MMT is here already

I cannot recomment strongly enough reading David Stockman's cogent exposition of how MMT is already here:

Yellen’s Dog Is Eating Homework Congress Didn’t Even Assign: Reflections On The Greatest Mission Creep Ever

MMT is just another egregious form of fiat money. I have come to believe that human primates are not sufficiently self-controlled to handle the ability to print money without abusing it in extreme ways. Money based on metal provides, historically, stable prices, and hence removes the impetus for ever-increasing leverage (to get rich quick). The proponents of MMT on the left would use it to promote social welfare, I agree; but the Fed has beaten them to it, to promote welfare for bankers.

As to the critique that metal-backed money creates too much instability, two points:

First, fractional reserve banking existed during the gold era, and yet prices were stable on average over long periods. To my knowledge, this effect hasn't been totally explained. To dispense with the assertion that modern, post-1971 monetary policy created a "great moderation," no, it created a great debt bubble, as spending went further and further beyond income.

Second, the very idea that the business cycle should be stabilized is suspect. People should be stabilized. Most cyclical adjustments (or even more so, structural adjustments) need to be made; and "stabilization" policy simply masks what needs to be done, and generally prevents progress from being made. For example, preventing bad debts from being charged off rather than being put on the backs of taxpayers (around the world, as our model has been copied).

People in transition should be stabilized. People are in fact any nation's greatest resource. They should be kept healthy and offered transition assistance or at least a basic income.

What we are learning is that "stabilization" has been coopted on behalf of the haves, the have-nots don't have enough money, and aggregate demand and human capital are collapsing.

The Ukraine: the dollar's Waterloo?

Very trenchant analysis from www.thegoldenjackass.com:

The desperation of the Anglo-American leadership, guided by the steady corrupt banker hands, has never been more acutely high, nor obvious in full view. The entire Ukraine situation is a travesty. It includes Langley agents killing police and street demonstrators from rooftops, the confirmation coming from the Estonian Embassy (translation of scripts). It includes thefts of official Ukrainian Govt funds, again sent to the Swiss hill sanctuary. It includes sanctions delivered by a US Paper Tiger, sure to cause horrific backlash. It involves the last gasp attempt to obstruct the Gazprom energy pipelines, which will inevitably corner the European market in monopoly. It involves subterfuge with the NATO card (aka Narcotics And Treachery Outlaws) with missiles placed on the Russian borders. Look for NATO members to find a back door to exit the spurious treaty. It involves playing with nitro-glycerine in the Petro-Dollar room. It involves putting tremendous risk for much more clear isolation of the United States. The more the USGovt pushes, the more the US will be isolated. Remember that Nazis steal from their enemy states, de-fraud from their allied states, and force themselves into an isolated state. In Ukraine, the United States has over-played its weak hand. Already, a secret document was leaked in London that the UKGovt would not support the US-led sanctions against Russia.

History repeats itself from the Kremlin phone calls made during the Syrian conflict just a few months ago, when the UKGovt withdrew its support and left the US isolated, looking very weak. Already, Putin has threatened to dump USTreasury Bonds. Putin aptly calls the Anglo-Americans as Mutants. Imagine the lunacy of trying to cut off the only Russian warm water military naval port in the Crimea. Just as stupid as the Trans Pacific Partnership faux pas, trying to cut off China from its Asian neighbors and partners in trade. The intelligence level of the USGovt has never been more stupid, destructive, and in full view. The lost ground for the United States is obvious and glaring in the Persian Gulf, the Mediterranean Sea, and the Caucasus region.

IMMEDIATE PETRO-DOLLAR RISK

If the Kremlin demands Gold bullion (or even Russian Rubles) for oil payments, then the interventions to subvert the Ruble currency by the London and Wall Street houses will backfire and blow up in the bankster faces. Expect any surplus Rubles would be converted quickly to Gold bullion. If the Chinese demand that they are permitted to pay for oil shipments in Yuan currency, then the entire Petro-Dollar platform will be subjected to sledge hammers and wrecking balls. The new Petro-Yuan defacto standard will have been launched from the Shanghai outpost. If the Saudis curry favor to the Russians and Chinese by accepting non-USDollar payments for oil shipments, then the Petro-Dollar is dead and buried. The rise of the Nat Gas Coop run by Gazprom is in progress, its gas pipelines to strangle the OPEC and its bastard Petro-Dollar child. The entire USDollar foundation with the USTreasury Bond bank reserve structure is at risk is collapsing, as consequence to the desperate adventure and criminal activity conducted in Ukraine. Just like with Syria, a hidden giant energy deposit is concealed under the table. Off the Lebanese and Syrian coast, a massive off-shore energy deposit was recently discovered. The US & UK & Israeli oligarchs wish to take it all. Confusion is their game. In the western plains of Ukraine, a massive gas deposit was recently discovered. The US & European oligarchs wish to take it all. Confusion is their game.

The danger level has never been higher. No resolution to the Global Monetary War can come, which we have been seeking, without a climax. It is hardly just a financial crisis amidst a stubborn economic recovery. The nature of the currencies and their underlying sovereign bond foundation is highly toxic, which requires a strong replacement as solution, using an alternative to the USDollar alongside its reserve ledger item the USTreasury Bond. A return to the Gold Standard is coming, but the birth will have loud pangs and possibly broad damage suffered. The Global Currency Reset is better named the Return to the Gold Standard. The United States and London will not give up their control of the Weimar Printing Press easily, used for elite self-dole of extreme wealth. It has served well as the Elite credit card. They will not go quietly, and assume their place in the backwater without taking the world to the brink. No climax can occur without enormous risk and loss. The Global Paradigm Shift is in full gear, with attendant risk huge here and now. My Jackass firm belief is that the US/UK fascist team face a Waterloo event in Ukraine, the victim to be the Imperial Dollar. This bulletin will not be a comprehensive note, as the situation is too vast. The information in the Hat Trick Letter is used to interweave a story of the impending removal of the USDollar from its corrupt throne.

UNITED STATES TRAPPED AND CORNERED

The Anglo Americans have fallen into a carefully designed trap by the Russians and Chinese in a clever designed sequence. More Sun Tzu tactics have been put into practice, which utilize the momentum from the enemy to be thrust back on them. Planning for final steps must have taken place during high level Putin meetings with Xi from the elite Sochi viewing box. The unfolding of events has been more carefully engineered and orchestrated than what appears. The US/UK team has been caught in a vise for months, as the rejection of the USDollar as global reserve currency is in high gear, the refusal of the USTBond a recognized trend in diversifications. The death process is slow and grueling. Much of the American Hemisphere is surrounded and controlled by Russia & China, whether the canal, the port facilities, the oil supply, the mineral deposits, even Yuan Swap facilities. Africa has largely gone under Chinese control, with Russia playing a hidden role as well.

