The current buzz about a rate hike by the Federal Reserve is music to their ears. However, they don't like the bond market stealing their thunder which is also in vogue. Then again, they have the money boys of Wall St. dancing to their fiddle. Even though the song has been played from a million times to now, a trillion times, it is the meme, their semper idem.
Started With
Chairman Volker who raised rates to fight inflation. He said he was fighting inflation, but if you need me to translate that old lingo, your mind has been captured by the Fed. He was fighting gold which had gone from $24. to $800. The chairman feared the public was rejecting fiat money with a return to the gold standard. He knew it could get worse. Maybe a call to eliminate the Fed itself. People were talking how the Founding Fathers rejected fiat money in favor of gold and silver. Here is a funny tidbit and ironic too. Present talk has the treasury replacing Jackson on the $twenty in favor of a woman to reflect our society. Maybe because Jackson was the last president to cancel the Fed? After all, they used woman's lib to hide the truth before when that was in vogue.
Now
the Fed has complete control. Gold has been rejected and only followed by "gold bugs." You never hear anyone mention it in a favorable light in economic discussions or by Wall St. There is not one week that passes where some Fed committee member does not hold a headline with a few well chosen words like rate movement or economic recovery. This is a dark time in the kingdom. Anyway, in the hope that people will see the light and the force be with us, I have elected to translate the current jingo into our lingo. By the way this is a world wide problem and since the ball is in Europe at the moment, what better time to expose their leader. Jean Claude Juncken is the president of the EC. This is a quote from him talking about financial crisis. It says so much, "When it becomes serious, you have to lie." How about another on excessive debt and rollovers of debt, "We continue step by step until there is no turning back."
You got to love this idiot if nothing else, his gall. Here in the USA, we have borrowed the English language and over time, we added our own nuances. The following are quotes from the Fed. You can apply their current words for future action. After each quote, I translated and in some cases give commentary under parenthesis.
1) QUOTE: The committee continues to see the risks to the outlook for economic activity and the labor market as nearly balanced.
MEANS: Things could go up - or down.
2) QUOTE: The committee continues to monitor inflation developments closely.
MEANS: We really don't know what will happen.(like the oil price collapse, but we want to instill confidence like we do know.)
3) QUOTE: In determining how long to maintain this target range, the committee will assess progress - both realized and expected - toward its objective of maximum employment and 2% inflation.
MEANS: We might do something about rates or not.(Not is most likely.)
4) QUOTE: The committee judges that an increase in the target range for the federal funds rate remains unlikely at the FOMC meeting.
MEANS: No rate hike. (everything is a smoke screen.)
5) QUOTE: Just because we removed the word, "patient" doesn't mean we are going to be impatient. MEANS: Just trust us. (another Indian smoke signal. However, if you are not patient, then you are impatient.)
6) QUOTE: The committee continues to expect a moderate pace of GDP growth, robust job gains and lower energy prices supporting households.
MEANS: Trust us. (question- when did the Fed get into energy prices? Oh, I forgot. They control the world.)
7) QUOTE: Any increase in rates could be warranted at any future meeting, depending on how the economy evolves.
MEANS: We love to see that you listen to our every syllable. (wait, didn't they say that robust job gains and lower energy prices will grow and support our economy?)
8) QUOTE: When an economy is operating at the so-called zero low bound, it creates a situation where there are asymmetric risks. It is possible if the economy proves stronger than is expected to respond to the tightening policy. If there are adverse shocks to demand that tend to push inflation and economic performance in averse direction it's not possible to lower rates.
MEANS: We know everything and we got the government in conjunction. They have eliminated food and energy from the CPI(consumer price index). (they are the only two things that everyone needs everyday out of the index. This is why there is never a spike in inflation according to them and their counter-parts around the world. China has cut its interest rates for the third time in the last six months.)
9) QUOTE: In some corporate debt markets, we do see evidence of unusually low spreads.
MEANS: Someone is interfering in our domain. We will smoke them out when we raise our rates.
10) QUOTE: The global experience shows that giving banks independence to make monetary policy is in the best interest of the country.
MEANS: We need more power! (giving us control over the Consumer Finance Protection Board is best for all, especially us.)
Bottom Line
QUOTE: Any talk about appearing before Congress or auditing is fine because we are ready to answer any question on any aspect of the Federal Reserve.
MEANS: No one can do anything to us because we report to no one and appointed for six years. We don't have to appropriate money for any of our policies, we just print it!(which dilutes all of our standard of living and puts our nation at risk which is why I say, End the Fed!
Wednesday, May 13, 2015
Wednesday, May 6, 2015
Born 1961 - Died 2015
- ...Ask not what your country can do for you, but what you can do for your country.
- JFK
In the 2008 financial crisis big banking and connected institutions received aid that numbered over $800 billion. The Federal Reserve printed over $3 trillion to cover this and other stimulus programs enacted by our government. Since 2008 we have doubled our national debt with no end in sight and no plan to pay this debt. We have not only endangered our country, but the psyche of ordinary citizens is also affected. We no longer are creating real wealth that benefits both the creator, his workers and our nation, but only individuals like the no content concept of Facebook, Twitter and the like. When too many hands reach for a slice, only a few will eat. The rest will go hungry and plot against those who ate. President Kennedy inspired us back in 1961. The Federal Reserve poisoned us in 2008. Consider the following aspect of some who are reaching for a slice of pie.
12 Steps for Financial Well-Being
1) Don't marry your woman, just live with her. While at the same time...
