“We really can't forecast all that well. We pretend that we can but we can't." - Alan Greenspan, to Jon Stewart in an interview on The Daily Show.
Dear All,
Taper talk and the labor force...Its been nearly six months since Ben Bernanke kicked off the Fed's propaganda campaign that the central bank would imminently scale back its monthly bond buying, while last Friday the Labor Department offered up the latest chapter of its employment fairy tale. According to the BLS 932,000 people were dropped from the labor farce, er...force in October bringing the total to a record 91.5 million Americans not counted as willing/able to work or otherwise "discouraged" in their pursuit of same. The labor force participation rate is now 62.8%, a 35 year low. By steadily reducing the head count of those the government claims are "looking" for work," the real unemployment rate is artificially depressed. Even so, in the latest report unemployment ticked up to 7.3%. Against this fiction, Shadowstats last week placed the true U.S. unemployment rate at 23.5%, a new high for their measurement and more than triple the official rate.
It is nearly unbearable to watch the economics profession accept, let alone 'analyze' the Orwellian drivel that emanates from the U.S. Bureau of Labor Statistics. Bear in mind that without an honest/accurate inflation measure, it is not possible to calculate GDP, just as an unemployment rate without a properly denominated labor force is worthless. To wit, I'm Not Sure How The Government Can Report GDP And Payroll Numbers This Absurd And Expect Anyone To Believe Them
Because official U.S. economic statistics are such nonsense one must increasingly rely on personal experience and anecdotal information to gauge economic reality. Recently I've gotten into the habit of asking checkout employees at retail food establishments their experience with customer use of food stamps (actually they are no longer stamps but rather, EBT cards which are swiped just like credit or debit cards). When I ask their impression of the percentage of customers who pay for food with them I generally hear that it's about half. At a Target store last week, I was told that it was a good 75%. These EBT cards are like cash, by the way. Since no identification is required at point-of purchase, they can be freely transferred and discounted, creating a black market.
From the horse's own mouth...WSJ: Confessions of a Quantitative Easer
"I can only say: I'm sorry, America. As a former Federal Reserve official, I was responsible for executing the centerpiece program of the Fed's first plunge into the bond-buying experiment known as quantitative easing.... We were working feverishly to preserve the impression that the Fed knew what it was doing...The central bank continues to spin QE as a tool for helping Main Street. But I've come to recognize the program for what it really is: the greatest backdoor Wall Street bailout of all time."
Federal student loans now exceed $1 trillion, of which $112 billion is delinquent, both records. So pervasive is the government student debt bubble that is raises the question as to whether there really are any longer such things as private colleges and universities. The academic cartel at private institutions feeds on the student debt culture to maintain its dysfunctional and profligate ways.
There is little to add to this Zerohedge commentary regarding Alan Greenspan's pathetic media appearances promoting his new book, other than this: Prior to being appointed Fed chairman Greenspan was an utter failure as an economic forecaster. His consulting firm, Townsand and Greenspan was on life support when Reagan picked him to run the Fed. According to the late economist, Pierre Renfret, "When Greenspan closed down his economic consulting business (to become Fed Chairman) he did so because he had no clients left and the business was going under (and we found) out he had none (of his employees left)." Greenspan is spending his retirement desperately trying to revise history. In a rare display of candor while attempting to defend his prominent role in causing the financial crackup he confessed, as quoted at top, to the pretense of his trade. Greenspan is a world class phony.
The NSA is but one element of the growing police state apparatus. Recall the SWAT/military shutdown of metropolitan Boston (including forced removal of innocent people from their homes) in order to find a 19 year-old bombing suspect: Our nation of citizen sheep desires their government's protection at any cost to their personal liberty and self-respect. I was in Manhattan on September 11, 2001, a day no more revolting than the police state the U.S. now embraces: Feds confiscate investigative reporter’s confidential files during raid
The transition of formerly powerless individuals into government thugs empowers the weakest and least productive among us. History's most evil regimes have always exploited humanity's darkest proclivities: Johannes Niederhauser: I got Kicked out of America for Having a Guitar
Pediatric neurosurgeon Ben Carson was awarded the Presidential Medal of Freedom after making medical history in 1987 by becoming the first surgeon to successfully separate conjoined twins attached at the head. He recently had some choice words about Obamacare: Dr. Carson: "Obamacare the Worst Thing That Has Happened Since Slavery"
Richard Maybury, in the latest issue of his 'U.S. and World Early Warning Report' weighs in on the big lie underlying the notion of "comprehensive" health care:
"Comprehensive health care is an impossible concept...Insurance is a simple thing. Few of us can afford to pay the costs of a sudden catastrophe, for instance a house fire. But such catastrophes are rare. We all put a little money into a 'pot' and the few who have serious fires divide up the pot. Insurance works only for losses that are unusual. If we all had serious fires, everyone would share the pot and no one would receive much. Comprehensive health insurance covers things that are common: colds, acne, flu, athlete's foot, allergies. Suppose we had house care insurance that worked like health care insurance. We'd all be filing claims every time we had a leaky faucet, a burned out light bulb, shower mildew, or crabgrass. Imagine the red tape. Is your crabgrass a species covered by your policy? We'll need to do lab tests. Is it being treated by an approved specialist? Fill out these forms. Is the specialist using a brand name treatment or a generic? More forms. Imagine the cost."
