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The U.S. Greater Depression Exposed, Part II

US Commentary

Part I of this series laid out the three conclusions which would be established:

1) The U.S. economy is currently in the midst of a Greater Depression; the worst sustained economic collapse in the history of that nation.

2) Given this collapse; the U.S. does not have one of the world’s stronger economies, but rather it has the weakest economy of any/all major nations.

3) The downward spiral in this Greater Depression is, in fact, a terminal collapse. The final result of this economic devolution can only mean the transformation of the United States into essentially a “Third Word nation”.

The prequel to this provided part of the basis for the first conclusion. It began by showing how one could pretend that an economy which was actually shrinking rapidly was instead “growing” rapidly, by doing nothing more than falsifying one number: the rate of inflation.

This was followed by unequivocal evidence in the form of two pairs of charts. The first pair of charts showed how the U.S. government lies-with-numbers in the realm of employment. One chart, containing “adjusted” (i.e. falsified) data, showed the U.S. economy (supposedly) creating new jobs, month after month, year after year.

That first chart was/is the only data which the Corporate media ever shows to the general public. It was then followed by a second a chart, which the general public never sees. This second chart contains unadjusted data (i.e. data which cannot be falsified), which showed conclusively that the U.S. has been losing jobs, for virtually every month of the supposed recovery.

Similarly; the second pair of charts separated fact-from-fiction in the U.S. housing sector. While the propaganda machine attempts to peddle the myth that there is a “new housing boom” in the U.S.; the reality is that the housing depression which began back in 2007 continues, with (real) housing activity merely equaling the worst levels of any/all previous crashes in this sector.

This last installment will focus primarily on only two pieces of data. However, they are sufficiently persuasive to not only fully establish the first conclusion, but the second and third conclusions as well.

The first data concerns U.S. energy consumption. There are a number of unequivocal “truths” when it comes to economics, and the dynamics of our (modern) economies. One of these Truths is that growing economies require more energy. The source of such growth in demand is two-fold.

On the consumption side; any increase in consumption necessarily implies using more energy. First there is the energy used to produce the good or service; then there is the additional energy required for transportation – either transporting the customer to the good/service, or transporting the good/service to the customer. Thus even a rise in “on-line shopping” still implies using more energy.

 

The U.S. Greater Depression Exposed, Part I

US Commentary

Since the beginning of 2014; we have been subjected to two constant themes in the propaganda of the mainstream media. One of these themes is that after “recovering” year after year after year; the U.S. economy is finally strong enough to begin the Exit Strategy which former Fed Chairman B. S. Bernanke (originally) promised us would begin early in 2009.

The other, closely related theme is the (supposed) collapse of “Emerging Market currencies”. In fact; what we have seen is the collapse of most of the world’s currencies versus the U.S. dollar. In no way can these two events be considered mere coincidence.

As explained in my last commentary; the contrived collapse of these currencies -- by financial criminals currently being investigated globally for serially rigging these same markets – is nothing more than a Reverse Beauty Contest. It is an effort to make the world’s least-attractive/most-worthless currency appear to be the world’s “strongest” currency.

With the perversion of statistics and the manipulation of our markets reaching new, absurd extremes; it becomes necessary to remind readers (and alert newer readers) of what is actually transpiring in the real world. This two-part series will establish three obvious points:

1) The U.S. economy is currently in the midst of a Greater Depression; the worst, sustained economic collapse in the history of this nation.

2) Given this collapse; the U.S. does not have one of the world’s stronger economies, but rather it has the weakest economy of any/all major nations.

3) The downward spiral in this Greater Depression is, in fact a terminal collapse. The final result of this economic devolution can only mean the transformation of the United States into essentially a “Third World nation”.

We start with the fundamental lie regarding the U.S. economy, the mythical “recovery” itself. By now; regular readers should understand that GDP (growth) is arguably the easiest of all statistics to falsify. All that is required is to first understate “inflation”, and then GDP can be exaggerated commensurately.

A simple example will explain this, for the benefit of newer readers. If (price) inflation is (hypothetically) 10% per year; then when our governments collect the raw data on economic growth, they must, roughly speaking, subtract 10% from their data. This is called the “GDP deflator”. If our governments did not subtract inflation out of the equation when they attempted to measure GDP, then they would not get a statistic which measured “economic growth”, but rather a statistic which measured economic growth plus the increase in prices.

Continuing with the hypothetical example; let’s suppose our governments now pretend that inflation is only 2%, rather than 10%. Thus when they measure GDP; they only “deflate” the data by 2% instead of 10%. And so the statistic they release which they call “GDP growth” is actually GDP growth + 8%. In fact; this hypothetical example very closely mirrors what we currently see in the U.S. economy.

