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Friday, July 26, 2013

By Michael Mccune: The Rant (US Government auditor for 16 years- Battling Surveys Show America Divided- (( to Have Michael send you the Rant to your Email contact Him Here (( memccunewyo@yahoo.com ))

Battling Surveys Show America Divided

A majority of Americans no longer trust what comes out of Washington. But what most Americans should be concerned about is believing the polls and surveys that inundate our society.
 
Two different polls were released today, July 26, 2013. One was released about 10 AM EDT, the other just after noon EDT. The two polls offered information that was completely contradictory.
 
Poll No. 1: From Nationwide Financial a survey entitled "Fear of Financial Planning" showed Americans are more afraid of the fast-rising stock market than they are of losing their jobs, speaking in public or even death. The poll had 783 respondents who were potential investors and almost 2/3rds (62%) claimed  they were afraid of investing in stocks. That beat out the 58% who said they were afraid of death and 57% who were loath to open their mouth in public. Less than 3 in 10 were afraid of losing their job, meaning 7 in 10 didn't care about working.
 
But the real jolt in the survey was 83% were afraid of another financial wreck.
 
Remember these stats as we review Poll No. 2.
 
Poll No. 2: From the Thomson Reuters/University of Michigan Consumer Confidence survey it was revealed consumer confidence in America to 85.1--the highest reading in more than six years.
 
Survery director Richard Curtin said, "This high level of confidence points to continued expansion of consumer spending in the year ahead." Increased expectation that interest rates would rise prompted consumers to pick up the pace of their purchases the survey noted, which explained a rise in durable good sales.
 
Thus the results of the two surveys clash as to defeat each other as a basis of reference. Somebody must have made an error in calculation.
 
But both surveys are right, as impossible as that might seem. Consumers do fear the market and do expect interest rates to rise which should damage all economic forecasts. The Federal Reserve will not change policies until forced to.
 
Where the error arrives is all parties continue the assumption that a dollar is a dollar and thus we can measure one against the other. Not so.
 
Take for instance that most trivial of items, firecrackers. As a kid I could get a gross of pop bottle rockets for a quarter in 1960. Today the same quantity costs, on an advertised sale price, $11.91, on the premise everything in the store was 99 cents but they only offer pop bottle rockets in packages of a dozen now.
 
It is an inferior rocket today to the one I could get 53 years ago because there is no "pop" at the end of the flight now just an end to the sizzle of the booster.
 
Using the lowly pop bottle rocket cost and applying it to the stock market, the cost increase of the market has exceeded the cost increase of the pop bottle rocket. But the corresponding drop in value of the pop bottle rocket has been exceeded by the corresponding drop in value of the companies listed in the market and Americans know this as surely as they breathe.
 
This explains why  the first poll is wildly divergent from the results of the second.
 
By nature, most humans expect the best and prepare that way. They do not anticipate failure and, when it strikes, are unprepared. In either case they have selective memories.
 
We have forgotten most of the pain that came with the recession in 2007, thus sentiment is gaining strength. We do remember the recession originated in the financial centers thus we are leery of that investment vehicle.
 
The real irony of the surveys? In both cases long-term outlook was weak, weaker than it has been in months.
 
Americans know government policies are destructive to economic well-being. They continue to foolishly feel they can get a handle on the government reins at the voting booth.
 
But the fear of taking a risk with  personal wealth is prevalent. The economy will never fully recover until that fear abates. That is something the government propaganda machine cannot alter but has to be seen on Main Street to be believed.
 
"I have sworn on the altar of God eternal hostility to every form of tyranny over the mind of man."--Thomas Jefferson
 

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