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“The risk of catastrophe will be very high. The nation could erupt into insurrection or civil violence, crack up geographically, or succumb to authoritarian rule. If there is a war, it is likely to be one of maximum risk and effort – in other words, a total war. Every Fourth Turning has registered an upward ratchet in the technology of destruction, and in mankind’s willingness to use it.” – Strauss & Howe – The Fourth Turning
“In the need to develop a capacity to know what potential enemies are doing, the United States government has perfected a technological capability that enables us to monitor the messages that go through the air. Now, that is necessary and important to the United States as we look abroad at enemies or potential enemies. We must know, at the same time, that capability at any time could be turned around on the American people, and no American would have any privacy left such is the capability to monitor everything—telephone conversations, telegrams, it doesn’t matter. There would be no place to hide.
If this government ever became a tyrant, if a dictator ever took charge in this country, the technological capacity that the intelligence community has given the government could enable it to impose total tyranny, and there would be no way to fight back because the most careful effort to combine together in resistance to the government, no matter how privately it was done, is within the reach of the government to know. Such is the capability of this technology.
I don’t want to see this country ever go across the bridge. I know the capacity that is there to make tyranny total in America, and we must see to it that this agency and all agencies that possess this technology operate within the law and under proper supervision so that we never cross over that abyss. That is the abyss from which there is no return.” – Frank Church on Meet the Press regarding the NSA – 1975
Ever since Edward Snowden burst onto the worldwide stage in June 2013, I’ve been wondering how he fits into the fabric of this ongoing Fourth Turning. This period of Crisis that arrives like clockwork, 60 to 70 years after the end of the previous Fourth Turning (Civil War – 66 years after American Revolution, Great Depression/World War II – 64 years after Civil War, Global Financial Crisis – 62 years after World War II), arrived in September 2008 with the Federal Reserve created collapse of the global financial system. We are now five and a half years into this Fourth Turning, with its climax not likely until the late-2020’s. At this point in previous Fourth Turnings a regeneracy had unified sides in their cause and a grey champion or champions (Ben Franklin/Samuel Adams, Lincoln/Davis, FDR) had stepped forward to lead. Thus far, no one from the Prophet generation has been able to unify the nation and create a sense of common civic purpose. Societal trust continues to implode, as faith in political, financial, corporate, and religious institutions spirals downward. There is no sign of a unifying regeneracy on the horizon.
The core elements of this Fourth Turning continue to propel this Crisis: debt, civic decay, global disorder. Central bankers, politicians, and government bureaucrats have been able to fashion the illusion of recovery and return to normalcy, but their “solutions” are nothing more than smoke and mirrors exacerbating the next bloodier violent stage of this Fourth Turning. The emergencies will become increasingly dire, triggering unforeseen reactions and unintended consequences. The civic fabric of our society will be torn asunder.
In retrospect, the spark might seem as ominous as a financial crash, as ordinary as a national election, or as trivial as a Tea Party. The catalyst will unfold according to a basic Crisis dynamic that underlies all of these scenarios: An initial spark will trigger a chain reaction of unyielding responses and further emergencies. The core elements of these scenarios (debt, civic decay, global disorder) will matter more than the details, which the catalyst will juxtapose and connect in some unknowable way. If foreign societies are also entering a Fourth Turning, this could accelerate the chain reaction. At home and abroad, these events will reflect the tearing of the civic fabric at points of extreme vulnerability – problem areas where America will have neglected, denied, or delayed needed action.” – The Fourth Turning – Strauss & Howe
The core crisis element of debt is far worse than it was at the outset of this Crisis in September 2008. The National Debt has risen from $9.7 trillion to $17.5 trillion, an 80% increase in five and half years. It took 215 years for the country to accumulate as much debt as it has accumulated since the start of this Crisis. We continue to add $2.8 billion a day to the National debt, and the president declares it is time for this austerity to end. The total unfunded liabilities of the Federal government for Social Security, Medicare, Medicaid, government pensions and now Obamacare exceeds $200 trillion and is mathematically impossible to honor. Corporate debt stands at an all-time high. Margin debt is at record levels, as faith in the Federal Reserve’s ability to levitate the stock market borders on delusional. Consumer debt has reached new heights, as the government doles out subprime auto loans to deadbeats and subprime student loans to future University of Phoenix Einsteins. Global debt has surged by 40% since 2008 to over $100 trillion, as central bankers have attempted to cure a disease caused by debt with more debt.
All of this debt accumulation is compliments of Bernanke/Yellen and the Federal Reserve, who have produced this new debt bubble with their zero interest rate policy and quantitative easing that has driven their balance sheet from $935 billion of mostly Treasury bonds in September 2008 to $4.2 trillion of toxic mortgage garbage acquired from their owners – the insolvent Too Big To Trust Wall Street banks. This entire house of cards is reliant upon permanently low interest rates, the faith of foreigners in our lies, and trust in Ivy League educated economists captured by Wall Street. This debt laden house of cards sits atop hundreds of trillions of derivatives of mass destruction used by the Wall Street casinos to generate “riskless” profits. When, not if, a trigger ignites this explosive concoction of debt, the collapse will be epic and the violent phase of this Fourth Turning will commence.
The core crisis element of civic decay is evident everywhere you turn. Our failed public educational system is responsible for much of the civic decay, as a highly educated critical thinking populace is our only defense against a small cabal of bankers and billionaires acquiring unwarranted influence and control over our country. Our children have been taught how to feel and to believe government propaganda. The atrocious educational system is not a mistake. It has been designed and manipulated by your owners to produce the results they desire, as explained bluntly by George Carlin.
