Tag Archives: Economic Collapse

Americans Have Already Skipped Payments On More Than 100 Million Loans, And Job Losses Continue To Escalate

Posted on by
Reply

By Michael Snyder

Source: Economic Collapse Blog

Those that have been hoping for some sort of a “V-shaped recovery” have had their hopes completely dashed.  U.S. workers continue to lose jobs at a staggering rate, and economic activity continues to remain at deeply suppressed levels all over the nation.  Of course this wasn’t supposed to happen now that states have been “reopening” their economies.  We were told that things would soon be getting back to normal and that the economic numbers would rebound dramatically.  But that is not happening.  In fact, the number of Americans that filed new claims for unemployment benefits last week was much higher than expected…

Weekly jobless claims stayed above 1 million for the 13th consecutive week as the coronavirus pandemic continued to hammer the U.S. economy.

First-time claims totaled 1.5 million last week, higher than the 1.3 million that economists surveyed by Dow Jones had been expecting. The government report’s total was 58,000 lower than the previous week’s 1.566 million, which was revised up by 24,000.

To put this in perspective, let me once again remind my readers that prior to this year the all-time record for a single week was just 695,000.  So even though more than 44 million Americans had already filed initial claims for unemployment benefits before this latest report, there were still enough new people losing jobs to more than double that old record from 1982.

That is just astounding.  We were told that the economy would be regaining huge amounts of jobs by now, but instead job losses remain at a catastrophic level that is unlike anything that we have ever seen before in all of U.S. history.

With the addition of this latest number, a grand total of nearly 46 million Americans have now filed initial claims for unemployment benefits since the COVID-19 pandemic began.

If you can read that statement and still believe that the U.S. economy is not imploding, I would like to know what you are smoking, because it must be pretty powerful.

Some of the things that we are seeing happen around the country right now are absolutely nuts.  For example, earlier this week in Kentucky it was being reported that people were waiting in line for up to 8 hours to talk with a state official face to face about their unprocessed unemployment claims…

This wasn’t supposed to happen.

By now, the U.S. economy was supposed to be roaring back to life and we were supposed to be entering a new golden age of American prosperity.

Unfortunately, the truth is that more bad economic news is hitting us on a continual basis, and that isn’t going to change any time soon.

Over the past few days, we have learned that Hilton is laying off 22 percent of its corporate staff, and AT&T has announced that it will be eliminating 3,400 jobs and closing 250 stores…

The wireless carrier AT&T is cutting 3,400 jobs and shutting down 250 stores over the next few weeks, according to a statement from the Communications Workers of America, a union representing AT&T workers.

The AT&T Mobility and Cricket Wireless retail closures will affect 1,300 jobs, while the other layoffs are said to be affecting technical and clerical workers.

Needless to say, all of these job losses are having a tremendous ripple effect throughout the economy.

Without paychecks coming in, a lot of Americans are having a really tough time paying their bills, and the Wall Street Journal is reporting that payments have already been skipped on more than 100 million loans…

Americans have skipped payments on more than 100 million student loans, auto loans and other forms of debt since the coronavirus hit the U.S., the latest sign of the toll the pandemic is taking on people’s finances.

The number of accounts that enrolled in deferment, forbearance or some other type of relief since March 1 and remain in such a state rose to 106 million at the end of May, triple the number at the end of April, according to credit-reporting firm TransUnion.

Wow.

To me, that is an almost unimaginable number, and it has become clear that a tremendous amount of pain is ahead for the financial institutions that are holding these loans.

A lot of people out there are going to keep hoping that there will be some sort of an economic rebound, but the cold, hard reality of the matter is that fear of COVID-19 is going to keep a large segment of the population from resuming normal economic activities for the foreseeable future.  And it certainly doesn’t help that the number of confirmed cases in the U.S. has been steadily rising over the past couple of weeks and that the mainstream media has been endlessly warning that a “second wave” is coming.

If you doubt what I am saying, just look at what is happening to the restaurant industry.  We had started to see a small bit of improvement in the numbers, but now fear of a “second wave” has caused restaurant traffic to start cratering again…

After three months of slow but consistent improvement in restaurant dining data in the US and across the globe, in its latest update on “the state of the restaurant industry”, OpenTable today reported the biggest drop in seated restaurant diners (from online, phone and walk-in reservations) since the depth of the global shutdown in March.

As shown in the OpenTable graphic below, on Sunday, June 14, restaurant traffic suddenly tumbled, sliding from a -66.5% y/y decline as of June 13 to -78.8% globally.

This was mostly due to a sharp drop in US restaurant diners, which plunged by 13% – from -65% to -78% – the biggest one day drop since the start of the shutdown in the US, and the second biggest one day drop on record.

Business travel is another area where we are seeing signs of big trouble ahead.  The following comes from Yves Smith…

Business travel is not coming back any time soon. People are getting accustomed to Zoom. And word may also get out that domestic flying is much worse than it used to be, which will be a deterrent to those who might be so bold as to want to get on a plane. That is a fundamental blow to airlines, airport vendors, hotels, restaurants, and convention centers. Hotel occupancy in April was 24.5% which if anything seems high based on my personal datapoints. The pricings I see say that hotel operators are not expecting much if any improvement through the summer.

Like many of you, I wish that economic conditions would go back to the way they used to be, but that simply is not going to happen.

Yes, we will see economic numbers go up and down over the coming months, but a return to “the good times” is not in the cards.

And what hardly anyone realizes is that this is just the beginning of our problems, and I am working on a new project right now which will explain why this is true in great detail.

So stay tuned, because things are about to get really, really “interesting”.

The financialization of the end of the world

Posted on by
1

By Kurt Cobb

Source: resilience

For those who are fans of cartoons from The New Yorker magazine and consistent readers of this blog, you might be able to guess my two favorite cartoons. In the first one, a man in a coat and tie stands at a podium and tells his unseen audience the following: “And so, while the end-of-the-world scenario will be rife with unimaginable horrors, we believe that the pre-end period will be filled with unprecedented opportunities for profit.”

In the second, a man in a tattered suit sits cross-legged near a campfire with three children listening to him intently as he says this: “Yes, the planet got destroyed. But for a beautiful moment in time we created a lot of value for shareholders.”

