ANTIESTABLISHMENTARIAN

Finance, Fuel Prices, Economics, Markets

As If You Didn’t Know

Well, here’s the proof from Zero Hedge.com (Read whole article here)

Gallup Consumer Spending Data Refutes Commerce Department January Retail Sales Announcement

Submitted by Tyler Durden on 02/12/2010 13:21 -0500

As if anyone needed more reasons to doubt the data coming out of our government. Earlier today the Commerce Department reported that January retail sales data came at a nice and bubbly 0.5% sequential increase, and an even nicer and bubblier 4.7% YoY. This presumably beat expectations which were looking for a sequential beat of 0.3%. Yet here comes the much more reliable Gallup data to throw some salt in yet another economic data fabrication. According to daily Gallup consumer polling, which due to its lack of proximity to the government propaganda complex is vastly more reliable, the January average data showed a decline of 5.8% over January 2009 and a whopping 16.3% decline over December. This is beginning to parallel the ever increasing divergence between the ABC consumer comfort index and the UMichigan index which lately seems to only track the average level of the S&P over the prior month.

The chart below shows the true consumer spending behavior of Americans.

The gallup methodology is much more accurate than anything that could possible come out of the Commerce Department with its infinite data “adjustments.”

If you’re in the business of selling stuff, now you know why sales aren’t so hot. The problem is not you, its our lovely government which seems incapable of telling the truth about ANYTHING.

Notice what the graph at left has to say about the notion of a recovery and a double-dip recession.  Do you see any recovery there? Ignore the spikes, those are holiday sales.

February 12, 2010 Posted by | Uncategorized | Leave a comment

LIARS

The US Federal Reserve is so conditioned to lying that they’re no longer aware of their own lies.  Here is the ultimate irony, proof of their lies contained within their own presentation. This comes in two parts, so first here are the words.

“The 2007-2009 recession is widely thought to have ended sometime last summer. How bad was this recession, and how quickly is the economy recovering? How does this recession and recovery compare to previous cycles?”

Now cometh the proof,

This is truly mind boggling. Their own graph shows the “recession” still deepening yet they would have us believe otherwise.

February 5, 2010 Posted by | Uncategorized | Leave a comment

Its So Simple

The following is a comment by a reader of a financial web site.  It is so to the point I filched it and reposted here:

“The system cannot be saved.

“Simple as that.  Regulation WILL NOT SAVE IT.

“You cannot REGULATE AWAY mathematics.

“We have an exponential growth system which requires that credit continue to grow endlessly.  Taking us back to where PEOPLE are the sole originators of credit is going to collapse credit outstanding and deflatively destroy the entire money supply.

“There is TOO MUCH DEBT out there and every last dollar of it REQUIRES interest service!  That means that there must at some point be MORE debt elsewhere that finds its way into the hands of the payors in order to pay the interest service.

“A monetary-system-as-debt IS a forced exponential growth animal.  There’s no way around this; I can demonstrate it in a minute as it is simple mathematics.

“Credit growth took off on its own when they figured out how to originate without using PEOPLE, iow, CDOs, MBSs, CDSs, and all the other synthetic instruments.  Erecting “regulations” to stop this will collapse credit creation back to 40 years ago.  Doing this would cause the EXISTING debts’ interest service costs to consume the entire money supply.

“All of this because of ACCOUNTING ENTRIES!  We have let the fuckin bankers BECOME the barbarous relic strangling our society!

“If you review the anti-gold standard commentary more than 100 years ago, you see the same issues…an inability to find specie to service monetary needs imposed by DEBT.”

There is really little more to be said. This system is self-destructing beyond recovery.

January 25, 2010 Posted by | Uncategorized | Leave a comment

The Future as I See It

I’ve been developing this vision of the future for several years now, having drawn on the ideas of many futurists. I don’t see all doom and gloom as many do, but rather a silver lining in the black cloud.

Anyone who was an adult in the 60’s and 70’s will recall how totally unpredictable the chain of events was during those years. There were widespread predictions of doomsday and Armageddon to such a degree that a president even gave a speech about the great malaise that had overtaken the nation (thanks to people like him ) The nation and the world faced numerous and very serious challenges, but ultimately sanity prevailed.

