At 64.2%, the labor force participation rate (as a percentage of the total civilian noninstitutional population) is now at a fresh 26 year low, the lowest since March 1984, and is the only reason why the unemployment rate dropped to 9% (labor force declined from 153,690 to 153,186). Those not in the Labor Force has increased from 83.9 million to 86.2 million, or 2.2 million in one year! As for the numerator in the fraction, the number of unemployed, it has plunged from 15 million to 13.9 million in two months! The only reason for this is due to the increasing disenchantment of those who completely fall off the BLS rolls and no longer even try to look for a job. Lastly, we won't even show what the labor force is as a percentage of total population. It is a vertical plunge.
Monday, February 7, 2011
Maybe this might help the dollar stop losing its value and the people can retain its purchasing power because the government can not borrow money.That is the best case scenario The average American household does not have the luxury of raising its debt limit with the credit card companies and with the bank at will with a family vote at the dinner table to maintain a unaffordable lifestyle,They do not have the option either making photo copies of hundred dollar bills either to spend to their hearts content. They have to cut back on expenses and live within their means. To not get into more debt is the most rational thing to do.
The Bush and Obama administrations has expanded the size of government to a bloated bureaucracy that neither produces ,nor serves any useful purpose to the people. Not raising the debt ceiling and start to put the brakes on borrowing might force government to do what the American people always did for years. Make sacrifices to keep the basic functions of government operational in its proper scope within the constitution.I do not see that happening.They will fire up the printing presses at warp speed. Some people in Congress who derive their power from spending money we do not have are the ones preaching gloom and doom to the economy if the debt ceiling is not raised. The will say the government can not function without borrowing and spending to keep this over sized government running.There is something more they fear.
Maybe not raising the debt ceiling.We might see what has happened when the Old Soviet Union Collapsed if the government can not borrow anymore and can not print its way to fund itself anymore without destroying the dollar to the point it can not pay its own workers anymore or the paycheck is worthless nobody will show up for work for useless paper money. The Federal Government has ran out of options. It can not borrow anymore and can not print paper money anymore to sustain itself. Now I see a handful states like Virginia are looking into alternate currencies to stay functional when the dollar is worthless because they see the writing on the wall.
What really has the big government politicians really scared is that there will be no doom and gloom that will happen as they predicted. If the government shuts down because it can not borrow anymore because the debt ceiling is not raised. They can not create money out of thin air with the help of the Federal Reserve Bank to sustain its bloated bureaucracy with a worthless currency. States are making moves to have their own currency in place when the dollar becomes no more. Many states will be set free from the private bankers debt based currency if they have their own money system in place. States like Texas and Montana might declare its independence and succeed being sovereign republics.A chain reaction could take place were states will regain its own sovereignty outside their system is what has them scared. I believe this is there biggest fear because not borrowing to spend is a threat to their power.
– 2/4/2011Tense and terrible times inevitably summon an odd coupling of two very different and difficult human conditions; honesty, and brutality. Certain painful truths are revealed, and often, a palpable fury erupts. Being that times today are particularly tense, and on the verge of being spectacularly terrible, perhaps we should embrace both conditions in a constructive manner, and become brutally honest with ourselves. This begins by admitting to that which most ails us. It begins by admitting how far we have fallen…
Our economy, our culture, our entire world, is built upon debt. No one ever asked us if that’s how we wanted it, it is simply how the system was designed when we came into it. Many of us have lived our entire lives under the assumption that debt is a necessary function of daily commerce and a valuable driver of successful society. Most households in America operate at a steep loss, trapped in constantly building cycles of liability and interest. There are even widely held schools of economic thought that are centered completely on the production and utilization of nothing but debt. Only recently have many people begun to ask themselves what the tangible benefits are (if any) in being dependent on debt based finance.
After careful examination, it becomes evident that debt does not fuel economy, it suffocates it. It does not nurture growth, it stunts and poisons it. Extreme debt is not a fundamental organ in a body of commerce; it is an aberration, a spreading cancer which disrupts the circulation of healthy trade. Debt is, in large part, unnecessary.
Of course, debt can be very useful if you are the controller or determining overseer of a system, especially if you wish to centralize and maintain power over that system. The tactical wielding of debt has been used by elites for centuries as a means to imprison the masses, or to create an atmosphere of endless dependency. Let’s take a look at what debt really is, and how it is being used against the average American today…
The Charles Dickens classic ‘Little Dorrit’ is commonly misinterpreted as a “love story”, however, the primary character in the book is not Little Dorrit, or the kindly Arthur Clennam, but the debt system of Britain itself, and its effects on every social class from the street beggar to the elitist socialite. Dickens despised the idea of debt and debtors prisons, being that his father was thrown into one for a good portion of his life, forcing young Charles to work just to support his parents. Dickens understood well the evil intent behind the debt system, and railed against it often in his writings.