2) Continue to use your mother's address for all your correspondence.
3) Save enough to buy a home. You can use the 3% HUD program.
4) Then, rent it to your woman who can apply for assistance under section 8. This will pay for your mortgage. The rest of us will pay for it.
5) Your stay at home woman can even get pregnant because she will receive a larger check. Again, we pay for it.
6)Your woman can also apply for Obamacare, so you don't have to worry about her medical needs. The rest of us will pay for it.
7)Your woman can apply her talents to get off the "dole." She can return to school to better her chances in life and as usual, we will pay for it.
8)Still hungry? Apply for food stamps.
9) Need a home number. Apply for a free cell phone.
10) Cold? Hot? Apply for utility aid and yes, we will pay for it.
11)Finally, you tire of getting up to go to work. You claim disability. We pay for this too.
12) This couple does nothing for the nation but takes advantage of compassionate ideas to help distressed cases. Their hands are in the pie while some real needs are not being met. We know you are doing this and we are sick and tired of it. We see your food card at the grocery store and then, see you drive away in a newer car. We hear of companies bilking Medicare with bonus claims. All this fraud and more could be stopped with the hiring of people to investigate claims. If this is not done, social unrest will follow. I, for one am angry at the following figures.
$21,000 disability
$10,800 housing assistance
$ 6,000 medical help
$ 6,000 food stamps
$ 4,800 utility aid
$ 6,000 School grants like Pell funds
$12,000 other school aid
$ 8,800 tax exemption on your tax return
Total= $75,000 . This is more than married couple make with both working and more than I ever dreamed of making in one year. It is right to kelp the needy, but like with coupons at stores, you should only be allowed to use one and not be able to have multiple streams of aid.
I only help those who help themselves.
- God
- JFK
In the 2008 financial crisis big banking and connected institutions received aid that numbered over $800 billion. The Federal Reserve printed over $3 trillion to cover this and other stimulus programs enacted by our government. Since 2008 we have doubled our national debt with no end in sight and no plan to pay this debt. We have not only endangered our country, but the psyche of ordinary citizens is also affected. We no longer are creating real wealth that benefits both the creator, his workers and our nation, but only individuals like the no content concept of Facebook, Twitter and the like. When too many hands reach for a slice, only a few will eat. The rest will go hungry and plot against those who ate. President Kennedy inspired us back in 1961. The Federal Reserve poisoned us in 2008. Consider the following aspect of some who are reaching for a slice of pie.
12 Steps for Financial Well-Being
1) Don't marry your woman, just live with her. While at the same time...
2) Continue to use your mother's address for all your correspondence.
3) Save enough to buy a home. You can use the 3% HUD program.
4) Then, rent it to your woman who can apply for assistance under section 8. This will pay for your mortgage. The rest of us will pay for it.
5) Your stay at home woman can even get pregnant because she will receive a larger check. Again, we pay for it.
6)Your woman can also apply for Obamacare, so you don't have to worry about her medical needs. The rest of us will pay for it.
7)Your woman can apply her talents to get off the "dole." She can return to school to better her chances in life and as usual, we will pay for it.
8)Still hungry? Apply for food stamps.
9) Need a home number. Apply for a free cell phone.
10) Cold? Hot? Apply for utility aid and yes, we will pay for it.
11)Finally, you tire of getting up to go to work. You claim disability. We pay for this too.
12) This couple does nothing for the nation but takes advantage of compassionate ideas to help distressed cases. Their hands are in the pie while some real needs are not being met. We know you are doing this and we are sick and tired of it. We see your food card at the grocery store and then, see you drive away in a newer car. We hear of companies bilking Medicare with bonus claims. All this fraud and more could be stopped with the hiring of people to investigate claims. If this is not done, social unrest will follow. I, for one am angry at the following figures.
$21,000 disability
$10,800 housing assistance
$ 6,000 medical help
$ 6,000 food stamps
$ 4,800 utility aid
$ 6,000 School grants like Pell funds
$12,000 other school aid
$ 8,800 tax exemption on your tax return
Total= $75,000 . This is more than married couple make with both working and more than I ever dreamed of making in one year. It is right to kelp the needy, but like with coupons at stores, you should only be allowed to use one and not be able to have multiple streams of aid.
I only help those who help themselves.
- God
Tuesday, April 28, 2015
Some Recovery= Slow Death of Middle Class
Like any patriot, I do the best that I can in regards to buying American. Since the financial crisis of 2008 the one unexpected bi-product from it has been the awareness by consumers that to find and keep good jobs in America, support our companies. This point has never been lost by the global community as they always buy local over imports. For them to buy American is seen as a luxury.
Further along this train of thought as pertaining to the American economy has been the success of horizontal oil drilling and the concept of fracking in gas wells.
Energy Independence
America is back on the road to providing itself with enough energy, however the same forces that gave us offshoring of jobs is attacking our law that says we need all the oil that we produce and thus, we don't export oil at present. I'm against exporting of oil, however I like the idea to allow the export of natural gas as we have excess and we could develop LNG terminals, shipping and more. This is a source for strong middle class jobs and raise our standard of living which has declined since the 1980s. Dear reader, I just stated that this would help our citizens and economy, but that isn't the truth. The ships that transport the gas aren't made here and no one plans to start making those carriers here. In addition, even the terminals are contracted out to foreign own companies and at best, we only will gain some local construction and employment jobs unless when the law is addressed, someone brings this to light. Next year is an election year, but I predict not one candidate will mention this subject. So much for our democracy. It is run by the wealthy for the wealthy. LNG is a future growth industry that not one leader is trying to make the US the number one country and yet, it is our product that will supply the means to it all. Very sad.
