Tag Archives: Economic Collapse

Greece Today, America Tomorrow?

The drama over Greece’s financial crisis continues to dominate the headlines

greece-greek-bankby Ron Paul | InfoWars | Originally published July 13, 2015

The drama over Greece’s financial crisis continues to dominate the headlines. As this column is being written, a deal may have been reached providing Greece with yet another bailout if the Greek government adopts new “austerity” measures. The deal will allow all sides to brag about how they came together to save the Greek economy and the European Monetary Union. However, this deal is merely a Band-Aid, not a permanent fix to Greece’s problems. So another crisis is inevitable.

The Greek crisis provides a look into what awaits us unless we stop overspending on warfare and welfare and restore a sound monetary system. While most commentators have focused on Greece’s welfare state, much of Greece’s deficit was caused by excessive military spending. Even as its economy collapses and the government makes (minor) cuts in welfare spending, Greece’s military budget remains among the largest in the European Union.

Despite all the handwringing over how the phony sequestration cuts have weakened America’s defences, the United States military budget remains larger than the combined budgets of the world’s next 15 highest spending militaries. Little, if any, of the military budget is spent defending the American people from foreign threats. Instead, the American government wastes billions of dollars on an imperial foreign policy that makes Americans less safe. America will never get its fiscal house in order until we change our foreign policy and stop wasting trillions on unnecessary and unconstitutional wars.

Excessive military spending is not the sole cause of America’s problems. Like Greece, America suffers from excessive welfare and entitlement spending. Reducing military spending and corporate welfare will allow the government to transition away from the welfare state without hurting those dependent on government programs. Supporting an orderly transition away from the welfare state should not be confused with denying the need to reduce welfare and entitlement spending.

On reason Greece has been forced to seek bailouts from its EU partners is that Greece ceded control over its currency when it joined the European Union. In contrast, the dollar’s status as the world’s reserve currency is the main reason the US has been able to run up huge deficits without suffering a major economic crisis. The need for the Federal Reserve to monetize ever-increasing levels of government spending will eventually create hyperinflation, which will lead to increasing threats to the dollar’s status. China and Russia are already moving away from using the dollar in international transactions. It is only a matter of time before more countries challenge the dollar’s reserve currency status, and, when this happens, a Greece-style catastrophe may be unavoidable.

Despite the clear dangers of staying on our recent course, Congress continues to increase spending. The only real debate between the two parties is over whether we should spend more on welfare or warfare. It is easy to blame the politicians for our current dilemma. But the politicians are responding to demands from the people for greater spending. Too many Americans believe they have a moral right to government support. This entitlement mentally is just as common, if not more so, among the corporate welfare queens of the militarily-industrial complex, the big banks, and the crony capitalists as it is among lower-income Americans.

Congress will only reverse course when a critical mass of people reject the entitlement mentality and understand that the government is incapable of running the world, running our lives, and running the economy. Therefore, those of us who know the truth must spread the ideas of, and grow the movement for, limited government, free markets, sound money, and peace.

 

Birth Pangs Of The Coming Great Depression

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The signs of the times are everywhere – all you have to do is open up your eyes and look at them

Michael Snyder | Economic Collapse | January 30, 2015

The signs of the times are everywhere – all you have to do is open up your eyes and look at them.  When a pregnant woman first goes into labor, the birth pangs are usually fairly moderate and are not that close together.  But as the time for delivery approaches, they become much more frequent and much more intense.

Economically, what we are experiencing right now are birth pangs of the coming Great Depression.  As we get closer to the crisis that is looming on the horizon, they will become even more powerful.  This week, we learned that the Baltic Dry Index has fallen to the lowest level that we have seen in 29 years.  The Baltic Dry Index also crashed during the financial collapse of 2008, but right now it is already lower than it was at any point during the last financial crisis.  In addition, “Dr. Copper” and other industrial commodities continue to plunge.  This almost always happens before we enter an economic downturn.  Meanwhile, as I mentioned the other day, orders for durable goods are declining.  This is also a traditional indicator that a recession is approaching.  The warning signs are there – we just have to be open to what they are telling us.

And of course there are so many more parallels between past economic downturns and what is happening right now.

For example, volatility has returned to the markets in a big way.  On Tuesday the Dow was down about 300 points, on Wednesday it was down another couple hundred points, and then on Thursday it was up a couple hundred points.

This is precisely how markets behave just before they crash.  When markets are calm, they tend to go up.  When markets get really choppy and start behaving erratically, that tells us that a big move down is usually coming.

At the same time, almost every major global currency is imploding.  For much more on this, see the amazing charts in this article.

In particular, I am greatly concerned about the collapse of the euro.  The Swiss would not have decoupled their currency from the euro if it was healthy.  And political events in Greece are certainly not going to help things either.  Economic conditions across Europe just continue to get worse, and the future of the eurozone itself is very much in doubt at this point.  And if the eurozone does break up, a European economic depression is almost virtually assured – at least in the short term.

 

And I haven’t even mentioned the oil crash yet.

There is only one other time in all of history when the price of oil collapsed by more than 60 dollars, and that was just prior to the horrific financial crisis of 2008.

Since the last financial crisis, the oil industry has been a huge source for job growth in this country.  The following is an excerpt from a recent CNN article

The oil sector has added over a half million jobs — many of them high paying — since the recession ended in June 2009. That’s 13% of all US job growth over that period.

Now energy companies and related sectors are laying off thousands. Expect that trend to continue, bears say.

But losing good jobs is just the tip of the iceberg of this oil crisis.

At this point, the price of oil has already dropped to a catastrophically low level.  The longer it stays at this level, the more damage that it is going to do.  If the price of oil stays at this level for all of 2015, we are going to have a complete and total financial nightmare on our hands

For the first time in 18 years, oil exporters are pulling liquidity out of world markets rather than putting money in. The world is now fast approaching a world reserve currency shift. If we see 8 to 12 months at these oil prices; U.S. shale industry will be wiped out. The effect on junk bonds will cascade to the rest of the stock market and U.S. economy.

…and this time there will be nothing left to catch the falling knife before it hits the American economy right in the heart. Not the FED nor the U.S. government can stop what’s coming. Liquidity will freeze up, our credit will be downgraded, the stock market will start to collapse, and then we can expect the FED to come in and hyper-inflate the dollar. This will cause the world to finish abandoning the world reserve currency in the last rungs of trade. This will be the end of the petrodollar.

Something that I have not discussed so far this year is the looming crisis in emerging market debt.

 

This is a really big deal.  As a Business Insider article recently detailed, we could be talking about hundreds of billions of dollars…

Russia this week became the first of the major economies to lose its investment grade status from Standard & Poor’s, falling out off the top ratings category for credits deemed to have a low risk of default for the first time in a decade.