Now, in the you-can’t-make-this-stuff-up category, financial writer Paul Farrell used the caption from the first cartoon in a 2015 piece for MarketWatch entitled: “Your No. 1 end-of-the-world investing strategy.” The subheading is: “How to pick stocks for the near term when long-term trends say collapse is near.” The subhead actually seems like it might be another caption from a New Yorker cartoon (or possibly one from The Onion). Why exactly would you invest in stocks—as opposed to seeds of food crops and sturdy garden implements—”when long-term trends say collapse is near”? But I’ll put that down to bad headline writing.

In Farrell’s defense, he frequently used his column in MarketWatch to warn his readers of the coming collapse of modern civilization if we don’t change our ways. He was obliged to give investment advice, of course, because that’s what the column was for.

Few other investment gurus are as intellectually honest as Farrell. Among prominent investment managers, only Jeremy Grantham comes close to understanding the scope of the challenges we face. Grantham wrote a piece in 2013 called “The Race of Our Lives” that outlines the myriad challenges humans face. He starts with a discussion of the fall of civilizations. (He updated his views in 2018.)

One would think that the coronavirus pandemic would allow for some sober reflection among those in the financial community as the pandemic-induced crash of the economy and the markets has called into question the stability of practically all the arrangements of modern civilization. Instead, the focus is on how stock markets could be back at or near all-times highs at the beginning of what is arguably the next Great Depression.

The New Yorker cartoons linked above appropriately characterize the madness that grips late-stage civilizations as their pillars begin to fall. Instead of attempting to adapt to new realities, every attempt is made to maintain the current fragile system. The trillions of dollars pumped into the world financial system by central banks and governments in the wake of the pandemic have done little except stoke renewed financial bubbles in practically all financial markets (and thereby bailed out the mostly wealthy owners of financial assets).

The disconnect is hard to miss. The latest reading of the U.S. Federal Reserve Bank of Atlanta’s GDPNow indicator, which is frequently updated as new data becomes available, now predicts that U.S. GDP will contract by 45.5 percent in the current quarter. (The number is annualized and seasonally adjusted.)

Even so the NASDAQ Composite Index hit a new all-time high earlier this month just three months after the recent trough reached during the crash. The S&P 500 is now very close to a new all-time high. Neither development makes sense in the middle of the worst economic downturn since the Great Depression. For comparison, it took more than two years for the NASDAQ Composite from the bottom in 2009 during the Great Financial Crisis to regain its 2007 highs. It took the S&P 500 more than four years.

Of course, the financialization of everything continues. Vaccine makers are in line for government funds. Naturally, it takes money to develop a vaccine. But drug makers aren’t in the business of keeping people healthy. They are in the business of making money. In the United States at least they are helped by the fact that they aren’t liable if their vaccine kills or injuries someone. And, executives in one money-losing pharmaceutical firm cashed in stock right after their company goosed the shares significantly higher with a very preliminary announcement about the company’s coronavirus vaccine research.

When it comes to real estate, it used to be that people bought it for income and as a store of value. Now firms buy real estate mostly with borrowed money and try to make gains mostly through property price appreciation. Often the real estate loans are packaged into securities that are sold and resold as part of the giant Wall Street and worldwide financial casino.

One of the surest signs of the financialization of everything and the growing disconnect of finance from reality is the credit default swap (CDS). The CDS is essentially insurance for loans and bonds. The buyer pays the seller a premium every month. If the instrument insured defaults, the seller provides a predetermined payment to reimburse the CDS buyer. Now here’s the weird thing: An investor doesn’t even have to own the loan or bond to insure it. It’s like me taking out an insurance policy on your home against fire when I have no ownership or interest in the home. In fact, I have every incentive to make sure your house burns down. Do you see any problem with that?

For normal insurance, the buyer must have an insurable interest. Typically, this means the buyer must actually own the thing he or she is insuring. The CDS, on the other hand, is an ideal instrument for those who want to bring on a financial end-of-the-world scenario. The buyers have every reason to want the economy to go down the drain as their payments may be 10 or even 20 times their initial investment.

Many wealthy people fear and even believe an end-of-the-world scenario is possible or probable. Some think they can hold up in luxury bunkers until the dust clears. But what if, when the dust clears, their wealth is gone and the financial world they used to inhabit has vanished.

Perhaps they will sit around campfires telling their grandchildren about the old days when finance was king and the real economy of goods and services was just a place where rubes got their daily bread—while, of course, simultaneously providing an outsized portion to the rich.

Globalists Reveal That The “Great Economic Reset” Is Coming In 2021

Posted on by
1

By Brandon Smith

Source: Alt-Market.com

For those not familiar with the phrase “global economic reset”, it is one that has been used ever increasingly by elitists in the central banking world for several years. I first heard it referenced by Christine Lagarde, the head of the IMF at the time, in 2014. The reset is often mentioned in the same breath as ideas like “the New Multilateralism” or “the Multipolar World Order” or “the New World Order”. All of these phrases mean essentially the same thing.

The reset is promoted as a solution to the ongoing economic crisis which was triggered in 2008. This same financial crash is still with us today, but now, after a decade of central bank money printing and debt creation, the bubble is even bigger than it was before. As always, the central bank “cure” is far worse than the disease, and the renewed crash we face today is far more deadly than what would have happened in 2008 if we had simply taken our medicine and refused to prop up weak parts of the economy artificially.

Many alternative economists often wrongly attribute the Fed’s habit of making things worse to “hubris” or “ignorance”. They think the Fed actually wants to save the financial system or “protect the golden goose”, but this is not reality. The truth is, the Fed is not a bumbling maintenance man, the Fed is a saboteur, a suicide bomber that is willing to destroy even itself as an institution in order to explode the US economy and clear the path for a new globally centralized one world system. Hence, the “Global Reset”.

In 2015 in my article ‘The Global Economic Reset Has Begun’, I stated:

“The global reset is not a “response” to the process of collapse we are trapped in today. No, the global reset as implemented by central banks and the BIS/IMF is the cause of the collapse. The collapse is a tool, a flamethrower burning a great hole in the forest to make way for the foundations of the globalist Ziggurat to be built….economic disaster serves the interests of elitists.”

