DEMOCRAT LAND OF DELUSION

Via Ben Garrison

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CRACKS IN THE WALL

Guest Post by Hardscrabble Farmer

There are cracks in the walls, everywhere.

Those interested in improving the soil look for signs of depletion and correct the deficiency. Those with no interest continue to mistreat the land and the decline and failure manifest themselves. It becomes obvious to anyone, even those with little or no understanding of stewardship. This is a healthy field, this one is barren.

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The Delusional World Of Imperial Washington

 

Think of this as a little imperial folly update — and here’s the backstory.  In the years after invading Iraq and disbanding Saddam Hussein’s military, the U.S. sunk about $25 billion into “standing up” a new Iraqi army.  By June 2014, however, that army, filled with at least 50,000 “ghost soldiers,” was only standing in the imaginations of its generals and perhaps Washington.  When relatively small numbers of Islamic State (IS) militants swept into northern Iraq, it collapsed, abandoning four cities — including Mosul, the country’s second largest — and leaving behind enormous stores of U.S. weaponry, ranging from tanks and Humvees to artillery and rifles.  In essence, the U.S. was now standing up its future enemy in a style to which it was unaccustomed and, unlike the imploded Iraqi military, the forces of the Islamic State proved quite capable of using that weaponry without a foreign trainer or adviser in sight.

In response, the Obama administration dispatched thousands of new advisers and trainers and began shipping in piles of new weaponry to re-equip the Iraqi army.  It also filled Iraqi skies with U.S. planes armed with their own munitions to destroy, among other things, some of that captured U.S. weaponry.  Then it set to work standing up a smaller version of the Iraqi army.  Now, skip nearly a year ahead and on a somewhat lesser scale the whole process has just happened again.  Less than two weeks ago, Islamic State militants took Ramadi, the capital of Anbar Province.  Iraqi army units, including the elite American-trained Golden Division, broke and fled, leaving behind — you’ll undoubtedly be shocked to hear — yet another huge cache of weaponry and equipment, including tanks, more than 100 Humvees and other vehicles, artillery, and so on.

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TIED FOR THIRD WORST

Damn. My beloved Pennsylvania is only projected to run a $2 billion deficit in the upcoming year. Only Alaska and Virginia politicians are doing a worse job than PA. politicians. And these are just projections. More than half the states in the country will run budget deficits in 2016. The new Democrat governor of PA. thought he was going to tax the living shit out of the fracking industry to balance his budget. Too late Tommy Boy. The frackers will be lucky to survive the next two years. There will be nothing left to tax. Of course plan B will be to tell the citizens of PA to bend over and take it up the ass again. He wants to increase our income tax rate by 21% and our sales tax rate by 10%. This is how politicians think. They never think to cut any spending. They never think to cut the gold plated pensions of government drones. Just increase taxes, fees and regulations on the little people.

This country is delusional, dysfunctional, dystopian, and in debt up to its eyeballs. We have supposedly had a growing economy for 6 years, the lowest unemployment rate in 8 years, 0% interest rates, and non-existent inflation (according to the BLS). If these states can’t balance their budgets under these “GREAT” economic conditions, just wait until the stock market implosion, soaring unemployment, and debt payments come due. You don’t have to be a doomer to understand the situation. You just need to understand math. Oh yeah. I forgot. I should have known better than to expect the iGadget addicted, math deficient, Kardashian watching, Twitter crowd to care, understand, or even pay attention.


AMAZON PROFIT IS JUST OVER THE HORIZON

Amazon reported their financial results for their first quarter last week. They had sales of $22.7 billion and somehow managed to lose $57 million. So you have a company with revenue growth of 13% that is losing money. The stock was already selling at an outrageous price of $385 per share. Wall Street’s reaction to 13% revenue growth and increasing losses was to drive the price up $65 in one day to $450 per share. It is up 56% in the last 6 months, while it was losing $400 million in the last 12 months. If you look really really hard at the chart below you still won’t see the profit bars. Maybe a magnifying glass will help.

This company had a negative operating cash flow of $1.5 BILLION for the quarter. It’s free cash flow was NEGATIVE $2.4 billion. It’s price to book value is 13.4. A normal price to book value is 1.0 to 2.0. It doesn’t have a PE ratio because you need earnings to calculate this ratio. This company is the poster child of the delusion that has overtaken our financial markets. Bezos always promises future profits that never materialize. Wall Street buys on the promises and spins stories about new paradigms, blah, blah, blah. We’ve heard it all before. We heard it in 2000 and we heard it in 2007. It always ends the same way. If you don’t believe me then just borrow on margin and pile into this juggernaut of losses.

Infographic: More of the Same From Amazon | Statista

You will find more statistics at Statista


WHO NEEDS FUNDAMENTALS WHEN YOU HAVE THE FED

These two charts tell you all you need to know about how disconnected Wall Street is from reality. Corporate profits are tanking. Consumer spending is tanking. Inflation in the things you need to live your everyday life is rising. Real median household income lingers at levels from 25 years ago. Greece, Portugal, Italy, Spain and Ireland are more insolvent than they were three years ago. The EU is disintegrating. Japan is committing economic hara-kiri. China’s trillions of real estate mal-investment is going bust. The OPEC countries, along with Russia, Brazil and Mexico are seeing their economies destroyed by low priced oil.

The US shale oil boom is going bust rapidly. Without the $500 billion of subprime auto and student loan debt injected into the veins of the American debt drug addicts, the economy would officially be in recession. Instead, recession is only a fact of life for the 99%. This cannot be sustained. So it won’t. At this point, we don’t even need a trigger event. The house of cards is so high, it will tumble just due to its sheer size. Look out below.


MILLENNIALS DO SOMETHING BETTER THAN BOOMERS

I guess doing stupid shit crosses generations. Even though Millennials are saddled with hundreds of billions in student loan debt, have either no jobs or shitty low paying jobs, live in their parent’s basement, and already waste what little money they have on electronic iGadgets, they still manage to eat out at restaurants at an astoundingly stupid level. Boomers, who should have accumulated a significant nest egg after 30 or 40 years in the workforce, spend 10.6% less per year at restaurants than supposedly broke, negative net worth Millennials. I guess marketing propaganda and complete lack of math skills taught in our public schools have worked their magic. The delusion of getting something for nothing and debt based consumption lives on.

Via Marketwatch

Who spends more eating out, Millennials or Boomers?

Shutterstock

Millennials love their restaurants.

Never mind the burden of student-loan debt and those low paychecks. Millennials—or at least those between 25 and 34 years old—spend more money on food outside the home than Boomers do.

Millennial households spent an average of $2,639 a year on their burgers, pizza, coffee and more in 2013, according to The Food Institute, a food-industry group. That’s 10.6% more than the $2,386 that the average Boomer household spends eating away from home.

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OUR TOTALITARIAN FUTURE – PART TWO

In Part One, I asked questions your keepers don’t want to answer truthfully, while providing the contextual setting for how our over-populated world is progressing relentlessly towards a future of war and totalitarianism.

Totalitarianism Now

“Where the republican or limited monarchical tradition is weak, the best of constitutions will not prevent ambi­tious politicians from succumbing with glee and gusto to the temptations of power. And in any country where numbers have begun to press heavily upon avail­able resources, these temptations cannot fail to arise. Over-population leads to economic insecurity and so­cial unrest. Unrest and insecurity lead to more con­trol by central governments and an increase of their power. In the absence of a constitutional tradition, this increased power will probably be exercised in a dictatorial fashion.” Aldous Huxley – Brave New World Revisited – 1958

         

Huxley wrote his dystopian masterpiece in 1931 before the rise of Stalin, Hitler and Mao and their murderous totalitarian empires, sustained by torture, mass murder, surveillance, and fear. Orwell wrote 1984 in 1948, after living through the nightmare of World War II and witnessing the malevolent systematic terrorism inflicted upon innocent populations by psychopathic tyrants like Hitler and Stalin. World War II killed 65 million people. Stalin’s purges killed 20 million Russians, and Mao murdered 45 million of his own people. It appeared that Orwell’s gruesome vision of a future of brutality, surveillance, and fear would come true.

Instead, Huxley’s vision gained ground in the post war world of cheap oil, mass production, consumerism, and TV advertising. It was found that government through terror works on the whole less well than government through the non-violent manip­ulation of the environment and of the thoughts and feelings of individual men, women and children. Propaganda, amusements, materialism, easily accessible debt, and relentless media messaging convinced the masses to love their enslavement and never dream of revolution. It worked as long as energy and debt remained cheap and plentiful.

The 4.4 billion increase (157%) in the world’s population since Huxley’s warning in 1958 is attributable to vast supplies of cheap easily accessible oil, natural gas and coal, which have allowed technological and agricultural advancements that have vastly expanded food production, water purification, global transportation, and medical advancements. With the peak in traditional worldwide oil production reached around 2005, and modest subsequent production increases obtained only by mining tar sands, fracking shale and drilling in deep water at much higher production costs, the era of cheap plentiful energy has come to an end.

Propaganda and storylines about vast reserves and energy independence fail to acknowledge the concept of Energy Returned on Energy Invested (EROEI). Once it requires investing more than one barrel of oil in energy to extract one barrel of oil, the game is over. We are approaching the limits of growth because our remaining energy resources will require much more capital investment and higher prices for companies to make that investment. Oil prices were $25 per barrel when George Bush and the neo-cons launched their Iraq Freedom campaign in 2003. Eleven years later, with U.S. oil production at 44 year highs and consumption at 2000 levels, a barrel of oil is over $100 per barrel. The combination of increased demand from developing countries, vastly higher production costs, and global unrest in the areas of the world storing “our” oil under their sand will put a floor on prices, with spikes upward as resource wars flare up around the globe.

