Tag Archives: central banks

Why Are so Few Americans Able to Get Ahead?

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By Charles Hugh Smith

Source: Of Two Minds

Our entire economy is characterized by cartel rentier skims, central-bank goosed asset bubbles and stagnating earned income for the bottom 90%.

Despite the rah-rah about the “ownership society” and the best economy ever, the sobering reality is very few Americans are able to get ahead, i.e. build real financial security via meaningful, secure assets which can be passed on to their children.

As I’ve often discussed here, only the top 10% of American households are getting ahead in both income and wealth, and most of the gains of these 12 million households are concentrated in the top 1% (1.2 million households). (see wealth chart below).

Why are so few Americans able to get ahead? there are three core reasons:

1. Earnings (wages and salaries) have not kept up with the rising cost of living.

2. The gains have flowed to capital, which is mostly owned by the top 10%, rather than to labor ((wages and salaries).

3. Our financialized economy incentivizes cartels and other rentier skims, i.e. structures that raise costs but don’t provide any additional value for the additional costs.

It’s instructive to compare today’s household with households a few generations ago. As recently as the early 1970s, 45 years ago, it was still possible for a single fulltime-earner to support the household and buy a home, which in 1973 cost around $30,000 (median house price, as per the St. Louis FRED database).

As recently as 20 years ago, in 1998, the median house price in the U.S. was about $150,000— still within reach of many two-earner households, even those with average jobs.

As the chart below shows, real median household income has only recently exceeded the 1998 level— and only by a meager $1,000 annually. If we use real-world inflation rather than the under-estimated official inflation, real income has plummeted by 10% or more in the past 20 years.

This reality is reflected in a new study of wages in Silicon Valley, which we might assume would keep up due to the higher value of the region’s output. The study found the wages of the bottom 90% declined when adjusted for inflation by as much as 14% over the past 20 years:

“The just-released report showed that wages for 90 percent of Silicon Valley workers (all levels of workers except for the top 10 percent)are lower now than they were 20 years ago, after adjusting for inflation. That’s in stark contrast to the 74 percent increase in overall per capita economic output in the Valley from 2001 to 2017.”

source: Why Silicon Valley Income Inequality Is Just a Preview of What’s to Come for the Rest of the U.S.

Meanwhile, the median house price has more than doubled to $325,000 while median household income has stagnated. Please note this price is not adjusted for inflation, like the median income chart. But if we take nominal household income in 1998 (around $40,000 annually) and compare it to nominal household income now in 2018 (around $60,000), that’s a 50% increase–far below the more than doubling of house prices.

To raise stagnant incomes, the Federal Reserve and other central banks have attempted to generate a wealth effect by boosting the valuations of risk-on assets such as stocks, bonds and commercial real estate. But the Fed et al. overlooked the fact that the vast majority of these assets are owned by the top 10%–and as noted above, the ownership of the top 10% is concentrated in the top 1% and .1%.

As a result, the vast majority of the wealth effect capital gains have flowed to the top 1%:

Lastly, the cartel structure of the U.S. economy has raised costs while providing no additional value. One example is higher education, a cartel that issues diplomas with diminishing economic value that now cost a fortune, a reality reflected in this chart of student loan debt, which simply didn’t exist a generation ago:

Our entire economy is characterized by cartel rentier skims, central-bank goosed asset bubbles and stagnating earned income for the bottom 90%. Given these realities, the bottom 90% are left with few pathways to get ahead in terms of financial security and building secure family wealth.

 

Conjuring Up the Next Depression

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By Chris Hedges

Source: TruthDig

During the financial crisis of 2008, the world’s central banks, including the Federal Reserve, injected trillions of dollars of fabricated money into the global financial system. This fabricated money has created a worldwide debt of $325 trillion, more than three times global GDP. The fabricated money was hoarded by banks and corporations, loaned by banks at predatory interest rates, used to service interest on unpayable debt or spent buying back stock, providing millions in compensation for elites. The fabricated money was not invested in the real economy. Products were not manufactured and sold. Workers were not reinstated into the middle class with sustainable incomes, benefits and pensions. Infrastructure projects were not undertaken. The fabricated money reinflated massive financial bubbles built on debt and papered over a fatally diseased financial system destined for collapse.

What will trigger the next crash? The $13.2 trillion in unsustainable U.S. household debt? The $1.5 trillion in unsustainable student debt? The billions Wall Street has invested in a fracking industry that has spent $280 billion more than it generated from its operations? Who knows. What is certain is that a global financial crash, one that will dwarf the meltdown of 2008, is inevitable. And this time, with interest rates near zero, the elites have no escape plan. The financial structure will disintegrate. The global economy will go into a death spiral. The rage of a betrayed and impoverished population will, I fear, further empower right-wing demagogues who promise vengeance on the global elites, moral renewal, a nativist revival heralding a return to a mythical golden age when immigrants, women and people of color knew their place, and a Christianized fascism.

