Busted: Bankers and The Global Economy

July 1, 2011

Recession Warning

Filed under: banking, economy, recession — Tags: , , , , — digitaleconomy @ 11:21 am

economic tsunamiThe Dallas Fed’s latest manufacturing gauge has imploded! It fell to -17.5 from -7.4, the worst reading in 11 months. The New York and Philadelphia indices tanked, and the overall plunge in these up-to-date manufacturing surveys over the past couple of months is one of the worst on record!

The Wall Street Journal reported on Monday …

“The Federal Reserve is just days away from ending one of the major steps to aid the U.S. economy — but the effort has done little to solve the original problem: The government and individuals alike are still heavily in debt.”

The Journal goes on to make the same argument:

“The fundamental problem is that reversing the trend of piling on the debt requires some combination of cutting spending, growing income or the economy, and inflation. But wage growth is stagnant and home prices, which underpin much of the debt problem, are still falling.

“Meanwhile, in a vicious circle, businesses aren’t hiring or investing because they know consumers are tapped out. Banks, for their part, are hoarding cash, being stingy with new loans.

Ben Bernanke admitted in his most recent press conference:

“We don’t have a precise read on why this slower pace of growth is persisting … Some of the headwinds that have been concerning us, like the weakness in the financial sector, problems in the housing sector, balance sheet and deleveraging issues, may be stronger and more persistent than we thought.”

If you’re counting on the Fed to get things right, good luck! They got the dot-com bubble wrong. They got the housing bubble wrong. Their plan to underwrite an economic recovery has proven to be the wrong medicine for what ails the nation.

May 12, 2011

Dangerous Inflation is on the Way

Filed under: economy, inflation, recession, stagflation — Tags: , , , — digitaleconomy @ 12:01 pm

I’ve written about false inflation figures for years. The U.S. government continues to pretend that Americans won’t be facing dangerous inflation by 2012. The facts show otherwise.

The Producer Price Index (PPI) increased 0.7% last month. This equates to 8.4% annual wholesale inflation in America! Prices are rising much faster than wages by any means.  April wholesale inflation data reflects an ever-accelerating cost of living in 2011.

Can official government statistics be trusted? Not according to John Williams at Shadowstats.com, whose alternative inflation index shows costs rising four times higher than “official” rates. Since 1980, the Bureau of Labor Statistics (BLS) has changed the way it calculates the Consumer Price Index (CPI) in order to account for the substitution of products, improvements in quality and other things.

“Near-term circumstances generally have continued to deteriorate,” says Williams. “Though not yet commonly recognized, there is both an intensifying double-dip recession and a rapidly escalating inflation problem.”

October 9, 2010

World economy breaking with US

As the US economy teeters on the edge of decline and a double dip recession, emerging economies continue to grow at a fast pace, fueled by multinational corporations. This changing global economy reveals a United States that is not the center of the economic world.

Financial leaders have joined hands to decide how to boost the global economy at the annual IMF and World Bank meeting. A number of these financial leaders suggest a break up, what is known as a “de-coupling”, in the wings for a number of years, but gaining traction as the US economy stagnates. Central bankers, along with complicit US politicians, have rode the US horse into the ground and now have their eyes on the next rising star to enhance their prosperity. Most politicians advertise that the US will live forever, even though powerhouse nations through history have ebbed like the tidal flow.

The world is breaking away from the US as the consumer of last resort,” said analyst Edward Harrison, the founder of CreditWriteDowns.com. “You’ll see a lot more importance in China, in Russia.” Corporate multinationals and US politicians have raided the US economy over the last thirty years and put that stock in other economies like China, Brazil, Russia and India in the name of globalism. The view is that growth in the global economy will be much more dependent upon these countries than on the “developed economies.” Whether this is true or not remains to be seen.

Meanwhile, the US continues to run by idiot lawmakers that are afraid of multinational corporate power or are having their pockets lined behind the scenes. Like the old Roman Empire, the US seems bent on its’ own self-destruction to salve the interests of a few “leaders of men.”

August 16, 2010

The Disingenuous Timothy Geithner

On a very regular basis, Treasury Secretary Tim Geithner engages in magical thinking with deliberate attempts to delude American workers into believing that business investment and consumer demand are on the uptick. Geithner’s pretense isn’t only disingenuous and disrespectful, but dangerous. How? He continually suggests  that American consumers should feel comfortable borrowing and spending in the vain hope of spurring any hope of economic bright light.

Mr. Geithner needs to stop with the tim-foolery as these truths hang over our nation like a plague:

  • The real unemployment rate is 18.3%, instead of the 9.5% rate the administration uses.
  • The number of real unemployed workers in all four categories of unemployment is no less than 29.3 million, instead of the administration’s one-category-only figure of 14.6 million.
  • In real terms the all-important “jobs gap” is 21.3 million new jobs.
  • Since the start of the Obama administration, the number of real unemployed workers has increased by 4.6 million. The U.S. economy needs to add 150,000 new jobs each month simply to keep up with “population growth.”
  • For unemployment benefits, the average number of weeks unemployed is at least 34 and the number of workers unemployed a half year or longer is at least 10.1 million.