 

The End of Too-Big-To-Fail? The End of The One Bank?

US Commentary

This commentary has a dual title, because it was impossible to give precedence to either one of these questions of paramount importance. The sequential order of these questions is governed by the fact that an affirmative answer to the first question gives rise to the second.

But such talk ‘puts the cart before the horse’. The first detail of which readers must be aware is the Reuters headline (and article) which provides the basis for these interrogatives:

Fed’s Lacker calls for new laws to end too-big-to-fail threat

Yes, we have seen/heard various banking officials and politicians occasionally muse about “doing something” about this systemic, corporate blackmail in the past. However, the strong/direct language of the title of this article was fortified with equally strong and explicit language in the text:

Calling too-big-to-fail banks “the most critical issue facing our financial system,” a top Federal Reserve official on Tuesday urged new laws to address the problem, including ending Fed emergency lending powers…

This is unprecedented, at least with respect to the last six years of saturation-fraud which has been condoned (if not actively assisted) by the same cast of banking officials and politicians. Here tone is of equal importance to substance. Note the judgmental nature of this reporting:

new laws to end too-big-to-fail threat

…“the most critical issue facing our financial system”

This is the sort of language which regular readers are used to seeing in my own commentaries – not coming from the lips of either our (corrupt) banking regime or our (corrupt) Corporate media. Indeed, for nearly six, long years; we have seen the media, our politicians, and (of course) the Banksters themselves all referring to the abominable concept of “too big to fail” as a permanent reality, and rarely as a “threat”.

Why is tone as important as substance? Simply look at our own, recent history. Over the past six years of ambivalent weasel-talk from this same collection of Villains; what we have seen is that the weak, equivocal language of these bankers/politicians/media drones has always been accompanied by equally weak action – either no action at all, or mere window-dressing which actually perpetuates the fraud/crime.

Conversely, when we have a “top Federal Reserve official” drawing attention to “the most critical issue facing our financial system”, and that issue is described as a “threat” and a “problem”; it becomes difficult to imagine how such language could manifest itself into anything other than strong legislation – if words do indeed lead to actions.

So let us go down that road. What if (finally) the call to action which we have seen this week is matched by meaningful legislative action, including “ending Fed emergency lending powers”? Simply, it changes everything; or perhaps to put it better, it is an essential first step along a path toward purging a System of saturation fraud/corruption/crime.

Let me connect-the-dots here. To understand this line of reasoning requires understanding what “too big to fail” really represents. Here regular readers already have the answer: too-big-to-fail is literally Corporate blackmail (by the Big Bank tentacles of the One Bank). “Pay us our blackmail, or we will blow-up the global financial system.”

   

Falling Emerging Market Currencies Prove Dollar-Fraud

International Commentary

Since roughly the beginning of this year; we have witnessed what is being characterized by the Corporate media as “the worst selloff in emerging-market currencies in five years”. This comes several months after our authorities began a (supposed) investigation into the serial rigging of currency prices in global FX markets by various tentacles of the One Bank.

Only the most naïve or obtuse of readers would not immediately suspect that we are witnessing yet another, monstrous financial crime by this rapacious crime syndicate. It is thus both ironic and amusing that as the mainstream propaganda attempts to pervert and conceal what is really occurring here that it inadvertently described what is taking place, in this Bloomberg headline:

Contagion Spreads in Emerging Markets as Crises Grow

Of course the “contagion” (or disease) which Bloomberg refers to is none other than the One Bank, itself. Simply and literally, this financial cancer destroys everything it touches, as part of an overall campaign to suck-out all of the world’s wealth.

How do we prove the One Bank’s guilt in this crime? The same way we prove guilt with any other crime: means, motive, and opportunity. Both “means” and “opportunity” are very obvious here; given that we are dealing with a financial monopoly which literally controls and operates all these markets. However; it is worthwhile to explicitly delve into the One Bank’s means for perpetrating these financial crimes – as it also epitomizes why smashing this crime syndicate is the primary imperative of our era.

Let me first revisit the Swiss research which defines the One Bank, itself:

In detail, nearly 4/10 of the control over the economic value of [all transnational corporations] in the world is held, via a complicated web of ownership relations by  a group of 147 TNCs in the core, which has almost full control over itself…an economic “super-entity”…3/4 of the core are financial intermediaries.