“There’s a reason that education sucks, and it’s the same reason it will never ever ever be fixed. It’s never going to get any better, don’t look for it. Be happy with what you’ve got. Because the owners of this country don’t want that. I’m talking about the real owners now, the big, wealthy, business interests that control all things and make the big decisions. They spend billions of dollars every year lobbying to get what they want. Well, we know what they want; they want more for themselves and less for everybody else. But I’ll tell you what they don’t want—they don’t want a population of citizens capable of critical thinking. They don’t want well informed, well educated people capable of critical thinking. They’re not interested in that. That doesn’t help them. That’s against their interest.”
The urban ghettos become more dangerous and uninhabitable by the day. The inner cities are crumbling under the weight of welfare spending and declining tax revenues. The very welfare policies begun fifty years ago to alleviate poverty have hopelessly enslaved the poor and ignorant in permanent squalor and destitution. The four decade old drug war has done nothing to reduce the use of drugs. It has benefited the corporate prison industry, as millions have been thrown into prison for minor drug offenses. Meanwhile, millions more have been legally addicted to drugs peddled by the corporate healthcare complex. The culture warriors and advocates of new rights for every special interest group continue their never ending battles which receive an inordinate amount of publicity from the corporate media. Class warfare is simmering and being inflamed by politicians pushing their particular agendas. Violence provoked by race and religion is growing by the day. The fault lines are visible and the imminent financial earthquake will push distress levels beyond the breaking point. Once the EBT cards stop working, all hell will break loose. Three days of panic will empty grocery store shelves and the National Guard will be called out to try and restore control.
The core crisis element of global disorder is evident everywhere you turn. The false flag revolution in the Ukraine, initiated by the U.S. and EU in order to blunt Russia’s control of natural gas to Europe, has the potential to erupt into a full blown shooting war at any moment. The attempt by Saudi Arabia, Israel and the U.S. to overthrow the Syrian dictator in order to run a natural gas pipeline across their land into Europe was blunted by Russia. Iraq is roiled in a civil war, after the U.S. invaded, occupied and destabilized the country. After 12 years of occupation, Afghanistan is more dysfunctional and dangerous than it was before the U.S. saved them from the evil Taliban. Unrest, violent protests, and brutal measures by rulers continue in Egypt, Turkey, Thailand, Venezuela, Bahrain, Brazil, and throughout Africa. American predator drones roam the skies of the world murdering suspected terrorists. The European Union is insolvent, with Greece, Spain, Italy and Portugal propped up with newly created debt. Austerity for the people and prosperity for the bankers is creating tremendous distress and tension across the continent. A global volcanic eruption is in the offing.
It is clear to me the American Empire is in terminal decline. Hubris, delusion, corruption, foolish disregard for future generations and endless foreign follies have set in motion a chain of events that will lead to a cascading sequence of debt defaults, mass poverty, collapsing financial markets, and hyperinflation or deflation, depending on the actions of feckless bankers and politicians. There is no avoiding the tragic outcome brought on by decades of bad choices and a century of allowing private banking interests to control our currency. The “emergency” QE and ZIRP responses by the Federal Reserve to the Federal Reserve created 2008 financial collapse continue, even though the propaganda peddled by the Deep State tries to convince the public we have fully recovered. This grand fraud cannot go on forever. Ponzi schemes no longer work once you run out of dupes. With societal trust levels approaching all-time lows and foreign countries beginning to understand they are the dupes, another global financial crisis is a lock.
The Snowden Factor
With ten to fifteen years likely remaining in this Fourth Turning Crisis, people familiar with generational turnings can’t help but ponder what will happen next. Linear thinkers, who constitute the majority, mistakenly believe things will magically return to normal and we’ll continue our never ending forward human progress. Their ignorance of history and generational turnings that recur like the four seasons will bite them in the ass. We are being flung forward across the vast chaos of time and our existing social order will be transformed beyond recognition into something far better or far worse. The actual events over the coming decade are unknowable in advance, but the mood and reactions of the generational archetypes to these events are predictable. The actions of individuals will matter during this Fourth Turning. The majority are trapped in their propaganda induced, techno distracted stupor of willful ignorance. It will take a minority of liberty minded individuals, who honor the principles of the U.S. Constitution and are willing to sacrifice their lives, to prevail in the coming struggle.
Despite fog engulfing the path of future events, we know they will be propelled by debt, civic decay, and global disorder. Finding a unifying grey champion figure seems unlikely at this point. I believe the revelations by Edward Snowden have set the course for future events during this Fourth Turning. The choices of private citizens, like Snowden, Assange, and Manning, have made a difference. The choices we all make over the next ten years will make a difference. A battle for the soul of this country is underway. The Deep State is firmly ingrained, controlling the financial, political and educational systems, while using their vast wealth to perpetuate endless war, and domination of the media to manipulate the masses with propaganda and triviality. They are powerful and malevolent. They will not relinquish their supremacy and wealth willingly.
Snowden has revealed the evil intent of the ruling class and their willingness to trash the Constitution in their psychopathic pursuit of mammon. The mass surveillance of the entire population, locking down of an entire city in pursuit of two teenagers, military training exercises in major metropolitan areas, militarization of local police forces by DHS, crushing peaceful demonstrations with brute force, attempting to restrict and confiscate guns, molesting innocent airline passengers, executive orders utilized on a regular basis by the president, and treating all citizens like suspects has set the stage for the coming conflict. Strauss & Howe warned that history has shown armed conflict is always a major ingredient during a Fourth Turning.
