Morning Update/ Market Thread 3/31 – Leadership Vacuum is Dangerous Edition…

Good Morning,

Equity futures are slightly lower this morning prior to the open. The dollar is sinking, bonds are rising, while equities seem to be correlating to the movement of the Japanese Yen – as the Yen moves lower (with massive intervention) the market moves higher, and visa versa. Today the Yen is stronger. Silver and gold are strong, rising close to new records, but food commodities are slightly lower.

Oil, however, is doing a moon shot! This comes on the heels of yesterday’s announcement that we are awash in oil – the highest Cushing reserves in history… so much oil that we are almost out of places to store it! And gasoline demand is plunging – proof that demand is being destroyed as the price of oil rises. And “expert” after “expert” in the media talks and talks about the high price of oil, yet NO ONE, especially the President of the United States, correlates the price of oil to the insane actions of the “Fed.”

The President the other night was shamed into finally giving a speech on his actions in Libya. Then, over the past two nights he has been doing interviews with NBC where he doesn’t go off script and is talking up all our success. While he’s talking about rebel success, the rebel forces are getting spanked as Gadafi’s men abandon targetable tanks and get into private trucks that make it impossible for pilots to tell which side they are on. Gadafi’s trained military is using simple tactics like flanking maneuvers across the desert to pinch the rebels into crossfire. The rebels have now lost nearly all the ground they supposedly gained, and now are at risk of losing major cities.

So much for our wonderful “humanitarian” progress in Libya – as if that was ever our real intention to begin with. No, what Obama is doing at every single turn is DANGEROUS. In his speech he stated that we are attacking despite not having any “interest” in doing so other than to avoid the “bloody images” that would surely ensue. He also stated that there was no plan to have U.S. personnel on the ground – yet now it is being reported that CIA “trainers” are on the ground working with the rebels.

His actions in Libya are dangerous because he is picking sides in an internal fight without consulting others in our political system as he is required to prior to going to war. Thus he is playing God – and those are the actions of a Despot. Despots always portray themselves as “saviors.” It is also dangerous because there is no strategy, exit or otherwise going in. How do we know that whatever government that follows will be any better than Gadafi’s? We don’t, and in fact it could be worse – yes, that is most certainly possible as whenever there is a leadership vacuum, despots are certain to be close by.

And yet isn’t it funny that we are only “humanitarian” to the point of involvement in countries that have oil? The very same mass killing of civilians is completely overlooked and not even discussed in countries that DO BUSINESS (oil and/ or military) with the United States. Thus, the proclaimed moral high ground is false.

Libya absolutely has the potential to snowball on us in the exact wrong direction. Our failure to hold Obama to long established standards will be very costly to America in the end, mark my words on this subject.

Inside our own country Obama has failed to hold anyone accountable for their actions - this is because he is beholden to the banker's money, a puppet. As are both Democrats and Republicans who play tit for tat on the deck of the Titanic while stuffing the pockets of bankers with your hard earned money.

Now, let’s talk about the leadership vacuum in regards to the nuclear situation in Japan where it is blatantly obvious that yet another energy special interest corporation is running the disaster in their own self-interests instead of the interests of humanity. Radioactive particles are flowing out of those plants at a very high level. They are making their way all over the globe, and now radioactive iodine and cesium have been found in MILK in both Washington State and in California!

Here’s the thing – allowing radiation to not be contained for days, weeks, and even longer puts massive amounts of these particles into the environment where they build up and up over time. Then the cow eats the grass or grain, and the next thing you know dairy products are contaminated. Same with our farmlands. And when it rains, particles that were in the atmosphere are deposited on anything the rain touches. Feel like a walk in the rain? Can I offer you a fresh glass of milk? And sorry media, there is NO safe level of ingestion for these particles. And what happens to our food supply if they continue to dilly dally for months?

Again, here is Arnie Gunderson of FairwindsAssociates giving a calm and rational update on the current situation. He is absolutely credible, has been in the industry for years and was involved in managing the Three Mile Island situation after it happened.

Update on Fukushima: Discussion of High Level Radiation Releases and the Previous "Worse Case Senario" from Fairewinds Associates

Mr. Gunderson should be given a Japanese translator and sent to Japan to act as the official spokesperson of the situation. He, and others, should be running the show in Japan, not Tokyo Electric officials who are making decisions on behalf of their corporation.

Remember, it was Obama who said that we should not worry, that radiation will NOT reach the United States! Remember that? And here it is, not only in the environment, but in the food.

No, our President, if he was any leader at all should have already been far more forceful on this situation. He should demand that TEPCO be removed from control of the situation and that outside experts be allowed to take over and make decisions that favor humanity. Finally, now that it’s in our food they are finally talking about containment – something that should have been the priority from day one. But our President, as well as officials in Japan, are beholden to special interests. The same thing happened in the BP incident.

The current system where the private banks pretend to be the “Fed,” make money from nothing and use it to buy all the branches of government and make laws that favor them is not only wrong, but it is absolutely dangerous to humanity and our very existence!

Let that sink in… it is not hyperbole – it is reality.

Forget the markets and the trumped up economic data… we have far more serious issues at hand.

Morning Update/ Market Thread 3/30 – Liquifaction Ain’t no Satisfaction Edition…

Good Morning,

Despite the worst nuclear accident in history occurring in Japan, the Nikkei Index rose 2.6% overnight. The news there is going from horrible to horrific as we learn more about the details of the condition of the nuclear plants at Fukushima. Intervention in the markets by adding liquidity is masking the reality of the situation. It’s the exact same phenomena that is occurring in the U.S. markets – again yesterday we have horrid economic data in terms of home prices (recoveries never occur without the housing market recovering too) and falling Consumer Confidence, yet the reality of the situation is papered over… resulting in dramatically rising prices… which leads to LOWER Consumer Confidence as real people have LESS disposable money.

Yet on the release of the bad data yesterday our stock market began a most unnatural climb straight up and is still going all through the evening hours to gap higher this morning. Is it real? No, it’s not real, it’s liquidity to the max… liquidity that is finding its way into all the wrong places while not making it into the pockets of the Citizens who now have been denigrated in importance to “Consumer.” This vernacular is now mainstream, just listen to your own President refer to you in that manner.

When liquidity froze up in 2008, it occurred because the banks were insolvent when marking their assets to reality. When allowed to mark them to fantasy, then everyone could pretend solvency existed again. Those trillions sent into the banks? That was nothing but robbery – but that “liquidity” is still finding its way into the price of most things “Consumers” need. This is the exact opposite of what needed to occur to produce a REAL recovery. The “Consumer” is still saturated with debt, primarily from buying homes, cars, education, and healthcare that are too expensive because the central bankers made them that way to begin with through the application of their never ending impossible math “growth” mantra.

Should even a portion of that money have gone to pay down the debt to remove the debt saturated condition, then we would be having a far different, way more positive discussion today. That didn’t happen, and is not likely to happen due to WHO it is that produces and controls the money. The private banks cannot look past their own self-interests (bonus maximization) to see that in the end even they would have been better off if they used that money to liquefy from the bottom up, instead of from the top where it just sits at the top spinning prices to the moon.

A rising stock market will only “feel good” as a marketing tool for a short time – and that time is just about up. If it continues to rise unabated, then commodity prices will rise with it, and the majority of people will simply wind up with less and less, while the minority of people wind up with more and more. That moves our nation higher and higher on the despot scale – and there is a point on that scale at which the people will rise up and remove those who have unjustly profited on the backs of the majority.

Liquifaction Ain’t no Satisfaction.

Oh yeah, and the banks are still insolvent, our nation is still insolvent, and regardless of how much money is thrown into the markets, the game of private banks creating never ending bigger numbers is almost over.

The conflicted, ridiculous, hideous, pathetic, and hypocritical Mortgage Banker’s Association (yeah, I like those reprehensible bankers that much) reported that the Purchase Index fell 1.7% in the past week with the Refinance Index falling 10.1%... just as the wave of expensive usurious Jumbo Option-ARM loans begin to reset in earnest (promoted, of course, by the MBA weasels):

Highlights
The Mortgage Bankers Association reports a 1.7 percent decline in purchase application volume in the March 25 week, ending what was otherwise a solid month compared to February. The month-to-month rise in purchase applications together with strength in Monday's pending home sales report and an easy comparison with very weak existing home sales for February point to strength for the March existing home sales report. The rise in rates during the week, up 12 basis points for the average 30-year mortgage to 4.92 percent, pulled down refinance applications by 10.1 percent.

As the MBA’s ship sinks, the banks throw more and more “liquidity” into the boat. They aren’t even smart enough to see that they are drowning not only the consumers, but also themselves in the end.

The Challenger Job-Cut report showed fewer mass layoff announcements for the month of March, falling from 50,702 to 41,528:

Highlights
Challenger's layoff count fell to 41,528 in March vs 50,702 in February and 67,611 in March last year. Aerospace/defense, retail, and autos all saw significant month-to-month declines in layoff announcements, while telecommunications and media both saw increases. Quarterly layoff announcements come to 130,749 for the lowest first-quarter total since 1995.

This report together with the easing underway in jobless claims confirm that businesses are no longer cutting their workforces. But are they building them up? ADP's payroll estimate at 8:15 ET today will offer clues for March.

Baloney to Econoday once again. The mass layoff phase of the collapse has already largely occurred, it can’t occur forever. The ADP report is about as accurate as animal sacrifices to forecast the weather.

According to ADP, Private Payrolls rose less in the month of March than they did in February, rising by 201,000 versus 217,000 respectively. Our economy is absolutely not creating any jobs, it is STILL losing jobs especially relative to our population growth. We have shed 7.5 million jobs since the peak in 2007.

