Over at The True Dollar Journal, I published a work of nerdy stats that reveals there has not been any recovery as you have been told. I am famous for doing that and revealing the truth.
Enjoy!
Friday, October 30, 2015
Friday, October 16, 2015
AMERICA'S GREATEST DEPRESSION. IT'S ON STILL. SEE THE PROOF!
Today, over at The True Dollar Journal I published a detailed work supported by a series of charts that proves definitively that Americans are still living through the Greatest Depression.
Also, in the work, I show why life has gotten ever worse for Americans not merely since the Banking Crisis of 2008 but for quite a long time before then.
If you like charts and want to prove to your friends and family what is the true state of the U.S. economy, check out Greatest Depression Still On. Americans Know Better. Obama Believes Americans are Idiots. Congress Lies To Seniors with the CPI. Personal Consumption Credit Has Ruined America.
Read more ...
Also, in the work, I show why life has gotten ever worse for Americans not merely since the Banking Crisis of 2008 but for quite a long time before then.
If you like charts and want to prove to your friends and family what is the true state of the U.S. economy, check out Greatest Depression Still On. Americans Know Better. Obama Believes Americans are Idiots. Congress Lies To Seniors with the CPI. Personal Consumption Credit Has Ruined America.
Monday, October 12, 2015
THEY TOLD YOU SINCE 2009 YOU ARE LIVING THROUGH A RECOVERY. HAVE YOU HEARD THE TRUTH? COMMERCIAL PAPER SAYS NO.
American businessmen haven't been offering up commercial paper for discount for years. That means there is no growth and no confidence in the future.
The discounting of commercial paper by commercial bankers and the re-discounting of that paper by Federal Reserve district bankers is a major aspect of commercial banking under the Federal Reserve system. When commercial paper discounting is on the decline, so too is the economy.
Over at the True Dollar Journal, you can see the true state of commercial paper. Checkout WEEKLY COMMERCIAL PAPER REPORT FAILS TO SHOW ANY MEANINGFUL RECOVERY.
That no one else has reported this reveals no one else understand economies and commerce. And clearly, those who have failed to report this don't understand commercial banking.
Read more ...
The discounting of commercial paper by commercial bankers and the re-discounting of that paper by Federal Reserve district bankers is a major aspect of commercial banking under the Federal Reserve system. When commercial paper discounting is on the decline, so too is the economy.
Over at the True Dollar Journal, you can see the true state of commercial paper. Checkout WEEKLY COMMERCIAL PAPER REPORT FAILS TO SHOW ANY MEANINGFUL RECOVERY.
That no one else has reported this reveals no one else understand economies and commerce. And clearly, those who have failed to report this don't understand commercial banking.
Thursday, September 3, 2015
Q2 2015 VELOCITY OF CIRCULATION. THE GREATEST DEPRESSION CONTINUES. IS THIS THE MOST DAMNING INDICTMENT AGAINST CONGRESS AND THE FEDERAL RESERVE?
Readers of Bizarro Theater know that Americans have not had a money-based economy legally since Congress decreed that Federal Reserve banknotes are legal tender. That happened more than 100 years ago.
Bizarro Theater readers know that were it to exist, money would be coined metal by weight and fineness. BT readers know that were it to exist, money could exist without either banking or lawgivers such as Congress.
BT readers know that cash is bank credits with bearer negotibility circulating in perpetuity. BT readers know that cash requires banking to exist. Further, BT readers know that cash as legal tender requires both banking, lawgivers and their enforcement agents.
So when anyone talks about the velocity of money, if they weren't muddled in thought by their false beliefs, rightly, they would say velocity of circulation or velocity of the circulating media or something along those lines.
With the legal tender banknote system Americans live by today, velocity of circulation reveals the turnover of negotiable bank credit in the buying and selling of domestically-produced products through time. A rising velocity of circulation shows anyone that Americans are trading new property in the pursuit of profit with greater frequency. Likewise, a falling velocity of circulation shows that Americans are trading new property with less frequency.
In short, an increasing velocity of circulation shows a bettering economy and likely leading to better living for many Americans, if not most. Likewise, a decreasing velocity of circulation shows a worsening economy and life worse off for most Americans.
Hover over the bars for the actual numbers.
For those old enough, when they follow along the chart and reflect on their life, they will see the chart corresponds to reality. In spite of minor recessions here and there, Americans became ever richer after World War 2 through the 1970s. Especially during the 1950s and 1960s, Americans moved to the suburbs, bought houses easily, had two cars in the garage while, had one primary income earner and could easily pay medical bills as well as easily pay for higher education for their college-aged children.
Americans were the envy of the world.
During the late 1970s, American living became increasingly harder. To quell inflation, Fed Chairman Volker oversaw the rising of Fed Funds Rate which pushd the prime interest rate through the roof.
During the Reagan years, and more so during the middle years of his presidency, living improved for many but not all. Yet, optimism prevailed among many.
By the time, the self-professed, kinder and gentler George Bush, Sr., became president, owing to the policies he supported that Congress turned into law, Americans began to see their livelihoods fall. American life became fairly bleak through near to the end of the first term of Bill Clinton.
Around 1994, Americans began to experience a bettering economy. This bettering rose until the peak of the Dot Com bubble, which hit in 1999. After sputtering during the early George Bush, Jr., years, Fed Res chairman Greenspan goosed the economy. Doing so led to the Greenspan-Bernanke Great Inflation, the biggest banking credit bubble in the history of mankind.
The Greenspan-Bernanke Great Inflation combined with reckless mortgage-backed securities peddled by the U.S. Congress itself through its GSE agents, Americans lived through a massive bubble, a false prosperity. That false living came to an end by Q4 2007.
Since Q4 2007, life for Americans has become progressively worse. Much of the damage has been done by the progressive Congress of Harry-Reid and Nancy Pelosi under Barack Obama, a man always who is willing to push more government upon Americans. As well, the Ben Bernanke-Janet Yellen Fed Res policy of near-zero interest rates has wrecked capitalism.
As our lawgivers are weak, mindless men, it's going to take much more pain from a much bigger disaster before smarter men ascend to power who put forth laws and action that restores prosperity to Americans by restoring capitalism, focusing on the protection of the individual and his property (right of ownership) while riding Americans of the failed doctrine of kinder, gentler, crony politics, near-socialism economics.
For those curious as to the technical details of the chart, in the first footnote of the Federal Reserve release titled Money Stock Measures - H.6, someone at the Federal Reserve has defined M1 thus:
The adjusted M1 is M1 with the traveler's checks removed.
Read more ...
Bizarro Theater readers know that were it to exist, money would be coined metal by weight and fineness. BT readers know that were it to exist, money could exist without either banking or lawgivers such as Congress.
BT readers know that cash is bank credits with bearer negotibility circulating in perpetuity. BT readers know that cash requires banking to exist. Further, BT readers know that cash as legal tender requires both banking, lawgivers and their enforcement agents.
So when anyone talks about the velocity of money, if they weren't muddled in thought by their false beliefs, rightly, they would say velocity of circulation or velocity of the circulating media or something along those lines.
With the legal tender banknote system Americans live by today, velocity of circulation reveals the turnover of negotiable bank credit in the buying and selling of domestically-produced products through time. A rising velocity of circulation shows anyone that Americans are trading new property in the pursuit of profit with greater frequency. Likewise, a falling velocity of circulation shows that Americans are trading new property with less frequency.
In short, an increasing velocity of circulation shows a bettering economy and likely leading to better living for many Americans, if not most. Likewise, a decreasing velocity of circulation shows a worsening economy and life worse off for most Americans.
Hover over the bars for the actual numbers.