One figure in ‘Little Dorrit’ which fascinated me was the character of Mr. Merdle, a national banking superstar who dominates the investment world with the help of British treasury officials and various political deviants. Merdle is referred to by merchant circles as “the man of the age”, a financial marvel who seems to make fortunes in every endeavor he touches. Little does anyone realize that Merdle is a fraud, a Ponzi scheme artist who takes money from unwary speculators and sinks it into increasingly more tenuous investments. In order to continue hiding the fact that all his financial ventures are ending in ruin, he lures more and more depositors to pay off previous debts. The problem is that Merdle is creating debt to chase debt. Eventually, his insolvency, and that of all those who trusted him, will catch up and overtake the lie he has carefully projected. All economic instability is invariably revealed, no matter how expertly it is hidden.
Mr. Merdle, in my mind, is an almost perfect literary representation of today’s private Federal Reserve and the global banking syndicates of JP Morgan, Goldman Sachs, Citigroup, etc. The Federal Reserve, with the help of politicians on both sides of the aisle, created a series of illusory incentives (through interest rate cuts) which allowed banks to begin lending almost unlimited fiat at rock bottom prices. America was awash in credit, to the point that it was nearly impossible for the average person to avoid the temptation of borrowing. What we didn’t understand then, but are beginning to grasp now, is that credit derived from fiat is not “capital”, it is NOT wealth. Credit is the creation of an obligation, to be paid at a later date, if it is paid at all, and because there are no rules to tie the debt to any legitimate collateral (at least for banks), there is nothing to back the obligation if it falters. Therefore, fiat induced credit is not the creation of wealth (as Keynesians seem to believe), but the destruction of wealth!
Because of its lack of tangibility, debt can be packaged and repackaged into whatever form banks like. Derivatives are a perfect example of the phantom nature of debt; securities which have no real value whatsoever yet are rated and traded as if they are a solid commodity. This brand of commerce is, at its very root, a kind of fiscal time bomb. Just as in the literary world of ‘Little Dorrit’, the Ponzi scheme in our very literal world had to reach a tipping point, and in 2008, it did.
One glaring difference between our troubles and those of Dickens’ fiction is that Merdle actually feels guilt over what he has done (or he at least fears the justice that will be dealt him), causing him to commit suicide towards the end of the novel. In the real world, the Merdles of our era appear fully content to watch this country crumble due to their intrigues, and rarely suffer any consequences for what they pursue. In fact, the modern banking elite are more liable to revel in the searing shockwave of a credit detonation, rather than feel any “remorse”. The point is, Dickens saw clearly over 150 years ago what many Americans today still do not; debt is an abstract idea, an absurd game which confuses and ensnares innocent people. Debt based systems con the citizenry into trading away their tangible wealth and labor for the promise of future settlements that will never come. Debt serves only to weaken the masses, and empower creditors.
The Consequences Of Debt
How has debt based economics served us so far?
The credit card debt of the average American household ranges from $8000 to $15,000. Total household debt including mortgage and home equity loans has hit an average of 136% of annual household income:
Approximately 80% of mortgage loans issued to subprime borrowers over the past decade were Adjustable Rate Mortgages (ARM), meaning 80% of mortgages in the U.S. have reset or are ready to reset at much higher interest rates. There were approximately 1.4 million bankruptcy filings in 2009, and 1.5 million in 2010. One in every 45 homes in America received a foreclosure filing in 2010:
Keep in mind that in 2005, new government regulations were implemented making filing for bankruptcy much more difficult. In 2006, filings collapsed. Now, despite stringent obstacles, filings are up again over 100%.
The “official” national debt now stands at over $14 trillion, which is around 100% of U.S. GDP (with entitlement programs like social security included, this number is probably closer to 400% of GDP) . The 100% mark is often cited as the breaking point for most countries struggling to sustain liabilities. Greece’s national debt stood at 108% – 113% of GDP when it collapsed into austerity. From 2004, to 2010 (a span of only six years) our national debt has doubled. To put this in perspective, it took the U.S. over 200 years to reach its first trillion dollars of debt. Now, we are looking at the accumulation of at least a trillion every year. This is unsustainable.