It is not a coincidence that the world economic system collapsed in 2008 after oil prices topped $140 per barrel. World food prices also spiked to all-time highs in 2008. The surge in food prices in 2011 to new highs was the impetus for the Arab Spring and social unrest across the Middle East and Africa. The FAO World Food Index spiked to levels only exceeded in 2011 earlier this year. Oil prices have surged as high as $106 and have averaged over $100 in 2014. Do you think it is just a coincidence that social unrest across the Middle East, Africa, Asia and Europe has surged in the last few months? Rising prices and the increasing scarcity of food, water and energy resources push the desperately poor towards revolution.

 

Societal strife, economic decline, poverty, lawlessness, and resource deprivation in third world countries result in dependency upon a central authority to sustain the masses. In the poorest countries without a long history of democracy, the people turn to a strong leader to save them. Before long too much power is accumulated in too few hands and totalitarian regimes are born. The world is awash in the blood spilled by dictators (North Korea, Egypt, Cuba, Saudi Arabia, Zimbabwe, Iran, Tunisia, Syria, Sudan) and presidents in name only (China, Vietnam, Nigeria, Turkey, Ukraine, Venezuela, Russia, Argentina).

Dreadfully poor people with no hope for a better future turn to radical religion, extremist ideas, and psychotic leaders. A full belly trumps freedoms and liberties. It is not surprising that despots proliferate in the poorest countries with the highest population growth rates. The so called developed world in the U.S. and Europe had been able to sidestep and even take advantage of these developing countries until the 2008 financial collapse. The oligarchs have treated the third world as slave plantations to be reaped, plundered and pillaged. Their banker solution to a crisis caused by the fraudulent issuance of debt products has been to redouble their looting and pillaging campaign through the issuance of even more debt in order to further enrich themselves at the expense of the many.

Huxley saw it beginning to happen even during the late 1950’s:

“Meanwhile impersonal forces over which we have almost no control seem to be pushing us all in the direction of the Brave New Worldian nightmare; and this impersonal pushing is being consciously acceler­ated by representatives of commercial and political organizations who have developed a number of new tech­niques for manipulating, in the interest of some minor­ity, the thoughts and feelings of the masses.” Aldous Huxley – Brave New World Revisited – 1958

I think Huxley underestimated the lengths to which a minority of criminal wealthy bankers, their crony capitalist corporate co-conspirators, and feckless bought off politicians would go in their sociopathic manipulation of the masses to gorge themselves upon the world’s resources and wealth. In 1958 the manipulators only had TV in its infancy and independent newspapers published by journalists who attempted to report the truth. They’ve come a long way baby.

The Deep State, Silent Government, Oligarchs, TPTB, or whatever term you want to employ to our Brave New World Controllers have mastered the art of propaganda, manipulation, distraction, and social engineering to such an extent the majority of Americans have come to love their techno-narcissistic, debt saturated, welfare/warfare, surveillance state. When a minority of evil minded men gain control of a nation’s currency, own and control the few remaining propaganda news outlets, run the mega-corporations selling toxic poison processed food and iGadgets to the masses on debt issued by Wall Street banks, pay-off the politicians writing legislation and tax codes, and brainwash the youth through government controlled education, your Brave New World nightmare has arrived.

Huxley believed that over-population was not an immediate threat to the personal freedoms of Americans and Europeans due to their long history under democratic constitutions. Of course our national debt of $276 billion in 1958 was only 57% of our annual GDP of $482 billion. The population of 175 million could easily be sustained, with ample supplies of energy, food and jobs. The standard of living for families rose consistently and an economy based upon savings, capital investment, and producing things flowed wealth across all classes – raising all boats. Banks accumulated deposits from citizens and leant money to small businesses. There were no stock options, derivatives, stock buybacks, or trading profits. People borrowed sparingly and saved for the things they wanted.

Huxley predicted trouble by the beginning of the twenty first century if the population of the U.S. continued to outpace the available resources to support that population. He was right again. The party ended in 2000.The National Debt has soared to $17.6 trillion, or 104% of GDP in 2014. Why did the debt go up by a factor of 64 while GDP only advanced by a factor of 35? In 1958, prior to the blossoming of the welfare/warfare state, there were little to no unfunded liabilities. Today the total exceeds $200 trillion. A country adding debt at this astronomical rate is a country consuming far more than it is producing. Depletion of resources, overconsumption, and economic decline lead to debt expansion and centralized government control. When 20% of all households depend upon food stamps to survive, your country has too many mouths to feed and a failing economic system designed to serve the oligarchs and impoverish the peasants.

Consumer debt outstanding in 1958 totaled $48 billion, all non-revolving debt mainly for auto purchases. The credit card did not exist. Consumer debt outstanding today totals $3.2 trillion. Has this 6,667% increase in consumer debt benefitted the average person or Jamie Dimon and his ilk? Is it a rational choice of consumers in a free capitalist market or is it a result of coordinated actions by the banking cabal and their captured government benefactors to enslave the masses in debt while keeping them dumbed down and distracted by electronic gadgets produced in slave labor camps overseas under the guise of globalization? Huxley didn’t anticipate Federal Reserve bankers and cowardly captured politicians purposefully inflating away 88% of the U.S. dollar’s purchasing power as they expanded the welfare/warfare state through monetary manipulation, abandonment of gold backed currency and unfettered debt expansion. The result is real wages haven’t advanced in the last 40 years, while corporate profits reach record heights and a small cadre of oligarchs reap the rewards of debt enslavement of the many.

 

The Ponzi scheme system created by the invisible “leaders” of the supposedly free developed world required never ending growth to support the never ending issuance of debt in order to keep the fleecing of the masses operation running smoothly. This is where increasing population and resource depletion have thrown a monkey wrench into their printing press operation. The autocrats harvested energy and minerals resources from third world countries, while utilizing the catch phrase of globalization, as a cover for their wage arbitrage mechanism to continue their worldwide pillaging scheme. The Ivy League educated moguls are extremely smart when it comes to figuring out new and creative ways to screw the common folk, but their unparalleled hubris and arrogant disregard for humanity blind them to the ultimate consequences of their malevolent machinations. There will be blood and they will not escape unscathed. War is coming, but not the war they anticipate.

The definition of totalitarianism is a political system in which the state holds total authority over the society and seeks to control all aspects of public and private life wherever possible. Our two party farce of a political system is aligned to control our lives through laws, regulations, rules, bylaws, procedures, tax codes, taxation, inflation, and debt, enforced by government apparatchiks, bureaucrats, politicians, bankers, police state thugs, and when all else fails – the military. While the masses were distracted by facebooking, texting, twittering, instagramming, taking selfies, playing Words with Friends, engaging make believe enemies on their PS3 or Xbox, watching the Kardashians on one of their 700 cable TV stations, or shopping for Chinese produced crap at one of our 1.5 million cookie cutter chain retail boxes, those in control of this country covertly turned the nation into a surveillance state while militarizing local police forces. They know the endless growth story is over. Our oppressors fear the repercussions when the masses realize it’s all been a big lie and they are left impoverished and hungry. They are attempting to instigate foreign wars, while preparing for the coming civil war.

The confusion, chaos, mayhem and war currently shaking the foundations of our planet are a direct result of too many people jammed into too small of a space with too few resources and too few opportunities for economic advancement. Poor, deprived, hungry people with nothing to lose begin to lose it. Revolution, civil unrest, radicalism, the rise of extremists and despots, and totalitarian regimes are the result. The invasion of Iraq was about oil. The overthrow of Gaddafi was about oil. The ongoing attempt to overthrow Assad is about a natural gas pipeline to Europe in order to isolate the Russians. The Ukrainian coup is about Russian natural gas and oil. The sanctions and saber rattling over Iran’s nuclear program is really about their oil. The United States is utilizing their military industrial complex and CIA assets to instigate turmoil and war around the world in an effort to gain control over the dwindling energy resources in the Middle East and Africa. Russia and China are blocking U.S. efforts at every turn, as the world inches ever closer to a major resource war.

Huxley’s Brave New World dystopian America had a good run from 1950 until 2000. Our keepers kept us fat, dumb, distracted, and in debt up to our eyeballs. Since 2000 Orwell’s 1984 dystopian Surveillance States of America seems to be taking shape, under the watchful eye of our very own Big Brother, the NSA. Fear, punishment, slogans (See Something Say Something) and appeals to non-thinking patriotism have replaced freedom, liberty, individual rights, the Constitution, personal responsibility for our own lives and questioning authority. The propagandists created the War on Terror as a way to keep the ignorant masses fearful and cowering behind the skirts of Big Brother. The 2008 financial collapse was another crisis that couldn’t go to waste. The Federal Government has expanded the spending of your tax dollars by 40% since 2007. The DHS concentrates on the internal enemy – you. The military industrial complex creates new foreign enemy threats every day – Hussein, Gaddafi, Ahmadinejad, Assad, and now Putin.

