Economics? Yikes!

[cortés]

IT’S A MATTER OF TRUST – PART ONE « The Burning Platform
The fact that 86% of American adults have never heard of Jamie Dimon should suffice as proof regarding
the all-encompassing level of ignorance in this country.

This Is Not The Soviet Union. This is the United States of America.

122 Minutes With Jamie Dimon -- New York Magazine
“Everyone is afraid of retaliation and retribution. We recently had an event with a hundred small bankers here,
and 85 percent of them said they can’t challenge the regulation because of the potential retribution. That’s a
terrible thing. Okay? This is not the Soviet Union. This is the United States of America. That’s what I remember.
Guess what,” he says, almost shouting now. “It’s a free F****** Country.”

Guest Post: The Shape Of The Debt Reset | ZeroHedge
I think this underlines the importance of trying to achieve the effects of a debt reset in an orderly way before
nature forces it upon us again, and before we have spent a long time stuck in the deleveraging trap with a huge
debt load relative to GDP, elevated unemployment, and very low growth.

Yet while most of the economic establishment remain convinced that the real problem is one of aggregate demand,
and not excessive total debt, such a prospect still remains distant. The most likely pathway continues to be one of
stagnation, with central banks printing just enough money to keep the debt serviceable (and handing it to the financial
sector, which will surely continue to enrich itself at the expense of everyone else). This is a painful and unsustainable
status quo and the debt reset — without an economic miracle, will eventually arrive — will in the long run likely
prove a welcome development for the vast majority of people and businesses.

[cortés]

Ever Wonder Why Everything You Buy Now Is Labeled "Made In China"?
Government. We've been waiting for someone to do this...it'll make you both angry & sick

22 Stats That Show How The Emerging One World Economy Is Absolutely Killing American Workers | ZeroHedge
For decades our politicians have promised us that the "free trade" agenda would bring us greater prosperity than ever before.
They insisted that merging our economy into the emerging one world economy would cause millions upon millions of new jobs
to be added to the U.S. economy. Unfortunately, it was all a giant lie.

Trading with other countries is not a bad thing as long as the level of trade is fairly equal on both sides. When trade becomes
very unequal, the consequences can be absolutely catastrophic. Since 1975, the United States has bought more than 8 trillion
dollars more stuff from the rest of the world than they have bought from us. We are the only economy on earth that
could have had 8 trillion dollars drained out of it and still be standing. Instead of leaving the country, those 8 trillion dollars
could have gone to U.S. businesses and U.S. workers. If we could go back and have a "do over," how much more prosperous would
we be today if we had kept that 8 trillion dollars inside the country?

But instead of pursuing a balanced trade philosophy, our politicians were so enamored with the emerging one world economy that
they threw all caution to the wind.

So we have lost tens of thousands of businesses, millions of jobs and trillions of dollars of our national wealth.

And this emerging one world economy is absolutely killing American workers. It lumps them into a global labor pool with workers
in other countries where it is legal to pay slave labor wages.

Highlights

#6 The Chinese undervalue their currency by about 40 percent in order to gain a critical advantage over foreign competitors.
This means that many Chinese companies are able to absolutely thrive while their competition in the United States goes out
of business.

#8 The U.S. trade deficit with China during 2011 was 295.4 billion dollars. That was the largest trade deficit that one nation
has had with another nation in the history of the world.

#9 Back in 1985, our trade deficit with China was only about 6 million dollars (million with an "m") for the entire year.

#11 The United States has actually lost an average of about 50,000 manufacturing jobs a month since China joined the World
Trade Organization in 2001.

#12 According to the Economic Policy Institute, America is losing about half a million jobs to China every single year.

#13 The United States has lost more than 56,000 manufacturing facilities since 2001.

#14 During 2010 alone, an average of 23 manufacturing facilities closed their doors in America every single day.

#15 Since the auto industry bailout, approximately 70 percent of all GM vehicles have been built outside the United States.

