A decline in same-store sales in WalMart for November result of stagflation and underemployment – effect on Dow?
Fred Day
Nov. 25, 2006

WalMart sales fell in November instead of consensus flat sales expectation from the market. The fall in sales is in parallel to drop in gas prices at the gas stations. That did not happen before. The economy is finally telling – it is tired of stagflation and underemployment.

The reasons for slow decline (parabolic) in retail sales are the debt burden, underemployment and stagflation. While the gas price is still at $2 and above, the tuition cost is rising at 10% or above per year, health insurance cost is rising at 8% or higher, the wages are stagnant. The middle class is getting squeezed like never before. It is difficult to make both ends meet for hard working families.

The effect is clear on retail sales. The slow parabolic fall takes decades to recover. The purchasing power is declining while manufacturers push their manufacturing agendas in China and India.

You cannot go too far exporting jobs to China and India. It has started backfiring now. By manufacturing in China the retailers have created their own graveyard. The lack of purchasing power and wage stagnation has created the lack of pricing power for corporations.

In essential areas like phone, cell phone, education, health care the service providers are charging the public excessive. They are for the time being getting away as people grudge and pay their bill. Systematic exploitation of people by these companies are weakening the economy and strengthening the stagflation. Deflation drive recession (if not depression) follows stagflation. The effect on Dow can be severe. The loss of equity values compared to that of gold is significant.

A decline in same-store sales in WalMart for November result of stagflation and underemployment – effect on Dow?
Fred Day
The fall in sales is in parallel to drop in gas prices at the gas stations. That did not happen before. The economy is finally telling – it is tired of stagflation and underemployment.
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