If Moody’s and Fitch follow, conservative investors barred from owning junk securities must sell their holdings. JPMorgan estimates this means they may ditch $6 billion in Russian government rouble and dollar debt.

Russia may have company. Almost $260 billion worth of sovereign and corporate bonds – nearly a tenth of outstanding emerging market (EM) debt – is in danger of being relegated to junk, according to David Spegel, head of emerging debt at BNP Paribas, who calls such credits “falling angels”.

And no article of this nature would be complete without mentioning derivatives.

I could not possibly overemphasize the danger that the 700 trillion dollar derivatives bubble poses to the global financial system.

As we enter the coming Great Depression, derivatives are going to play a starring role.  Wall Street has been pumped full of funny money by global central banks, and our financial markets have been transformed into the greatest casino in the history of the world.  When this house of cards comes crashing down, and it will, it is going to be a financial disaster unlike anything that the planet has ever seen.

And yes, global central banks are very much responsible for setting the stage for what we are about to experience.

 

I really like the way that David Stockman put it the other day…

The global financial system is literally booby-trapped with accidents waiting to happen owing to six consecutive years of massive money printing by nearly every central bank in the world.

Over that span, the collective balance sheet of the major central banks has soared by nearly $11 trillion, meaning that honest price discovery has been virtually destroyed. This massive “bid” for existing financial assets based on credit confected from thin air drove long-term bond yields to rock bottom levels not seen in 600 years since the Black Plague; and pinned money market costs at zero—-for 73 months running.

What is the consequence of this drastic financial repression along the entire yield curve? The answer is bond prices which keep rising regardless of credit risk, inflation or taxes; and rampant carry trade speculation that can’t get out of its own way because  central banks have made the financial gamblers’ cost of goods—the “funding” cost of their trades—-essentially zero.

Of course I am not the only one warning that a new Great Depression is coming.  For instance, just consider what British hedge fund manager Crispin Odey is saying…

British hedge fund manager Crispin Odey thinks we’ve entered an economic downturn that is “likely to be remembered in a hundred years,” and central banks won’t be able to stop it.

In his Odey Asset Management investor letter dated Dec. 31, Odey writes that the shorting opportunity “looks as great as it was in 07/09.”

“My point is that we used all our monetary firepower to avoid the first downturn in 2007-09,” he writes, “so we are really at a dangerous point to try to counter the effects of a slowing China, falling commodities and EM incomes, and the ultimate First World Effects. This is the heart of the message. If economic activity far from picks up, but falters, then there will be a painful round of debt default.”

Even though most average citizens are completely oblivious to what is happening, many among the elite are heeding the warning signs and are feverishly getting prepared.  As Robert Johnson told a stunned audience at the World Economic Forum the other day, they are “buying airstrips and farms in places like New Zealand“.  They can see the horrifying storm forming on the horizon and they are preparing to get out while the getting is good.

It can be very frustrating to write about economics, because things in the financial world can take an extended period of time to play out.  Sadly, most people these days have extremely short attention spans.  We live in a world of iPhones, iPads, YouTube videos, Facebook updates and 48 hour news cycles.  People no longer are accustomed to thinking in long-term time frames, and if something does not happen right away we tend to get bored with it.

But the economic world is not like a game of “Angry Birds”.  Rather, it is very much like a game of chess.

And unfortunately for us, checkmate is right around the corner.

Source

 

There Is No Inflation (Unless You Eat Food, Use Water, Live In A House, Get Sick, Go To School, Or Do Taxes)

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Your government keepers will continue to drown you in propaganda and misinformation

Jim Quinn | Zero Hedge | January 17, 2015

 

Government data reports are so funny. The blaring headlines today tells us that prices dropped in December. We are all saving billions from the drop in oil and gas. Hallelujah!!!

The corporate MSM never digs into the numbers to get the real truth. These reports and their distribution to the sheep are designed to keep you sedated and calm. Facts are not necessary. How this data pertains to your everyday life is not important to the .1% who control the flow of information.

Here is a link to the detailed inflation numbers by category. We already know they massage these numbers to achieve a happy ending, but even the massaged numbers tell an entirely different story than the one peddled to the masses by the government and corporate media.

 

I don’t know about you, but the costs listed above account for a significant amount of my budget. Do those price increases jive with the message being spewed by the government controlled media?

The credibility of their numbers is highly questionable in that they say health insurance accounts for .75% of a person’s annual budget. They actually have the balls to say health insurance fell by 0.5% over the last year. I’d love to hear from anyone out there whose health insurance premiums fell in the last year. Mine went up by 20%.

Your government keepers will continue to drown you in propaganda and misinformation. But the average person should know they are being lied to. They see how much money they have left over at the end of every month. If any.

 

Source

 

 

Warning: Stocks Will Collapse by 50%

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Thursday, 08 Jan 2015 12:49 AM

It is only a matter of time before the stock market plunges by 50% or more, according to several reputable experts.

“We have no right to be surprised by a severe and imminent stock market crash,” explains Mark Spitznagel, a hedge fund manager who is notorious for his hugely profitable billion-dollar bet on the 2008 crisis. “In fact, we must absolutely expect it.”

Unfortunately Spitznagel isn’t alone.

“We are in a gigantic financial asset bubble,” warns Swiss adviser and fund manager Marc Faber. “It could burst any day.”

Faber doesn’t hesitate to put the blame squarely on President Obama’s big-government policies and the Federal Reserve’s risky low-rate policies, which, he says, “penalize the income earners, the savers who save, your parents — why should your parents be forced to speculate in stocks and in real estate and everything under the sun?”

Billion-dollar investor Warren Buffett is rumored to be preparing for a crash as well. The “Warren Buffett Indicator,” also known as the “Total Market Cap to GDP Ratio,” is breaching sell-alert status and a collapse may happen at any moment.

So with an inevitable crash looming, what are Main Street investors to do? One option is to sell all your stocks and stuff your money under the mattress, and another option is to risk everything and ride out the storm.

But according to Sean Hyman, founder of Absolute Profits, there is a third option.

“There are specific sectors of the market that are all but guaranteed to perform well during the next few months,” Hyman explains. “Getting out of stocks now could be costly.”

How can Hyman be so sure?

He has access to a secret Wall Street calendar that has beaten the overall market by 250% since 1968. This calendar simply lists 19 investments (based on sectors of the market) and 38 dates to buy and sell them, and by doing so, one could turn $1,000 into as much as $178,000 in a 20-year time frame.

Editor’s Note: Sean Hyman Reveals His Secret Wall Street Calendar in This Controversial Video, Click Here.