Now in 2020 we see the globalist plan coming to fruition, with the elites revealing what appears to be their intent to launch their reset in 2021. The World Economic Forum officially announced the Great Reset initiative as part of their Covid Action Platform last week, and a summit is scheduled in January 2021 to discuss their plans more openly with the world and the mainstream media.

The WEF also posted a rather bizarre video on the Reset, which consists of a series of images of the world falling apart (and images of factories releasing harmless carbon emission into the air which I suppose is meant to scare us with notions of global warming). The destruction is then “reset” at the push of a button, with everything reversing back to a pristine human-less world of nature and the words “Join Us”.

The reset, according to discussions by the IMF, is basically the next stage in the formation of a one-world economic system and potential global government. This seems to fall in line with the solutions offered during the Event 201 pandemic simulation; a simulation of a coronavirus pandemic that was held by the Bill And Melinda Gates Foundation and the World Economic Forum only two months before the REAL THING happened at the beginning of 2020. Event 201 suggested that one of the top solutions to a pandemic would be the institution of a centralized global economic body that could handle the financial response to the coronavirus.

Is it not convenient that the events of the real coronavirus pandemic fall exactly in line with the Event 201 simulation, as well as directly in line with the global reset plans of the IMF and the World Economic Forum? As they say, let no crisis go to waste, or, as is the motto of the globalists “Order Out Of Chaos”.

With civil unrest about to become a way of life for many parts of the world including the US, and the pandemic set for a resurgence of infections after the “reopening”, creating a rationale for a second wave of lockdowns probably in July, the economy as we know it is being destroyed. The last vestiges of the system, hanging by a thin thread after the crash of 2008, are now being cut.

The goal is rather obvious – Terrify the population with poverty, internal conflicts and a broken supply chain until they lobby the establishment for help.  Then, offer the “solution” of medical tyranny, immunity passports, martial law, a global economic system based on a cashless digital society in which privacy in trade is erased, and then slowly but surely form a faceless “multilateral” global government which answers to no one and does whatever it pleases.

I remember back in 2014 when Christine Lagarde first began talking about the reset. That same year she also made a very strange speech to the National Press Club in which she started rambling gleefully about numerology and the “magic number 7”. Many within the club laughed, as there was apparently an inside joke that the rest of us were not privy to. Well, I would point out that the World Economic Forum meeting on the global reset in 2021 will be held exactly 7 years after Lagarde gave that speech. Just another interesting coincidence I suppose…

The new world order, the global reset, is a long running scheme to centralize power, but in a way that is meant to be sustained for centuries to come. The elites know that it is not enough to achieve global governance by force alone; such an attempt would only lead to resistance and eternal rebellion. No, what the elites want is for the public to ASK, even beg for global governance. If the public is tricked into demanding it as a way to save them from the horrors of global chaos, then they are far less likely to rebel against it later. Problem – reaction – solution.

The pandemic is not going away anytime soon. Everyone should expect that state governments and the federal government will call for renewed lockdowns. With these new lockdowns, the US economy in particular will be finished. With 40 million people losing their jobs during the last lockdowns, many states only partially reopened, and only 13% to 18% of small businesses receiving bailout loans to survive, the next two months are going to be a devastating wake-up call.

The real solution will be for people to form more self reliant communities free of the mainstream economy. The real solution should be decentralization and independence, not centralization and slavery. The globalists will seek to interfere with any effort to break from the program. That said, they can do very little if millions of people enact localization efforts at the same time. If people aren’t reliant on the system, then they cannot be controlled by the system.

The real test will come with the final collapse of the existing economy. When stagflation spikes even harder than it is right now and prices of necessities double or triple yet again, and joblessness skyrockets even further, how many people will clamor for the globalist solution and how many will build their own systems? How many will be bowing in submission and how many will be ready to fight back. It is a question I still don’t have an answer to even after 14 years of analysis on the issue.

What I suspect is that many people will fight back. Not as many as we might hope for, but enough to defend the cause of liberty. Maybe this is overly optimistic, but I believe the globalists are destined to lose this war in the long run.

Another Bank Bailout Under Cover of a Virus

Posted on by
Reply

By Ellen Brown

Source: Web of Debt

Insolvent Wall Street banks have been quietly bailed out again. Banks made risk-free by the government should be public utilities.  

When the Dodd Frank Act was passed in 2010, President Obama triumphantly declared, “No more bailouts!” But what the Act actually said was that the next time the banks failed, they would be subject to “bail ins” – the funds of their creditors, including their large depositors, would be tapped to cover their bad loans.

Then bail-ins were tried in Europe. The results were disastrous.

Many economists in the US and Europe argued that the next time the banks failed, they should be nationalized – taken over by the government as public utilities. But that opportunity was lost when, in September 2019 and again in March 2020, Wall Street banks were quietly bailed out from a liquidity crisis in the repo market that could otherwise have bankrupted them. There was no bail-in of private funds, no heated congressional debate, and no public vote. It was all done unilaterally by unelected bureaucrats at the Federal Reserve.

“The justification of private profit,” said President Franklin Roosevelt in a 1938 address, “is private risk.” Banking has now been made virtually risk-free, backed by the full faith and credit of the United States and its people. The American people are therefore entitled to share in the benefits and the profits. Banking needs to be made a public utility.

The Risky Business of Borrowing Short to Lend Long

Individual banks can go bankrupt from too many bad loans, but the crises that can trigger system-wide collapse are “liquidity crises.” Banks “borrow short to lend long.” They borrow from their depositors to make long-term loans or investments while promising the depositors that they can come for their money “on demand.” To pull off this sleight of hand, when the depositors and the borrowers want the money at the same time, the banks have to borrow from somewhere else. If they can’t find lenders on short notice, or if the price of borrowing suddenly becomes prohibitive, the result is a “liquidity crisis.”

Before 1933, when the government stepped in with FDIC deposit insurance, bank panics and bank runs were common. When people suspected a bank was in trouble, they would all rush to withdraw their funds at once, exposing the fact that the banks did not have the money they purported to have. During the Great Depression, more than one-third of all private US banks were closed due to bank runs.