June 4, 2010

Why We’re Falling Into a Double-Dip Recession

Filed under: business, corporatism, credit, economy, government, inflation, money, recession, stagflation — Tags: , , — digitaleconomy @ 5:12 pm

The only reason the economy isn’t in a double-dip recession already is because of three temporary boosts: the federal stimulus (of which 75 percent has been spent), near-zero interest rates (which can’t continue much longer without igniting speculative bubbles), and replacements (consumers have had to replace worn-out cars and appliances, and businesses had to replace worn-down inventories). Oh, and, yes, all those Census workers (who will be out on their ears in a month or so).

~ Robert Reich

April 28, 2010

Wall Street: Worse than Robber Barons

I’ve said it before. I’m going to say it again. Wall Street, the whole lot of them are self-deceived and full of themselves. They are worse than Robber Barons. Remember last November when Goldman Sachs chief Lloyd Blankfein told “adoring crowds” through The Times of London that he was, but a humble banker “doing God’s work”?

This nation and the entire world has had unscrupulous tycoons for some time now under the reign of corporatism. Now the nation takes full ownership of market manipulators and connivers, the most obnoxious and self-deceived weasels in recent history.  They hold the higher ground while admitting no wrong. They haven’t a clue what dishonest gain is about. Antisocial behavior simply consumes them. They live in their own self-made bubble of finance and privilege.

They are in bed with government minds of the same persuasion, a circle of self-dealing and wanton abandon of anything but self. Meanwhile, they pretend to tell the nation, even the world, what financial literacy is when they cannot balance, much less leverage their own checkbook.  For example, venerable chief of the Federal Reserve, Ben Bernanke applies this paradigm to you, but excludes himself, Wall Street and his banker cohorts.

An undergraduate student from Atlanta’s Morehouse College asked Bernanke what accounts for the enormous racial disparity in wealth in America. Bernanke responded that the source of the problem was the lack of “financial literacy” and “financial education” on the part of blacks, particularly with respect to savings decisions. While a scholar of Depression Era America, he clearly omitted his own knowledge of history. Bernanke never mentioned the notorious history of national violence that included the seizure, destruction and appropriation of black property, never mind the property and lives of others. The idea of financial literacy has nothing to do with principles and everything to do with who you are.

During 250 years of slavery, blacks as a people were both capital and financial assets for whites, and even after emancipation.  The national failure has been continual. At one time, the nation failed to endow black ex-slaves with a promised forty acres and a mule in any place in America. It doesn’t stop with the blacks. Today, through the Federal Reserve system of finance and government, all people have systematically have been denied the fruits of their labor. The national has simply switched gears, commandeered by the appearance of wealth, influence and power.  Land acquired between 1880 and 1910 frequently was taken by government complicity, fraud and outright seizures by terrorists. Our current reality is little different.

Regardless of race, creed or faith, few have any incentive to save in a world where Robber Barons, in this case the International Society of Bankers, simply consume any savings through the modern miracle of inflation. Inflation is the miracle of the system that regularly extracts the precious substance of American wealth because of the mindless fearful weasels that run amok in government and in finance. The real problem remains in the minds of Americans. We sit around and listen to this blather instead tarring and feathering them, even though this same judgment seems perfectly adequate in older times. Goldman Sachs is simply more of the same. Everyone else are the suckers. We’ve paid for their crimes, lock, stock and barrel.

September 16, 2009

Double Dip Recession or Recovery?

Filed under: corporatism, credit, economy — Tags: , , , , , , , , , , , , , — digitaleconomy @ 7:55 am

Global industrial production now shows clear signs of recovering at least when comparing the current ‘recession’ with the Great Depression. During that time, a decline in industrial production continued for a full three years. The question remains regarding final demand for this increased production. Will renewed demand actually materialize or did the U.S. government create a small bubble with $2 billion “Cash for Clunkers” program? Will consumer spending, especially in the US, remain weak, causing the increase in production to go into inventories? If production simply falls into inventories, this will result in sharp cut backs and result in a return to recession. The labor market combined with ailing business credit and finance in the U.S. does not hold out much promise for an end to the recession. Will the Obama administration jigger with credit markets to somehow expand credit markets?

Global stock markets and investment banking and profiteering have mounted a sharp recovery since the beginning of the year. Still, the decline in stock market wealth remains even greater than at a comparable stage of the Great Depression. The downward spiral in global trade volumes has abated. This may be due to the return of the old ways of doing business that President Obama has decried publicly in the last few days. Data exists for June that shows a modest uptick in trade, but  the collapse of global trade remains dramatic by the standards of the Great Depression.

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