Recovery
The stock market is already higher today than in 2008. Studies reveal that 97% of the lost jobs in manufacturing have returned. In addition, there is talk about restoring of the offshore jobs due to the cheapness of energy which is a high component in the finished product. Sounds great until you look at the prime example: Automobile production.
Ageing Fleet
Back in 2008 a study revealed that the average age of the cars on the US roads was eleven years. This made car people dizzy with anticipation. The concept: New Cars for Clunkers was an easy stimulus for Congress, especially when everyone was upset that the banks which caused the depression were the only ones to receive aid. When President Obama bailed out GM, it was not that risky because he was aware of the same study. Americans had to upgrade their vehicles. Prime Minister Abe of Japan was quick to act with this info. He devalued the Yen so his countries car manufacturers could capture a strong niche in the overall market. Today, GM sells more cars in China than here. However, the bounty of car sales does not and will not help the US economy and our dying middle class because of one important aspect.
US Percentage
When you build a vehicle, you subcontract many parts like air condition, seats, security systems, computer components, LEDs and chips, more chips and still more chips. No, don't buy Dorito's stock. This is how car sales help an economy and the working class. In the US there were almost 16 million cars sold in 2014. The figure for 2015 will be similar. However, like I said the middle class is not capturing a stronger future because the percentage of each car built is pitiful when you see how little is made in the US.
Congress passed the American Automobile Labeling Act(AALA)so consumers could see how much and by how many, together helped to build the car. If you want to buy American, this would help.
Buick Encore
is a quality American car, but people, it only contains 3% American made products. This is a mortal sin to economics. For the public school students that is 97% of the car is made elsewhere! Sorry, couldn't resist. This says so much about how our legislatures failed to protect our standard of living and more.
Ford Fusion
It is 25% American with 50% being made in Mexico. NAFTA is a SHAFTA!
Chevrolet Aveo
It is 2% American.
The sad truth is that not even 10 cars have 75% parts made in America. It is a slow countdown that is on nine and the worse part of this story comes next.
Toyota Camry
is made in the US, but the money goes offshore with each sale. Honda Odyssey falls into the same category, but our government classifies these cars as US because the plant is here. Get Real!
The only silver lining is American citizens are getting work, but only because those foreign car companies chose anti-union states which in itself is anti-worker at its core.
So, at a time when cars are selling, middle class jobs are not growing and this is called a recovery. If one needs to be reminded, we invented the TV, PC, cell phone and solar energy. None of those products are produced in the US. Apple sells phones, but does not create job because their product is made elsewhere. We have solar companies, but the big money in turbines is made offshore. Until we protect American companies and workers we will continue this descending spiral to our economy and standard of living. This is the heart of the wealth gap. When people are depressed, it is easy to see all the bad in society which leads to unrest like in Baltimore and Missouri, especially when you have plenty of time since you are unemployed. Tariffs is one solid answer. It is used by every nation. "Free trade" is just two phony words. Fear not retaliation because at best, we only export 14%, so let's protect the other 86% before it becomes its expression and we all end up in the dumps. Globalization is a lie to mask the outsourcing of jobs which was retaliation against unions and workers seeking higher wages at its soulless soul.
Further along this train of thought as pertaining to the American economy has been the success of horizontal oil drilling and the concept of fracking in gas wells.
Energy Independence
America is back on the road to providing itself with enough energy, however the same forces that gave us offshoring of jobs is attacking our law that says we need all the oil that we produce and thus, we don't export oil at present. I'm against exporting of oil, however I like the idea to allow the export of natural gas as we have excess and we could develop LNG terminals, shipping and more. This is a source for strong middle class jobs and raise our standard of living which has declined since the 1980s. Dear reader, I just stated that this would help our citizens and economy, but that isn't the truth. The ships that transport the gas aren't made here and no one plans to start making those carriers here. In addition, even the terminals are contracted out to foreign own companies and at best, we only will gain some local construction and employment jobs unless when the law is addressed, someone brings this to light. Next year is an election year, but I predict not one candidate will mention this subject. So much for our democracy. It is run by the wealthy for the wealthy. LNG is a future growth industry that not one leader is trying to make the US the number one country and yet, it is our product that will supply the means to it all. Very sad.
Recovery
The stock market is already higher today than in 2008. Studies reveal that 97% of the lost jobs in manufacturing have returned. In addition, there is talk about restoring of the offshore jobs due to the cheapness of energy which is a high component in the finished product. Sounds great until you look at the prime example: Automobile production.
Ageing Fleet
Back in 2008 a study revealed that the average age of the cars on the US roads was eleven years. This made car people dizzy with anticipation. The concept: New Cars for Clunkers was an easy stimulus for Congress, especially when everyone was upset that the banks which caused the depression were the only ones to receive aid. When President Obama bailed out GM, it was not that risky because he was aware of the same study. Americans had to upgrade their vehicles. Prime Minister Abe of Japan was quick to act with this info. He devalued the Yen so his countries car manufacturers could capture a strong niche in the overall market. Today, GM sells more cars in China than here. However, the bounty of car sales does not and will not help the US economy and our dying middle class because of one important aspect.