The end of the world as we know it didn’t happen, there was no nuclear war and USA didn’t fall apart. Overpopulation didn’t result in worldwide calamity. Here we are now 40 years later with a similar series of events and crises. But now a financial disaster faces the whole world which stems from the profound changes that took place 40 years ago. History is evolutionary.

All of our present circumstances basically resulted from the US emerging dominance after WWII and the arrogance of power that went along with it. What could have been more insane than the nuclear arms race? That arrogance of power is fueling the backlash that will ultimately cut it down to size. The glory days of American wealth and power are drawing to a close, lasting a mere 50 years. We will end up much like the collapse of the British empire which was also accompanied by severe financial problems. This is all to the good, a much needed adjustment.

Will the USA collapse? No, I don’t think so, there remains of this nation far too much wealth – both in terms of money and the dynamism of its people – for that to happen. We are corrupted, but not utterly corrupt. There yet remains much goodness in our people. The rest of the world has a love/hate relationship with us; we are not perceived as a totally evil empire but rather a misguided one.

I do not believe that there is any grand conspiracy by the elites. I can’t give them that much credit for being that smart, or organized. Rather, they just exploit conditions to their advantage as opportunities arise. Nowhere in history of nations do we find such such conspiracies. No, I think the behavior of the elites are simply misguided by amorality and greed, and like all such, they will destroy themselves. Caesar will end up with Brutus’s knife in his back. They always do.

The US will survive all this in a much humbled condition just as Britain did, and the good news is that I don’t think this will end up in a series of world wars as happened back then. Bad things will happen, to be sure. Maybe even a nuke will be set off somewhere in the world, but the futility of war is sinking into the minds of much of the world. Today it has advanced to Mutually Assured Destruction for all.

2010 is likely to be the pivotal year in which the 60 year status quo finally ends. The scenario I foresee is a repeat of the Great Depression without the world war that followed. The system of debt-money and the endless growth thesis that is required to maintain it has failed. It will be replaced by a new paradigm, a new economy in which technological advancement is no longer dominant and driven by constant, unending growth which is no longer possible due to resource scarcity and excessive populations. The global economy will not end but take a huge hit, scaling back by 50-75%. Import/export economies will no longer be viable; instead import nations will be forced back into self-sustaining economics; Americans will become poorer, the rest of the world richer.

Corporate, finance and investment structures will also undergo radical changes. Global corporations will die out quickly; nationalism will prevail. There will be trade wars and much fighting over resources; that’s never going to cease. Employment will evolve into a huge issue; I don’t see a bright future for free enterprise. We will end up looking more like Europe. It is a maxim that the larger populations grow, the more personal liberties shrink. That is inevitable, so get used to it. This doesn’t necessarily mean a lower quality of life. Your desire to do whatever you wish will be restrained.

We will be forced to live with less energy. We’ll be lucky to have one car in the driveway, yet alone two. I agree with Kunstler that there will be vast changes in the socio-economic layout of the nation. There will be huge migrations of people along with much social upheaval. The consumer economy is finished forever to be replaced by a self-sustaining economy or perish. Fifteen to twenty years from now the USA will more closely resemble the US of 1950 than of Y2K. And we will likely be happier and more mentally well balanced because of it.

Our so-called leaders are not Machiavellian conspirators. They are mostly ignorant, stupid, greedy people who are drunk on their own perceptions of illusory power. And most of them are laying the seeds of their own destruction. And while they think they are, they are not smart enough to organize a one world government. That’s a joke: these people can’t even agree on the time of day, yet alone organize a world government. The UN is proof of this impossibility.

Fiat currency will not come to an end, but the debt basis of that money probably will, replaced by some other arrangement, possibly by gold or other commodity backing. How this will play out is unknowable. The relative value of precious metals will increase dramatically but ultimately may end up in the hands of government exclusively as a monetary basis.

January 21, 2010 Posted by | Uncategorized | Leave a comment

The Direction

January 16, 2010 Posted by | Uncategorized | Leave a comment

Default is the Answer

The question is, how do we get out of this mess? The truth is, we won’t. Political expediency will lead it where it has always led.