The 2008 financial crisis, as the economist Nomi Prins points out, “converted central banks into a new class of power brokers.” They looted national treasuries and amassed trillions in wealth to become politically and economically omnipotent. In her book “Collusion: How Central Bankers Rigged the World,” she writes that central bankers and the world’s largest financial institutions fraudulently manipulate global markets and use fabricated, or as she writes, “fake money,” to inflate asset bubbles for short-term profit as they drive us toward “a dangerous financial precipice.”

“Before the crisis, they were just asleep at the wheel, in particular, the Federal Reserve of the United States, which is supposed to be the main regulator of the major banks in the United States,” Prins said when we met in New York. “It did a horrible job of doing that, which is why we had the financial crisis. It became a deregulator instead of a regulator. In the wake of the financial crisis, the solution to fixing the crisis and saving the economy from a great depression or recession, whatever the terminology that was used at any given time, was to fabricate trillions and trillions of dollars out of an electronic ether.”

The Federal Reserve handed over an estimated $29 trillion of this fabricated money to American banks, according to researchers at the University of Missouri. Twenty-nine trillion dollars! We could have provided free college tuition to every student or universal health care, repaired our crumbling infrastructure, transitioned to clean energy, forgiven student debt, raised wages, bailed out underwater homeowners, formed public banks to invest at low interest rates in our communities, provided a guaranteed minimum income for everyone and organized a massive jobs program for the unemployed and underemployed. Sixteen million children would not go to bed hungry. The mentally ill and the homeless—an estimated 553,742 Americans are homeless every night—would not be left on the streets or locked away in our prisons. The economy would revive. Instead, $29 trillion in fabricated money was handed to financial gangsters who are about to make most of it evaporate and plunge us into a depression that will rival that of the global crash of 1929.

Kevin Zeese and Margaret Flowers write on the website Popular Resistance, “One-sixth of this could provide a $12,000 annual basic income, which would cost $3.8 trillion annually, doubling Social Security payments to $22,000 annually, which would cost $662 billion, a $10,000 bonus for all U.S. public school teachers, which would cost $11 billion, free college for all high school graduates, which would cost $318 billion, and universal preschool, which would cost $38 billion. National improved Medicare for all would actually save the nation trillions of dollars over a decade.”

An emergency clause in the Federal Reserve Act of 1913 allows the Fed to provide liquidity to a distressed banking system. But the Federal Reserve did not stop with the creation of a few hundred billion dollars. It flooded the financial markets with absurd levels of fabricated money. This had the effect of making the economy appear as if it had revived. And for the oligarchs, who had access to this fabricated money while we did not, it did.

The Fed cut interest rates to near zero. Some central banks in Europe instituted negative interest rates, meaning they would pay borrowers to take loans. The Fed, in a clever bit of accounting, even permitted distressed banks to use these no-interest loans to buy U.S. Treasury bonds. The banks gave the bonds back to the Fed and received a quarter of a percent of interest from the Fed. In short, the banks were loaned money at virtually no interest by the Fed and then were paid interest by the Fed on the money they borrowed. The Fed also bought up worthless mortgage assets and other toxic assets from the banks. Since Fed authorities could fabricate as much money as they wanted, it did not matter how they spent it.

“It’s like going to someone’s old garage sale and saying, ‘I want that bicycle with no wheels. I’ll pay you 100 grand for it. Why? Because it’s not my money,’ ” Prins said.

“These people have rigged the system,” she said of the bankers. “There is money fabricated at the top. It is used to pump up financial assets, including stock. It has to come from somewhere. Because money is cheap there’s more borrowing at the corporate level. There’s more money borrowed at the government level.”

“Where do you go to repay it?” she asked. “You go into the nation. You go into the economy. You extract money from the foundational economy, from social programs. You impose austerity.”

Given the staggering amount of fabricated money that has to be repaid, the banks need to build greater and greater pools of debt. This is why when you are late in paying your credit card the interest rate jumps to 28 percent. This is why if you declare bankruptcy you are still responsible for paying off your student loan, even as 1 million people a year default on student loans, with 40 percent of all borrowers expected to default on student loans by 2023. This is why wages are stagnant or have declined while costs, from health care and pharmaceutical products to bank fees and basic utilities, are skyrocketing. The enforced debt peonage grows to feed the beast until, as with the subprime mortgage crisis, the predatory system fails because of massive defaults. There will come a day, for example, as with all financial bubbles, when the wildly optimistic projected profits of industries such as fracking will no longer be an effective excuse to keep pumping money into failing businesses burdened by debt they cannot repay.

“The 60 biggest exploration and production firms are not generating enough cash from their operations to cover their operating and capital expenses,” Bethany McLean writes of the fracking industry in an articletitled “The Next Financial Crisis Lurks Underground” that appeared in The New York Times. “In aggregate, from mid-2012 to mid-2017, they had negative free cash flow of $9 billion per quarter.”

