DO YOU BELIEVE THE GOVERNMENT OR YOUR BANK ACCOUNT?

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Posted on 6th May 2013 by Administrator in Economy |Politics |Social Issues

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As most of you know, the CPI is a government manipulated, bastardized joke that has been “adjusted” so the sheeple will believe they are not losing purchasing power due to Federal Reserve created inflation. Almost 40% of the calculation is based on a made up calculation called owner’s equivalent rent that has absolutely no relativity to your daily life. The government drones “adjust” away price increases in steak by saying you will substitute chicken for steak. The government drones “adjust” away the increase in car prices and technology by saying you are getting more for your money. Anyone with an ounce of brains knows this total bullshit.

Inflation is the how much more it costs you to live your everyday existence. My largest expenses are groceries, mortgage, taxes, fuel/utilities, college costs, clothing, and home maintenance. Our grocery bills are up at least 5%. The mortgage is flat. My real estate, payroll, and income taxes are up over 5%. My fuel and natural gas expense is up close to 10% since January 1. College related costs are up over 5%. Our clothing costs are at least 5% higher. And my 18 year old house is requiring more and more investment (new dish washer last week, new hot water heater last month, new water main in February). My home repair expenses are increasing at 10% per year. My real inflation rate is between 5% and 10%.

My government tells me my inflation rate is 2%. Who should I believe? Government propaganda and Federal Reserve banksters or my bank account?

What is YOUR Inflation Rate?

 
Posted by Deviant Investor on May 2nd, 2013

 

We all know that our cost of living is increasing, but how much?

 

    • The official government statistics assure us that inflation is running around 2% per year. It reminds me of the line attributed to Groucho Marx, “Who are you going to believe, me or your own eyes?”

 

    • But, your cost of living increase – your personal inflation rate – may be much larger or smaller than that of the person next door. Your spending choices matter a great deal in determining your personal inflation rate.

  

    • I think we can all agree that some items are increasing much faster than others. A few that come to mind are college tuition, medical care, hospital costs, and health insurance. Several that increase more slowly are postage and milk. If you spend more on medical care and health insurance than on postage, your cost of living increase will be much larger than the person who buys more stamps than health care.

 

    • If the official CPI goes up, then social security payments increase and total government expenses increase. Hence, government has an incentive to want low CPI inflation statistics. The US government has changed the process and the formula several times since the 1980s. The result, of course, is that the official CPI is low. Maybe it is fair, maybe not, but it is the official story, and it helps keep social security payments low.

 

    • The various statistical measures used to calculate the CPI have been discussed and criticized in detail in many other publications. In the opinion of many people, they don’t reflect economic reality for most people.

 

Other writers disagree and assure us the inflation rate is low.


 

  • John Williams, a competent economist and statistician, computes the annual inflation rate at about 9%. He uses the statistical calculation process that was used by the government in 1980.

 

    • Dennis Miller did an inflation rate survey. It was not intended to be statistically robust – just practical. His readers responded with an average inflation rate of 8%, but 23% of the respondents thought their personal rate of inflation was over 11% per year.

 

    • The Deviant Investor did a similar survey and received a large number of responses. Our readers thought their average inflation rate was nearly 8% per year, while 39% thought it was higher than 9% per year.

 

    • Rex Nutting thinks it is close to 3% per year and that most of us are “CPI Deniers.” Mainstream media mostly agrees – but I can’t find anyone (in casual conversation) in a grocery store who thinks food prices are only increasing 2 – 3% per year.

I estimate my personal inflation rate at about the average found in the surveys – around 8% per year. I am one of those “CPI Deniers.” Most people I know are “CPI Deniers.”

So How Important is a Few Percent Per Year?

A few percent seems unimportant, but over a decade it becomes very important. Let’s assume in this very simple example that your expenses increase 8% per year, and your income increases 3% per year. In year one your income was much larger than your expenses, and you saved the difference.