The monetary and fiscal policies of the country have remained in permanent crisis mode because the Ponzi scheme can’t be maintained without a constant debt fix. As our permanent state of crisis devolves into war, our remaining liberties will be stripped away in the name of safety, security and unquestioned support of the state. Huxley knew that we would consume, obey and submit until dictatorship became almost inevitable. Will you sit idly by while a small cabal of power hungry men destroys our country? Will you send your sons off to wars manufactured by tyrants as cannon fodder to further enrich the military industrial complex? Will you make a stand when they begin to round up subversives, dissenters, and malcontents under the guise of protecting you from domestic terrorists? Will you choose liberty and freedom over repression and descent into captivity and totalitarianism? The choice is yours.

“But liberty, as we all know, cannot flour­ish in a country that is permanently on a war footing, or even a near-war footing. Permanent crisis justifies permanent control of everybody and everything by the agencies of the central government. And permanent crisis is what we have to expect in a world in which over-population is producing a state of things, in which dictatorship becomes almost inevitable.” Aldous Huxley – Brave New World Revisited – 1958

 

Are you a believer?

“One believes things because one has been conditioned to believe them.” – Aldous Huxley – Brave New World

Or a truth seeker?

“You shall know the truth and the truth shall make you mad.” – Aldous Huxley

OUR TOTALITARIAN FUTURE – PART ONE

“On the first Christmas Day the population of our planet was about two hundred and fifty millions — less than half the population of modern China. Sixteen cen­turies later, when the Pilgrim Fathers landed at Plym­outh Rock, human numbers had climbed to a little more than five hundred millions. By the time of the signing of the Declaration of Independence, world pop­ulation had passed the seven hundred million mark. In 1931, when I was writing Brave New World, it stood at just under two billions. Today, only twenty-seven years later, there are two billion eight hundred million of us. And tomorrow — what?” Aldous Huxley – Brave New World Revisited – 1958

As the world explodes in violence, war, riots, and uprisings, it is challenging to step back and examine the bigger picture. With airliners being shot down over the Ukraine, missiles flying between Israel and Gaza, ongoing civil war in Syria, Iraq falling apart as ISIS gains ground, dictatorship crackdown in Egypt, Turkey on the verge of revolution, Iran gaining control of Iraq, Saudi Arabia fomenting violence, Africa dissolving into chaos, South America imploding and sending their children across our purposely porous southern border, Mexico under the control of drug lords, China experiencing a slow motion real estate collapse, Japan experiencing their third decade of Keynesian failure, facing a demographic nightmare scenario while being slowly poisoned by radiation, and Chinese-Japanese relations moving towards World War II levels, it is easy to get lost in the day to day minutia of history in the making.

Why is this happening at this point in history? Why is the average American economically worse off today than they were at the height of the economic crisis in 2009? Why is the Cold War returning with a vengeance? Why is the Federal Reserve still employing emergency monetary policies when we are supposedly five years into a recovery and the stock market has attained record highs? Why do the ECB and European politicians continue to paper over the insolvency of their banks and governments? Why did the U.S. support the ouster of a dictator we supported for decades in Egypt and then support the elevation of a new dictator after we didn’t like the policies of the democratically elected president? Why did the U.S. eliminate the leader of Libya and allow the country to descend into anarchy and civil war? Why did the U.S. fund and provoke a revolutionary overthrow of a democratically elected leader in the Ukraine? Why did the U.S. fund and arm Al Qaeda associated rebels in Syria who are now fighting our supposed allies in Iraq? Why has the U.S. been occupying Afghanistan for the last thirteen years with the result being a Taliban that is stronger than ever? Why are the BRIC countries forming a monetary union to challenge USD domination? Why is the U.S. attempting to provoke Russia into a conflict with NATO?

Why is the U.S. government collecting every electronic communication made by every American? Why is the U.S. government spying on world leader allies? Why is the U.S. government providing military equipment to local police forces? Why is the U.S. military conducting training exercises within U.S. cities? Why is the U.S. government attempting to restrict Second Amendment rights? Why is the U.S. government attempting to control and lockdown the internet? Why has the U.S. government chosen to treat the Fourth Amendment as if it is obsolete? Why is the national debt still rising by $750 billion per year ($2 billion per day) if the economy is back to normal? Why have 12 million working age Americans left the workforce since the economic recovery began? How could the unemployment rate be back at 2008 levels when there are 14 million more working age Americans and the same number employed as in 2008? Why are there 13 million more people on food stamps today than there were at the start of the economic recovery in 2009? Why have home prices risen by 25% since 2012 when mortgage applications have been at fourteen year lows? Why are Wall Street profits and bonuses at record highs while the real median household income stagnates at 1998 levels?

Why do 98% of incumbent politicians get re-elected when congressional approval levels are lower than whale shit? Why are oil prices four times higher than they were in 2003 if the U.S. is supposedly on the verge of energy independence? Why do the corporate controlled mainstream media choose to entertain and regurgitate government propaganda rather than inform, investigate and seek the truth? Why do corporations and shadowy billionaires control the politicians, media, judges, and financial system in their ravenous quest for more riches? Why has the public allowed a privately owned bank to control our currency and inflate away 96% of its value in 100 years? Why have American parents allowed their children to be programmed and dumbed down by government run public schools? Why have Americans allowed themselves to be lured into debt in an effort to appear wealthy and successful? Why have Americans permitted their brains to atrophy through massive doses of social media, reality TV, iGadget addiction, and a cultural environment of techno-narcissism? Why have Americans lost their desire to read, think critically, question authority, act responsibly, defer gratification, and care about future generations? Why have Americans sacrificed their freedoms, liberties and rights for the false expectation of safety and security? Why will we pay dearly for our delusional, materialistic, debt financed idiocy? – Because we never learn the lessons of history.

There are so many questions and no truthful answers forthcoming from those who pass for leaders in this increasingly totalitarian world. Our willful ignorance, apathy, hubris and arrogance will have consequences. Just because it hasn’t happened yet, doesn’t mean it’s not going to happen. The cyclicality of history guarantees a further deepening of this Crisis. The world has evolved from totalitarian hegemony to republican liberty and regressed back to totalitarianism throughout the centuries. Anyone honestly assessing the current state of the world and our country would unequivocally conclude we have regressed back towards a totalitarian regime where a small cabal of powerful oligarchs believes they can control and manipulate the masses in their gluttonous desire for treasure. Aldous Huxley foretold all the indicators of a world descending into totalitarianism due to overpopulation, propaganda, brainwashing, consumerism, and dumbing down of a distracted populace in his 1958 reassessment of his 1931 novel Brave New World.

Is There a Limit?

“At the rate of increase prevailing between the birth of Christ and the death of Queen Elizabeth I, it took sixteen centuries for the population of the earth to double. At the present rate it will double in less than half a century. And this fantastically rapid doubling of our numbers will be taking place on a planet whose most desirable and pro­ductive areas are already densely populated, whose soils are being eroded by the frantic efforts of bad farmers to raise more food, and whose easily available mineral capital is being squandered with the reckless extravagance of a drunken sailor getting rid of his accumulated pay.” Aldous Huxley – Brave New World Revisited – 1958

Demographics are easy to extrapolate and arrive at an accurate prediction, as long as the existing conditions and trends remain relatively constant. Huxley was accurate in his doubling prediction. The world population was 2.9 billion in 1958. It only took 39 years to double again to 5.8 billion in 1997. It has grown by 24% in the last 17 years to the current level of 7.2 billion. According to United Nations projections, world population is projected to reach 9.6 billion in 2050. The fact that it would take approximately 70 years for the world’s population to double from the 1997 level reveals a slowing growth rate, as the death rate in many developed countries surpasses their birth rate. The population of the U.S. grew from 175 million in 1958 to 320 million today, an 83% increase in 56 years.

The rapid population growth over the last century from approximately 1.8 billion in 1914, despite two horrific world wars, is attributable to cheap, easy to access oil and advances in medical technology made possible by access to cheap oil. The projection of 9.6 billion in 2050 is based upon an assumption the world’s energy, food and water resources can sustain that many people, no world wars kill a few hundred million people, no incurable diseases spread across the globe and there is no catastrophic geologic, climate, or planetary events. I’ll take the under on the 9.6 billion.

Anyone viewing the increasingly violent world situation without bias can already see the strain that overpopulation has created. Today, six countries contain half the world’s population.

A cursory examination of population trends around the world provides a frightening glimpse into a totalitarian future marked by vicious resource wars, violent upheaval and starvation for millions. India, a country one third the size of the United States, has four times the population of the United States. A vast swath of the population lives in poverty and squalor. India contains the largest concentration (25%) of people living below the World Bank’s international poverty line of $1.25 per day. According to the U.N. India is expected to add 400 million people to its cities by 2050. Its capital city Delhi already ranks as the second largest in the world, with 25 million inhabitants. The city has more than doubled in size since 1990. The assumptions in these U.N. projections are flawed. Without rapidly expanding economic growth, capital formation and energy resources, the ability to employ, house, feed, clothe, transport, and sustain 400 million more people will be impossible. Disease, starvation, civil unrest, war and a totalitarian government would be the result. With its mortal enemy Pakistan, already the sixth most populated country in the world, jamming 182 million people into an area one quarter the size of India and one twelfth the size of the U.S. and growing faster than India, war over resources and space will be inevitable. And both countries have nuclear arms.