The global financial system is a ticking time bomb. The question is not if it will explode but when it will explode. And once it does, the inability of the global speculators to use fabricated money with zero interest to paper over the debacle will trigger massive unemployment, high prices for imports and basic services, and a devaluation in which the dollar will become nearly worthless as it is abandoned as the world’s reserve currency. This manufactured financial tsunami will transform the United States, already a failed democracy, into an authoritarian police state. Life will become very cheap, especially for the vulnerable—undocumented workers, Muslims, poor people of color, girls and women, anti-capitalist and anti-imperialist critics branded as agents of  foreign powers—who will be demonized and persecuted for the collapse. The elites, in a desperate bid to cling to their unchecked power and obscene wealth, will disembowel what is left of the United States.

America’s Debt Dependence Makes It An Easy Economic Target

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By Brandon Smith

Source: Alt-Market.com

There is a classic denial tactic that many people use when confronted with negative facts about a subject they have a personal attachment to; I would call it “deferral denial” — or a psychological postponing of reality.

For example, point out the fundamentals on the U.S. economy such as the fact that unemployment is not below 4% as official numbers suggest, but actually closer to 20% when you factor in U-6 measurements including the record 96 million people not counted because they have run out of unemployment benefits. Or point out that true consumer inflation in the U.S. is not around 3% as the Federal Reserve and the Bureau of Labor Statistics claims, but closer to 10% according to the way CPI used to be calculated before the government started rigging the numbers.  For a large part of the public including a lot of economic analysts, there is perhaps a momentary acceptance of the danger, but then an immediate deferral — “Well, maybe things will get worse down the road, 10 or 20 years from now, but it’s not that bad today…”

This is cognitive dissonance at its finest. The economy is in steep decline now, but the mind in denial says “it could be worse,” and this is how you get entire populations caught completely off guard by a financial crash. They could have easily seen the signs, but they desperately wanted to believe that all bad things happen in some illusory future, not today.

There is also another denial tactic I see often in the world of politics and economics, which is what I call “paying it backward.” This is what people do when they have a biased attachment to a person or institution and refuse to see the terrible implications of their actions. For example, when we point out that someone like Donald Trump makes destructive decisions, such as the continued support of Israel and Saudi Arabia in Syria and Yemen, or the reinstatement of funding for the White Helmets in Syria who are tied to ISIS, Trump supporters will often say “Well what about Obama?”

This is a game of shifting accountability. Is one person worse than the other? Possibly. I say give it time and make notes. However, the negative decisions of one politician we don’t like do not diminish the negative decisions of another politician we might like. They should BOTH be held accountable.

The same goes for countries and economies. When an analyst points out that U.S. debt is at historic highs and is utterly unsustainable, people in denial will say “but what about China or Europe?” One does not negate the other and, of course, there are differences that make the situation in the U.S. far more tenuous.

Primarily I am talking about America’s endless dependency on the world reserve status of the U.S. dollar and, beyond that, the steady expansion of debt at low interest rates for the past decade.

The Federal Reserve, once the No. 1 buyer of U.S. debt, has essentially declared it is cutting off support and has begun dumping assets from its balance sheet. The only assets the Fed seems to be maintaining are Mortgage Backed Securities (MBS). All others are being cut, including Treasuries. The American economy is inexorably attached to the idea of our Treasury debt as a safe investment, with our national debt spiking above $21 trillion and many trillions more owed to entitlement programs depending on how you calculate the expenditures, there is a vital need for steady foreign investment in U.S. debt.

But what happens when investment in U.S. debt becomes politically unsavory? Consider the current escalation of the trade war; Many pro-dollar talking heads and cheerleaders have argued in the past that no nation has the guts to dump dollar denominated assets and risk the wrath of American “economic might.” But, already we have seen Russia dump half its U.S. Treasury holdings in a single month and the trade war has only just begun.

Is Russia’s action a sign of things to come? Will other nations like China follow the same strategy? We will have to wait and see, but I believe this is the inevitable outcome of the trade war if it drags on for the rest of the year.

America’s dependent nature, feeding off of foreign investment to support its debts, is a disaster waiting to happen. The concept of economic “recovery” is laughable until this issue is addressed.  And, entering into a trade war while ignoring this blaring weakness is foolish, to say the least.

Beyond the issue of government (taxpayer) debt, let’s not forget about American corporations and consumers. U.S. corporate debt as a percentage of gross domestic product is at historic highs not seen since the housing bubble of 2008 or the dot-com bubble of 2001. There is a distinct difference, though, that makes today’s bubble far more insidious. After years of near-zero interest rates, corporations have become addicted to cheap debt. So much so that they have been borrowing nonstop to support their own stock prices through stock buyback manipulation. But now the Fed is raising interest rates and has committed to expanded hikes in the future.

So, what will corporations do as the cheap debt dries up? Thus far, they are spending the majority of their Trump tax cut still trying to artificially prop up stock process. When this money runs out (and I believe it will much faster than the mainstream thinks), the existing debt of these companies will cost much more to finance, and future borrowing at the same pace will become impossible. This is a threat that is developing now, not in some far-off future.

Eventually, corporations will have to make deep spending cuts rather than borrow. This means mass layoffs, store closures and potential cuts to pensions. And, of course, no more stock buybacks, meaning a market crash will ensue.