For those old enough, when they follow along the chart and reflect on their life, they will see the chart corresponds to reality. In spite of minor recessions here and there, Americans became ever richer after World War 2 through the 1970s. Especially during the 1950s and 1960s, Americans moved to the suburbs, bought houses easily, had two cars in the garage while, had one primary income earner and could easily pay medical bills as well as easily pay for higher education for their college-aged children.
Americans were the envy of the world.
During the late 1970s, American living became increasingly harder. To quell inflation, Fed Chairman Volker oversaw the rising of Fed Funds Rate which pushd the prime interest rate through the roof.
During the Reagan years, and more so during the middle years of his presidency, living improved for many but not all. Yet, optimism prevailed among many.
By the time, the self-professed, kinder and gentler George Bush, Sr., became president, owing to the policies he supported that Congress turned into law, Americans began to see their livelihoods fall. American life became fairly bleak through near to the end of the first term of Bill Clinton.
Around 1994, Americans began to experience a bettering economy. This bettering rose until the peak of the Dot Com bubble, which hit in 1999. After sputtering during the early George Bush, Jr., years, Fed Res chairman Greenspan goosed the economy. Doing so led to the Greenspan-Bernanke Great Inflation, the biggest banking credit bubble in the history of mankind.
The Greenspan-Bernanke Great Inflation combined with reckless mortgage-backed securities peddled by the U.S. Congress itself through its GSE agents, Americans lived through a massive bubble, a false prosperity. That false living came to an end by Q4 2007.
Since Q4 2007, life for Americans has become progressively worse. Much of the damage has been done by the progressive Congress of Harry-Reid and Nancy Pelosi under Barack Obama, a man always who is willing to push more government upon Americans. As well, the Ben Bernanke-Janet Yellen Fed Res policy of near-zero interest rates has wrecked capitalism.
As our lawgivers are weak, mindless men, it's going to take much more pain from a much bigger disaster before smarter men ascend to power who put forth laws and action that restores prosperity to Americans by restoring capitalism, focusing on the protection of the individual and his property (right of ownership) while riding Americans of the failed doctrine of kinder, gentler, crony politics, near-socialism economics.
For those curious as to the technical details of the chart, in the first footnote of the Federal Reserve release titled Money Stock Measures - H.6, someone at the Federal Reserve has defined M1 thus:
M1 consists of (1) currency outside the U.S. Treasury, Federal Reserve Banks, and the vaults of depository institutions; (2) traveler's checks of nonbank issuers; (3) demand deposits at commercial banks (excluding those amounts held by depository institutions, the U.S. government, and foreign banks and official institutions) less cash items in the process of collection and Federal Reserve float; and (4) other checkable deposits (OCDs), consisting of negotiable order of withdrawal (NOW) and automatic transfer service (ATS) accounts at depository institutions, credit union share draft accounts, and demand deposits at thrift institutions. Seasonally adjusted M1 is constructed by summing currency, traveler's checks, demand deposits, and OCDs, each seasonally adjusted separately.
The adjusted M1 is M1 with the traveler's checks removed.
Friday, August 28, 2015
IF I COULD ASK PAUL KRUGMAN (OR JANET YELLEN, OR ...) ONE QUESTION
There is a scene in the movie True Lies where action-hero Arnie Schwarzenegger gets a shot sodium mannitol to force him to speak truth and answer questions. If I could ask Paul Krugman, Janet Yellen, Ben Bernanke and others like them one question with them being under the influence of sodium mannitol, I would ask each of them one question:
What is it like being wrong even when you sleep?
U.S. PROPAGANDA ROLLS ONWARD. Q2 2015 DISPOSABLE PERSONAL INCOME SHRANK AT THE ANNUAL RATE OF -2%
Yesterday's, pro-government workers at the Bureau of Economic Analysis promoted their fiction that "real" GDP is now growing at the annual rate of 3.7% when in truth, the economy shrank -1.5% (see: Q2 2015 GDP FIRST REVISION. THE FICTION OF 3.7% "REAL" ANNUAL GDP GROWTH), the story for individuals gets even worse.
Personal income shrank at the annual rate of -1.9% as measured in the second quarter
Of those who work for a living, the hardest hit have been shopkeepers, restaurateurs and other proprietors whose income ex-inventory and capital depreciation shrank at the rate of -2.3%. The next hardest hit have been wage-earning workers whose compensation shrank at the annual rate of -2.2%.
Of everything, unemployment insurance payouts have shrunk the fastest, falling at the annual rate of -8.1%.
Likely, for those who are lucky enough to stumble upon my work, there are some, maybe even many, who doubt my True Dollar™ method. Owing to cognitive dissonance, they feel the need to defend the lies they accept from politicians, agents of Congress, academics and news media talking heads.
That doesn't bother me whatsoever. My graphs do the ultimate talking. My graphs consistently line up with reality, the reality of everyone's experiences. Reality never lines up with the claims made by agents of Congress like those of the BEA and agents of the President along with the data and charts they present.
If you look at the Personal Rental Income, and if you thought about what happened after the peak of the Greenspan-Bernanke Great Inflation, the biggest credit bubble in the history of mankind, you would expect rental income to go up as millions of Americans defaulted on their mortgages and reverted to living in rentals. My chart shows that exactly.
Sometimes, confusion hits many because they see that welfare doled by Congress has fallen. They would expect such welfare to have risen during tougher times. In current dollars, that welfare spending rose, but in True Dollars™, that spending fell. Why welfare collectees didn't notice because True Dollars™ prices for the things they buy, like food, have fallen at a faster rate.
If you look at the Unemployment Insurance Income chart, and if you thought about what happened after the peak of the Greenspan-Bernanke Great Inflation, the biggest credit bubble in the history of mankind, you would expect unemployment income to go up as millions of Americans found themselves out of work. My chart shows that exactly. Now that claims have been exhausted, payouts for unemployment insurance have fallen precisely because there are few left who qualify to make claim for benefits. My chart shows that exactly as well.
These Medicare and Medicaid income charts match reality as well.
You should tell all your family, friends and co-workers about Bizarro Theater. You should stop listening to the silliness propagated by academicians, politicians and those who work in financial news media.
Read more ...
Personal income shrank at the annual rate of -1.9% as measured in the second quarter
Of those who work for a living, the hardest hit have been shopkeepers, restaurateurs and other proprietors whose income ex-inventory and capital depreciation shrank at the rate of -2.3%. The next hardest hit have been wage-earning workers whose compensation shrank at the annual rate of -2.2%.
Of everything, unemployment insurance payouts have shrunk the fastest, falling at the annual rate of -8.1%.
Likely, for those who are lucky enough to stumble upon my work, there are some, maybe even many, who doubt my True Dollar™ method. Owing to cognitive dissonance, they feel the need to defend the lies they accept from politicians, agents of Congress, academics and news media talking heads.
That doesn't bother me whatsoever. My graphs do the ultimate talking. My graphs consistently line up with reality, the reality of everyone's experiences. Reality never lines up with the claims made by agents of Congress like those of the BEA and agents of the President along with the data and charts they present.
If you look at the Personal Rental Income, and if you thought about what happened after the peak of the Greenspan-Bernanke Great Inflation, the biggest credit bubble in the history of mankind, you would expect rental income to go up as millions of Americans defaulted on their mortgages and reverted to living in rentals. My chart shows that exactly.
Sometimes, confusion hits many because they see that welfare doled by Congress has fallen. They would expect such welfare to have risen during tougher times. In current dollars, that welfare spending rose, but in True Dollars™, that spending fell. Why welfare collectees didn't notice because True Dollars™ prices for the things they buy, like food, have fallen at a faster rate.