US Percentage
When you build a vehicle, you subcontract many parts like air condition, seats, security systems, computer components, LEDs and chips, more chips and still more chips. No, don't buy Dorito's stock. This is how car sales help an economy and the working class. In the US there were almost 16 million cars sold in 2014. The figure for 2015 will be similar. However, like I said the middle class is not capturing a stronger future because the percentage of each car built is pitiful when you see how little is made in the US.
Congress passed the American Automobile Labeling Act(AALA)so consumers could see how much and by how many, together helped to build the car. If you want to buy American, this would help.
Buick Encore
is a quality American car, but people, it only contains 3% American made products. This is a mortal sin to economics. For the public school students that is 97% of the car is made elsewhere! Sorry, couldn't resist. This says so much about how our legislatures failed to protect our standard of living and more.
Ford Fusion
It is 25% American with 50% being made in Mexico. NAFTA is a SHAFTA!
Chevrolet Aveo
It is 2% American.
The sad truth is that not even 10 cars have 75% parts made in America. It is a slow countdown that is on nine and the worse part of this story comes next.
Toyota Camry
is made in the US, but the money goes offshore with each sale. Honda Odyssey falls into the same category, but our government classifies these cars as US because the plant is here. Get Real!
The only silver lining is American citizens are getting work, but only because those foreign car companies chose anti-union states which in itself is anti-worker at its core.
So, at a time when cars are selling, middle class jobs are not growing and this is called a recovery. If one needs to be reminded, we invented the TV, PC, cell phone and solar energy. None of those products are produced in the US. Apple sells phones, but does not create job because their product is made elsewhere. We have solar companies, but the big money in turbines is made offshore. Until we protect American companies and workers we will continue this descending spiral to our economy and standard of living. This is the heart of the wealth gap. When people are depressed, it is easy to see all the bad in society which leads to unrest like in Baltimore and Missouri, especially when you have plenty of time since you are unemployed. Tariffs is one solid answer. It is used by every nation. "Free trade" is just two phony words. Fear not retaliation because at best, we only export 14%, so let's protect the other 86% before it becomes its expression and we all end up in the dumps. Globalization is a lie to mask the outsourcing of jobs which was retaliation against unions and workers seeking higher wages at its soulless soul.
Wednesday, April 22, 2015
Corrupt State of Affairs: No Free Market
What is, is no longer what is. What do I mean by that? The intangible web of deceit and market manipulation is so deep, so pervasive and so profound that a picture no longer depicts an answer or has value. It has lost its thousand words. There are many examples in the market. The financial crisis of 2008 showed that the Federal Reserve is really socialism for the banking industry. The big institutions were saved from extinction and now, central bankers everywhere just print to cover loses or governments pass regulations to protect failure under the code word "stimulus." So, why should anyone be surprised that in the past week two Chinese companies went into default and there was no negative reaction in the market. In fact, just the opposite. The Chinese exchange kept rising every other day. In Europe Greece has all but stated that it won't be able to meet payment for loans received. The buzz is already covering this event. It doesn't mean that Greece will be kicked out of the EU. No, dear reader, it means that given more time and maybe a bridge loan, a solution will be achieved. After all, all these central bankers have to do is buy more worthless paper from Greece called a bond, hold it forever and all will be forgiven and to the public these fakes will appear as financial geniuses. So, sorry Rod Stewart, Every Picture Does Not Tell A Story. Take a read.
Kaisa Group Holding
is a huge Chinese real estate developer. I have told you before that they will probably go bust and on Monday, they did. I also warned you about the two largest segments in the Chinese economy that are in trouble which could set off a dangerous chain reaction of derivatives which no one can cover. Well, this company can't pay back its loan. They have stated that they can't raise money, but no damage to the market. No chain reaction of debts, loans and bonds. The Hang Seng keeps rising. Maybe my definition of default is not the same as reality. To me it means that your company goes to court and whatever is left is divided on a hierarchy of liens. I guess I'm wrong and I can't interpret a picture.
I should've realized that failure is no longer absolute. You get another chance if you are big enough to influence the central banker and government. Don't believe that? We both get a second opinion with yesterdays default by a transformer company in China called Baoding Tianwei Group Co. It is a unit of China South Industries Group Co. This is a state sponsored entity.
Again, my understanding is that China South would make good on Baoding's bad moves and obligations. Again, I'm wrong. Apparently, Baoding bonds just went from AA+ to "B." To me, if you don't pay back what you owe that is an "F." You know, a failure, a fools and his money to be departed. The transformer company operates like nothing is wrong to the 30 nations where it does business.
China Debt: Public & Private
China's corporate debt is the highest in the world and many companies are borderline at present due to global slowing. In addition, China's government is in debt to $28T according to McKinsey & Co. This works out to 282% of GDP which is even higher than Greece. If things continue to slow with more defaults on the horizon, stimulus which is code for debt will only add to the horrible figures.
There are many examples of private enterprise failures in China like Kaisa, but this is the first state company to be allowed to fail. Some say this is a positive that China feels secure with its economy to let the market forces dictate results. People, that is shills seeking your confidence and your money to keep playing the game like in every other market in the world. As soon as these defaults multiply, responses that allow time and manipulation will awaken. The first in line will probably be Erzhong Group Deyang Heavy Industry Co. This is a steel equipment maker who is behind on its payments. They are still functioning, but default is looming. However, just like bankruptcy that is just a word. Someone will pay a price and dear reader, we cannot afford to be that someone. My suggestion is this: We now have seen a rapid decline in core economic sectors for the world in oil, steel, copper, lumber and mining. These are statement alerts, red flags indicating something is wrong. The first defaults in China present a picture even if it has been photo-chopped because every picture tells a story.
