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HYPER INFLATION IN WHEN A WHEELBARROW WON'T HOLD ENOUGH $100 BILLS TO BUY A WHEELBARROW.
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As I have been saying. (See 2 and 2a below.)
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Dick
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1)Jim Rogers: 'Catastrophe' Coming, Thanks to Central Banks
Aggressive easing programs by central banks around the world will create a financial catastrophe, says legendary investor Jim Rogers, chairman of Rogers Holdings.
"This is the first time in recorded history that we have every major central bank in the world printing money, so the world is floating on an artificial sea of liquidity," Rogers told CNBC.com.
"Well, the artificial sea is going to disappear someday. And when it does, the catastrophe will be even worse. Yes, it's coming."
And what about the timing?
"If I was smart enough to tell you when it's going to happen, I would get rich," Rogers said.
He says there's no reason to sell stocks now. "I'm not buying U.S. shares at the moment, but I'm not shorting either, because I am concerned this may turn into a huge bubble. So I'm sitting and watching," Rogers said.
Still, with the U.S. representing the biggest debtor nation in history, there's no fundamental justification for rising stock prices, he says.
"We may well have a big rally in the U.S. stock market, but it's not based on reality," Rogers said.
Some investors are exiting U.S. stocks amid concern about the government shutdown. The Standard & Poor's 500 Index dropped 2.7 percent from Sept. 18 through Thursday.
"I think people are starting to raise an eyebrow finally,” Joseph Saluzzi, co-head of equity trading at Themis Trading, told Bloomberg. “The longer this goes on, people get a little more nervous. And when people get nervous, they sell first and ask questions later.”
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2)
Make-Believe Debt Limit Hysteria from the Political Establishment
In closing, let’s take a step back and look at the big picture. What’s America’s biggest long-run economic challenge? Almost surely, the answer is that poorly designed entitlement programs will lead to a much more onerous burden of government spending.
2)
Make-Believe Debt Limit Hysteria from the Political Establishment
It appears that the government shutdown, which technically is a battle over annual appropriations legislation for so-called discretionary spending, is going to drag on for a while.
The Obama Administration has shown zero willingness to negotiate, even though Republicans have made a series of offers to resolve the conflict.
And the longer this fight lasts, the more likely that the shutdown battle will get wrapped up in a bigger fight over the debt limit.
The White House apparently thinks this is a good development because of the assumption that GOPers can be stampeded into a bad deal to keep the government from supposedly defaulting.
Indeed, the Administration already is fanning the flames of economic anxiety. Here’s some of what the Treasury Department recently wrote as part of this world-is-ending hysteria.
I’m surprised they didn’t warn about the four horsemen of the apocalypse and also say that default would mean cancer, tooth decay, and the heartbreak of psoriasis.
On a more serious note, there are three things about the Treasury report that are worth noting.
1. The Obama Administration is deliberately trying to blur the difference between defaulting on the debt, which would have real consequences, and “defaulting on obligations,” which is a catch-all phrase that includes mundane and uneventful matters such as postponing a Medicare payment to a hospital or delaying a grant disbursement to a state government.
2. The Treasury report repeatedly says bad things “could” happen and “might” happen, but never that they “will” happen. Well, I “could” be the clean-up batter next year for the New York Yankees, and I “might” date a couple of supermodels from Victoria’s Secret. But I wouldn’t want to bet my life on either of those things happening. Likewise, don’t hold your breath waiting for the sky to fall if the debt limit isn’t immediately increased.
3. The White House wants people to believe genuine default is likely even though tax receipts this fiscal year are expected to be more than $3 trillion and interest on the debt is projected to be only $237 billion. In other words, the Treasury will collect more than 12 times as much revenue as needed to pay interest on the debt. Even someone like me, with my well-known views on the incompetence of the federal government, thinks that the Treasury Department will have no problem figuring out how to avoid default.
