Dear All,
The modern economist -- a used-car salesman's dream...He never looks under the hood, doesn't ask questions and accepts what he's told.
Friday's report of 288,000 non-farm jobs created was heralded as evidence the economy is recovering. The headlines however are one-dimensional apple-to-orange quantitative comparisons. Here's what was under the hood: Full-time jobs declined by 523,000 while part-time jobs increased 840,000 -- a multi-decade record for a monthly part-time employment increase. If that sounds to you like something other than a recovering economy you'ld make a lousy economist. The headlines don't tell the story of the deteriorating quality of those jobs either. Then there is the usual seasonal-adjustment fudging, birth-death modeling and non-counting of "discouraged workers" contorting each report such that
Shadowstats' John Williams concludes,
“[T]he aggregate average overstatement of employment change easily exceeds 200,000 jobs per month.”
The most revealing tidbit in the farce known as the "war on terror" is that Abu Bakr al-Baghdadi, the Sunni head of the brutally violent ISIS (Islamic state of Iraq and Syria) had been held in a US detention center in Iraq and released in 2009. They released this guy yet we're still taking our shoes off in airports.
With the increased airport security inconvenience this past holiday weekend and the potential for further summer delays, many travelers want an understanding of the rationale for all this government pomp as they attempt to catch their flights. For those who request it, the TSA provides a Q&A pamphlet entitled: "Your infrequently asked Questions and Answers about the TSA." As one can imagine, it is quite difficult to obtain the pamphlet given the small printing run, however through my sources I am able to reprint its contents here:
Q: Why has there not been a terrorist attack on a commercial aircraft since 9/11/01?
A: Lack of desire
Q: Why would a terrorist group bother to go through airport security in order to attempt to blow up an aircraft when they could simply board an Amtrak train, crowded subway or enter a shopping mall with no security whatsoever in order to kill and injure people?
A: Good question. Next question.
Q: Has airport security ever prevented a terrorist attack?
A: When an aircraft does not explode or crash it fails to do so in spite of the existence of the U.S. Transportation Safety Administration, not because of it. However since this is not provable, the TSA can take credit for achieving this safety record.
Q: Why doesn't the TSA reallocate its significant resources to targeting suspects as opposed to traveler water bottles and footwear? For that matter, tarmac security has been shown to be a joke. Why not concentrate resources there?
A: There's no point in putting on a show without an audience.
Q: What then is the purpose of the TSA's presence at airports?
A: Its purpose is multi-fold: a) To provide the illusion of safety b) To create an increased government presence and public sector jobs c) To create an inventory of toothpaste, shampoo, tweezers and other personal hygiene products to be offered to TSA employees, and d) To deliver these hygiene products to people in underdeveloped countries after TSA employees decline to use them
The irony of the chaos the U.S. created in Iraq is that any hope for a temporary return to stability will come in the form of a strong dictator with no tolerance for religious extremists. Someone such as...Saddam Hussein. In the face of our ongoing national suicide mission there and elsewhere in the region a friend remarked to me recently that he wondered if any of Obama's advisers had ever read
T.E. Lawrence, who drew this map of the Middle East at the end of the first World War based on its tribal roots, rather than the artificial and colonial manner in which the British and French carved it up in 1916 under the Sykes-Picot Agreement. Sykes-Picot was essentially a transfer from one imperialist regime (Turk Ottoman) to another:
Lawrence attended the Paris Peace Conference at the end of the War (historian David Fromkin referred to the Versailles Conference as the “Peace To End All Peace.”) in the failed hope of overturning Sykes-Picot, envisioning separate governments in the predominantly Kurdish and Arab areas in what is now Iraq. Lawrence understood the inevitable folly of the Sykes-Picot boundaries, the bloody consequences of which continue to play out a century later.
The U.S. police state is growing with an increasing militarization marked by a pervasiveness of SWAT raids. There are now 80,000 police SWAT raids per year in the United States and the number is increasing. The majority of these raids occur at private homes:
TIME: This is Why Your Local Police Department Might Have a Tank
When was the last time you heard President Obama mention the environmental impact of nuclear radiation leaks? While he makes speeches about the changes in the outdoor temperature with dire and speculative forecasts about the future he has never once mentioned the real and present danger of radiation leakage from US military sites under his watch. There is no political benefit in talking about government nuclear radiation slippage -- the money and political capital is in the climate change racket:
Nuclear Radiation Releases Continue in New Mexico
"The US has actually been cooling since the Thirties, the hottest decade on record...When I first began examining the global-warming scare, I found nothing more puzzling than the way officially approved scientists kept on being shown to have finagled their data...[A]ny theory needing to rely so consistently on fudging the evidence, I concluded, must be looked on not as science at all, but as simply a rather alarming case study in the aberrations of group psychology."