“But this calendar is just one part of my investment system,” Hyman adds. “I have also designed a Crash Alert System that is designed to warn investors before a major correction as well.”

(The Crash Alert System was actually programmed by one of the individuals who coded nuclear missile flight patterns during the Cold War so that it could be as close to 100% accurate as possible).

Hyman explains that if the market starts to plunge, the Crash Alert System will signal a sell signal warning investors to go to cash.

“You would have been able to completely avoid the 2000 and 2008 collapses if you were using this system based on our back-testing,” Hyman explains. “Imagine how much more money you would have if you had avoided those horrific sell-offs.”

One might think Sean is being too confident, but he has proven himself correct in front of millions of people time and time again.

In a 2012 interview on Bloomberg Television, Hyman correctly predicted that Best Buy would drop down to $11 a share and then it would rally back up to $40 a share over the next few months. The stock did exactly what Hyman predicted.

Then, during a Fox Business interview with Gerri Willis in early 2013, he forecast that the market would rally to new highs of 15,000 despite the massive sell-off that was haunting investors. The stock market almost immediately rebounded and hit Hyman’s targets.

“A lot of people think I am lucky,” Hyman said. “But it has nothing to do with luck. It has everything to do with certain tools I use. Tools like the secret Wall Street calendar and my Crash Alert System.”

With more financial uncertainty than ever, thousands of people are flocking to Sean Hyman for his guidance. He has over 114,000 subscribers to his monthly newsletter, and his investment videos have been seen millions of times.

In a recent video, Hyman not only reveals the secret Wall Street calendar, he also shows how his Crash Alert System works so that anybody can follow in his footsteps (click here to watch it now)

Source

First HSBC Halts Large Withdrawals, Now Lloyds ATMs Stop Working

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Zero Hedge
January 26, 2014

First HSBC bungles up an attempt at pseudo-capital controls by explaining that large cash withdrawals need a justification, and are limited in order “to protect our customers” (from what – their money?), which will likely result in even faster deposit withdrawals, and now another major UK bank – Lloyds/TSB – has admitted it are experiencing cash separation anxiety manifesting itself in ATMs failing to work and a difficult in paying using debit cards. Sky reports that customers of Lloyds and TSB, as well as those with Halifax, have reported difficulties paying for goods in shops and getting money out of ATMs.

All three banks are under the Lloyds Banking Group which said: “We are aware that some customers are unable to use their debit cards either to make purchases or to withdraw money from ATMs. “We are working hard to resolve this as swiftly as possible and apologise for any inconvenience caused.”

Further from SkyNews, TSB, which operates as a separate business within the group, issued a statement saying: “We are aware that some TSB customers are unable to use their debit cards either to make purchases or to withdraw money from ATMs. “This has impacted all Lloyds Banking Group brands. We are working hard to resolve this and unreservedly apologise for any inconvenience caused.”

TSB chief executive Paul Pester said in a tweet: “My apologies to TSB customers having problems with their cards. I’m working hard with my team now to try to fix the problems.”

Clients were not happy:

    On the microblogging site, one TSB customer Nicky Kate said: “Really embarrassed to get my card declined while out shopping, never had any problems with lloyds then they changed my account.”

Hannah Smith: “I am a TSB customer with a Lloyds card still (like everyone else). And I’ve been embarrassed three times today re: card declined.”

Another customer Julia Abbott ‏said: “Lloyds bank atm and card service down. 20 mins on hold to be told this. Nothing even on website. Shoddy lloyds. … shoddy.”

Helen Needham ‏said: “#lloyds bank having problems with there card service… Can’t pay for anything or get money out!”

Another Twitter user wrote: “This problem is also affecting Halifax debit cards as I found out trying to pay for lunch with my wife!”

And Jane Lucy Jones tweeted Halifax, saying: “Why can’t I get any money out of any cashpoints, what is going on?

What is going on is known as a “glitch” for now, and perhaps as “pre-emptive planning” depending on who you ask. Sure, in a few months in may be called a bail-in (see Cyprus), but we will cross that bridge when we get to it.

 

20 Early Warning Signs That We Are Approaching A Global Economic Meltdown

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Michael Snyder
Economic Collapse

January 24, 2014

Have you been paying attention to what has been happening in Argentina, Venezuela, Brazil, Ukraine, Turkey and China?  If you are like most Americans, you have not been.  Most Americans don’t seem to really care too much about what is happening in the rest of the world, but they should.

In major cities all over the globe right now, there is looting, violence, shortages of basic supplies, and runs on the banks.  We are not at a “global crisis” stage yet, but things are getting worse with each passing day.  For a while, I have felt that 2014 would turn out to be a major “turning point” for the global economy, and so far that is exactly what it is turning out to be.  The following are 20 early warning signs that we are rapidly approaching a global economic meltdown…

#1 The looting, violence and economic chaos that is happening in Argentina right now is a perfect example of what can happen when you print too much money

For Dominga Kanaza, it wasn’t just the soaring inflation or the weeklong blackouts or even the looting that frayed her nerves.

It was all of them combined.

At one point last month, the 37-year-old shop owner refused to open the metal shutters protecting her corner grocery in downtown Buenos Aires more than a few inches — just enough to sell soda to passers-by on a sweltering summer day.

#2 The value of the Argentine Peso is absolutely collapsing.

#3 Widespread shortages, looting and accelerating inflation are also causing huge problems in Venezuela

Economic mismanagement in Venezuela has reached such a level that it risks inciting a violent popular reaction. Venezuela is experiencing declining export revenues, accelerating inflation and widespread shortages of basic consumer goods. At the same time, the Maduro administration has foreclosed peaceful options for Venezuelans to bring about a change in its current policies.

President Maduro, who came to power in a highly-contested election last April, has reacted to the economic crisis with interventionist and increasingly authoritarian measures. His recent orders to slash prices of goods sold in private businesses resulted in episodes of looting, which suggests a latent potential for violence. He has put the armed forces on the street to enforce his economic decrees, exposing them to popular discontent.

#4 In a stunning decision, the Venezuelan government has just announced that it has devalued the Bolivar by more than 40 percent.

#5 Brazilian stocks declined sharply on Thursday.  There is a tremendous amount of concern that the economic meltdown that is happening in Argentina is going to spill over into Brazil.

#6 Ukraine is rapidly coming apart at the seams

A tense ceasefire was announced in Kiev on the fifth day of violence, with radical protesters and riot police holding their position. Opposition leaders are negotiating with the government, but doubts remain that they will be able to stop the rioters.

#7 It appears that a bank run has begun in China

As China’s CNR reports, depositors in some of Yancheng City’s largest farmers’ co-operative mutual fund societies (“banks”) have been unable to withdraw “hundreds of millions” in deposits in the last few weeks. “Everyone wants to borrow and no one wants to save,” warned one ‘salesperson’, “and loan repayments are difficult to recover.” There is “no money” and the doors are locked.