More than half the globe’s inhabitants now live in urban areas, with China, India and Nigeria forecast to see the most urban growth over the next 30 years. Twenty-four years ago, there were 10 megacities with populations pushing above the 10 million mark. Today, there are 28 megacities with areas of developing nations seeing faster growth: 16 in Asia, 4 in Latin America, 3 in Africa, 3 in Europe and 2 in North America. The world is expected to have 41 sprawling megacities over the next few decades with developing nations representing the majority of that growth. Today, Tokyo, with 38 million people, is the largest in the world, followed by New Delhi, Jakarta, Seoul, Shanghai, Beijing, Manila, and Karachi – all exceeding 20 million people.

To highlight the rapid population growth of the developing world, the New York metropolitan area containing 18 million people was ranked as the third largest urban area in the world in 1990. Today it is ranked ninth and is expected to be ranked fourteenth by 2030. The U.S. had the fewest births since 1998 last year at 3.95 million. We also had the highest recorded deaths in history at 2.54 million.  The fertility rate for 20- to 24-year-olds is now 83.1 births per 1,000 women, a record low. That combination created a gap in births over deaths that is the lowest it has been in 35 years.

This is the plight of the developed world (U.S., Europe, Japan) and even China (due to one child policy). According to the U.N. report, the population of developed regions will remain largely unchanged at around 1.3 billion from now until 2050. In contrast, the 49 least developed countries are projected to double in size from around 900 million people in 2013 to 1.8 billion in 2050. The rapid growth of desperately poor third world countries like Nigeria, Afghanistan, Niger, Congo, Ethiopia, and Uganda will create tremendous strain on their economic, political, social, and infrastructural systems. Nigeria’s population is projected to surpass the U.S. by 2050. Japan, Europe and Russia are in demographic death spirals. China is neutral, and the U.S. is expected to grow by another 89 million people. I wonder how many of them the BLS will classify as not in the labor force.

What are the implications to mankind of the world adding another billion people in the next twelve years, primarily in the poorest countries of Asia, Africa and South America? What does the world think of the U.S., which constitutes 4.4% of the world’s population, but consumes 20% of the world’s oil production and 24% of the world’s food? Will there be consequences to having the 85 richest people on earth accumulating as much wealth as the poorest 3.5 billion, with 1.2 billion surviving on less than $1.25 per day? Can a planet with finite amount of easily accessible financially viable extractable resources support an ever increasing number of people? Is there a limit to growth? I believe these questions will be answered in the next fifteen years as the dire consequences play out in civil strife, resource wars, totalitarian regimes, and societal collapse. Fourth Turning Crisis cycles always sweep away the existing social order and replace it with something new. It could be better or far worse.

Impact of Over-Population

“The problem of rapidly increasing numbers in relation to natural resources, to social stability and to the well-being of individuals — this is now the central problem of mankind; and it will remain the central problem certainly for another century, and perhaps for several centuries thereafter. Unsolved, that problem will render insoluble all our other problems. Worse still, it will create conditions in which individual free­dom and the social decencies of the democratic way of life will become impossible, almost unthinkable. Not all dictatorships arise in the same way. There are many roads to Brave New World; but perhaps the straightest and the broadest of them is the road we are travel­ing today, the road that leads through gigantic num­bers and accelerating increases.” Aldous Huxley – Brave New World Revisited – 1958

The turmoil roiling the world today is a function of Huxley’s supposition that over-population pushes societies towards centralization and ultimately totalitarianism. The relentless growth in the world’s population, not matched by growth in energy resources, water, food, and living space, results in increasing tension, anger, economic decline, government dependency, war and ultimately totalitarianism. Huxley believed politicians and governments would increasingly resort to propaganda and misinformation to mislead citizens as the problems worsened and freedoms were revoked. Could this recent statement by our commander and chief of propaganda have made Edward Bernays and Joseph Goebbels any prouder?

“The world is less violent than it has ever been. It is healthier than it has ever been. It is more tolerant than it has ever been. It is better fed then it’s ever been. It is more educated than it’s ever been.”

I’m sure the people living in Gaza, the Ukraine, Libya, Syria, Iraq, Afghanistan, Thailand, Turkey, Africa and American urban ghettos would concur with Obama’s less violent than ever mantra. Disease (Cholera, Malaria, Hepatitis, Aids, Tuberculosis, Ebola, Plague, SARS) and malnutrition beset third world countries, while the U.S. obesity epidemic caused by consumption of corporate processed food peddled to the masses through diabolical marketing methods enriches the mega-corporate food companies, as well as the corporate sick care complex. Religious wars and culture wars rage across the world as intolerance for others beliefs reaches all-time highs. After three decades of government controlled public education they have succeeded in dumbing down the masses through social engineering, propaganda, and promoting equality over excellence. Obama should stop trying to think and stick to what he does best – golf and fundraising. After reading his drivel, I’m reminded of a far more pertinent quote from Huxley:

“Facts do not cease to exist because they are ignored.”

The chart below details the fact that 12% of the world’s population in countries producing 9% of the world’s oil are currently in a state of war. The violence, war, and civil unrest roiling the Ukraine, Syria, Egypt, Libya, Iraq, and Afghanistan are a direct result of U.S. meddling, instigation, and provocation. The U.S. government funds dictators (Hussein, Mubarak, Assad, Gaddafi) until they no longer serve their interests, engineer the overthrow of democratically elected leaders in countries (Iran, Egypt, Ukraine) that don’t toe the line, and dole out billions in military aid and arms to countries around the world in an effort to make them do our dirty work and enrich the military industrial complex. The true motivation behind most of the violence, intrigue and war is the U.S. need to maintain the U.S. petro-dollar hegemony and to control the flow of oil and natural gas throughout the world. The ruling oligarchy’s power, influence, and wealth are dependent upon dictating currency valuations and flow of oil and gas from foreign fiefdoms.

http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2014/07/20140725_war2.png

In Huxley’s 1931 Brave New World fable the world’s population is maintained at an optimum level (just under 2 billion) calculated by those in control. This is done through technology and biological manipulation. Procreation through sexual intercourse is prohibited. Creation of the desired number of people in each class is scientifically determined and the classes are conditioned from birth to fulfill their roles in society. When Huxley reassessed his novel in 1958’s Brave New World Revisited he didn’t argue for an optimum level of population. He simply hypothesized a close correlation between too many people, multiplying too rapidly, and the formulation of authoritarian philosophies and rise of totalitarian sys­tems of government.

The introduction of penicillin, DDT, and clean water into even the poorest countries on the planet had the effect of rapidly decreasing death rates around the globe. Meanwhile, birth rates continued to increase due to religious, social and cultural taboos surrounding birth control and the illiteracy and ignorance of those in the poorest regions of the world. The ultimate result has been an explosion in population growth in the developing world, least able to sustain that growth. Huxley just uses common sense in concluding that as an ever growing population presses more heavily upon accessible resources, the economic position of the society undergoing this ordeal becomes ever more precarious.

It essentially comes down to the laws of economics. Most of the developing world is economic basket cases. They cannot produce food, consumer goods, housing, schools, infrastructure, teachers, managers, scientists or educated workers at the same rate as their population growth. Therefore, it is impossible to improve the wretched conditions of the vast majority, as they wallow in squalor. Unless a country can produce more than it consumes, it cannot generate the surplus capital needed to invest in machinery, agricultural production, manufacturing facilities, and education. The rapidly growing population sinks further into poverty and despair. Huxley grasps the nefarious implications for freedom and liberty as over-population wreaks havoc around the globe:

“Whenever the economic life of a nation becomes pre­carious, the central government is forced to assume additional responsibilities for the general welfare. It must work out elaborate plans for dealing with a criti­cal situation; it must impose ever greater restrictions upon the activities of its subjects; and if, as is very likely, worsening economic conditions result in polit­ical unrest, or open rebellion, the central government must intervene to preserve public order and its own authority. More and more power is thus concentrated in the hands of the executives and their bureaucratic managers.”Aldous Huxley – Brave New World Revisited – 1958

Despots, dictators, and power hungry presidents arise in an atmosphere of fear, scarce resources, hopelessness, and misery. As the power of the central government grows the freedoms, liberties and rights of the people are diminished and ultimately relinquished.

In Part Two, I examine our relentless path towards totalitarianism and war.

THE BROKEN LIMB & BURST PIPE FALLACIES

“Economics is haunted by more fallacies than any other study known to man. This is no accident. While certain public policies would in the long run benefit everybody, other policies would benefit one group only at the expense of all other groups. The group that would benefit by such policies, having such a direct interest in them, will argue for them plausibly and persistently. It will hire the best buyable minds to devote their whole time to presenting its case. And it will finally either convince the general public that its case is sound, or so befuddle it that clear thinking on the subject becomes next to impossible.

In addition to these endless pleadings of self-interest, there is a second main factor that spawns new economic fallacies every day. This is the persistent tendency of man to see only the immediate effects of a given policy, or its effects only on a special group, and to neglect to inquire what the long-run effects of that policy will be not only on that special group but on all groups. It is the fallacy of overlooking secondary consequences.” Henry Hazlitt – Economics in One Lesson

 

Saturday was the first day since a double shot of snow and ice storms hit the Philadelphia metro area on Monday and Wednesday I had a chance to drive around Montgomery County and witness the devastation firsthand. Over 750,000 homes lost power at the height of the ice storm on Wednesday and over 100,000 remained without power this past weekend. The mainstream media has become such a farce and propaganda machine for vested interests, it is essential to verify with your own eyes everything they report as fact. Their purpose is to entertain the consciously ignorant, exaggerate threats to keep the low IQ multitudes fearful, and function as mouthpieces for the ruling class. Deceitful corporate executives, mendacious government apparatchiks, and oblivious teleprompter reading media talking heads have been utilizing cold weather as an excuse for every poor earnings announcement, horrific employment report, and dreadful decline in retail sales. It certainly has nothing to do with decades of stagnant household income, awful monetary and fiscal policies, or the consequences of Obamacare.  

