEO’s receive bonuses for doing so well as their company’s stock values stay up.
10. The CEO’s fund reelection of those politicians who support #1,2, and 3.
11. The Federal Reserve keeps rates low enough for the public corporations to buy back stock and pay less dividends out. They also receive a tax break.
12. The middle class receives less interest on their life savings due to #11.
13. The middle class starts using up savings to live on.
14. At some point, the middle class family applies for their EBT card so they can eat.
15. More EBT cards means that the U.S. Treasury needs to fund the outflow with more debt. Go to Step #1
The 64 Trillion Dollar question is: “How long will investors tolerate the creation of money by the Federal Reserve thus depreciating their current investment valuation?”
When one major player heads to the exit, there will be a stampede. Only Our Heavenly Father knows the day and the hour.