“History offers even more sobering warnings: Armed confrontation usually occurs around the climax of Crisis. If there is confrontation, it is likely to lead to war. This could be any kind of war – class war, sectional war, war against global anarchists or terrorists, or superpower war. If there is war, it is likely to culminate in total war, fought until the losing side has been rendered nil – its will broken, territory taken, and leaders captured.” – The Fourth Turning – Strauss & Howe -1997
It appears to me the Deep State is preparing for armed conflict with the people. Why else would they be utilizing Big Brother methods of surveillance, militarization of police forces and Gestapo like tactics of intimidation to control the masses? This doesn’t happen in a democratic republic where private individuals are supposed to know everything done by public government servants, not vice versa. They know the cheap, easy to access energy resources are essentially depleted. They know the system they have built upon a foundation of cheap energy and cheap debt is unsustainable and will crash in the near future. They know their fiat currency scheme is failing.They know it is going to come crashing down.
They know America and the world will plunge into an era of depression, violence, and war. They also know they want to retain their wealth, power and control. There is no possibility the existing establishment can be purged through the ballot box. It’s a one party Big Brother system that provides the illusion of choice to the Proles. Like it or not, the only way this country can cast off the shackles of the banking, corporate, fascist elites, and the government surveillance state is through an armed revolution. The alternative is to allow an authoritarian regime, on par with Hitler, Stalin and Mao, to rise from the ashes of our financial collapse.This is a distinct possibility, given the ignorance and helplessness of most Americans after decades of government education and propaganda.
The average mentally asleep American cannot conceive of armed conflict within the borders of the U.S. War, violence and dead bodies are something they see on their 52 inch HDTVs while gobbling chicken wings and cheetos in their Barcalounger. We’ve allowed a banking cartel and their central bank puppets to warp and deform our financial system into a hideous façade, sold to the masses as free market capitalism. We’ve allowed corporate interests to capture our political system through bribery and corruption.
We’ve allowed the rise of a surveillance state that has stripped us of our privacy, freedom, liberty and individuality in a futile pursuit of safety and security. We’ve allowed a military industrial complex to exercise undue influence in Washington DC, leading to endless undeclared wars designed to enrich the arms makers. We’ve allowed the corporate media and the government education complex to use propaganda, misinformation and social engineering techniques to dumb down the masses and make them compliant consumers. These delusions will be shattered when our financial and economic system no longer functions. The end is approaching rapidly and very few see it coming.
Glory or Ruin?
The scenario I envision is a collapse of our debt saturated financial system, with a domino effect of corporate, personal, and governmental defaults, exacerbated by the trillions of currency, interest rate, and stock derivatives. Global stock markets will crash. Trillions in paper wealth will evaporate into thin air. The Greater Depression will gain a choke-hold around the world. Mass bankruptcies, unemployment and poverty will sweep across the land. The social safety net will tear under the weight of un-payable entitlements. Riots and unrest will breakout in urban areas. Armed citizens in rural areas will begin to assemble in small units. The police and National Guard will be unable to regain control. The military will be called on to suppress any and all resistance to the Federal government. This act of war will spur further resistance from liberty minded armed patriots. The new American Revolution will have begun. Leaders will arise in the name of freedom. Regional and local bands of fighters will use guerilla tactics to defeat a slow top heavy military dependent upon technology and vast quantities of oil. A dictatorial regime may assume power on a Federal level. A breakup of the nation into regional states is a distinct possibility.
With the American Empire crumbling from within, our international influence will wane. With China also in the midst of a Fourth Turning, their debt bubble will burst and social unrest will explode into civil war. Global disorder, wars, terrorism, and financial collapse will lead to a dramatic decrease in oil production, further sinking the world into depression. The tensions caused by worldwide recession will lead to the rise of authoritarian regimes and global warfare. With “advances” in technological warfare and the proliferation of nuclear warheads, this scenario has the potential to end life on earth as we know it. The modern world could be set back into the stone-age with the push of a button. There are no guarantees of a happy ending for humanity.
The outcome of this Fourth Turning is dependent upon the actions of a minority of critical thinking Americans who decide to act. No one can avoid the trials and tribulations that lie ahead. We will be faced with immense challenges. Courage and sacrifice will be required in large doses. Elders will need to lead and millennials will need to carry a heavy load, doing most of the dying. The very survival of our society hangs in the balance. Edward Snowden has provided an example of the sacrifice required during this Fourth Turning. How we respond and the choices we make over the next decade will determine whether this Fourth Turning will result in glory or ruin for our nation.
“Eventually, all of America’s lesser problems will combine into one giant problem. The very survival of the society will feel at stake, as leaders lead and people follow. The emergent society may be something better, a nation that sustains its Framers’ visions with a robust new pride. Or it may be something unspeakably worse. The Fourth Turning will be a time of glory or ruin.” – Strauss & Howe – The Fourth Turning
Click these links to read the first two parts of this three part series:
From Fernando del Pino Calvo-Sotelo, published originally in Expansion
View from Spain: Running away from reality (pdf)
In a society that’s incessantly pulling all sorts of rights out of its hat, the right to not suffer is the father of them all. We feel entitled to keep our jobs, our health, our home and our leisure, demanding in fact to be carefree. We don’t want our lifestyle to depend on how hard we work or how much we save, and neither do we want our wrong decisions to have any consequences. In our delirium, we feel we have the right to know the future or even to decide when life should start (that of others, of course) and also when death should come (usually that of others as well). In brief, we want the security that we will be able to avoid pain. The problem is that, in life, pain is as undesirable as it is inevitable, and security, in the words of Helen Keller, is “a superstition that does not exist in nature”. However, man persists in his chimerical search for the security that will keep him free from suffering. Citizens demand that from their ruling classes, who promise ever more extravagant rights and certainties, constantly fleeing reality and truth. And in this hysterical, unbridled race to reach an evanescent security, liberty is thrown into the dust like a bothersome burden.