If you look at the Unemployment Insurance Income chart, and if you thought about what happened after the peak of the Greenspan-Bernanke Great Inflation, the biggest credit bubble in the history of mankind, you would expect unemployment income to go up as millions of Americans found themselves out of work. My chart shows that exactly. Now that claims have been exhausted, payouts for unemployment insurance have fallen precisely because there are few left who qualify to make claim for benefits. My chart shows that exactly as well.
These Medicare and Medicaid income charts match reality as well.
You should tell all your family, friends and co-workers about Bizarro Theater. You should stop listening to the silliness propagated by academicians, politicians and those who work in financial news media.
Q2 2015 GDP FIRST REVISION. THE FICTION OF 3.7% "REAL" ANNUAL GDP GROWTH
Minions at the Bureau of Economic Analysis claim that real gross domestic product is now growing at an annual rate of 3.7% as measured in Q2 2015 after a statistical revision from a number published a month ago. Their claim is pure fiction.
These minions deflate current GDP using a past inflated GDP. Ask yourself, how could that work, logically?
True GDP expressed in True Dollars™ tells an altogether different story. As you can see in the chart, True GDP is down -1.5% for the quarter and -4.4% year over year.
The only growth to be seen is growth in inventories. No one should want a growth in their inventories in a just-in-time world.
Mark my words. Black Friday is going to expose all of the phony numbers published by agencies of Congress, like the Commerce Department's BEA. In True Dollars™, total consumer credit relative to disposable personal income is too high. I shared the chart for that with you in THERE STILL IS NOT A RECOVERY SEVEN YEARS LATER. HERE IS WHY, PARTLY.
Americans continue to live in the Greatest Depression. Likely, there is world wide depression as the Chinese have now entered recession as I have shared in Q2 2015 CHINESE GDP REVEALS THE CHINESE ECONOMY IS SHRINKING. THE CHINA MIRACLE HAS COME TO AN END.
Read more ...
These minions deflate current GDP using a past inflated GDP. Ask yourself, how could that work, logically?
True GDP expressed in True Dollars™ tells an altogether different story. As you can see in the chart, True GDP is down -1.5% for the quarter and -4.4% year over year.
The only growth to be seen is growth in inventories. No one should want a growth in their inventories in a just-in-time world.
Mark my words. Black Friday is going to expose all of the phony numbers published by agencies of Congress, like the Commerce Department's BEA. In True Dollars™, total consumer credit relative to disposable personal income is too high. I shared the chart for that with you in THERE STILL IS NOT A RECOVERY SEVEN YEARS LATER. HERE IS WHY, PARTLY.
Americans continue to live in the Greatest Depression. Likely, there is world wide depression as the Chinese have now entered recession as I have shared in Q2 2015 CHINESE GDP REVEALS THE CHINESE ECONOMY IS SHRINKING. THE CHINA MIRACLE HAS COME TO AN END.
Friday, August 21, 2015
THERE STILL IS NOT A RECOVERY SEVEN YEARS LATER. HERE IS WHY, PARTLY
Economists seem slack-jawed to explain why there has been little in the way of a recovery after seven years of Bernanke-Yellen near zero interest rate policy (ZIRP) along with the crazed sum of cash accretion owing to Bernanke's failed academic exercise of Quantitative Easing.
As can be seen in these charts, in True Dollars™, disposable personal income is way down. Likewise, wages and salaries are way down.
And it should be no surprise that consumer credit has fallen as all credit in the has fallen substantially. That great deflation is resultant of the first cause, the Greenspan-Bernanke Great Inflation, the greatest credit bubble in the history of mankind.
Most academician eggheads in the field of economics believe that many Americans paid off their debts in what they call merely a "recession," as if it were an ordinary recession. So these eggheads wonder why Americans aren't now spending since also they believe a recovery has been underway since 2009.
And these two charts say thousands of words. While both incomes and credit have fallen, Americans have taken on ever more credit to maintain semblance of the lifestyle they once enjoyed during the boom phase of the Greenspan-Bernanke Great Inflation, the greatest credit bubble in the history of mankind.
Consumer indebtedness has increased during the Greatest Depression. That should surprise no one. First Bernanke and then Yellen made borrowing cheaper than acquiring income. And as massive unemployment pushed wages downward, those with income falling at a slower than credit opted for credit to make up for their buying power shortfall.
Falling true incomes and rising true indebtedness is a recipe for disaster.
Many call the day after Thanksgiving in the USA, Black Friday, because it is the day retailers are supposed move from losses to beyond breakeven and thus enter black into their accounting ledgers rather than red for losses. Don't count on it this Christmas retail shopping season. I wonder if bears plan to short major retailers soon.
It doesn't seem likely that Americans can take on much more debt prudently.
For more of why, check out ZIRPED! BERNANKE AND NOW YELLEN HAVE FELLED CAPITALISM. VOLKER WAS RIGHT ON HOW TO DO IT.
I happen to live in a fairly well-to-do city, which happens to be home to a big biotech firm. Since the Banking Crisis of 2008 and the subsequent reckoning of the Greatest Depression, even my city has been touched. Seedy massage parlors popped up all over the main shopping boulevard like festering sores. Some have taken to living in illegal RV parks hidden behind fences on larger parcels.
The Greatest Depression keeps rolling along.
Read more ...
As can be seen in these charts, in True Dollars™, disposable personal income is way down. Likewise, wages and salaries are way down.
And it should be no surprise that consumer credit has fallen as all credit in the has fallen substantially. That great deflation is resultant of the first cause, the Greenspan-Bernanke Great Inflation, the greatest credit bubble in the history of mankind.
Most academician eggheads in the field of economics believe that many Americans paid off their debts in what they call merely a "recession," as if it were an ordinary recession. So these eggheads wonder why Americans aren't now spending since also they believe a recovery has been underway since 2009.
And these two charts say thousands of words. While both incomes and credit have fallen, Americans have taken on ever more credit to maintain semblance of the lifestyle they once enjoyed during the boom phase of the Greenspan-Bernanke Great Inflation, the greatest credit bubble in the history of mankind.
Consumer indebtedness has increased during the Greatest Depression. That should surprise no one. First Bernanke and then Yellen made borrowing cheaper than acquiring income. And as massive unemployment pushed wages downward, those with income falling at a slower than credit opted for credit to make up for their buying power shortfall.
Falling true incomes and rising true indebtedness is a recipe for disaster.
Many call the day after Thanksgiving in the USA, Black Friday, because it is the day retailers are supposed move from losses to beyond breakeven and thus enter black into their accounting ledgers rather than red for losses. Don't count on it this Christmas retail shopping season. I wonder if bears plan to short major retailers soon.
It doesn't seem likely that Americans can take on much more debt prudently.
For more of why, check out ZIRPED! BERNANKE AND NOW YELLEN HAVE FELLED CAPITALISM. VOLKER WAS RIGHT ON HOW TO DO IT.
I happen to live in a fairly well-to-do city, which happens to be home to a big biotech firm. Since the Banking Crisis of 2008 and the subsequent reckoning of the Greatest Depression, even my city has been touched. Seedy massage parlors popped up all over the main shopping boulevard like festering sores. Some have taken to living in illegal RV parks hidden behind fences on larger parcels.
The Greatest Depression keeps rolling along.
Friday, July 31, 2015
2015 Q2 GDP REPORT FROM THE BEA, ANOTHER REPORT AND ANOTHER BIG LIE.
Once again, workers at the Bureau of Economic Analysis, an agency of Congress, have lied to Americans. According to these minions of Congress,
How does that work? It doesn't. It can't, ever.
Meanwhile, true GDP as measured in True Dollars™, which is the only legitimate way to account for inflation, has declined yet again. Year over year, true GDP is down -4.4%. Quarter over quarter, true GDP is down -1.8%.