We have become a delusional state dependent upon fallacies to convince ourselves our foolhardy beliefs, ludicrous economic policies, corrupt captured political system, and preposterously fraudulent financial system are actually based on sound logic and reason.  Some fallacies have been perpetrated intentionally by the ruling class to manipulate, sway and deceive the populace, while others have been willfully employed by millions of techno-narcissistic iGadget addicted zombies as a substitute for thinking, reasoning and taking responsibility for the course of our nation.

You have men who constitute the unseen true ruling power of the country making a conscious and intentional effort to peddle fallacies to the masses in order to manipulate, mold, and corral them in a manner beneficial to the ruling power, financially, politically, and socially. The ruling class has been hugely successful in their capture of the public mind, creating a vast majority of the willfully ignorant who desperately grasp at fallacious concepts, beliefs, and storylines in order to avoid dealing with reality and being accountable for their actions and the actions of their leaders.   

The fallacy being flogged by government drones and the legacy media about companies not hiring new employees because it has been cold and snowy during the winter is beyond absurd, except to someone who lives in the cocoon of Washington D.C. or regurgitates words processed on a teleprompter by paid minions of the ruling class. If you live in the real world, run a business, or manage employees, you understand weather has absolutely nothing to do with your decision to hire an employee. An organization takes weeks or months to hire employees. They don’t stop hiring because it snowed on Wednesday or the temperature was below normal. The contention that hiring has been weak for the last two months due to weather is outlandish and based upon flawed logic and warped reasoning. It is so illogical, only an Ivy League economist could believe it.

The other fallacy being pontificated by retail executives in denial, cheerleaders on CNBC and the rest of the propaganda press is weather is to blame for terrible retail sales over the last quarter. Again, this argument is specious in its conception. The retail executives use weather as an excuse for their failure in execution, hubris in over-expanding, and arrogance in pursuit of quarterly earnings per share and bonuses. CNBC and the rest of the Wall Street media pawns must provide lame fallacies for the corporate fascists regarding our downward economic path or the masses my wake up to reality. Protecting and expanding the wealth of the parasitic oligarch class is the one and only purpose of the corporate media.

Think about whether cold and snow in the winter will really stop purchases by individuals. If you need a new shirt for work or a pair of sneakers and it snows on Wednesday, you will wait until Saturday to make the purchase. Groceries will be consumed and replenished whether it is cold and snowy, or not. If an appliance or car breaks down, weather will be a non-factor in the new purchase decision. The proliferation of on-line retailing allows everyone to shop from the warmth of their homes. If anything, bad winter weather often spurs stocking up of groceries and the purchase of items needed to contend with winter weather (salt, shovels, coats, hats, gloves). Only an asinine spokes-model bimbo on CNBC could non-questioningly report the press release excuses of retailers. Critical thinking skills and journalistic integrity are non-essential traits among the propaganda mainstream press today.

Revealing the truth about pitiful employment growth and dreadful retail sales would destroy the fallacy of economic recovery stimulated by the monetary policies of the Federal Reserve and fiscal policies of the Federal government. The ruling class must perpetuate the myth that central bankers pumping $3.2 trillion of debt into the veins Wall Street banks and Obama dumping $6.7 trillion of debt onto the shoulders of future generations in order to cure a cancerous disease created by debt, has revived our economy and cured the disease. The unseen governing class cannot admit their traitorous actions have impoverished the working middle class, destroyed small businesses, depleted senior citizens of their savings, and warped our economic system to such an extent that recovery in now impossible. If the ignorant masses were to become sentient, the ruling class would become lamppost decorations.

After discovering water pipes at my rental property had burst due to the extreme cold weather and witnessing the widespread damage caused by the mid-week ice storm, I immediately thought how overjoyed my favorite Keynesian, Ivy League, Nobel Prize winning, New York Times scribbler, Paul (destruction is good) Krugman must be. All this destruction and devastation will be a tremendous boost to the economy according to Krugman and his ilk. This intellectually deceitful, morally bankrupt, despicable excuse for a human being spoke these words of wisdom three days after the 9/11 attacks:   

“Ghastly as it may seem to say this, the terror attack – like the original day of infamy, which brought an end to the Great Depression – could even do some economic good.  So the direct economic impact of the attacks will probably not be that bad. And there will, potentially, be two favorable effects. First, the driving force behind the economic slowdown has been a plunge in business investment. Now, all of a sudden, we need some new office buildings. As I’ve already indicated, the destruction isn’t big compared with the economy, but rebuilding will generate at least some increase in business spending.”

He had expanded his broken window beliefs to broken buildings, broken nations, and a broken people. You can’t keep a cunning Keynesian down when they need to propagate discredited fallacies in order to feed their own ego and promote foolish debt fueled spending by government, consumers and corporations as a solution to all economic ills. It makes no difference to a statist like Krugman that Frederic Bastiat had obliterated the preposterous notion that destruction and the money spent to repair the destruction was a net benefit to society, 164 years ago in his essay – That Which is Seen, and That Which is Not Seen. Bastiat’s logic is unassailable. Only the most highly educated Princeton economists don’t get it.    

Have you ever witnessed the anger of the good shopkeeper, James B., when his careless son has happened to break a pane of glass? If you have been present at such a scene, you will most assuredly bear witness to the fact that every one of the spectators, were there even thirty of them, by common consent apparently, offered the unfortunate owner this invariable consolation – “It is an ill wind that blows nobody good. Everybody must live, and what would become of the glaziers if panes of glass were never broken?”

Now, this form of condolence contains an entire theory, which it will be well to show up in this simple case, seeing that it is precisely the same as that which, unhappily, regulates the greater part of our economical institutions.

Suppose it cost six francs to repair the damage, and you say that the accident brings six francs to the glazier’s trade – that it encourages that trade to the amount of six francs – I grant it; I have not a word to say against it; you reason justly. The glazier comes, performs his task, receives his six francs, rubs his hands, and, in his heart, blesses the careless child. All this is that which is seen.

But if, on the other hand, you come to the conclusion, as is too often the case, that it is a good thing to break windows, that it causes money to circulate, and that the encouragement of industry in general will be the result of it, you will oblige me to call out, “Stop there! Your theory is confined to that which is seen; it takes no account of that which is not seen.”

It is not seen that as our shopkeeper has spent six francs upon one thing, he cannot spend them upon another. It is not seen that if he had not had a window to replace, he would, perhaps, have replaced his old shoes, or added another book to his library. In short, he would have employed his six francs in some way, which this accident has prevented.

I wonder whether the myopic focus on only immediate impacts and inability of ideologues to understand unintended consequences is premeditated or just erroneous reasoning. The broken window fallacy can now be extended to broken limbs and burst pipes across the Northeast. Huge trees have been toppled, limbs and branches are strewn on the properties of homeowners across the region, homes and businesses have been physically damaged, and power outages wrecked profits at small businesses. Society has gained no benefit whatsoever from the mass destruction wrought by these storms. Thi

s weather induced ruin exposes GDP calculations as useless and misleading regarding the true economic health of the nation. The hundreds of millions in destruction will not be factored into the GDP calculation, but the spending by homeowners and businesses to remove downed trees, fix broken roofs, replace burst pipes and clean-up debris will be factored positively in the GDP calculation. The inevitable politician response will be increased government spending to repair damage to infrastructure. This will also be additive to GDP. Krugman will get a tingle up his leg.

CNBC’s Cramer & Liesman will rave about the unexpectedly strong GDP in the first quarter as proof the economy is doing great. The fallacy that GDP growth and stock market gains are beneficial to the average American will be flogged by the propaganda press at the behest of the ruling class until the last vestiges of national wealth are confiscated by the oligarchs. In the real world, the destruction caused by the harsh winter weather will not benefit society one iota. GDP will reflect the immediate short-term seen impact of the cleanup and repair of property damage. GDP will ignore the unseen opportunity costs which were lost and the long-term consequences of expenditures made to put property back in the condition in which it started. Destruction does not create profit, except in the Keynesian world of Krugman and his Ivy League educated sycophant cronies.

There are 2.5 million households in the Philadelphia metro area. There are hundreds of thousands with trees down, pipes frozen, gutters smashed, roofs leaking and electrical infrastructure damaged. An individual homeowner with a couple of large trees down will need to pay $500 to $1,000 for a tree service to remove the debris from their property. Considering the median household income in Montgomery County, PA is $75,000, that is not an insubstantial sum.

The homeowner did not anticipate this expenditure and will react by not dining out, taking a shorter vacation, not buying that new couch, or not investing in their small business. A landlord who has to repair busted pipes will incur added expense, resulting in less profit. Less profit means less taxes paid to the state and federal government, exacerbating their budget deficits. The landlord will defer replacing that old air conditioner for at least another year. Multiply these scenarios across the entire Northeastern United States and you have the long-term negative financial implications outweighing the short-term boost to GDP.

