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Sunday, May 19, 2013

Economic Stories of Relevance in Today's World -- May 19, 2013

Washington Signals Dollar Deep Concerns  -  Paul Craig Roberts - May 18, 2013 - ...
That leaves gold and silver. The enormous increase in the prices of gold and silver over the last decade convinced Washington that there are a number of miscreants who do not trust the dollar and whose numbers must not be permitted to increase.                         The price of gold rose from $272 an ounce in December 2000 to $1,917.50 on August 23, 2011. The financial gangsters who own and run America panicked. With the price of the dollar collapsing in relation to historical real money, how could the dollar’s exchange rate to other currencies be valid? If the dollar’s exchange value came under attack, the Federal Reserve would have to stop printing and would lose control over interest rates.                   The bond and stock market bubbles would pop, and the interest payments on the federal debt would explode, leaving Washington even more indebted and unable to finance its wars, police state, and bankster bailouts.              Something had to be done about the rising price of gold and silver.                     There are two bullion markets. One is a paper market in New York, Comex, where paper claims to gold are traded. The other is the physical market where personal possession is taken of the metal–coin shops, bullion dealers, jewelry stores.                     The way the banksters have it set up, the price of bullion is not set in the markets in which people actually take possession of the metals. The price is set in the paper market where speculators gamble.                    This bifurcated market gave the Federal Reserve the ability to protect the dollar from its printing press.                   On Friday, April 12, 2013, short sales of gold hit the New York market in an amount estimated to have been somewhere between 124 and 400 tons of gold. This enormous and unprecedented sale implies an illegal conspiracy of sellers intent on rigging the market or action by the Federal Reserve through its agents, the BTBF that are the bullion banks.                       The enormous sales of naked shorts drove down the gold price, triggering stop-loss orders and margin calls. The attack continued on Monday, April 15, and has continued since.                 Before going further, note that there are position limits imposed on the number of contracts that traders can sell at one time. The 124 tons figure would have required 14 traders with no open interest on the exchange to sell all together in the same few minutes 40,000 futures contracts. The likelihood of so many traders deciding to short at the same moment at the maximum permitted is not believable. This was an attack ordered by the Federal Reserve, which is why there is no investigation of the illegality.                   Note also that no seller that wanted out of a position would give himself a low price by dumping an enormous amount all at once unless the goal was not profit but to smash the bullion price.                 Since the April 12-15 attack on the gold price, subsequent attacks have occurred at 2pm Hong Kong time and 2 am New York time. At this time activity is light, waiting on London to begin operating. As William S.Kaye has observed, no entity concerned about profits would choose this time to sell 20,000 to 30,000 futures contracts, but this is what has been happening.                  Who can be unconcerned with losing money in this way? Only a central bank that can print it.                    Now we come to the physical market where people take possession of bullion instead of betting on paper instruments. Look at this chart from ZeroHedge. The demand for physical possession is high, despite the assault on gold that began in 2011, but as the price is set in the non-real paper market, orchestrated short sales, as in the current quarter of 2013, can drive down the price regardless of the fact that the actual demand for gold and silver cannot be met.                     While the corrupt Western financial press urges people to abandon bullion, everyone is trying to purchase more, and the premiums above the spot price have risen. Around the world there is a shortage of gold and silver in the forms, such as one-ounce coins and ten-ounce bars, that individuals demand.                  That the decline in gold and silver prices is an orchestration is apparent from the fact that the demand for bullion in the physical market has increased while naked short sales in the paper market imply a flight from bullion.                     What does this illegal manipulation of markets by the Federal Reserve tell us? It tells us that the Federal Reserve sees no way out of printing money in order to support the federal deficit and the insolvent banks. If the dollar came under attack and the Federal Reserve had to stop printing dollars, interest rates would rise. The bond and stock markets would collapse. The dollar would be abandoned as reserve currency. Washington would no longer be able to pay its bills and would lose its hegemony. The world of hubristic Washington would collapse.                       It remains to be seen whether Washington can prevail over the world demand for gold and silver. Can the dollar remain supreme when offshoring has deprived the US of the ability to cover its imports with exports? Can the dollar remain supreme when the Federal reserve is creating 1,000 billion new ones each year, while the BRICS, China and Japan, China and Australia, and China and Russia are making deals to settle their trade balances without the use of the dollar?                      If the consumption-based US economy deprived of consumer income by jobs offshoring takes a further dip down in the third or fourth quarter–a downturn that cannot be masked by phony statistical releases–the federal deficit will rise. What will be the effect on the dollar if the Federal Reserve has to increase its Quantitative Easing?
A perfect storm has been prepared for America. Real interest rates are negative, but debt and money are being created hand over foot. The dollar’s demise awaits the world’s decision how to get out of it. The Federal Reserve can print dollars with which to keep the bond and stock markets high, but the Federal Reserve cannot print foreign currencies with which to keep the dollar afloat.                   When the dollar goes, Washington’s power goes, which is why the bullion market is rigged. Protect the power. That is the agenda. Is it another Washington over-reach?