The Consensus for Friday’s Employment Report is that we added 200,000 nonfarm payroll jobs in March, up from 192k in February. Looking at the fantastical “Birth/ Death Model,” March is a month with a middle-of-the-road addition to payrolls from this calculation – but the trend is that the additions are getting larger year over year (nonsensical). So, we’re likely to be dazzled with bull, while the reality is that real job growth has died on the debt saturated, drowning in liquidity vine:



I want to keep talking about the situation in Japan because I believe that what’s happening there is critical to humanity. TEPCO has been absolutely incompetent in their handling of the disaster, a disaster that was largely of their own making. The CEO cannot handle the pressure of the circumstances and has been hospitalized while the Chairman has taken over. Bad information and rumors have been the norm due to the lack of meaningful real information. But the damage has been obvious to me, and radiation in huge amounts doesn’t just grow on trees, so the conclusion in my mind has always been that the reactors had been breached, that a melt-down was in fact in progress, and that there is simply no way that humans can perform the repair work necessary to stop criticality from continuing. If you can’t stand that opinion coming from me, here’s someone with some unbiased credibility on the subject:



I’m sorry, but it’s already too late – the area surrounding the reactor is already contaminated and yet the contamination continues with no meaningful effort to contain it still. The result is that the area surrounding the plants is already a wasteland and will be uninhabitable for decades, maybe even centuries.

And what we are learning about how nuclear waste is handled here in the U.S. is simply frightening. Spent fuel is simply piled high into reactor cooling pools that now hold up to seven times their design capacity. The potential fallout from these pools is a far greater threat than even a nuclear bomb should the worse occur. Yes, that should scare us, and we should absolutely use this event to reevaluate what it is we’re doing, and what we’re not doing. My real fear is that we will fail to take action and that the politicians will allow the special interests to overrule common sense.

The markets? They are BROKEN. They are not real. They are to the point where they are inflicting pain instead of performing their natural functions. This will all be undone in time, but for now the liquidity is still flowing like a flooded river Nile. I note that the time since the last Hindenburg Omen has now expired, and that the McClellan Oscillator is positive once again. Bravo, great job, I hope everyone enjoys the ride – it’s already wild.

Morning Update/ Market Thread 3/29 - Mony, Mony Edition...

Good Morning,

Equity futures are higher after yesterday’s pre-close tumble. The dollar, lower all night, has jumped into the higher category this morning as the Yen continues to fall in value – it would seem that the intervention into the Yen is working for now, although I note that currency intervention is almost always undone in the end. Bonds are lower, oil is lower again, and so are most other commodities including gold, silver, and most food commodities. It would seem that the multiple “Fed” officials publically downplaying QE for now is working to dampen the hot money flow… again, for now.

I keep receiving questions about inflation and deflation regarding the actions of the “Fed” and how much control they actually possess to affect inflation. There are those who think that the “Fed” cannot induce inflation that is sustainable, and there are those who believe that we’re experiencing “stagflation” – that is a stagnant economy coupled with rising prices. Here’s what I think…

The inflation/ deflation debate is very muddled and confused because most people don’t understand what is “money.” In fact, we don’t really have money in the United States, we pass around loans from the private banks – these are called “notes,” just look at the top of any bill in your wallet. A loan, such as the notes in your wallet, come into being as someone’s liability, they are debt and they carry interest payable to the private banks who create them. But a funny thing happened to this terrific (if you’re a central banker) debt money system – debt saturation occurred where there were no longer anymore qualified patsies to assume even more debts… the people were saturated, local governments were saturated, and now our national level government is saturated – the whole world is saturated with more debt than income can service. Thus their required never-ending growth ended.

What’s a central banker, whose bonuses are in trouble, to do? Lower interest rates, remove fractional lending limits, and then lower them again and again. But then the whole world becomes saturated even at zero. So then, with only one tool left, the central banks simply begin printing under the guise of “Quantitative Easing.”

Up until QE began, overall the debt saturation of CREDIT money was creating powerful deflationary forces. But QE is a process that adds money that is not credit into the system… thus temporarily holding the deflation at bay. Yes, Bernanke is correct that a motivated enough central banker can always create inflation – in this case it took unbelievable quantities of printing to do it, and not just QE either, the issue is confused with the use and creation of other types of leverage, especially the use of derivatives that function as if they are “money” allowing the creators to assume positions greater than the actual money they possess.

Let’s say that a business has inventory and they sell their inventory only to cash customers. One day they decide that they might spur more sales if they extend credit to customers, and so allow customers to take their inventory on credit. Guess what, that business just created credit dollars! They are not a bank, but their act of lending out inventory for later payment is just one form of credit creation.

Derivatives allow people and corporations to assume positions against both tangible and non-tangible things – they work to expand and to amplify the underlying thing that is being derived. In effect, derivatives work like another form of money so that now we must consider Real Money (of which there is little), Credit Money (of which there is a ton and we are all saturated), and Derivative Money (of which there are ten tons, which is largely unregulated and untracked being created by anyone and everyone).

So, to get a true handle on inflation and deflation, we must be able to know how much total money is in the system – real money + credit money + derivative money. This is not knowable under today’s system because we let derivative money get completely out of control. And then it is vastly complicated because our borders with regard to the flow of all three is open and other agents around the globe also create derivative and credit money and it mixes and flows.

Both credit and derivatives are TEMPORARY instruments! Real money is not temporary!

It is credit money and derivative money that set the foundation for DEFLATION... but not until saturation occurs! Prior to credit and derivative money saturation, the addition of credit and/ or derivatives is inflationary.

Let’s look back in time. During the “roaring twenties” we were on a supposed gold standard, but the “Fed” had been created and thus credit money was flying fast and loose, created by the private banks who had stolen the money creation powers from the people. Stocks were massively purchased on “Margin” which is either a form of credit, or a form of derivative, take your pick – but the net result was that debt saturation was reached. At that time there was a mix of real money, credit money, and margin. Prior to saturation there was temporary inflation, which after saturation was followed by deflation – and the “Fed” at the time was not willing to do what was necessary to keep inflation going.

Since that time, real money was methodically replaced with credit money. When credit saturation began to reoccur, derivatives came on the scene and kept the overall expansion of the three types of money going. Prices rose and inflation was very prevalent over the past few decades, picking up more and more steam. Then bubbles began to form – a big one in technology stocks burst in the year 2000. Okay, lower interest rates to let more credit money in, and loosen up the laws to let more and more derivative money in. “Growth” occurred pushing home prices and stocks into a bubble until the FASB finally demanded that the banks mark their “assets” to a current market price. And just like that, those bubbles burst.

Then the banks used their money creation powers to blackmail the public and the FASB to get mark-to-fantasy accounting reinstated and to get all regulators off their backs. Total capture had then occurred, but saturation was not, and is not cured as the banks have subverted the rule of law which demands that insolvent companies go through the bankruptcy process. They have not, and thus the over credit saturation condition remains.

In comes a concerted Bernanke who is bent on creating enough QE (which is real money by the way – and is permanent, unlike credit money) and he prints and prints to unbelievable quantities, most of which is used to replace BONDS which is his attempt to buy down interest rates to keep the debt saturated condition and insolvency from showing.

But all that money being added doesn’t go just to pay down debt – oh no, our debts (credit money) are still growing, especially at the Federal level. It takes the load off the bankers and allows them to throw hot money around all over the place. They buy up all the strategic businesses they can – they own the media, the military industrial complex, the stock and commodity exchanges, they own and invest via High Frequency Trading Machines and thus basically fix the price of anything and everything.

Again, the world’s central bankers are all now doing the same, and thus knowing the overall money in the system is not just difficult, I would contend that it is impossible.

The issue of inflation/ deflation is also now confused with very bad data. Price data simply does not match up with reality, and the disconnect is getting larger over time. This is due, I believe, to the fact that the overall quantity of the three types of “money” is growing on an exponential slope, and thus efforts to mask the true effects on price also must get more severe.

So, for me there are very powerful deflationary forces underlying credit money and derivative money, but the “Fed” is replacing that money with real money via QE and various other methods both known, and I believe unknown.

I believe that without being able to correctly measure the true quantity of money that it is impossible to maintain equilibrium on the part of the “Fed.” They are blindly guessing and there are time lag effects that complicate the balancing act they are attempting. I therefore think that we see waves of deflation and inflation as they induce oscillations back and forth, but that the overall trajectory is inflation – that is their desire.

Inflation = impossible math. It simply is not possible to have a stable environment with never ending rising prices. For that to occur, the quantity of all monies must rise and rise and rise until the quantity of money is so great that it simply holds no value. The growth is not linear, it is exponential and we are on a rapidly rising slope of exponential money growth. That means that it is not stagflation, for the REAL economy is not stagnant, it is dying on the debt saturated vine. And while there are waves of deflation, the overall trajectory is inflationary. The end game is that our money is worthless and must be replaced.

Once we can wrap our minds around the inevitable, then maybe we can look at trying to create a better way forward for the next time. To accomplish that, we must understand what “money” is; we must understand that what backs money is not nearly as important as WHO controls its production; we must understand that “money” is a human construct – there is no natural automatic correcting device, that is bunk, but there are limits to growth that nature will impose.

Competition in money is not a good thing, nor is it a panacea – we have real world examples throughout history and it simply doesn’t work either. It enriches those WHO create their currency, but the competition inevitably breaks down into a money creation race to the bottom – as is occurring now world-wide.

Yes, it is possible for man to create a stable money system! In my opinion, it must be a common currency – and it should be backed by the only thing that truly matters – the productive efforts of humans and a legitimate rule of law. We must be able to correctly monitor the total quantity of money, and we must use that knowledge to target exactly ZERO percent overall price inflation – the only mathematically sustainable target there is over time. This does NOT mean that all credit money must go away – fractional reserve banking is NOT the cause of the world’s problems! Letting fractional reserve banking run amok is the problem – and thus there has to be a separation of special interests and politics. There is absolutely NO REASON for a nation to have a national debt – not when the money system works to the benefit of the people at large, instead of just a few specially self-privileged individuals. It is possible to have free markets and yet keep the quantity of money under control. Competition can and does work, but like any man-made game there must be rules and the rules of the game must be enforced.

We’ll discuss today’s economic data, including the Case-Shiller Home Price Index and Consumer Confidence inside of today’s daily thread.