Obviously when the Swiss academics refer to 40% “control” of all of the world’s “transnational corporations”, they are not talking about minority-interests of all these corporations, but rather 100% control being exerted over 40% of all the world’s largest corporations. Thus when the Swiss academics refer to a “super-entity” what they are really describing is a corporate monopoly so enormous in size/scope that it makes Microsoft or Google look like corner grocery-stores in comparison.

More specifically; with the research indicating that 75% of this Mega-Monopoly is composed of “financial intermediaries”; we are clearly dealing with (primarily) a Financial Monopoly. Here; the research does name names:  JPMorgan Chase & Co, Goldman Sachs, Bear Stearns, Lehman Brothers, T.Rowe Price, UBS AG, Barclays PLG, Merrill Lynch, Citigroup, Deutsche Bank AG, Morgan Stanley, Prudential Financial, Franklin Resources, Credit Suisse, Commerzbank AG, and Bank of America. These are merely some of the One Bank’s 147 tentacles, and obviously some of these tentacles have since been cannibalized.

 

Federal Reserve Increases Counterfeiting

US Commentary

At the beginning of 2012; readers were presented with a commentary about the U.S. Treasuries market (Maximum Fraud in U.S. Treasuries Market) which merely stated the obvious. There was no visible/legitimate means by which this market, and the massive quantities of new supply coming onto the market could be supported – at all.

With the world having already begun its transition away from the U.S. dollar as reserve currency to China’s renminbi; we had already entered into a new, permanent paradigm of declining demand for the U.S. dollar (and thus U.S. debt). Coupled with this; the large fiscal surpluses which had been used to soak-up U.S. Treasuries (in BRIC economies, and other Emerging Markets) during previous years have shrunk considerably.

Thus we had/have parameters where nations have dramatically less incentive to accumulate U.S. dollars (through buying Treasuries), and these nations have significantly less funds with which to make any purchases of foreign debt. Combined with the explosion in supply; this could only mean an enormous drop-off in demand, and (at best) a sharp spike in Treasuries prices – if not a complete collapse of this (obvious) bubble-market.

Even more outrageous is the fact that we have had these bubble-prices for U.S. Treasuries after it had become totally obvious to anyone paying attention that the United States is now hopelessly insolvent, or in the words of a former economic advisor in the Reagan regime, “bankrupt”. The (to be polite) questionable solvency of the U.S. economy dictates bond prices at absolute lows – not absolute highs. What we are supposed to believe is that virtually overnight; all of the world’s bond-traders suddenly/completely forgot the concept of “risk” with respect to the pricing of U.S. Treasuries.

But on top of all of this; simultaneously we have had U.S. equities markets soaring to record highs. Back when we had sane, legitimate (legal) markets, where the Laws of Supply and Demand still applied; bond markets and equity markets ran counter-cyclical to each other. When one market was moving toward its highs, the other was dropping-off in a trough.

Yet in the magical, arithmetic-defying realm of the U.S. Treasuries market; we had Treasuries prices at record highs, despite the obvious drop-off in demand. We had Treasuries prices at record highs, despite the obvious insolvency of the U.S. government. We had Treasuries prices at record highs, despite U.S. equities markets also, simultaneously soaring into bubble country.

A portion of this massive glut of supply was soaked-up in the Fed’s so-called “Operation Twist”. But first of all, the total quantity of Treasuries-buying was a mere $400 billion, and secondly it was only a temporary operation. It wasn’t enough to soak-up the additional supply the U.S. has been piling onto the market each year since 2007, let alone absorb any of the large drop-off in demand.

A second “round” of this bond-buying is now (supposedly) being wound down, as the Federal Reserve pretends to begin “tapering” the money-printing publicly devoted to funding this Ponzi-scheme. But even before this mythical “tapering” began; the supply/demand numbers in this market could not possibly add up.

   

2013: A Successful Year of Price Suppression, Part III

International Commentary

Part II of this series ended with the promise to explain to readers how “globalization” (based on so-called “free trade”) was not only contributing to the destruction of food inventories, but is also an important, overall component of the One Bank’s price-suppression paradigm. This will not be obvious to readers, as here the Machiavellian machinations of this Crime Syndicate are more indirect than what we are used to seeing.

To understand these two, parallel tracks of economic destruction; it is necessary (as always) to begin with definition of terms. In defining “globalization”; it is best to start with discussing what globalization is not. It is not “free trade”.

Free trade” is a theoretical model of (supposed) economic efficiency in the realm of trade, which has two necessary/essential components. It must be pure trade, meaning trade unencumbered by any trade-distorting rules, and it is trade based entirely upon the doctrine of “comparative advantage”.