The Greatest Depression continues, first brought to you by the Greenspan-Bernanke Great Inflation, the greatest credit bubble in the history of mankind, followed by the Bernanke-Yellen Quantitative Easing, the greatest capital killer in the history of mankind.
Since Q1 1959, this is the state of economy with respect to quarters up or down and streaks of true growth or true decline.
The USA economy has never been this bad for this long since 1959. Why should anyone expect anything else? Americans experienced the greatest inflation — rise in bank credit — in the history of mankind between 1994 and 1997. Americans have been experiencing reckoning ever since.
GDP is now down -6.3% below the Bill Clinton Q1 1994 low. OBAMA AND HIS CONGRESSES HAVE STEERED AMERICA INTO A 1975 FORD ERA ECONOMY.
Read more ...
Real gross domestic product -- the value of the production of goods and services in the United States, adjusted for price changes -- increased at an annual rate of 2.3 percent in the second quarter of 2015, according to the "advance" estimate released by the Bureau of Economic Analysis. In the first quarter, real GDP increased 0.6 percent (revised).The BEA jokers say "Real" GDP is up 2.3%. But they use a previous inflated GDP to deflate the current GDP. How can something currently inflated be deflated by something also inflated?
How does that work? It doesn't. It can't, ever.
Meanwhile, true GDP as measured in True Dollars™, which is the only legitimate way to account for inflation, has declined yet again. Year over year, true GDP is down -4.4%. Quarter over quarter, true GDP is down -1.8%.
The Greatest Depression continues, first brought to you by the Greenspan-Bernanke Great Inflation, the greatest credit bubble in the history of mankind, followed by the Bernanke-Yellen Quantitative Easing, the greatest capital killer in the history of mankind.
Since Q1 1959, this is the state of economy with respect to quarters up or down and streaks of true growth or true decline.
The USA economy has never been this bad for this long since 1959. Why should anyone expect anything else? Americans experienced the greatest inflation — rise in bank credit — in the history of mankind between 1994 and 1997. Americans have been experiencing reckoning ever since.
GDP is now down -6.3% below the Bill Clinton Q1 1994 low. OBAMA AND HIS CONGRESSES HAVE STEERED AMERICA INTO A 1975 FORD ERA ECONOMY.
Saturday, July 25, 2015
LAWDY, LAWDY FINANCIAL END TIMES ARE SURE TO BE COMING UPON US, SO SAYS THE PREACHER MAN.
With the Internet, like most everything else, the good and the bad stand before you. You must decide.
Sometimes the bad of the Internet is baneful stupidity spread by Financial End Times preachers. Spewing populist sermons from their blogger pulpits, these deliverance preachers promise to guide their flocks through Financial Armageddon. Such Financial End Times preachers are fond of fleecing their flocks with sales of their numerous books of revelation.
These Financial End Times preachers claim the financial apocalypse is always about to happen soon. They claim to have the gift of financial prophecy. For them, their Satan, their evil foe is the supposed Financial New World Order.
One of the more insidious sermons often preached is how "the debt is going to explode in our faces." These preachers breathe fiery sermons of brimstone and treacle, that devil-spawn bankers and corrupted law givers have engaged in such financial evils that a price must be paid to set things aright.
Reality of course is far different from superstition.
The Greenspan-Bernanke Great Inflation, the biggest credit bubble in the history of mankind led to peak GDP. After the Greenspan-Bernanke Great Inflation blew up, deflation started. We're only seeing signs now of banking deflation stopping.
First under Bernanke and then under Yellen, central bankers have masked that deflation with what they call Quantitative Easing. And that is the whole point of Quantitative Easing. Quantitative Easing makes everyone believe that prices they look upon with their eyes are at least the same as before if not slightly higher.
If you were to ask almost everyone you were to meet if prices of things are up or down in their supermarkets and elsewhere, they would tell you that prices are up. Of course, as all prices get quoted in dollars, dollar prices are up.
However, once you look at prices in True Dollars™, you would find that true prices are down for almost everything.
Credit isn't any different. Credit is up in current dollars. Since credit is the flip side of debt, debt is up in current dollars. Populist end times financial preachers point to current dollar charts of debt and have their flock believing locusts are about ready to swarm.
However, in True Dollars™, credit is down and thus so is debt, for everyone. So let's have a look.
Where do the women and men of Congress stand with their debt? Congress debt has fallen to true GDP peak-approaching 2007 levels.
What about the law givers of the various states and counties and municipalities?
What does the debt position of financial firms look like?
Where are the non-financial corporations?
Where are the non-financial businesses not incorporated?
And what about individuals, where do households stand these days on debt?
As you can see from the table below, that all parties of the economy have been reducing their true debt, their debt tallied in True Dollars™.
Unlike the populist financial end times preachers as well as those other superstition lot, the academia economist preachers, I give you to scientific reality. You won't find anywhere else on the Internet, my charts, all of which correspond to the reality everyone experiences daily.
Read more ...
Sometimes the bad of the Internet is baneful stupidity spread by Financial End Times preachers. Spewing populist sermons from their blogger pulpits, these deliverance preachers promise to guide their flocks through Financial Armageddon. Such Financial End Times preachers are fond of fleecing their flocks with sales of their numerous books of revelation.
These Financial End Times preachers claim the financial apocalypse is always about to happen soon. They claim to have the gift of financial prophecy. For them, their Satan, their evil foe is the supposed Financial New World Order.
One of the more insidious sermons often preached is how "the debt is going to explode in our faces." These preachers breathe fiery sermons of brimstone and treacle, that devil-spawn bankers and corrupted law givers have engaged in such financial evils that a price must be paid to set things aright.
Reality of course is far different from superstition.
The Greenspan-Bernanke Great Inflation, the biggest credit bubble in the history of mankind led to peak GDP. After the Greenspan-Bernanke Great Inflation blew up, deflation started. We're only seeing signs now of banking deflation stopping.
First under Bernanke and then under Yellen, central bankers have masked that deflation with what they call Quantitative Easing. And that is the whole point of Quantitative Easing. Quantitative Easing makes everyone believe that prices they look upon with their eyes are at least the same as before if not slightly higher.
If you were to ask almost everyone you were to meet if prices of things are up or down in their supermarkets and elsewhere, they would tell you that prices are up. Of course, as all prices get quoted in dollars, dollar prices are up.
However, once you look at prices in True Dollars™, you would find that true prices are down for almost everything.
Credit isn't any different. Credit is up in current dollars. Since credit is the flip side of debt, debt is up in current dollars. Populist end times financial preachers point to current dollar charts of debt and have their flock believing locusts are about ready to swarm.
However, in True Dollars™, credit is down and thus so is debt, for everyone. So let's have a look.
Where do the women and men of Congress stand with their debt? Congress debt has fallen to true GDP peak-approaching 2007 levels.
What about the law givers of the various states and counties and municipalities?
What does the debt position of financial firms look like?
Where are the non-financial corporations?
Where are the non-financial businesses not incorporated?
And what about individuals, where do households stand these days on debt?
As you can see from the table below, that all parties of the economy have been reducing their true debt, their debt tallied in True Dollars™.
Unlike the populist financial end times preachers as well as those other superstition lot, the academia economist preachers, I give you to scientific reality. You won't find anywhere else on the Internet, my charts, all of which correspond to the reality everyone experiences daily.
Wednesday, July 22, 2015
A GHOST FROM 1888 REVEALS THE FUTURE OF THE AMERICAN ECONOMY
Back in 1888, The Knickerbocker Press published a work by Roderick Henry Smith titled, The Science of Business a Study of the Principles Controlling the Laws of Exchange. Smith completed the work in July, 1885. And yes, you read that date right. These aren't typos or mental errors on my part.