The free man must be responsible for his behavior without being able to blame anyone else when things go wrong. He must live in discomfort and uncertainty and accept the authorship of all his decisions. This is hard. That’s why as soon as the sweet illusion of freedom gives way for the bitter taste of responsibility and effort which that very freedom bears with it, man revolts against the latter. Some 3500 years ago, the Jewish people, having been oppressed for generations by slavery, was freed by Moses, who took them out of Egypt in order to lead them to the Promised Land. But just a few short days after their last minute’s escape from Pharaoh’s claws in the Red Sea, as the harshness of the desert started to put a dent in their spirit, the Jews forgot the humiliations, whippings, hardships and indignity of their slavery, cursed their freedom and blamed their liberator for freeing them, to the extent that Moses was nearly stoned: “Why did we not die at Yahweh’s hand in Egypt, where we used to sit round the flesh pots and could eat to our heart’s content!”. The security of a hot meal and a loaf of bread seemed worth more than the recently recovered freedom.
It goes without saying that throughout History all power seekers and power holders have taken good note of this story. They have come to realize that all they need to have the people surrender their liberty is to promise them security: a certainty – liberty – in exchange for a promise – security; an extremely valuable good in exchange for a chimera. And over and over again, the people have fallen into the same trap.
Today, under the disguise of a promise of physical security, governments treat each of us as if we were suspected criminals and not free citizens with rights: they record our conversations, intercept our mails, take our fingerprints and as many pictures as they deem necessary, do body searches and leave us half naked when we travel as if it were business as usual, and ruthlessly hunt down as traitors those who uncover these practices.
As far as economic security is concerned, totalitarian communism was an extreme of this barter: the people lost their liberty and never found any security, except for the certainty of being poor under a merciless tyranny. The fraudulent Welfare State proposed something similar (do you believe that the wording of Social “Security” is casual?): it promised a paradise of “free” pensions, healthcare and education in exchange for giving up our freedom to save (thus relieving us off the uncomfortable responsibility of doing so). We surrendered our savings to the politicians, those incurable squanderers, well known for anything but respecting either their word or other people’s money! And now that, even after burying us under a mountain of taxes and perpetual debts, public money is scarce and nearing extinction, where is the promised security to be found? We must understand once and forever more that security is not only liberty’s enemy, but an impediment to prosperity. In fact, security and prosperity are antonyms.
The 2008 financial crisis was mostly caused by politicians and central bankers wanting to avoid the suffering caused by economic cycles. Due to the irritating fact that pained voters tend not to reelect incumbent governments, what better promise could they make than that of trying to end recessions and live in a plateau of permanent prosperity? We still believe the charlatans who, in politics or in central banking, assure us that they can get rid of the uncertainty that terrifies us so much. We long for a control that simply does not exist, and these are the consequences: perversely, the chimeric search for security brings much more suffering than what it pretended to avoid in the first place.
In 1891, Pope Leo XIII prophetically forewarned us in his wise Encyclical Rerum Novarum about the evils that are now upon us: “To suffer and to endure, therefore, is the lot of humanity; let them strive as they may, no strength and no artifice will ever succeed in banishing from human life the ills and troubles which beset it. If any there are who pretend differently – who hold out to a hard-pressed people the boon of freedom from pain and trouble, an undisturbed repose, and constant enjoyment – they delude the people and impose upon them, and their lying promises will only one day bring forth evils worse than the present”.
We have to accept insecurity and pain as something inherent to human nature and promptly mistrust anyone promising the opposite, in the conviction that that promise only seeks to fool the unsuspecting. An economic and political system focused on avoiding the inevitable, promising an inexistent security, is due to fail and headed for poverty. That’s why we should make peace with the reality of uncertainty and suffering and not try to escape from both. Only from the deep acceptance of these realities, will the trembling, fragile ember of hope that has always raised the human being up from his falls catch fire again. The history of man is the successful story of a flexible adaptation to an ever changing, ever insecure environment. As a country, we should look suffering in the eye, without fear, and dedicate all our energies to adapting to the new reality instead of continuously running away from it.
by David John Marotta & Megan Russell | 01-19-2014
Keynesian economists have cited the rising U.S. stock market as evidence that the economy is picking up steam. Then they’ve been surprised by the unemployment and lack of hiring. The stock market, despite record highs, is not correlated to the performance of the overall economy.
The misery index is an economic indicator of unemployment plus inflation. Together these two measurements represent significant economic hardship for the country. The misery index was used frequently during the Nixon, Ford and Carter years as a scorecard to show how government policy can harm working people.
In contrast, officially reported unemployment numbers decrease when enough time passes to discourage the unemployed from looking for work. A decrease is not necessarily beneficial; an increase is clearly detrimental.
In the United States, we need to add a minimum of 127,000 jobs per month just to account for our annual population increase . Last month, only 74,000 jobs were added, the lowest increase since January 2011. Of those, 55,000 were added in the retail sector during the holidays. With so many unemployed experienced workers, many recent college graduates are left chasing too few rookie positions.
The purported decrease in unemployment largely reflects how the government measures it. The unemployment rate only describes people who are currently working or looking for work.
During particularly bad times, the unemployment rate frequently decreases by the number of people dropping out of the jobs market entirely . In December, the job participation rate fell to 62.8%, its lowest level in 35 years. According to Heidi Shierholz of the Economic Policy Institute , if these missing workers were included in the calculation, the unemployment rate would be 10.2%.
