Busted: Bankers and The Global Economy

October 12, 2010

U.S. on the Way to the Third World?

Everyone is talking about unemployment, but nobody is talking about the long-term reality of the U.S. economy. Wall Street is playing investment games with agricultural commodities to make money, which is now impacting prices apart from traditional supply and demand. This translates to higher prices despite a poverty-stricken economy. Food processors and manufacturers are cutting products sizes and raising prices, which means that Americans continue to get the short shrift on all sides.

Then there are the jobs. This month the U-6 category from the Bureau of Labor Statistics (a measure of unemployment that includes those who have stopped looking for work)  jumped to 17.1%, yet another red flag.

Also, consider the U.S. trade deficit that sends billions of dollars overseas to foreign countries, never to return, evaporating into the global economy. The deficit means that the Fed will print more money to add to an already robust global dollar supply.

The nation has another banking crisis, where it has been revealed that fraudulent foreclosure documents were signed without evaluation. This could plunge both the the mortgage industry and the banking industry into another “too big to fail” bailout. Who are we kidding? Messy lawsuits could be the order of the day as buyers and investors seek redress for damages, either real or imaginary. All this financial pressure will undoubtedly influence exporting more jobs outside of America to cut corporate costs. That is why you are hearing all the media hype about Americans not being trained enough for sophisticated jobs that they no longer qualify for. They are preparing you for the ugly truth, even if the reasons are really fiction.

Many Americans struggle to pay for necessities now as those prices continue to rise. Food basics are once again on the rise. Food processors are likely to pass that on American consumers. To counter all the bad news, the Fed is considering creating inflation with the hope of boosting the economy. Printing more dollars to send overseas is hardly a solution. Printing dollars to keep those dollars here is the only viable solution, but hardly an option since most corporate shareholders only care about the bottom line as they send the bulk of their work to cheaper labor markets. Whether that bottom line rests on foreign factories or in American ones doesn’t matter to them.

This short-sided thinking is unsustainable at best, even as corporations seek government funding because they are unwilling to take risks in the U.S. marketplace. They seek that money only because the U.S. government is stupid enough to offer incentives to those that don’t really need the cash. It just pads the bottom line for larger corporations, as that money evaporates forever with little reward for Americans. Meanwhile, the media continues to boast that small business is responsible for a robust economy, even as the U.S. government penalizes small business. Enjoy the new American third world and the decline of the nation in favor of funding multinational corporations.

January 10, 2009

Unemployment: Jiggering with Accounting

abc-news-job-loss1102008There is no question that American job losses over the last year have been stunning. Whether Americans like to admit the truth or not, over time the Federal Government has demonstrated that they feel compelled to dicker with statistics, often simply to make a single administration look better, if that is possible. As a result, most of the statistics and measures that are commonly published do not use the same standards as measures used consistently for decades. Instead, dickering with statistics has become a legendary propaganda tool, usually to make whatever the statistics are supposed to prove appear much better. This “dumbing down” of statistics is legendary with the Federal Reserve, notably in changing from M-3 statistics and is prevalent in Unemployment Statistics. You will find similar cheats when comparing state economies across the United States. It is all about the perception of the public and the attempt to more evenly distribute data.

At this posting, the “government darling” unemployment rate is 7.2%. By the end of 2009, this economist expects the unemployment rate to approximately double to just at 15%, although a proliferation of additional and unknown failures  could easily bring that number higher. Meanwhile, the real statistics that Americans are actually living with are higher as demonstrated in the chart below.

Chart of U.S. Unemployment
The passion of John Williams is to keep up with older and usually more accurate measures of economic statistics. The details at shadowstats.com, if you care to examine them, demonstrates the manipulation of data by government officials to their own ends. The average  and often clueless American citizen often wonders why he or she is having such a hard time treading economic water.  John Williams sheds a lot of light on this situation and has been doing so for years. This chart shows an unemployment rate approaching 18%. It all depends whom you choose to believe. ~ E. Manning

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