But President Franklin D. Roosevelt, who took office in 1933, was skeptical about insuring bank deposits. He warned, “We do not wish to make the United States Government liable for the mistakes and errors of individual banks, and put a premium on unsound banking in the future.” The government had a viable public alternative, a US postal banking system established in 1911. Postal banks became especially popular during the Depression, because they were backed by the US government. But Roosevelt was pressured into signing the 1933 Banking Act, creating the Federal Deposit Insurance Corporation that insured private banks with public funds.

Congress, however, was unwilling to insure more than $5,000 per depositor (about $100,000 today), a sum raised temporarily in 2008 and permanently in 2010 to $250,000. That meant large institutional investors (pension funds, mutual funds, hedge funds, sovereign wealth funds) had nowhere to park the millions of dollars they held between investments. They wanted a place to put their funds that was secure, provided them with some interest, and was liquid like a traditional deposit account, allowing quick withdrawal. They wanted the same “ironclad moneyback guarantee” provided by FDIC deposit insurance, with the ability to get their money back on demand.

It was largely in response to that need that the private repo market evolved. Repo trades, although technically “sales and repurchases” of collateral, are in effect secured short-term loans, usually repayable the next day or in two weeks. Repo replaces the security of deposit insurance with the security of highly liquid collateral, typically Treasury debt or mortgage-backed securities. Although the repo market evolved chiefly to satisfy the needs of the large institutional investors that were its chief lenders, it also served the interests of the banks, since it allowed them to get around the capital requirements imposed by regulators on the conventional banking system. Borrowing from the repo market became so popular that by 2008, it provided half the credit in the country. By 2020, this massive market had a turnover of $1 trillion a day.

Before 2008, banks also borrowed from each other in the fed funds market, allowing the Fed to manipulate interest rates by controlling the fed funds rate. But after 2008, banks were afraid to lend to each other for fear the borrowing banks might be insolvent and might not pay the loans back. Instead the lenders turned to the repo market, where loans were supposedly secured with collateral. The problem was that the collateral could be “rehypothecated,” or used for several loans at once; and by September 2019, the borrower side of the repo market had been taken over by hedge funds, which were notorious for risky rehypothecation. Many large institutional lenders therefore pulled out, driving the cost of borrowing at one point from 2% to 10%.

Rather than letting the banks fail and forcing a bail-in of private creditors’ funds, the Fed quietly stepped in and saved the banks by becoming the “repo lender of last resort.” But the liquidity crunch did not abate, and by March the Fed was making $1 trillion per day available in overnight loans. The central bank was backstopping the whole repo market, including the hedge funds, an untenable situation.

In March 2020, under cover of a national crisis, the Fed therefore flung the doors open to its discount window, where only banks could borrow. Previously, banks were reluctant to apply there because the interest was at a penalty rate and carried a stigma, signaling that the bank must be in distress. But that concern was eliminated when the Fed announced in a March 15 press release that the interest rate had been dropped to 0.25% (virtually zero). The reserve requirement was also eliminated, the capital requirement was relaxed, and all banks in good standing were offered loans of up to 90 days, “renewable on a daily basis.” The loans could be continually rolled over. And while the alleged intent was “to help meet demands for credit from households and businesses at this time,” no strings were attached to this interest-free money. There was no obligation to lend to small businesses, reduce credit card rates, or write down underwater mortgages.

The Fed’s scheme worked, and demand for repo loans plummeted. Even J.P. Morgan Chase, the largest bank in the country, has acknowledged borrowing at the Fed’s discount window for super cheap loans. But the windfall to Wall Street has not been shared with the public. In Canada, some of the biggest banks slashed their credit card interest rates in half, from 21 percent to 11 percent, to help relieve borrowers during the COVID-19 crisis. But US banks have felt no such compunction. US credit card rates dropped in April only by half a percentage point, to 20.15%. The giant Wall Street banks continue to favor their largest clients, doling out CARES Act benefits to them first, emptying the trough before many smaller businesses could drink there.

In 1969, Prime Minister Indira Gandhi nationalized 14 of India’s largest banks, not because they were bankrupt (the usual justification today) but to ensure that credit would be allocated according to planned priorities, including getting banks into rural areas and making cheap financing available to Indian farmers.  Congress could do the same today, but the odds are it won’t. As Sen. Dick Durbin said in 2009, “the banks … are still the most powerful lobby on Capitol Hill. And they frankly own the place.”

Time for the States to Step In

State and local governments could make cheap credit available to their communities, but today they too are second class citizens when it comes to borrowing. Unlike the banks, which can borrow virtually interest-free with no strings attached, states can sell their bonds to the Fed only at market rates of 3% or 4% or more plus a penalty. Why are elected local governments, which are required to serve the public, penalized for shortfalls in their budgets caused by a mandatory shutdown, when private banks that serve private stockholders are not?

States can borrow from the federal unemployment trust fund, as California just did for $348 million, but these loans too must be paid back with interest, and they must be used to cover soaring claims for state unemployment benefits. States remain desperately short of funds to repair holes in their budgets from lost revenues and increased costs due to the shutdown.

States are excellent credit risks – far better than banks would be without the life-support of the federal government. States have a tax base, they aren’t going anywhere, they are legally required to pay their bills, and they are forbidden to file for bankruptcy. Banks are considered better credit risks than states only because their deposits are insured by the federal government and they are gifted with routine bailouts from the Fed, without which they would have collapsed decades ago.

State and local governments with a mandate to serve the public interest deserve to be treated as well as private Wall Street banks that have repeatedly been found guilty of frauds on the public. How can states get parity with the banks? If Congress won’t address that need, states can borrow interest-free at the Fed’s discount window by forming their own publicly-owned banks. For more on that possibility, see my earlier article here.

As Buckminster Fuller said, “You never change things by fighting the existing reality. To change something, create a new model that makes the old model obsolete.” Post-COVID-19, the world will need to explore new models; and publicly-owned banks should be high on the list.