What about the U.S. consumer? U.S. consumer debt is set to reach new highs by the end of the year; around $4 trillion by official estimates.  While discussion continues about the alleged “labor shortage” in the U.S., one thing is clear — the jobs that do exist do NOT pay wages that keep up with true inflation. When we see spikes in retail sales in the U.S. and this is applauded as economy recovery, very few mainstream analysts point out that higher retail sales are merely tracking higher inflation.

That is to say, consumers are spending more money on less stuff. Again, this is unsustainable, which is why consumer debt is exploding. Dependency on credit cards and loans is being used by the public to offset much higher costs. But as the Fed raises interest rates, this too will end. Higher Fed rates translate to higher credit rates as well as higher mortgage rates (indirectly). With higher interest payments comes a large drop in overall spending.

As you can see, there are at least two forces at work here that will end all talk of U.S. recovery and which undermine any notion of economic strength — the first is the trade war, which I believe is a massive distraction designed to draw attention away from the actions of international banks and central banks. The second is the Federal Reserve, which has addicted the country to cheap fiat and is now flushing the drugs. We cannot delude ourselves into thinking that this trend will remain slow or that it will not develop into a crash in the near term. We also cannot simply deflect to other countries like China or those in Europe as if their problems are somehow worse and therefore ours are not a concern.

The fact that the health of the US economy is inexorably reliant on the continued foreign demand for the dollar and Treasury debt means any reduction of the dollar’s world reserve status or petro-status, or any decline in treasury purchases, will directly affect the carefully crafted image of America as a stable system.  Without a sudden and aggressive resurgence of domestic production and innovation America has no safety net in the event that our debt addiction is used against us.

The argument that the central bank can jump in at any time to monetize that debt and reduce the danger is also delusional.  This assumes first and foremost that the Fed WANTS to reduce the danger.  I believe they want the danger to increase, not decrease.  Debt monetization also has the added bonus of causing even more inflation as foreign investors dump their dollar denominated assets back into the US.  Monetization is a poison, not a cure.

The crisis is here, now. Seeing and accepting it allows us to prepare accordingly. Denying it as inconsequential sets people up as victims of their own bias and ignorance.

USA in a Debt Trap Death Spiral

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By F. William Engdahl

Source: New Eastern Outlook

The US economy and its financial structures have never recovered from the great financial meltdown of 2008 despite the passage of ten years. Little discussion has been given to the fact that the Republican Congress last year abandoned the process of mandatory budget cuts or automatic sequestration that had been voted in a feeble attempt to rein in the dramatic rise in US government debt. That was merely an added factor in what soon will be recognized as a classic debt trap. What is now looming over not just the US economy but also the global financial system is a crisis that could spell the end of the post-1944 dollar system.

First some basic background. When President Nixon, on advice of Paul Volcker, then at US Treasury, announced on August 15, 1971 the unilateral end of the Bretton Woods gold-dollar system, to replace it with a floating dollar, Washington economists and Wall Street bankers realized that the unique role of the US dollar as leading reserve currency held by all central banks and the currency for world commodity and other trade, especially oil, gave them something that appeared to be a gift from monetary heaven.

So long as the world needed US dollars, Washington could run government deficits without end. Foreign central banks, especially the Bank of Japan in the 1980’s and since the turn of the century, the Peoples’ Bank of China, would have little choice but to reinvest their surplus trade dollar earnings in interest-bearing AAA-rated US Treasury securities. This perverse dollar system allowed Washington to finance its wars in faraway places like Afghanistan or Iraq with other peoples’ money. During the Administration of George W. Bush, when Washington’s annual budget deficit exceeded annually one trillion dollars, Vice President Dick Cheney cynically quipped, “debt doesn’t matter; Reagan proved that.” Up to a point that appeared so. Now we are getting dangerously near to that “point” where debt does matter.

Federal Debt Rise

There are generally speaking three major divisions of debt measured in the US economy: Federal debt of Washington, corporate debt and private household debt. Today, owing in large part to ten years of historic low interest rates following the largest financial crisis in history–the 2007-2008 sub-prime crisis that became a global systemic crisis after September 2008–all three sectors have borrowed as if there was no tomorrow because of the near-zero Federal Reserve interest rates and their various Quantitative Easings. Nothing so radical can last forever.

Since the financial crisis erupted in 2008 US Federal debt has more than doubled from $10 trillion to over $21 trillion today. Yet conditions were made manageable by a Federal Reserve emergency policy that dealt with the financial and banking crisis by buying almost $500 billion annually of that debt. Much of the remainder was bought by China, Japan and even Russia and Saudi Arabia. Further debt levels were restrained by the bipartisan spending caps established in the Budget Control Act of 2011 that had kept recent deficits partially in check.

Now conditions of future US Federal debt and deficit growth are pre-programmed for systemic crisis over the next several years.