The Persian Gulf is in transition, with the critical protectorate role shifting to China. The Qatar royals have just ordered a dismissal of USGovt ambassadors from their nation. Note that Qatar is the site of a giant USNaval base. To be sure, the Sochi Olympic Games are over, a successful event. The gloves have thus come off. The risks have reached acute levels. The US leadership seems cavalier to the risks that over half the USGovt debt is in foreign hands, over 30% of it in Russian & Chinese hands. A severe backlash cometh. The most vulnerable player in the room is the most aggressive, arrogant, vile, and obnoxious. The instability of the situation is far beyond acute. The victim will be the USDollar and its sidekick the USTreasury Bond. The USTBonds will be kicked out of the global banking system. The Third World awaits the United States, for its domestic betrayals, its financial failures, its criminal deeds, and its war aggression.

THE RUSSIAN BACKLASH TO BE SUDDEN

Russian President Vladimir Putin will slam the West, and very soon. The initial salvo might be a natural gas cutoff by Gazprom, the Russian giant which has fast moved into the global monopoly position. Eventually, Putin might demand gold payment for the natgas in the captured pipelines, that being the plan according to The Voice. Russia supplies one quarter of Western European gas needs. It will be the opening salvo for Gold Trade Settlement, for which the Iran workarounds to the sanctions provided the critical prototype. Combined with a formal announcement of USTreasury Bond sales in volume by Russia & China, the impact would be tremendous, even devastating. The reverberation will be soon seen as the pending demise of the defacto Petro-Dollar Standard, dictated by crude oil sales in USD terms. It will also be soon seen as the end of the USTBond as the global reserve standard in banking systems. Notice for over two years, the primary buyer of USGovt debt (and its refunded rollover) has been the US Federal Reserve via bond monetization, an absolute heresy to central banking. Hyper monetary inflation cannot stand as fixed policy. The world has responded by constructing an alternative to trade settlement. The forum has been the BRICS conferences and the G-20 Meetings of finance ministers. The US & UK will gradually be excluded from both forums, a process well along. Even traditional allies like Japan are buying gold in high volume, with suppressed lowball data so far. This is game over for the USDollar, the direct victim of Ukraine backlash. The war against Russia has been veiled, but the Jackass has exposed it.

VEILED ATTACKS AGAINST RUSSIAN GAZPROM

First was the attack against Russian Gazprom in Cyprus. It was a hidden attack made to look like a bank confiscation event. Notice no bank account confiscations outside the small but important island nation. The entire Russian banking clearance system had been done through Cyprus. Also, Russia was making significant transactions to purchase Gold bullion using Cyprus as clearing house for the purchases. Second was the attack against Russian Gazprom in Syria, another complicated event. The US had used the Libyan Embassy as a weapons running facility (major diplomatic violation), after which the US lost Egypt as a transfer station on the weapons running. The false flag attack in Syria was made to look like a chemical weapons event. However, the Saudis were the guilty party. The motive by the US was to block the advance of Russian Gazprom pipelines, which are to connect to the vast Iran supply centers. Iran has far more oil & gas than Iraq. In fact, Iran is the linchpin nation, which will throw its support toward Russia. Iran will push the Nat Gas Coop certain to eclipse Saudi Arabia and the loud gaggle of OPEC members. With the Russian Gazprom, together Iran and the Nat Gas Coop will usher in the Petro-Yuan Standard and bury the Petro-Dollar, the price set by Russia, the contracts set in Shanghai. Thus the Saudis will be expendable, and their Gold in London to be totally stolen.

Move to the present. Third was the attack against Russia Gazprom in Ukraine, done by the CIA and its partner security agents from the small ally nation on the SouthEast Med corner. The old game of destabilization, popular uprising, bank thefts, and now data files stolen has been put into action. The theft of significant funds in Ukraine has only started, funds gone to Swiss banks. The full betrayal will be seen soon. The US & UK have a lunatic plan to corral the Ukraine pipelines and possibly the vast farmlands of Ukraine. The wrong-footed plan will backfire, when Putin cuts off the natgas supply to Europe, when Putin demands a new type of energy supply payment structure, and when Putin engineers certain other steps. They might execute a Nat Gas Coop double in price, much like the OPEC event in 1973. Witness the upcoming Birth of the Eurasian Trade Zone, the birth pangs heard in Ukraine. The United States and Great Britain will not be included. The Eurasian Trade Zone will span 14 time zones and will settle in gold.

IRAN WORKAROUND AS KEY PROTOTYPE SOLUTION

The Anglo Americans have disrupted a key nation with longstanding historical and religious ties to Russia. The land of Ukraine also contains Russia's only warm water naval port in the Crimea, the site of a recent suspicious earthquake. The response will be swift and firm. The Eastern nations (led by China & Russia) have been making detailed preparations in the last couple years to launch the alternative trade system founded in Gold Settlement. Its launch lacks a potential open door trigger, possibly offered by the Ukraine situation. The Gold Standard could return in a baptism by fire. The open door trigger appears to be the Western interventions into Ukraine, since the Western banking structures will not be permitted to collapse, the ugly reality. The abuse of the central bank monetary expansion and fraudulent bond redemption has gone totally out of control, forcing an endless cycle of alternative preparations and motivated reactions, including the Iran workaround with Turkey as intermediary in gold provision. Other attacks have taken place in the last few months against the Russian Ruble by Wall Street firms. The reaction will possibly be the launch of what could eventually be understood to be a gold-backed Ruble currency, combined with natgas cutoffs to Europe and USTBond dumps. At first it could be perceived as the oil-backed Ruble, but its quick hidden conversion to Gold bullion could be revealed later on. The USDollar will be discarded as obsolete, even toxic. The USDollar debt basis might be widely accepted to be the cause of the global financial crisis, and the USFed Quantitative Easing be widely understood to be the cause of the global financial collapse.