Kaisa Group Holding
is a huge Chinese real estate developer. I have told you before that they will probably go bust and on Monday, they did. I also warned you about the two largest segments in the Chinese economy that are in trouble which could set off a dangerous chain reaction of derivatives which no one can cover. Well, this company can't pay back its loan. They have stated that they can't raise money, but no damage to the market. No chain reaction of debts, loans and bonds. The Hang Seng keeps rising. Maybe my definition of default is not the same as reality. To me it means that your company goes to court and whatever is left is divided on a hierarchy of liens. I guess I'm wrong and I can't interpret a picture.
I should've realized that failure is no longer absolute. You get another chance if you are big enough to influence the central banker and government. Don't believe that? We both get a second opinion with yesterdays default by a transformer company in China called Baoding Tianwei Group Co. It is a unit of China South Industries Group Co. This is a state sponsored entity.
Again, my understanding is that China South would make good on Baoding's bad moves and obligations. Again, I'm wrong. Apparently, Baoding bonds just went from AA+ to "B." To me, if you don't pay back what you owe that is an "F." You know, a failure, a fools and his money to be departed. The transformer company operates like nothing is wrong to the 30 nations where it does business.
China Debt: Public & Private
China's corporate debt is the highest in the world and many companies are borderline at present due to global slowing. In addition, China's government is in debt to $28T according to McKinsey & Co. This works out to 282% of GDP which is even higher than Greece. If things continue to slow with more defaults on the horizon, stimulus which is code for debt will only add to the horrible figures.
There are many examples of private enterprise failures in China like Kaisa, but this is the first state company to be allowed to fail. Some say this is a positive that China feels secure with its economy to let the market forces dictate results. People, that is shills seeking your confidence and your money to keep playing the game like in every other market in the world. As soon as these defaults multiply, responses that allow time and manipulation will awaken. The first in line will probably be Erzhong Group Deyang Heavy Industry Co. This is a steel equipment maker who is behind on its payments. They are still functioning, but default is looming. However, just like bankruptcy that is just a word. Someone will pay a price and dear reader, we cannot afford to be that someone. My suggestion is this: We now have seen a rapid decline in core economic sectors for the world in oil, steel, copper, lumber and mining. These are statement alerts, red flags indicating something is wrong. The first defaults in China present a picture even if it has been photo-chopped because every picture tells a story.
Tuesday, April 14, 2015
Electon 2016: 82 Weeks of Lies
It began on Sunday when the Democratic Party had a candidate. I lost count on how many Republicans are running. The Beat Goes On as the spins of the previous lies are repackage, reshuffled and dealt to us by big money which is backed by old money and increased in size by new money seeking to become old money.
Isn't it amazing that necessity is the mother of invention and with our future clouded everyone running has the formula to set our nation back to greatness and yet, these same pundits will never say that the country is in decline, ailing or off track. None will speak for peace, cutting the military complex and stop offshoring of jobs. None will mention the great building blocks of America: social mobility, freedom of expression and a sound currency based on histories soundest idea, gold.
What they will recite has been tested with think tanks, approved by the financial donors and is politically correct and lawyer proofed. From time-to-time they will mention studies when it benefits a pseudo issue like on Monday, the IMF stated its study on global growth. It stated the US to be 3.1% in 2015. Six months ago the same agency said 3.6%. The US grew at 2.4% in 2014 when many said 4%. They said Japan will grow at 1%. Last year its economy shrank. They said the EU will gain 1.6% when in 2014 it barely registered a positive digit. They said China would grow at 7.4% just six months ago. Now, they say 6.8%.They always say positive growth because they base their knowledge on fiat money which needs new money to cover old money. This printing of debt to cover credit depreciates everyone's standard of living and they wonder why there is an inequality gap. The US hasn't had real growth since the 1980s, but my definition of growth is to create wealth, a living wage and slowly improve your standard of living. Their definition is expanding debt and credit and by that standard we are out of this world or as Ralph Kamden would say, "To the moon, Alice!"
Debt History
It took 231 years to put our nation in debt to the tune of $8 trillion and in the last eight years we doubled that figure. There is something seriously wrong with the mentality of these fiat people and our federal government.
In the late 1980s with the advent of the internet and cell phones, productivity increased many times over. The thinking prior to this output of work was that companies would expand and provide wage increases. Our companies expanded...overseas and no one saw wage increases. Those were some of the lies in that campaign season. The other big lie was with our national deficit. Republicans said they would cut. They did. They exported our best jobs. They increased our debt, but said growth will provide higher revenues and by 1990s, the deficit will be gone. Clinton said it would be gone by 2000. In 2000 Bush said it would be gone by 2012. In 2008 Obama said it would be gone by 2020.
Promises, Promises
Well, in a way, the money is in the bank because they are bigger now than they ever were, but the money is owed to the bank and it never gets paid. It just rolls over into new debt and credit which they call growth. Greece is the poster child. Whatever the figure, we lend to them and they pay us our newly printed money back. The Beat Goes On.
Anyway, I see the US only "growing" by 1.7% at best. However, our debt and credit will fudge those numbers. Here's the indicator.