How To Defeat Tyranny
Our financial system is a stampeding procession of nightmare fueled blood-drenched circus freaks dancing
in an ether driven haze of pungent absurdity. It is as if our economy has become a morbid parody of itself,
like a queasy piece of horror/comedy cinema. We are so far along in the collapse of our markets that the
banksters no longer see the need to hide the fraud. With the advent of the Libor Scandal, governments,
central banks, corporate financiers, all flaunt their criminality with pride. Yet, some Americans still clasp their
naïve hopes to a chance of fiscal recovery.

To fight against an evil of this magnitude takes more than anger, or physical preparation, or organization.
It takes personal exploration, a steeling of one’s heart, and a conquering of one's shortcomings.

Tyranny, true tyranny, thrives on our selective awareness, and our ability to bend our minds and our vision to
avoid seeing that which is really there. In the end, victory over tyranny is less about guns, bombs, mass dissent,
and civil fury; it instead requires an acceptance of the dark side of the world, and the unwavering will of honorable
men ready to face it. That is to say, the defeat of tyranny begins and ends in the mind.

Rule #3: Deal With Your Fear, Or It Will Be Used Against You
All men are afraid to take risks, especially mortal risks. However, great men understand the necessity of risk in the
pursuit of that which is right. Fear should play no part in your life, ever.

[cortés]

Auto Bailout Legacy: GM's European Nightmare
Three years into their forced marriage with GM, the American taxpayers have seen the value of their
investment in GM deteriorate by approximately $24 billion, largely due to continuing European losses.
Exposure in Europe has contributed to crushing the value of GM's stock due to its chaotic and failing
Opel unit in Germany. While government, journalists and Wall Street sympathizers have given the Obama
Administration and GM leadership an almost incomprehensible pass on this value destruction and massive
loss (presumably due to the macro-economic nature of the crisis), it's time to call for the accountability
that this new Board was supposedly going to deliver.

Unfortunately for the taxpayers, it appears the damage is done and the ability to pull out a recovery is all
but passed. There is no reason to continue the market-timing gamble that sees taxpayer money risked on
a company that should be allowed to sink or swim on its own, without government input. It's time to simply
cut the losses and dump taxpayers' remaining stock and end this failed experiment once and for all.

Moody's: More Calif. Cities At Risk Of Bankruptcy

[cortés]

"Only a crisis, real or perceived produces real change."
~Milton Friedman

“Sovereign is he who decides the state of emergency.”
~Carl Schmitt, Nazi political theologian

When the Weakest Critical Part Fails, the Machine Breaks Down-charles hugh smith
Consumer spending is the bedrock of the global economy, and consumer spending depends on expanding debt and
leverage. Once that subsystem fails, consumerism and the global economy grind to a halt.

The failure of any critical subsystem in an organism triggers a catastrophic, fatal decline. It doesn't matter if
the rest of the critical subsystems are functioning at optimum levels; the failure of even one essential "part" leads to
death. The metaphor is easily extended to machines, where a perfectly sound engine will fail once the oil pump ceases
functioning. The cliche is that a chain is only as strong as its weakest link. The conventional wisdom is that the U.S.
economy is so large and diverse that the failure of any one part will have only limited consequences on the economy as
a whole.

But this belief was undermined by the financial crisis of 2008, in which the apparently "limited" implosion of subprime mortgage
debt dominoed into a full-blown global financial crisis. Conventional wisdom confuses redundancy and complexity.

Italian Dies After Setting Himself On Fire Outside Parliament | World | Reuters
A 54-year-old man died on Sunday after setting himself on fire outside the Italian parliament last week
to highlight his struggle with unemployment, police said.

Italians are grappling with a recession and rising unemployment while facing higher taxes and state spending
cuts introduced by the government to try to help rein in Italy's massive public debt. Di Carlo's death is the latest
in a wave of highly publicised suicides linked to financial woes in recent months which have highlighted the human
cost of the country's economic crisis.

54-Year-Old Italian Dies After Self-Immolating In Front Of Parliament | ZeroHedge
Reader Comment:

If he thought he had nothing to lose, he should have burned the parliament building or a bank.
When that happens regularly something will be done.

True. And even if it isnt, the problem is still solved.