Sample Inflation Calculation

Year Income Expenses Net to
Savings
1 80,000 60,000 20,000
2 82,400 64,800 17,600
3 84,872 69,984 14,888
4 87,418 75,583 11,835
5 90,041 81,629 8,411
6 92,742 88,160 4,582
7 95,524 95,212 312
8 98,390 102,829 (4,440)
9 101,342 111,056 (9,714)
10 104,382 119,940 (15,558)

 

By year 8, in this simple example, the cost increases overwhelmed your income, and you were forced to withdraw from savings. Of course, in the real world, there are more variables and adjustments. We cut back on expenses, increase credit card debt, take a second job, win the lotto, file for bankruptcy – whatever. But the critical point is that your personal inflation rate is important, and a few percent over a decade can make a huge difference.

What to Do?

    • Cut back on expenses.

 

    • Get out of debt, and stop paying interest.

 

    • Increase your income.

 

    • Start a business, or take a second job.

 

    • Make investments that pay more than the minimal interest provided by savings accounts and certificates of deposit.

 

    • Invest in real things – gold, silver, diamonds, land, rental property.

 

  • Invest in “ABCD,” which for David Stockman is “Anything Bernanke Can’t Destroy.” We Have Been Warned!

According to the surveys, real people think their personal inflation rate is around 8% per year with a significant percent of the responders claiming 9 – 11% or more per year. Are you going to believe what the government is telling you or your own experience?

2% CUT

17 comments

Posted on 3rd May 2013 by Administrator in Economy |Politics |Social Issues

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If sequestration is reeking havoc across the land, as the MSM propaganda networks and the liberal politicians keep saying, why is the stock market at all-time highs?

Michael Ramirez Cartoon

ABSOLUTELY RIDICULOUS MSM HEADLINE OF THE DAY

14 comments

Posted on 30th April 2013 by Administrator in Economy |Politics |Social Issues

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The MSM mouthpieces continue to spew forth the propaganda of the ruling class. This huge headline on Marketwatch is designed to convince the average dumbass that the government has their act together. The economy is doing so well, we are able to pay down our national debt. This is the biggest load of bullshit shoveled onto the heads of the American mushrooms since Obama said that Obamacare wouldn’t add one cent to the deficit. Let’s go straight to the horse’s mouth. Here is a link to check out the national debt:

http://www.treasurydirect.gov/NP/NPGateway

Here are the facts:

National Debt on September 30, 2012 – $16.066 trillion

National Debt on April 26, 2013 – $16.757 trillion

In less than 7 months your politician leaders in Washington DC have added $691 BILLION to the national debt. We are adding $3.32 BILLION per day to the national debt and the MSM article below is attempting to convince the ignorant dumbasses in this country that the Treasury is paying down debt. They have really bought into the Adolf Hitler Big Lie theory.

By the end of this fiscal year on September 30, 2013, the national debt will have risen by $1.2 trillion. The U.S. Treasury will have issued this much new debt and the Federal Reserve will have purchased most of it because no foreign country in their right mind would purchase it.

The national debt will hit the magical $17 trillion mark sometime in August. The bullshit is so deep you need a shovel and thigh high boots just to get around these days.

 

U.S. to pay down debt for first time in six years

By Greg Robb, MarketWatch

WASHINGTON (MarketWatch) — In another sign of an improving deficit picture, the Treasury on Monday said it expects to pay off debt in the current quarter for the first time in six years.

In a statement, Treasury said it now expects to pay off $35 billion of debt in the April-to-June quarter, compared to an earlier projection, given in February, that it would have to borrow $103 billion.

 
Treasury Secretary Jacob Lew

This will be the first quarter that Treasury has paid off debt since April-to-June period 2007.

The payoff “is emblematic of the turn in budget finances from horrible, to grim, on their way to steadily better,” said Eric Green, global head of rates and foreign-exchange research at TD Securities.

Treasurys on the longer end of the yield curve weakened slightly after the news. The 10-year note (ICAPSD:10_YEAR)  was yield was up about a half a basis point up on the day at 1.668%, while the 30-year bond yield (ICAPSD:30_YEAR)   climbed more than 1 basis point on the day to 2.876%. Read MarketWatch’s bond report.