#8 Art Cashin of UBS is warning that credit markets in China “may be broken“.  For much more on this, please see my recent article entitled “The $23 Trillion Credit Bubble In China Is Starting To Collapse – Global Financial Crisis Next?

#9 News that China’s manufacturing sector is contracting shook up financial markets on Thursday…

Wall Street was rattled by a key reading on China’s manufacturing which dropped below the key 50 level in January, according to HSBC. A reading below 50 on the HSBC flash manufacturing PMI suggests economic contraction.

#10 Japanese stocks experienced their biggest drop in 7 months on Thursday.

#11 The value of the Turkish Lira is absolutely collapsing.

#12 The unemployment rate in France has risen for 9 quarters in a row and recently soared to a new 16 year high.

#13 In Italy, the unemployment rate has soared to a brand new all-time record high of 12.7 percent.

#14 The unemployment rate in Spain is sitting at an all-time record high of 26.7 percent.

#15 This year, the Baltic Dry Index experienced the largest two week post-holiday decline that we have ever seen.

#16 Chipmaker Intel recently announced that it plans to eliminate 5,000 jobs over the coming year.

#17 CNBC is reporting that U.S. retailers just experienced “the worst holiday season since 2008“.

#18 A recent CNBC article stated that U.S. consumers should expect a “tsunami” of store closings in the retail industry…

Get ready for the next era in retail—one that will be characterized by far fewer shops and smaller stores.

On Tuesday, Sears said that it will shutter its flagship store in downtown Chicago in April. It’s the latest of about 300 store closures in the U.S. that Sears has made since 2010. The news follows announcements earlier this month of multiple store closings from major department stores J.C. Penney and Macy’s.

Further signs of cuts in the industry came Wednesday, when Target said that it will eliminate 475 jobs worldwide, including some at its Minnesota headquarters, and not fill 700 empty positions.

#19 The U.S. Congress is facing another deadline to raise the debt ceiling in February.

#20 The Dow fell by more than 170 points on Thursday.  It is becoming increasingly likely that “the peak of the market” is now in the rear view mirror.

 

And I have not even mentioned the extreme drought that has caused the U.S. cattle herd to drop to a 61 year low or the nuclear radiation from Fukushima that is washing up on the west coast.

In light of everything above, is there anyone out there that still wants to claim that “everything is going to be okay” for the global economy?

Sadly, most Americans are not even aware of most of these things.

All over the country today, the number one news headline is about Justin Bieber.  The mainstream media is absolutely obsessed with celebrity scandals, and so is a very large percentage of the U.S. population.

A great economic storm is rapidly approaching, and most people don’t even seem to notice the storm clouds that are gathering on the horizon.

In the end, perhaps we will get what we deserve as a nation.

 

 

Gold Steadies Near Six-Week High

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Reuters

January 20, 2014

Gold steadied on Monday, after touching its highest level in nearly six weeks, as it found support from a lower dollar and a dip in equities, which improved investor confidence in the metal.

Platinum prices rose to their highest level in more than two months after the main trade union for South African platinum miners said workers at the world’s top three producers would go out on strike this week.

Spot gold was up 0.2 percent at $1,255.90 an ounce by 1259 GMT after hitting its highest level since mid-December at $1,259.46 earlier in the day. U.S. gold futures for February delivery were up $3.90 at $1,255.90 an ounce.

Read more

 

12 Signs Of Extreme Social Decay In America That Are Almost Too Horrible To Talk About

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Michael Snyder
American Dream

January 8, 2014

Hearts in America are getting colder even faster than the weather is.  Sometimes it is hard to believe how twisted and deranged many Americans have become.  In order for a society to function efficiently, people need to be able to have a basic level of trust in one another.

Unfortunately, we are rapidly getting to the point in America where it is becoming very difficult to trust anyone that you do not know personally.  As you will see below, the United States is rapidly becoming a cesspool of liars, thieves, murderers, perverts and psychopaths.  Please do not allow any young children to read this article.  All of this material is from mainstream news reports, but a lot of it is too disturbing for young kids to be exposed to.  The reason why I write about this stuff is because there is never going to be any hope of a turnaround in this country until we take a good, long look in the mirror and admit how far we have fallen.  Yes, a lot of these things are almost too horrible to talk about, but as a nation we must understand how bad things have become.  There is evidence of extreme social decay all around us, and it is steadily eating away at the very foundations of our Republic.

The following are excerpts from 12 recent mainstream news reports.  Once again, let me warn you that some of these crimes are so twisted that it is very difficult to even read about them.  But this is how you get an addict that has reached “rock bottom” to change.  You show them how their behaviour is literally destroying them and the people around them.  And without a doubt, America is being systematically destroyed by all of this evil.  The following are 12 signs of extreme social decay in America that are almost too horrible to talk about…

#1 ‘Many going to Super Bowl for child sex’ in New Jersey: The Super Bowl has been called the “largest human-trafficking venue on the planet” with many attending the event not to watch football but for sex with men, women and children.

#2 A 13-Year-Old Boy Who Murdered His Cousin Because Of An XBox: A 13-year-old boy who allegedly killed his sleeping 16-year-old cousin after an argument over a video game system was ordered held in custody today by a juvenile court judge, authorities said.

The teen shot his cousin, Raymond Galloway, in the head at around 5:50 a.m. Sunday while Galloway slept in the teen’s bedroom in the 500 block of East 38th Place, according to Chicago police and Cook County prosecutors.

#3 District man charged with fatally stabbing wife during argument over cable bill: A man charged with fatally stabbing his wife in a Northeast Washington apartment had been arguing with her over an unpaid cable bill, which led to a violent confrontation, according to court papers filed in D.C. Superior Court on Monday. A friend found the body of Claudia Hall, 51, on Friday lying on her bed in her residence in the 300 block of 18th Place NE. Police said she had been stabbed in the abdomen and choked, and was pronounced dead at the scene.

#4 Surveillance Video Shows Bystanders Walking Over Dead Body in Convenience Store Entrance: Disturbing surveillance video shows the body of 24-year-old Jheryl Wright lying in the doorway of a convenience store in Kalamazoo, Michigan while customers walked by unaffected.

Wright had been gunned down at the entrance of the convenience store just minutes before what’s shown in the video, and according to reports, the store clerks didn’t even check to see if he was alive or dead. People came in and out of the store, stepped over him, and acted as if there wasn’t a dead body in front of them.

#5 Pizza delivery man arrested after ‘being caught on hidden camera having sex with family dog’: A Papa John’s delivery man in Florida has been arrested and charged after he was allegedly caught on hidden camera having sex with the family dog.