Mass Distraction And Fake “V-Shaped” Recovery Provide Cover For The Fed Induced Crash

Posted on by
Reply

By Brandon Smith

Source: Alt-Market.com

This article, originally titled ‘The Fed Just Got Cover For The Collapse Of The US Economy’, was written by Brandon Smith and first published at Birch Gold Group

The scapegoating has already started. In almost every sector of the economy that is collapsing, the claim is that “everything was fine until the pandemic happened”. From tumbling web news platforms to small businesses to major corporations, the coronavirus outbreak and the national riots will become the excuse for failure. The establishment will try to rewrite history and many people will go along with it because the truth makes them look bad.

And what is the truth? The truth is that the U.S. economy – and in some ways, the global economy – was already collapsing. The system’s dependency on ultra-low interest rates and central bank stimulus created perhaps the largest debt bubble in history – the Everything Bubble. And that bubble began imploding at the end of 2018, triggered primarily by the Federal Reserve raising rates and dumping its balance sheet into economic weakness, just like it did at the start of the Great Depression. Fed Chair Jerome Powell knew what would happen if this policy was initiated; he even warned about it in the minutes of the October 2012 Federal Open Market Committee, and yet once he became the head of the central bank, he did it anyway.

For a year leading up to the pandemic, the Fed was struggling to maintain and suppress a repo market liquidity crisis. National debt, corporate debt and consumer debt were at all-time highs. Companies were desperate for new stimulus, and they were getting crumbs from the Fed, rather than the tens of trillions that they needed just to stay afloat. The central bank had sabotaged the economy, but they had to keep it in a state of living death until they had a perfect cover event for the collapse. The pandemic and inevitable civil unrest do the job nicely.

What many people do not understand is that the Fed does not care about the economy. In fact, every Fed action since its inception in 1913 has led to the downfall of the U.S. The Fed is not a maintenance man trying to stave off collapse; the Fed is a suicide bomber willing to destroy everything including itself in order to serve a greater ideology.

Total global centralization is the goal, and every new disaster is exploited to this end by the establishment. “Order out of chaos” is the motto of the global elites; in other words, in every crisis there is “opportunity”. This crisis has been no different. Suggested solutions have ranged from the creation of a cashless society operating on a digital currency system, to permanent lockdowns in the name of stopping “global warming”, to a surveillance state and medical tyranny utilizing 24/7 tracking of citizens in order to “stop the spread of the virus”. But how does the establishment plan to get people to go along with such freedom-crushing policies?

The pandemic by itself is not enough. The George Floyd riots may be a motivator, but they might fizzle out over time. The real catalyst, as I have said for many years now, will be an ongoing economic crash. This crash, engineered in 2008, has been a long time coming. Everything that is happening today is an extension of what happened over a decade ago. That said, the current phase was set in motion in 2018, as noted above.

The virus and the lockdowns solidified the crash, and while some people including Trump are calling for a V-shaped recovery, this is not going to happen.  Perhaps Trump is referring to stock markets artificially inflated by the Fed stimulus backstop?  Is anyone gullible enough to believe the stock market represents the real economy?  Because today’s jobs report from the BLS, despite all the hype, does not suggest V-shaped recovery to me.  The US lost 40 million jobs in the span of 6 weeks.  The BLS reports a gain of 2.5 million jobs in May as the country “reopened”.  So, we are still down nearly 38 million jobs in the past couple months yet the BLS stats are being called “stunning” and a “sign of recovery”?

The assumption being made here I think is that job gains will now be constant each month from now on.  I think not.  I think the jobs that were gained in May are the peak, and every jobs report after today will disappoint.  Here’s why…

The latest Fed models predict a GDP plunge of 52.8%, and the manner in which the Fed calculates GDP is actually rigged to the upside. It is difficult to predict the REAL fall in data, but we know it will likely be larger than 52%. Keep in mind that this crash is in the 2nd quarter, while the Fed pumped trillions into the system. What exactly did this money printing buy? Well, stock markets stabilized, but the rest of the economy didn’t, and stock market optimism isn’t going to last much longer either is there are renewed lockdowns.

The primary reason we now face a second Great Depression is because the small business sector has been destroyed. Small businesses are vital to the U.S. economy, representing around 50% of the job market. The closures resulted in around 40 million job losses in the past two months. Add that to the 95 million Americans that have been out of work but not counted by the BLS as unemployed – as well as the 11 million people that are counted – and you are looking at nearly 150 million working age people not generating an income.

The latest BLS jobs gains and the way they are being hyped by the media are suspicious to me.  It seems as if the establishment is trying to convince the public that the pandemic will have no affect on the economy and that their jobs will simply be waiting for them after every new shutdown (as long as they adhere to the rules and restriction set up by state and federal governments).

But it’s only going to get worse from here on…

The public doesn’t realize it yet, but many of the businesses that shut down over the past couple months are not coming back. Sure, a lot of them will try to reopen, and there will be a last gasp of activity during the next month or two, but the levels of debt attached to these ventures was already high before the pandemic hit. The recent small business bailouts seemed as if they were designed to give people false hope. According to figures out of JP Morgan, of the 300,000 clients that applied for the small business aid, only 18,000 actually received any. And, of that 18,000, many were larger corporation, not small businesses.

Business sectors most affected include retail and service, which crashed a record 16.4% overall in April. Food service lost approximately 30% of sales. Electronics and appliances lost 60%. Clothing plunged 78%. Auto sales fell 33% in May, and the expected rebound after the reopening has been disappointing.

The businesses most likely to die first are those that had large debt obligations before the lockdowns, as well as those that received no bailout money. Even though companies like General Electric, Verizon, IBM and Tesla all have massive debt issues, they may be kept alive by government bailouts, at least for a time. Small businesses, on the other hand, appear to be slated for destruction.

In particular, I suspect most restaurants besides major chains will go into bankruptcy. Boutique stores and clothing outlets will run out of money fast. Movie theater chains will collapse. Car rental outlets will collapse. Tourism businesses will close en masse and tourism towns will suffer profit losses despite the “reopening” in some states. Larger companies, like airlines, will continue to decline, and they will have to diversify into other areas, such as shipping, in order to survive. The auto industry is not coming back any time soon.