In a statement, Treasury said the changed projection related to higher receipts and lower outlays, but gave no details. The agency also said it expects to have more cash on hand than was previously assumed.Congress allowed a payroll tax cut to expire at the beginning of the year. This tax hike and continued growth has put more money into the government’s coffers. The sequester, in effect since March, has helped cut outlays.

For the fourth fiscal quarter, which begins in July, the government expects to borrow $223 billion.

This assumes quarter-end cash balances of $75 billion on June 30 and $80 billion on September 30.

The Treasury will announce details of its quarterly refunding on Wednesday. Green said Treasury is expected to hold the refunding auction sizes steady at $32 billion three-year notes, $24 billion of ten-year notes, and $16 billion in 30-year bonds.

“But if there is a surprise, we know where it leans,” Green said.

Over the next two years, the Treasury offering of coupon securities could be $250-$325 billion lower than it has been, Green estimated.

Last week, as a result of the improved outlook for the deficit, the Bipartisan Policy Center pushed back the estimated date that the U.S. might hit its debt ceiling to far as mid-to-late September from the previous estimate of late August to mid-September.

Treasury Secretary Jacob Lew said last week he could not forecast the exact date when Congress has to raise the ceiling to avoid a default.

Republicans in Congress want to use the debt ceiling to seek spending cuts from President Barack Obama.

 

RETAIL SALES ALWAYS FALL DURING AN ECONOMIC RECOVERY – RIGHT?

6 comments

Posted on 12th April 2013 by Administrator in Economy |Politics |Social Issues

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It was the Sequester!!! It was Easter!!! It was too cold!!! It was too much fiscal austerity!!!!

What we’ve got here is TOO MUCH BULLSHIT!!!

Wall Street, the MSM and your political hack representatives will try to spin our deteriorating economic calamity into gold, but report after report confirms that we are in recession and headed south. But, buy stocks anyway. Just because consumer spending accounts for 71% of GDP, why would a collapse in consumer spending have an impact on our economy? It takes a village of idiots to run this country.

Here is the link to the atrociously bad retail report:

http://www.census.gov/retail/marts/www/marts_current.pdf

Here are my observations, which will be SLIGHTLY different than the bullshit you will hear on CNBC or read on Marketwatch:

  • Retail sales fell in March versus February by $2 billion, and shockingly January sales which had been reported as being higher, were revised lower. Your government drones doing their usual coverup.
  • The increase over last year of 2.8% is less than the real inflation rate of 5%.
  • Even auto sales dropped, despite 48% of sales from subprime loans and as long as 7 years.
  • If there is a housing recovery how could furniture and electronics sales be flat with last year? I guess Blackrock isn’t buying furniture for their millions of rental units.
  • How could Building Materials stores (Home Depot, Lowes) have flat sales if there is a housing recovery?
  • General merchandise store (Wal-Mart, Target) sales fell month over month and year over year. This is with 5% inflation. The profits of department stores are going to plummet in the 1st quarter.
  • Even internet sales were flat. They had been advancing at a 10% to 15% clip.
  • Even with food inflation of 5% to 10%, grocery store sales declined.
  • The fractional increase in restaurant and bar sales was due to inflation and people drowning their sorrows in alcohol.

This was a horrific retail report. The Obama tax increases, Obamacare premium increases, declining real wages for workers, and the continued QEing of the American middle class by Bernanke is why this is happening. It ain’t the fucking weather!!! 

 

Retail sales post biggest drop in 9 months

Spending falls by 0.4% in March as most stores take a hit

By Jeffry Bartash, MarketWatch

WASHINGTON (MarketWatch) — Americans spent less at gasoline stations and most other stores in March, as retail sales posted the biggest decline in nine months.

The decline in sales — the biggest since last June — might be a sign that higher taxes and slower job creation are taking a bite out of the economy. A cold snap in March might also have limited sales for some retail items such as clothing. 