Present Debt Picture
For the month of March our national debt was $52.9 billion which is larger than the GDP of many countries in the world. This figure is up from $36.9 billion compared to last March. Six months into 2015 the government deficit is up 6.3% from last years $439.5 billion. Yes, tax collections are up and due today, but good old Obamacare cost more than projected which always is the fact. Programs will always cost more than estimated and our economy is always smaller than projected. The CBO who said revenues will close the deficit this year and next because of "growth." Dear reader, credit and debt are not growth and that is why all of the above and future promises by ding-dongs always get it wrong. One reason why I see our debt going to $20 T sooner than expected is because there are over 500,000 baby boomers on line to collect Medicare and Social Security every month for the next fifteen years! I predict some pundit will speak about it. Whatever is suggested or claimed to save money will then be appropriated for the military. No one gives peace a chance. No one will speak for the workers of America, although they will claim they are with their first words, "My fellow Americans..." The lies aren't really beginning. They are mixed to the old tune, The Beat Goes On. If we ever are going to have a real democracy as envisioned by our founding fathers, we need to return to their thinking and the first change should be End the Fed!
Isn't it amazing that necessity is the mother of invention and with our future clouded everyone running has the formula to set our nation back to greatness and yet, these same pundits will never say that the country is in decline, ailing or off track. None will speak for peace, cutting the military complex and stop offshoring of jobs. None will mention the great building blocks of America: social mobility, freedom of expression and a sound currency based on histories soundest idea, gold.
What they will recite has been tested with think tanks, approved by the financial donors and is politically correct and lawyer proofed. From time-to-time they will mention studies when it benefits a pseudo issue like on Monday, the IMF stated its study on global growth. It stated the US to be 3.1% in 2015. Six months ago the same agency said 3.6%. The US grew at 2.4% in 2014 when many said 4%. They said Japan will grow at 1%. Last year its economy shrank. They said the EU will gain 1.6% when in 2014 it barely registered a positive digit. They said China would grow at 7.4% just six months ago. Now, they say 6.8%.They always say positive growth because they base their knowledge on fiat money which needs new money to cover old money. This printing of debt to cover credit depreciates everyone's standard of living and they wonder why there is an inequality gap. The US hasn't had real growth since the 1980s, but my definition of growth is to create wealth, a living wage and slowly improve your standard of living. Their definition is expanding debt and credit and by that standard we are out of this world or as Ralph Kamden would say, "To the moon, Alice!"
Debt History
It took 231 years to put our nation in debt to the tune of $8 trillion and in the last eight years we doubled that figure. There is something seriously wrong with the mentality of these fiat people and our federal government.
In the late 1980s with the advent of the internet and cell phones, productivity increased many times over. The thinking prior to this output of work was that companies would expand and provide wage increases. Our companies expanded...overseas and no one saw wage increases. Those were some of the lies in that campaign season. The other big lie was with our national deficit. Republicans said they would cut. They did. They exported our best jobs. They increased our debt, but said growth will provide higher revenues and by 1990s, the deficit will be gone. Clinton said it would be gone by 2000. In 2000 Bush said it would be gone by 2012. In 2008 Obama said it would be gone by 2020.
Promises, Promises
Well, in a way, the money is in the bank because they are bigger now than they ever were, but the money is owed to the bank and it never gets paid. It just rolls over into new debt and credit which they call growth. Greece is the poster child. Whatever the figure, we lend to them and they pay us our newly printed money back. The Beat Goes On.
Anyway, I see the US only "growing" by 1.7% at best. However, our debt and credit will fudge those numbers. Here's the indicator.
Present Debt Picture
For the month of March our national debt was $52.9 billion which is larger than the GDP of many countries in the world. This figure is up from $36.9 billion compared to last March. Six months into 2015 the government deficit is up 6.3% from last years $439.5 billion. Yes, tax collections are up and due today, but good old Obamacare cost more than projected which always is the fact. Programs will always cost more than estimated and our economy is always smaller than projected. The CBO who said revenues will close the deficit this year and next because of "growth." Dear reader, credit and debt are not growth and that is why all of the above and future promises by ding-dongs always get it wrong. One reason why I see our debt going to $20 T sooner than expected is because there are over 500,000 baby boomers on line to collect Medicare and Social Security every month for the next fifteen years! I predict some pundit will speak about it. Whatever is suggested or claimed to save money will then be appropriated for the military. No one gives peace a chance. No one will speak for the workers of America, although they will claim they are with their first words, "My fellow Americans..." The lies aren't really beginning. They are mixed to the old tune, The Beat Goes On. If we ever are going to have a real democracy as envisioned by our founding fathers, we need to return to their thinking and the first change should be End the Fed!
Wednesday, April 8, 2015
Why Bear Returns: Misc. Factors
This part may fall under the last reasons, but it is very scary all by itself. There are so many intangible aspects as to why an outside event could disrupt the global economy and thus, find its way to the US stock market that I will probably miss a few. This revelation in itself should send up your red flags. The dominoes are all lined up and the recent fracking worries pertaining to earthquakes could topple the first chip.
Greece
Our western civilization begins there and it is the center for the rollover Ponzi schemes of central bankers. Tomorrow, the Greek government must repay a loan to the IMF which will empty its coffers. Then, they will ask the EU for more money just to keep the lights working and the doors open. You rob Paul to pay Peter and look for some white knighted saint to make amends with Paul.
Ukraine
Then, there is the geographic hot-spot in Europe. It is unresolved. From my perspective I see these hard-luck people having their nation split in two like Korea. This is another Berlin in the making.