To be sure, there would be some real problems if the debt limit wasn’t raised. The Treasury Department would have to override its own system to stop payments from automatically occurring. The bureaucrats would have to figure out how to prioritize payments.
Interest unquestionably would be paid on the debt, so there’s no real possibility of default. One also assumes the Administration would figure out how to make politically sensitive payments such as Social Security checks. But this would be uncharted territory, so things probably would be messy.
All that being said, I want to reiterate that a default only would happen if the White House wanted it to happen. And while the Obama Administration has shown a willingness to inflict pain on innocent third parties – as illustrated by theattempts to inconvenience Americans when the sequester imposed a tiny bit of fiscal restraint, it is inconceivable that the White House would decide to engineer an actual default.
By the way, it’s not just partisan political operatives in the Obama Administration who are making hysterical assertions.
Here are some blurbs from a Wall Street Journal report showing that the CEO of Goldman Sachs seems to be on the same page as the White House.
And here are parts of a story from the UK-based Guardian about the views of the IMF’s head bureaucrat.
So what’s going on? Why are they making these hyperbolic statements?
Beats me, but here are my three theories.
1. They don’t know what they’re talking about, either because of stupidity of laziness. Since neither Blankfein nor Lagarde are stupid, perhaps they are simply too lazy to learn how the federal government operates and they don’t understand that the Treasury Department will have far more money than is needed to pay interest on the debt.
2. They understand the issues, but they’re willing to make dishonest and misleading statements because they want to please the White House. This could be because they sympathize with the President’s agenda. Or perhaps this is a typical case of DC-style horsetrading, with Blankfein supporting the White House in exchange for some sort of regulatory favor and Lagarde providing help to Obama in exchange for more subsidies from American taxpayers for the IMF.
3. They understand the issues, but are genuinely afraid that the President is so petty and ideological that he might deliberately force a default, so they are warning about the risks of that approach. Seems totally improbable, but keep in minds that the White House is so petty and spiteful that it has been spending money in a shutdown to keep elderly WWII vets from visiting an open-air memorial!
I’m guessing the second option is most accurate, but there’s no way to know for sure.
In closing, let’s take a step back and look at the big picture. What’s America’s biggest long-run economic challenge? Almost surely, the answer is that poorly designed entitlement programs will lead to a much more onerous burden of government spending.
The President made this problem worse with Obamacare (just as Bush made it worse with the prescription drug entitlement).
Advocates of fiscal responsibility want to address this problem now, before we get close to the point of a Greek-style fiscal collapse.
I’m not sure they can win, given the structure of America’s political system, but I’m damn sure glad that at least some people are trying to do what’s best for the country.
2a)The Cold Hard Facts of Obama's Economy
By Chad Stafko
There's an old adage, "Don't let the facts get in the way of a good story."
That could be the battle cry within the Obama administration when it comes to Obama's work on the economy through his five plus years as president. But a close and objective look at the facts shows that the Obama-led and Obama-owned economy tells one and only one story -- FAILURE.
Let's begin on the labor front, where the numbers are atrocious. While the monthly unemployment rate is the headline-grabbing number so many flock to, it is far from the best gauge of labor market strength.
The unemployment rate currently stands at 7.3%. Obama backers will point to the fact... again let's look at the facts, and rightfully say that the unemployment rate has steadily fallen from its peak of 10% in October 2009 and has remained below 8% since August 2012. These are indeed facts, but they mask the underlying and quite troubling data.
Understand that the unemployment rate is a rather simplistic calculation. The numerator is composed of the number of people unemployed and who have looked for work in the past four weeks. That number is then divided by the total number of individuals in the labor force.
Simple math tells us that this figure can decline in a number of ways. The natural inclination for many is to assume that the unemployment percentage is dropping because the numerator, again measured by the total number of unemployed people actively seeking work, is declining due to these folks having found work. Not so, however.
