Sunday, July 21, 2013

58 Minutes = Future Schock...L&C

To paraphrase the great William Shakespeare, "...tears do not come in drips, but torrents."

Detroit is back in the news. Yeah, the Tigers look good for the pennant. But no! The Lions have troubles.  Yes, but no again. So, what is the reason? Bankruptcy. I don't like labels or one word answers. There are problems with single answers as expressed by my blog mission. The general public has been exposed to sound bytes on Detroit for years. There is a reason for this. The status quo know that this is the best way to deal with issues that could blow up their control over our society. It softens the blow as the public already knew what was going to happen. If you watch any financial network or media shows like Meet the Press, Face the Nation, et al. Their expert guests will throw how Detroit failed to diversify from the auto business. How cronyism was short-sighted in long-term economic trends. Some truth in there, but hides the real culprit which makes these answers all B.S.! When you had over 300,000 manufacturing workers in a country that has under the radar race issues in your city and it is the most integrated in the nation, you are diversified. Those middle class jobs developed many other opportunities like real estate, construction, appliances, teachers, doctors, whatever.
64K Question
The real culprit was the anti-union movement by greedy producers who used globalization to destroy the unions which led to the beginning of tax loss for the city. The related fields were affected, but only revealed through time.The dominoes fell like the loss of the related jobs, the results of inflation, drugs and crime, white flight and more which leaves Detroit today with only 27,000 manufacturing jobs that will shrink if the global recession continues. Sadly, that is what I see and predict.
other cities are watching the events unfold. Oakland, Baltimore, Chicago, San Jose, LA, Houston, everywhere. Why? Because if the bankruptcy judge says Detroit does not have to pay the full amount of its unfunded obligations to its pension program, they will sing Hallelujah 
The powers-to-be screwed the private unions and now, they will screw the public unions.
Oakland As always had pitching and they want a new stadium. B.S.! I love sports, but life takes center stage before leisure. There is a local artist who lives at Jack London Square. He filmed car robbers in action. He called the police who did not come. He gave them the video. They have done nothing. This has happened many times with no response or help for what the police classify as petty crimes.
I placed this tidbit because the media made a big deal over the fact that it takes the police in Detroit 58 minutes to respond. They don't even come in Oakland!
this is feel good news that is a lie. Ten years ago and millions less in population we consumed 150,000billions of gallons in yearly gasoline. Today, we are down to 130,000b. We have more people collecting food stamps than working full time. Greece is in its fifth year of recession with Italy and Spain heading for their third. What is EU answer? They will paper over the debts as they seek a new answer to avoid inflation and default. The problem as I see it is this: they, meaning central bankers, will end currency in society. The government will have full big brother control over you because all your spending will be recorded. Financial freedom will end because you will not be allowed to pay cash for anything. The young will jump on the ease of transaction not aware of the big picture until it is too late. The military ended the street war protests with a volunteer, full time army. Local government ended long lines at the unemployment office with electronic entitlements as did other agencies like social security. Out of sight, out of mind. The Fed plans to end cash. You won't be seen because you won't have financial freedom. You won't need a  local branch bank because all money will be electronic. The government loves it. No printing press means no need for special paper and ink. No repairs to fix. No labor. Fiat money is saving itself. They realized this when Orange County went bankrupt. The list slowly expanded with San Bernadino, Stockton and Jefferson County, however the list is huge. There are over 50,000 communities that lost middle class manufacturing jobs and there isn't enough money to rollover the debt. They will seek to hide the truth as all money will be under their control, electronically. This long rant ends with the message that I said before and I say it again, End the Fed!
Liars and Crooks: the banking industry led by Deutsche Bank, however this lead is tenuous as JPMorgan will eventually take over. What, you ask? The banks were caught trying to manipulate electricity prices by placing bets in the market because they constructed deals to go their way. Barclays is appealing their $470million fine, however Deutsche have already settled. You see when central banks give you free money at .25%, you can multiply it many times over with leverage with the only setback being caught, not claiming guilt, pay your fine and if it is so serious as to threaten your business, well, it pays to have the central bank cover your ass with a bonus to boot. End the Fed!

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