‘Trumponomics’ Disaster

The economics of the Trump Tax Cuts Act of 2017, signed in December, dramatically cut certain taxes on business corporations from 35% to 21%, but did not offset that with revenue increases elsewhere. The promise is that cheaper taxes will spur economic growth. This is a myth under present economic conditions and overall public and private debt burdens. Instead, the new tax law, assuming ideal economic conditions, will decrease expected revenues by a total of $1 trillion over the next 10 years. If the economy goes into severe recession, highly likely, tax revenues will plunge and the deficits will explode even more.

What the new Trump tax cut act will do is dramatically increase the size of the US annual budget deficit. The Congressional Budget Office estimates that as early as Fiscal Year 2019 the annual deficit that must be financed by debt will reach $1 trillion. Then the Treasury Borrowing Advisory Committee expects government debt issues of $ 955 billion for FY2018, compared with $ 519 billion in FY 2017. Then for FY 2019 and 2020 the deficit will exceed $1 trillion. By 2028, ten years from now, under mild economic assumptions, the size of the USA Federal debt will rise to an untenable $34 trillion from roughly $21 trillion today, and the deficit in 2028 will exceed $1.5 trillion. And this year 2018 alone, with historically low interest rates the cost of interest only on the total Federal debt will reach $500 billion.

Zombie borrowers…time bombs

Now after almost a decade of unprecedented low interest rates to bail out Wall Street and create new asset inflation in stocks, bonds and housing, the Fed is in the early stages of what some call QT or Quantitative Tightening. Interest rates are rising and have been for the past year, so far very gradually as the Fed is being cautious. The Fed however is continuing to raise rates, and now the Fed Funds stands at 1.75% after nearly ten years at effectively zero. Were they to stop now it would signal a market panic that the Fed knew something far worse than they say.

Because never in its history has the Federal Reserve indulged in such a monetary experiment with so low rates so long, the effects of reversing are going to be as well unprecedented. At the onset of the 2008 financial crisis the Fed rates were around 5%. That is what the Fed is aiming at to return to “normal.” However, with rising interest rates, the lowest credit sector, so-called non-investment grade or “junk bonds” face domino style defaults.

Moody’s Credit Rating has just issued a warning that, barring some sort of miracle, as US interest rates rise, and they are, as much as 22% of US corporations that are being kept alive borrowing at historically low interest, not only in shale oil but in construction and utilities, so-called “zombie” corporations, will face an avalanche of mass defaults on their debt. Moody’s writes that, “low interest rates and investor appetite for yield has pushed companies into issuing mounds of debt that offer comparatively low levels of protection for investors.” The Moody’s report goes on to state some alarming numbers: since 2009, the level of global non-financial junk-rated companies has soared by 58%, representing $3.7 trillion in outstanding debt, the highest ever. Some 40%, or $2 trillion, are rated B1 or lower. Since 2009, US corporate debt has increased by 49%, hitting a record total of $8.8 trillion. Much of that debt has been used to fund stock repurchases by the companies to boost their stock price, the main reason for the unprecedented Wall Street stock market bubble.

Fully 75% of federal spending is economically non-productive including military, debt service, social security. Unlike during the 1930s Great Depression when levels of Federal debt were almost nil, today the debt is 105% of GDP and rising. Spending on national economic infrastructure including the Tennessee Valley Authority and a network of federally-build dams and other infrastructure resulted in the great economic boom of the 1950s. Spending $1.5 trillion on a dysfunctional F-35 all-purpose fighter jet program won’t do it.

Into this precarious situation Washington is doing its very best to antagonize the very countries that it needs to finance these deficits and buy the US debt—China, Russia and even Japan. As financial investors demand more interest to invest in US debt, the higher rates will trigger the default avalanche Moody’s warns. This is the real backdrop to the dangerous US foreign policy actions of the recent period. No one in Washington seems to care and that’s the alarming fact.

How Interlinked Corporations Rule The World

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By Kris Kanthan

Source: Activist Post

Globalism is just like the mafia, but with lot more complexity and respectability. If you have watched mob films such as The Godfather, you can understand how the world works. For example, in Godfather II, a bunch of mobsters get together in Havana, Cuba, to celebrate Hyman Roth’s birthday. As the birthday cake is symbolically cut into pieces and distributed, Roth tells the group how Cuba will be split up amongst the guests. Extrapolate this scene to the world, you can visualize how the world works.

Corporations to Central Banks

The power structure of global elites is like nested Russian dolls made up of corporations. How many people realize that KFC, Taco Bell and Pizza Hut are owned by the same corporation? Or that HBO, CNN, TBS, TNT, Cartoon Network all report to the same boss? Or that whether you drink Budweiser, Corona, Stella, Busch or Michelob (and dozens of others), you end up paying one giant corporation?

Who controls these corporations? It’s not the CEO, as most people believe. The real control lies in the hands of the largest shareholders and/or the Board of Directors. The Board of Directors of all giant corporations are linked to each other by one or two degrees of separation. Some elites even sit on multiple boards at the same time. For example, Rochelle Lazarus sits on the boards of Merck, GE and Blackstone; Jon Huntsman sits on the boards of Hilton, Ford, Caterpillar and Chevron; and Timothy P. Flynn is a director at JP Morgan Chase, Wal-Mart, Alcoa and United Healthcare. Think for a moment how all these corporations would seem totally unrelated to a regular person.