[cortés]

Study History Because It Will Foretell The Future

What 40 Years Of Gold Confiscation By The US Government Looks Like
The chart below, which is a time series showing the total "Gold Held by the US Treasury and the Federal
Reserve" (which for all intents and purposes are interchangeable), demonstrates vividly the moment when
the US government enacted Executive Order 6102, aka the "forbidding the Hoarding of Gold Coin, Gold Bullion,
and Gold Certificates within the continental United States" order which criminalized the possession of monetary
gold "by any individual, partnership, association or corporation." But not the government of course. Spot the
moment after which gold confiscation by the US government (also known as a 40% USD devaluation) from its
citizens was legalized.

What Happened After Europe's Last Three Currency "Unions" Collapsed
It may come as a surprise to some of our younger readers, that the Eurozone, and its associated currency, is
merely the latest in a long series of failed attempts to create a European currency union and a common currency.
Three of the most notable predecessors to the EUR include the Hapsburg Empire, the Soviet Union, and Yugoslavia.
Obviously, these no longer exist. Just as obvious, all of these unions, having spent time, energy, money, and effort
to change the culture and traditions of member countries and to perpetuate said unions, had no desire, just like
Brussels nowadays, to see these unions implode. The question then is: what happened after these multi-nation
currency unions fails. VOX kindly answers: "they all ended with disastrous hyperinflation."

Shhhh…It’s Even Worse Than The Great Depression « Across the Street
Velocity of money is the frequency with which a unit of money is spent on new goods and services. It is a far
better indicator of economic activity than GDP, consumer prices, the stock market, or sales of men’s underwear.
In a healthy economy, the same dollar is collected as payment and subsequently spent many times over. In a
depression, the velocity of money goes catatonic. Velocity of money is calculated by simply dividing GDP by a given
money supply. This VoM chart using monetary base should end any discussion of what ”this” is and whether or not
anybody should be using the word “recovery” with a straight face.

In 1920 Weimar Republic, a loaf of bread soared to $1.20, and then in 1921 it hit $1.35. By the middle of 1922 it
was $3.50. At the start of 1923 it rocketed to $700 a loaf. Five months later a loaf went for $1200. By September
it was $2 million. A month later it was $670 million (wide spread rioting broke out). The next month it hit $3 billion.
By mid month it was $100 billion. Then it all collapsed. ….In 1913, the total currency of Germany was a grand total
of 6 billion marks. In November of 1923 that loaf of bread we just talked about cost 428 billion marks.

While the economy was going up in flames, German economic heads had no idea what was happening. They actually
thought that it was a matter of currency shortage...so they just kept on printing.




Jacob Rothschild, John Paulson And George Soros Are All Betting That Financial Disaster Is Coming
The financial world is starting to wake up to the fact that the globe is absolutely drowning in debt and it is not really good
to be holding fiat currencies when a debt crisis erupts.
When men like John Paulson and George Soros start pouring huge amounts of money into gold, it is time to start becoming
alarmed about the state of the global financial system.

The amount of money that these men are investing in gold is staggering....

There was also news last week in an SEC filing that both George Soros and John Paulson had increased their investment in
SPDR Gold Trust, the world’s largest publicly traded physical gold exchange traded fund (ETF).
Mr Soros upped his stake in the ETF to 884,400 shares from 319,550 and Mr Paulson bought 4.53m shares, bringing his stake
to 21.3m. At the current price of about $156 a share, these are new investments of about $88m of Mr Soros’ cash and more
than $700m from Mr Paulson’s funds. These are significant positions.

[cortés]

Guest Post: A Matter Of Trust - Part Two | ZeroHedge
Henry Ford made this statement [above] decades before the debasement of our currency entered overdrive.
The facts reflected in the chart below should have provoked a revolution, but the ruling class has done
a magnificent job of ensuring the mathematical ignorance of the masses through government education,
mass media propaganda, and statistical manipulation of inflation data to obscure the truth.

Ron Paul Rising
Say what you will about Mr Paul. On issues economic, he's usually the sharpest guy in the room and
he's consistent. Ron Paul has been banging the drum for a Federal Reserve audit and returning to the
Gold Standard for at least the past two decades. These 2 actions alone will return power to the citizens
and whole value to our money. Every American should welcome this turn of events.

