Wednesday, August 6, 2014

Master Manipulators> Fiat Demographics

They've got a set of Republican waiters on one side and a set of Democrat waiters on the other side, but no matter which set of waiters bring you the dish, the legislative "grub" is all prepared
in the same Wall St. kitchen.

--  Huey Pierce Long

He called it like it was back in the 30s. Today, the chefs do stints at the Treasury and the reviews of their work(market trend) dictate the menu at the Fed, who still claim independence. Ha! Study their action not their words. Greenspan, Bernanke and now, Yellen all kept interest rates low to spur the economy and employment while at the same time, check inflation. B.S.!
Real Reason
help our federal government with its massive deficits, caused by waging foolish wars, while at the same time cheap money lifts the stock market. This gives a confidence "feel" through the media that although you may have low wages or lost your job, things will get better.
Now, you might argue that this policy helps the nation, keeps the dollar stable, keeps trade flowing and everyone can benefit from higher values in equities. To answer this in detail one would need a chapter, and although blogs are so much better than the sound bytes of the news, one cannot do justice because as I stated in my unpublished book all things are related both in our time and through time. The sad reality of global trade is that everything in every country is manipulated. In the next few weeks I'll reveal some of their tricks. Let's start at the top.
Fed and Treasury
by deceiving the public about gold, the bankers pushed the idea of the Fed as the best way to keep money flowing(credit and currency)nothing about a dual mandate of inflation and employment. This gave the greedy bankers security because the Fed was their socialism. The taxpayer would foot the bill if anything went wrong. In less than twenty years after their start, they gave us the Great Depression, and so many boom and busts that a book would be needed. Yet, these shills still claim their actions saved our economy time-after-time. They never take responsibility for their errors and they have the gall to claim that their actions are independent of political influence.The recent pull-back in the market called volatility which is a code word meaning declining values is also a code word for the Fed to keep rates low and to keep the punch bowl full or we will push the market even lower.
Anyway, the Fed cheapens money by buying treasuries, which allows our government leaders to be irresponsible with our money. Banks get their money from the Fed's discount window and through lobbying(read manipulation)are allowed to leverage this money 10x. The worthless fiat money has expanded to $4t of debt at the Fed and over $40t of debt in the private sector.Together, this is 4, cuatro, four, IV times the value of our economy, give or take a trillion. Doesn't matter, they will print to cover the correlation. Basically, fiat above refers to money and it has no convertible value while demographics reflects the balance of a population(US)either it is rising or declining, however segments within it can dictate economic effects. Our largest segment is ageing. Baby boomers are not buying soda, pampers, and if anything are down sizing their homes. In our consumer society a home is the largest purchase one can buy. If homes don't sell, the economy flops. No manipulation can change the facts of life and this in a nutshell is the real dilemma of our economy. The Fed knows this and it also knows that all central bankers have been printing fiat money to gain market share through exports. The cheapest price wins at the cash register.
We don't have to study books to see the effects on our standard of living, jobs, wages and the American Dream. We invented TV, but we don't make them. We invented the computer, but we don't make them. Almost anything that you can name can finds its roots here, but we get no benefit like jobs and wages that raise our standard of living. Global nations not only use currency manipulation, but protectionism, rules and regulations which is why twenty-one nations have a better living standard than Americans. What little manufacturing that we still produce is only because the military complex needs the products that they make. The military is a partner to cheap money and no member of Congress will oppose them because the military has spread out its influence in every state which translates to jobs, campaign money and votes. This is the status quo in the US today.
Tool Box
The Fed has many techniques to maintain the system. In the old days they just printed new dollars to finance the old dollars, however this produces inflation. They realized this in the 20s. The idea of QE was developed in the 30s and the crisis of 2008 revisited this technique. Now, they claim it is coming to an end. Of course, they said this twice before. Last week, they did enact the follow up to keep interest rates low. It may work. It may not. Here is the plan. They changed the money market fund which is based on keeping a dollar invested, always worth a dollar. During the financial crisis of 2008 there was a run on the buck and it fell below a dollar. To put this in perspective the Fed lends money at .015%. Banks then can multiply that 10x and charge from four and a half percent to twenty-one percent with credit cards. I won't get into their fees. This is how the Fed recapitalized our banks. Our Treasury will use the money market interest rate which will be similar to the present rate to finance the government. If it doesn't, 40 year bonds will be on the horizon.
Although our population continues to expand, our largest segment is past its peak spending days. It takes time to counter the Fed and government manipulation of our economic data. The first quarter GDP was negative 2.9%, which was revised to negative 2.1%. They then tell us our present GDP is 4%, but I'll tell you this is a lie. They will quietly revise it lower in a future date, but the truth is our economy is slowing with deflation on the horizon. Here are some facts that cannot be manipulated. International trade under the Baltic Shipping Index is falling so low, it is almost off the chart. Home Builders Index is so low that the curb looks up. Home sales was quietly revised so low that it set a record. The number of first time home buyers is 18% and falling big each year. Historically this number should be around 40%. When you add the age of this new buyer to over 34 when it was just 31, you see a negative outlook. By the way Europe has the same root problem in the EU. Italy just went back into the recession. Spain, Greece and Portugal banks are day-to-day. Throw in the fiat crazy Argentina and no sous-soup chef can save that meal. Germany's demographics is terrible which explains why its exports are declining.
Meanwhile, if you thought that homes are rebounding and foreclosures are fading, think again Kimosabe. Foreclosures are up 30% in Utah, up 11% in Wisconsin, up 40% in Iowa, up 8% in Ohio, up 22% in Illinois, up 7% in Maryland and over 6% in Florida. That is trouble with a capital "T."
When government does not listen to the voice of its people, geopolitical events happen. Do you know what happened in 1776 or 1789? Do you follow the Middle East, Central America, parts of Asia, and parts of South America today? In our own country the Occupy Wall St. movement knew something was amiss, but lacked vision to answer the question. I don't have the following of likes that is the social media, but I know that people understand the truth when they read it like "..we hold these truths to be self-evident..."
As history has demonstrated the Fed will fail again because an economy is not a math equation or a ledger with pluses and minuses. It is a reflection of its people who are now getting older who will spend less which correlates to deflation which a natural progression in life.
As for the Fed with its founding idea of currency and credit, let us check the video. We saw the bubble in credit in 2008 and a recent reflection in the value of the dollar saw it drop from $1.20 in the 90s to eighty cents today. If the Fed was truly independent and acted for the best interest for all our citizens, it would've defended the dollar. It didn't. That is the reason why the middle class is disappearing and so many Americans are in poverty, homeless and suffer going hungry. If they did not buy treasuries, the government might not have been controlled by the military complex and there would've been no money for Vietnam, Irag or Afghanistan. Better yet, no money for future made up conflicts. Instead our dollar has declined decade-after-decade, the military has the biggest part of our budget and the rising stock market reflects the fact that it takes money to make money which all leads to the wealth gap until someone says no more! End the Fed!