EUROPE AS KEY REGION TO TIP EASTWARD

Events inside Western Europe could unfold rapidly. Behind the scenes, much is happening. The important German-French Axis is breaking down, weakened by each passing month and bailout exercise. The motive for much of the German support of bailouts and rescue plans, as faulty as they have been, is the oversized German ownership of both French Govt debt and big French banks. They will fail, both the French sovereign debt and the big French banks. Germany must undergo a split, with a restructure from the devastating damage due to Southern European sovereign debt and related big bank losses. At the same time, Germany is on the verge of turning East to Russia. Already Russia is a large energy and mineral supplier to Germany, the heavy railway facilities in place. The core of Nordic Europe is firm. Austria and Finland are aligned with the pragmatic forces in Germany and the Netherlands. Italy is being transformed, but Spain might be lost to chaos. Turkey is also undergoing change during chaotic reform. The entire NATO Alliance has never been weaker. The military action in Ukraine is framed as a supposed NATO exercise to honor a treaty. Watch the loose end like Turkey fall off the NATO wagon, while Finland falls off the Euro currency wagon. The Jackass is eager to see the Snowden NSA files reveal key data on the illicit usage of NATO bases for narcotics distribution, the origin being Afghanistan. What a bombshell it would be if Turkey announced that their government would no longer permit heroin shipments from USMilitary aircraft on their Incirlik Airbase.

A key player in the mix is Israel. They have a Tamar floating platform, whose natgas has been pledged under contract to Russian Gazprom. The tiny nation is possibly changing its alliances out of pragmatism, seeing its drained weakened host that has duly served its purpose. The next big step is for Western Ukraine to suffer the drain of remaining resources (financial and agricultural) to the West, using all the diplomatic tools the Euro Elite can muster. The people in the East will realize that they have been betrayed once more by the Western powers. This is the critical final step. Several swing nations will consequently align with Germany, if only to make being integrated by Russia less painful. During all the transitions, China will take care of Asia in this game. The remaining overriding question is whether the US & Britain will go quietly in the night of faded empires, or else to wreck the world with nukes and viruses. The main exports out of the United States and its royal handlers have been fraudulent bonds, military hardware, genetically modified food, fast food with diabetes, pharmaceuticals, surveillance software, computer viruses, and jamming software technology. Such is the nature of the fascist transformation.

RUSSIA CANNOT BE ISOLATED

The West is in for a gigantic surprise in the sequence of events to unfold. They have placed criminal oligarchs into top government positions in Ukraine. Doing so might suit the West but not the Ukrainian people. The political brain trust in Berlin shows extremely errant strategy, still kowtowing to the USGovt and London Elite in an incomprehensible manner. The West cannot isolate Russia, which is the latest absurd bone-headed strategy. They need Russia in vital ways that will become apparent when the West faces energy supply cutoff or forced Gold payments during an open global USDollar rejection. The US will quickly feel the lost Petro-Dollar gear mechanisms. China has already aligned itself beside Russia, which makes isolation impossible. Consider the Russian commodity supply and Chinese industrial power, the new axis to the Eurasian Trade Zone.

The West cannot continue to bully Russia & China. Poking a stick in the bear's face will not work for long. Disrespecting the Chinese creditor is deep folly. The risk that coincides is for the two Asian superpowers to threaten or actually execute a dumping initiative of USTreasury Bonds, and force the United States to use its last card in a grotesque display of hugely amplified monetary expansion. The US would collapse by falling on its own sword, the event occurring in the Weimar chamber. A super high volume bond monetization machine to cover globally dumped USTBonds is a strong likelihood as climax event, with a broken derivative mechanism that is revealed during its fracture. The London banker murders (another Jackass correct forecast, made in mid-2011) indicate a motive to keep covered up the extreme $100 billion JPMorgan derivative losses at the hands of the London Whale Bruno Iksil, first sighted in May 2012. The accelerated hyper monetary inflation in response to Russian & Chinese joint retaliation would finally kill the USDollar. The echo event, born from failure, would be for the USGovt to launch the new split Scheiss Dollar. Then the USGovt could have its domestic currency finally, and then wreck it with an assured painful sequence of devaluations. The fundamentals for the US domestic only currency are truly horrible, typical of a Third World nation. Ukraine is about the last gasp of the USDollar. It has no viable defense.

UKRAINE AS WATERLOO FOR THE USDOLLAR

Ukraine is the Waterloo event for Team Obama and the Wall Street handlers, the true controllers of the White House puppet. Ukraine will lead to wreckage to the USDollar and its USTBond partner in crime. Witness the death of the USDollar and the Birth of both the Gold Trade Standard, on the new Eurasian Trade Zone landscape. Neither Russia nor China will cooperate on the IMF super sovereign reformed currency basket at this point, not during extreme hostility and conflict. Hope and pray for cooler heads to prevail, since already many serious military attacks have occurred with advanced weapons off the Syrian coast. The Western Press prefers to frame the Ukraine situation as one more curious Orange Revolution event staged in Eastern Europe, akin to the other deceptive Arab Spring events. The old Soviet Union was trapped years ago, forced to use hyper monetary inflation in defense, as the nation imploded financially. The United States is now trapped in an ironic parallel manner, and will be exposed for its heretic inflationary response that ramps up to obscene volumes, followed by financial implosion. In fact, the events from here onward are the final hurrah for the USDollar regime and the criminal cabal.

Now has never been a better time to own a big stack of gold & silver coins & bars, stored in a secure place outside the United States, outside England, outside Switzerland, even outside Canada. The people must defend against a climax of systemic failure, led by arrogance, stupidity, desperation, and delusion, even armed aggression. It remains to be seen whether the Kremlin has some secret allies who might emerge in time, from other worlds. But that is an entire other story to be told someday maybe. We earthlings will all find out soon enough. Times are changing fast, and better to be alert than to get hurt. The Global Currency Reset lies directly ahead, complete with its doubled Gold price and doubled Silver price. The Russians & Chinese are motivated to respond to a military prod, poke, and nudge by delivering a financial response. The rejection of the USDollar is near. The rapid diversification away from the USTreasury Bond is near. The arrival of the new Global Gold Standard is imminent.

 

How monetary policy drives foreign policy

It should now be evident that America's foreign policy is to an extent being driven by our banking mess. Again and again, we see Washington, including Wall Street's handmaiden, the Fed, exporting monetary chaos implicitely in order to weaken the status of potentially competing reserve currencies:

• Wall Street sent a tsunami of bad AAA-rated mortgage debt to Europe, much to Germany, the locus of power for the Euro (and again, implicit admission of guilt is seen in the apparent fronting of billions of bailout dollars to the European banks by the Fed after the crisis);
• Washington has apparently fomented or supported a coup in the Ukraine that increases the likelihood of war in Europe dramatically therefore sending the gigantic pools of liquid financial assets in the world scurrying into the greenback and US Treasuries, which the Chinese have stopped gobbling up;
• the other factor is that the military-industrial complex needs war to get its funding, and when drone-bombing rag-heads can't provoke a serious attack, destabilizing a former Eastern bloc nation and provoking a somewhat justifiably paranoid Russian leader into military action guarantees at least a shot in the arm of crisis funding.

