Tag Archives: Plunge Protection Team

What globalism did was to transfer the US economy to China

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By Paul Craig Roberts

Source: Intrepid Report

The main problem with the US economy is that globalism has been deconstructing it. The offshoring of US jobs has reduced US manufacturing and industrial capability and associated innovation, research, development, supply chains, consumer purchasing power, and tax base of state and local governments. Corporations have increased short-term profits at the expense of these long-term costs. In effect, the US economy is being moved out of the First World into the Third World.

Tariffs are not a solution. The Trump administration says that the tariffs are paid by China, but unless Apple, Nike, Levi, and all of the offshoring companies got an exemption from the tariffs, the tariffs fall on the offshored production of US firms that are sold to US consumers. The tariffs will either reduce the profits of the US firms or be paid by US purchasers of the products in higher prices. The tariffs will hurt China only by reducing Chinese employment in the production of US goods for US markets.

The financial media is full of dire predictions of the consequences of a US/China “trade war.” There is no trade war. A trade war is when countries try to protect their industries by placing tariff barriers on the import of cheaper products from foreign countries. But half or more of the imports from China are imports from US companies. Trump’s tariffs, or a large part of them, fall on US corporations or US consumers.

One has to wonder that there is not a single economist anywhere in the Trump administration, the Federal Reserve, or anywhere else in Washington capable of comprehending the situation and conveying an understanding to President Trump.

One consequence of Washington’s universal economic ignorance is that the financial media has concocted the story that “Trump’s tariffs” are not only driving Americans into recession but also the entire world. Somehow tariffs on Apple computers and iPhones, Nike footwear, and Levi jeans are sending the world into recession or worse. This is an extraordinary economic conclusion, but the capacity for thought has pretty much disappeared in the United States.

In the financial media the question is: Will the Trump tariffs cause a US/world recession that costs Trump his reelection? This is a very stupid question. The US has been in a recession for two or more decades as its manufacturing/industrial/engineering capability has been transferred abroad. The US recession has been very good for the Asian part of the world. Indeed, China owes its faster than expected rise as a world power to the transfer of American jobs, capital, technology, and business know-how to China simply in order that US shareholders could receive capital gains and US executives could receive bonus pay for producing them by lowering labor costs.

Apparently, neoliberal economists, an oxymoron, cannot comprehend that if US corporations produce the goods and services offshore that they market to Americans, it is the offshore locations that benefit from the economic activity.

Offshore production started in earnest with the Soviet collapse as India and China opened their economies to the West. Globalism means that US corporations can make more money by abandoning their American work force. But what is true for the individual company is not true for the aggregate. Why? The answer is that when many corporations move their production for US markets offshore, Americans, unemployed or employed in lower paying jobs, lose the power to purchase the offshored goods.

I have reported for years that US jobs are no longer middle-class jobs. The jobs have been declining for years in terms of value-added and pay. With this decline, aggregate demand declines. We have proof of this in the fact that for years US corporations have been using their profits not for investment in new plant and equipment, but to buy back their own shares. Any economist worthy of the name should instantly recognize that when corporations repurchase their shares rather than invest, they see no demand for increased output. Therefore, they loot their corporations for bonuses, decapitalizing the companies in the process. There is perfect knowledge that this is what is going on, and it is totally inconsistent with a growing economy.

As is the labor force participation rate. Normally, economic growth results in a rising labor force participation rate as people enter the work force to take advantage of the jobs. But throughout the alleged economic boom, the participation rate has been falling, because there are no jobs to be had.

In the 21st century, the US has been decapitalized and living standards have declined. For a while the process was kept going by the expansion of debt, but consumer income has not kept place and consumer debt expansion has reached its limits.

The Fed/Treasury “plunge protection team” can keep the stock market up by purchasing S&P futures. The Fed can pump out more money to drive up financial asset prices. But the money doesn’t drive up production, because the jobs and the economic activity that jobs represent have been sent abroad. What globalism did was to transfer the US economy to China.

