Written by Jeff Nielson Thursday, 27 March 2014 13:58
In our current paradigm of Hostage Markets in the precious metals sector, which has existed in this extreme form for three years now; appearances can be deceiving. By all appearances; it is the One Bank which is in complete-and-absolute control of our fraud-ridden markets, and precious metals investors who are the helpless hostages. But in effective terms, is that really the case?
In fact; it is the One Bank itself that we see with less and less latitude for action, which is a qualitative basis for the definition of a “hostage”. As we see prices “trapped” within an absurdly limited trading range, we begin to see that this paradigm of Hostage Markets is not a strategy of choice on the part of the One Bank – but rather a strategy of lack of choice.
Ever since the One Bank’s minions in our central banks squandered most of the West’s bullion, flooding bullion markets with ridiculously excessive quantities of bullion year after year, simply because they could do so; the final chapter in this game of bullion-manipulation has already been written. The “story” ends with either an (official) bullion-default, or an (unofficial) decoupling – between the banksters’s paper-fraud markets and the real/legitimate bullion market.
This is because even in its least-destructive manifestation, this permanent price-suppression in bullion markets has (inevitably) created a permanent, structural deficit in supply. Regular readers are fully familiar with the dynamics here, summed-up nicely in the title of a previous commentary: “shorting consumes, investing conserves.”
The supply/demand mechanics are simple, and the “chocolate bar” market makes a good hypothetical example. If we were to (under) price chocolate bars at 10 cents apiece, we know what would happen – and in a relatively short amount of time. Store shelves around the world would quickly be stripped bare, as people over-consumed this radically under-priced good.
Simultaneously, chocolate-bar manufacturers would stop making chocolate bars (and go bankrupt) because they couldn’t manage to ‘break even’ selling their product at such an artificially low price. There would be a “default” in the global chocolate-bar market, as buyers tried to buy more chocolate bars, but there was no more supply. This hypothetical example applies to any/all markets for physical goods, because the cost-of-production is significantly greater than zero.
It is long investment (in any such “physical” market) which pushes prices higher – in a healthy manner – until supply exceeds demand, at which point prices level off in equilibrium. But with the permanent price-perversion in our precious metals markets, such an equilibrium can never/will never be achieved; a permanent supply-deficit is the only, possible outcome.
This has reduced the One Bank’s overall strategy in bullion markets to a simple one: to delay losing the game as long as possible. Once we (correctly) identify the only, rational strategy here, it becomes equally easy to determine how successfully the One Bank is playing the game: the size of the supply-deficit. A small supply-deficit means the banksters are playing their game of price-manipulation well; a large supply-deficit means that these psychopaths are executing their strategy in a short-sighted, and ultimately suicidal manner.
Ever since the One Bank launched its first scorched-earth assault on bullion markets (one aspect of the contrived, Crash of ’08); there has been only one relatively short interval where the banksters have been playing their game of price-manipulation well, meaning that the supply-deficit was relatively small. This began in the latter half of 2010, after two, solid years of explosively higher prices.
Written by Jeff Nielson Sunday, 23 March 2014 13:46
Regular readers are familiar with the plight of the massive numbers of unemployed in Western nations, in general, and in the United States, in particular. There are approximately 100 million unemployed people across the Western world, roughly half of those inside the United States. Worse still, over 90% of these people are permanently unemployed.
This is the worst unemployment ever experienced in the history of our societies. Proof comes in the numbers, the real numbers and (ironically) the best data available is U.S. data. There are 144 million people in the U.S. with jobs, out of a population of 317 million. That translates into 46% of Americans with jobs, and 54% without jobs – a working minority.
Of course not all Americans (or all people in any society) are employable. Some are too old, or too young, or otherwise physically/mentally unfit for employment. Fortunately we also have data on employable Americans, the “civilian participation rate”. The chart below shows how many employable Americans are actually working.
Currently, only a little over 63% of employable Americans have jobs, and that rate continues to fall like a rock, throughout the mythical “U.S. recovery”. Regular readers are also aware that the standard of living in the U.S. (and across the Western world) has fallen by more than 50% over the past 40 years. In real dollars; the workers of 2014 are paid Great Depression wages.
The Middle Class are now the Working Poor (those who still have jobs). Where a single wage-earner used to be able to support a family (comfortably); it now requires two wage-earners. This is why before our governments destroyed our economies we saw the civilian participation rate going rapidly higher in the U.S. (and throughout the West).
To get most of the Poor out of poverty in the United States, in 2014 (at Great Depression wages), the U.S. would require a civilian participation rate of at least 80%, and likely closer to 90%. There are about 230 million employable Americans, meaning there are 86 million employable Americans without jobs.
If we assume an ideal/necessary civilian participation of 80%, this translates into 40 million unemployed Americans who need/want jobs today. If we assume a rate of 90%, that means 63 million unemployed Americans who need jobs – and (as the chart above proves) that number increases every month.
If we assume there are 40 million unemployed Americans needing jobs, that translates into an unemployment rate of over 18%. If we assume 60 million unemployed, that puts the U.S. unemployment rate well above 25%. Yet the liars in the Corporate media, the U.S. government, and the Federal Reserve pretend that the U.S. “unemployment rate” is only 6.5%, that ‘only’ about 15 million Americans need jobs. Janet Yellen, the Fed’s new Chief Liar boasted last week about: “cumulative progress toward maximum employment”.