The Keynesian fallacy of increased economic activity being beneficial is annihilated by the fact homeowners and business owners are left in the same condition as they were prior to the storms, while the money spent to achieve the same property condition was not spent on other goods and services that would have truly expanded the economy. The fallacious government engineered GDP calculation will portray destruction as an economic boost. Keynesian worshiping economists and government bureaucrats observe this tragedy as only between two parties, the consumer who is forced to repair their property and is denied the pleasure of spending their money on something more enjoyable and the tree service company who experiences a positive impact to their business. They exclude the appliance store, restaurant, or hotel that did not receive the money spent on repairing the property. It is this third unseen party who is left out of the equation. It is this third party that shows the absurdity of believing destruction leads to profit and economic advancement. The national economic output is not increased, but highly educated government drones and Wall Street captured economists will point to GDP and disseminate the fallacy.

This leads us to government in general and the fallacy that government spending, government borrowing, and government programs are beneficial to society and the economy. Legalized plunder of the populace through income taxes, real estate taxes, sales taxes, gasoline taxes, cigarette taxes, license fees, sewer fees, tolls, and a myriad of other ass raping techniques is used to subsidize crony capitalist special interests, the military industrial complex, faux wars on poverty, drugs and terror, a failed public education system, vote buying entitlement programs, and a tax code written to benefit those who pay the biggest bribes to the corrupt politicians slithering around the halls of congress.

Government is a criminal enterprise designed to take from the weak and powerless while benefitting the connected and powerful. The government extracts the earnings of citizens and businesses at the point of a gun and redistributes those funds to special interests; funding boondoggles, wars of choice, foreign dictators, and the corporate and banking interests who control the puppet strings of Washington politicians. State organized and legal plunder designed to enrich everyone at the expense of everyone else is the delusional fallacy permeating our cultural mindset today.

President Obama declared my region a disaster area, allowing for government funds to supposedly help in the cleanup efforts. Again, the fallacy of government intervention benefiting society is unquestioned by the ignorant masses. Local and State governments are required by law to balance their budgets. The never ending progression of storms and record cold temperatures has already blown the winter storm budgets of transportation departments across the region. Gaping potholes are swallowing vehicles and will need to be repaired.

Government spokespersons and politicians tell the public not to worry. The government will come to the rescue, even when the funds officially run out. They won’t react the way a family would react to a budget overage, by cutting spending in another area. We have had mild winters in the recent past when the winter road budgets were far under. Did the government set aside this surplus for winters like the one we are currently experiencing? Of course not – they spent it on some other boondoggle program or useless shovel ready bridge to nowhere. Government politicians and their lackeys do not look beyond their 2 year election cycle.

The government budget overages due to winter storms will show up in the GDP calculation as a positive impact. A snowplow pushing snow to the side of the road and a crew filing a pothole has put the roadway back into the condition it was prior to the bad weather. The roadway is exactly the same. The money spent could have been used to pay down debt, fund the government pension shortfalls which will overwhelm taxpayers in the foreseeable future, or be given back to citizens to spend as they choose. There has been no net benefit to society.

No government spending provides a net benefit to society. Every government program, law, regulation, subsidy, tax or fee gives rise to a series of effects. The immediate seen effect may be favorable in the eyes of myopic politicians and an ignorant populace, but most government intervention in our lives proves to be fatal and unsustainable in the long-term. Whatever short-term benefits might accrue is far outweighed by the long-term negative implications on future generations. All government expenditures are foisted upon the public either through increased taxation or state created surreptitious inflation.         

We have a country built on a Himalayan mountain of fallacies. We are a short-term oriented people who only care about our present situation, giving no thought about long-term consequences of our policies, programs, laws or actions. Critical thinking skills, reasoning abilities, and a basic understanding of mathematical concepts appear to be beyond our grasp. We’d rather believe falsehoods than deal with the harsh lessons of reality. We choose to experience the severe penalties of burying our heads in the sand over using our God given ability to think and foresee the future consequences of our irrational choices. We suffer from the ultimately fatal disease of ignorance, as described by Bastiat.

This explains the fatally grievous condition of mankind. Ignorance surrounds its cradle: then its actions are determined by their first consequences, the only ones which, in its first stage, it can see. It is only in the long run that it learns to take account of the others. It has to learn this lesson from two very different masters – experience and foresight. Experience teaches effectually, but brutally. It makes us acquainted with all the effects of an action, by causing us to feel them; and we cannot fail to finish by knowing that fire burns, if we have burned ourselves. For this rough teacher, I should like, if possible, to substitute a more gentle one. I mean Foresight.

It’s a big country and one fallacy doesn’t fit all. Some fallacies are committed purposefully by evil men with evil intent. The Wall Street financial elite, big corporations, big media and their politician puppets fall into this category. Other fallacies are executed by people whose salary depends upon the fallacies being believed by the masses. Middle level bankers, managers, journalists, and bureaucrats fall into this category. And lastly you have the willfully ignorant masses who would rather believe fallacies than look up from their iGadgets, Facebook, and Twitter and think. The thing about fallacies is they eventually are buried under an avalanche of reality. If you listen closely you can hear the rumble of snow beginning to give way on the mountaintop. Fallacies are about to be crushed and swept away by the real world of consequences.

“Wall Street had been doing business with pieces of paper; and now someone asked for a dollar, and it was discovered that the dollar had been mislaid.  It was an experience for which the captains of industry were not entirely prepared; they had forgotten the public.  It was like some great convulsion of nature, which made mockery of all the powers of men, and left the beholder dazed and terrified.   In Wall Street men stood as if in a valley, and saw far above them the starting of an avalanche; they stood fascinated with horror, and watched it gathering headway; saw the clouds of dust rising up, and heard the roar of it swelling, and realized it was only a matter of time before it swept them to their destruction…

But it is difficult to get a man to understand something when his salary depends upon him not understanding it.”

Upton Sinclair – The Moneychangers

 

THE RETAIL DEATH RATTLE

“I was part of that strange race of people aptly described as spending their lives doing things they detest, to make money they don’t want, to buy things they don’t need, to impress people they don’t like.”Emile Gauvreau

If ever a chart provided unequivocal proof the economic recovery storyline is a fraud, the one below is the smoking gun. November and December retail sales account for 20% to 40% of annual retail sales for most retailers. The number of visits to retail stores has plummeted by 50% since 2010. Please note this was during a supposed economic recovery. Also note consumer spending accounts for 70% of GDP. Also note credit card debt outstanding is 7% lower than its level in 2010 and 16% below its peak in 2008. Retailers like J.C. Penney, Best Buy, Sears, Radio Shack and Barnes & Noble continue to report appalling sales and profit results, along with listings of store closings. Even the heavyweights like Wal-Mart and Target continue to report negative comp store sales. How can the government and mainstream media be reporting an economic recovery when the industry that accounts for 70% of GDP is in free fall? The answer is that 99% of America has not had an economic recovery. Only Bernanke’s 1% owner class have benefited from his QE/ZIRP induced stock market levitation.

Source: WSJ

The entire economic recovery storyline is a sham built upon easy money funneled by the Fed to the Too Big To Trust Wall Street banks so they can use their HFT supercomputers to drive the stock market higher, buy up the millions of homes they foreclosed upon to artificially drive up home prices, and generate profits through rigging commodity, currency, and bond markets, while reducing loan loss reserves because they are free to value their toxic assets at anything they please – compliments of the spineless nerds at the FASB. GDP has been artificially propped up by the Federal government through the magic of EBT cards, SSDI for the depressed and downtrodden, never ending extensions of unemployment benefits, billions in student loans to University of Phoenix prodigies, and subprime auto loans to deadbeats from the Government Motors financing arm – Ally Financial (85% owned by you the taxpayer). The country is being kept afloat on an ocean of debt and delusional belief in the power of central bankers to steer this ship through a sea of icebergs just below the surface.

The absolute collapse in retail visitor counts is the warning siren that this country is about to collide with the reality Americans have run out of time, money, jobs, and illusions. The most amazingly delusional aspect to the chart above is retailers continued to add 44 million square feet in 2013 to the almost 15 billion existing square feet of retail space in the U.S. That is approximately 47 square feet of retail space for every person in America. Retail CEOs are not the brightest bulbs in the sale bin, as exhibited by the CEO of Target and his gross malfeasance in protecting his customers’ personal financial information. Of course, the 44 million square feet added in 2013 is down 85% from the annual increases from 2000 through 2008. The exponential growth model, built upon a never ending flow of consumer credit and an endless supply of cheap fuel, has reached its limit of growth. The titans of Wall Street and their puppets in Washington D.C. have wrung every drop of faux wealth from the dying middle class. There are nothing left but withering carcasses and bleached bones.

The impact of this retail death spiral will be vast and far reaching. A few factoids will help you understand the coming calamity:

  • There are approximately 109,500 shopping centers in the United States ranging in size from the small convenience centers to the large super-regional malls.
  • There are in excess of 1 million retail establishments in the United States occupying 15 billion square feet of space and generating over $4.4 trillion of annual sales. This includes 8,700 department stores, 160,000 clothing & accessory stores, and 8,600 game stores.
  • U.S. shopping-center retail sales total more than $2.26 trillion, accounting for over half of all retail sales.
  • The U.S. shopping-center industry directly employed over 12 million people in 2010 and indirectly generated another 5.6 million jobs in support industries. Collectively, the industry accounted for 12.7% of total U.S. employment.
  • Total retail employment in 2012 totaled 14.9 million, lower than the 15.1 million employed in 2002.
  • For every 100 individuals directly employed at a U.S. regional shopping center, an additional 20 to 30 jobs are supported in the community due to multiplier effects.