Yemen
Then, there is this desert fun spot. You see, dear reader, we could keep saying, "Then, there is..." almost all day. This explosive situation will only get worse. It is a civil war just like our north and south entanglement except its Shite v. Sunni. In the US today, there is still lingering resentment by southerners towards northerners. These situations get their feelings compounded when lives are lost. Healing is never easy or quick.
China
Then, there is the largest economy in the world. We all know that the "Red" Chinese government built "ghost" cities and thus, their real estate is a huge bubble that could burst any day. However, their stock market is just as bad, maybe worse. Their tech stocks are valued higher than NASDAQ 5000, back in 2000. The average P/E ratio is 220 to 1. Are these people insane?
China has two parts of its economy set to implode. If it does, the world economy sinks with it. People, it is baseball season and here is your correlation. China has two strikes on its batter. If you play the percentages, this batter will more likely make an out than get a hit.
Then, there is Economic Instability. No, this is not a repeat of troubled hot-spots like Syria and elsewhere. This is governments that face domestic unrest due to economics. Places like Venezuela, Brazil, Argentina, Nigeria, Kenya, Thailand, all over the world. A common suffering is from the recent currency evaluations and volatility. These nations feel inflation, especially with food prices. This could also find its way in the US with the severe drought in California. Have you purchased any eggs lately? Yes, Virginia, the price is high.
Finally, there is a disconnect within the world which is directly caused by the Federal Reserve. The rise in the dollar while at the same time, low interest rates effect bond prices. The Fed engineered this manipulation of interest rates to save the banking industry and at the same time allow our government to continue to run up deficits. Low financing for our national deficit. Now, Japan and the EU are boarding the same ship of fools. The collateral damage will be felt by merging markets, but they are not liking it. The US could feel a severe backlash if all these nations form trading alliances to circumvent the dollar. If that happens, we will suffer, big time and it will all be the Feds fault which is why I say, End the Fed!
Greece
Our western civilization begins there and it is the center for the rollover Ponzi schemes of central bankers. Tomorrow, the Greek government must repay a loan to the IMF which will empty its coffers. Then, they will ask the EU for more money just to keep the lights working and the doors open. You rob Paul to pay Peter and look for some white knighted saint to make amends with Paul.
Ukraine
Then, there is the geographic hot-spot in Europe. It is unresolved. From my perspective I see these hard-luck people having their nation split in two like Korea. This is another Berlin in the making.
Yemen
Then, there is this desert fun spot. You see, dear reader, we could keep saying, "Then, there is..." almost all day. This explosive situation will only get worse. It is a civil war just like our north and south entanglement except its Shite v. Sunni. In the US today, there is still lingering resentment by southerners towards northerners. These situations get their feelings compounded when lives are lost. Healing is never easy or quick.
China
Then, there is the largest economy in the world. We all know that the "Red" Chinese government built "ghost" cities and thus, their real estate is a huge bubble that could burst any day. However, their stock market is just as bad, maybe worse. Their tech stocks are valued higher than NASDAQ 5000, back in 2000. The average P/E ratio is 220 to 1. Are these people insane?
China has two parts of its economy set to implode. If it does, the world economy sinks with it. People, it is baseball season and here is your correlation. China has two strikes on its batter. If you play the percentages, this batter will more likely make an out than get a hit.
Then, there is Economic Instability. No, this is not a repeat of troubled hot-spots like Syria and elsewhere. This is governments that face domestic unrest due to economics. Places like Venezuela, Brazil, Argentina, Nigeria, Kenya, Thailand, all over the world. A common suffering is from the recent currency evaluations and volatility. These nations feel inflation, especially with food prices. This could also find its way in the US with the severe drought in California. Have you purchased any eggs lately? Yes, Virginia, the price is high.
Finally, there is a disconnect within the world which is directly caused by the Federal Reserve. The rise in the dollar while at the same time, low interest rates effect bond prices. The Fed engineered this manipulation of interest rates to save the banking industry and at the same time allow our government to continue to run up deficits. Low financing for our national deficit. Now, Japan and the EU are boarding the same ship of fools. The collateral damage will be felt by merging markets, but they are not liking it. The US could feel a severe backlash if all these nations form trading alliances to circumvent the dollar. If that happens, we will suffer, big time and it will all be the Feds fault which is why I say, End the Fed!
Wednesday, April 1, 2015
Reason #4: Why Bear = Earnings and Evaluation
The revised GDP came out last week. It's official! We grew at 2.2% in the forth quarter of 2014. Funny thing about that was back in January 2014, the pundits for the government stated GDP would be 3.1%. Not only the "yes man" but the IMF said it would be 3.5%. The EU agreed with that figure and the shills, not to be outbid, called for 4% plus!
Dear reader, we haven't had 4% in twenty years! Reality is that our GDP has only averaged 1.2% for the past eight years. In fact, I can and will make a case that our present stock market record highs is nothing more than funny money and manipulation. Doubt that? Read on!
Debt & Credit
Just prior to the financial crisis in 2007, world debt which is only exercised credit, was at $142 trillion. Today, it is $199 trillion. All we did was rollover our debt to the tune of 42% and this is the only answer central banks offer. The Swizz were smart to unpeg the euro because it has a long way to fall. Of course, Greece holds the poster on rollover debt as they are seeking to do it again for the umpteenth time. It gets worse.
Related
Consider this tidbit. Congressman Paul Kanjorski stated that people withdrew $550b in less than two hours back during the first moments of the financial crisis of 2008. In another 24 hours every bank in the nation would have been bankrupt if the Fed didn't give them money. The first and only purpose that the Fed was created was due to liquidity and this shows it failed. No, you say?! They provided money to cover the problem. I see it different. If people demanded their money instead of credit like with cards, checking and now, with their phones, there wasn't enough money in circulation to cover our needs or demands. We do have a liquidity problem.