Meanwhile, events in Japan continue to worsen. Plutonium has been found outside of the plant. The media, corporations, and politicians in Japan, however, are downplaying the risks still. They are also manipulating the information presented in the media – for example, articles on the working condition of those trying to salvage the reactors has been shaved down to nearly nothing (Case of Disappearing Articles). A dead man was found face up in a parking lot 5 miles away from the reactor and was so radiated that his remains could not be handled – yet, it was “likely the tsunami that killed him.” Riiiggghhhht – because water always makes people glow in the dark.

They are still making like maybe the reactors have been breached and maybe they haven’t… Riiiigggghhhht, like all that radiation is just spontaneously created. “Just imagine if there were holes,” LOL, it would be outright funny if the incompetence wasn’t so serious. Oh, and maybe it wasn’t so great pouring water all over everything as now the radiation is going everywhere the water goes – duh.

Tokyo power should be removed from the premises and replaced with outside experts who have the freedom to make decisions on behalf of humanity, not on behalf of a piece of paper called a corporation. A knowledgeable outside person should be appointed to act as a public spokesperson in order to keep the public informed.

The U.S. absolutely needs to be reviewing and bring our own reactors up to date – but all of this starts with the separation of special interests and government. There simply can be no meaningful regulation when special interests are allowed to finance campaigns and to appoint insiders into political and other government positions. The ROOT of all these problems is the same! Once you allow private individuals to control the production of your money, then they use that money to subvert the rule of law and any checks and balances that may have existed. The rule of law cannot and will not be reinstated until we change out WHO it is that controls the production of money.

Morning Update/ Market Thread 3/28 - Draggin’ the Line Edition…

Good Morning,

Equity futures are slightly higher this morning, with the dollar slightly higher, bonds a little lower; oil, gold, and silver all significantly lower; and most food commodities are lower as well.

Oil and gold look like they may have put in a small double-top, while the food commodities are carving out what looks like a potentially large Head & Shoulder’s pattern. If so, we are working on the right shoulder now. This formation is clear even without my drawing, below are the daily charts for rice and wheat:



The stock market’s rise off the March 2009 lows is now two years old. In that two years, the “Fed” has produced more money and shoveled it at the markets than at any time in modern history. They literally own such a large percentage of it that the concept of a “free” market is long gone. Of course they don’t carry the stocks on their balance sheet… no, they let the very same primary dealers who literally own the “Fed” do that. Portfolios are marked to fantasy, shell corporations are made to spin off the bad debts, accounting frauds of all types are foisted to divert the eye, all designed to market a new reality to you.

The spin is that the financials are healthy and making profits (yeah right) sufficient enough to justify record bonuses for those making the paper engineering go. For now, it would appear that they are defying gravity. Bonds (debt instruments) are at the heart of their paper empire – these are the instruments from which “money” springs seemingly eternal. Are there not limits on how much of this paper can be created? Yes! Anyone with more than two neurons will shout – it requires income to service debt – unless you can simply print money!

And print we are! So now we are forced to ask are there no limits to the amount of “money” that can be printed? And to that, again, anyone with two or more neurons will shout, “YES! Of course!” That limit will be reached when the quantity of money is so great that people lose confidence in it and refuse to hold it for more than a very short time period. That time period is getting shorter and shorter, and thus the confidence is already eroding.

But at some point the people are going to grow weary of all the bullish talk and façade… if it’s so bullish, then why must we continue to prop up the markets? The answer, of course, is due to the impossible math created by the bond market – the very heart of our money system, the way it was created by the private banks who call themselves the “Fed.” At some point interest rates should begin to rise – that will cause the value of bonds to fall. One trick that will probably be attempted will be to change the laws and attempt to convince you that you should now “invest” your retirement money in bonds… just as they are about to burst with rising rates. I don’t put this past them at all, in fact this is exactly what they did when they convinced everyone to abandon their pension plans and to “invest” in their ERISA 401k’s. The net result has been a disaster for most Americans, and so too would be the net result of forcing retirement money into the bond market.

The charade of money printing is on full display this morning with the release of the Personal Income and Expenditures. Incomes are supposedly rising, but honestly I don’t see how that claim can be made with a straight face. And even with wage exaggeration and price under-reporting, the difference between any supposed wage increase and the cost of goods is glaring enough that even Econospin can’t ignore it:

Highlights
For the latest month, consumers went on a bit of a spending spree-although a big part of it was on autos and gasoline. Income also was up nicely though an important issue is that it lagged inflation. Personal income in February advanced 0.3 percent, following a 1.2 percent advance the prior month. February's number fell short of analysts' forecast for 0.4 percent. Wages & salaries gained a moderately healthy 0.3 percent, matching the rise in January.

Again, consumer spending in February was led by auto sales and higher gasoline prices. Personal consumption expenditures jumped 0.7 percent, following a 0.3 percent rise in January. The latest figure beat the median forecast for a 0.6 percent gain.

For PCEs in February, strength was led by durables, up 1.6 percent, after a 0.3 percent rise in January. For the latest month, nondurables (includes gasoline) jumped 1.4 percent, following a 1.0 percent rise in January. Services spending nudged up 0.2 percent after no change the month before. Despite some erosion from inflation, real purchases were up as chained dollar purchases advanced 0.3 percent in February after no change the prior month.

On the inflation front, the PCE price index increased a notably warm 0.4 percent, topping the 0.3 percent boost in January. The core rate gained 0.2 percent in February, matching the prior month's pace and equaling expectations. On a year-ago basis, headline PCE prices are up 1.6 percent in February-up notably from 1.2 percent the month before. Core inflation nudged up to a 0.9 percent year-on-year pace versus 0.8 percent in January.

Year on year, personal income for February was up 5.1 percent, compared to 4.9 percent in January. PCEs growth improved to 4.1 percent from 3.9 percent the month before.

The consumer sector is doing fine other than the worry about inflation eroding spending power. Income and spending numbers have been a little volatile lately but over the last two months both have been relatively strong. But for the consumer sector to keep contributing to lifting the recovery, inflation is going to have to soften and/or income will need to pick up the pace-which is not likely until employment strengthens. It's not rocket science, but economists will be tracking oil prices and employment to judge the pending health of the recovery.

Oh no, it’s definitely not rocket science – more like voodoo meant to distract you.

Pending Home Sales are released at 10 Eastern this morning. Consumer Confidence comes tomorrow, and the rest of the week is fairly busy culminating with the Employment Situation Report this Friday which is April fool’s day – a somehow fitting day for major economic releases.

Missed by many is that the Census Bureau reported home vacancy rates shot up from an already horrific 12.1% to more than 13% last year… and home prices are supposed to start going up again when? True, home prices will rise again… sometime – just not now.

Meanwhile we open up another war front. The middle-east at large is in complete disarray, the sands are shifting very quickly. We are involved with no idea of the outcome or consequences.

This having no idea of the outcome or consequences seems to be our motto, especially when it comes to pushing the boundaries of energy. The parallels between the nuclear situation in Japan and the BP Gulf oil spill are striking – yet no one in the mainstream is talking about them. From my perspective the handling of both incidents are rife with corporate self-interest that towers above humanity casting a shadow over the very progression of mankind. TEPCO should have been removed from the situation in Japan a long time ago – and to those who are downplaying the significance of this event, your hubris will be spanked in the end – we must pay attention to the political/ corporate/ human interest aspect of these crisis. Ignoring or downplaying the significance of these events will only lead to worse outcomes in the future.

Weekend Open Thread...

Dateline: China's Ghost Cities and Malls...

Morning Update/ Market Thread 3/25 - Crystal Blue Persuasion Edition…

Good Morning,

Equity futures are slightly higher this morning, with the dollar stronger, bonds higher, oil slightly lower, gold higher after setting a new all-time high yesterday and then getting raided, silver is flat, and food commodities are mercilessly rising.

The completely bogus 4th quarter GDP number was revised higher from 2.8% to 3.1% with the expectation being 3.0%. This number is so grossly distorted that it absolutely has no resemblance to reality, yet here’s Econoday dishing out a little persuasion:

Highlights
It turns out that the economy at the end of 2010 was about as strong as most had expected all along. Fourth quarter GDP growth was bumped back up to 3.1 percent annualized growth from the second estimate of 2.8 percent. The latest estimate came in slightly higher than the consensus forecast for 3.0 percent. As with the prior estimate, the fourth quarter was still stronger than the third quarter pace of 2.6 percent.

The upward revision to fourth quarter growth primarily reflected stronger inventory investment, nonresidential structures, equipment & software, and residential investment. Downward revisions were seen in net exports and government purchases.

Demand numbers were little changed. Final sales of domestic product were unrevised net from the second estimate of 6.7 percent. Final sales to domestic purchasers (takes out net exports) were revised up marginally to 3.2 percent from the second estimate of 3.1 percent for the fourth quarter.

Year-on-year, real GDP in the fourth quarter is up 2.8 percent, compared to 3.2 percent in the third quarter.

On the inflation front, the GDP price index was unrevised compared to the second estimate of 0.4 percent. Analysts had expected 0.4 percent.

The latest estimates for GDP and components indicate that the economy had moderately strong forward momentum at the end of 2010. More recent monthly numbers show overall momentum continuing but very mixed by sector with manufacturing, export, and consumer sectors leading growth and with housing, commercial real estate, and state & local government sectors weighing on growth.

On the news, markets were little changed.

GDP is grossly overstated – on the order of 40% or more. Even counting the false paper as “growth,” the massaging of the deflator and components of this report are criminal. This, and many other economic reports, have become just as false as the markets for which they act as a marketing device to convince the suckers to hand over their productive assets under the rouse of an “investment.”

You hand over your hard earned money to the criminals, and they will take it from you eventually, plain and simple. They convince you to fork it over and then steal it via a myriad of methods. And that’s not enough for them, they also directly steal from you by printing massive amounts of money and then leverage it up to infinity with other forms of false paper – so much so, that it is completely impossible to get a handle on just how much “money” there truly is.

A CNN article this morning points to “Fed” data that says:

NEW YORK (CNNMoney) -- The average American family's household net worth declined 23% between 2007 and 2009, the Federal Reserve said Thursday.