The much talked about debt ceiling has been raised six times in the past three years. This frequency is unprecedented. International ratings agencies are now openly suggesting an end to America’s AAA credit rating:
A credit rating downgrade would be devastating to what little foreign interest is left in the U.S. Treasury bond investment.
On the local front, cities and states are on the verge of folding due to the evaporation of municipal bond markets. Cities depend greatly on two sources of revenue in order to continue operations; property taxes, and municipal investment. Property taxes, obviously, are disappearing as property values continue to spiral downwards. This leaves only municipals, which have also unfortunately fallen off the map:
Wall Street analyst, Meredith Witney, recently stated in an interview with 60 Minutes that she believed 50 to 100 American cities would default in the midst of a municipal crisis in 2011. She was promptly lambasted by the rest of the MSM for her prediction. In my opinion, she was rather minimalist in her estimates, especially if the Federal Reserve does not commit to another round of quantitative easing (QE3) for the states (Bernanke denies this policy would be enacted by the Fed, though, which means there is a good chance it will be).
To summarize, the U.S. is swimming in debt. Absolutely nothing has been changed for the better in terms of wealth destruction and liabilities since the credit crisis began, and the situation only looks more precarious with each passing quarter.
Where Is The Debt Roller Coaster Taking Us?
What is the most likely outcome of the conditions described above? The vital factor will be the continued Federal Reserve policy of fiat bailouts as a “counterbalance” to the evolving debt crisis.
As is clearly explored in the Dickens novel we discussed earlier, staving off the effects of debt by creating more debt is a temporary solution that only leads to greater calamity down the road. Anyone who believes that fiat inflation actually “cancels out” debt instability is going to find themselves sorely disappointed. At bottom, government created stimulus is not a solution to corporate engineered debt burdens, but a reallocation of debt away from banks and into the laps of the American taxpayer. The Federal Reserve and our own Treasury have not paid off anything. They merely shifted the responsibility of payment away from the banks that created the problem, and handed that responsibility to us. On top of this, they have also set the dollar up for a crushing blow of devaluation. Here is where the prison bars enclose…
If our historic debt is not being diminished, but only moved around while it expands, then this means that eventually our credit worthiness will come into question. In fact, it already has. Foreign investment in long term Treasuries has dwindled. Our own central bank is now the largest holder of U.S. debt, surpassing even China (Note: this news has so far been ignored by almost all mainstream outlets):
So, the question of debt default turns from theoretical to quite imperative. If the Federal Reserve continues buying our debt with fiat, it means that the effects of the debt will only be delayed, the dollar will be dropped as the world reserve currency, and hyperinflation is a certainty. If they do not continue buying, then our government defaults, the country’s financial infrastructure ceases to exist, the dollar loses its world reserve status, and hyperinflation is a certainty. The banking elites haven’t just erected a prison, they’ve tossed us in Alcatraz!
The battle over yet another increase of the debt ceiling has obscured the fact that the debt has already done all the damage it needs to do. Freezing the ceiling in place becomes a battle of principle, and an important one, but it would in no way stop the dysfunction and chaos to come. At best, it might shorten the duration of the disaster by a few years. The important thing to remember is that government intervention will only incur greater loss. There is no easy way out, no magic shortcut, no last minute brilliant idea that will wrap up this mess. Years of hard work, determination, honesty, and sacrifice are ahead of us.
Inflation will be the buzzword of 2011. Endless debt facilitates endless Keynesian liquidity. Expect to see commodities double once again this year.
Household debt will probably level off through 2011, as more Americans abandon their credit habits and make more concerted efforts to save. In 2009, Visa lost 11% of its credit use, while MasterCard lost 22%. Over 8 million consumers have stopped using credit cards altogether since the end of 2009:
Bank lending is still tight as creditors raise the requirements necessary to receive FHA (Federal Housing Administration) mortgages:
Will credit use and debt based consumption ever return to levels similar to 2006? Not a chance. One might predict then that savings will rise dramatically as credit use falls, but this too is unlikely. Why? Because over the next year Americans will be spending far more on essential goods due to inflation than they ever have before. Whatever savings they would have accrued will be eaten up by the relentless spike in commodity prices. The term used for the combination of chronic debt, low job growth, and burgeoning inflation, is “stagflation”. I honestly can’t think of a worse situation than being subject to exploding costs in light of a dilapidated standard of living. As Dickens points out plainly in ‘Little Dorrit’, how can a man be expected to settle his obligations when he is imprisoned for them?