The first two chapters yield much entertainment. Smith piles on a litany of examples to show that things in motion take paths of least resistance and that many things move in cycles, though Smith called such movement smaller rhythms within larger rhythms. It is from these two claimed principles that Smith attempts to build his argument.
Smith opens with this:
In the third chapter, Smith wrote,
Later in the chapter, Smith delivered this gem:
So, after breezing through Smith's work, I began googling for data for counts on firms and failures so that I might construct a time series of survival-to-failure ratio and plot the results. Alas, that data can't be had anywhere.
The best I could find is the something the Bureau of Labor Statistics (BLS) publishes called the Quarterly Census of Employment and Wages (QCEW). The QCEW reports a count of employment and wages reported by employers to State unemployment insurance programs comprising 98% of wage and salary civilian employment in the country.
The QCEW doesn't have counts of firms nor does it have counts of failures. The worst bit, there is almost six months lag from the end of a quarter to the release of its respective data! That is so laggy to be almost useless.
However, the QCEW does have something — establishment counts! Establishment counts can stand in as a proxy as firm counts since every year for decades now, the ratio of establishments to firms has increased.
An establishment gets defined as single economic unit, such as a farm, a mine, a factory, or a store, that produces goods or services. Establishments exist at one physical location and engaged in one, or predominantly one, type of economic activity for which a single industrial classification may be applied.
OK, let's look at some pictures. First up, let's look at the quarterly change in all establishments.
If we keep in mind what Smith claimed — "the percentage number of failures to the year has been found to be always greater in the first quarter of the year than in the last three..." — we might hit on something useful.
As can be seen at the far left, the economy experienced a mild recession leading up to the heinous anti-American terrorist attack on September 11, 2001, the recession that Greenspan refused to let deepen.
The net change to Q1 2002 was -5,536 establishments. Greenspan then more than doubled up in his quest to set off the Greenspan-Bernanke Great Inflation, the greatest credit bubble in the history of mankind.
As you can see after Greenspan acted to cut rates repeated, a growth happened in Q1 establishments all the way through 2006.
The massive drop of -50,348 at Q1 2007 should have been the canary in the coalmine. And had I known about the QCEW, I could have told Americans in September 2007 that peak GDP was coming — it did by the end of Q4 2007 — and that a stock crash would happen — it did by March 6, 2009. As it is, the Q1 2008 net change of -45,789, confirmed the previous year's disastrous number.
There is another thing to notice about this graph. This graph confirms what I've been telling you for awhile, we're living in the Greatest Depression. Every net change in the Q1 establishment count from 2009 through 2014 has been negative. There is no way there can be true growth in GDP when Q1 net change in establishment counts is negative year-over-year, consistently.
Academician economists teach a false doctrine about what they call "real GDP," by which they mean trying to deflate current dollar GDP with past inflated GDP. It still shocks that few see the absurdity in that feebleness.
However, when GDP gets expressed in True Dollars™, you can see the reality of declining true GDP. The graph above supports perfectly the GDP graph below. And it is for the ongoing decline in True GDP confirmed by horrible first quarter numbers in the net change in establishments that keep Janet Yellen from doing anything about interest rates, quite likely.
Now, let's take a look at a few others.
There is two ways you could look at this chart. One way is to see that American manufacturing has been a depression for a long time. Yet, another way is to see that American manufacturing needs ever fewer establishments. To be sure, the Q1 2014 positive net change number is the first time that has happened in at least 13 years.
Q1 2007 and Q1 2008 net changes in establishment counts for construction also acted as canaries. It's likely crucial for the Q1 2015 number to come in positive.
The Information sector is leading the recovery. It should be clear that Information sector suffered for a long time from the Dot Com Bubble blow up.
And here is the chart that makes me believe the economy is going to shift into higher gears soon. Positive financial activity must come before major advance as all advances arise from the expansion of credit.
Well, we must await until mid-September for those Q1 numbers. And yes, this stuff is genius.
Say, you can hire me. If you need a C-level strategy guy who can see stuff you can't, email now.
Read more ...
The first two chapters yield much entertainment. Smith piles on a litany of examples to show that things in motion take paths of least resistance and that many things move in cycles, though Smith called such movement smaller rhythms within larger rhythms. It is from these two claimed principles that Smith attempts to build his argument.
Smith opens with this:
In the third chapter, Smith wrote,
Later in the chapter, Smith delivered this gem:
So, after breezing through Smith's work, I began googling for data for counts on firms and failures so that I might construct a time series of survival-to-failure ratio and plot the results. Alas, that data can't be had anywhere.
The best I could find is the something the Bureau of Labor Statistics (BLS) publishes called the Quarterly Census of Employment and Wages (QCEW). The QCEW reports a count of employment and wages reported by employers to State unemployment insurance programs comprising 98% of wage and salary civilian employment in the country.
The QCEW doesn't have counts of firms nor does it have counts of failures. The worst bit, there is almost six months lag from the end of a quarter to the release of its respective data! That is so laggy to be almost useless.
However, the QCEW does have something — establishment counts! Establishment counts can stand in as a proxy as firm counts since every year for decades now, the ratio of establishments to firms has increased.
An establishment gets defined as single economic unit, such as a farm, a mine, a factory, or a store, that produces goods or services. Establishments exist at one physical location and engaged in one, or predominantly one, type of economic activity for which a single industrial classification may be applied.
OK, let's look at some pictures. First up, let's look at the quarterly change in all establishments.
If we keep in mind what Smith claimed — "the percentage number of failures to the year has been found to be always greater in the first quarter of the year than in the last three..." — we might hit on something useful.
As can be seen at the far left, the economy experienced a mild recession leading up to the heinous anti-American terrorist attack on September 11, 2001, the recession that Greenspan refused to let deepen.
The net change to Q1 2002 was -5,536 establishments. Greenspan then more than doubled up in his quest to set off the Greenspan-Bernanke Great Inflation, the greatest credit bubble in the history of mankind.
As you can see after Greenspan acted to cut rates repeated, a growth happened in Q1 establishments all the way through 2006.
The massive drop of -50,348 at Q1 2007 should have been the canary in the coalmine. And had I known about the QCEW, I could have told Americans in September 2007 that peak GDP was coming — it did by the end of Q4 2007 — and that a stock crash would happen — it did by March 6, 2009. As it is, the Q1 2008 net change of -45,789, confirmed the previous year's disastrous number.
There is another thing to notice about this graph. This graph confirms what I've been telling you for awhile, we're living in the Greatest Depression. Every net change in the Q1 establishment count from 2009 through 2014 has been negative. There is no way there can be true growth in GDP when Q1 net change in establishment counts is negative year-over-year, consistently.
Academician economists teach a false doctrine about what they call "real GDP," by which they mean trying to deflate current dollar GDP with past inflated GDP. It still shocks that few see the absurdity in that feebleness.
However, when GDP gets expressed in True Dollars™, you can see the reality of declining true GDP. The graph above supports perfectly the GDP graph below. And it is for the ongoing decline in True GDP confirmed by horrible first quarter numbers in the net change in establishments that keep Janet Yellen from doing anything about interest rates, quite likely.
Now, let's take a look at a few others.
There is two ways you could look at this chart. One way is to see that American manufacturing has been a depression for a long time. Yet, another way is to see that American manufacturing needs ever fewer establishments. To be sure, the Q1 2014 positive net change number is the first time that has happened in at least 13 years.
Q1 2007 and Q1 2008 net changes in establishment counts for construction also acted as canaries. It's likely crucial for the Q1 2015 number to come in positive.