Joshua Lee Werbicki, 22, was taken into custody on Friday at the Palm Bay restaurant where he works and charged with felony cruelty to animals and misdemeanour criminal sex act with an animal after a video was handed to the police.

Werbicki’s roommate set up the camera after she became suspicious when the dog, a German Shepherd mix, began limping and became startled around people.

#6 Stockton Couple Accused Of Dismembering Roommate, Burning Torso In Campfire: A couple is accused of a grisly crime, killing a man and then dismembering the body. Stockton police say the suspects left a trail of blood that led them to the remains.

#7 Man Accidentally Recorded Himself Installing Hidden Camera to Secretly Record Co-workers Using Restroom: According to the San Antonio Express-News, police said Ray De la Cruz, 44, was arrested Thursday after a co-worker found a recording device “taped to the back of a shelf of a storage locker located directly in front of the toilet.”

#8 N.Y. Group Applies To Build Satan Statue At Oklahoma State Capitol: The Satanic Temple unveiled designs Monday for a 7-foot-tall statue of Satan it wants to put at the Oklahoma state Capitol, where a Ten Commandments monument was placed in 2012. The group formally submitted its application to a panel that oversees the Capitol grounds, including an artist’s rendering that depicts Satan as Baphomet, a goat-headed figure with horns, wings and a long beard that’s often used as a symbol of the occult. In the rendering, Satan is sitting in a pentagram-adorned throne with smiling children next to him.

#9 First Grade Teacher Tells Young Child That “Jesus Is Not Allowed In School”On December 13, 2013, first grader Isaiah Martinez took Christmas gifts intended for his teacher and classmates at Merced Elementary in the West Covina Unified School District. Each gift consisted of a traditional candy cane with a message attached that recited the legend of the candy cane. The legend references a candy maker who created the candy cane to symbolize the life of Jesus Christ.

Isaiah’s older sister told him about the legend of the candy cane and Isaiah asked if he could share it with his teacher and his classmates. Isaiah and his sister then purchased candy canes, printed the candy cane message and tied a copy to each candy cane.

When Isaiah brought his Christmas gift to school, his teacher took possession of the candy canes. After conferring with the school principal, the teacher told Isaiah that “Jesus is not allowed in school” and, at the apparent direction of her principal, ripped the candy cane message from each candy cane, threw the messages in the trash, and handed the candy canes back to Isaiah for delivery to his classmates. Isaiah then nervously handed the candy canes to his classmates in fear that he was in trouble for trying to bring a little Christmas cheer and “good tidings” to class.

#10 A Man Who Planned The Sexual Abuse Of His Own Daughter Before She Was Even Born: Evidence at Adleta’s trial showed that he abused his son and daughter and the child of another woman, children who ranged in age from 1 to 4.

He also ordered his wife and girlfriend to abuse children and recorded the acts; then he distributed the images as child pornography.

Adleta said nothing at the hearing except to answer, “No, your honor,” when asked by the judge if he had anything to say.

#11 Coroner: California priest beaten to death with wooden stake, metal gutter pipe: A beloved priest who was killed in the Northern California city of Eureka was beaten to death with a wooden stake and a metal gutter pipe, his autopsy shows.

#12 Hundreds of teens trash mall in wild flash mob: A wild flash mob stormed and trashed a Brooklyn mall, causing so much chaos that the shopping centre was forced to close during post-Christmas sales, sources said Friday.

 

Whenever I do an article like this, a few people out there will try to dismiss it by claiming that these are just a few isolated “anecdotes” and that most Americans are “good people” and that we really don’t have a problem at all.

I don’t understand how anyone can possibly come to that conclusion, but for those thinking along those lines I would encourage you to check out the hundreds of other examples of advanced moral decay in America that I have discussed in previous articles.  The following are five of my previous articles to help get you started…

1. “Nation Of Sickos: Should We Be Concerned About The Moral Collapse Of America?

2. “12 Signs That The Decay Of Society Is Accelerating

3. “The Knockout Game Is Just A Preview Of The Chaos That Is Coming To The Streets Of America

4. “There Are 747,000 Registered Sex Offenders In The United States

5. “20 Shocking Examples Of How Sadistic And Cruel People Have Become

Of course most people out there already know that this nation is heading in the wrong direction.

Most people out there already know on a very deep level that something has dramatically “shifted” in this nation.

The American people no longer have the same character that they once did.

So what has happened?

Why is there so much social decay all around us?

Please feel free to share what you think by posting a comment below…

 

Marc Faber ‘Congratulates’ Ben: “Well Done, Mr. Bernanke!”

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Zero Hedge
January 2, 2014

In a little under four minutes, Marc Faber explains to Fox Business’ Dagen McDowell all that is wrong with the Central Planners ‘current plan.’

Watch the Video interview here

From a re-bubbled housing ‘recovery’ pricing real buyers out of the market (“homes do not offer a great opportunity today”) to forced-renters paying increasing amounts of their stagnant wages, and the small percentage of ordinary Americans who actually benefit from a rising stock market, reducing their disposable income to which Faber sarcastically rants “well done, Mr. Bernanke.” His advice, be diversified, don’t BTFATH in stocks, and physical gold is always a good insurance.

 

 

Ron Paul: Federal Reserve Blows More Bubbles

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Ron Paul Infowars.com May 6, 2013

Last week at its regular policy-setting meeting, the Federal Reserve announced it would double down on the policies that have failed to produce anything but a stagnant economy. It was a disappointing, but not surprising, move.

 

The Fed affirmed that it is prepared to increase its monthly purchases of Treasuries and mortgage-backed securities if things don’t start looking up. But actually the Fed has already been buying more than the announced $85 billion per month. Between February and March, the Fed’s securities holdings increased $95 billion. From March to April, they increased $100 billion. In all, the Fed has pumped more than a half trillion dollars into the economy since announcing its latest round of “quantitative easing” (QE3) in September 2012.

 

Although many were up in arms when the Fed said it would buy $600 billion in government debt outright for the previous round, QE2, all seems quiet about the magnitude of QE3 because it doesn’t come with huge up-front total price tag. But by year’s end the Fed’s balance sheet could hit $4 trillion.

With no recovery in sight, where’s all this money going? It is creating bubbles. Bubbles in the housing sector, the stock market, and government debt. The national debt is fast approaching $17 trillion, with the Fed monetizing most of the newly issued debt. The stock market has been hitting record highs for the past two months as investors seek to capitalize on the Fed’s easy money. After all, as long as the Fed keeps the spigot open, nominal profits are there for the taking. But this is a house of cards. Eventually, just like in 2008-2009, the market will discipline the bad actions of the Fed and seek to find the real normal.

