Future Shock

If the American people ever allow private banks (read Federal Reserve) to control the issue of their currency, first by inflation (1970s), then by deflation (present), the banks and corporations that will grow up around (central bank) will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks (central bank / Fed) and returned to the people, whom it properly belongs.
- Thomas Jefferson  



In past articles I have reported the dangerous demise of not only our retail sector, but the restaurant industry. The dangers that republicans love to blame is unions. However, they cannot use that lie in these cases, because those industries have little or no union influence. The guilt lies elsewhere. One central cause is the loss of our purchasing power caused by the combined spending of government and the massive dollar printing by the Federal Reserve.
There is no need to reprint the litany of causalities that is a result of dollar printing and deficit spending. You can see the effects while driving in your auto. There are many malls that sit vacant like ghost towns of the Old West. There are many more malls and shopping centers where the anchor vacated and resourceful owners turned that retail space into a skating ring or another space eater.
Little tots today will never have heard of Sears, J.C. Penny, Radio Shack or K-Mart. With that said, they will age into a world with less opportunity because Congress refused to make a level playing field between brick and mortar and the internet. It is understandable that the government gave advantages to online shopping in its nascent stages. They wanted the new technology to succeed. Today, we see the effects of this put-off decision. Forever 21 is the latest retail entity to file for bankruptcy. Why would any consumer buy a product at a store if that same person knew that one could get the same product for 6% less? We are talking about the sales tax.

State Sales Tax

on a national average is about 6%. If you buy on the internet, the seller offers as an incentive, free shipping. A consumer gets the same product from TVs to diapers without paying a sales tax. Every day e-commerce is bustling with shoppers as a lone clerk walks around an empty shop, waiting and hoping for a customer. This is why there are fewer and fewer book stores, clothing stores, department stores and now, supermarkets are also under duress. All these wage opportunities for kids and upward to earn are fading. All those warehouses, stocking jobs and similar for Christmas money are ending. This may be the time for the Fall Classic, but no one can afford to go to a game. The scoreboard in the industry is like the results of the N. Y. Mets in their early years. The only record that the team recorded was the most losses by a team, ever!

8,200 Stores

will close between now and next year. Simple math translates into tens of thousands lost jobs. Since 2007 that number exceeds 200,000 people. The only bright light in our economy as unemployment hit a 50-year low of 3.5% last week was whenever a business ended, another sought help. This one man's ceiling for another man's floor will not continue. The news will awaken one day to the tsunami of lost jobs in a slowing economy and unemployment will explode overnight.

It Gets Worse

The announcement of store closings could balloon past 8K to 12,000. This is according to Coresight Research. In another survey by Duke University, the CFOs of two-thirds of the companies responded that they expect a recession in 2020. The overall condition is not helped by cheap money. The reason is like an addiction by an addict. CEOs take the debt in hope of turning around the enterprise, but later and sadly, realize that they are over-leveraged. They cannot make revenue meet expenses. They close their doors.

New Hurdle

Politics will enter the equation. I have already pointed out how Congress which is basically Democrats and Republicans have failed to act responsibly. Some states have realized taxing e-commerce is an easy tax to pass. The revenue helps to balance their budgets. The problem is candidates seeking to make debt and the national deficit an issue will look to the same target. This Monday morning quarterbacking will result in dual taxation like we already pay with gasoline purchases. When you buy gas, you pay both a state and federal tax. So, we will get taxation on the internet and although the playing field in retail will be level, it may be too late. Sadly, I foresee another threat to the industry. Foreign retail will fill the void. This will only worsen our national deficits. Our government will be bought as they do little for our citizens. There are many examples of this process in the making. States have allowed foreign companies to build roads and then, put up excessive tolls to pay for the expense. Candidates like Bernie Sanders offer ideas to tax companies that don't pay employees fairly. His idea is to put a wealth tax on companies over $100 million in revenue that have an excess pay gap between the CEO and the lowest paid employee. To put this in clear language: Walmart would pay $800 million, J. P. Morgan would pay $1 billion and even McDonald's would cough up $100 million. Together, all these actions and ideas will not paint a pretty picture for retail in the future.

Believe It or Not

Even after all that I pointed out, the retail association foresees a robust Christmas shopping season. They forecast a 4.2% sales increase in 2019 as compared to 2018. They base their prediction on the good economic standing of the consumer. Dear Reader, this is like a meal in a restaurant. While you are eating, no one worries about the bill. After your hunger is vanquished and you receive the bill, ii is then when you question your thinking. I hope the retail group is correct and homes are warmed by new purchases, because in January comes the bill.

Banks are more dangerous than standing armies. The idea of spending (deficits) that may be paid by posterity under the scope of funding is but swindling futurity on a large scale.
- Thomas Jefferson