If there is one patriotic platitude I particularly despise it is this nonsense about "supporting our troops." This may actually be the most effective phrase of propaganda ever created -- an example of how message repetition lulls the masses -- in this case appealing to nationalism and ignorance in order to implement the worst evils of the military and political class. Whenever you hear this tired cliche' invoked recognize it for what it represents -- the subordination of free will to authority and the indoctrination of the populace to accept immoral behavior as necessity. Its pervasive use in language is a validation of
the Milgrim experiment of the 1960's.
So for the record, I don't support our men and women in uniform serving overseas. They don't belong there and they don't serve my interests. The fact that they may sincerely believe otherwise is their mistake, not mine. This doesn't mean I wish them ill in any way; to the contrary -- I'd like them all to return safely home immediately. But let's stop pretending that we can somehow disapprove of the evil and false political agendas that send our kids to places they don't belong in order to engage in insane behavior and at the same time be supportive of what they're doing. Perhaps if we were a bit more critical and a touch less flattering of the Americans who head overseas to implement the lunacy designed by political varmint fewer of them would willingly go (To be fair, military service often represents one of the few employment options for young Americans). I recognize that I set myself up for plenty of disdain here but before you email explaining why you've canceled your blog subscription, consider that in Europe some seventy years ago there were undoubtedly conversations along these lines: "I disapprove of Hitler's Jewish policies but we need to support our boys working in the camps." The willingness to disconnect those who order immoral behavior from those who implement it equates to the abandonment of free thought, personal responsibility and ultimately -- one's humanity.
General Motors was spared a deserved death by President Obama, who used taxpayer funds to repay his political debt and provide a windfall to the labor unions. So it should shock no one to learn that with its recall of 8.4 million vehicles on June 30th, General Motors in the first half of 2014 recalled more vehicles than it sold in all of 2011, 2012, 2013 combined, equating to 40% of its vehicles on the road. Yes, you read that right. 28.1million vehicles sold over those three years. 28.5 million recalled in the first half of 2014.
Following her mother's back-peddling over her claim that the Clinton's were "dead broke" upon leaving the White House, Chelsea Clinton has weighed in on the importance of money in one's life. In a
Fast Company interview she explained
"I tried really hard to care about things that were very different from my parents. I was curious if I could care about [money] on some fundamental level, and I couldn’t. That wasn’t the metric of success that I wanted in my life.”
It may not be her metric of success but to hear such ordure about not caring about money, well -- one can be forgiven for being reminded of the manner in which her father, having acted upon his uncontrollable urges sought to later distance himself from the various women he groped or raped. Ms. Clinton succeeded in deriding those less fortunate who have no choice but to care about obtaining the means to feed themselves as well it would seem, her own parents' -- for
their particular metric of success:
Here’s How Little Chelsea Clinton Cares About Money, In Dollars "How indifferent is she to the lure of filthy lucre? Clinton is currently pulling down $600,000 per year for [a] no-show job...is so unconcerned with money that she shelled out $10.3 million of the worthless stuff just last spring to buy a swanky pad near Manhattan’s Flatiron Building....Her 2010 wedding to Marc Mezvinsky cost an estimated $3.3 million...And how does someone who doesn’t care about money spend twice as much on a wedding as the average American earns in a lifetime?"
Not talking about one's money is admirable. Openly condemning it is not. A 20th-century French philosopher once commented upon the character of those who live a lavish lifestyle while at the same time degrading the means that provides it:
"It is a kind of spiritual snobbery that makes people think they can be happy without money." -- Albert Camus
According to a Federal Reserve Bank of NY study, in 1980 the average four-year tuition cost of a Bachelor's degree (in 2013 dollars) was 30% of the average wage (in 2013 dollars). Today it is 90%. Real wages have stagnated while college costs have soared, making the benefit and debt burden of a college degree for the vast majority of students a questionable proposition.
'The report, to be published this week by the Official Monetary and Financial Institutions Forum (OMFIF), confirms $29.1tn in market investments, held by 400 public sector institutions in 162 countries, which "could potentially contribute to overheated asset prices."
Gee, ya think?
"To summarize, the global equity market is now one massive Ponzi scheme in which the dumb money are central banks themselves, the same banks who inject the liquidity to begin with."
A new financial television channel will shortly be launching as an alternative to the nauseating and useless drivel delivered by CNBC and the like. RealVision promises to be an antidote to financial Romper Room. 
The trend...
While the U.S. is antagonizing the entire planet, a new order is taking shape:
BRICS morphing into anti-dollar alliance
China plans investment bank to break World Bank dominance
Silver and gold...
Here's the scorecard for the first half of 2014:
S&P 500 + 6 %
Dow Jones Ind Avg + 2 %
Russel 2000 + 2 %
Silver + 7 %
Gold + 10 %
GDX large cap gold mining ETF + 25 %
GDXJ junior gold mining ETF + 36 %
Notwithstanding this stealth outperformance -- precious metal prices and pm equities remain artificially suppressed coiled springs. There is simply no asset class as despised and as cheap. Price always reverts to its mean value. Always. The outsized returns that are coming will be dizzying.
My best,
Jeff