Real statistical analysis, as contrasted with the official propaganda, shows that the happy picture of a booming economy is an illusion created by statistical deception. Inflation is undermeasured, so when nominal GDP is deflated, the result is to count higher prices as an increase in real output, that is, inflation becomes real economic growth. Unemployment is not counted. If you have not searched for a job in the past 4 weeks, you are officially not a part of the work force and your unemployment is not counted. The way the government counts unemployment is so extraordinary that I am surpised the US does not have a zero rate of unemployment.

How does a country recover when it has given its economy away to a foreign country that it now demonizes as an enemy? What better example is there of a ruling class that is totally incompetent than one that gives its economy bound and gagged to an enemy so that its corporate friends can pocket short-term riches?

We can’t blame this on Trump. He inherited the problem, and he has no advisers who can help him understand the problem and find a solution. No such advisers exist among neoliberal economists. I can only think of four economists who could help Trump, and one of them is a Russian.

The conclusion is that the United States is locked on a path that leads directly to the Third World of 60 years ago. President Trump is helpless to do anything about it.

The Matrix Is Real and How It Will Change All Of Our Lives

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By Paul Craig Roberts

Source: King World News

Americans are the most manipulated people in history. Since 2008, the economy has been manipulated for the benefit of a few oversized banks “too big to fail.” US foreign policy has been manipulated to serve the hegemonic agenda of a handful of neoconservatives. These manipulations have undercut the consumer basis of the US economy and have pushed the American people into a conflict situation with Russia and China.

Lies, US Economic Collapse And Nuclear War

US economic collapse and nuclear war are the two most likely outcomes of Washington’s manipulations of the American people. Time and again, the American public has fallen for transparent lies and orchestrated events. 2015 is a decisive year. Will a credulous people cast off their gullibility, or will they be swept away by economic collapse and war?

There are reasons to believe that the government’s manipulations have overreached and are crossing the point of believability, even on the part of credulous Americans. Let’s review some of these manipulations — first, economic, and then foreign policy.

Unemployment Number Is Meaningless

On January 9, the US government told Americans that the unemployment rate had fallen to a comforting 5.6 percent, an indication that the Federal Reserve’s policy of Quantitative Easing was successful in restoring the US economy. A 5.6 percent rate of unemployment suggests that Americans have a reasonable chance of finding a job. Yet we know there are millions of discouraged workers who have given up looking for a job.

The explanation of this paradox is that the 5.6 percent unemployment rate (U.3) does not include unemployed people who have not looked for a job in the previous four weeks. These unemployed are called “discouraged workers.” If they have been discouraged for less than one year, they are counted in a seldom-reported measure of unemployment (U.6). This rate stands at 11.2 percent, twice as high as the unemployment rate stressed by government and financial media.

The 11.2 percent rate is an official measure, but it is not publicized because it indicates a dismal employment outlook 5.5 years after the 2008 recession was declared over, in June 2009. What kind of recovery is it when the unemployment rate remains at 11.2 percent years after the recession has officially ended?

The Great Lie Exposed

The story worsens. The 11.2 percent rate does not include the millions of unemployed long-term discouraged workers (those discouraged for more than one year). Prior to 1994, the US Bureau of Labor Statistics counted the long-term discouraged as unemployed, and the government of Canada still does. John Williams (shadowstats.com) continues to include the long-term discouraged. When the long- term discouraged are added to the U.6 measure, the rate of unemployment again doubles, to 23 percent.

In other words, the actual unemployment rate is actually four times higher than the comforting figure released January 9.

Inflation Rate Also Falls Victim

The government engages in similar deception with the inflation rate. If the price of an item in the index rises, a lower-priced item is substituted, thus eliminating inflation by substitution. Inflation also is eliminated by redefining a price rise as a quality improvement.

By undercounting inflation, the government reports price increases as real economic growth, denies cost-of-living increases to Social Security recipients, and justifies paying savers negative real interest rates. These manipulations provide banks with free money, thus boosting bank profits while encouraging the stock market with “good news.”