Russia has repeatedly stated over the past decades that an EU move on the Ukraine crosses a red line. The EU ignored the warning, and with the US's help and the ire of Ukrainians sick of a corrupt government crossed Putin's red line. What the Ukrainians want is democracy and relief from their corrupt plutocrats (see previous post's article by Paul Craig Roberts).

The US has no compelling strategic interest in the Ukraine, or in the Crimea remaining part of the Ukraine. Yes, the Ukraine has been looted by its oligarchs, just as Russia was, and just as the US is being looted by its oligarchs right now; incomes of a majority of American households are falling so the banks can collect on bad debts. It would be nice for people everywhere if they could break the grip of the plutocrats over their livelihoods. In the Ukraine, to substitute debt servitude to Western banks for the domination of the oligarchs would only accelerate the collapse of the EU. And it's not clear the EU, if it offers help, won't be ripped off by the oligarchs as well. The new government in the Ukraine has already increased the power of the oligarchs by giving them provinces to rule, so it's not clear the Western "rescuers" are even able to help solve the fundamental problem at all, and might end up losing their shirts again, as they have in Greece, Portugal, et al.

Until democratic governments around the world become strong enough to counteract the power of the plutocrats by taxing them, both their income and their wealth (as Sweden does) the revolving looting of sovereign governments and demolition of middle classes by the plutocrats and their corporations will continue.

A couple of posts ago I said the scariest thing I've heard recently was Catherine Anne Fitts saying what the world needs now is a global debt for equity swap. I should say I generally like Ms. Fitts' analysis and suspect she may even have misspoken when she made this comment. Such a move would concentrate ownership of the world's assets sufficiently to create even more of a Plantation Earth than we have currently.

She identified the problem, but not the solution. What the world needs now is a global jubilee, debt forgiveness. The debt that the Fed is shoving under the carpet via QE is what is known in banking circles as "bad debt." It is loans that never should have been made because they will never be repaid. In honest not crony capitalism such debts come out of the profits (as losses) of the banks that made them. In crony capitalism, with a central bank controlled by the banks, such debts are "paid back" by being monetized and put on the backs of the taxpayers either directly or through inflation.

The austerity programs Europe has put in place so that Wall Street and European banks can be paid back bad debts have destroyed more than one economy and more are probably yet to fall. (The idea promoted ten plus years ago of "convergence" of interest rates in the EU between periphery and core caused me to gag at the time.) Debt slavery to Western banks is not the answer. (China is apparently making similar mistakes; it will be interesting to see what they do with the bad debt. I suspect their strong central government will tell the bankers to go stuff it.) Ms. Fitts suggests that sooner or later the plutocrats will destroy the banks in order to buy them cheap and collect the rents themselves, canny suggestion indeed.

Chaos in the world = a strong dollar. Until it doesn't. Chaos has a way of being unpredictable.

Capitalism has killed democracy. "Free" markets dominated by monopolies and oligopolies are not what Adam Smith had in mind. It's time for democracy to be reborn. There are degrees of economic inequality that are simply immoral and destructive and humankind has the right to reject them. When the top 85 families own as much as the bottom 3.5 billion people, as recently reported, we have reached such a point.

The scariest thing I've heard recently

In an interview with Greg Hunter on his YouTube channel Catherine Austin Fitts said, "What we need now is a global debt for equity swap."

In other words, let the sovereigns out of their unpayable debt by selling off public assets to the global plutocratic class.

This will seal the deal for generations of neo-feudalism to come.

More and more, I think the only way populations will throw off this yoke will be by national strikes that shut the corporatocracy down. I'm not advocating national strikes, but I don't see any way to combat entrenched neo-feudalism through democratic means, as the democracies have been eviscerated through the corrupting powers of money.

Talk continues to percolate through the Intertubes of the imminent "global reset"....

QE = Quantitative Erasing

How even the nostrums of decades of accepted mainstream academic economics are debased by propaganda in these latter days!

As John Hussman has pointed out, the euphoria of the current expansion (among the haves) is largely due to the legerdemain of FAS 157, the "pretend and extend" statement.

But FAS 157 was not enough.

Graduate students have been taught for decades that excess reserves are just that, in excess of required reserves, and therefore do not contribute to money multiplier money creation, or to movement of the real economy.

So "quantitative easing" (taking bank assets into the Fed and letting them serve as reserves) when it involves adding to already excessive levels of reserves should not expected to have an effect on the real economy. And it hasn't, by definition.

So why do it? The reason for QE is simply to sweep the mountains of bad debt on the banks' balance sheets into the unauditable fetid swamp that is the "Federal" Reserve System. It is "quantitative erasing" of these bad debts and magical transmutation of them into the gold (for the bankers) of high-powered reserves, so that the bonuses may increase!

The Fed has never to my knowledge reported on the losses on the assets it holds.

So I gag when I hear that Fed policy is going to remain "accommodative." It is a measure of the level of false consciousness even among supposedly professional economists that no one is calling out the Fed on this canard. ZIRP is so far from being repealed (see Hussman's beautiful chart relating reserves as a percent of GDP to short rates a couple of posts ago) that the dreaded "taper" can a priori have no effect on short rates; the only effect might be lower long-term inflation expectations, which would flatten the yield curve, which would be bearish for the economy, other things equal.

So I just think of QE as "quantitative erasing" and further plunging into the monetary chaos to come.

The banking system remains an anvil around the neck of the American economy. The Fed needs radical reform, or better, to be abolished.

And when the crisis comes, I pray that the haves in America will rediscover a collective conscience and realize that the countrymen and women they have expropriated are their closest relatives.

Inequality forever: the (hidden) neo-feudalist agenda

I read a lot of different blogs, mostly for their links. I have little interest in reading Yves or Michael Snyder, but they both provide lots of high-quality links, so I frequent their blogs. Some blogs I won't go to, like Brad de Long's, simply because the stench of the self-satisfied Establishment is too much.

What I find tragic about the libertarians like Mish and about the Evangelicals like Michael Snyder is that they are apparently willing to play so readily into a Government-destroying gambit that opens the way for those in control of vast wealth, the 1 percent, so to speak, to bankrupt governments worldwide and then buy up their assets at trivial prices as occurred after the fall of the Soviet Union; in other words, to take the world into the new world order dreamed of by Rockefellers and other Illuminati for generations, a neo-feudalism enforced by financial fascism through a world-wide fiat money system run by the Bank of International Settlements, which there are the lords and ladies of wealth over the debt-serfs, everyone else. Snyder even had a link to a Carroll Quigley quote on this from the Sixties.