The Information sector is leading the recovery. It should be clear that Information sector suffered for a long time from the Dot Com Bubble blow up.
And here is the chart that makes me believe the economy is going to shift into higher gears soon. Positive financial activity must come before major advance as all advances arise from the expansion of credit.
Well, we must await until mid-September for those Q1 numbers. And yes, this stuff is genius.
Say, you can hire me. If you need a C-level strategy guy who can see stuff you can't, email now.
Sunday, June 28, 2015
FEDERAL RESERVE AUTOMATED CLEARINGS, FIRST QUARTER 2015. WHERE IS THE COMMERCIAL REBOUND?
Back on Friday, November 7, 2014, I wrote THE SECRETS OF AUTOMATED CLEARINGS, GDP AND THE ECONOMY. RECOVERY? WHEN? In that work, I explained the significance of banking automated clearings.
Since then, I've automated the data gathering to support these rather important charts.
The ACH action has looked horrible for years now in True Dollars™ terms. If the economy were at least in a steady state of neither declining or advancing, commercial ACH clearings would at least would be flat. 2014 looked like we were getting there.
Even though the Fed Res behind-the-curtains wizards of greenbacks ended Quantitative Easing back in Q4 2014, don't bet on those wizards raising interest rates rising for a long time to come.
Read more ...
Since then, I've automated the data gathering to support these rather important charts.
The ACH action has looked horrible for years now in True Dollars™ terms. If the economy were at least in a steady state of neither declining or advancing, commercial ACH clearings would at least would be flat. 2014 looked like we were getting there.
Even though the Fed Res behind-the-curtains wizards of greenbacks ended Quantitative Easing back in Q4 2014, don't bet on those wizards raising interest rates rising for a long time to come.
Wednesday, June 24, 2015
JUNE 2015 NEW RESIDENTIAL SALES REPORT FOR MAY. ARE WE HEADED TOWARD RECOVERY AT LONG LAST?
So the Bureau of Census minions released the June 2015 New Residential Sales report with the latest one-month lagging data, the May 2015 data.
The picture looks great. We have been headed in the right way the end of October 2010 although it has been a tough slog.
We're still far from peak sales, quite far. Quarter over quarter and year over year looks solid.
From an average price viewpoint, in True Dollars™, it continues to be the best time to buy. The May 2015 average price is -35.1% below the average price between January 1975 and July 1994.
Builders' confidence has stayed strong.
Read more ...
The picture looks great. We have been headed in the right way the end of October 2010 although it has been a tough slog.
We're still far from peak sales, quite far. Quarter over quarter and year over year looks solid.
From an average price viewpoint, in True Dollars™, it continues to be the best time to buy. The May 2015 average price is -35.1% below the average price between January 1975 and July 1994.
Builders' confidence has stayed strong.
Tuesday, June 16, 2015
JUNE 2015 NEW RESIDENTIAL CONSTRUCTION REPORT REVEALS GREEN SHOOTS ARE GROWING
The minions at the Census Bureau were at it again today releasing the New Residential Construction report for June, 2015. The report contains data through May, 2015.
As I say, always, those who rely on data without context, can't possibly see reality. Some well-known blogger pundits believe this report is a bad report.
With context, the trend in new residential construction is toward normalcy. The state of 1-unit construction and 2-4 unit construction looks good.
Relative to the buying age population (Americans, 20 and up), housing starts for May compare to housing starts for April 2008 (2,415.0), February 1993 (2,417.3), and January 1951 (2,1414.5).
Read more ...
As I say, always, those who rely on data without context, can't possibly see reality. Some well-known blogger pundits believe this report is a bad report.
With context, the trend in new residential construction is toward normalcy. The state of 1-unit construction and 2-4 unit construction looks good.
Relative to the buying age population (Americans, 20 and up), housing starts for May compare to housing starts for April 2008 (2,415.0), February 1993 (2,417.3), and January 1951 (2,1414.5).
Wednesday, June 10, 2015
MONTHLY WHOLESALE TRADE REPORT, JUNE 2015. THE GREATEST DEPRESSION CONTINUES ...
The minions at the U.S. Census Bureau released their Monthly Wholesale Trade Report for June 2015, which details activity through April 2015.
Like most other reports, once adjusted for True Dollars™, the Wholesale Trade Report reveals an economy in decline.
Today, one of the not-so-smartest-guys-in-the-room-afterall, Jamie Dimon has been quoted as saying Elizabeth Warren, the law-school egghead cum U.S. Senator doesn't understand the global banking system. Likely, he is right. I've read some words attributed to Warren. She doesn't understand much of reality.
That said, Dimon doesn't understand capitalism, at all. Quantitative Easing has been a disaster for the economy and for capitalism.
When too much credit gets extended, the right action, the action absent intervention is rising interest rates.
You can think of rising interest rates as raising the stakes in poker. Weak hands and the gutless get forced to fold. Only the strongest survive in poker.
The same is with the economy. Those who built businesses upon capital structures paid with credit on expected rising prices that never materialize need to fold and go out of business.
Rising rates protects profitable extant capital structures, structures of efficiency that can earn profits on falling prices.
However, artificially lowering interest rates, which is what Quantitative Easing does, and is the policy action of Dimon's employees, Ben Bernanke and Janet Yellen, wrecks the return to extant capital. To restore the expected needed return, firms fire workers. This is what happened all during Quantitative Easing.
QE is the worst policy action in the history of commercial banking. It has been the worst policy for Americans, perhaps all-time. It's perpetuating the Greatest Depression.
From last month, there are a few bright spots like Lumber and Construction Materials, Beer and Booze, Oil Products and other Non-durable Goods. Yet, that could reflect the upcoming summer season of deck parties and road trips.
Read more ...
Like most other reports, once adjusted for True Dollars™, the Wholesale Trade Report reveals an economy in decline.
Today, one of the not-so-smartest-guys-in-the-room-afterall, Jamie Dimon has been quoted as saying Elizabeth Warren, the law-school egghead cum U.S. Senator doesn't understand the global banking system. Likely, he is right. I've read some words attributed to Warren. She doesn't understand much of reality.
That said, Dimon doesn't understand capitalism, at all. Quantitative Easing has been a disaster for the economy and for capitalism.
When too much credit gets extended, the right action, the action absent intervention is rising interest rates.
You can think of rising interest rates as raising the stakes in poker. Weak hands and the gutless get forced to fold. Only the strongest survive in poker.
The same is with the economy. Those who built businesses upon capital structures paid with credit on expected rising prices that never materialize need to fold and go out of business.
Rising rates protects profitable extant capital structures, structures of efficiency that can earn profits on falling prices.
However, artificially lowering interest rates, which is what Quantitative Easing does, and is the policy action of Dimon's employees, Ben Bernanke and Janet Yellen, wrecks the return to extant capital. To restore the expected needed return, firms fire workers. This is what happened all during Quantitative Easing.
QE is the worst policy action in the history of commercial banking. It has been the worst policy for Americans, perhaps all-time. It's perpetuating the Greatest Depression.
From last month, there are a few bright spots like Lumber and Construction Materials, Beer and Booze, Oil Products and other Non-durable Goods. Yet, that could reflect the upcoming summer season of deck parties and road trips.
Friday, June 5, 2015
WHERE HAS LIVING BEEN BEST SINCE THE GREENSPAN-BERNANKE GREAT INFLATION, PEAK GDP AND THE GREATEST DEPRESSION?
Today, I did some sleuthing. Using income per resident, age 16 and up, expressed in True Dollars™, I compared the 50 states and the District of Columbia to see what Americans have weathered the Greatest Depression storm the best.
While I am not going to put up all 51 curve charts plotting per capita income for each state and DC, I shall present to you a few tables.