Americans who search for jobs without success know other Americans in the same situation. As time passes, they learn from experience that the unemployment rate cannot be low and falling when jobs are harder to find. People who shop for food and pay utility bills know inflation is far higher than the government reports. Experience and the passage of time make the government’s numbers less and less believable.

Global Financial Markets Manipulated

The financial markets also are manipulated. To protect the dollar from declining in value due to its overproduction, the Federal Reserve’s bullion bank agents drive down the price of gold and silver by dumping uncovered shorts in the futures market. Since 2011, we have had the extraordinary situation in which the prices of gold and silver have been driven down despite strong demand and constraints on supply — a result that can be achieved only by manipulation in the futures market.

The dollar’s value also is manipulated by foreign central banks in cooperation with Washington. The Japanese and European central banks print yen and euros to protect the dollar’s exchange value. If all major currencies also are being printed, the dollar cannot decline.

The government’s Plunge Protection Team can prevent major stock-market corrections by stepping in and purchasing S&P futures, thus preventing the market’s overvaluation from bursting the bubble.

These manipulations are apparent to experienced investors. Sooner or later, attentive Americans will realize that the government’s deceit is not limited to the marketplace, but extends into foreign policy.

Fooled Over And Over Into War

Ever since the Clinton regime’s demonizations of Yugoslavia and Serbia, Americans have been deceived into supporting expensive wars and foreign-policy positions that are not in their interest. Washington’s demonizations of the Taliban, Osama bin Laden, Saddam Hussein, Gaddafi, Assad, Iran and of Muslims generally have resulted in 14 years of wars in which seven or eight countries have been invaded, bombed and attacked with drones. Increasingly, people at home and abroad understand these wars and bombings are based on lies and deceptions.

The destruction of countries and the massive human hurt happened because the US government lied and deceived.

There were no weapons of mass destruction in Iraq. Assad did not use chemical weapons in Syria. Gaddafi did not issue Viagra to his troops to assist in the rape of Libyan women. Iran does not have a nuclear- weapons program.

Millions of Muslims have been killed, maimed and dislocated by these wars, and tens of thousands of American soldiers have been killed and physically or psychologically maimed. The destruction of countries and the massive human hurt happened because the US government lied and deceived.

The most extraordinary aspect of the Charlie Hebdo event is that the French cartoonists are being championed in the name of free speech. Yet the Anglo-American world does not have free speech. Free speech, if it involves criticism or exposure of the government, is being redefined as “domestic extremism.” Criticism of Washington now implies that the critic is hostile to the public, a possible extremist who must be deterred before he inflicts harm on innocents. As Glenn Greenwald noted, try satirizing Israelis in the manner that Charlie Hebdo satirized Muslims, and you will find out how little free speech there is. http://bit.ly/1xYF93V Free speech is used to demonize Washington’s hand-picked enemies. That’s about as far as it goes.

Washington Demonizing Russia

As 2014 drew to a close, Washington was at work demonizing Russia and its president. Russia no more invaded Ukraine than Saddam Hussein had weapons of mass destruction. But despite years of experience with the government’s foreign-policy lies, polls show that more than 60 percent of the US population has fallen for Washington’s demonization of Russia.

We now have two decades of evidence that Washington uses demonization as a prelude to war. Russia and China, recognizing Washington’s intent to destabilize, have formed a strategic alliance. War with Russia and China would not be like war with Iraq and Libya, or drone attacks on Yemen and Pakistan. Unlike Saddam Hussein and Iran, Russia and China do have weapons of mass destruction — plenty of them.

Whereas Americans are not subject to any meaningful retaliation from Washington’s wars against Muslims, Washington’s aggressive warlike policy toward Russia and China, ringing both countries with military bases while demonizing both with false charges, threatens the life of every American and every person on earth. A threat of this magnitude could pull Americans out of their insouciance and force them to confront the government over its dangerous manipulations of public opinion.