Depression conditions are known to foster fascism, but the indicated depression conditions don't seem to bother the Evangelicals or the libertarians.

But history is nonlinear, and I maintain hope that in the Crisis to come a new viable democratic form will emerge.

The Fed is (probably) insolvent; bank margins to suck more

John Hussman has come and said what many have believed for some time now, that the Fed is probably insolvent (here).

The Fed has become the dumping ground for bad assets. Here’s what happens: they take them in from the banks at some highly notional (what is called “mark to unicorn”) value and hold them as “reserves” against the bank’s putatively active lending; which may or may not occur because the Fed now pays interest on reserves even as the reserves are likely deteriorating in value.

The Fed is the proverbial carpet under which the bad debt of the banking system is swept. Hence, the creditors and owners of banks and bank holding companies are relieved of having to recognize losses, and the fiction of “simulative monetary policy” is maintained. As Zero Hedge is fond of pointing out, the only known transmission mechanism from loose money to anything is to asset bubbles, the current one being stocks again, with a bubblet appearing in real estate.

This is capitalism without failure writ large. The antidote, in the view of the “Washington [/New York] consensus” (to borrow a term) is “more of the same.”

Like Bernanke, Janet Yellen didn’t a thing coming of the last crisis (even though the world-wide ramp-up of housing pricing made front page news in “The Economist,” as I recall.

And I can say from personal experience that many in retail banking wondered what would happen to Consumption when the housing ATM was shut off.

Thus I believe MMT will win out in the end, as war and/or infrastructure projects demand funding. Whether a major inflation or hyperinflation gets going remains an open question to me, as I believe an inflation (wage-price spiral) is a labor market phenomenon accommodated by monetary policy, and there seems little indication that the PTB have any intention of raising anybody’s wages.

Bad debts, those destined for charge-off, don’t go away by themselves; they have to be charged off. A major deflation will occur when that reconciliation finally takes place. Even if accounting fiction remains in place, the fact that such debts when returned to the banking system do not contribute revenues tells us bank margins are going to get a lot thinner in the future. A bank may be able to dress up its balance sheet but not so much its income statement.

Freedom’s Sunset

I am pleased to recommend a new thriller, Freedom’s Sunset, which is currently in the top 50 in Amazon’s political thriller category.  Please support this new author by reading the book and (if you like it) giving it a five-star review. Amazon’s algo's are very sensitive to the reviews.

Book Description

Are you concerned about the collapse of the American economy?  Here is a thriller about the collapse of the Soviet empire that provides historical insight into that collapse. It is June 1990. Mikhail S. Gorbachev, President of the Union of Soviet Socialist Republics, fears that his policies of glasnost--openness--will cause the union to split apart.  The Berlin Wall fell in the past November. 

His political rival, Boris Yeltsin, appears to be gaining popularity. On a cold day Gorbachev comes to Minnesota in the American heartland for a historic visit. A product of the Russian countryside himself, Gorbachev is happy to be free of the intrigues of Washington, D.C. and Moscow for a day. 

But he will face an encounter with Zack Pedersen, a troubled youth from South Dakota, on Summit Avenue in St. Paul that sheds light on two very different empires in different stages of collapse.

Written in a style combining John le Carré with The Hunger Games, this book will appeal to those around the world who yearn for freedom and are willing to pay the price to keep it. The story contains strong language and adult themes.

This book includes a lot biographical flashbacks on Gorbachev’s life.  Reviewers find that it provides a lot of historical insight into the collapse of the USSR, and what has happened there subsequently.  Gorbachev’s personal story is especially compelling.

Russia currently has a sovereign debt to GDP ratio of approximately 10-15 percent.  They defaulted on much of the USSR’s debt.  Putin must be laughing at the what the bankers are doing to the Europeans.

Financial fascism leads to collapse

I posted this over at macrofuge.com:

In story form: when financial capital (ownership of “physical capital” aka the means of production) becomes too concentrated, a “failure of effective demand” occurs as the owners of the means of production lower wages to the point where consumption spending begins to fail; this depresses “animal spirits” quite rationally because most [true] investment demand is a derived demand (from consumer demand); hence the preference among those owning the means of production in the form of financial capital to prefer rents and speculation (with their cash) over investment in “physical” capital; through influence the rentiers lower capital requirements and create an inherently unstable monetary structure, within which they fight like pirhanas over speculative opportunities, which leads to a cycle of intermediary collapses, extreme monetary base creation, and bailouts using sovereign powers of taxation to pass the loss along to the people; once trust on the monetary unit vanishes, perhaps with an expropriation of deposit funds, the stage is set for (1) deflationary collapse, as bank runs overwhelm the deposit insurance system, and (2) hyperinflation, as the monetary authorities order banks to issue prepaid debit cards to anyone wanting to withdraw his or her money from the bank to “restore confidence.”  They then go and spend it as fast as they can.

The structural reforms needed: no more (or much higher reserve level) fractional reserve banking; steeply progressive income and, for a time, wealth taxation to restore a healthy circulation of income and product. See Emanuel Saez’s recent interview on this at http://www.bostonreview.net/BR38.1/emmanuel_saez_david_grusky_income_inequality_taxes_rent_seeking.php

Marx has the last laugh.

Personal note:  the bank has cut my position, and I am seeking new opportunities.  While I was happy to support small business lending, which is what I did, it was hard for me to reconcile working in such a manifestly corrupt industry as banking with my personal values.  The Fed and the big banks are sucking the life blood out of the economy.  As has recently become public knowledge, the big banks’ “profits” are manufactured out of their influence (being “too big to fail”).  Still, small businesses need loans (sometimes), and I felt good about supporting that, although I would encourage anyone thinking of starting a small business to avoid debt if at all possible. 

We are living through a period of history when the Devil has much of the world by the throat.  One can only hope and pray that it ends better this time than it did in 1940.  It will take a miracle of collective willpower.

A scorcher of a commencement speech

A modern-day prophet Isaiah speaks to the graduates.

Hussman on bank reform

Via:  www.Hussmanfunds.com :

That's what's so frustrating about the discussion surrounding bank "failure" - a $15 trillion stock market can lose 20% ($3 trillion) and it's just a run-of-the-mill bear market. But let bank bondholders face a similar loss, and the banks cry that the whole financial system will go down. We'll finally get some economic traction when global leaders have the sense to take bloated, mismanaged banks into receivership, mark down the assets to their actual value, restructure the repayment terms with homeowners and other borrowers, haircut the liabilities enough to make the resulting entities solvent, and then return them to the private market under a regulatory structure that splits traditional lending from securities trading. That prospect is getting closer.

