Wednesday, September 7, 2016

Excuses, Excuses...

That is the genius of the Federal Reserve. Dear reader, as I see it, the real story behind low interest rates is to mask the national deficit and maintaining the status quo as they play pretend to the nation.
Quick Recap
If you recall former Fed chairman, Bernanke said low rates was the stimulus to boost unemployment back to a target of 5.1% and then, the Fed would normalize rates. What about the QE, you ask? That was considered a separate issue to save the economy from a collapse. Of course, no one attacked the Fed for causing the crisis in the first place due to the fact that the media is controlled by the status quo which gave rise to populism and the "Donald," but that is another story.
As we entered the tenure of the present chair, Yellen, the excuses have been played down to a fine art. Will the Fed drop a key adjective from the minutes? Will the phrase have a new code word to indicate that the easing period is over? Meanwhile, the federal government continues to spend with the military in 130 countries as the national deficit approaches $20 trillion. The military complex is more dangerous to our nation than all the terrorists combined. They are sending us to poverty and bankruptcy. You see, folks, the status quo never changes. They control our media to be turned to focus on the meetings of the Fed to make our lives and economy better, rather than the structural changes that our society needs to address. Whenever Yellen is questioned be it Congress or at a speech, new excuses emerge like global weakness is the reason we cannot raise rates now, as the dollar would be too strong and effect global trading.
At other times Yellen says, "We are looking at the data and as for now, the economy is growing moderately. If unemployment continues to strengthen and inflation meets our 2% target, then we will consider a rate hike." That's so much BS when the cost of food, energy and shelter are never included in their target inflation equation.
Consider this Yellen, unemployment as you chart it, is at 4.9% and that is below the original target by Ben Bernanke. However, if you told some of the truth like 93 million workers who are not employed or participating as you classify it, then you would have a valid point. If, when the employment numbers were released and 150k plus jobs were achieved and you argue over the 180K that were expected, but leave out these facts: You never mention that 4k quality mining jobs were lost or the 14k manufacturing jobs cut or even the 6k construction jobs dropped during the same period. Then you are nothing more than a manipulator in our society.
Jackson Hole, Wyoming
In the big summit Yellen made a political statement and yet, she claims the Fed is independent? Did she mention that the national debt grows at triple the GDP? No, of course not! Why would they since they consider debt and credit as economic progress. Did she mention that the original purpose of the Fed was to keep our currency liquid and in supply? No, of course not! By the way, Bonner Research did a study and found our currency circulation is in dire straights. It found that the same $11.2 trillion dollars passes around in society on a yearly basis and the reason our GDP keeps growing is through credit expansion. This is in part the velocity of money. You work and you receive a check. No cash. You deposit that check and use your own checks or credit cards to make purchases. No cash. For those who don't work, many receive some form of government help and it too comes as a direct deposit or an account on a government credit card. No cash. Pay Pal and other companies like Apple are joining the no cash bandwagon by using your smart phone to make purchases. No cash. Yellen has put negative rates on the table which means banks will tax your money even before you see it. Keep in mind that although $11.2 trillion moves around within the economy do not be misled by the amount. Bonner's research concludes that less than $2 trillion is actually in circulation and a currency supply problem could happen overnight.
The reasons are many and it is more than ending the $100 dollar bill to curb crime and drugs. It is a war on cash and your financial independence. Bonner found that if everyone in America demanded cash from their banks, the banks could only give everyone less than $1k each due to our limited money in circulation which means the Fed has failed its original declared purpose. If that sad day ever arrives, I can't wait for that excuse. And yes, I did say declared purpose because the Fed is really nothing more than socialism for the banking industry. They cover their lies with excuses. I don't know about you, but I'm sick of it. This is another reason why I say, "End the Fed!"
And The Beat Goes ON...
Walmart announced the layoff of 7,000 workers. The manufacturing index is in contraction territory at 49.4%. Macy's is closing 100 stores. How will that effect our malls, you ask? All I can say is, it ain't good. Sears is offering for sale its two crown jewels, Craftsman tools and Kenmore appliances. In addition, productivity continues to decline while labor costs rise, company operating revenues have declined for 7 straight quarters and profits for 5 straight quarters and yet, the stock market rises. There is no actual correlation between earnings and stock valuations. CEOs like Kevin Plank of Under Armour are selling their companies shares at a fever pace. He sold 2.1 million shares, but you can stream your fantasy football scores. (update to the old Sonny and Cher song.)
Finally, consider this: the stock market is suppose to look six months in advance with the current price. Now, go back to April 2015. The market was rising to a new record, but six months later, earnings declined. The excuse, it was the weather. It declined again the next quarter. The excuse, problems with longshoremen on the West coast. It declined again the next quarter. The excuse, things are getting better. It declined again in the next quarter. The excuse, the declines are less. It declined this quarter. The excuse, the declines were even less. The trend is to profits. So much BS!
I'm gonna write a song. I don't know the lyrics, but there is no doubt that it will be under the Blues. I have the title, "Excuses, Excuses."