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VANCOUVER (Silver Gold Bull) -- Back in March I wrote "The U.S. Prison Cell Economy". At that point I was speaking in metaphorical terms. However, as Bloomberg reveals to us in a recent article, the U.S. "prison economy" is a very literal concept.

Every month, year after year, U.S. homebuilders start construction on 50% to 100% more units than they sell. Yet, the propaganda machine claims inventories of U.S. new homes have been plummeting.

In my article I stated a simple conclusion: Either the official U.S. housing numbers were total fabrications or more than half of these "housing starts" were units that did not require a "sale" to an individual owner in order for the builder to be paid .

In attempting to come up with an answer to this riddle I could only formulate one possibility: All of these phantom "housing starts" were, in fact, prison cells.

This conclusion should hardly be surprising to informed readers. The U.S. warehouses more of its own population in prisons than any other Western nation by a vast margin. Canada is a distant second, and then there is a further drop once we move past North American "incarceration mania." Furthermore, the Corporate Media has been gushing over the fantastic growth curves of U.S. private prison corporations.

Nonetheless, it would undoubtedly be greatly disturbing to the vast majority of (under-informed) Americans to learn their own government is secretly and rapidly expanding the "maximum occupancy" of its entire, (increasingly private) prison system.

Want to "compete" with Chinese and Indian labor in the U.S. but you can't find workers willing to work for 1/10th their (previous) wages? Just lock 'em up and force them to do that labor for even less. What will be the secret to Corporate America's "success" in the 21st century? Chain gangs.

Now we see apparent (corporate) confirmation of this new Prison Economy taking shape in the U.S. When one retailer moves into a particular market, we see that as "filling a niche." However, when a plethora of retailers congregate in that same market, we see a "growth sector."


phony numbers produced on U.S. retail sales cannot hide the fact that month after month U.S. retailers are selling fewer goods (they simply cost more because of soaring inflation). This is due to the fact that (in real dollars) U.S. wages have fallen by

more than 50% over the past 40 years.

With costs also soaring (because of the aforementioned inflation), profit margins are collapsing. The U.S. retail sector is dying. Seeing "the writing on the wall," more and more U.S. retailers are focusing on the only remaining "growth market" in U.S. retail that doesn't involve exclusively servicing the rich: the ever-growing U.S. prison population.



writing about only one segment of the prison population market: music downloads (and players). It lamented that one of the problems for Corporate America as it tries to cash in on this growing market is:

...Corrections facilities generally forbid devices that can be turned into weapons, be used to communicate freely with the outside world, or conceal contraband.

Talk about cramping the ability of these capitalists to make a buck on this "captive market"!

More searching uncovered a much more general article about the "retail boom" in selling products to inmates. A

NY Times

writer named Pamela LiCalzi O'Connell, wrote

a piece titled "New Economy; For consumer goods producers, it is not so bad to be behind bars".

The writer's own bias is clear when she notes callously about the millions of Americans being warehoused in prisons that "to some, these figures are a national embarrassment. To others, they represent a marketing opportunity." Nonetheless, the article has several very interesting factoids within.

After obtaining information from a company called



, which markets headphones, the writer notes that:

... It is one of the few companies willing to talk about how it markets to the segment. "This business is very quiet, very tight-lipped," Mr. Koss said. "We sell through a group of closely held companies that specialize in getting merchandise into the prison stores. This is a lucrative business -- both for the manufacturers and the distributors -- so there is a reluctance to talk about it for fear of attracting competition." One of Koss's distributors confirmed that assessment. "We don't like exposure," said Tom Thomas, president of Union Supply... emphasis mine

So we know that the U.S. Prison Economy is both very lucrative and very secretive. However, what makes this

NY Times

article especially fascinating (chilling?) is the date: May 14, 2001. That was six months before the U.S. changed forever, degenerating into a fascist enclave where "rights" are now always subordinate to "security."

As part of that security, information is now heavily suppressed in our "free and open societies."

Try to find information on the total number of private prisons being constructed in the U.S., the total number already built, and the total population size that these mushrooming facilities will be able to warehouse. Remember that all the good folks at Homeland Security have to do is to wave their magic wand and call these facilities "detention centers", and suddenly it's verboten to even mention them -- as part of "national security."

When the

NY Times

article came out back in 2001, it noted that:"...During the 12-month period ended June 30, 1999

the most recent data available at that time, the Federal prison population rose 9.9 percent, the largest yearly gain ever reported. The incarceration rate has tripled since 1980."

Note that what the Times writes about was before the explosion in private prison/detention center construction in the U.S. even began. Trying to get accurate current numbers on the U.S. prison population is becoming increasingly difficult.

The Times reported, "More than 1.3 million inmates under the jurisdiction of state and Federal prison authorities in 1999, according to the Justice Department." The U.S. Bureau of Justice Statistics notes only

1.6 million inmates under state/federal "jurisdiction" in 2010, but this conveniently omits 750,000 additional prisoners in the U.S. being warehoused in jails all across the country (also

using 2010 data) -- the "revolving door" that leads into the prison system.

Note that while the U.S. government claimed to only be holding 1.6 million prisoners as of 2010, that back in 2006


stated "there are more than two million inmates serving time" in the U.S. -- as part of its

article on what was already a "$37 billion economy bulging with business opportunity."

Even more alarming, it will no longer be possible to obtain precise numbers on the U.S.'s inmate population in the future. Thanks to the "indefinite detention" law enthusiastically supported by both halves of the Two-Party Dictatorship,

habeas corpus

is dead in the U.S., the only independent means of verifying how many people (in total) are being incarcerated by the U.S. government.

The number of prison facilities in the U.S. (of one form or another) is exploding, but we have no idea by exactly how much. The U.S.'s mammoth incarceration population continues to grow, but we no longer know by how much. We do know that this is very, very "good for business" -- but few of the Oligarchs want to talk about precisely how good it is.

In 2001, the

NY Times

told us that the U.S. Prison Economy was the "New Economy." In 2012, it's now the Growing Economy (and the only part of the U.S. economy still growing). How much longer before it's simply the only economy?

This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.