Unemployment has never been measured very accurately . Calculations do not count those who have just entered the labor force and haven’t found a job yet, who have been searching for employment so long they have given up the search , who work part time but are actively seeking full-time work and who are actively seeking employment but were not included in the monthly jobs survey.
Unemployment in its truest definition, meaning the portion of people who do not have any job, is 37.2%. This number obviously includes some people who are not or never plan to seek employment. But it does describe how many people are not able to, do not want to or cannot find a way to work. Policies that remove the barriers to employment, thus decreasing this number, are obviously beneficial.
In contrast, officially reported unemployment numbers decrease when enough time passes to discourage the unemployed from looking for work. A decrease is not necessarily beneficial; an increase is clearly detrimental.
So how could our stock market be at such record highs while so many are unemployed? Given current government policies, it is specifically by avoiding U.S. workers that companies are keeping their profits strong. Obamacare punishes large companies for each full-time worker and provides strong incentives for small businesses to stay below 50 full-time-equivalent employees. Automation and outsourcing are making U.S. companies more profitable at the expense of U.S. employment.
Inflation, the other half of the misery index, assists stock prices as well. Every month, the Federal Reserve has been injecting $85 billion into the money supply. This devaluation of the currency causes inflation that naturally pushes all prices, including stock prices, higher.
The broadest measure of inflation is the Consumer Price Index. But since 1997, the government has manipulated the raw data and significantly underreported inflation. Now they use a “hedonic deprecator.” If the quality of a commodity increases more than its price, the quality increase is counted as deflation. And because consumers use “creative substitution,” switching from an expensive good to a similar but cheaper good, the government argues that only a portion of price increases should be counted as inflation.
These tricks, along with a host of other dubious accounting schemes, underreport inflation by about 3%. Today, inflation is officially 1.24%. According to Shadow Stats , which computes the old way, it is closer to 4.5%.
Think of that 4.5% of actual inflation as a tax on anyone who is storing their money in dollars. And since 1997 that 3% annual underreporting has had the effect of cutting Social Security benefits by a cumulative 40%.
Today, the misery index would be 7.54 using official numbers. Using Shierholz’s measurement including discouraged workers (10.2%) and the historical method of calculating inflation (4.5%), the current misery index is closer to 14.7, worse even than during the Ford administration.
The younger and more economically disadvantaged members of society feel the misery most acutely. But the economics is much more complex than adding laws to help them directly. Longer unemployment benefits or subsidized government-run health care contribute to systemic government policies that discourage production and employment.
Meanwhile, the stock market can occasionally benefit from the misery index. It does not correlate to an economic recovery but is a powerful financial asset for those wise enough to remain invested and diversified during all kinds of economic movements.
Blogs like this one are a total fucking waste of time. We are a handful of hardcore realists reading each others’ blogs and reinforcing what we already know. All while the stoned masses sit at home fat and happy watching the Kardashians, hypnotized by Dow Casino ticking higher with every passing day. After 2008, the comfort-seekers at large curled up into the fetal position and have remained that way ever since. Regardless, how can we possibly warn the oblivious masses about today’s economic risks when it’s all doomed to collapse under the weight of its own moral depravity? Basic logic dictates that the majority can’t all get out of a house of cards intact. The Idiocracy at large is totally bought in and sold out to the promise of the jokers and fools who run this globalized catastrophe, you know, the same ones who collapsed it the last time…
There is nothing any bearish blogger can do to bring about the collapse of this fabrication that global thought dealers are not already doing. They collapsed world markets in 2008 and they are fully capable of doing it again all on their own. These people went to the top schools in the U.S., the UK, Canada – across the world. They know what they are doing. They generated the 2008 clusterfuck, profited from it, and now are guiding us straight ahead to the next catastrophe. Who was at the helm of the Federal Reserve in 2006, 2007 and 2008? Bernankenstein of course. And who until this very month has steadfastly been Wall Street’s largest leveraged banker? Bernankenstein. He saved us from a catastrophe that he himself subsidized. Soon he will hand over the reins to Janet Yellen, who has degrees from Yale and Brown, two more Ivy Leagues. Surely she can finish the job and pile drive this fucker straight into the ground. Yellen admits that she didn’t see the 2008 financial crisis coming – apparently giving subprime loans to illegal immigrants and watching Goldman invent the self-imploding CDO didn’t raise any alarm bells with her. So she is definitely the right person to finish the job. Speaking of which, the self-imploding CDO that took out AIG and Lehman was invented at Goldman Sachs under current chairman Loyd Blankfein (see: Ayn Rand Gone Wild), who was Harvard roommate to the Bennie Bernank. Fortunately Goldman was bailed out by that other Harvard/Goldman alum Hank Paulson as Treasury Secretary (and Bernanke). The Credit Default Swap (CDS) was invented by JP Morgan/Cambridge superstar Blythe Masters who was just let go from JPM for her alleged role in an energy market manipulation scheme a la Enron. The CDS may well be the ultimate financial weapon of mass destruction (WMD) – still out there working its magic. Meanwhile, Central Bankster Mark Carney, another Harvard/Goldman Sachs alum, just finished inflating Canada’s massive real estate bubble and has now moved to the UK to help top off their real estate bubble. And if only Larry Summers, Dean of Harvard, had been picked as Fed chairman, surely this clusterfuck would already have collapsed by now. It was Summers who suggested just last year that the secret to improving a nation’s credit rating was to borrow more not less. Genius ! Summers also of course was a key proponent of repealing Glass-Steagall, the Depression-era law meant to preclude another financial crisis. The other key proponent behind Glass-Steagall repeal was Robert Rubin (Goldman/Citigroup/Yale/Harvard). Obama/Bush, two more Harvard frat boys gleefully sowing the seeds of anarchy. This is all well in hand. Clearly, we need to sit back and wait. There is nothing we can do to end this shit show that the dumbfucks from Harvard and other Ivy League schools are not doing on their own. No offense, but I highly doubt if anyone reading this blog could collapse the world financial system – I doubt if I could. So the longer we doom forecasters warn of risks and otherwise prescribe caution, the longer this circus will continue. Think about it. Harvard dunces will end this globalized catastrophe once and for all. We just need to be a bit more patient and give them time to work.