In the case of restaurants, the social distancing requirements reduce the number of customers that they can seat at any given time. Restaurants were already suffering major declines before the pandemic, and while take-out venues might have seen an uptick because of the lockdowns, this will not last as people begin to run out of cash and start cooking at home.

The same goes for small boutique stores, which rely on consumers with expendable cash flows. Such consumers no longer exist, and notions of “extra cash” will disappear along with waning government checks. As for tourism, I think there will be some travel, as lockdown restrictions are partially lifted. Many people in the cities will try to get away for a week or two just to escape and feel normal for a little while. However, I also think mainstream economists are underestimating the number of people who will refuse to travel because of concerns about coming in contact with the coronavirus. Just as retail refuses to rebound, so will tourism profits.

Air travel is unlikely to improve for the same reasons. Social distancing makes airplane flights a losing investment as passenger capacity is reduced. New car sales will remain stagnant because people are traveling less, and the used car market is being stocked with product as average people sell off vehicles to get extra cash to make ends meet.

All of these factors result in long-term job losses and debt defaults for small businesses as well as some larger companies. Which means much higher poverty rates and further dependency on government welfare programs.

The real test for the public will come when lockdowns return. I realize that there is a bit of denial in the population when it comes to this idea. I see many people operating on the assumption that the “reopening” is a long-term situation. I assure you, it is not. As I have noted in many previous articles, the establishment intends to use what I call “wave theory”, or a cycle of shutdowns and openings over the span of a year or longer. There WILL be new lockdowns, if not in the name of a resurgence in COVID infections, it will be in the name of stopping the national riots.

The response from the American people will be critical here. Will we support further lockdowns or martial law, even though the measures would harm us economically? Or will the public resist? Will the political left embrace a second lockdown in the face of further infection spikes? Will conservatives embrace lockdowns in the face of leftist protests and riots? Both sides of the political spectrum are being tempted with the use of a totalitarian government response in order to ensure their personal “safety”.

People must be made to understand the reality of our situation: the economy has already been undermined and this threat is far greater than either the virus or the riots. This is the danger that is being hidden by the pandemic and civil unrest distractions, and it is a threat that the government has no means or intention of saving us from. We must save ourselves, and doing that requires preparation and acceptance that the world is changed.

That Change You Requested…?

Posted on by
1

By James Howard Kunstler

Source: Kunstler.com

All the previous incidents of white cops killing blacks were just too ambiguous to seal the deal. Michael Brown in Ferguson, Missouri (a murky business); Tamir Rice in Cleveland (waving the BB gun that looked like a .45 automatic); Trayvon Martin (his killer George Zimmerman was not a cop and was not “white”); Eric Garner, Staten Island (black policewoman sergeant on the scene didn’t stop it); Philandro Castile, Minneapolis, (the cop was Hispanic and the vic had a gun). Even the recent February killing of jogger Ahmaud Arbery in Brunswick, Georgia, had some sketchy elements (did Arbery try to seize the shotgun?) — YouTube has scrubbed the video (?) — and then it took months for the two white suspects (not cops) to be arrested.

The George Floyd killing had none of those weaknesses. Plus, the video presented a pretty much universal image of oppression: a man with his knee on another man’s neck. Didn’t that say it all?  You didn’t need a Bob Dylan song to explain it. The Minneapolis police dithered for four days before charging policeman Derek Chauvin with Murder 3 (unpremeditated, but with reckless disregard for human life). The three other cops on the scene who stupidly stood by doing nothing have yet to be charged. Cut it, print it, and cue the mobs.

The nation was already reeling from the weird twelve-week Covid-19 lockdown of everyday life and the economic havoc it brought to careers, businesses, and incomes. In Minnesota, the stay-at-home order was just lifted on May 17, but bars and restaurants were still closed until June. Memorial Day, May 25, was one of the first really balmy days of mid-spring, 78 degrees. People were out-and-about, perhaps even feeling frisky after weeks of dreary seclusion. So, once the video of George Floyd’s death got out, the script was set: take it to the streets!

Few Americans were unsympathetic to the protest marches that followed. Remorse, censure, and tears flowed from every official portal, from the mouth and eyes of every political figure in the land. The tableau of Officer Chauvin’s knee on Mr. Floyd’s neck was readymade for statuary. Indeed, there are probably dozens of statues extant in the world of just such a scene expressing one people’s oppression over another. And yet the public sentiments early-on after the George Floyd killing had a stale, ceremonial flavor: The people demand change! End systemic racism! No justice, no peace! How many times have we seen this movie?

What is changing — and suddenly — is that now it’s not just black people who struggle to thrive in the USA, but everybody else of any ethnic group who is not a hedge fund veep, an employee of BlackRock Financial, or a K-Street lobbyist — and even those privileged characters may find themselves in reduced circumstances before long. The prospects of young adults look grimmest of all. They face an economy so disordered that hardly anyone can find something to do that pays enough to support the basics of life, on top of being swindled by the false promises of higher education and the money-lending racket that animates it.

So, it’s not surprising that, when night falls, the demons come out. Things get smashed up and burned down. And all that after being cooped up for weeks on end in the name of an illness that mostly kills people in nursing homes. Ugly as the ANTIFA movement is, it’s exactly what you get when young people realize their future has been stolen from them. Or, more literally, when they are idle and broke and see fabulous wealth all around them in the banks’ glass skyscrapers, and the car showrooms, and the pageants of celebrity fame and fortune on the boob tube. They are extras in a new movie called The Fourth Turning Meets the Long Emergency but they may not know it.

Hungry for change? You won’t have to wait long. This society may be unrecognizable in a few months. For one thing, there’s a good chance that the current violence in the streets won’t blow over as it has before. There hasn’t been such sudden, massive unemployment before, not even in the Great Depression — and we’re not even the same country that went through that rough episode. Just about every arrangement in contemporary life is on-the-rocks one way or another. Big business, small business, show business… it’s all cratering. The great big secret behind all that is not that capitalism failed; it’s that the capital in capitalism isn’t really there anymore, at least not in the amounts that mere appearances like stock valuations suggest. We squandered it, and now our institutions are straining mightily to pretend that “printing” money is the same as capital. (It’s just more debt.) Note, the stock markets are up this morning at the open! Go figure….