Below is an image that show how the Boards at Netflix and Procter & Gamble are linked to some other popular corporations. (Note: this is a partial list of connections).

The Board of Directors report to the next level of bosses, the financial overlords. All the public corporations in the West – and much of the world now – are controlled by large shareholders, who are giant financial corporations. Thus a study in 2011 showed that fewer than 150 mega corporations pretty much control all the corporations in the world! Some of these have recognizable names such as Barclays or JP Morgan; other names such as State Street or AXA are hardly known outside the financial circles, yet they have incredible influence and wealth.

For these people, it doesn’t matter if you buy Pepsi or Coke; cars from GM or Ford or Toyota; or produce from Walmart or Safeway. It also doesn’t matter to them if you watch ABC or NBC or Fox. Your money goes to the same place.

There are also a few individuals like Carl Icahn or Paul Singer who can borrow billions of dollars at 0%, buy tons of shares of a corporation, change its policies (say, the dividends given out), and make a killing few months later. This is how the financial mafia’s shakedown works.

On the top of the food chain are the central banks who have the amazing ability to create money out of thin air. As Rothschild once said, “Give me control of a nation’s money supply, and I don’t care who makes the laws.” These people are the ultimate Godfathers of globalism. They determine the winners and the losers in capitalism, and thus control all the corporations (including the media), politicians, militaries, and the Deep States around the world.

How to use Corporations

All these corporations are but tools to be used for a higher purpose – controlling people. The financial system is the primary tool used to control nations. Any nation’s debt, wealth, credit rating, stock market, etc. can be manipulated by Wall Street, which is the financial weapon of mass destruction.

There are other corporations that wield power in less obvious ways. GMOs are effective weapons in controlling nations (if a country has to buy seeds and pesticides from foreign corporations every year, that country will stay submissive). Big Pharma and medicines also create dependencies in people and nations.

Above all, globalists strive for the ability to control what people think. This is where media, entertainment and the Internet come into play. Fortunately, all are corporatized, so that Facebook, Twitter, Google, mainstream media, and Hollywood can all work together to form the Ministry of Truth and control what people all over the world feel, think and believe.

The Internet is also a great tool to spy on people and leaders of nations all over the world. This comes in handy when uncooperative leaders have to be blackmailed or overthrown (example: anti-US Brazilian president, Rousseff, was removed by a leaked phone call. The NSA had spied on her and tapped her phone).

When Corporations Need Some Help…

Corporatocracy needs a lot of help in a “free market,” and that’s where military and politics come into play. Globalism demands that all the natural resources around the world be privatized, people of all nations be ready to work for the globalists, and all the economies be open for the corporations to sell their products. When nations resist this trend, they will suddenly face extraordinary problems. (Those who are familiar with John Perkins and his work as an “Economic Hit Man” understand this process.)

An ideal nation will be a vassal nation which will generously share and privatize its natural resources, provide cheap labor, open its markets to multi-national corporations, borrow excessive amounts from the World Bank and IMF, buy a lot of US treasury bonds, host US/NATO military bases, purchase US/EU weapons, and vote in the UN as instructed.

In the mafia movies, people who need to be persuaded may receive a dead fish wrapped in a newspaper or may wake up next to a horse’s head on their beds. In geopolitics, the warnings come in the form of color revolutions (Georgia, Ukraine), attacks by Islamic terrorists (Libya, Syria, Philippines), rise of separatist movements (Kurdistan, Balochistan), hostile attitudes from neighboring countries (Qatar, Iran), etc. If those don’t work, there will be sanctions (Venezuela) and eventually a shock and awe invasion. Unlike the mobster world who can simply carry out a helicopter attack(Godfather II), globalists put in a lot of efforts to justify their overt violence. This task of selling a war is carried out by press, pundits and politicians.

In my book, “Syria – War of Deception,” I explain the geopolitics of proxy wars, Islamic terrorism, and the struggle for global hegemony.

Politicians are also key stakeholders in globalism, and they sell to the public treaties such as NAFTA, WTO and TPP that give corporations power over individual nations. Secretary of State Hillary Clinton said in a speech (exposed by WikiLeaks) that the plan is to create a “hemispheric common market” that would be a union of North, Central and South Americas. There are also political unions that go beyond trade treaties – the creation of EU being an excellent example.

The Beginning of the end? 

People who’re not caught up in the daily drama can see enormous problems with the current system. Globalists have used fake, fiat money to push the U.S. and most nations around the world into colossal debt. The entire global economy is sustained by artificial interest rates, real estate bubbles, stock market bubbles, and fictitious assets such as $500 trillion of derivatives (when the global GDP is only $75 trillion). We live in a real world that’s dependent on a Ponzi system fueled by virtual assets. While globalists keep assuring us how wonderful things are, the uber rich now have more wealth than ever before – just one-fifth of one percent of the world have a net worth of $63 trillion!