Bernanke fixed Wall Street by giving them $3 trillion to play with…
Fed balance sheet (blue line) with Dow Casino. Fast, slow, fast. Sounds familiar…
Apparently we’re still waiting for the melt-up to occur. Sure, whatever…
Nasdaq 100 – 70% retracement
Speaking of melt-ups…
And Priceline (Nasdaq in background)
Top performing S&P stock – Up 2200% in five years
Are we in a bubble? I can’t tell. Although the last time this stock went parabolic I lost a shit ton of money shortly thereafter that’s all I know. It’s a good thing I’m not bitter, especially towards Central Banksters and their continued market manipulations…
Twitter (below) priced at $26 and recently traded at $75 for a 200% gain in 6 weeks. Its price to sales ratio is a ludicrous 75. Apple’s price/sales ratio is 3. Twitter’s profit margin is -25% so it sells dollar bills for 75 cents and yet its market cap is greater than that of 80% of S&P companies. It’s the most overvalued piece of shit on the entire planet.
Meanwhile, per IBD on Friday, “Investor’s Intelligence (sentiment) bulls v.s. bears ratio is in the silly zone” That’s because there are no bears left except for a handful of bloggers engaged in a mutual admiration circle jerk…
Ode to Ponzi Capitalism and Securitization
In a big FU to customers, BusinessWeek informs us last week that companies with the poorest customer service have outperformed in the stock market. There is actually negative correlation between customer satisfaction and stock performance. Time Warner Cable is the reference company (appearing on the list multiple times); however, Facebook is at the very bottom of the ratings.
Fadebook: Shitty service and abuse of customer data privacy
The strategy is working – Booyah Skidaddy !
One of these countries monetizes its debt in order to levitate asset markets, the other does not. One reflects reality – the other one, not so much…
Applying Krugmanite/Bernanke Idiocratic logic, it’s abundantly clear that Canadians don’t borrow enough, print enough or outsource enough of their economy and that’s just bad management.
Guzzling the Kool-Aid from a fire hose. No risks are priced in right now. Not one.
“We paid our Social Security and Medicare taxes; we earned our benefits.” It is that belief among senior citizens that President Obama was pandering to when, in his second inaugural address, he claimed that those programs “strengthen us. They do not make us a nation of takers.”
If Social Security and Medicare both involved people voluntarily financing their own benefits, an argument could be made for seniors’ “earned benefits” view. But they have not. They have redistributed tens of trillions of dollars of wealth to themselves from those younger.
Social Security and Medicare have transferred those trillions because they have been partial Ponzi schemes.
After Social Security’s creation, those in or near retirement got benefits far exceeding their costs (Ida Mae Fuller, the first Social Security recipient, got 462 times what she and her employer together paid in “contributions”). Those benefits in excess of their taxes paid inherently forced future Americans to pick up the tab for the difference. And the program’s almost unthinkable unfunded liabilities are no less a burden on later generations because earlier generations financedsome of their own benefits, or because the government has consistently lied that they have paid their own way.
Since its creation, Social Security has been expanded multiple times. Each expansion meant those already retired paid no added taxes, and those near retirement paid more for only a few years. But both groups received increased benefits throughout retirement, increasing the unfunded benefits whose burdens had to be borne by later generations. Thus, each such expansion started another Ponzi cycle benefiting older Americans at others’ expense.
Social Security benefits have been dramatically increased. They doubled between 1950 and 1952. They were raised 15 percent in 1970, 10 percent in 1971, and 20 percent in 1972, in a heated competition to buy the elderly vote. Benefits were tied to a measure that effectively double-counted inflation and even now, benefits are over-indexed to inflation, raising real benefit levels over time.
Disability and dependents’ benefits were added by 1960. Medicare was added in 1966, and benefits have been expanded (e.g., Medicare Part B, only one-quarter funded by recipients, and Part D’s prescription drug benefit, only one-eighth funded by recipients).
The massive expansion of Social Security is evident from the growing tax burden since its $60 per year initial maximum (for employees and employers combined). Tax rates have risen and been applied to more earnings, with Social Security now taking a combined 12.4 percent of earnings up to $113,700 (and Medicare’s 2.9 percent combined rate applies to all earnings, plus a 0.9 percent surtax beyond $200,000 of earnings).
Those multiple Ponzi giveaways to earlier recipients created Social Security’s 13-digit unfunded liability and Medicare’s far larger hole. And despite politicians’ repeated, heated denials, many studies have confirmed the results.
One recent study of lifetime payroll taxes and benefits comes from the Urban Institute. For Medicare, they calculated that (in 2012 dollars) an average-wage-earning male would get $180,000 in benefits, but pay only $61,000 in taxes — “earning” only about one-third of benefits received. A similarly situated female does even better. The cumulative “excess” benefits equal $105 trillion, with net benefits increasing over time.