Change? We’re getting it good and hard, and not at a rate we were prepared for. It’s hugely disorienting. It produces friction, heat, and light, which easily becomes violence. There’s, for sure, plenty we can do to make new arrangements for American life without becoming communists or Nazis, but a lot of activities have to fail before we see how that could work. The overburden of obsolete complexity is crushing us, like Derek Chauvin’s knee on George Floyd’s neck. They were both, in their way, common men, caught in the maelstrom of metaphor. That proverbial long, hot summer we’ve heard about for so long…? It’s here.

Nationwide Uprising Against Failed State Triggered By Police Killings

Posted on by
2

By Kevin Zeese and Margaret Flowers

Source: CounterCurrents.org

The nationwide uprising sparked by the murder of George Floyd and other recent racially-motivated events is a response to the bi-partisan failed state in which we live. It comes in the midst of the COVID19 pandemic and the largest economic collapse in the US in more than a century. These three crises have disproportionately impacted people of color and added to longterm racial inequality and injustice.

Black Lives Matter erupted six years ago when a police officer shot and killed Mike Brown in Ferguson, MO. Since that time, police have murdered approximately 1,100 people every year. The response of the government at all levels to the crisis of police killings has been virtually nonexistent. While people seek to avenge the death of George Floyd, the problems are much deeper and the changes needed are much broader.

The Root Of The Problem Is A Failed State

During the COVID19 pandemic, millionaires and billionaires have been bailed out by the government with trillions of dollars while working people were given a pittance of $1,200 per person and a short term increase in unemployment benefits for the more than 40 million people who have lost their jobs. Many workers who provide essential services have had to continue to work putting themselves and their communities at risk.

Urgently needed healthcare is out of reach for millions with no or skimpy health insurance resulting in people dying at home or not going to the hospital until their illness became serious. For this and other reasons, COVID19 is disproportionately impacting communities of color.

Glen Ford of Black Agenda Report puts the mass revolt in the context of the long history of white supremacy that has existed since Africans were brought to the United States. Chattel slavery was enforced by the earliest form of policing, with the first formal slave patrol created in the Carolina colonies in 1704. After the Civil War and a brief period of Reconstruction where African people could participate in civic life, Jim Crow followed with white racists, often allied with Southern police, inflicting terrorism against the Black population through lynchings and other means. Black people were arrested for laws like vagrancy and then punished by being forced to work picking cotton or other jobs. This new form of slavery continues as inmates are forced to work for virtually no pay in prisons, are leased out to dangerous jobs like meat processing, or are used as scabs.

George Floyd’s murder enraged people who have seen too many deaths as a result of police violence. The murder in broad daylight with cameras filming and scores of witnesses showed the impunity of police who are used to not being held accountable for their violence. During the uprising, police have used extreme violence and targeted people with cameras and the media even saying they were the problem.

The root of the problem is a failed state that does not represent the people and has a deep history of racism and inequality that are being magnified by the current crises. The failure to respond to these crises is resulting in an ungovernable country as the social contract has been broken.

Lawlessness among the wealth class, corruption of politicians by campaigns financed by the wealthiest with payoffs to their children and relatives has set the stage for no respect for the law. As one protester exclaimed, “Don’t talk to us about looting, you are the looters. You have been looting from black people. You looted from the Native Americans. Don’t talk to us about violence, you taught us violence.”

The Failed State Cannot Reform Itself

George Floyd’s final words, “I can’t breathe,” echoed the same words of Eric Garner, who was killed six years ago by a New York police officer. Although there were protests then, not much has changed. The system failed to respond.

Failure starts at the top. There have been years of inaction at all levels of government. The New York Times reports “The administration has largely dismantled police oversight efforts, curbing the use of federal consent decrees to overhaul local police departments. Mr. Barr has said that communities that criticize law enforcement may not deserve police protection, and Mr. Trump has encouraged officers not to be ‘too nice’ in handling suspects.”

Trump poured gasoline on the current fire with incendiary rhetoric promising ‘looting leads to shooting’ echoing racists of the past and promising to send in the US military if Democrats can’t stop the uprising. Trump has put the military on alert to deploy to civilian protests. He maintains power by dividing people praising armed protesters who demanded reopening the economy despite the pandemic and calling unarmed protesters against police violence “thugs”.

On Friday, the White House locked down on security alert because of protests. Trump responded by calling for MAGA protesters to come to the White House. They did not come but protests at the White House have continued to increase.

Both Republicans and Democrats are responsible for the current rebellion. Joe Biden has described himself as a ‘law and order’ Democrat from the beginning of his career. He was the primary architect of the federal mass incarceration of Black people and helped add hundreds of thousands of police with militarized equipment to urban communities. He courts police unions that defend killer cops. And Biden opposed the integration of schools.

The failure of leadership continues at the state and local levels with politicians closely tied to the Fraternal Order of Police, which aggressively defends police who kill civilians. Every city can point to a series of police killings with no prosecutions or acquittals and few convictions. Minneapolis is a city with a long history of race-based police violence. Indeed, violence against Indigenous peoples led to the formation of the American Indian Movement.  Tne Intercept summarizes some of the cases:

  • In 2015, the police killed Jamar Clark a  24-year-old black man. Protests lasted two weeks but led to no prosecution.
  • In 2016, Philando Castile, a 32-year-old black motorist, was killed in a Minneapolis suburb. More than two weeks of protest followed and two years later the officer was acquitted.
  • In 2017, Justine Ruszczyk, a 40-year-old white woman, approached a Minneapolis police car to report a sexual assault. The police officer, Mohamed Noor, who shot and killed her was sentenced to 12 years in prison, and her family was awarded a record $20 million settlement.
  • In 2018, body camera footage showed Minneapolis police chasing Thurman Blevins, a 31-year-old black man, and shooting him to death. Prosecutors refused to file charges against the officers who killed Blevins.

Protests have led to some changes but they haven’t solved the problem. Money has been spent on body cameras, which have rarely had any impact. Similarly, training on de-escalation and racial sensitivity has made little difference.

Over the last six years, cities have increased funding for police departments at the expense of health, education, and other underfunded urban programs. Rather than providing people with necessities, the government has relied on controlling neglected communities with an occupying police force. Some of the police are even trained by the Israeli occupiers.