What is “comparative advantage”? Few, if any readers will be able to answer that question, because it is a phrase which is rarely uttered by the charlatan economists, and on the rare occasions they do use these words, they are always speaking in purely theoretical terms. Why is this? Because comparative advantage exists nowhere in the 21st century global economy.

By itself; this proves that globalization has absolutely nothing to do with free trade. However; it is even more important to look at the second, violated principle of “free trade”: the (lack of) purity of the international trading system. Here it is revealing to look at a recent confession by the Political Puppets, (surprisingly) published by the Corporate media.

Obama Seeks Trade Deals Sought by Biggest U.S. Companies

This is what globalization is really all about; making the world a “better place” for the world’s largest mega-corporations – and only the largest mega-corporations. Any benefits for people which result from globalization are purely accidental, and completely unintended.

When our Western governments betrayed their own populations, and signed these “free trade deals”; they only erased some of the trade-distorting rules which made our international system less-than-pure. Specifically; they tore-up all of the rules which provided protection/support for jobs and wages, and they kept most of the rules which only subsidized corporations.

In the ultra right-wing, utterly insane paradigm of the 21st century economy; subsidies or “welfare” of any kind for the People are the ultimate evil, while welfare for the largest corporations (which are merely fronts for Western Oligarchs) is the ultimate good. But this subsidization hypocrisy is only tangential to our discussion (despite the $trillions in welfare these mega-corporations extort each year).

Globalization is primarily a model of wage-destruction: goods in the 21st century global economy are not produced where they can be produced best (“comparative advantage”); rather they are simply produced where the Oligarchs can pay the lowest slave-wages. It is a perpetual race-to-the-bottom for workers; while all the profits/benefits of global production are hoarded by these Corporate fronts (i.e. the One Bank), on behalf of the Oligarchs.

Globalization was a (Western) scheme with the primary goal of giving away tens of millions of Western manufacturing jobs (literally “shipping them to Asia”), and destroying the wages and working conditions for the jobs which remained for Western workers – with the ultimate objective of global slavery. And the Oligarchs are succeeding.

Western “structural” unemployment is now somewhere in excess of 100 million workers, we’re not sure precisely how obscenely large this number is, because our Traitor Governments refuse to measure the total number of unemployed workers – or, at least, they simply refuse to tell us that number. It is the worst unemployment ever experienced in the Western hemisphere since the Industrial Revolution.

 

Debunking Tapering Mythology

Gold Commentary

One could only hope that after nine, nauseating months of lies and half-truths from the U.S. Federal Reserve and mainstream media on so-called “tapering” that we would be spared any more of this nonsense in 2014. Sadly, since the mainstream propaganda machine found this a very fruitful form of lying in 2013, and since it is rapidly running out of any other semi-plausible fiction to use in holding together our smoke-and-mirrors economies; it appears that “tapering” is here to stay – i.e. talk about “tapering”.

The improving economy led the Federal Reserve to begin tapering its bond purchases this year. Monthly purchases of government bonds and mortgage-backed securities will be reduced from $85 billion to $75 billion this month, and it is likely that the quantitative easing program will come to a close by the end of 2104. [sic]

The delightful “Freudian slip” above by the Conference Board of Canada is the nexus of all this propaganda, and so it is the first point which must be stressed in debunking the lies. There is no “tapering” taking place in the United States, in fact most likely the money-printing has increased. A previously familiar chart (below) demonstrates this.

Where is the supposed “tapering” which took place last year? It’s not here, meaning that no reduction in the money-printing ever took place.

But regular readers undoubtedly have another question. Why does this chart of the U.S. adjusted monetary base now appear stretched-out, rather than the simple, vertical line that they are used to seeing? Because a chart which used to be scaled in decades is now scaled in years. Throughout the entire (modern) history of the U.S. dollar; changes in the monetary base have been so slow/gradual that the chart which measured the monetary base could be scaled in decades.

Today, with the Federal Reserve’s virtual “printing press” running white-hot, 24/7; the only way we can still see incremental changes (i.e. anything other than a sheer, vertical line) is by stretching-out the scale of the chart dramatically. The simple fact that this chart has been re-scaled tells us there will be no tapering. No reputable institution would change the scale of a key statistic temporarily, for just a few months. If the Federal Reserve had any serious plans to “taper”; it would have never changed the scale of its own chart measuring the (official) money-printing.