The Urban Institute’s calculations revealed a different situation for Social Security. An average-earning male who retired in 2010 will receive $277,000 in lifetime benefits, $23,000 less than his lifetime taxes, while for females, their $302,000 in lifetime benefits approximates their lifetime taxes. And things are getting worse. By 2030, that man will be “shorted” 16 cents (10 cents for women) of every lifetime tax dollar paid.
While those results resoundingly reject “we earned it” rhetoric for Medicare, the Social Security results, with new retirees getting less than they paid in, could be spun as “proving” Social Security is not a Ponzi scheme. However, that would be false. The reason is that Medicare is still in its expansion phase, as with Medicare Part D, piling up still bigger future IOUs. However, Social Security has essentially run out of new expansion tricks, although liberal groups are pushing to apply Social Security taxes to far more income as one last means of robbing those younger to delay the day of reckoning. That simply means that we are being forced to start facing the full consequences of the redistribution that was started in 1935. That is, the current bad deal Social Security offers retirees is just the result of the fact that it has been a Ponzi scheme for generations, and someone must get stuck “holding the bag.”
In fact, perhaps the best description of the current Social Security and Medicare situation comes from Henry Hazlitt, long ago, in Economics in One Lesson:
Today is already the tomorrow which the bad economist yesterday urged us to ignore. The long-run consequences of some economic policies may become evident in a few months. Others may not become evident for several years. Still others may not become evident for decades. But in every case those long-run consequences are contained in the policy as surely as the hen was in the egg, the flower in the seed.
Social Security and Medicare’s generational high-jacking has become “the third rail of politics” in large part because seniors want to believe that they paid their own way. But they have not. They have only paid for part of what they have gotten. The rest has indeed been a Ponzi scheme. And as Social Security is already revealing, the future cannot be put off forever, however much wishful thinking is involved. Some are already being forced to confront the exploding pot of IOUs involved, and it will get much worse.
The supposedly “most successful government program in the history of the world,” according to Harry Reid, has turned seniors into serious takers. The fact that some of them are now starting to share the pain caused by those programs does not contradict that fact. It just shows the dark side of the most successful Ponzi scheme in the history of the world.
If you believe that there is high inflation in the United States, you are just imagining things. That is the message that the U.S. government and the Federal Reserve would have us to believe. You might have noticed that the government announced on Wednesday that the cost of living increase for Social Security beneficiaries will only be 1.5 percent next year. This is one of the smallest cost of living increases that we have ever seen. The federal government is able to get away with this because the official numbers say that there is hardly any inflation in the U.S. right now. Of course anyone that shops for groceries or that pays bills regularly knows what a load of nonsense the official inflation rate is. The U.S. government has changed the way that inflation is calculated numerous times since 1978, and each time it has been changed the goal has been to make inflation appear to be even lower. According to John Williams of shadowstats.com, if the inflation rate was still calculated the same way that it was back when Jimmy Carter was president, the official rate of inflation would be somewhere between 8 and 10 percent today. But if the mainstream news actually reported such a number, everyone would be screaming and yelling about getting inflation under control. Instead, the super low number that gets put out to the public makes it look like the Federal Reserve has plenty of room to do even more reckless money printing. It is a giant scam, but most Americans are falling for it.
Meanwhile, the prices of the things that most Americans buy on a regular basis just keep going up. The following are just a few examples of price inflation that we have seen lately…
-McDonald’s has killed the dollar menu because it is becoming impossible to “make any money selling burgers for $1“.
But don’t worry – the government says that the inflation you see is just your imagination.
-Amazon.com has raised the minimum order size required for free shipping from $25 to $35.
But don’t worry – you can afford to order more stuff thanks to the great new job that you got during this “economic recovery”.
-It is being projected that those using natural gas to heat their homes will see their heating costs rise by 13 percent this winter.
But don’t worry – “global warming” should kick in to high gear any day now.
-The price of chocolate has gone up by 45 percent since 2007, and it is being projected that it will now be increasing at an even faster pace.
But don’t worry – eating chocolate is bad for you anyway.
-Thanks to Obamacare, the health insurance premiums of many American families are absolutely skyrocketing. As I wrote about the other day, one family down in Texas just got a letter informing them that their health insurance premiums are going up by 539 percent.
But don’t worry – this is just “health care reform” in action.
Meanwhile, things just continue to get tougher for middle class American families. Household incomes have actually been declining for five years in a row and total consumer credit has risen by a whopping22 percent over the past three years.
The quality of our jobs continues to go down and our paychecks are not keeping up with inflation. In fact, 40 percent of all U.S. workers are now making less than what a full-time minimum wage worker made back in 1968 after you account for inflation.
So what do the “authorities” say that the solution to our problems is?
They want even more inflation of course. According to CNBC, many Federal Reserve officials (including Janet Yellen) believe that what the U.S. economy really needs is a lot more inflation…
Inflation is widely reviled as a kind of tax on modern life, but as Federal Reserve policy makers prepare to meet this week, there is growing concern inside and outside the Fed that inflation is not rising fast enough.
Some economists say more inflation is just what the American economy needs to escape from a half-decade of sluggish growth and high unemployment.
The Fed has worked for decades to suppress inflation, but economists, including Janet Yellen, President Obama’s nominee to lead the Fed starting next year, have long argued that a little inflation is particularly valuable when the economy is weak. Rising prices help companies increase profits; rising wages help borrowers repay debts. Inflation also encourages people and businesses to borrow money and spend it more quickly.
The rest of that article goes on and on about how wonderful inflation is for an economy and about how the U.S. economy desperately needs some more of it.
Well, if that was actually true, then the Weimar Republic should have had one of the best economies in the history of mankind.