In the meantime, real families are suffering. While Wall Street and the government take advantage of access to the Fed’s new “free” money, the Fed claims there is no inflation. But who hasn’t paid higher prices at the grocery store, the gas pump, for tuition, for insurance? It’s bad enough that household incomes have stagnated, but real purchasing power has declined so much that one in seven Americans, 47.3 million people, are on food stamps. Five million are collecting unemployment insurance with 21.5 million afflicted by unemployment according to the government’s own figures. That’s 13.9 percent — close to double the 7.5 percent unemployment number reported last week.

We are certainly not in a recovery. We don’t see the long unemployment and soup kitchen lines like in the Great Depression, but that’s just because the lines are electronic now.

It is not surprising the Fed has decided to hand the American people more of the same failed policies. But it is disappointing. We know what the real solution is: allow the marketplace to work. Allow entrepreneurs the chance to create instead of stifling innovation with arbitrary regulations. Allow interest rates to rise to equal the risks in the economy. Allow bad debts to be liquidated so we can build on a firm foundation. Stop printing money to benefit the government and big banks. Restore sound money to the economy and the American people. Sound money is the bedrock for prosperity and the best check on big government and crony capitalism.

Former Congressman Paul’s article first appeared at the-free-foundation

 

Listen to Ron Pauls Radio Broadcast on our YouTube Channel here…

 

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IMF Urges Economic Death Blow with Gasoline Carbon Tax

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Infowars.com April 3, 2013

Following the criminal plot by the IMF, the EU and the European Central Bank to steal billions from depositors in Cyprus, the banksters have hatched a new plan to steal trillions, level the economic playing field and force millions into grinding poverty.

 

Watch our Report Filed on our YouTube Channel here…

 

In order to save the earth and pay for social programs supposedly designed to help the victims of our alleged carbon crimes, the IMF says we need to pay an extra $1.40 per gallon in taxes.

“The time has come for subsidy reform and carbon taxation,” declared the IMF’s deputy director, David Lipton, last week. “The IMF will draw attention to the issue and help those who want to go forward.”

 

The IMF says impoverishing more people through burdensome taxation will reduce traffic jams and accidents by discouraging driving.

Gas in the U.S. is currently between $3.26 and $4.00 per gallon and the proposed IMF tax, if adopted, would inflict further damage on the economy.

 

“Good grief!” exclaimed Rep. Fred Upton, a Michigan Republican who chairs the House Energy and Commerce Committee. “Higher gas prices hit those who can least afford it the most as American families are forced to pay a larger percentage of their income on higher energy prices.

“Drivers across the country are already struggling to pay up to $4.00 a gallon for gas, and further price increases at the pump could be devastating to low and middle-class families and disastrous to our economic recovery. Instead of finding way to make gas more expensive, our focus needs to be on finding solutions to keep energy prices affordable.”

 

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Wall-Street Craziness Is Back

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testosteronepit.com March 30, 2013

The craziness on Wall Street, the reckless for-the-moment-only behaviour that led to the Financial Crisis, is back. This time it’s Citigroup that is once again concocting “synthetic” securities, like those that had wreaked havoc five years ago. And once again, it’s using them to shuffle off risks through the filters of Wall Street to people who might never know.

What bubbled to the surface is that Citigroup is selling synthetic securities that yield 13% to 15% annually—synthetic because they’re based on credit derivatives. Apparently, Citi has a bunch of shipping loans on its books, and it’s trying to protect itself against default. In return for succulent interest payments, investors will take on some of the risks of these loans.

The first deal of this type was negotiated privately with Blackstone Group and closed last December. This second deal will be open to a broader group of institutional investors. Soon, similar synthetic securities will be offered to the treasurers of small towns in Norway.

 

Read more

 

 

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CEO: Cyprus Bank Account Looting Could Blow Up Europe

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Paul Joseph Watson Infowars.com March 18, 2013

Pimco CEO Mohamed El-Erian told CNBC today that the decision to loot the bank accounts of Cypriot savers could blow up Europe and lead to civil unrest across the continent.

El-Erian said that the European Union had lit two sticks of dynamite in backing a proposal that could see bank accounts raided for up to 15% of their value in what has ludicrously been described as a “wealth tax” yet amounts to nothing less than an act of wanton financial plunder.

“By including small depositors, they are risking social unrest, political disorder, and potentially an exit from the eurozone,” said El-Erian, referring to people with under 100,000 euros who will still be hit by a levy of 6.75% under current proposals. Savers with 500,000 euros in the bank face losing as much as 75,000 euros.

“The worst outcome is that you get complete political breakdown, social unrest, and then Cyprus is forced to exit,” said El-Erian, adding that the move had accelerated the journey to disorder which could lead to more countries exiting the eurozone.

“The other stick of dynamite that’s been lit is much more complicated and more uncertain,” El-Erian stated. “That is a question mark about the sanctity of bank deposits in Europe,” alluding to the threat of bank runs in other Mediterranean countries.

Although El-Erian and CNBC hosts professed ignorance as to why the IMF would knowingly enforce policies that could foster domestic disorder, a brief look at the organization’s track record in Greece and Argentina answers the question.

As we discussed in our earlier article concerning a potential move to loot Italians of 15% of their savings, the infamous “IMF riot” is a deliberate move designed to engender civil unrest, scare away investors and allow western banks to buy up assets on the cheap in exchange for the target country’s dependency on IMF loans.

Fearing an escalated bank run, Cyprus today delayed a vote on the “bailout tax” until tomorrow and announced that all banks would remain closed until Thursday.

Large protests are set to take place in the Mediterranean country tonight as well as during tomorrow’s parliamentary vote. Demonstrators have already begun congregating with signs that read “hands off Cyprus”.

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The Rape Of Cyprus By The European Union & The IMF

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Zero Hedge March 18, 2013

Submitted by Mark J. Grant, author of Out of the Box,

I have been watching articles pour forth about Cyprus all weekend. I am almost as aggravated with the majority of them as I am with what took place. People are dancing around the edges while the propaganda machines of Europe are churning out the usual bunk.

 

Let’s get some things straight and look what has happened directly in the face.

There was no tax on the bank accounts in Cyprus. There still is no tax; the Cyprus Parliament has not passed it and will not vote on it until tomorrow so whatever action takes place it is retroactive. Next, this was not enacted by Cyprus. The people from Nicosia did not go to the Summit and ask to have the bank accounts in their country minimized to help pay the bills. Far from it; the nations of Europe, Germany, France, the Netherlands and the rest, demanded that this take place, a “fait accompli,” the President of Cyprus said and Europe annexes Cyprus. Let’s be quite clear; the European Union has confiscated the private property of the citizens in Cyprus without debate, legislation or Parliamentary agreement.