And that’s measured in dollars! As if that weren’t bad enough, they are devaluing our money at a furious pace and thus what little worth you had left is quickly becoming worth even less. And I would be willing to bet that for the middle-class American the loss of wealth was probably far greater, as those on the top gained tremendous wealth during the same time frame offsetting losses by everyone else in this regard – a transfer of wealth.

A transfer of wealth ALWAYS occurs when you allow money to be created to the benefit of a few and not on behalf of the people at large. This is the very reason that the idea of competing currencies is nonsense – you cannot allow different entities to produce their own currencies in competition, or it will simply turn into a race to produce the most – all currencies in competition would quickly devalue. Don’t believe me? Just look at the world today… that is exactly what the world has, is it not? It is, and each nation who produces their own currency is currently in a race to out produce the others – and those who are the closest to that production profit while the people lose. If the concept of competing currencies ever comes up in the U.S. – all I can say is that I will immediately begin producing the “Natebuck,” – two for you, one for me, etc.

Want to talk about the situation in Portugal? Naw, just another failed state and future slave for those producing the money at the IMF – we know this story already, it won’t be any different until some nation has the nads to tell the central bankers to go to Hades, where they belong.

It’s the Japanese nuclear problems that have my attention at this point. They are finally admitting that there is likely a reactor breach in plant number 3 – the one with the plutonium fuel – but they are still slow leaking the information and their reaction. Meanwhile, the government is giving the go ahead to Tokyo Electric to restart nuclear plants in the region, on top of other major fault lines, and not adequately protected against tsunamis. Special influence capture of government at its finest…

And now heavier radioactive elements, like radioactive zirconium, are turning up in the water near the plant – the meaning of which is that the casing of the fuel rods has been compromised – of which there are more than 11,000 at the plants. And officials are beginning to admit to higher and higher amounts of radiation that has escaped – and yes, this is rivaling the disaster at Chernobyl. How serious is this for Japan? It is major league bad for a nation that size, just look at this map comparing the size of the affected Chernobyl area with the size of Japan:



Absolutely frightening – don’t buy into the be calm bull, this is major league nasty business. And now the Japanese are finally calling for VOLUNTARY evacuations out to 30 kilometers. In my opinion they should have long ago conducted mandatory evacuations out twice that far. And now it’s totally in the food and in the water - something that other experts are now warning that there is NO safe level of ingestion – once a radioactive particle gets inside of you all of its radiation will do harm as long as it’s there, greatly raising the odds of cancer.

So, that situation is most certainly not under control and is trending worse, not better despite the many claims to the contrary.

But not to worry, because we can print money, kill the dollar, and cause the stock market to go up… momentarily. It has become nothing but a marketing/ theft enterprise – a means of crystal blue persuasion…

Morning Update/ Market Thread 3/24

Good Morning,

Equity futures are higher this morning with the dollar down, the Yen spookily quiet ever since G7 intervention was announced, bonds down, oil is higher and just about to break to new highs, gold closed yesterday at a new all-time closing high and is higher this morning, silver is running to new record highs now just under $38 an ounce, and food commodities are also rising.

There was a very small change in the McClellan Oscillator yesterday, thus we can expect a large move in price today or tomorrow.

The SPX has now clearly broken out of its down channel which means that the prior wave 4 count is probably incorrect. McHugh is thinking this to be a wave 2, but we’ll have to see as it’s not a definitive read for me at this point. The 50dma is at 1303 and is acting as resistance for now:



Speaking of McHugh, I want to share a snippet of his from his recent update regarding the housing industry – it is a good summary of the recent data:

It is time to get real. The fact is, we are now in a housing market depression. Almost every economic recovery in this nation's history has been started by the housing industry. That is not happening at this time. Just the opposite, Housing is disintegrating into the Great Housing Depression. Check out these numbers: First of all, housing prices have fallen 26 percent since their peak a few years ago, the largest price decline ever in our nation, worse than what occurred during the Great Depression of the 1930's. We just learned this week that New Home Sales fell 17 percent month over month in February 2011 versus January 2011. The gross number of New Home Sales in February 2011 annualizes to 250,000, which is the worst on record, ever. This number is less than half the number of sales in 1963, which saw 560,000 New Home sales - but with 120 million fewer people then than now live in the U.S. Think about that. February's number is abysmal. Families dependent upon the Housing Industry are headed for economic ruination. The construction industry is going to see a ton of small builders go belly up. When we consider the February 250,000 sales figure, we need to understand that 700,000 annual sales is normal for a healthy economy. Up to this point, the worst sales year ever still had 323,000 New Home sales. This February figure is dreadful. Banks have tightened lending standards, making it so difficult to qualify for a mortgage that a third of all sales are now 100 percent cash deals. In other words, a third of all sales are occurring without a bank. Collateral values are sinking. Short sales are rising. This is a spiraling black hole of coming economic devastation, a contagion that will spread throughout the entire economy (except of course the protected Wall Street folks, who get to enjoy the Fed's fraud on America, taking all the liquidity the Fed can print and trading markets with the printed cash for self-gain, a corruption right up there with Nero fiddling while Rome burned). Existing Home Sales were no better, falling 10 percent in February, with prices plunging on existing homes that get sold. All the above will contribute toward significant increases in the value of precious metals as folks flock to a financial instrument that has no counterparty, is real and physical, and not subject to corporate mismanagement.

Yep, that about sums it up. Entirely different read than you get from the mainstream and shills whose livelihood depends upon you being a sucker.

Weekly unemployment claims fell by a paltry 3,000 in the prior week, falling from 385,000 to 382,000 with 385k the consensus. Remember, it requires readings below 350k to give an indication that jobs are actually being created. Here’s econospin shilling away:

Highlights
Fewer and fewer Americans are claiming unemployment benefits in a developing trend that will boost expectations for accelerating payroll growth. Initial jobless claims fell 5,000 in the March 19 week to 382,000 (prior week revised to 387,000). The four-week average edged lower to 385,250 to show a more than 15,000 month-ago improvement. These are the best readings of the recovery.

Continuing claims are also posting the best readings of the recovery, down 2,000 to 3.721 million in data for the March 12 week. The four-week average of 3.755 million shows a nearly 150,000 month-ago improvement. A total of 8.766 million claimed unemployment benefits in data for the March 5 week, an improvement of more than 187,000 from the prior week.

Another week, another revision higher, and another opportunity to make the false claim that the number fell further than it actually did (from what was originally reported – remember, you must compare apples to apples and the media does not do that, and always in the direction that makes the economy somehow look better than it actually is). There are still 3.6 million people drawing Emergency Unemployment, and that rose by 85,712 in the past week.

While we’re on the subject of Unemployment benefits, I have been reading several articles lately about how states are looking at cutting back benefits, both in terms of the duration and amount of benefits. The truth is that this program went bankrupt and that the Treasury has been covering up the insolvency of the program – thus ultimately requiring more false money from the “Fed” to keep the anti-revolution program going.

Durable Goods Orders fell by .9% in the month of February, against a consensus looking for a positive 1.7%. This comes, if you recall, on the heals of a 2.7% print in January due solely to aircraft orders (and mostly from .gov). Here’s a surprised Econoday:

Highlights
Today's durables report is a quandary relative to all of the good news in earlier released manufacturing surveys. New durables orders were unexpectedly down and with just over half of the major industries declining for the month. Overall durables orders in February dipped 0.9 percent, following a revised 3.6 percent rebound in January (previously estimated at up 3.2 percent). Excluding transportation, new orders for durable goods decreased 0.6 percent after a 3.0 percent drop in January.

Transportation led February's drop, slipping 1.9 percent after a huge 29.6 percent jump in January. The decrease was primarily due to an 18.4 percent fall in defense aircraft orders. On the positive side within transportation, motor vehicles rose 1.9 percent while nondefense aircraft & parts increased 26.7 percent.

Outside of transportation, the numbers were mixed. Declines were seen in primary metals, down 2.1 percent; machinery, down 4.2 percent; and in "other," down 0.6 percent. Gains were seen in fabricated metals, up 2.1 percent; computers & electronic parts, up 0.6 percent; and in electrical equipment, up 2.6 percent.

Business investment in equipment has softened after strength late last year. Nondefense capital goods orders excluding aircraft in February decreased 1.3 percent, following a 6.0 percent drop the month before. Shipments for this series edged back up 0.8 percent, following a 2.3 percent fall in January.

The durables orders series is one of the most volatile that there is on a monthly basis and that may be the focus of analysts as the worst-than-expected number was outweighed by a marginally lower-than-forecast number for initial jobless claims. On the news, equity futures edged up on the jobless claims.

LOL, the bull flows nonstop. Always a reason to justify the movement in stock prices – never understanding for a second how fully captured the markets are and how they have been taken over by HFT computers and hot money. Durable goods are measured in dollars. We don’t manufacture much, so when a multi-billion dollar aircraft order is processed, it causes the data to swing wildly. The only reason this data was positive in January was due to aircraft orders from the government – how sustainable is that? And they act surprised.

Of course the government has no money to buy anything, much less new aircraft. Thus the debt is simply piled high nonstop while the REAL interest expense explodes causing the “Fed” to have to spend trillions to artificially keep rates down. And as they spend, confidence in our “money” wanes, and gee, silver at new record highs, gold at new record highs, oil to the moon, and food prices that result in starvation for those around the globe who are on the margins. It’s a great system of never ending “growth,” brought to you by you know WHO.

This morning the media is downplaying the radiation hazard in Japan, now stating that Tokyo water is safe once again to drink for infants as the measured amount of radioactive iodine has fallen to “acceptable” levels. Uh no thanks. It’s what they aren’t telling you that is most significant. What concerns me most is not only the radioactive iodine or even the cesium particles, but what I would really like to know is where the Plutonium particles are going. Once you understand that ingesting these particles is far worse than simply having them in the environment, then you’ll understand that the numbers being bandied about in the media are meaningless as being in a contaminated area makes it nearly impossible not to ingest those particles.