The first table shows the change in income per head from various dates in the past.
Nevada has been the best place to live since Peak GDP merely because Nevadans enjoyed the smallest decline in income per resident expressed in True Dollars™.
The second table shows how the states rank by changes in income as expressed in the percents above.
It fails to surprise that car making country — Michigan and Ohio sit at the bottom. Also, who wouldn't expect high-tax states like New York and Illinois to be near the bottom. It surprises that residents of upstate New York continue to pay taxes to feed the residents of New York City. Likewise, it seems the residents of Chicago have the rest of Illinoisans held hostage.
The third table shows how the states rank by income per head at Peak GDP in True Dollars™, Q4 2007, and for the latest report (Q3 2014 as of this writing). Also, the table reveals the per cap income percentile for each state.
This table can give you an idea in which states living is declining and in which states living is improving.
For any state, if the number in the second column is larger than the number in the first column, living is worsening in that state.
Read more ...
While I am not going to put up all 51 curve charts plotting per capita income for each state and DC, I shall present to you a few tables.
The first table shows the change in income per head from various dates in the past.
Nevada has been the best place to live since Peak GDP merely because Nevadans enjoyed the smallest decline in income per resident expressed in True Dollars™.
The second table shows how the states rank by changes in income as expressed in the percents above.
It fails to surprise that car making country — Michigan and Ohio sit at the bottom. Also, who wouldn't expect high-tax states like New York and Illinois to be near the bottom. It surprises that residents of upstate New York continue to pay taxes to feed the residents of New York City. Likewise, it seems the residents of Chicago have the rest of Illinoisans held hostage.
The third table shows how the states rank by income per head at Peak GDP in True Dollars™, Q4 2007, and for the latest report (Q3 2014 as of this writing). Also, the table reveals the per cap income percentile for each state.
This table can give you an idea in which states living is declining and in which states living is improving.
For any state, if the number in the second column is larger than the number in the first column, living is worsening in that state.
Wednesday, June 3, 2015
JUNE 2015 U.S. INTERNATIONAL TRADE STATE. THE BALANCE OF PAYMENTS PICTURE GETS BETTER AND BETTER, AS EXPECT DURING A LONG DEPRESSION
The trade balance continues to better. This should surprise no one as Americans have imported ever less, even in the face of shrinking exports.
It appears foreigners are buying ever less of Americans' service economy.
Tuesday, June 2, 2015
JUNE 2015 MANUFACTURERS' SHIPMENTS, INVENTORIES, AND ORDERS — NEW ORDERS. IT'S ALMOST ALL DARK WITH A FEW RAYS OF HOPE.
So, the worker bees at the Bureau of the Census have released the April data for the June 2015 Manufacturers' Shipments, Inventories, and Orders report.
After putting the data in True Dollars™, for new orders, the change from the previous month looks bad along with the change from the previous year as well as from five years ago. Only the change from the previous quarter looks good.
There are a few bright spots, though. It is from here that a basis of true recovery likely is forming.
The industries that are showing consistent bettering are construction materials, electric components, industrial machinery, material handling, ferrous metal foundries, iron and steel mills.
Read more ...
After putting the data in True Dollars™, for new orders, the change from the previous month looks bad along with the change from the previous year as well as from five years ago. Only the change from the previous quarter looks good.
There are a few bright spots, though. It is from here that a basis of true recovery likely is forming.
The industries that are showing consistent bettering are construction materials, electric components, industrial machinery, material handling, ferrous metal foundries, iron and steel mills.
Friday, May 29, 2015
TODAY'S ECONOMY IS THE SAME AS AMERICA IN 1975. Q1 2015 GDP REVISION.
The Bureau of Economic Analysis workers released the revised numbers to first quarter GDP. In the 21st century, one would expect that government workers could release GDP data monthly and not seasonally adjusted.
As no one uses money anymore — coined metal by weight and fineness — there is little cause to adjust data for seasonality. Gold and silver don't get shipped to "money center" banks by rural farm bankers to earn interest anymore. As there is no money, that kind of banking hasn't existed for tens of decades. Thus, there isn't a seasonality effect in the economy anymore.
Well, GDP has now fallen to about what it was for the first quarter of 1975 during the Greatest Depression.
The change in True GDP as measured in True Dollars™ is quite revealing. All who have lived through these years know how accurate the chart tracks good times and bad times.
Yet, because of the power of persuasion-in-propaganda and peer pressure effects of crowds, most today, believe they have been living in an economic recovery, albeit a slow one, merely because they have heard that sermon repeatedly and are afraid to believe otherwise.
The propaganda isn't true. Americans have been living in the Greatest Depression after having lived through the Greenspan-Bernanke Great Inflation, the biggest credit bubble in the history of mankind.
The year-over-year change yields a much clearer picture. The economy is bettering but hasn't recovered. Not until the line crosses over the zero mark can anyone claim the economy has recovered.
And while the economy crashed after the Banking Crisis of 2008, an inevitable crisis brought on by the Greenspan-Bernanke Great Inflation, the signs of trouble arose by Q2 2006. In spite of claims to the contrary, the last decent economic run Americans experienced began Q2 1994 and ended Q4 2000, with the best of those times ending Q1 1997.
The worst action Federal Reserve central bankers could have done, they did. They did so precisely because Fed Res bankers don't understand capitalism and how capitalism works, at all.
Rather than cut interest rates to near zero and engage in Quantitative Easing, the truest definition of voodoo economics, Fed Res bankers ought to have pushed interest rates higher faster. Cutting rates impaired extant capital bought on credit by enterprisers who operated prudently. To maintain return on capital, such enterprisers were forced to do the only act they could, cut labor.
Meanwhile, even at low rates, new entrants could not come into markets, borrowing credit to buy new capital and thus put Americans to work since even at those low rates, returns to any new capital could not materialize. In short, if Americans aren't workers and thus lack wages, they can't buy goods and services at prices needed to gain returns to capital.
Academician economists with their phony doctrine of economics are quite wrong. Fed Res central bankers have been quite wrong. Congressmen, whether House members or Senators, have been quite clueless.
The true fixes likely never will happen.
Read more ...
As no one uses money anymore — coined metal by weight and fineness — there is little cause to adjust data for seasonality. Gold and silver don't get shipped to "money center" banks by rural farm bankers to earn interest anymore. As there is no money, that kind of banking hasn't existed for tens of decades. Thus, there isn't a seasonality effect in the economy anymore.
Well, GDP has now fallen to about what it was for the first quarter of 1975 during the Greatest Depression.
The change in True GDP as measured in True Dollars™ is quite revealing. All who have lived through these years know how accurate the chart tracks good times and bad times.
Yet, because of the power of persuasion-in-propaganda and peer pressure effects of crowds, most today, believe they have been living in an economic recovery, albeit a slow one, merely because they have heard that sermon repeatedly and are afraid to believe otherwise.
The propaganda isn't true. Americans have been living in the Greatest Depression after having lived through the Greenspan-Bernanke Great Inflation, the biggest credit bubble in the history of mankind.
The year-over-year change yields a much clearer picture. The economy is bettering but hasn't recovered. Not until the line crosses over the zero mark can anyone claim the economy has recovered.
And while the economy crashed after the Banking Crisis of 2008, an inevitable crisis brought on by the Greenspan-Bernanke Great Inflation, the signs of trouble arose by Q2 2006. In spite of claims to the contrary, the last decent economic run Americans experienced began Q2 1994 and ended Q4 2000, with the best of those times ending Q1 1997.
The worst action Federal Reserve central bankers could have done, they did. They did so precisely because Fed Res bankers don't understand capitalism and how capitalism works, at all.