Republicans Eye Return to Gold Standard
The gold standard has returned to mainstream U.S. politics for the first time in 30 years, with a “gold commission”
set to become part of official Republican party policy. The move shows how five years of easy monetary policy —
and the efforts of congressman Ron Paul — have made the once-fringe idea of returning to gold-as-money a legitimate
part of Republican debate.

The proposal is reminiscent of the Gold Commission created by former president Ronald Reagan in 1981, 10 years
after Richard Nixon broke the link between gold and the dollar during the 1971 oil crisis.

A 2012 US dollar is worth about 10 cents by comparison to a 1971 dollar. Think about that really hard.
With an audit and a link back to gold, the government and the Fed would no longer be able to commit
wholesale theft by inflation. If your dollar was actually worth a dollar by today's standards most regular
folks would feel wealthy.

[cortés]

charles hugh smith-The Fantasy of Debt: No Trade-Offs, No Sacrifices
Easy, cheap credit has created a fantasy world where everyone "deserves" everything right now, and trade-offs
and sacrifice have been banished as unnecessary.

Debt offers a compelling fantasy: there is no need for difficult trade-offs or sacrifices, everything can be bought
and enjoyed now. In the old days when credit was scarce and dear, buying a better auto required substituting 1,000
brown-bag lunches for restaurant meals: yes, four years of daily sacrifice.

Sending a child to college meant no meals out (or perhaps once or twice a year), driving an old car, no vacations other
than camping, working overtime to make a few extra dollars, summer jobs for every teen in the family and a hundred other
sacrifices and trade-offs. All too often, only the oldest got to go away to university; younger siblings had to sacrifice their
education for the greater good of the family.

If the oldest sibling was fortunate enough to earn a decent salary after graduation, he or she sacrificed to pay for the
education of younger siblings.

Trade-offs and sacrifices were the core of household finances for those families that sought to "get ahead" or purchase
things that required substantial cash.

Abundant, cheap credit upended the incentives to make adult trade-offs and sacrifice consumption for future benefits.
Why eat 1,000 brown-bag lunches when you can buy a new car for $500 down and "easy" monthly payments? Heck, you
don't even need to pay for the lunches with cash; just charge them.

Want to go to college? Just borrow the money via student loans. Why scrimp and save when Uncle Sam will guarantee
$100,000 in student loans?

Why choose between a lavish vacation, a year of college or a boat? Buy all three on credit.

This mentality has infected the entire nation and culture. Why should we have to choose between $600 billion military
spending and $600 billion Medicare spending? Let's just borrow the $1.2 trillion every year to pay for both.

[cortés]

A 2012 US dollar is worth about 10 cents by comparison to a 1971 dollar. Think about that really hard.
With an audit and a link back to gold, the government and the Fed would no longer be able to commit
wholesale theft by inflation. If your dollar was actually worth a dollar by today's standards most regular
folks would feel wealthy.

As the Federal Reserve continues to devalue the dollar, working Americans are robbed of their wealth.
Regular citizens dont stand a chance as long as this system continues.

The Rot Runs Deep 1: The Federal Reserve Is A Parasitic Wealth Transfer Machine
The Federal Reserve is a wealth transfer machine, skimming wealth from the productive many and transferring
it to the parasitic few.

Today I launch a series entitled "The Rot Runs Deep" that examines the moral and financial rot at the core
of American finance, politics and culture. We have reached a unique junction of American history: the confluence
of Big Lie propaganda, neofeudalism and the worship of false financial gods.

The Big Lie propaganda machine of corporate media and the Central State has perfected Orwell's nightmare vision of
centralized media and a fascist centralized State which turn lies into self-serving "truth."

Since the Federal Reserve is once again expected to "save" a crumbling, exploitative Status Quo, let's use
the Fed as an example. The propaganda machine would have us believe that the Federal Reserve, the privately owned
central bank of the U.S., has "saved" the Status Quo from financial ruin on numerous occasions by "smoothing out" the
business cycle (credit expands and contracts) and by "stimulating aggregate demand" by lowering interest rates and
pumping money into the economy (quantitative easing).