There will be no recovery of the U.S. economy because of the pervasive belief in the free lunch theory of economics that has led us down the same road as Japan. Let’s consider that nation, like the United States once considered an economic powerhouse. Just this week it was announced that Korean automaker Hyundai has exceeded Toyota in auto sales. Japan’s once invinceable car makers are now on the ropes and hurting badly as China gears up to take over from the fallen giant.

The Japanese economy collapsed in 1989 due to an enormous real estate bubble financed by excessive credit fostered by its central bank. Sound familiar? In 1990 the Nikkei reached an all-time high of 39,000; today, twenty years later it sits 75% lower right at 10,000. Japan has been in recession/depression for two whole decades, and the reason why is that the massive defaults from its collapsing markets were never recognized, never written off. They were carried on the books by the banks as good loans all these years when, in fact, the loans were not being repaid.

Why did they do this? Because they thought they could cheat the laws of math, have their cake and eat it too, and cover up the losses of dead banks indefinitely and they’d somehow miraculous resurrect themselves. The laws of math can’t be cheated any more than you can sit on fire and not be burned.

This is the same “solution” adopted by Barrack Husein Obama and his merry band of theives occupying the White House, as well as his predecessor. In addition to throwing a couple trillion of borrowed and printed money at the now bankrupt banks, they determined to sweep all the bad debts under the rug by changing the accounting rules so that banks could keep bad loans on the books as good loans. By the numbers, this makes the banks look solvent when, in fact, they are not.

As most readers know, the banks are not really lending, other than to hedge funds to speculate in the stock markets. The money lent by the Fed to the banks to keep them afloat was itself a new form of Ponzi Scheme. I apologize for the overuse of that term, but a rose by any other name . . . . . anyway, the money lent to the banks was for the purpose of the banks buying Treasury bonds since Uncle Sam was in acute danger of not being able to borrow nearly infinite amounts of money, so Bernanke & Friends cooked up this scheme, whereby the banks could deposit those bonds at the Fed as “excess reserves” on which the Fed would pay interest. As of May 2009, excess bank reserves totaled $840 billion; today they stand at $1.064 trillion and growing. But the banksters still are not lending despite the highest recorded reserve ratios in history. Why not?

Well, for one thing the banks are not really solvent due all those bad loans they carry on the books, and secondly there are no longer many credit worthy entities they would like to lend to. For some odd reason, the banksters suddenly became very prudent about lending. Apparently being broke has that effect on some people!

The banks are in this position because they have been insanely pushing credit down everyone’s throat with goading of our government in order to keep the Ponzi scheme economy going. A debt based money system is one that requires endless and infinite credit growth. Of course the flip side of credit growth is debt growth and only an idiot would think that debt could grow forever without disastrous consequences. This, naturally, has a lot to say about the general intelligence and integrity level of banking and politics. To wit, there is none.

Without bank lending, credit is shrinking dramatically; money is created by credit, so when credit shrinks, so does money supply. In saner times this is known as deflation, but that is a devil word not to be spoken by righteous men. So, when credit shrinks, the economy does likewise. To repeat, there are two reasons why the economy will remain trapped in depression. The first is bankrupt banks with trillions of bad loans on the books; the second is a populace that is hopelessly in debt and cannot repay those loans, or at least a too large percentage of them cannot. Ultimately, the bad debts on bank books will grow and grow, and loans will increasingly not be made, businesses will be starved for capital in an environment where the consumers are retrenching anyway, and on and on it will go just like Japan continues to do. Like flushing the toilet, it all spirals down the tubes.

There is yet a third element to the US situation that Japan does not have, which is the U.S. dollar as world currency. Like Japan, the US will try to bail itself out of this viscous circle by government stimulus . . . . borrowing and printing ever more money. The hope here is that inflation will erode away much of the debt overload. Unfortunately, this will not work because the end result will not be price inflation but dollar depreciation that ultimately must result in an international currency crisis and the death of the dollar, which will amount to the same thing as inflation, only in this case will be hyperinflation as the dollar looses upwards of 75% of its value. And when that transpires, any notion of the government engaging in deficit spending comes to a sudden end.

There is virtually nothing the government can do to fix the economy, any more that Bernie Madoff could extricate himself from his scheme; they can only succeed in making it worse. They merely rearrange the deck chairs on the Titanic while goading the band to play louder.