Breaking The Cycle In The Midst Of Global Strife
Why after thirty years under the despotic rule of the Hosni Mubarak regime did the Egyptian people suddenly decide to revolt? Why now? The MSM will field a number of political tales, but the key to most popular uprisings, especially in the Middle East, has been the lack of necessities. The last time Egypt saw an uprising of this magnitude was during the Bread Riots of 1977, when the IMF terminated state subsidies of basic foodstuffs. Is it any wonder that turmoil has developed so quickly in the region as grain prices double? This is the devastating power of debt, and the so called “solutions” which merely perpetuate debt.
Tunisia, Egypt, and Yemen, are only the beginning. The sting of inflation will be unbearable as austerity measures take hold in Europe, and the potential for riots in Greece, Spain, Portugal, and Italy looms large. The most volatile environment on the planet to date, however, is the United States, which, as we have shown in previous articles, is being dismantled deliberately and viciously in preparation for IMF regulation and centralization. Today, the IMF is stalking Egypt, ready to pounce as the nation goes mad. Tomorrow, it will be us. I will be very surprised if we are not hearing about IMF intervention in the U.S. economy and the dollar by the end of this year, offering more debt, and more unaccountable governance.
The secret to breaking the circle of debt is to adopt a policy of decentralization, and self sufficiency. To take back control of our local commerce and to establish micro-economies with self contained methods of trade. Debt must be removed from the equation altogether, and systems protected by flexibility and redundancy must be applied. Savings and meaningful production would have to take the place of endless spending and outsourcing. The claustrophobic nurse-maid philosophies of globalism would have to be cast aside and replaced with goals of independence and self reliance. By cutting our dependency on the corrupt establishment, we sever its ability to feed off of us. By building a better system, we make the faulty one obsolete. Whether or not we throw off the trappings of the debt machine is entirely up to us.
Two very important steps are required; the realization that debt is not the only way, and, the realization that debt is the worst way. Prosperity is not achieved at the expense of the future. The society that finally takes this fact to heart will accomplish incredible things indeed…
You can contact Giordano Bruno at: email@example.com
SPECIAL NOTE TO NEITHERCORP READERS: Our Alternative Market Project which is being developed in tandem with Oathkeepers will be officially announced in the next two weeks. I also have been invited to speak at the very exciting ‘Save America Convention’ in Tampa, Florida in March. Keep your eyes out for our announcement, and an article on the details of the convention which should be published shortly.
Do not read this column if you are among the one out of seven Americans living on food stamps or among the one out of six living in poverty. Do not read if you are among the more than 14.5 million unemployed.
If you still have a TV, do not turn it on. Today is Super Bowl Sunday. Those living in the other American economy are going to gleefully romp in a nationwide gala of conspicuous consumption.
Packers? What's left to pack? Steelers? Shouldn't they sell their name to Asia?
Two teams representing otherwise forgotten rust-belt cities will drive the most frivolous spending boom since Christmas.
The National Retail Federation says the average consumer will spend $59.33 on game-related merchandise, clothing and snacks, up from $52.63 last year.
This puts total consumer spending at $10.1 billion for one game.
"Consumers hoping to wow their friends and family with a new HD TV should act fast," said Mike Gatti of the Retail Advertising and Marketing Association. An estimated 4.5 million people will buy new TVs, versus 3.6 million last year, the association's survey showed.
As much as TVs cost, Super Bowl tickets cost more. A ticket averaged nearly $5,000 on the resale market last week. Some were priced at more than $277,000.
The average food-stamp recipient receives $133 a month. Yet some of us can blow enough loot to buy a house, a car and a big-screen TV on just one ticket.
Do you know what it costs to park? A mile from Cowboys Stadium in Arlington, Texas, $55. Across the street, more than $1,000, according to Parkwhiz.com. The website listed one spot at a nearby Taco Bell for $330.
The stadium -- just across from a Wal-Mart -- cost $1.2 billion to build. Taxpayers put up $325 million of that war chest. Many don't even like football, but the game arguably benefits them by keeping dangerous people off the streets.
More than 100,000 will attend. They'll spend an estimated $5 million on concessions and memorabilia. Another 110 million or so will watch at home. To reach all these people, many of whom have no respect for money, advertisers spend $3 million for 30-second spots.
More than one-quarter of Americans surveyed say they watch the game for the commercials, according to the retail-association survey. That's more than the 19.5% who say they enjoy getting together with friends. Who needs friends when you can afford stuff?
Rapper P. Diddy, born in a public housing project in Harlem, will be hawking Mercedes-Benz. General Motors, still partially owned by the U.S. government after its bankruptcy, is back after a two-year hiatus with five spots. It'll give a Camaro to the MVP of this festival of shameless avarice.