We are constantly prompted to worship the Federal Reserve's supposedly god-like powers to rescue a corrupt and venal
Status Quo from the black hole of recession and collapse, and this Big Lie masks its real nature: The Fed is nothing
but a parastic wealth transfer machine, skimming wealth from the many and transferring it to the few.

The mechanisms of the Fed's parasitic transfer of wealth are well-known. Here's one: the Fed "loans" money to
the Feudal Lords at 0% interest. the Lords then loan this free money out to peasants, students and other debt-serfs
at high rates of interest. The interest "earned," courtesy of the parasitic Fed, is theirs to keep.

Here's another: the Fed "loans" free money (0% interest) to the Financial Lords, who then buy low-risk long-term U.S.
Treasury bonds paying 3%. When the Lords spot a better skimming opportunity, they sell the bonds to the Fed, who buys
the bonds from the Lords as part of its "Operation Twist."

[cortés]

The Bretton Woods Agreement - "As Good As Gold"

The End of Dollar Hegemony - Ron Paul - Before the US House of Representatives, February 15, 2006
Congress created the Federal Reserve System in 1913. Between then and 1971 the principle of sound money
was systematically undermined. Between 1913 and 1971, the Federal Reserve found it much easier to expand
the money supply at will for financing war or manipulating the economy with little resistance from Congress —
while benefiting the special interests that influence government.

The 1944 Bretton Woods agreement solidified the dollar as the preeminent world reserve currency, replacing the
British pound. Due to our political and military muscle, and because we had a huge amount of physical gold, the
world readily accepted our dollar (defined as 1/35th of an ounce of gold) as the world's reserve currency. The
dollar was said to be “as good as gold,” and convertible to all foreign central banks at that rate. For American
citizens, however, it remained illegal to own. This was a gold-exchange standard that from inception was doomed
to fail.

EDIT: Imagine right now exchanging all of your dollars for 1/35 oz gold bullion each @ current $1600 oz.

The U.S. did exactly what many predicted she would do. She printed more dollars for which there was no gold backing.
But the world was content to accept those dollars for more than 25 years with little question — until the French and
others in the late 1960s demanded we fulfill our promise to pay one ounce of gold for each $35 they delivered to the
U.S. Treasury. This resulted in a huge gold drain that brought an end to a very poorly devised pseudo-gold standard.

It all ended on August 15, 1971, when Nixon closed the gold window and refused to pay out any of our remaining 280
million ounces of gold. In essence, we declared our insolvency and everyone recognized some other monetary system
had to be devised in order to bring stability to the markets.

Amazingly, a new system was devised which allowed the U.S. to operate the printing presses for the world reserve
currency with no restraints placed on it — not even a pretense of gold convertibility, none whatsoever! Though the
new policy was even more deeply flawed, it nevertheless opened the door for dollar hegemony to spread.

Realizing the world was embarking on something new and mind-boggling, elite money managers, with especially strong
support from U.S. authorities, struck an agreement with OPEC to price oil in U.S. dollars exclusively for all worldwide
transactions. This gave the dollar a special place among world currencies and in essence “backed” the dollar with oil.
In return, the U.S. promised to protect the various oil-rich kingdoms in the Persian Gulf against threat of invasion or
domestic coup. This arrangement helped ignite the radical Islamic movement among those who resented our influence
in the region. The arrangement gave the dollar artificial strength, with tremendous financial benefits for the United States.
It allowed us to export our monetary inflation by buying oil and other goods at a great discount as dollar influence flourished.

This post-Bretton Woods system was much more fragile than the system that existed between 1945 and 1971. Though
the dollar/oil arrangement was helpful, it was not nearly as stable as the pseudo—gold standard under Bretton Woods.
It certainly was less stable than the gold standard of the late 19th century.

The economic law that honest exchange demands only things of real value as currency cannot be repealed. The chaos
that one day will ensue from our 35-year experiment with worldwide fiat money will require a return to money of
real value. We will know that day is approaching when oil-producing countries demand gold, or its equivalent, for their oil
rather than dollars or Euros. The sooner the better.

[Swift Silver]

That is interesting American history.

Sent from my iPhone using Forum Runner