Rather than cut interest rates to near zero and engage in Quantitative Easing, the truest definition of voodoo economics, Fed Res bankers ought to have pushed interest rates higher faster. Cutting rates impaired extant capital bought on credit by enterprisers who operated prudently. To maintain return on capital, such enterprisers were forced to do the only act they could, cut labor.
Meanwhile, even at low rates, new entrants could not come into markets, borrowing credit to buy new capital and thus put Americans to work since even at those low rates, returns to any new capital could not materialize. In short, if Americans aren't workers and thus lack wages, they can't buy goods and services at prices needed to gain returns to capital.
Academician economists with their phony doctrine of economics are quite wrong. Fed Res central bankers have been quite wrong. Congressmen, whether House members or Senators, have been quite clueless.
The true fixes likely never will happen.
- Fed Res bankers need to be stripped of their power to set the inter-bank lending rate (Fed Funds Rate) as such a rate is the basis for commercial lending rates.
Such bankers lack omniscience. They don't know what commercial rates ought to be.
Instead, rates ought to be set in futures markets. Futures markets are why Americans never starve and never run out of energy. - Congressional-backed mortgage securities need to end, which means so-called Government-Sponsored Enterprises (GSE) such as Federal National Mortgage Association (Fannie Mae) and Federal Home Loan Mortgage Corporation (Freddie Mac) need to be shuttered.
Bankers need risk. With the advent of mortgage-backed securities (MBS) guaranteed by successive U.S. Congresses, bankers have lost their bearings and have become imprudent in the practice of banking.
MBS worked for bankers as the source of structured investment to pay off deposits until such didn't anymore. Think about the perversity of it all.
Bankers sell credit to borrowers and buy rights of action against borrowers called mortgages. Then bankers sell those rights to U.S. Congresses through their GSE agencies. After bundling mortgages into securities, GSEs sell those MBS to bankers, effectively selling back to bankers the mortgages they originated, but now with risk to bankers stripped out. - By constitutional amendment, all legislators need their taxing authority severely limited. No American should be forced to pay more than 10% to 12% of her or his income in total to all levels of legislators.
By significantly restricting taxation authority, legislators would have their borrowing capacity restricted significantly. Thus, legislating would become challenging.
Each year, there should be contentious fighting by members of the House and Senate as to what gets funded and by how much. Thus, only the most important legislation with the greatest effect for the most people, if not all, should be debated.
And the same thing should happen in the states and the counties.
Legislation should be hard to come by. Everything should be a contentious fight among legislators. Legislating should be a pain-in-the-ass, a hard job, so hard that only the most important issues should be debated and decided upon. It should be so hard that only the most tenacious and thoughtful persons should be attracted to do the work. - Working-age immigration needs to be restricted, likely for decades. If Americans want their wages to rise in True Dollars and thus experience a rise in buying power, they must awaken to reality and agitate for restricted immigration, say to no more than 5% of total population each year.
Wages and capital are interlinked. Wages are a consequence of producing wealth under efficiency. The more wealth produced and gained by each worker, the higher wages can rise.
High capital spending causes high wages. Wages rise when capital spending per worker rises.
Only in proportion as labor becomes pricier that it becomes profitable to use cheaper methods (capital) to amplify labor. Capital spending arises because of likely increasing returns to capital.
Labor becomes pricier only under a dearth of workers. When there is an abundance of workers, labor is cheap.
Heed my dictum. Labor makes property. Capital makes property efficiently.
Capital becomes a factor in production only if in using capital, workers can produce property in stock or in work cheaper than by producing property in those things without capital. Without capital, there is little reason to organize workers. Without capital, everyone lives at bare subsistence.
Before the industrial era, almost all Americans were poor, barely living above bare subsistence poverty. Almost all were farmers who traded little. Farmers had little capital. There were hand tools and maybe a few plow horses.
The few "wealthy" Americans were those involved in shipping. Ships of shipping, of course, are capital.
Under the automation of industrialism, true wages or "real" wages if said by economists rose and rose substantially. As Americans added machinery, which, of course, is capital, workers' buying power as expressed in true pay rose.
If Americans desire to live in a golden age, like Americans of the past, say between the 1950s and 1960s, they need to return to living by capitalism. That means the fixes above must happen.
I'm right. Guys like Peter Schiff are right, intuitively, most times, except guys like Peter Schiff don't have the numbers to back up their claims. I do.
Wednesday, May 13, 2015
IS TRUE ECONOMIC GROWTH AT LONG LAST COMING SOON TO THE U.S. ECONOMY? MAYBE.
The pessimists seem quite down on the U.S. economy. However, these pessimists rely on nominal GDP stats and the quite dubious real GDP stats from the Census bureau.
One well-known pessimist, a brokerage firm operator also who peddles gold believes a spate of bad numbers will translate into Q2 GDP numbers lower than Q1, a new round of quantitative easing and dollar that buys less than it does now, especially against cash from other banking systems. Another well-known pessimist, a stocks salesman who is a popular financial blogger has called for a recession.
The U.S economy can't go into recession because at least through Q1 2015, the economy has been shrinking since the last growth peak of Q4 2007. Likely, many disbelieve my claim. Yet, in true terms, after removing the effects of monetary accretion, the economy has been shrinking.
At a point sometime in the near future, the shrinking is going to stop. When it does, the economy is going to take off and along with it, the prices of stocks and commodities.
We might be nearing that point given these charts.
When Americans were in true hard times, there were slightly more than nine out-of-work Americans for every American hired. Have a look.
At the peak of hard times, there were almost 13 Americans clawing for every new job opening. Now, there are about four truly unemployed Americans for everyone new job opening.
During the peak of hard times, there were about 41 Americans working under supervision for every working American who found himself or herself laid off or fired. By the end of March 2015, that had grown by more than twice as much.
As a contrarian of sorts, I'd say now is the time to look at depressed commodities like timber and steel. Likely, now is the time to look at firms and industries that have been out of favor during the great dollar-figure run-up of the S&P 500.
The last time I looked, Americans were living in great times to buy houses. Low rates plus jobs equals house buying. I'd expect new construction to take off if present employment trends hold.
I look forward to the Q2 GDP numbers. For now, I say, let's go!
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One well-known pessimist, a brokerage firm operator also who peddles gold believes a spate of bad numbers will translate into Q2 GDP numbers lower than Q1, a new round of quantitative easing and dollar that buys less than it does now, especially against cash from other banking systems. Another well-known pessimist, a stocks salesman who is a popular financial blogger has called for a recession.
The U.S economy can't go into recession because at least through Q1 2015, the economy has been shrinking since the last growth peak of Q4 2007. Likely, many disbelieve my claim. Yet, in true terms, after removing the effects of monetary accretion, the economy has been shrinking.
At a point sometime in the near future, the shrinking is going to stop. When it does, the economy is going to take off and along with it, the prices of stocks and commodities.
We might be nearing that point given these charts.
When Americans were in true hard times, there were slightly more than nine out-of-work Americans for every American hired. Have a look.
At the peak of hard times, there were almost 13 Americans clawing for every new job opening. Now, there are about four truly unemployed Americans for everyone new job opening.
During the peak of hard times, there were about 41 Americans working under supervision for every working American who found himself or herself laid off or fired. By the end of March 2015, that had grown by more than twice as much.
As a contrarian of sorts, I'd say now is the time to look at depressed commodities like timber and steel. Likely, now is the time to look at firms and industries that have been out of favor during the great dollar-figure run-up of the S&P 500.
The last time I looked, Americans were living in great times to buy houses. Low rates plus jobs equals house buying. I'd expect new construction to take off if present employment trends hold.
I look forward to the Q2 GDP numbers. For now, I say, let's go!
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