Kim "Keeping Up With" Kardashian will pitch Skechers shoes. And E*Trade will be back for the fourth time with its talking-baby spokesman.
Millions are still reeling from the big bust, and E*Trade has a baby on TV, talking smack as he trades his stock portfolio. A little baby, cynically nonchalant about his highly liquid net worth.
Hey, I warned you not to read this.
Bil’in Marches in Solidarity with the People of Egypt
Posted by Joseph Dana
Dozens of Palestinian, International and Israeli activists march under the banner of solidarity with the Egyptian people. The demonstration was attacked quickly with the same American made tear gas which has been used for the past ten days against the protests in Egypt.
The weekly march began after Friday prayers in the center of the village of Bil’in and featured residents together with dozens of Palestinian, international and Israeli activists. They marched under the banner of solidarity with the Egyptian people. The protesters called for national unity, an end to the occupation, the removal of the separation barrier and the release of all political prisoners. Protesters also carried Palestinian and Egyptian flags to the area of the barrier.
Upon the arrival at the construction site of the barrier, the army fired dozens of tear gas and sound grenades towards the participants in an attempt to disperse them. Dozens of demonstrators suffered from tear gas inhalation as ambulance crews were forced to retreat from the protest area because of the amount of tear gas.
The popular committee of Bil’in released the following points of solidarity with the people of Egypt:
We salute the Egyptian and Tunisian people and reiterate the nation’s right to live in freedom and pride. We call for national unity and the preservation of civil peace, and to protect the home front and tolerance among all segments of society. We hope that the rebelling Arab people make it their priority to demand from any government or leadership to come to sever their ties with the Israeli occupation and abandon the Egyptian – Israeli peace treaty. We believe it would be better to direct the masses towards the Israeli embassies and interests as an alternative to targeting the capabilities of the Egyptian people and the headquarters of its security.
We call on all free nations in the world, especially Europe and the U.S., to get out in massive demonstrations on 11 \ 2 \ 2011 to confirm the right of peoples to live in freedom and dignity — a day of anger against the Israeli occupation of Arab land, and as a beginning of the Global Intifada.
~~~~~~~~~~~~~~~~~PHOTO ESSAY ~~ THANK YOU AMERICA! (sic)Photos © by Bud Korotzer~~~~~~~~~~~~~~~
Five Cent Revolution
Do you remember when the Bush was in office and all of the leftist, progressives shouted from every mountain top that he was a fear monger--claiming there was a terrorist behind every tree? If not, let me remind you:
Of course, they were right. The Bush administration certainly used fear mongering to push an agenda. The problem was not with the claim, but with the people making it. Every time the liberals accuse republicans or conservatives of being a fear mongers, they are also making a silent assertion that their guys--the liberals, socialists, progressives, and democrats--aren't. Nonsense. Career politicians, from all political persuasions, are professional motivators. The only way any politician ever gets elected, shapes public opinion, or pushes an agenda is by motivating the people who listen to them. And, like it or not, fear is a hell of a motivator.
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According to analyses by Middle East experts, Mubarak has taken much of the gains overseas and deposited much of his wealth in secret bank accounts in British and Swiss banks, The Guardian reported on Friday.
Observers say the Mubaraks have also invested in real estate in London, New York, Los Angeles and along expensive tracts of the Red Sea coast.
Thirty years in presidential office has helped Mubarak have access to investment deals that have generated hundreds of millions of pounds in profits.
Amaney Jamal, a political science professor at Princeton University, said the estimate of $40bn-70bn was comparable with the vast wealth of leaders in other Persian Gulf countries.
"The business ventures from his military and government service accumulated to his personal wealth," she said.
"There was a lot of corruption in this regime and stifling of public resources for personal gain," she added.
"This is the pattern of other Middle Eastern dictators so their wealth will not be taken during a transition. These leaders plan on this," the professor opined.
Mubarak's sons Gamal and Alaa are said to be billionaires as well, with posh homes in London. Experts also say Mubarak's wife's fortune could be as much as five billion dollars.
Egyptians seek Mubarak's resignation from the top post after 13 days of revolution that has already claimed over 300 lives and thousands of injuries, according to the United Nations.On Saturday, Egyptian state television announced that Mubarak has resigned as chairman of the ruling National Democratic Party.
Senior members of Mubarak's party also resigned on Saturday, but demonstrators staging days of revolution rejected the shuffle as a cosmetic move.