The reason the number has been declining is that the denominator, which is composed of the total labor force in America, continues to fall. In fact, the overall labor force declined by 312,000 in August, which is the most recent data available. That means 312,000 Americans dropped out of the labor force in August. In other words, they gave up looking for a job.
The far more accurate and factual representation of the labor market is the labor force participation rate. It paints a far purer picture. This rate is simply the percent of the population who are either working or actively looking for work. In other words, these individuals are engaged in the labor market.
Here's the cold hard facts in that regard. The labor force participation rate fell to 63.2% in August, its lowest level since 1978. Think about that for a moment and let it sink in. We have the lowest percent of people participating in the labor market in 35 years. Note also that this rate is has continued to decline since the recession supposedly ended in June 2009.
So, here we are five and a half years into the Obama presidency and we have the lowest percent of Americans working since 1978. That is an undeniable fact.
There is even more evidence pointing towards the atrocity that is the Obama-led and owned U.S. labor market. According to a report released September 30th by the Georgetown University Center on Education and the Workforce, only about half of adults in their late 20s -- let me emphasize late 20s -- were working full-time as of 2012. That figure was derived from official U.S. census data.
Let's put that in perspective. These are adults, if they went in the military, who would be halfway or more towards the minimum service time for retirement, yet half of these adults don't even have a full-time job.
They could instead be theoretically college-educated with six or seven years of experience, yet half are jobless.
Stick with the young adults for a moment and suppose you're one of them and fortunate enough to have a full-time job. What about your earnings? Are you making a good living within the Obama economy?
The answer, again based upon facts, is an emphatic "No."
That same Georgetown University study showed that young adults working are now 30 years of age before they earn $42,000 per year. Back in 1980, it took you only to the age of 26 to earn that much money per year.
Stay with me on the earnings front and consider these figures. As of 2012, the median U.S. household inflation-adjusted income was $51,017. That figure has dropped every year during Obama's tenure as president... every single year. Also, it is at its lowest level since 1995. What that means is we're earning no more than a typical household was in 1995, almost 20 years ago. Again, ignore the noise from the Oval Office, these are the facts.
Even the poorest of the poor have had it worse under Obama. Last year 15% of Americans were considered to be living in poverty with little sign of improvement, a theme characterizing the poor throughout the Obama presidency. That percentage equates to some 46.5 million Americans.
But what about the business community? How have they fared in the Obama-led and Obama-owned economy? Not well, to say the least.
Through September 2013, corporations have announced 387,384 job cuts. Over the first nine months of 2012, 386,000 job reductions were announced by corporations. So, some simple math tells us that equates to zero improvement in the corporate job market year-over-year. Again, those are the facts.
We've seen some of these massive job cut announcements in business headlines throughout the year. For example, Cisco Systems announced it would cut 4,000 employees and IBM laid off an undisclosed number of employees across the company, with some estimating that figure to be between 6,000-8,000.
Not to be outdone, the world-renowned Cleveland Clinic, one of the largest employers in the state of Ohio, recently stated that it plans to offer early retirement to some 3,000 workers. Those reductions appear to have been due to ObamaCare, as Clinic spokesperson Eileen Sheil, stated that the cuts were due to the fact that "Hospital systems have to become much more efficient to make health care affordable to patients in the future."
All of these negative aspects of the Obama economy, from joblessness to poor-paying jobs to outright poverty, has resulted in challenging times for Americans. In fact, according to an Associated Press report from this summer, a whopping four out of five Americans are struggling to make ends meet financially. For some that may be hard to fathom... 80% of Americans are having issues meeting their financial obligations.
How can anyone therefore possibly believe that President Obama has been an economic success with a large majority of the American population financially struggling?
Whether you think of economic progress by the number of Americans employed, or their level of earnings, or whether the poor are escaping poverty, the cold hard facts reveal that the Obama-led and owned economy has been and remains a disaster.
Chad Stafko is a writer and political consultant living in the Midwest. He can be reached at stafko@msn.com
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