Retail sales in the U.S. fell 0.4% last month after a revised 1.0% gain in February, the Commerce Department said Friday. That was below the MarketWatch forecast of a 0.1% decline.

Sales for January were also revised to show a 0.1% drop instead of a 0.2% increase, suggesting that first-quarter growth might not be as strong as forecast. The U.S. is estimated to have grown 3.0% in the first quarter, according to the latest MarketWatch estimate.

The drop in retail sales is the latest in a string of reports, including last week’s disappointing employment number for March, signaling the U.S. economy has cooled off again.

The “recent data suggest that the economy took a step backward in March after coming out of the gates reasonably strongly to start the year,” said Jim Baird, chief investment officer at Plante Moran Financial Advisors.

Sales fell the sharpest at gasoline stations, down 2.2% in the month, as the price at the pump declined. The average cost of regular gas fell from $3.72 a gallon to around $3.57 in March, according to government figures.

Falling sales at gas stations are a good thing for consumers because it gives them more to spend on other items aside from basic necessities. Yet Americans also reduced purchases at many other stores.

Sales fell a seasonally adjusted 0.6% at auto dealers, 1.6% at electronic and appliance stores, 1.2% at general-merchandise outlets and 1.1% at department stores.

Retailers that sell books, music, hobby items, personal-care goods also posted lower sales. Even spending at groceries tapered off.

Many economists had predicted sales might soften in the spring as consumers began to feel the pinch of higher taxes or move to rebuild a savings rate that plunged at the end of 2012. Reductions in federal spending via a law known as the sequester and a slower pace of hiring may have also weighed on consumer spending.

Retail sales account for about one-third of consumer spending, the main engine of the economy. They are a good proxy for how fast the U.S. is growing, though the data is prone to sharp revisions like what occurred in January.

Sales have fallen in two of the first three months of 2013, though, and the pace of spending has decelerated. In the past 12 months, the increase in retail sales slowed to 2.8% in March from 4.4% in February.

A few retailers stood out in March. Spending jumped 0.9% at stores that sell home furnishings, a carryover from improving home sales. The housing market is finally rebounding from a long slump, and sales are expected to continue to rise.

Sales also rose at bars and restaurants, in somewhat of a surprise, as well as at Internet retailers, a category that has outperformed most others over the past decade.

Sales were essentially flat at apparel stores, perhaps because of a cold spell in March. That may have spurred shoppers to delay the purchase of new clothes for the spring, meaning there could be a snapback in April.

In February, the government revised the retail-sales increase to 1.0% from 1.1%

MSM JOINS THE PARTY & LIES ABOUT JOBS

5 comments

Posted on 5th April 2013 by Administrator in Economy |Politics |Social Issues

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Marketwatch, owned by the Wall Street Journal – owned by Murdoch, didn’t take long to join the liefest about the horrific jobs report. They have a huge headline saying that the dreadful government spending cuts are causing businesses to cut payrolls. They print drivel from some Obama loving left wing excuse of an economist, working for a liberal think tank. It goes to show that the right wing and left wing are in total agreement regarding the size of government. The right wants their warfare expenditures and the left want their welfare expenditures. They want government to grow.

Does this chart reveal ANY government spending CUTS? ANY AT ALL?

Federal government spending in 2008 was $3 trillion. In 2004 it was $2.3 trillion. In 2000 it was $1.9 trillion.

The sequester “CUTS” are not cuts. They are a reduction in increases. The total for this year will be $40 billion. This amounts to 1.05% of the total government spending in FY13.

The clueless dupes, Keynesian fools, Obama lovers, and welfare/warfare statists will buy this load of crap from ideologues, even though anyone with even a basic amount of curiousity could prove the Chief Economist of the Center for American Progress to be a lying shill.

 

Jobs numbers show sharp cuts in hiring

Commentary: Government spending cuts already sapping recovery

By Heather Boushey


Shutterstock

WASHINGTON (MarketWatch) — Sequester spring is not starting out well.