Governments successful with their deceptions end up overreaching. The Charlie Hebdo affair possibly is an overreach. The Paris shootings have many characteristics of a false-flag operation. The attack on the cartoonists’ office was a disciplined professional attack associated with special forces; yet the suspects later corralled and killed seemed bumbling and unprofessional. It is like they were two different sets of people.

Is This Really The Official Story?

Muslim terrorists are usually prepared to die in the attack; yet the two professionals who hit Charlie Hebdo so hard escaped. Their identities were established by the unprofessional and unlikely act of leaving their identification in the getaway car. This reminds me of the undamaged passport miraculously found among the ruins of the two World Trade Center towers. The incriminating passport was the only undamaged item in the entire ruins and was the basis for identifying the 9/11 alleged hijackers.

It is a plausible inference that the ID left in the getaway car was the ID of one of the two brothers later killed by police, from whom we will never hear anything, and not the ID of the professionals who attacked Charlie Hebdo. An important fact that supports this inference is the report that the third suspect in the attack, Hamyd Mourad, the alleged driver of the getaway car, when seeing his name circulating on social media as a suspect, realized the danger he was in and quickly turned himself in to police for protection against being murdered by security forces as a terrorist.

Hamyd Mourad says he has an ironclad alibi. If so, this makes him the despoiler of a false-flag attack. If that is the case, he is likely to be coerced or tortured into some sort of confession to support the official story. http://bit.ly/1Aai8pJ

Mainstream Media Clueless

The American and European media have ignored this important story. I googled Hamyd Mourad and all I found (January 12) was the main US and European media reporting that the third suspect had turned himself in. The news was reported in a fashion that gave credence to the accusation that the suspect who turned himself in was part of the attack. Not a single US mainstream media source reported that the alleged suspect turned himself in because he had an ironclad alibi. The list of sources that reported Mourad’s turning himself in to police report in a way that can be read as confirmation of his guilt.

Some merely reported it in a headline with no coverage in the report. The list of those I googled includes:

• The Washington Post (January 7, by Griff Witte and Anthony Faiola)

• Die Welt (Germany), “One suspect has turned himself in to police in connection with Wednesday’s massacre at the offices of Parisian satirical magazine, Charlie Hebdo”

• ABC News (January 7), “Youngest suspect in Charlie Hebdo Attack turns himself in”

• CNN (January 8), “Citing sources, the Agence France Presse news agency reported that an 18-year- old suspect in the attack had surrendered to police.”

High-Ranking Police Official Suddenly Commits Suicide?

Another puzzle in the official story that remains unreported, according to my 6 p.m. Google search on January 12, is the alleged suicide of a high-ranking member of the French Judicial Police who had a lead role in the Charlie Hebdo investigation. For unknown reasons, a police official involved in the most important investigation of a lifetime decided to kill himself in his police office in the middle of the night while writing his report on his investigation. The alternative media reports it: http://bit.ly/1xc8W1W So did the UK Telegraph. But no suspicion is seen in the police official’s death, and as far as the US “presstitute” media is concerned, it did not happen. There are no reports, domestic or foreign, at the time of writing, about his death and whether his report has disappeared.

Media Cloaks The Lies And Crimes Of Government

As Gerald Celente has pointed out for years and as Patrick L. Smith writes in CounterPunch (Vol. 21, No. 10, 2014), the media serve as presstitutes. The media justify withholding information from the public on the basis of patriotism. Patriotism requires the media to support the government, not the truth. Patrick Smith quotes former New York Times editor Jill Abramson, who says in defense of the New York Times misleading the American people: “Journalists are Americans, too. I consider myself to be a patriot.” Of course, journalists lie to us because their careers are controlled by government and corporations dependent on government. Patriotism has little to do with it, but it serves as a cover. Patriotism is like “national security,” a cloak for the lies and crimes of government.

Life In The Matrix

Here we have it. The media lie to us because they are patriots. We believe the lies because we are patriots. More likely, the fact of the matter might be that both the media and the people are morally and spiritually corrupt.

In other words, we willfully live in The Matrix and are our own worst enemy.