The collapse in foot traffic to the 109,500 shopping centers that crisscross our suburban sprawl paradise of plenty is irreversible. No amount of marketing propaganda, 50% off sales, or hot new iGadgets is going to spur a dramatic turnaround. Quarter after quarter there will be more announcements of store closings. Macys just announced the closing of 5 stores and firing of 2,500 retail workers. JC Penney just announced the closing of 33 stores and firing of 2,000 retail workers. Announcements are imminent from Sears, Radio Shack and a slew of other retailers who are beginning to see the writing on the wall. The vacancy rate will be rising in strip malls, power malls and regional malls, with the largest growing sector being ghost malls. Before long it will appear that SPACE AVAILABLE is the fastest growing retailer in America.

The reason this death spiral cannot be reversed is simply a matter of arithmetic and demographics. While arrogant hubristic retail CEOs of public big box mega-retailers added 2.7 billion retail square feet to our already over saturated market, real median household income flat lined. The advancement in retail spending was attributable solely to the $1.1 trillion increase (68%) in consumer debt and the trillion dollars of home equity extracted from castles in the sky, that later crashed down to earth. Once the Wall Street created fraud collapsed and the waves of delusion subsided, retailers have been revealed to be swimming naked. Their relentless expansion, based on exponential growth, cannibalized itself, new store construction ground to a halt, sales and profits have declined, and the inevitable closing of thousands of stores has begun. With real median household income 8% lower than it was in 2008, the collapse in retail traffic is a rational reaction by the impoverished 99%. Americans are using their credit cards to pay their real estate taxes, income taxes, and monthly utilities, since their income is lower, and their living expenses rise relentlessly, thanks to Bernanke and his Fed created inflation.

The media mouthpieces for the establishment gloss over the fact average gasoline prices in 2013 were the second highest in history. The highest average price was in 2012 and the 3rd highest average price was in 2011. These prices are 150% higher than prices in the early 2000’s. This might not matter to the likes of Jamie Dimon and Jon Corzine, but for a middle class family with two parents working and making 7.5% less than they made in 2000, it has a dramatic impact on discretionary income. The fact oil prices have risen from $25 per barrel in 2003 to $100 per barrel today has not only impacted gas prices, but utility costs, food costs, and the price of any product that needs to be transported to your local Wally World. The outrageous rise in tuition prices has been aided and abetted by the Federal government and their doling out of loans so diploma mills like the University of Phoenix can bilk clueless dupes into thinking they are on their way to an exciting new career, while leaving them jobless in their parents’ basement with a loan payment for life.

 

The laughable jobs recovery touted by Obama, his sycophantic minions, paid off economist shills, and the discredited corporate legacy media can be viewed appropriately in the following two charts, that reveal the false storyline being peddled to the techno-narcissistic iGadget distracted masses. There are 247 million working age Americans between the ages of 18 and 64. Only 145 million of these people are employed. Of these employed, 19 million are working part-time and 9 million are self- employed. Another 20 million are employed by the government, producing nothing and being sustained by the few remaining producers with their tax dollars. The labor participation rate is the lowest it has been since women entered the workforce in large numbers during the 1980’s. We are back to levels seen during the booming Carter years. Those peddling the drivel about retiring Baby Boomers causing the decline in the labor participation rate are either math challenged or willfully ignorant because they are being paid to be so. Once you turn 65 you are no longer counted in the work force. The percentage of those over 55 in the workforce has risen dramatically to an all-time high, as the Me Generation never saved for retirement or saw their retirement savings obliterated in the Wall Street created 2008 financial implosion.

To understand the absolute idiocy of retail CEOs across the land one must parse the employment data back to 2000. In the year 2000 the working age population of the U.S. was 213 million and 136.9 million of them were working, a record level of 64.4% of the population. There were 70 million working age Americans not in the labor force. Fourteen years later the number of working age Americans is 247 million and only 144.6 million are working. The working age population has risen by 16% and the number of employed has risen by only 5.6%. That’s quite a success story. Of course, even though median household income is 7.5% lower than it was in 2000, the government expects you to believe that 22 million Americans voluntarily left the labor force because they no longer needed a job. While the number of employed grew by 5.6% over fourteen years, the number of people who left the workforce grew by 31.1%. Over this same time frame the mega-retailers that dominate the landscape added almost 3 billion square feet of selling space, a 25% increase. A critical thinking individual might wonder how this could possibly end well for the retail genius CEOs in glistening corporate office towers from coast to coast.

This entire materialistic orgy of consumerism has been sustained solely with debt peddled by the Wall Street banking syndicate. The average American consumer met their Waterloo in 2008. Bernanke’s mission was to save bankers, billionaires and politicians. It was not to save the working middle class. You’ve been sacrificed at the altar of the .1%. The 0% interest rates were for Jamie Dimon and Lloyd Blankfein. Your credit card interest rate remained between 13% and 21%. So, while you struggle to pay bills with your declining real income, the Wall Street bankers are again generating record profits and paying themselves record bonuses. Profits are so good, they can afford to pay tens of billions in fines for their criminal acts, and still be left with billions to divvy up among their non-prosecuted criminal executives.

Bernanke and his financial elite owners have been able to rig the markets to give the appearance of normalcy, but they cannot rig the demographic time bomb that will cause the death and destruction of our illusory retail paradigm. Demographics cannot be manipulated or altered by the government or mass media. The best they can do is ignore or lie about the facts. The life cycle of a human being is utterly predictable, along with their habits across time. Those under 25 years old have very little income, therefore they have very little spending. Once a job is attained and income levels rise, spending rises along with the increased income. As the person enters old age their income declines and spending on stuff declines rapidly. The media may be ignoring the fact that annual expenditures drop by 40% for those over 65 years old from the peak spending years of 45 to 54, but it doesn’t change the fact. They also cannot change the fact that 10,000 Americans will turn 65 every day for the next sixteen years. They also can’t change the fact the average Baby Boomer has less than $50,000 saved for retirement and is up to their grey eye brows in debt.

With over 15% of all 25 to 34 year olds living in their parents’ basement and those under 25 saddled with billions in student loan debt, the traditional increase in income and spending is DOA for the millennial generation. The hardest hit demographic on the job front during the 2008 through 2014 ongoing recession has been the 45 to 54 year olds in their peak earning and spending years. Combine these demographic developments and you’ve got a perfect storm for over-built retailers and their egotistical CEOs.

The media continues to peddle the storyline of on-line sales saving the ancient bricks and mortar retailers. Again, the talking head pundits are willfully ignoring basic math. On-line sales account for 6% of total retail sales. If a dying behemoth like JC Penney announces a 20% decline in same store sales and a 20% increase in on-line sales, their total change is still negative 17.6%. And they are still left with 1,100 decaying stores, 100,000 employees, lease payments, debt payments, maintenance costs, utility costs, inventory costs, and pension costs. Their future is so bright they gotta wear a toe tag.

The decades of mal-investment in retail stores was enabled by Greenspan, Bernanke, and their Federal Reserve brethren. Their easy money policies enabled Americans to live far beyond their true means through credit card debt, auto debt, mortgage debt, and home equity debt. This false illusion of wealth and foolish spending led mega-retailers to ignore facts and spread like locusts across the suburban countryside. The debt fueled orgy has run out of steam. All that is left is the largest mountain of debt in human history, a gutted and debt laden former middle class, and thousands of empty stores in future decaying ghost malls haunting the highways and byways of suburbia.

The implications of this long and winding road to ruin are far reaching. Store closings so far have only been a ripple compared to the tsunami coming to right size the industry for a future of declining spending. Over the next five to ten years, tens of thousands of stores will be shuttered. Companies like JC Penney, Sears and Radio Shack will go bankrupt and become historical footnotes. Considering retail employment is lower today than it was in 2002 before the massive retail expansion, the future will see in excess of 1 million retail workers lose their jobs. Bernanke and the Feds have allowed real estate mall owners to roll over non-performing loans and pretend they are generating enough rental income to cover their loan obligations. As more stores go dark, this little game of extend and pretend will come to an end. Real estate developers will be going belly-up and the banking sector will be taking huge losses again. I’m sure the remaining taxpayers will gladly bailout Wall Street again. The facts are not debatable. They can be ignored by the politicians, Ivy League economists, media talking heads, and the willfully ignorant masses, but they do not cease to exist.

“Facts do not cease to exist because they are ignored.”Aldous Huxley

CAN YOU SMELL THE DESPERATION?

 

So the stock market is at new all-time highs. GDP is at an all-time high, well above 2007 levels. Unemployment has supposedly fallen from over 10% in 2009 to only 7.3% today. Corporate profits are at all time highs. Wall Street bonuses are at all-time highs. The talking heads on CNBC and the rest of the MSM tell me that things are great. Interest rates, at least for some people and banks, are at record lows. Bernanke pumps $2.5 billion of heroin into the veins of Wall Street on a daily basis.

So why so glum average Americans? It seems average Americans plan on spending 10% less for Christmas gifts this year than last year. Not only that, but they are spending 19% less than they spent in 2007 and 18% less than they spent in 1999. Didn’t you people get the message? Stop with the goddamn austerity, whip out that credit card, and buy Chinese shit you don’t need with money you don’t have. Don’t you realize Wall Street bankers and mega-retailer CEOs are depending on your recklessness materialism to generate their $7 million bonuses?