Shut Them Down! – Payday Loan Companies Are Making Billions Preying On The Misery Of The Poor - The Economic Collapse Blog - Michael - May 12th, 2013 -Would you take out a loan that has an annual percentage rate of 391 percent?  Yes, I know that sounds absolutely crazy, but millions of Americans do it every single year.  The typical payday loan requires borrowers to pay about 15 dollars for every $100 that they borrow for two weeks.  That comes out to a yearly rate of about 391 percent.  And the payday loan companies know exactly who to target.  They have set up thousands of shops in the poorest communities all over the nation over the last several decades.  Each year, approximately 12 million Americans take out payday loans and they pay approximately 7.4 billion dollars in interest and fees on those loans.  Sadly, once you get hooked on payday loans they are very hard to stop.  In fact, one study found that only 13 percent of payday borrowers get two loans or less per year.  All other borrowers take out more loans than that.  In fact, more than a third of all payday borrowers take out between 11 and 19 loans during the course of a single year.  And as was mentioned earlier, the interest rates on these loans are beyond exorbitant.  Payday loans are estimated to be about  20 times more expensive than bank loans, with annual interest rates that are sometimes as high as 500 percent.  The payday loan companies circle the poor like vultures, because they know that the poor are the only ones desperate enough to agree to such terms.  This is why we need to shut them down.  The payday loan companies are making billions preying on the misery of the poor and it needs to be stopped.                 And it just isn't small, disreputable banks that are involved in these practices.  The truth is that some of the largest banks in America are now making payday loans...

29 Shocking Facts That Prove That College Education In America Is A Giant Money Making Scam - The End of the American Dream Blog - Michael  - May 7, 2013 - College education in the United States has become a cruel joke.  We endlessly push our high school kids to invest tens of thousands of dollars and at least four years of their lives to get a college education because they won’t have any sort of a “future” without it.  So they sign up for decades of debt slavery and spend years listening to pompous windbags fill their heads with utter nonsense.  The sad truth is that most college courses are a total joke and they do very little to actually prepare those students for the real world.  I know – I attended public universities in the United States for eight years.  Most college courses are so easy that the family dog could pass them.  When they finally graduate, our young people discover that they were lied to all along.  The promised “good jobs” are not there for most of them, but the huge debts that they committed themselves to will follow them around permanently.  When you are just starting out and you are not making a lot of money, having to make payments on tens of thousands of dollars of student loan debt can be absolutely crippling.  This is why I say that college education in America is a giant money making scam.  Our young people are seduced by the idea of college being a five year party that will provide an automatic ticket into the middle class, but the reality is that the only guarantee is that it is a ticket to serfdom unless you have wealthy parents that are willing to foot the bill for you.  And bankruptcy laws have been changed to make it incredibly difficult to get rid of student loan debt, so once you have signed up for student loan debt slavery you are basically faced with two choices: either you are going to pay it or you are going to die with it.                         Yes, college graduates do make more money and they do have a lower unemployment rate.  But most of them are also burdened by absolutely suffocating levels of student loan debt that will haunt them for decades.                  So who is really better off?                  If you can get someone to pay for your college education that is great.  Because otherwise you are probably getting a rotten deal.  The following are 29 shocking facts that prove that college education in America is a giant money making scam…

To the Seniors of the Class of 2013 - Make Sure Your Commencement Ceremony Helps to Pass Senator Elizabeth Warren’s Bank on Students Loan Fairness Act ! - - May 8. 2013 - As every college student knows, the crushing burden of student loan debt poses the single greatest obstacle to anyone seeking a good education. An undergraduate degree frequently means $30,000-$50,000 and up in debt. An advanced degree starts at twice that, and medical and law degrees can saddle the student with six figures of loans. For the nation as a whole, student loan debt is a social crisis set to exceed $1 trillion. Interest rates vary, but they are always far too high for young people starting out in life, or for anyone else. And things are scheduled to get worse, with the interest rate on one key type of student loan set to double from 3.4% to 6.8% on July 1. A whole generation of young people is being forced to put their lives on hold, prevented by high interest debt from continuing their schooling, from renting or buying a home, from getting married and having children. This is simply intolerable.                  At the same time, Wall Street banks can borrow from the Federal Reserve Discount Window for a mere 0.75%. That’s right — just three quarters of 1%. Why should students be crushed when the bankers who caused the present economic crisis with their wild and irresponsible derivatives speculation get a sweetheart deal?                           Fortunately, Massachusetts Senator Elizabeth Warren has now offered a bill which would force the Federal Reserve to fund federal Stafford loans through the US Department of Education at an annual interest rate of just 0.75% — the discount rate the Fed offers banks. Do the arithmetic and you can easily figure out how much interest this bill will save you every year. But this bill faces an uphill battle to become law, since it is likely to be opposed by Wall Street lobbyists, the congressional leadership of both parties, and by the Obama White House. The only hope for the Warren bill lies in a massive outpouring of support, starting with the graduation ceremonies of the class of 2013. That means a big part of your economic destiny is now in your hands.
Fact Sheet: Bank on Students Loan Fairness Act

More Americans Committing Suicide than During the Great Depression - Washington's Blog - May 17, 2013

Glenn Beck - IRS Gives Laughable Defense

10 Amazing Charts That Demonstrate The Slow, Agonizing Death Of The American Worker
- The Economic Collapse Blog - Michael - May 16th, 2013

 #1 Wages And Salaries As A Percentage Of GDP

#2 Average Annual Hours Worked Per Employed Person In The United States

#3 Manufacturing Employment

#4 Employment-Population Ratio

#5 Labor Force Participation Rate

#6 Duration Of Unemployment

#7 Delinquency Rate On Residential Mortgages

 #8 New Homes Sold

 #9 Consumer Credit

 #10 Self-Employment At A Record Low

1 comment:

wandaarnold1716 said...

Thanks for gathering this information each week and passing it on.