October 23, 2009 Posted by | Uncategorized | Leave a comment

UN Attacks the Dollar

If you’re wondering why I have been posting infrequently, it is because I am constantly getting locked out of my own blog. And I just don’t have the time to t ry to figure out why this keeps happening. Then, all of a sudden, without explanation, it starts working again.

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The UN is once again calling for a new “reserve currency,” only this time they have a plan. They want it to be IMF special drawing rights. Now, if you know what SDR’s are, then you know that it is the equivalent of PayPal, which is not a currency. Here is the description of SDR’s right from the horse’s mouth:

The SDR is neither a currency, nor a claim on the IMF. Rather, it is a potential claim on the freely usable currencies of IMF members. Holders of SDRs can obtain these currencies in exchange for their SDRs in two ways: first, through the arrangement of voluntary exchanges between members; and second, by the IMF designating members with strong external positions to purchase SDRs from members with weak external positions. In addition to its role as a supplementary reserve asset, the SDR, serves as the unit of account of the IMF and some other international organizations. (See? PayPal :lol: )

Now, if you can make any sense out of that, you are pretty damn smart. Actually, its a defunct system that attempted to prevent the drain of gold from national treasuries; it didn’t work. The way its devised today is basically the “basket of currencies” approach. Its used for such obscure things as international settlement of postal accounts between nations. Sexy, huh? And can you see more than $3 trillion per day in transactions going through that system? Not a snowball’s chance in hell.

A major problem with “basket of currencies” idea is that it further removes penalties for monetary mismanagement as a result of concealing individual values in averages. It has all the negative attributes of socialism. If nations are monetarily irresponsible now, this will make them even more so. Moreover, it will concentrate power in the hands of who ever ends up controlling this system. For ultimately somebody has to make critical value decisions, decisions that today are made by a fairly free market.

What would ultimately happen is that every nation who’s currency was part of that basket of averages, would end up going hog wild in printing money because the inflationary effects would be protected or muted by that basket of averages, but the whole freaking basket would go right to hell in the proverbial hand basket. Try putting brain in gear before mouth in motion.

The reason why this is NOT going to happen is that the faults of such a system are painfully obvious and when push comes to shove ( and there will surely be a lot of that), nobody will want to take a chance on it. The current system is subject to Churchill’s comment about democracy: its a terrible system and the only good thing about is that every other system is worse.

If people don’t like the dollar, they should stop trading in it, but they don’t. Why? Because they don’t trust any other currencies either, so they prefer the devil they know over the ones they don’t. They DO trust the degree of transparency from the Fed, but they surely would NOT trust the ECB nor Beijing, nor Tokyo because they have NO transparency, so they bitch and moan, make a lot of noise and complain, but in the end they will not move away from the dollar.

Nobody is forcing China to accept payment in dollars. So why do they? If you can answer that question, you’ll understand why I say China is now in deep doo-doo.

October 7, 2009 Posted by | Uncategorized | , , , , | Leave a comment

Newspeak & The Minstry of Truth

Oct. 1 (Bloomberg) — The number of Americans filing first-time claims for jobless benefits rose more than forecast last week, a sign companies are still cutting workers as the economy pulls out of the recession.

Applications rose by 17,000 to 551,000 in the week ended Sept. 26, from a revised 534,000 the week before, Labor Department data showed today in Washington. The total number of people collecting unemployment insurance fell in the prior week to 6.09 million, the least since April.

And just yesterday they were telling us that jobless claims were falling. (CNBC, September 30th)

Reuters, 10/1/09  – September US Auto sales  off 47.2% yoy.

“As the economy pulls out of recession.”  Uh huh, sure, right. No lie is ever too large to tell.

“The economy is on track for a jobless recovery and unemployment will likely remain high well into next year,” said Sal Guatieri, a senior economist at BMO Capital Markets.  Never mind who this man is, this kind of crap is flooding all media of late.

They are making it very clear that a “recovery” is the very same thing as the bottom of a recession. Thirty million people without jobs is recovered, good, all is well, getting better. The lying just becomes increasingly insane.

Its interesting, too, how they take us for total blithering idiots, as if we can’t see the contradiction in the term “jobless recovery. Either that or far too many Americans have become blithering idiots that they will swallow such crap without a peep.