Even in the midst of a pandemic and economic collapse, the government cannot give people access to healthcare, protect their jobs, suspend their rents or control food prices. As Rosa Miriam Elizalde writes in her comparison of the United States to Cuba, the difference is a matter of values. The United States government spends more than 60 percent of the discretionary budget on weapons and war. It should be no surprise that the government acted more quickly to suppress people with militarized police, thousands of National Guard troops, and curfews than it did to protect their lives when the pandemic and recession started.

Reform Is Not Enough: Defund The Police, Give Communities Control, Build Alternatives To Police

The country must look more deeply at policing. Retired police major, Neill Franklin, the executive director of the Law Enforcement Action Partnership told the Intercept, “We need a new paradigm of policing in the United States. It needs to be completely dismantled and reconstructed, not changing a policy here or there.”

The Minneapolis group, Reclaim the Block, wrote a statement calling on the city council to defund the police department. Last week, they made four demands of their city council:

  1. Never again vote to increase police funding.
  2. Propose and vote for a $45 million cut from MPD’s budget as the city responds to projected COVID19 shortfalls.
  3. Protect and expand current investment in community-led health and safety strategies.
  4. Do everything in their power to compel MPD and all law enforcement agencies to immediately cease enacting violence on community members.

This is an agenda that makes sense for cities across the country. A growing movement demands the defunding of police departments. It is evident that the way to reduce police violence is to fund alternative non-law enforcement approaches to conflict resolution, safety strategies, and mental health as well as investing in neglected communities.

Another growing movement calls for democratic community control of the police where communities elect a Civilian Police Accountability Council (CPAC). The critical difference between this and Civilian Police Boards is that the Accountability Council is democratically elected not appointed by the police chief or politicians who are allied with the police. Neill Franklin urges a national database of officers terminated for misconduct so they will not be hired by other police departments.

The New York Times reports that “in 2012, the civilian board in Minneapolis was replaced by an agency called the Office of Police Conduct Review. Since then, more than 2,600 misconduct complaints have been filed by members of the public, but only 12 have resulted in an officer being disciplined.”  The most severe censure was only a 40-hour suspension. Derek Chauvin, who killed George Floyd, has at least 17 misconduct complaints, none of which derailed his career, in nearly two decades with the Minneapolis Police Department.

Chauvin was involved in the fatal shooting in October 2006 when Senator Klobuchar was Minneapolis’ district attorney. Rather than prosecuting Chauvin, she sent the case to a grand jury that declined to indict Chauvin. In 2011, Chauvin was involved in a high-profile shooting of a Native American. He was placed on administrative leave but was reinstated to the force when no charges were brought. If democratic community control of the police were in place, it is highly likely Chauvin would have been removed as a police officer and George Floyd would still be alive.

Support for change is growing. Bus drivers refused to transport arrested protesters for the police in Minneapolis and New York. Payday Report wrote transit union leaders nationwide are instructing members not to cooperate with police in arresting protesters. And Universities are dropping their contracts with the Minneapolis Police Department.

Protests continue nationwide. Thus far escalating police violence and the use of the National Guard has failed to stop them. The government may use the military, although by law there are restrictions on that. There will be efforts to pacify the protests by political leaders and non-profits who will try to take over the leadership. These must be rejected.

To achieve the changes we need, people must stay in the streets and connect the problems we face to the demand for systemic changes. We will need to support each other as many are doing by distributing food and providing medical care, jail support and legal representation. We urge people to meet in assemblies to discuss what their goals are, their vision of how communities could be organized differently and what actions they can take.  We need to build confidence in each other that we can work together for the future we want. That is how we will get there.

 

Kevin Zeese and Margaret Flowers are directors of Popular Resistance

From Soft to Hard Fascism: “Get In Your House Right Now!”

Posted on by
2

By Kurt Nimmo

Source: Another Day in the Empire

There can no longer be any doubt—America is now a full-blown fascist state. In the past, authoritarian fascism was kept reserved in the shadows, largely out of the public eye, but in a remarkably short period of time it has emerged from the darkness to show its fangs and snarl menacingly at the people, many of them cowed and dutifully following irrational orders from on high.

As the following video demonstrates, state violence is not directed exclusively at rioters and Antifa goons pretending to be anarchists (most would be unable to define the term) as they loot, burn, and attack the media and innocent bystanders. Violence is used to frighten and intimidate the real enemies of the state—the American people, or those who casually and defy the COVID lockdown and others peacefully protesting murder at the hand of a psychopathic cop.

Fortunately, the woman in the video was not seriously injured. She wasn’t looting Target or burning down Walmart. The woman made the mistake of venturing out on the porch of her home, her private property, and for this crime, she was shot with a paintball by a member of a “state militia” (now federalized).

The social fabric is coming apart at the seams. First mandatory lockdowns, state-imposed impoverishment, followed by an unfolding Greatest Depression as a result of a shutdown economy, and now social unrest, violence, theft, and arson in two dozen large cities across the country.

If this degree of violence and destruction is possible centered around the death of a single man, imagine what will happen when millions of people are in desperate straits, unemployed, many evicted, and homeless. It will not be simply police stations that go up in flames. It will be statehouses.   

However, the American people have demonstrated repeatedly they are gullible and easily steered into dead-end diversions pumped up and hyped 24/7 by a corporate propaganda media. The Trump hatefest and political polarization—worse than any in recent memory—will no doubt go by the wayside as millions of Americans face the “new normal” envisioned by their masters—a standard of living in rapid freefall, soon to crash on the rocks. None of this is happenstance or coincidental.

Most Americans may not have protested the endless wars and criminal economic scams of the ruling elite (mostly due to decades of incessant propaganda), but they will raise their voices and fists when they are unemployed for months on end, evicted from homes and apartments, have their cars repossessed, and are confronted with hunger, want, and homelessness.

In order to enforce the latest manifestation of psychopathic neoliberalism and predatory crony capitalism, the state will depend on steroid-headed soldiers and cops to frighten and intimidate the people.

It may be paintballs today, but tomorrow it might be live ammo.