My heart truly goes out to those still in Japan… the wealthy, of course, are long gone leaving the rest to suffer the effects. And it’s shocking how the governments of the world, including ours, are failing to step in and demand that containment become the top priority! Finally, there was evidence admitted to yesterday that the reactors were probably breached, but they still won’t come out and say it in plain language. Meanwhile radiation continues to pour from those devastated plants, with some estimating that the amount of cesium released into the atmosphere now exceeds that of the Chernobyl disaster. Let’s face it, there is FAR more material here than in Chernobyl. These particles are lethal, and this disaster is being totally downplayed.

The following link takes you to a must read interview of a worker who helped to “liquidate” a town nearby Chernobyl – she is one of the few surviving workers, her thyroid gone, the description of what she went through is shocking and the cover-up/ denial sounds awfully familiar. I think everyone in Japan needs to read her account, and if you live anywhere near that region, you needed to be gone a long time ago:

Chernobyl Cleanup Survivor's Message for Japan: 'Run Away as Quickly as Possible'

What message do you have for Japan?
Run away as quickly as possible. Don't wait. Save yourself and don't rely on the government because the government lies. They don't want you to know the truth because the nuclear industry is so powerful.

That is a message I truly hope the people of Japan act upon – I know that it’s hard, but the enemy is completely invisible and the effects are insidious over time. Humanity should be screaming out to evacuate the citizens of Japan, and we should be screaming to get busy with containment NOW.

Again, this is not happening because we are letting a special interest manage the disaster in their own self-interest, not in humanity’s self-interest.

And what's happening in Tokyo, one of the world's most "advanced" cities? Shelves are empty, just like that:



Oh yeah, the Portuguese government basically collapsed yesterday over the government’s proposed austerity measures. They are headed directly to the same circumstance of Iceland, Ireland, and Greece – that is the loans of “salvation” are coming. And the pressures of debt stream like the river Nile, and no one seems powerful enough to just say “NO” to the pushers of this most toxic drug.

Morning Update/ Market Thread 3/23 – Don Quiote Edition…

Good Morning,

Equity futures are lower this morning after bizarrely ramping overnight. The dollar is strengthening significantly, bonds are higher, oil is higher, gold is higher, silver is near a new record, rice is rocketing, while most other food commodities are flat.

The worthless, conflicted, unethical, and hypocritical Mortgage Banker’s Association says that Purchase Applications rose 2.7% in the prior week, and magically, so too did the refinance Index rise the same exact 2.7%. I can usually smell a con, and the figures coming from the MBA is just that:

Highlights
Plus 2.7 percent is wild for March 18 mortgage applications data, a gain posted for the purchase index, the refinance index, and of course the composite index. The purchase index is still below levels at year end but is showing month-to-month strength that hints at improved home sales for March. The refinance index is tangibly higher reflecting favorable mortgage rates, averaging 4.80 percent in the week for 30-year fixed loans.

Excuse me while I hurl with laughter. Existing Home Sales just CRATERED in the recent report and Econday has the nads to spin MBA data like that? It’s become nothing but the theatre of the absurd. Yesterday the House Price Index also fell, and so too did the Richmond “Fed” Manufacturing Index.

New Home Sales are released at 10 Eastern this morning – results will be posted within the daily thread located in the comments at the bottom of this post.

Yesterday the market refused to break the down channel and the SPX was stopped once again by the 1300 mark, refusing even to test the 50 dma at 1303:



Look at how prices perfectly followed that upper channel trendline down. You think mom and pop are watching that line? No, only machines can follow lines perfectly like that – and our markets have been completely turned over to the machines, those machines are owned by you know WHO. I’ve watched the markets for decades and can tell you that the markets do not behave anything like they used to. Of course all this HFT activity draws it’s fuel from the funny money created by the “Fed” and from the FRAUD transpiring within the banks and within our own government.

Chris Whalen uncovered more fraud yesterday when he wrote about how Fannie and Freddie are purposely ignoring INSURED losses so that the monoline industry, which was absolutely busted to begin with, can avoid having to show just how busted they remain. Fraud has already been rampant in the mortgage insurance industry, and even after they failed, the fraud was allowed to be sweped under the rug by regulators when they allowed Ambac to create a shell company in a manner similar to the illegal shell game being played with the banks who create shell companies to hide their garbage loans.

Why would regulators allow Freddie and Fannie to not make claims that protect American’s assets, and not end the incestuous relationship between the monolines and the rating agencies? Because they know that if they do, then the whole ball of wax unwinds, that’s why. They know that the math is impossible and that the game is over – their failure to act early has led to their inability to act now.

For more on what Chris Whalen says about FRE and FNM, here’s a link: Fannie and Freddie Hiding Over $100 Billion of Losses?. Yes, I would guess WAY over. Every single day, day after day, all I see is one fraud after another.

It’s funny, but nature has a way of dealing with impossible math. Narcissists who create never ending growth don’t ever stop to ponder that, however. If they did, they would understand how unchecked growth causes man to test the boundaries of nature. Deep oil drilling – major catastrophe. Hundreds of millions of people crammed onto a tiny island on a major fault line – nuclear reactors shoddily built and covered up with fraud – major catastrophe. And so we see what are natural events, but we fail to acknowledge how our own actions and FALSE LAWS work against nature instead of with it.

What do I mean by “false law?” I mean that man can make any law they choose, but if we make laws that go against the natural order of the universe, then eventually said law will be smacked down. The law that is currently most at odds with the natural order of the universe is The “Federal Reserve” Act.

I know that it’s hard to see the connection for most narcissists, so if you need the connection explained to you, then you probably fall into the narcissist camp of misunderstanding the way the world really works.

Another example of an unnatural law is the way municipalities are sleazily getting in bed with the defense industry by allowing them to put their ticket by mail cameras up all over creation. The defense industry takes 40% of the cut, while the municipality gets 60%, but has to deal with the overhead of issuing so many ILLEGAL tickets. I say they are illegal because ticket by mail systems fail to identify the person driving the vehicle and issue tickets to the registered owner. When the ticket is received in the mail, the registered owner, who may not have been the one operating the car, is assumed to be guilty and must go expend his energy and effort to prove his innocence. This is completely against the natural order of the universe whereby people must assume innocence until proven guilty. There’s a reason for that… it’s called empathy. Remember, no commerce happens until empathy, then communication occur.

So, in placing these cameras against the public, municipalities are creating tension against the natural order of the universe. Living in towns rich with these cameras makes every outing tense. If given the choice of where I spend my money, I will avoid cities that have these every single time. While narcissistic politicians don’t get what I’m saying here, those who feel that tension may relate.

And things like this may be shirked off as trivial in the scheme of things, but they are not. Our very survival as a species depends upon us getting that order of law correct. The good news is that compared to the dark ages we have progressed. The bad news is that we are currently taking a giant step backwards. If we wish to come out of this impossible math situation progressing mankind, then we must strive to create a human order and rule of law that is compliant with nature. The place to start is by revoking the “Federal Reserve” Act.

Unfortunately, I don’t expect that enough people will understand what I’m saying to get the critical mass required. And thus the impossible math will continue to express itself in negative ways and nature will continue to spank us until we get it right.

And talk about getting it wrong… the information we’re learning about the nuke disaster in Japan is amazing on many fronts.

The way in which these reactors were built and fueled is flawed to say the least – outright criminal is more like it. Here again the rule of law was subverted by special interest money where Tokyo Electric was allowed to do things that never should have been done.

And the Japanese government is absolutely failing still to keep them in check in the same exact manner that the United States failed to keep BP and the other energy companies in check. Radiation is being allowed to escape in a way that could absolutely destroy much of Japan for decades… it doesn’t have to be like that. What’s happening is that the corporation is being allowed to attempt to salvage their lost assets and to avoid the expense of properly containing the radiation by encasing those reactors in a way that keeps the radiation on site. This is because the corporation’s self-interest is NOT aligned with humanity’s self-interest. In my opinion, the very first step in a big man made disaster like this is to REMOVE the firm that runs the activity, and replace them with outside experts who can make decisions based on what’s best for humanity and not what’s best for the corporation. Corporations are NOT people, when will we ever learn?!

But money is a corruptive power that is sometimes more powerful than human life itself. It’s a shame, really, because money and corporations should be a tool of mankind, not a tool of a few to take advantage of mankind. And that’s why the Federal Reserve Act works so fervently against nature.

And nature is taking it on the chin in Japan. The nuclear plants have once again been evacuated as radioactive smoke continues to pour out of the plants to the highest radiation levels seen so far. From my perspective there is no hope of salvaging the ruins and containment, not salvage, should be the number one priority – obviously it is not.

Contamination of food in Japan is getting worse. And now radiation is twice acceptable levels in the water supply of Tokyo proper! THINK about that! This is one of the world’s largest cities… would you live there under these circumstances? I sure as heck would not. And you are being lied to about the dangers being posed… if you can handle the truth, then I suggest you read this: What They're Covering Up at Fukushima.

Don’t bother reading that if you prefer to play ostrich. Just remember that you have been warned about the danger, and that the particles in discussion can absolutely make it to our shores and already are.

And with just a few minutes of research, I taught myself about how the Russians initially contained Chernobyl, but are now in progress of building a more permanent sarcophagus. This is no small feat, it is akin to building a pyramid of Giza on top of a lethal smoking nuclear plant. And man, is it expensive – we’re talking about a sarcophagus that is 303 feet high and more than 880 feet wide! The new sarcophagus will cost Billions of dollars to build. Is there any wonder why Tokyo Electric doesn’t want to go there? Their site may need four or more of these structures! We need to get over this bull that “it’s not worse than Three-mile Island,” or “It’s approaching Chernobyl levels of danger.” Bunk! It’s by far and away the worst nuclear accident in the history of mankind, now let’s get on with the job of limiting the disaster further – and I don’t mean pouring seawater on what are obviously completely destroyed facilities! (New Safe Confinement)

Meanwhile, speaking of the Giza Pyramids, Egypt attempted to open their stock markets… and they promptly crashed, so they shut them down again. Oh well, nice try. And yet further evidence that when the criminals are removed, that what they are leaving behind is nothing but fluff for the REAL people. This same exact scenario is coming to America and to global markets – again, if you don’t see the fluff for what it is, then you are very likely a part of feeding into that fluff, addicted to it. Being addicted to the paper fluff is far worse than being an alcoholic or a drug addict – heck, at least some of them can admit they have a problem. But once you build your life around the paper, your home, your cars, your toys, and even your family then are dependent upon you keeping that paper inflated, regardless of whether or not it conforms to the laws of nature. And then you are stuck and it becomes even harder to extricate yourself than it is ridding yourself of most bodily addictions.