President’s men: debt disaster coming

Via:  www.washingtonpost.com

Obama's debt commission warns of fiscal 'cancer'

By Dan Balz
Washington Post Staff Writer
Monday, July 12, 2010; A02

BOSTON -- The co-chairmen of President Obama's debt and deficit commission offered an ominous assessment of the nation's fiscal future here Sunday, calling current budgetary trends a cancer "that will destroy the country from within" unless checked by tough action in Washington.

The two leaders -- former Republican senator Alan Simpson of Wyoming and Erskine Bowles, White House chief of staff under President Bill Clinton -- sought to build support for the work of the commission, whose recommendations due later this year are likely to spark a fierce debate in Congress.

"There are many who hope we fail," Simpson said at the closing session of the National Governors Association annual meeting. He called the 18-member commission "good people with deep, deep differences" who know the odds of success "are rather harrowing."

(Graphic: President Obama's proposed 2011budget explained)

Bowles said that unlike the current economic crisis, which was largely unforeseen before it hit in fall 2008, the coming fiscal calamity is staring the country in the face. "This one is as clear as a bell," he said. "This debt is like a cancer."

The commission leaders said that, at present, federal revenue is fully consumed by three programs: Social Security, Medicare and Medicaid. "The rest of the federal government, including fighting two wars, homeland security, education, art, culture, you name it, veterans -- the whole rest of the discretionary budget is being financed by China and other countries," Simpson said.

"We can't grow our way out of this," Bowles said. "We could have decades of double-digit growth and not grow our way out of this enormous debt problem. We can't tax our way out. . . . The reality is we've got to do exactly what you all do every day as governors. We've got to cut spending or increase revenues or do some combination of that."

Bowles pointed to steps taken recently by the new coalition government in Britain, which also faces an acute budgetary problem, as a guide to what the commission might use in its recommendations. That would mean about three-quarters of the deficit reduction would be accomplished through spending cuts, and the remainder with additional revenue.

Most Republicans in Congress are opposed to any tax increases, which has made the work of the commission far more difficult. Bowles and Simpson appealed for support to the governors, who have been forced by their states' constitutions to balance their budgets with deep spending cuts and, in many cases, tax increases.

Bowles and Simpson said the commission would have had a stronger hand politically had it been created by Congress, rather than through an executive order. Simpson was pointed in his criticism of seven Republicans who once co-sponsored such a measure but who helped block it in the Senate.

"As far as I can discern, it was to stick it to the president," Simpson said. "That's where we are in Washington." He later added that all seven "have now come to us to say, 'We're ready to help.' "

The presentation by Simpson and Bowles, which included repeated statements of determination to produce a bipartisan set of recommendations, drew praise from the governors.

"I don't know that I've every heard a gloomier picture painted that created more hope for me," said Arkansas Gov. Mike Beebe (D).

Washington Gov. Chris Gregoire (D) said that many governors fear that the commission's recommendations will result in more demands on the states.

Bowles, who noted that the 1997 balanced-budget agreement between the Clinton White House and the Republican-controlled Congress included many provisions that put more burdens on the states, said that wasn't likely.

"I don't think you're going to see a lot of devolution coming from us because the states are all broke," he said.

Simpson also warned that the November elections could add another wild card to the work of the commission. "I have no idea what's going to happen on Election Day but it's going to be disruptive . . .," he said. "It's going to be a big wake-up call around the whole United States. I have no idea where it's going, but thank heaven we have a month then to work through the wreckage."

See also:  Niall Ferguson's Complete And Definitive Guide To The Sovereign Debt Crisis

The collapse of effective demand (cont.)

First quarter 2010 data on the components of nominal aggregate demand show only consumption and government spending above pre-recession levels.  Investment spending is at early 2003 levels in dollars and would be lower in real terms. 

The uptrend in consumption is not supported by “real” personal income growth as pointed out by contraryinvestor.com in their May note—it’s mostly coming from government transfer payments.

 

Consumption out of disposable income is soaring again as consumers get tired of saving.

The picture of final sales to domestic purchasers shows domestic nominal demand at 2007 levels.

Employment/population has improved slightly, it is still at early 1980s levels, and the labor market continues to be very slack, with the unemployed experiencing extreme difficulties in finding a new job.

If the government experiences any trouble at all in floating its debt, the transfers to the lower income brackets will probably be diminished, causing a collapse of consumption spending.  The lifting of the “emergency” extensions of unemployment benefits would fall into this category.

The government could kill the economy more quickly in a number of ways, including requiring 1099s to be filed for all expenses over $600 paid by any business that would kill small business; by the imposition of a VAT that would kill small business; by a tax increase on any middle- or lower-income bracket.

The rich have conspired to suck a disproportionate amount of the income from corporate America to themselves, while keeping marginal tax rates on that income at historically low levels.  There is not organic personal income growth to support a recovery.  A “classic Keynesian” prescription would be for government to debt-finance a massive government investment injection to aggregate demand, but the bond market probably won’t like that.  Keynesianism as practiced by the mainstream has ignored debt/GDP, now at record levels. 

In the coming collapse of aggregate demand, the rich will have to answer the question, “Am I my brother’s keeper?”

Ben Bernanke as the Wizard of Oz

Is it all just a Ponzi scheme? – Sprott Asset Management  h/t zerohedge.com  Must reading.

Not only does the Fed not tell us what’s charging off on the asset side of its balance sheet, of all the crap they’ve taking in, but the Treasury’s accounting for purchases of Treasury securities suggests the Fed has been much busier than they have admitted, monetizing US federal debt, and that international demand for our sovereign debt is much weaker than most imagine.

I called my Senators and told them not to reappoint Bernanke.  Even though I have a Ph.D. in economics and lots of industry experience, I have trouble fathoming what’s going on.  But some things stand out:  WaMu failed and the depositors were just fine.  They found people to run the bank.  Most big banks have infrastructures that run themselves largely independently of the wheeling and dealing that occupies the fat cats.  As Barry Ritholtz and I and others have pointed out, the bailouts represented the largest wealth transfer in the history of the world.  And in this case the transfer of wealth was upwards, from taxpayers to the generally well-heeled bond and equity investors—and the very well compensated managements—of the rescued institutions.  This was truly obscene.

And now Ben Bernanke has apparently decided that he needs to rescue the US government.  This is pretend and extend on a massive scale.