But this inevitably happens when a nation starts producing fiat currency that is backed by absolutely nothing. There is always a temptation to just print a little bit more.
In the end, we are going to be destroyed by our own foolishness. We have the de facto reserve currency of the planet, and the rest of the world has trusted it for decades. But now we are systematically destroying our currency, and the rest of the globe is looking on in horror.
If you want to see a very good example of the impact that inflation has had on our economy in recent years, just check out this amazing chartwhich shows what the Federal Reserve’s reckless policies have done to the prices of commodities.
Ultimately, the U.S. dollar will be destroyed, and we will have done it to ourselves.
Many people are attempting to protect themselves against this inevitability by putting a lot of their money into hard assets such as gold and silver, but before you do that you might want to make sure that you don’t have a vengeful spouse that will toss it all into a dumpster someday. The following is from a recent New York Post article…
A Colorado man was so angry at his ex-wife for divorcing him that he had the couple’s life savings of $500,000 converted to gold — then tossed it in a dumpster so she couldn’t have any of it, the Colorado Springs Gazette reports.
In June, Earl Ray Jones, 52, of Divide, Colorado, was ordered by a judge to pay $3,000 a month to the woman he’d been married to for 25 years, so he pillaged the couple’s retirement account and had it converted into 22 pounds worth of gold and silver bars, the paper reports.
Jones claims he then tossed the modern-day treasure into a dumpster behind a motel, where he had been living temporarily, later telling the judge he had no money to give his ex-wife, according to the paper.
Did that story make you smile? It sure did the trick for me.
But that story is also a picture of what the Federal Reserve is doing with our dollar.
Our currency has been used for decades by almost everyone else around the planet. In fact, more U.S. dollars are used outside of our country than inside of it.
But now the Federal Reserve is systematically trashing the dollar and the rest of the globe is starting to lose faith in it.
Instead of realizing their mistakes, Fed officials say that we need to create even more inflation and they just keep on wildly printing more money.
In the end, we will all pay a great price for their foolishness.
Meanwhile, in Europe… | Zero Hedge. (FULL ARTICLE)
For years, since the onset of the euro crisis, we have heard that the crisis is over. Every year, politicians keep on telling us that the worst is over, but that next year will be so much better. Do you really think so? Here are some hard facts & figures instead of wishful thinking of lying politicians showing that the euro crisis is not over. On the contrary, things are getting worse.
La Dolce Vita, the good life, is no longer achievable for millions of Italians. Italy is the third largest Eurozone country and is in dire straits. Public debt has ballooned to well over 130 percent! Is this money ever going to be repaid? Who is going to do that? The country has one of the fastest aging populations in the world. Italian women, when having any children at all, prefer to have just one child. In order for a society to maintain a healthy demographic balance, they should have at least two. Nonetheless, unemployment, from a European perspective, is relatively low at 12 percent. But wait, youth unemployment is virtually at 40 percent. So there are no jobs in Italy, public debt is out of control and its aging population lays a heavy burden on both income taxes and Social Security payments.
- Austerity pushing Europe into social and economic decline, says Red Cross (theguardian.com)
- Europe’s Best Hope Is a German Grand Coalition (bloomberg.com)
- The euro crisis: Europe bleeds out | The Economist (dralfoldman.com)
The BPC, whose initial analysis of the US default has become the staple “go-to” analysis for Treasury cash obligations and key events in the days surrounding and following the X-Date, has released a new update on when the US runs out of money. The latest: October 22 – November 1. Which means that if it so desires, the GOP can and probably will delay a debt ceiling bargain until the last possible moment which may well be, appropriately enough, Halloween. In the meantime, the US Treasury now has about $40 billion in total cash on hand and available extraordinary measures and declining fast.
The latest complete note:
As BPC’s X Date Window Narrows, Economic Risks Grow
- BPC’s Updated X Date Range: October 22 – November 1
- Major Debt Rollovers: October 17 – $120 billion; October 24 – $93 billion
- Major Payments Due During X-Date Range: $12 billion in Social Security benefits on October 23; $6 billion in interest on the public debt on October 31; over $55 billion in major payments on November 1
- Likely Impact of Shutdown on X-Date Range: If resolved shortly – negligible; if prolonged – a couple days
Updated data on Treasury cash flows through the first week of October show that the range for the Bipartisan Policy Center’s (BPC) X Date – the date on which the United States will be unable to meet all of its financial obligations in full and on time – has narrowed to between October 22 and November 1. The updated range is consistent with BPC’s earlier estimate….
- Debt Ceiling Dates, Explained (blogs.wsj.com)
- Key Treasury Cash Payments And Transactions After The X-Date (zerohedge.com)
- Group: U.S. Faces Debt Deadline Between Oct. 18 and Nov. 5 (blogs.wsj.com)
Try this experiment.
Ring up your credit card company at the end of this month. Tell them that you and your spouse can’t seem to reach an agreement about how to allocate your monthly budget.
So in the meantime, you have been forced to shutdown your household… but you hope to be back on track in a few weeks.
Chances are, they won’t take you seriously. Yet for some reason, this has been dismissed as commonplace and benign in the Land of the Free.
Here’s a list of quotes we’ve heard from the telescreen talking heads over the last 24-hours:…
- Watch Out! Propaganda! (oktaviyantiabdullahbelitong.wordpress.com)
- ‘Propaganda: Power and Persuasion’ at the British Library (lemonarts.wordpress.com)
- Propaganda?!? (babblesnow.wordpress.com)
- propaganda vs… (abbybielman.wordpress.com)
- Propaganda is a Way of Life (marvinscorridor.com)