 

A bank account is not a bond or a stock or any sort of investment.

This seems to be lost on many people. A bank account is the private property of a citizen or a corporation and does not belong to the government or at least that was the supposition up until now in Europe.

 

Next there is deposit insurance in Europe.

Every country has its own version but it is there. It guaranteed the bank accounts of citizens up to one hundred thousand Euros. So much for the meaning of any guarantee in Cyprus or any other country in Europe. Null and Void! If the European Union can dismantle deposit insurance in Cyprus they can damn well do it in whatever country they please and at any time.

 

Here’s the description of the Cypriot government deposit insurance plan:

“Participation in the DPS is compulsory for all banks authorized by the Central Bank of Cyprus, i.e. banks incorporated in the Republic of Cyprus, including their branches in other countries, and the Cyprus branches of foreign banks, incorporated outside the Republic of Cyprus or the Member-States of the European Union. The DPS does not cover deposits of branches of banks established in European Union Member States. These deposits are covered by the corresponding deposit protection scheme established in the country of incorporation.

 

The DPS is activated in the event a decision is reached that a member bank is unable to repay its deposits, or as a result of a Court’s order for the winding-up of a member bank. Where a bank is unable to pay its deposits, the relevant decision is adopted by the Central Bank of Cyprus or, where a member bank is incorporated in a country outside the Republic of Cyprus, by the competent supervisory authority of the country of incorporation.

The maximum level of compensation, per depositor, per bank, is €100.000.”

 

Please note that until yesterday all depositors in Cypriot banks were insured up to the value of €100,000 with any one bank.

Today that solemn governmental promise has been shown for what it is; a lie. Worse and actually far worse and quite scary in fact is that the European Union and the European Central Bank and the IMF has not just allowed violation of the deposit insurance but demanded it. One thing is certain here; if they can void deposit insurance in Cyprus then they can void it in any country in Europe. Further; if they can void deposit insurance then they can void bond covenants with the scratch of a pen on paper. Nothing now; Nothing is safe!

 

Pay attention please. The European Union and the European Central Bank and the IMF have just advocated the confiscation of private property for their own indulgence.

Bank accounts are not bonds or stocks or some other form of investments. It is private property like your house or your car. Germany, France et al came in and said, “We want it and we are taking it and it is necessary for our government.” These countries did not demand it, yet, from their own citizens though they might soon but they demanded it from the citizens of Cyprus in exchange for funds.

This is not a European Union this is a European Fourth Reich!

“The moment the idea is admitted into society that property is not as sacred as the law of God, and that there is not a force of law and public justice to protect it, anarchy and tyranny commence.”

-John Adams

 

 

 

When Truth Is Suppressed Countries Die

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Paul Craig Roberts Infowars.com March 15, 2013

Over a decade during which the US economy was decimated by jobs offshoring, economists and other PR shills for offshoring corporations said that the US did not need the millions of lost manufacturing jobs and should be glad that the “dirty fingernail” jobs were gone.

America, we were told, was moving upscale. Our new role in the world economy was to innovate and develop the new products that the dirty fingernail economies would produce. The money was in the innovation, they said, not in the simple task of production.

As I consistently warned, the “high-wage service economy based on imagination and ingenuity” that Harvard professor and offshoring advocate Michael Porter promised us as our reward for giving up dirty fingernail jobs was a figment of Porter’s imagination.

Over the decade I repeated myself many times: “Innovation takes place where things are made. Innovation will move abroad with the manufacturing.”

 

This is not what corporations or their shills such as Porter wanted to hear. Corporations were boosting their profits by getting rid of their American employees and replacing them with lowly paid foreigners. Porter’s job was to reassure the sheeple so that no outcry would materialize against the greed that was hollowing out the US economy.

Now comes a study conducted by 20 MIT professors and their graduate students that concludes on the basis of the facts that “the loss of companies that can make things will end up in the loss of research than can invent them.”

I am pleased to be vindicated by MIT. Of course, the professors are too late. The loss has already occurred. Nevertheless, it will be interesting to see if the MIT professors can be heard through the orchestrated disinformation.

Two years ago in 2011 a Nobel prize-winning economist, Michael Spence, confirmed my decade-old conclusion that the US economy no longer had the capability to create any jobs except low-wage domestic service jobs that do not produce tradable goods and services that can be exported to reduce the massive US trade deficit. Spence validated my argument that the “new economy” was the offshored economy. Spence concluded that the outlook for the US economy and US employment is dire.

The US faces “a long-term structural challenge with respect to the quantity and quality of employment opportunities in the United States. A related set of challenges concerns the income distribution; almost all incremental employment has occurred in the non-tradable sector, which has experienced much slower growth in value added per employee. Because that number is highly correlated with income, it goes a long way to explain the stagnation of wages across large segments of the workforce.” http://www.cfr.org/industrial-policy/evolving-structure-american-economy-employment-challenge/p24366

 

There has been no more public policy response to Spence’s conclusion than to my identical conclusion.

We have heard all our lives that ideas are the most powerful force and prevail over material interests. Perhaps this was once true, but that would have been in previous times when material interests did not control the media, the universities, and the publishing companies along with the government. Voices such as mine, that of a high US Treasury official, and that of Spence, a Nobel prize winner, cannot compete with the voices paid by Big Money. Today the bulk of the population knows nothing except the propaganda fed to them by the oligarchic interests. They sit in front of Fox News or CNN and ingest it all. Those who fancy themselves more sophisticated get the same dose of lies from the New York Times.

If those who speak truth cannot be bought off or shut up, they are ignored or demonized. Almost everything Americans need to know is off limits in public discussion. Anyone who broaches the truth becomes an “anti-American,” a “terrorist sympathizer,” a “commie-socialist,” a “conspiracy theorist,” an “Anti-Semite,” a “kook,” or some other name designed to scare Americans away from the message of truth.

 

The corrupt corporations, the corrupt media, and the corrupt US government have insulated the country from truth. The result will be a massive crash. A country built on lies is like a house built on sand:

“Therefore everyone who hears these words of mine and puts them into practice is like a wise man who built his house on the rock. The rain came down, the streams rose, and the winds blew and beat against that house; yet it did not fall, because it had its foundation on the rock [truth]. But everyone who hears these words of mine and does not put them into practice is like a foolish man who built his house on sand [lies].The rain came down, the streams rose, and the winds blew and beat against that house, and it fell with a great crash.” Matthew 7:24-27 (NIV)

……………………………

 

Dr. Paul Craig Roberts is the father of Reaganomics and the former head of policy at the Department of Treasury. He is a columnist and was previously the editor of the Wall Street Journal. His latest book, “How the Economy Was Lost: The War of the Worlds,” details why America is disintegrating.