I surmise that the monetary authorities of the world are trying to orchestrate a global debt jubilee through rampant coordinated inflation, perhaps hyperinflation once it gets going—and that the Vampire Squids of the world, the Goldman Sachs and as a class the well-heeled speculators of the world with deep pockets and even deeper access to leverage, are just salivating over the opportunity to lever up again after the next debt-deflationary collapse circa 2013 (and there must be another debt-deflation because we still carry all that bad debt on the books).  Debts that can’t be repaid get charged off sooner or later—unless the Fed buys them and never tells us about them, in yet another secret monetary transfer to the wealthy!

This reminds me of the cyclic universe theories, in which the universe goes from big bang up and down to big bust in a new singularity, over and over again.  For surely the next leveraged rip-off by the moneyed class in the almost inevitable inflation to come will enable further strangulation of honest working people around the world, and further increases of inequality, that primary cause of the current collapse of effective demand.

For most people, money in the bank is a deposit, not a loan.  It’s money.  The feds could have insured deposits up to $250,000 or more and let all the big bankrupt financials collapse and most people wouldn’t have noticed any more than a change in the sign on the bank. And then with all the bad debt and the bad managements cleared out of the system, we might have started to work towards having sound money. 

But that would have required a kind of backbone and commitment to principle that our federal government and the Fed don’t have. 

The Fed blew it, and continues to blow it, if Sprott’s analysis is correct.  Volatility of all kinds is bound to increase once the inflation begins.  We are in the eye of the storm.

Animal spirits update

Data to October.  Unemployment is assumed to climb to 11.1 percent in a year and then decline.  I still expect “animal spirits” to climb up to about zero in 2012.  The last couple of times they rose to zero from depressed levels in a presidential election year were 1972, followed by Nixon’s resignation, and 1976, followed by the electorate’s rejection of the Republicans.  President Obama faces an ugly national mood.

Confidence will stagger upward till 2012 even if unemployment rises to 13 percent over coming quarters according to the “animal spirits” model.

The recession forecasting model, which forecast the last two recessions a year or more ahead in real time, well ahead of the consensus, sees no NBER-defined “recession” in the coming year.  Output and demand aggregates can be expected to grow, although I think the collapse of consumption (November 2009 commentary) due to increased saving will crimp growth.

This economic situation is unfortunate in that a majority of people will retain their jobs and houses and will have very little incentive to adopt changes that appear risky or expensive to them.  The process of marginalization of the lower strata that has been so evident over the post-Reagan years will become pronounced.  I think any American can understand how this can happen.  Most of us have little job security, much to lose, and there is no safety net to speak of.  Congress’s recent extension of unemployment benefits only highlights this sad fact.  Most of us have friends who have lost their jobs and are dealing with losing their houses and their family’s way of life in short order if adequate employment is not found.  And of course our politicians will do nothing fundamental until events force their hand, in which case they are likely to serve the hand that feeds them.

This is what the late stages of failure of the social contract might look like.  As regular readers know, I subscribe to the thesis of Strauss and Howe’s The Fourth Turning in this regard.  It is a couple of economists’ melding of economic long wave theory with a theory of generational archetypes.  Anglo-American history has been punctuated by crises about every saeculum, the length of a long human lifetime, or about 80 years, in a sequence like this: 1688, 1776, 1860, 1940,…2020?

The crisis will unfold with bankruptcies of the federal government, states, pensions, banks, and anything else that is insolvent and resistant to the Fed’s ministrations of reflation.  Will Hank Paulson’s threat to impose martial law come true?  Will the unemployed cease to pay taxes on whatever pick-up work they can get?  Will a barter economy emerge?  Will we all be living hand to mouth?  Certainly there is another hard leg down coming—for most people, maybe not so much for the rich.  One way to look at the past thirty years is to note that to counter a slowing economy the rich have simply increased their share of income and lowered the tax rates they pay on it.  The fact the share of taxes paid by the rich has gone up only shows that inequality has increased faster than tax rates have gone down.

It is not necessary to comment on the obscene remarks by the head of Goldman Sachs alleging that he is “doing God’s work.”

See Robert Samuelson’s article on the IMF’s view of world fiscal policy.  Note that even a sustained 6 percent inflation won’t solve our problem, even if it didn’t damage our currency.

I still expect the next debt-deflationary collapse to come in 2013 or 2014.  There doesn’t seem to be much danger of inflation before then.

Zombie government

hat tip Zero Hedge

Dead government walking – Sprott

“Animal spirits” still poised to rise

Not because the fundamentals of the economy are better, but because people are becoming accustomed to the higher unemployment rates (rising adaptation level), some degree of confidence is returning to American consumers, although they are still in technically “depressed” territory because the current unemployment rate at 9.8 percent is above the current adaptation level of 6.4 percent.  Recall that my formula for imputed “animal spirits,” A, is

A = - (U – UMEAN)/Stdev(U)

over a recent four-year period, where UMEAN is an exponential weighted average.

Click on graphs for a larger image in new window

The primary distinguishing feature of this slump is the credit crisis.  But not everything is different this time, to coin a phrase.  “Animal spirits” still drive economic activity to a large degree, and inversions of the yield curve (perhaps as reflections of expectations) accurately signal “recessions” as defined by the NBER, what ordinary folk call business cycle slumps, troughs, depressions or panics.  My model predicted this past slump in 2006, and the previous recession in 2001, both at times when the majority of professional forecasters were predicting “no recession in sight.” 

So it is with a bit of irony that I report that my “animal spirits” plus slope of the yield curve recession forecasting model is saying “no recession in sight.”

That little blue squiggle near the zero line extending a year into the future represents the “probability of recession” over the coming year.  It is negligible, in the NBER-defined sense of recession.  The components of output they look at will probably turn upward and show positive growth rates.  Unemployment will continue to climb for about a year, and there will be no reform of the financial institutions that created this mess.  Wall Street is squarely to blame.  Barry Ritholtz and Andrew Ross Sorkin have books out that do a good job describing how.  Our entire monetary system is compromised, our financial markets manipulated at a prima facie level beyond dispute (e.g., Goldman Sachs and Morgan Stanley, now “banks,” can borrow at a zero interest rate from the Fed in a carry trade and turn around and speculate with taxpayer money); our Congress and President are totally flaccid in the grip of Big Money.

I expect, with others, that the United State of America is heading toward a major crack-up that will change the way we live permanently.  Whether the rich and their mercenaries take over the country and subject the rest of the populace to a form of neo-feudal servitude (likely the result here and in China), or whether there will be a splitting up of the American states (unlikely), or whether there will be a “revolution” and a new government put in place (possible), who knows?  But the additions to debt that Congress and the President are blithely talking about—coming on top of existing indebtedness—will bankrupt the US and destroy the value of its currency, so a hand-to-mouth existence for many is entirely possible.

