VANCOUVER ( Bullion Bulls Canada ) --Unlike most market commentators, I generally wait until about mid-January before "reporting" on the U.S. holiday shopping season. There are two good reasons for this. First, there is no point in trying to interject any rationality during the shopping season, since it will simply be drowned-out by the mind-numbing hype "predicting" a great holiday shopping season for the U.S.
The second reason to delay my own analysis of this critical component of the U.S. economy is that by mid-January, the real numbers come out and it becomes impossible for the U.S. propaganda-machine to continue to distort the truth. Indeed, the propagandists were previously forced to reluctantly acknowledge that 2008 and 2009 were the two worst U.S. holiday shopping seasons since records began to be kept on this subject. Thus, when I report that the 2010 U.S. shopping season was even worse than 2008 and 2009, it will hopefully cause those deluded by all the hype to pause and reconsider the facts. Whenever discussing retail sales statistics, the first point which must always be made is that these numbers are never adjusted for inflation (not even with the phony numbers of the U.S. "consumer price index"). This leads to a very obvious analytical point: in order to determine if there was any real growth in U.S. retail sales (i.e. retailers actually selling more goods), we must subtract the (real) rate of inflation from the gross (unadjusted) increase in retail sales. Doing this reveals the ugly truth. The most important number we need to begin this calculation is the real rate of inflation. As regular readers know, there is only one destination for those who want realistic statistical information on the U.S. economy: Shadowstats.com. Visit that site, and John Williams (the respected economist who runs the site) will tell you that as of his most recent reading, U.S. inflation was still running at about an 8.5% annual rate of increase. Now the raw data from the U.S. retail sector. Comparing December 2010 to December 2009, we see that total retail sales rose 7.9%. Subtracting 8.5% from that number, we see that the sales of goods in the U.S. fell in December 2010 -- to below the level of the two worst (previous) shopping seasons on record. If we look at the full-year numbers, the picture is even worse. Total U.S. retail sales in 2010 were up 6.6%, nearly a full 2% lower than the rate of inflation.