And for those still fretting over what the markets will or won’t do – Bill Gross says that as the world economy slows to look for QE3 to come, higher inflation, and thus eventually interest rates will have to rise. Oh yeah, it’s coming… but it won’t be a straight line getting there, there are many “other events” still in progress – the drum beat of REAL change is steadily increasing, it is marching to the beat of the impossible math. Can you hear it, or am I simply Tilting at Windmills?

Morning Update/ Market Thread 3/22 - Doesn’t Matter Edition…

Good Morning,

The Nikkei Index jumped 4.36% last night, of course the mainstream says that the market is signaling “All’s clear” in the world and that recent natural and man-made disasters, wars, revolution and commodity price induced famine are now fully priced into the markets, lol. Of course they fail to mention concerted G7 intervention into ALL the markets, or the additional $2 Trillion Yen injection yesterday that comes on top of tens of Trillions all injected in the past week.

So, we paper over and manipulate markets in such a manner that they cannot possibly correct for world events or the human condition. And thus we see massive price inflation in nearly all commodities.

I was accused yesterday of being overly cynical. It’s true that I’m losing my life long natural optimism for the human condition. It is, however, the world that is changing and not just my outlook. Corruption is more rampant than ever, just look at the current AIG fiasco and the obviously corrupt Treasury Department and “Fed” actions surrounding Maiden Lane “assets.” The corruption and fraud seem to be never ending and the politicians and agencies who are supposed to “police” do nothing, they are just as corrupt. ALL the markets are captured by just a few individuals WHO control the production of “money” (debt). Our entire economy, and all our markets are nothing but fraud and false instruments that have turned into a marketing branch for those producing that money.

And YES, you need to consider the safety of your food supply! Indeed, just yesterday radiation traces from Japan were found in Seattle! Oh, but it’s nothing to be concerned about, just traces. Well, what happens when trace amounts accumulate day after day onto the farmland and water that comprises our food supply? Is the radiation event over? When will it end? The corporation who owns the nuclear power plants seem reticent to stop the release of radiation, they are evidently more concerned about “saving” their assets. But the truth is that those reactors are well beyond saving. Yet they pour sea water over nuclear waste causing contamination of the air, ground, and sea. Instead, they could be dumping sand and concrete in an attempt to stop the release of radiation. But no.

And thus you should be concerned about the safety of your life’s sustenance going forward. Ignoring these very real and legitimate concerns is simply not rational.

By the way, it is reported that the radiation levels 20 miles from the site are 1,600 TIMES normal! Hey, how long has it been now? At least in a nuclear explosion the radiation event occurs and then ends quickly. What happens when radiation is spread over days and days? And why are we not discussing the possible effects on the food chain? Instead, all official communications are meant to only placate – “trust them,” the experts say it is of no concern – here is the depth of their communication with the public:

Low radiation levels from Japan detected in Washington; no health risk

OLYMPIA - A Department of Health air monitor in Seattle has detected trace levels of radiation in connection with Japan’s nuclear emergency. The minuscule amounts of radioactive iodine are millions of times lower than levels that would be a health concern. Despite these very small amounts, the state’s overall background radiation levels haven’t risen.

The positive results are consistent with findings reported by federal and Canadian partners, and by independent researchers. As expected, because of the distance from Japan and air mixing, radiation reaching our state is so diluted there is no health risk here, making protective action unnecessary.

People in Washington shouldn’t take potassium iodide, also known as KI, because of what’s happened in Japan. Only people who work in or around nuclear power plants during an emergency, or who live near such a plant and can’t get away, should take KI.

Got it? NO health risk. As if anyone of these experts has studied and determined the effects caused by prolonged exposure such as this…

Well, if they stop the release of radiation and the exposure is truly short term, then great. But if they keep stalling the inevitable, and fail to contain the radiation, then it absolutely can get worse and not better – their assurances mean little to me.

And the markets, flooded with cash and controlled by HFT machines owned by the same people who produce the money and also own the exchanges continue mostly unabated. The SPX, however, is still within the confines of the recent down channel:



Each upstroke in the markets is matched with a down stroke in the dollar. On the monthly chart you can see that support has clearly been broken:



Not that the dollar index means much in reality. It is weighed against a central banker basket of depreciating currencies and thus is disconnected from the reality of what your promissory notes they call money can buy.

Meanwhile, in the REAL economy, Existing Home Sales cratered to a new low. Unit sales for February fell to only 4.88 million, down from 5.3 million, and way below consensus. That’s a 9.6% fall from one month – here’s Econoday:

Highlights
The housing sector may be suffering another setback, at least based on the February report for existing home sales which fell nearly 10 percent to a lower-than-expected annual rate of 4.88 million. Year-on-year, sales are down 2.8 percent. Declines are evenly split between single-family homes and condos and are also evenly split across regions.

The bad news continues: supply is up and prices are down. Supply rose 3.5 percent to 3.488 million homes in what is 8.6 months of supply at the current sales rate, up from 7.5 months in January and even above year-ago February supply of 8.4 months. The median price fell 1.1 percent February to $156,100 with the average price down 1.4 percent to $203,000. Year-on-year, the decline for the median price is deepening, at minus 5.2 percent, but is steady for the average price at minus 2.7 percent.

Distressed sales made up a very heavy 39 percent of all transactions with cash transactions at 33 percent, a very heavy proportion pointing to bottom fishing by investors but also reflecting still tough credit conditions for ordinary home buyers. The economy, unlike other cycles, has been able to recover nicely even without the housing sector. New home sales data will be posted on Wednesday.

And there’s the lie, isn’t it? “The economy, unlike other cycles, has been able to recover nicely even without the housing sector.”

Uh huh, and without employment too!

And gee, could it be that the economy is not really recovering at all? Gee, what else is different about this “recovery?” Ummm, could it have anything to do with the creation of TRILLIONS upon TRILLIONS of paper notes used to the benefit of a few? Uh huh.

The House Price Index and Richmond “Fed” are released at 10 Eastern… not sure anymore what is real or what has meaning… it all seems to be a façade to me.

Bill Still - No More National Debt...

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Bill Still - No More National Debt

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Read this book and you’ll understand the root of many of the world’s problems, AND you’ll see that there are solutions once you begin to think outside of the Central Banker box!

Morning Update/ Market Thread 3/21 – Distract You Again War Edition…

Good Morning,

Equity futures are higher this morning as what I believe may be wave 4 of 3 down progresses. The dollar is breaking down to lower lows, bonds are also lower, oil jumped back to more than $104 a barrel and is sitting right on the 61.8% retrace line, silver & gold gapped higher, while food commodities are jumping again.

The Chicago “Fed” National Activity Index was negative once again in February, here’s Econoday:

Highlights
The Chicago Fed's national activity index slipped to minus 0.04 in February from minus 0.01 in January (revised from minus 0.16). Continued weakness in the consumption & housing component during February offset positive contributions from the index's other three components. The three-month moving average rose to plus 0.11 from January's plus 0.05 (revised from minus 0.10).

So, how exactly does a three month moving average continue to supposedly rise when the last two months have been negative? Again, anything that emanates from the “Fed” is disinformation, as in slight of hand that’s meant to distract you.

Existing Home Sales are released at 10 Eastern this morning, and there’s a fairly steady stream of data all week but no major releases other than the final trumped up Q4 revision of GDP.

Peace is breaking out all over the globe, right? I mean isn’t that why the people are rising up the world over? Didn’t President Obama just win the Nobel Peace Prize? And we’re now in yet another war in the name of what, defending the people of Libya? Isn’t that exactly what we said going into Iraq after all the other excuses were proven false? Let’s cut through all the slight of hand and get to the root of the matter… but first, let’s review Slight of Hand (just another version of the Shell Game):



Slight of Hand is meant to distract you.

Distract you from what?

How about the theft of your productive efforts, the total capture of global markets and politics, war, and especially WHO it is that produces and controls the money the world over? Make no mistake, the central bankers might as well be wearing a bandana over their faces and holding a gun to your head, they are robbing all of us (the people of the world) in broad daylight, while distracting us with their slight of hand.

We’re bombing Libya, but don’t call it a “war,” that’s a term we use to describe our efforts to PROMOTE drugs, terror, and illiteracy. No, a war is something that Congress must declare, only they haven’t done their job for decades and they aren’t going to start now. Congress has been captured, completely and totally. Tackle the deficit problem? Are you kidding? That would mean placing a Check on the bankers and the military industrial complex… Never happen. And make no mistake, the U.N. is nothing but a cover for the very same central bankers.

So we’ll come to the rebel’s “rescue” in Libya, but not in Egypt, Bahrain, Saudi Arabia, Yemen, or any of the other countries that we do business with, right?

What business? Well, either we do business in oil, or we do business with military hardware, or both. But not in Libya… oh no, in Libya they have sweet crude and the oil fields there were nationalized and removed from our special interest’s control. They don’t buy weapons from us, and they don’t host our military. And thus, Libya is attacked, the banker owned defense industry goes Ka-Ching at your expense, the nuclear fallout and food contamination goes unreported, money from nothing continues to flow, while they rob day after day a bigger and bigger portion of every dollar you hold, every dollar you earn. Thus we arm the "rebels" as long as they promise to be our friends (do business) once we put their new dictator in power, just like we did their last one. Very sick, and very evil.

And there's a lesson there is completely lost in the heat of battle... that is that true FREEDOM cannot be handed to you! True Freedom can only be EARNED - something the people of the United States are forgetting. And there's another lesson to be learned in that giving your government a military and intelligence complex that is too powerful, blocks the people from experiencing true freedom. Thus we have sacrificed our own freedom in the name of security - just more slight of hand.