As Proverbs says,

He who oppresses a poor man insults his Maker,
but he who is kind to the needy honors him.

The fate of America depends largely on the wisdom of the wealthy, who have feathered their nests so well since Reagan (symbolically, at least) began the movement toward false wealth (debt) for the majority, lower taxes and massive worldly wealth for the tiny upper crust.  It is the now-inbred arrogance of the American “aristocracy” (oligarchy?) that makes me think the best near-term remedy for what ails us would be to raise marginal tax rates on incomes over a million dollars to something like 75 percent—to bring these knuckleheads down to earth and make them realize they breathe the same air the rest of us do.  Man up, Congress!  Man up, Mr. President!  And this is coming from a quasi-libertarian classical liberal!  There is no escaping the state; there will always be a state; the question is what do we want it to do.

I still expect a greater collapse to come after the next Presidential election, in about 2014.  It may come with war.  Our Federal Reserve is on record stating that some inflation would be good for us.  But they have the problem that excessive debt, debt that doesn’t get repaid, causes deflation, not inflation, as we’ve seen in real estate.  Historically, a hot war is the best way to get an inflation going.  The secret hope of the Federal Reserve is that the rest of the fiat money central banks in the world, many in as bad shape as ours, inflate more quickly than we do, causing our currency to retain relative value. 

This will be the final supernova of Bretton Woods II, pure fiat money with no backing.

But it will take a long time to get an inflation going, easily five years, I would guess.  We could continue to have deflation in some major asset prices like houses while experiencing inflation in day-to-day consumer prices like food and energy.

In other developments, labor market volatility, which serves to soften the blows of rising unemployment when volatility is rising, and to amplify the psychological effects of small increases of unemployment when volatility is very low, as it was early in this decade—labor market volatility will peak around yearend 2010 and begin a steep decline.

“Animal spirits,” in turn, will “go positive” a year later, about the beginning of 2012.  The sense of a stabilizing labor market will be strong.  If this occurs as forecast, it will herald a time of seeming happiness (that Shakespearean “seeming” is added because I don’t think people will really believe it).  It may be quite euphoric and strange.

“Animal spirits” will peak in early 2013 shortly after the president’s inauguration.  Then “animal spirits” and the economy will probably drop like a rock as the federal debt binge and drying up international credit squeeze the last drop of effective demand out of American households.  By rights, this should be a deflationary collapse because it will be caused by too much debt.  As I say, I think it will take a hot war to get a general inflation going.  In passing, I note that when you have a carry trade in a quantitatively-eased currency, the Big Money can create spot inflations and hyper-inflations in commodities or paper assets at will, as happened with commodities last year.  Certainly the sharpies are keeping an eye on oil, as a little trumped-up panic about the stability of the Middle East could create a situation they could play going up and coming down.

I do believe that our thoughts have power, not only on other people, but in the physical world.  Lynn McTaggart’s wonderful books provide an introduction to the now three or four decades of scientific research on such topics.  It is necessary for the mass of humankind to pray for the new aristocrats, the oligarchs, who bestride the globe with their unimaginable wealth and their plans for the rest of us.  Let’s all pray that they come back down to earth, that they realize that it is not they who are going to determine what our rights are, but a power far higher than we or they. 

For the love of money is the root of all evils; it is through this craving that some have wandered away from the faith and pierced their hearts with many pangs.

Peace.

Reading assignment for President Obama

In the Financial Times (click through on title; FT has asked us not to repost):

This time will never be different

Review by Martin Wolf

Published: September 28 2009 03:18 | Last updated: September 28 2009 03:18

This Time Is Different: Eight Centuries of Financial Folly
By Carmen Reinhart and Kenneth Rogoff

How can change come?

For me the litmus test of whether Bernanke will ultimately fail and lead the country into deeper depression—or whether he will reform the financial system—begins with this:  now that the immediate crisis is averted, over coming months does he weed out the bad debts and bad banks, letting the losses fall where they should according to law, or will he attempt to sweep them under the carpet as I suggested yesterday, to try to make them disappear into the black hole of the Fed?  The latter would complete the massive transfer of wealth from ordinary Americans to the financial elite that Hank Paulson initiated.  If Bernanke temporizes and “lets zombie banks run” we are assured a prolonged liquidity trap, more asset bubbles as the Goldman Sachs’s and other trading banks take advantage of free money from the Fed, and a grinding immiseration of the national psyche. 

• The troubling side of Ben Bernanke - Ambrose Evans-Pritchard h/t Yves
• Dismantle Bernanke's 'Happy Conspiracy' ... now! – MarketWatch h/t Mish
• Which Bernanke? Whose Bubble? – Baseline Scenario
• The case against Bernanke – Financial Times
• Audit The Fed "Dangerous"? – Market Ticker 

My proposal for fiscal policy is to provide livable workfare and health benefits to the unemployed before spending a nickel on anything else.  Ron Paul suggests bringing troops home to pay for national health insurance—that at this moment in history to cut everyone loose as his libertarian principles would require would be inhumane.  If the fiscal stimulus is distributed anything like the financial bailouts were, it will go to the richest Americans.  The political system has been corrupted by money and serves moneyed interests above all others. 

Let’s forget macroeconomic models, “fiscal stimulus” and “quantitative easing.”  Let’s concentrate on the American people.  The nation is a fiscal basket case—and the people don’t trust the government to spend their money any more.  They didn’t agree with the bailouts and no one listened to them.  They’re right to be concerned with the deficits.  They don’t trust the financial markets any more.  They have no idea how to invest their growing savings.

Let’s stop all the academic nonsense and help out the American people.  The American empire is showing all the classic signs of elitist, hubristic collapse.  It never ceases to amaze me how even commentators on the left can ignore what’s going on right under their noses while debating macroeconomic figments.  In this context the way that most of academic economics has circled its wagons to support Bernanke is particularly pathetic.  They did the same for Greenspan, while it was the “tinfoil hats” who were critical.

How does change come when the President and Congress are so clearly compromised?

William Black is always worth watching

This is making the rounds and is worth watching.  I’ve posted William Black videos before.  He speaks clearly and with tremendous authority about the financial fraud that our government is enabling, aiding and abetting so cavalierly.  Once the American people glean the slightest understanding of what is considered normal protocol in Washington and New York, I expect we’ll witness great social change.