Slight of Hand
Now, you ask what does this have to do with earnings and evaluation? Glad you asked.
Companies in the S & P 500 spent $2 trillion on their own stock since 2001. When there is less stock, the company can meet estimates with less earnings which keeps the evaluation high. This gives the stock market a floor. The present market rally is correlated to this buyback money and it equals the S & P earnings since 2009. Many times these same companies borrowed money to use to buy their own stock and or, offer dividends. When you borrow to buy stock even your own, that is MANIA!
Consider this: Since the market peak on 6 March more companies are making a 52 week low than a 52 week high. In addition, the fourth quarter of 2014 saw earnings of only 1.6% on average and I predict that the first quarter of 2015 to be negative. Now, the present P/E is 18.2. What will it be with negative earnings?
NASDAQ
all the pundits talk about Nas...5000. They refer to the index of stocks back in 2000 which was the last time that it was over the 5,000 mark. They say today it is different. They forget to mention that they all had buy ratings just before the crash. Nevertheless, they show the present earnings and evaluation which on first look appear O.K. However, many of the companies in 2000 are no longer in existence. Money gone forever! The prices of the stocks will never get your money back. Do you think Yahoo will be over $300 again? How about Cisco at $75? I could go on and on. So, as you see dear reader, a closer look reveals it is not the same and there is one bubble waiting to pop. The bio segment of NASDAQ, labeled $NBI or Bio-tech has a P/E that is over110. It has tripled in price from November 2013 at 1329 to the market peak on 6 March to 3902. It is not due to earnings or revenues, but hype and speculation. Many of enclosed companies won't even exist in a few years. Do you know what your blood pressure will read when your favorite bio company is delisted? 200 plus!
Bottom Line:
The Fed kept rates so low, companies went into debt to buyback shares and offer dividends because their stock options will make them rich and you will be left holding some paper that says you have so many shares of the billion that they printed. How much is a delisted stock worth? If the Fed didn't entice CEOs with cheap money, maybe they would have actually did some R & D work to develop their company which is another reason why I say, End the Fed!
Dear reader, we haven't had 4% in twenty years! Reality is that our GDP has only averaged 1.2% for the past eight years. In fact, I can and will make a case that our present stock market record highs is nothing more than funny money and manipulation. Doubt that? Read on!
Debt & Credit
Just prior to the financial crisis in 2007, world debt which is only exercised credit, was at $142 trillion. Today, it is $199 trillion. All we did was rollover our debt to the tune of 42% and this is the only answer central banks offer. The Swizz were smart to unpeg the euro because it has a long way to fall. Of course, Greece holds the poster on rollover debt as they are seeking to do it again for the umpteenth time. It gets worse.
Related
Consider this tidbit. Congressman Paul Kanjorski stated that people withdrew $550b in less than two hours back during the first moments of the financial crisis of 2008. In another 24 hours every bank in the nation would have been bankrupt if the Fed didn't give them money. The first and only purpose that the Fed was created was due to liquidity and this shows it failed. No, you say?! They provided money to cover the problem. I see it different. If people demanded their money instead of credit like with cards, checking and now, with their phones, there wasn't enough money in circulation to cover our needs or demands. We do have a liquidity problem.
Slight of Hand
Now, you ask what does this have to do with earnings and evaluation? Glad you asked.
Companies in the S & P 500 spent $2 trillion on their own stock since 2001. When there is less stock, the company can meet estimates with less earnings which keeps the evaluation high. This gives the stock market a floor. The present market rally is correlated to this buyback money and it equals the S & P earnings since 2009. Many times these same companies borrowed money to use to buy their own stock and or, offer dividends. When you borrow to buy stock even your own, that is MANIA!
Consider this: Since the market peak on 6 March more companies are making a 52 week low than a 52 week high. In addition, the fourth quarter of 2014 saw earnings of only 1.6% on average and I predict that the first quarter of 2015 to be negative. Now, the present P/E is 18.2. What will it be with negative earnings?
NASDAQ
all the pundits talk about Nas...5000. They refer to the index of stocks back in 2000 which was the last time that it was over the 5,000 mark. They say today it is different. They forget to mention that they all had buy ratings just before the crash. Nevertheless, they show the present earnings and evaluation which on first look appear O.K. However, many of the companies in 2000 are no longer in existence. Money gone forever! The prices of the stocks will never get your money back. Do you think Yahoo will be over $300 again? How about Cisco at $75? I could go on and on. So, as you see dear reader, a closer look reveals it is not the same and there is one bubble waiting to pop. The bio segment of NASDAQ, labeled $NBI or Bio-tech has a P/E that is over110. It has tripled in price from November 2013 at 1329 to the market peak on 6 March to 3902. It is not due to earnings or revenues, but hype and speculation. Many of enclosed companies won't even exist in a few years. Do you know what your blood pressure will read when your favorite bio company is delisted? 200 plus!
Bottom Line:
The Fed kept rates so low, companies went into debt to buyback shares and offer dividends because their stock options will make them rich and you will be left holding some paper that says you have so many shares of the billion that they printed. How much is a delisted stock worth? If the Fed didn't entice CEOs with cheap money, maybe they would have actually did some R & D work to develop their company which is another reason why I say, End the Fed!
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