And the nuclear situation in Japan is NOT getting better as the media proclaims! There is now smoke emanating from reactor 3’s spent fuel pool, that’s the one with the plutonium fuel… and radioactive iodine and cesium are being found in the water, in the milk, and in leafy vegetables in many parts of Japan. They continue to pour sea water on the reactors and rod storage pools without concern for the radio active steam or water runoff and where it’s going. Had they buried the reactors and pools with sand, this type of runoff would not be happening.

Oh yeah, restoring power to that smoldering heap is going to help:



And let’s not discuss where this radiation is going around the globe, no let’s downplay the risk – at least that’s what the mainstream does in order to placate you. I, on the other hand, want to practice risk management, and that involves looking at the possible scenarios and then being prepared should the worst happen.

Let’s start with what we know… the food supply in Japan is contaminated. It is likely to be contaminated for quite some time as radiation contamination doesn’t just go away quickly. That’s a huge strike to the world’s supply of food.

Now let’s say that the radiation moves across the U.S. blanketing farmland, dairy land, and fruit orchards. What would be the result? Well, everyone would want non-contaminated food… and the second it’s reported that the food in the U.S. is contaminated, EVERYONE will want to run out and stock up on food that was produced prior to the contamination – that would be the food that’s sitting on the store shelves right now. That food could be gone in an instant.

Are you prepared for that should it occur? Oh yeah, it may not happen, but you have no one in government or in the mainstream media who will even discuss the possibility. Heck, when our own overweight Surgeon General initially said that she thought we should all be prepared by possessing potassium iodide, she was forced to retract that statement because it might panic us know nothing people.

And so, I’m telling you that in my opinion it is possible the food supply gets contaminated, and that you don’t want to arrive at the stores once the shelves are bare.

But then again, the markets are higher, don’t look at which countries we aren’t willing to go to war over to “help” the rebels. Don’t look at how you and the people of the world are being robbed. Don’t look at what might happen when special interest corporations are allowed to build energy facilities that threaten your food and our planet. Don’t look at WHO it is that profits and garners power from the production and control of your nation’s money.

Want to turn it all around? Then you MUST regain control of that money production on behalf of the people – only then will you begin to see solutions to these problems and the impossible math that’s been imposed upon you.

If this is wave 4 that’s occurring, it’s just about to hit the top of the channel right at the SPX 1,300 mark:

Economic Disinformation

*Note: The following was written for Bill Still's new book, "No More National Debt," which can be purchased here: Bill Still - No More National Debt

Economic Disinformation

Do not put your faith in what statistics say until you have carefully considered what they do not say.
~William W. Watt

By now you are quite aware that the “Federal Reserve Bank” is not “Federal,” nor do they hold reserves, and not even are they a bank. The disinformation begins there and reaches out like tentacles from a metastasizing cancer to spread into most government statistics, our education system and business schools, our media, and even our history books.

The disinformation is pervasive, it causes massive misallocations of human and natural resources while working to congregate wealth into the hands of those who control the production of money – private banks. They need apparent growth (inflation) to keep their game going, without it the Ponzi of ever increasing sums (and profit) collapses into deflation.

On the national level all deficits add to the national debt that is financed through the Treasury and ultimately owned as an asset by the private banks in the form of U.S. Treasury Notes and Bonds. In this way the people are effectively charged interest payable to those banks via income taxes. This dynamic simply does not have to work in that manner, in effect it causes the people to pay for the use of their own money system – a system that belongs to them via Congress and not to the private banks.

Thus, the population is placed into a false box in which the solution to debt is either more debt, which is ridiculous of course, or into “austerity” – that is higher taxes and less spending. According to corporate sources who live and think inside of the current box, those are the only two alternatives. Reality and the right answers, of course, are only found well outside of that two-dimensional illusion.

But before any solution stands a chance of working over long periods of time, first we must be able to be honest with ourselves in understanding the current system and we must be able to accurately measure what’s really happening in the monetary system and then in our economy. I would posit that we are currently living a mass-experienced delusion within a fog of economic disinformation.

Math is not pliable to disinformation. Inflation will absolutely destroy any currency given enough time. What sounds mundane in the short term, say 3%, will literally make a currency worthless in just a few short decades. Why would any country implement a monetary system that depends on inflation, or said another way, why would one target inflation when that inflation will most certainly lead to the eventual demise of that currency?

That hardly seems sane… unless you are the one who produces the money and profits from it! Thus it is vital to look through the lens of those who control the quantity of money when trying to make sense of the economy.

As Bill Still has repeatedly stated, WHO controls the quantity of money is far more important than WHAT backs it! For it is the who that not only makes the quantity decisions (more is always good when you’re the one making it), but who it is that controls the production of money eventually also controls the production of a nation’s laws, aka “The Golden Rule.” This is why who produces the money within the economy is so vitally important to politics, and by extension world events.

Let me make that last point clear. There is a direct chain that leads from the production of money to world events! Follow the money and the production thereof. This is true because money is ultimately about control. He who produces the money is in control. Let the private bankers produce the money, they are in control, you just surrendered your sovereignty! Take loans from the IMF, surrender your sovereignty! Borrow money from China, surrender your sovereignty!

That money can be backed by seashells, gold, silver, paper, or whatever… ultimately the quantity of money can always be manipulated by those who produce it! Once the perception becomes pervasive that the quantity of money is out of control, then the end of the current money system is at hand.

Thus I would propose that any system that targets positive price inflation is not sane or rational in the sense that it serves the people over the long term. There is only one price inflation target that’s mathematically sustainable, and that is ZERO percent inflation.

Since there is smaller profit involved in producing a non-inflating currency, don’t look for private entities to back this rational inflation target any time soon. Thus the production of money can only be rational when it is in the hands of the people who rightly own it. And who are the people’s representatives? Congress – and they too must respect the math or the system will ultimately fail. Not accepting the reality of the math leads to disinformation, fuzzy thinking, and problems that never seem go away.

The Bad Math of Debt

Nearly all money produced today comes into existence as somebody’s debt. The myth is that the government currently “prints” money. They do not, and have not for quite some time. Private banks and other quasi-financial institutions are the ones who produce most of the money, and they do so from thin air without assets backing their credit money creation.

It didn’t used to be this way, but today it is a fact. Private institutions make the money. They hold the debt as an asset and they collect interest on it.

This is quite different than sovereign money which is created when a nation produces its own money without debt.

When a nation first transitions from a sovereign money system into a debt money system, adding more credit money works to stimulate the economy as the total supply of sovereign and credit money expand, creating new infrastructure and new industry. The “Keynesian” model is to add more credit money to the economic dips in order to spur the economy. This works in an immature economy where the ratio of credit dollars to sovereign dollars is low.

But then the math of debt begins to catch up with the economy as credit money begins to outstrip sovereign money. The problem with debt is that it requires continuous income to service it. Once a nation’s money becomes 100% credit, as is the case in the United States and throughout much of the globe now, then scarcity is assured as all that money carries interest. The interest works to consolidate the money into the hands of those producing the debt.

For everybody else, they eventually enter a condition that I term “Debt Saturation.” That is the point at which current income can no longer service more debt. If more debt is added to a debt saturated situation, then something must mathematically give way.

The United States as a whole reached the debt saturated condition quite some time ago. Once reached, adding more debt, as we are massively attempting to do, no longer results in real economic expansion. Instead it results in real economic contraction, the exact opposite of what worked before! Let me make that clear, attempting to stimulate a debt saturated economy with more debt will only lead to real economic contraction and higher levels of structural unemployment!

But remember WHO produces the money! In order for their profits to grow, they must produce ever increasing sums of debt, such that today the acknowledged Current Account Deficit of the United States exceeds $14 Trillion!

If only it were that good in reality! But sadly it’s not – there is much disinformation and fuzzy thinking here.

Even if we give this number the benefit of naively believing that’s the extent of it, it is still completely unworkable math. Even the mainstream media, who is complicit in creating and disseminating economic disinformation, is forced to concede that the numbers are completely unworkable. Just taken at face value, the current advertised account deficit of $14 trillion+ equals more than $45,000 of debt for every man, woman, and child in the United States (current population approximately 310 million). My family of four would thus be responsible for more than $180,000 just in our share of national debt!

Oh, but if only it were that promising! Not even close!

The never mentioned truth is that not only are our families responsible for the national debt, but they are also the same people responsible for our state’s debts, our county’s debts, our city’s debts, our personal debts, and ultimately because we’re end use consumers, we’re also responsible for corporate debts! Whew, it all adds up to sums so vast that there is absolutely no possible way the debt can ever be repaid. In fact, it really can’t even be seriously paid down without dramatically shrinking economic activity. Math is math… it cannot be fooled. It can be ignored for a while, and that’s exactly how we’ve been handling it so far.

Lies, Damn Lies, and Statistics

"There are three kinds of lies: lies, damned lies, and statistics."
~Mark Twain, autobiography, 1904

Another way that logic is turned on its head is when the bankers, politicians, and economists (who are trained in schools financed by bankers), compare GDP (Gross Domestic Product) to our nation’s debt! What do the two have to do with one another? Very little!

What’s far more important is our nation’s debt compared to our nation’s income. After all, it requires income to service debts, not some trumped up measurement of production. Even using our crooked $14 Trillion current debt number, it is 583% of our nation’s $2.4 trillion annual income:



Why do I say that number is crooked? For starters our government refuses to use GAAP accounting like they demand of companies within the United States. This means that we are failing to acknowledge accounts payables – future obligations and other promises that are not currently on the books, that’s why it’s called the “current” account deficit. Adding future obligations catapults the $14 Trillion total into the $60 Trillion (conservative figure) to $100 Trillion + range ($322,000+ per person, $1.3 million for a family of four).

Additionally, GDP is supposed to be the measurement of goods and services produced in this country. This figure is VASTLY overstated for two primary reasons – this makes our debt condition all the more ominous:

1. Credit money production and derivatives, aka financial engineering, should be subtracted from GDP as creating a debt dollar only pulls future demand forward into the here and now and thus creates a future obligation. This is like taking a cash advance on a credit card and counting it towards your personal income! It’s not income, it’s a loan! This single effect has masked the fact that the United State’s real output of goods and services has not actually increased in the past decade at all. This overestimates the value of our GDP by roughly 30% to 40%.