In a reversal of recent trends, today’s new data from the U.S. Bureau of Labor Statistics show that employers have cut back sharply on hiring. Government cutbacks have already been slowing our nation’s economic growth and are now actively pulling employment downward, but the worst may be yet to come.

The sharp across-the-board cuts in government spending implemented March 1 are only beginning to show their ugly consequences. While it’s too early to know what the full impact will be on the unemployment rate, government spending cuts are already stealing wind from the sails of the recovery.

In March the U.S. economy only added 88,000 new jobs, but the unemployment rate ticked down slightly to 7.6%. The employment data for January and February were revised upward by a total of 61,000 jobs, and over the past three months, the economy has added an average of 168,000 jobs per month. At this rate, the United States will get back to full employment in 2020.

As jobs fail to appear fast enough to soak up all those who need a job, many people have given up searching for work. In March the labor force declined by about half a million people, and the labor force participation rate decreased by 0.2 percentage points to 63.3%. Adult men’s labor force participation (men ages 20 and over) was 72.7% in March, hitting the low of August 2012 and lower than any other month since 1948 at the end of World War II.

For those who continue looking for a job, the search remains an arduous process. Among those out of work and searching for a new job, 37.1% have been doing so for at least six months, and the typical unemployed worker takes 18.1 weeks to find a new job. When the unemployment rate was 4.6% in 2007, just before the start of the Great Recession, it took the typical unemployed worker only 8.5 weeks to find a new job.

Unemployment continues to be higher among those who are young, have less education, are veterans, or are non-white. In March the unemployment rate among teens was 24.2%, while it was 33.8% among African American teens and 28.1% among Hispanic teens.

Among those with only a high school diploma, the unemployment rate was 7.6%. African Americans and Hispanics had unemployment rates of 13.3% and 9.2%, respectively, while Iraq and Afghanistan veterans had an unemployment rate of 9.2%.

Housing hangover

The recovery in housing is also showing up in the labor market. Construction employment rose in March, adding 18,000 new jobs for a total of 162,000 over the past year. Alongside new homes, however, consumers should be out there buying new furniture, garden supplies, and appliances. But employment in retail sales is down in furniture (-1,800), building material and garden supply stores (-10,100), and electronics and appliances (-5,700).

One issue may be that too many new homes are actually being bought by investors and are not owner-occupied. Thus, even though housing is recovering, it isn’t (yet) leading the recovery in jobs as it has in so many prior recoveries.

Even though unemployment is stagnant, the low rate of inflation means that those with jobs are seeing a rise in their real take-home pay, although it’s a small one. Over the past three months, wages rose by an annualized quarterly rate of 2.3%, just above the rate of inflation as measured by the Consumer Price Index for All Urban Consumers, or CPI-U, which increased 2% over the past 12 months.

Based on Congressional Budget Office estimates, due to the combined effect of the payroll tax increase (800,000 fewer jobs in 2013) and sequestration (750,000 fewer jobs from March–December 2013), the U.S. economy will create 142,000 fewer jobs each month for the rest of the year. In January Congress allowed the payroll tax to revert to its usual level, eliminating the two-year tax holiday, and in March Congress allowed the so-called sequestration to occur, which will cost about 750,000 jobs over 10 months in 2013. Most of these jobs will be lost in the second and third quarters of this year, so we are only now beginning to see the effects. Without austerity, we might have seen a more robust number this month.

About five or six years ago, I had lunch with a good economist friend where we debated what the worst-case outcomes could be from the collapse of the housing bubble. My friend suggested that the worst that could happen would be an L-shaped recovery, one where employment didn’t grow enough to bring on full employment, but where employment grew just enough that policymakers could breathe a sigh of relief that things weren’t actually moving in the wrong direction. For years now, I have hoped that the lunchtime conversation wouldn’t be so prescient. With the sequester’s impacts yet to be felt, however, I wonder if we weren’t too optimistic.

Heather Boushey is chief economist at the Center for American Progress.

 
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