Most leaders of countries around the world have bought into this globalist system, either willingly or grudgingly. However, there are a few who are still resisting it to various degrees – North Korea does it belligerently; Syria, Iran, Venezuela and Russia do it defensively; and some such as China, Myanmar and the Philippines do it in more nuanced ways.

There’s also resistance to globalism from the left and the right of the political spectrum, albeit for different reasons.

The next twenty years may be the most significant in modern human history. Entire nations, societies and our way of life may change irrevocably. Will there be a challenge to the current world order either from sovereign nations or grassroots level organizations? Or will we say, “fuggedaboutit” and meekly go along, hoping for the best?

 

Chris Kanthan is the author of a new book, Syria – War of Deception. It’s available in a condensed as well as a longer version. Chris lives in the San Francisco Bay Area, has traveled to 35 countries, and writes about world affairs, politics, economy and health. His other book is Deconstructing Monsanto.

Boobs on Credit

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From BreastImplantFailure.net

By Jim Quinn

Source: The Burning Platform

Do you ever hear something so startlingly mind numbingly ridiculous you realize it must be a sign things have gotten so fucked up something has got to give? As I was driving to work yesterday morning on the Schuylkill Expressway a commercial comes on the radio from a plastic surgeon advertising for anyone looking for a better set of boobs. I had never heard a plastic surgeon commercial before, so I thought that was unusual. But, that wasn’t the best part. This plastic surgeon was offering no money down 18 month interest free financing on your new boobs.

I wonder if they are moving boobs with subprime debt the same way the auto companies have used subprime debt to move cars. Of course, when a deadbeat defaults on an auto loan the car is easily repossessed. What happens when a bimbo defaults on her boob loan? How narrow minded of me. What happens when some dude who wants to be a bimbo defaults on his/her loan? I guess it was just a matter of time before breast enhancement met debt enhancement in this warped world of materialism, narcissism, financialization, and delusions.

Now that revolving credit has reached a new all-time high of $1 trillion and total consumer debt outstanding has exceeded it’s 2008 peak at $12.8 trillion, the Fed has completed its job of helping the average American again in-debt themselves up to their eyeballs. This is considered a success story in this twisted, perverted, bizarro world we call America today. The solution to an epic debt induced global financial catastrophe caused by Federal Reserve easy money, Wall Street fraud, and Washington DC corruption has been to increase global debt by 50% since 2007, with virtually all of it created by central bankers and the governments they control.

In what demented Ivy League educated academic mind would piling $68 trillion more debt on the backs of taxpayers as a cure for a disease caused by the initial $149 trillion of debt be considered rational and sustainable? It’s like having pancreatic cancer and trying to cure it with a self inflicted gunshot. And no one seems to care about or even notice the coming reset when this mass debt induced hysteria of delusion turns into the biggest financial collapse in the history of mankind.

This entire ponzi scheme edifice of debt is nothing but a confidence game. When people begin to realize they can’t repay their own debts, start to understand their governments will never honor their debt based promises, and realize central bankers are nothing more than pretend wizards behind a curtain, the confidence will evaporate in an instant and a collapse which will make 2008/2009 look like a walk in the park will ensue. That’s when civil and global war will engulf the world and teach people real lessons about the real world.

The boobs on credit commercial I heard this week is just another example of Wall Street and their Deep State crony co-conspirators completing their scheme to financialize every aspect of our lives and entrap us in chains of debt, beholden to these modern day Wall Street slave owners. When you see the record number of retail bankruptcies and store closings happening when GDP is supposedly rising by 3% and witness with your own two eyes the number of vacant storefronts and restaurants across our great land of materialism, you might wonder why revolving credit card debt is at a new all-time high.

The answer is Wall Street has successfully financialized virtually every aspect of our day to day lives. Consumer and taxpayer transactions which required cash or check ten years ago can now be paid with a credit card. You can pay your IRS bill with a credit card. You can pay your real estate taxes with a credit card. You can pay your utilities with a credit card. You can pay your school tuition with a credit card. You can pay your rent with a credit card. You can “buy” furniture and appliances without paying for seven years. And guess what? That’s what millions of average Americans are doing. In addition, they are driving “rented” $35,000 automobiles on seven year nothing down payment plans.

This massive debt induced fraud of a recovery gives the appearance of normalcy and stability. The stock market is at all-time highs is used as the narrative of central banker success. We’ve experienced extremely low volatility as the central bankers around the world have coordinated their money printing/debt creating schemes to purposely elevate financial markets to give the masses confidence that all is well. Anyone with critical thinking skills knows all is not well. The longer this fake stability is maintained the greater the collapse. Success breeds disregard for the possibility of catastrophe.

So you can call me the boy who cried wolf, but our Minsky Moment is approaching. Sometimes they do ring a bell at the top. In this case they are shaking fake boobs at the top.