 

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Italy’s economy shrinks as EU leader warns of lost generation

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Rachel Cooper telegraph.co.uk March 11, 2013

Data from Italy’s national statistics institute ISTAT showed that the country’s economy shrank by 0.9pc in the fourth quarter of last year and gross domestic product was down a revised 2.8pc year-on-year.

The economy was hobbled by chronically weak domestic demand and a fall in inventories, while exports posted modest growth.

 

Italy has been mired in recession since the middle of 2011 and is not expected to show any growth until the second half of this year at the earliest.

The economy contracted by 2.4pc last year and on Friday Fitch cut Italy’s sovereign credit rating, citing a deep recession, rising debt and political instability following last month’s inconclusive election.

 

Read more

 

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Staring Armageddon In The Face But Hiding It With Official Lies

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Paul Craig Roberts Infowars.com March 11, 2013

According to the Bureau of Labour Statistics, the US economy created 236,000 new jobs in February. If you believe that, I have a bridge in Brooklyn that I’ll let you have at a good price.

Where are these alleged jobs? The BLS says 48,000 were created in construction. That is possible, considering that revenue-starved real estate developers are misreading the housing situation.

Then there are 23,700 new jobs in retail trade, which is hard to believe considering the absence of consumer income growth and the empty parking lots at shopping malls.

 

The real puzzle is 20,800 jobs in motion picture and sound recording industries. This is the first time in the years that I have been following the jobs reports that there has been enough employment for me to even notice this category.

The BLS lists 10,900 jobs in accounting and bookkeeping, which, as it is approaching income tax time, is probably correct; 21,000 jobs in temporary help and business support services; 39,000 jobs in health care and social assistance; and 18,800 jobs in the old standby–waitresses and bartenders.

That leaves about 50,000 jobs sprinkled around the various categories, but not in numbers large enough to notice.

The presstitute media attributed the drop in the headline unemployment rate (U3) to 7.7% from 7.9% to the happy jobs report. But Rex Nutting at Market Watch says that the unemployment rate fell because 130,000 unemployed people who have been unable to find a job and became discouraged were dropped out of the U3 measure of unemployment. The official U6 measure which counts some discouraged workers shows an unemployment rate of 14.3%. Statistician John Williams’ measure, which counts all discourage workers (people who have ceased looking for a job), is 23%.
In other words, the real rate of unemployment is 2 to 3 times the reported rate.

Nutting believes that the U3 unemployment rate has become too politicized to have any meaning. He suggests using instead the work force participation rate. This rate is falling substantially, reflecting the discouragement that occurs from inability to find jobs.

John Williams (shadowstats.com) says that distortions in seasonal factor adjustments overstate monthly payroll employment by about 100,000 jobs. The jobs data that is not seasonally adjusted shows about 1.5 million fewer jobs in the economy.

In a recent communication, statistician John Williams (shadowstats.com) reports that the rigged official annual rate of consumer inflation (CPI) of 1.6% is in fact, as measured by the official US government methodology of 1990, 9.2%. In other words, the rate of inflation is 5.75 times greater than the reported rate. If Williams is correct, the interest rate on bonds is extremely negative.

 

Over the years the official measure of inflation has been altered in two ways. One is the introduction of substitution for what formerly was a constant weighted basket of goods. In the former measure, if a price of an item in the basket (index) rose, the CPI rose by the weight of that item in the basket.

In the substitution-based measure, if a price of an item in the basket goes up, the item is removed from the basket, and a cheaper item is put in its place. For example, if the price of New York strip steak rises, the new CPI will substitute the price of a cheaper cut.

In this new measure, inflation is held down by measuring not a fixed standard of living but a declining standard of living.

The other adjustment used to restrain the measure of inflation is to re-classify many price rises as “quality improvements.” Price rises declared to be quality improvements do not translate into a higher measure of inflation. In other words, if a product rises in price, the price increase or some portion of it can be assigned to improved quality, not to a rise in component or energy costs. As the incentive is to hold down the inflation measure in order to save money for the government on Social Security cost-of-living-adjustments, quality improvements are over-estimated.

 

Consumers have to pay the higher prices, and as incomes, except for the 1 percent, are not growing, higher product prices, regardless of whether they are or are not quality improvements, mean a lower standard of living for the 99 percent.

The understated new measure of inflation allows the government to show real GDP growth and thus the end of the December 2007 recession, and it allows the government to show in the latest report real retail sales again matching the pre-recession level. However, when measured correctly, as by statistician John Williams, the true picture of retail sales shows a steep decline from 2007 through 2009 and bottom bouncing since.

The reason real retail sales cannot recover is that real average weekly earnings continues its downward path. Earlier in this new century, the lack of income growth for the bulk of the US population was masked by a rise in consumer debt. Americans borrowed to spend, and this kept the economy going until the point was reached that consumers had more debt than they could service.

 

John Williams report of real average weekly earnings shows that Americans are taking home less purchasing power than they did in the 1960s and 1970s.

Reflecting the dollar’s loss of purchasing power, the price of gold and silver in dollars has risen dramatically during the Bush and Obama regimes.

For the last year or two the Federal Reserve and its dependent banks have operated to cap the price of gold at around $1,750. They do this by selling naked shorts in the paper speculative gold market.

There are two gold markets. One is a market for physical possession by individuals and central banks. The rising demand in the physical bullion market points to a rising price for gold.

The other market is the speculative paper market in which financial institutions bet on the future gold price. By placing large amounts of shorts, this market can be used to suppress price rises in the physical market. The Federal Reserve, which can print money without limit, can cover any losses on its agents’ paper contracts.

 

It is important to the Federal Reserve’s low interest rate policy to suppress the bullion price. If the prices of gold and silver continue to rise relative to the US dollar, the Fed cannot keep the prices of bonds high and interest rates low. If the dollar is widely perceived to be declining in value in relation to gold, the price of dollar-denominated assets will also decline, including bonds. If the dollar loses value, the Fed loses control over interest rates, and the US financial bubble pops, with hell to pay.

To forestall Armageddon, the Fed and its dependent banks cap the price of gold.

The Fed’s fix is temporary, and as the Fed continues to create ever more dollars, the price of gold will eventually escape the Fed’s control as will interest rates and inflation.

The Fed has produced a perfect storm that could consume the US and perhaps the entire Western world.

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Dr. Paul Craig Roberts is the father of Reaganomics and the former head of policy at the Department of Treasury. He is a columnist and was previously the editor of the Wall Street Journal. His latest book, “How the Economy Was Lost: The War of the Worlds,” details why America is disintegrating.

 

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