Maybury nicely summarizes the flawed logic in expanding the medical insurance culture and the distorted definition of viable insurance. A few decades ago medical insurance was limited to serious illness and hospitalization -- commonly referred to as "major medical." As government expanded Medicare and further removed the patient from the supervision of medical pricing, costs not surprisingly surged upward. Today, with ubiquitous third-party health police and $20 co-pays for office visits, the customer is largely removed from pricing issues, a recipe for disaster and surging costs. The United States suffers not from insufficient health care coverage but rather -- from all too much of it.
In this video points Charles Biderman explains why boobus americanus' continued submission to the lure of political promise will only bring more boondoggles such as Obamacare: The biggest of the Big Lies is that government can effectively provide services.
Channeling his inner Pat Geary...For those readers unfamiliar with the reference, Geary is the corrupt Nevada senator in the novel and film, The Godfather. Harry Reid is the non-fictional version of a shady Nevada politician who having weathered the rigorous ethical standards and intellectual discernment (cough) imposed by his Democratic colleagues, becomes their chosen leader. Reid is a vile political hack of the highest order. This video clip of him five years ago claiming that the payment of income taxes is voluntary must be seen, for it is an excellent specimen of the feckless cur leading our country. Beyond the question of the amount of alcohol he consumed prior to the interview is the mystery of what would have compelled Reid to embark in such pointless idiocy. My take is that what we're observing is the reflexive and diversionary instinct politicians employ when anticipating or experiencing a tough line of questioning; a conversational form of filibuster -- in this case, gone terribly awry: Blast from the Past: Harry Reid Claimed Income Taxes are “Voluntary”
President Obama said the following regarding the pressure being exerted by some groups for the NFL's Washington Redskins to change its name, "If I were the owner of the team and I knew that the name of my team — even if they've had a storied history — was offending a sizable group of people, I'd think about changing it." Accordingly, ownership has announced that the team will now be referred to simply as 'The Redskins.'
Nearly a century ago H.L. Mencken described elections as "advanced auctions on stolen goods." Cash is what drives the legislative process. Voting is placebo for the masses: There’s Something Absolutely Insane Happening In The House Right Now
"The New York Times reports that 70 of the 85 lines in the new House bill [repealing the Dodd-Frank derivative regulations] reflect recommendations made in a piece of model legislation drafted by lobbyists for Citigroup...Members of the House received $22.4 million from interest groups that support the bill."
Well worth the read: Is It Wrong To Be 'Anti-Government'?
Be Careful With That Sushi You Are About To Eat
"Ever wonder why you are not reading news about the Fukushima nuclear reactor disaster? Do you even realize what a catastrophe it is - and will be for the west coast of the United States? How about because of the fact that General Electric built all six reactors for plant and was integral in the construction of it. It just so happens that GE used to own NBC, CNBC and MSNBC as well"
For college students interested in a career in advertising or publishing, a place in Conde Nast's summer internship program is a coveted slot. Our son was an intern there for two summers leading to his current career in advertising. He received a modest salary but would have gladly worked for free. Outside the Washington beltway there are few lower forms of life than pedophiles and class-action attorneys, who line their pockets at the expense of decent people which includes quite often, their own misguided clients: NYTimes: Sued Over Pay, Condé Nast Ends Internship Program. Between Obamacare, mandatory minimum wage, and the fear that every employee is a potential litigant, is it any wonder that companies are reluctant to hire?
In this April blog post, The Bitcoin Proxy I suggested that Bitcoin was behaving as a proxy for gold as an alternative to paper currencies, and that were it not manipulated, we would be seeing similar action in the pricing of gold. Fast forward seven months:
Bitcoin Exchange Rate
Perhaps the most important financial story of the past several weeks and barely reported, China is well on its way to establishing an international reserve currency: Currency swap signed with the EU a 'landmark'
Bloomberg: treasuries losing appeal with weakest foreign demand since 2001
Telegraph: China aiming for 'de-Americanized world’ with renminbi replacing dollar
FinancialTimes: China makes renminbi-trading agreement with Singapore
Regarding silver and gold...
A tale of two ETF's...Grant Williams recently noted that whereas GLD has reported a reduction of 34% of largely paper denominated gold, Sprott Trust (which owns the real stuff) saw only a 2% reduction during the same period.
His penchant for hyperbole aside (he has yet to conduct an interview not "remarkable, "powerful" or "stunning") this Erik King conversation with GATA's Chris Powell is noteworthy. Chris made some presentations in Asia recently where central bankers made some off the record comments to him regarding their knowledge of the gold fractional reserve system.
It is only a matter of when, not if the precious metals market explodes. The counterintuitive price behavior of gold and silver in the face of a booming bull market in portable assets (The art market is on fire) is strictly the result of central bank shenanigans and a fractional reserve gold system on its last legs. The U.S. stock market, goosed by the Fed's zero interest rates and its manipulation of virtually all financial markets has become the primary repository of risk capital. When that casino stops redeeming its chips the run to the exit doors will be ugly. If you're participating in that bubble, the screwing you're going to get is strictly voluntary.
When the public clamors for a lifeline silver and gold will become the go-to investments, propelling their prices to extraordinary levels. Could it get worse before the explosion? Anything is possible, including a final assault on price as occurred last April. The price action of bitcoin and fine arts though is an indication of what is coming once the dust settles. The gold and silver stocks will be a sight to behold.
All the best,
Jeff