   

2013: A Successful Year of Price-Suppression: Part II

International Commentary

Part I of this series ended with some rather ominous questions. Most of those questions tied-in to the chart below, and what it signified in both practical and statistical terms:

Here readers see a picture which is markedly different from the parameters we know to exist with (for example) precious metals. With gold and silver; we have two commodities where production is (now) falling, and inventories are (already) near-zero. It’s easily understandable why these commodities are already at a crisis-point in terms of basic supply/demand analysis.

It is much less-easy to understand why the chart above also represents a looming crisis. This is due in large part to the obvious/unequivocal importance of food production. Because food (self) sufficiency is a key policy objective of almost every nation; their reactions to the food-crisis looming ahead of us have coloured this data – and thus (somewhat) hidden the underlying problems.

It’s also important to point out another premise of simple logic. Because food-production (and sufficiency) will always remain a top priority; in the attempts to ward-off a near-term food catastrophe we could (will) see our governments simply trigger a different form of economic cataclysm – hyperinflation – which will also lead to mass hunger/starvation, but simply in a less-direct route.

Here it is necessary to itemize the causal links in this (inevitable) chain. To do so; we start by simply looking at the current trend which the chart above indicates unequivocally: the ratio of inventories to supply/demand is falling – and at a rapid rate. While this does not appear close to any crisis-point (at present); we can understand that the continuation of this trend will (at some point) take us to parameters which will look very similar to what we see in precious metals today.

So how/why does this trend represent an immediate – and enormous – problem? This is where it is necessary to add all of the additional, necessary economic/financial context to make the answer to this question self-evident. In the most general terms; what is the root problem leading to inventory-destruction in all commodity markets (especially precious metals)?

 

2013: A Successful Year of Price-Suppression, Part I

International Commentary

There must certainly be times when regular (and objective) readers ask themselves if it is not me who is “living in fantasy-land” rather than – as alleged again and again in these commentaries – the drones of the mainstream media. There was an example today of an item from Bloomberg (and the “statistic” it contained) which might create such doubts in readers’ minds.

Wholesale prices in the U.S. climbed in December for the first time in three months to cap the smallest annual increase in five years, showing companies face little pressure to charge more…  [emphasis mine]

Where is the “hyperinflation” which I (and John Williams, and others) insist is already ‘in the pipes’ of the global monetary/financial system? While readers have seen a chart (on numerous occasions) showing U.S. money-printing in an exponential spiral – a near-vertical line, to be precise – we see wholesale prices actually moving in the opposite direction.

How is this possible? Or, put another way, who is telling the truth? To answer these questions; let me ask an additional and more specific question. Why do precious metals prices not reveal the hyperinflationary pressures which are alleged to exist? Regular readers and knowledgeable precious metals investors would have no difficulty answering that question in a convincing manner: price-suppression.

Over recent years; readers have been supplied with overwhelming evidence of price-suppression/manipulation in precious metals markets, and in a variety of different forms:

1) Bullion-leasing fraud

2) Regulatory malfeasance

3) Falsified data/statistics

4) Outrageous ratios of paper to bullion in markets

5) The collapse of global inventories of gold and silver

Overlaid on top of this; we have the daily price-action in these markets: endless, repetitive examples of vertical lines, as prices “gap” lower (and sometimes) higher in these large, global futures markets. Here readers need to know the history (and math) behind these futures markets.

Why do we even allow these fantasy-markets, where the paper traded by the banker-gamblers of the 21st century exceeds the actual commodities they are trading by fantastic ratios, in the case of bullion, ratios of greater than 100-to-1? Because these very same banker-gamblers assured our governments and (supposed) regulators that these futures markets would bring much greater “liquidity”, and thus near-perfect “price discovery”.

Translation? Futures markets should never gap higher or lower, with the rare exceptions of truly momentous events which can/could cause legitimate surges or plunges in price. The daily trading of the bankers themselves is empirical proof that these markets are being constantly manipulated. The outrageous/indefensible Pied Piper trading algorithms which these banksters use is the “smoking gun” which provides the unequivocal means to perpetrate such market crime.

Thus do we have my broader answer (and rebuttal) to the original questions. Wholesale prices (and the commodities prices which underpin them) do not reveal the enormous hyperinflationary pressures created by the money-printing of our central banks because of the constant price-suppression of the One Bank – across virtually all commodity markets – which depresses the prices which should be indicating those pressures.

Fortunately, there is equally compelling evidence to support my allegation that the same price-manipulation we see on a daily basis in precious metals markets extends across the entire spectrum of commodities. Once again; it is the daily trading of the banksters themselves which provides us with absolutely conclusive evidence.

   

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