October 1, 2009 Posted by | Uncategorized | , , , | Leave a comment

Still Talking Recovery?

Propaganda broadcast by or through the media can be a powerful tool to sway public perceptions.  Back during the great depression every possible means of convincing people that the worst was over and all was deployed just as it is today. It has an effect that may last a little while, but not for long. When lots of people are broke and unemployed, the reality can’t be hidden for long.

Neither can basic economic data, which is what I propose to do today with only two simple graphs that tell us that there is no recovery underway despite the massive amounts of borrowed money thrown at a mountain of collapsing debt.

ABCconfidence

The above graph reveals a severe divergence between the S&P 500 stock index and the ABC consumer confidence index.  Stocks are soaring, thanks to lots of gasoline thrown on the fire by the Fed, but consumer confidence index says that the consumer is not nearly so exuberant. That’s an understatement; note the index stands at minus 45, while the S&P has rebounded by 60%. If the consumer doesn’t want to spend, then where are corporate profits going to come from? They’ve already burned through capital and borrowing to maintain dividends, but this charade can’t last.  And when there is no correlation between consumer attitudes and stock prices, guess which one always wins?

retailsales

This next chart reveals the actual results of consumer attitudes, and the fact that the stock market has rocketed off on yet another orgy of greed-induced self delusion. Stocks  are now, only six months after reaching their bottom, grossly overpriced. And we  know how it got that way, too. The very same way the monstrous credit bubble created six years ago got created, and by the very same outfit. The man is often dubbed, Bubbles Bernanke.  He is desperately blowing another one using the most extreme tactics of nearly bankrupting the Federal government with debt.

And if you didn’t much care for the ending of the last bubble, this next one will be the bubble to end all bubbles.

September 30, 2009 Posted by | Uncategorized | , , , , , | Leave a comment

A Terminal Cancer

Michael Moore was on  TV the other day claiming that capitalism has failed. That isn’t true because we don’t have capitalism; our current system is best described as a mutant of fascism controlled by a financial mafia of mega banks that are nothing more than financial crime syndicates. Moore is just a propagandist for a communist movement that disguises itself under the banner of environmentalism and “the people”. One might also claim that democracy has failed as well, but we no longer have a democratic republic. That has been slowly dismantled over the last 100 years, replaced by a sham of free elections that perpetually keeps the same political mafia in office in a fascist oligarchy.

Who would have imagined that Obama would be a puppet of Wall Street and that Goldman Sacks and J.P. Morgan have aligned themselves with the likes of Acorn? Truth is stranger than fiction, but the political criminals have been put to good use by the syndicates.

Crime is a parasitical activity that feeds on its host and ultimately kills it, like viruses, bacteria and leaches. The financial syndicates known as banks have consumed its host to the point where the host is dying. In order to save themselves, the parasites have determined that the best way to save themselves and their political lackies is to increase their rate of consumption. But having indentured the nation to the tune of $109 trillion, they now find little blood left to suck. All that is left is a vast mountain of debt and capital has all but vanished, so next they are turning to the savings and pensions of the people, which is all that remains of the host. Just like Argentina did, twice.

The word on the street is that the Fed is now attempting to drive money out of the money markets, which is where the majority of pension money resides. The purpose of this is to keep the stock markets from collapsing. It is a last gasp effort by the mafia to avoid total collapse, and of course, such actions can only hasten the day of collapse, for do they not claim that this is a 70% consumer economy? And do not corporations and the very mafia itself depend on consumers to fuel their boundless greed? Once the consumer is dead, upon whom will they feed? They have already engaged in cannibalism, killing, cooking and eating their fellow hoodlums; Bear-Sterns, Lehman Brothers, Morgan-Stanley, IndyMac, etcetera.

In robbing the pensions of the hosts, the parasites make one last desperate attempt to save themselves. It is an attempt that can only fail, for with a dead host they cannot continue. And when the host has nothing left to loose, is near starvation, that is when the host reverses roles with the parasite, turns on it and consumes it. That day is drawing ever closer.

To claim that the Great American Experiment has failed hits the nail squarely on the head, for we have strayed far, far beyond any hope of reform and recovery. The cancer is now terminal.

September 26, 2009 Posted by | Uncategorized | Leave a comment