“Stability leads to instability. The more stable things become and the longer things are stable, the more unstable they will be when the crisis hits.” – Hyman Minsky

 

Saturday Matinee: 97% Owned

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From TopDocumentaryFilms.com

97% owned present serious research and verifiable evidence on our economic and financial system. This is the first documentary to tackle this issue from a UK-perspective and explains the inner workings of Central Banks and the Money creation process.

When money drives almost all activity on the planet, it’s essential that we understand it. Yet simple questions often get overlooked, questions like; where does money come from? Who creates it? Who decides how it gets used? And what does this mean for the millions of ordinary people who suffer when the monetary, and financial system, breaks down?

Political philosopher John Gray, commented, “We’re not moving to a world in which crises will never happen or will happen less and less. We are in a world in which they happen several times during a given human lifetime and I think that will continue to be the case.”

If you have decided that crisis as a result of the monetary system is not an event you want to keep revisiting in your life-time then this documentary will equip you with the knowledge you need, what you do with it is up to you.

On the Process of Awakening

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lifestyle

By Charles Hugh Smith

Source: Of Two Minds

We cannot help but feel a hunger for authenticity, honesty, spiritual solace and human connection, but these are precisely what is scarce in our social and economic structure.

There is a tremendous amount of pain in our society. There are many sources of this pain: the emotional desertification of dysfunctional families, the knowledge that we don’t fit in and never will, a widening disconnect between the narratives we’re told are true and our experience, and a social and economic structure that tosses many of us on the trash heap.

The lifestyle we’re told we need to be happy is unattainable to many, and disconcertingly unsatisfactory to the top 10% who reach it.

We cannot help but feel a hunger for authenticity, honesty, spiritual solace and human connection, but these are precisely what is scarce in our social and economic structure.

The process of awakening has many paths. For some, the path starts with the incoherence of official explanations and narratives. For others, it’s the inner search for truth via psychotherapy or spiritual practice.

For some, it’s an investigation into the way our economic and political hierarchy function. For others, art is the starting point: a film, a novel, a comic, a song.

For many of us, it begins with this simple but devastating realization: I don’t fit in. I don’t fit in, have never fit in and never will fit in. I play along because it’s easier on me and everyone I interact with to do so, and I value my independence which means I have to find a way to support myself. That is difficult, as what I like to do has little to no value in our economy.

What interests me is how the epidemic of pain and alienation that characterizes our society is the direct result of how our economy and social order is structured. Incoherence, self-destruction, pain and alienation are the only possible outputs of the system we inhabit.

I have explored this dynamic in my books, starting with Survival+ in 2009 and working forward to my latest book, Why Our Status Quo Failed and Is Beyond Reform. (My other books are: A Radically Beneficial World: Automation, Technology and Creating Jobs for All; Get a Job, Build a Real Career and Defy a Bewildering Economy; The Nearly Free University and the Emerging Economy: The Revolution in Higher Education; Resistance, Revolution, Liberation: A Model for Positive Change; Why Things Are Falling Apart and What We Can Do About It and An Unconventional Guide to Investing in Troubled Times.)

I recently had an amazing free-form 1:50 hour conversation on these topics with New Zealand talk-show host Vinny Eastwood. Any conversation that stretches from the erosion of community to loneliness to Daniel Ellsberg to Marx to Taoism to alienation to Michelangelo Antonioni and on to the process of awakening is amazing in my view.

Here’s Vinny’s page with listening/viewing/downloading options, and the program on Youtube (please ignore my goofy expressions): The magic of bitcoin and cryptocurrencies (1:49:54)

My conclusion may strike many as radical, but to me it is self-evident: the primary source of the rot, insecurity, inequality and alienation of our society is the way we create and distribute money, which is the conduit for creating and distributing political power.

I explain why this is so in my books A Radically Beneficial World: Automation, Technology and Creating Jobs for All and Why Our Status Quo Failed and Is Beyond Reform.

If we don’t change the way money is created and distributed, we change nothing. Money = power. If we don’t devise a form of money that is beyond the reach of central banks and states, all “reform” is just window-dressing, simulacra of “change” that simply solidifies the system’s bogus claim of being reformable.

Cryptocurrencies are in their infancy. There will be many more iterations of Cryptocurrencies beyond bitcoin and Ethereum; recall that bitcoin went public in 2009.

There are security challenges with cryptocurrencies, and the potential for central-state meddling via backdoors in computer operating systems. But once we understand that community and the potential for a less toxic society and economy are crippled by the centralized structure of the state and its money, then there is no way forward but to develop structures of money, work, community, purpose and meaning that are outside the direct control of the state and central bank.

This sort of “crazy talk” is unwelcome. As I noted earlier this week on my chart of the Ministry of Propaganda, in the status quo, skepticism is always a conspiracy or a hoax.

So instead we consider an exploding opiate epidemic, an epidemic of obesity and metabolic illnesses, a discourse of inchoate rage and a Grand Canyon-sized gap between what we’re told is true and what we experience as true “normal.” These things are not normal; they are manifestations of a system that can only generate one output: self-destruction.