2. Our GDP is measured in dollars and not in actual goods or services. Thus if the value of the dollar falls, it will appear that more goods and services are being created than actually are (apparent growth). For example, if the value of the dollar falls 5% in real terms, but GDP supposedly increases 3%, then real growth is actually -2%. The BEA (Bureau of Economic Analysis) and BLS (Bureau of Labor Statistics) calculate supposed inflation and then use a “deflator” to adjust the GDP number, but due to errors in the way they calculate those numbers, the net effect is to understate inflation and that overstates GDP.

The net effect of these errors is that you are being fed disinformation about the state of our economy, and about our ability to service our debts. Our nation is functionally insolvent as are large private banks.

The lie in this regard is that we are a sovereign nation and can simply print money and thus make it easier to pay back our debts and future obligation. But once debt saturation is reached and interest rates are at zero, then the only way left to cause apparent growth is to either use fraudulent accounting, or to print money. We are doing both, and both will lead to the eventual loss of confidence that will end the charade that the quantity of money being produced is under control – it is not.

Imagine that you are the largest lender to a nation. You worked hard for the money that you lent them. But that nation continues to spend money they don’t have and begin to take the easy way out by printing up more money. This action devalues the money that they are paying you back with, and thus in effect they are stealing from you! Will you continue to lend your hard earned money to such a nation? Certainly not forever, and thus there are limits. History has proven these limits time and time again, yet the disinformation is overpowering.

Growth and inflation are two completely different things, but the terms are often confused for one another. This is a large part of the disinformation that is laced throughout economic statistics. Often inflation is used to sell the idea that growth is occurring when in fact it is not.

A bowling ball manufacturer, for example, may build and sell 10,000 balls in one year, selling each for $80, and thus creating $800,000 in revenue. The next year they do not report the number of balls produced, but claim that sales rose to $990,000. Congratulations! If this is the only data one has, a person may be forced to conclude that they are growing their business, and one would have to conclude that demand is strong! But when given the fact that they actually produced only 9,000 bowling balls, but sold them for $110 each, then it becomes apparent that they made and sold 10% fewer products! While the company can report sales grew by $190,000 or 23%, real production declined! The conclusion here is different, now it could be that demand is super strong and they were setting a higher price point, OR monetary inflation is quite high. Once you have this real quantity information then it’s easy to tell that what rose was the quantity of money, and not the quantity of product. The quantity of money in the transaction may have risen, but fewer workers will be needed with the real quantity of items being produced in decline.

The problem is even more severe when Retail Sales are reported. These are also overstated as they are measured and expressed in dollars which are being devalued. Additionally, Retail Sales are only reported for stores open one year or longer, thus capturing only sales of stores that are open. This instills substitution bias because sales at stores that have closed in the past year are not considered! This error gets larger the more stores that close.

The biggest and most pervasive errors are in the way our government reports inflation data. They use “hedonistic adjustments” and a myriad of other faulty methods to make inflation appear smaller than it actually is. These errors are now famous so I won’t describe them all except to say that they use these numbers to artificially hold down things like annual Social Security paycheck adjustments. And, because this inflation data is bad, almost all other data is bad too when corrections for inflation are attempted to make them “real.”

Many economic data sets use “real” data. They are actually not real. This inflation adjustment error ripples throughout the data sets and winds up painting a completely false picture. Producing good retail sales numbers would be very easy with today’s technology, yet we don’t do it because those financing it all can’t stand the truth. And everything today is marketing and perception driven. The fear is that if perceptions of weakness are evident then it will lead to more weakness. But eventually the math expresses itself, it cannot be hidden forever.

Are economic statistic errors intentional? You bet they are. They are getting worse and worse over time as one lie is placed upon the former. Some may be “adjusted” with the best of intentions by the people doing the adjusting, but this simply brings in another type of bias, that is the optimism bias. People simply don’t like to report or promote bad news.

But when money interests get involved, look out!

Organizations like the MBA (Mortgage Banker’s Association) report statistics for their own economic segments. In the case of the MBA, they report Pending Home Sales and Refinance activity on a weekly basis. They are now famous hypocrites for chastising home owners who walk away from their homes (thus returning the collateral to the bank) while they were simultaneously doing exactly that with their own corporate headquarters.

When the data starts looking bad, as it did for home sales, private organizations like the MBA begin to clam up and start obscuring the data, making it hard to examine and compare with past figures. This is disinformation step number one – a lack of transparency. The “Fed” has never been transparent and fights every attempt to force it, the latest being the “Audit the Fed” bill sponsored by Congressman Ron Paul. The “Fed” won’t allow itself to be audited because it would make the fraud absolutely apparent.

Our unemployment numbers are also another piece of gross disinformation. The BLS induces huge errors into these reports with massive seasonal adjustments and by using phony models such as their small business “Birth/Death” model. Additionally, they also use old and outdated technology to gather information (a phone survey) when technology exists to get a very timely and accurate view. Employers are required to provide payroll information directly and thus real information could be easily compiled and reported, yet it is not.

And since our money is created by so many private companies, and then it is further leveraged and confused with derivatives, we have completely lost touch of our ability to even know what the total quantity of money is! Don’t fall for the disinformation, “Fed” reported money aggregates are not even close to reality! What little they actually do track and report is dwarfed by what they fail to track and report, namely the derivates within the “shadow banking industry.” Truly, there is no agency that is privy to the actual total quantity of money within the system and throughout the globe. They want it that way, the more you are kept in the dark, the easier it is for them to do as they please.

An entire book filled with the specifics of bad economic data could be written, I observe and report on it every single day. The information is there for those with the willingness and courage to look.

So, you have to ask yourself why is the data slanted, and almost always the slanting is in the direction that makes the economy look more healthy than it actually is? The answer, I believe, is readily apparent when you simply follow the trail of money back to who profits from it, and who produces the money.

Misallocation and then Turmoil

This pervasive economic disinformation leads to tremendous misallocations of resources, both human and capital. The housing bubble is an excellent example of that, causing people and resources to simply produce far more than was needed. When we are producing things we don’t really need, we need to be asking ourselves what it is we’re not producing but should be – like energy infrastructure.

And to keep the illusion going interest rates were lowered to zero and kept there. Then comes the outright money printing disguised in the form of “Quantitative Easing” – which is simply more blatant disinformation by the same private organization who refers to themselves as the “Fed.” Their lie is that money printing in this manner is benign. It is not, as is readily apparent by the doubling of food commodity prices in just the past six months alone.

Real people throughout the world are starving due to these actions, yet our government fails to acknowledge this, much less take action to prevent it. People who live in poor regions are affected to a much greater degree than those who are wealthier as a much larger percentage of their income goes to pay for food. For example, approximately 40% of the average income is needed just to buy food for the average income earner in China. Imagine the effects on their lives if the cost of food doubles for them. In the United States a much smaller percentage of income goes to food, and thus we are affected to a much smaller degree. Still, those on the margins are greatly affected, a travesty of greed that has resulted in the breakdown of the rule of law.

The saying is that “desperate people do desperate things.” In this manner then, the undertow of economic misallocation leads to what I term “other events.” Hunger and discontent can lead to violence, revolution, and war. We are seeing these “other events” play out on the world stage now, yet few can see the chain of events leading from the “Fed’s” economic and money disinformation directly to these tragedies.

Transparency, Checks & Balances are Paramount

How to stop and to prevent the spread of economic disinformation? Unfortunately it probably won’t change until we change WHO produces and controls the quantity of money. However, if we look forward to the day that change does occur, then we need to be ready to create a system that is sustainable in the very long term.

Money absolutely corrupts. This makes it essential that those disseminating important economic data be neutral in regards to financial incentive. The Mortgage Banker’s Association, for example, should not be the ones reporting mortgage information to the public and to investors! The government agencies responsible for reporting statistics should not be under the influence of private corporations, nor should they be beholden to politicians whose careers are dependent on winning votes (often by showering money upon their constituents). Thus, agencies that report economic statistics should be separated as much as possible from those money driven influences.

This could be accomplished by replacing the current alphabet soup of agencies with one independent agency responsible solely for the collection and dissemination of economic data.

Such an agency would be tasked with the following:

1. Compile and track all data necessary to monitor and to adjust the economy. This panel must be completely independent and without influence from all other agencies. Workers within this agency should not come from or leave to go to work within corporations who may benefit from this agency’s work for a specified time both before and after employment.
2. Complete transparency is required, ALL data is made available to the public, free of charge.
3. Raw data should be made available as soon as it’s available to them, no individual, firm, or politician should have access to the data before the public.
4. Independent parties must compile and report statistics for any industry that has a measurable effect on the overall economy. In other words, a neutral party should be required to compile and report meaningful industry data so that insiders do not have the ability to manipulate overall industry data.
5. Statistics should be separated and reported in three categories:
   a. Raw data.
   b. Timeless data – methods should be developed to report data in such a manner that the methods of calculation can be repeated and reported consistently over time, thus ensuring that future generations can compare apples to apples.
   c. Modern data – these are data that can be improved and changed over time. However, all such changes shall be completely transparent and shall always be presented with the raw data and with access to the way in which the statistic is compiled and calculated.

But this alone is not enough. The special interests who produce the money also control our education system and our media. They also actively work to prevent good and honest scientific research in the field of economics. Again, keeping people in the dark is profitable for them. This is why the field of economics seems more like voodoo than science.

We fail to track and monitor the economy properly, we fail to do meaningful research, and then we anoint a supposed “expert” to act as God at the head of the “Fed” who is supposedly “independent.” This is laughably archaic, intentionally so, and against the wishes of our nation’s founders who understood the importance for checks and balances.

We should be doing meaningful research within the economy and we should be attempting to model it and the associated human behavior. We should be striving to create controls to keep the quantity of money under control – this is not impossible. What is impossible is expecting gold backing or private individuals to keep the quantity of money under control on their own. There must be transparency coupled to checks and balances if we wish to be truly prosperous over the long haul.