It seems the 99% are not cooperating with the 1% plan for economic recovery. Maybe they are little depressed because their health insurance policy just got cancelled and their new Obama policy is going to cost 40% more. Maybe it is the $1,000 less the average household has to spend this year versus last year because the 2% Social Security tax reduction expired. Maybe it is because they lost their $80,000 per year job at Merck and are now working at the Dunkin Donuts across the street for $9.00 per hour – but they get free donuts at the end of the shift. Maybe it’s the fact that the real median household income is 10% below the level of 1999.

You see, reality is a bitch. Your owners can prop up the stock market and spew propaganda on the corporate media outlets, but they can’t create wealth for you. The average American is spending less because they have less. It really is that simple. And the less they spend, the more retailers will suffer. The JC Pennys, Sears, Radioshacks, Barnes & Nobles, Best Buys and many more will be forced to shutter stores, fire employees and in some cases file bankruptcy. You can smell the desperation among the mega-retail conglomerates. They over-expanded based on the delusional belief that this credit based fantasy could go on forever. They will pay the price.

Opening stores on Thanksgiving will not save their sorry asses. They fucked up and they will pay the piper. It’s a zero sum game. The average American is running on empty. The Wall Street/Hamptons crowd can not sustain the nation with their extravagant spending. I love the smell of desperation in the morning. It smells like bankruptcy and disgrace for delusional retail CEOs.    

 

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Holiday Spending to Dive: Gallup

 

TRYING TO STAY SANE IN AN INSANE WORLD – PART 1

“I mean—hell, I been surprised how sane you guys all are. As near as I can tell you’re not any crazier than the average asshole on the street.”R.P. McMurphy – One Flew Over the Cuckoo’s Nest

“Years ago, it meant something to be crazy. Now everyone’s crazy.”Charles Manson

 

“In America, the criminally insane rule and the rest of us, or the vast majority of the rest of us, either do not care, do not know, or are distracted and properly brainwashed into acquiescence.”Kurt Nimmo

I have to admit to being baffled by the aptitude of the Wall Street and K Street financial elite to keep their Ponzi scheme growing. I consider myself to be a rational, sane human being who understands math and bases his assessments upon facts and a sensible appraisal of the relevant information obtained from trustworthy sources. Of course, finding trustworthy sources is difficult when you live in a corrupt, crony-capitalist, fascist state, controlled by banking, corporate and military interests who retain absolute control over the mainstream media and governmental propaganda agencies. Those seeking truth must pursue it through the alternative media and seeking out unbiased critical thinkers who relentlessly abide by what the facts expose. This is no time for wishful thinking, delusions and fantasies. In the end, the facts are all that matter. As Heinlein noted decades ago, the future is uncertain so facts are essential in navigating a course that doesn’t lead you to ruin upon the shoals of ignorance.

“What are the facts? Again and again and again – what are the facts? Shun wishful thinking, ignore divine revelation, forget what “the stars foretell,” avoid opinion, care not what the neighbors think, never mind the un-guessable “verdict of history” – what are the facts, and to how many decimal places? You pilot always into an unknown future; facts are your single clue. Get the facts!” ― Robert A. Heinlein

Facts are treasonous and dangerous in an empire of lies, fraud and propaganda. It is maddening to watch the country spiral downward, driven to ruin by a psychotic predator class, while the plebs choose to remain willfully ignorant of reality and distracted by their lust for cheap Chinese crap and addicted to the cult of techno-narcissism. We are a country running on heaping doses of cognitive dissonance and normalcy bias, an irrational belief in our national exceptionalism, an absurd trust in the same banking class that destroyed the finances of the country, and a delusionary belief that with just another trillion dollars of debt we’ll be back on the exponential growth track. The American empire has been built on a foundation of cheap easily accessible oil, cheap easily accessible credit, the most powerful military machine in human history, and the purposeful transformation of citizens into consumers through the use of relentless media propaganda and a persistent decades long dumbing down of the masses through the government education system.

This national insanity is not a new phenomenon. Friedrich Nietzsche observed the same spectacle in the 19th century.

“In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule.”

The “solutions” imposed by the supposed brightest financial Ivy League educated minds and corrupt bought off political class upon people of the United States since the Wall Street created 2008 worldwide financial collapse are insane and designed to only further enrich the crony capitalists and their banker brethren. The maniacs are ruling the asylum. John Lennon saw the writing on the wall forty five years ago.

“Our society is run by insane people for insane objectives…. I think we’re being run by maniacs for maniacal ends … and I think I’m liable to be put away as insane for expressing that. That’s what’s insane about it.”John Lennon, Interview BBC-TV (June 22, 1968)

The world is most certainly ruled by a small group of extremely wealthy evil men who desire ever more treasure, supremacy and control, but the vast majority of Americans have stood idly by mesmerized by their iGadgets and believing buying shit they don’t need with money they don’t have is the path to happiness and prosperity, while their wealth, liberty and self-respect were stolen by the financial elite. Our idiot culture, that celebrates reality TV morons, low IQ millionaires playing children’s sports, egomaniacal Hollywood hacks, self-promoting Wall Street financers, and self-serving corrupt ideologue politicians, has been degenerating for decades.

“We are in the process of creating what deserves to be called the idiot culture. Not an idiot sub-culture, which every society has bubbling beneath the surface and which can provide harmless fun; but the culture itself. For the first time, the weird and the stupid and the coarse are becoming our cultural norm, even our cultural ideal.” Carl Bernstein -1992

The examples of our national insanity are almost too vast to document, but any critical assessment of what we’ve done over the last one hundred years reveals the idiocracy that has engulfed our collapsing empire.

The Madness of Crowds

In reading The History of Nations, we find that, like individuals, they have their whims and their peculiarities, their seasons of excitement and recklessness, when they care not what they do. We find that whole communities suddenly fix their minds upon one object and go mad in its pursuit; that millions of people become simultaneously impressed with one delusion, and run after it, till their attention is caught by some new folly more captivating than the first.”Charles MacKay – Extraordinary Popular Delusions and the Madness of Crowds

We have become a nation that seamlessly goes mad every five years in pursuit of some new delusionary fantasy sold to us by the ruling class, only to see those dreams shattered like a wooden ship on the reef of reality. You can never underestimate the power of human stupidity. Ben Bernanke and his Federal Reserve cronies have printed $2.6 trillion of new money out of thin air since September 2008 in order to prop up their Wall Street owners, who had engineered the largest control fraud (mortgage debt/housing bubble) in world history, recklessly gambled in their ravenous appetite for sordid profits, and drove their firms into insolvency. It took the Federal Reserve 95 years to accumulate a balance sheet of $900 billion of safe U.S. Treasuries.

fed balance sheet

They have insanely quadrupled their balance sheet in the last 5 years by accumulating toxic mortgage debt from Wall Street banks and purchasing the majority of new Treasury debt being issued to fund the Federal government’s insane trillion dollar annual deficits. Bernanke, the corporate media, government apparatchiks, and captured political class act as if this is normal, when it is clearly the act of a desperate ruling class in its final death throes. Bernanke has leveraged his balance sheet 60 to 1. Lehman and Bear Stearns were leveraged 30 to 1 when they collapsed. The 100 basis point move in rates over the space of two months has resulted in Bernanke losing $200 billion and effectively wiping out his $55 billion of capital.

fed 10 year

Of course, in a corrupt regime accounting fraud is encouraged and applauded by the status quo. Just as the spineless accountants on the FASB buckled to threats from Bernanke and Paulson in early 2009 and reversed the requirement that assets be marked to market so the felonious Wall Street banks could fraudulently hide their insolvency, the Federal Reserve has decided their losses don’t matter. The Federal Reserve classifies their losses as an asset. Don’t you wish you could classify your 401k losses and your home value losses as an asset? The tapering bullshit storyline is just another attempt to distract the masses from focusing on the fact that Bernanke will never stop expanding his balance sheet because if he stops the financial system will collapse in a catastrophic implosion. The Ponzi scheme will continue until loss of faith leads to a scramble away from the U.S. dollar.

fed balance sheet

Since the infamous creation of the Federal Reserve by a secretive cabal of bankers and politicians in 1913, the ultimate destination of the American empire was set. Every fiat currency in world history has collapsed. Our entire system has been based on infinite exponential growth. The fallacy of American exceptionalism has been built on an underpinning of pure stupid luck and the issuance of more and more debt. The American empire grew to epic proportions due to the discovery of cheap easily accessible oil in the late 19th century and the physical and economic destruction of Europe, Russia and Japan during World War II. The accumulation of debt was fairly moderate during the glory years after World War II, but began to accelerate after the fateful year of 1971 when U.S. oil production peaked and Tricky Dick Nixon removed the last vestiges of restraint from central bankers and politicians by closing the gold window. With the shackles removed from the wrists of corruptible knaves and shysters, America’s future depended upon the wisdom, honesty and financial acumen of Washington politicians and Wall Street financers. Once the citizens realized they could vote for more bread and circuses, our ultimate demise was set in motion. A nation that had produced real annual growth of 4% during the 1950’s and 1960’s has seen a steady decline for the last four decades.   

The term pushing on a string describes the Quantitative Easing (literally money printing) and Keynesian debt financed pork spending efforts of our increasingly frantic owners. The insanity of what we’ve done since 1971 is almost too crazy to comprehend. In the first 182 years of our existence the leaders we elected to steward the nation accumulated $400 billion of national debt. By 1981, unleashed from any semblance of spending control, the politicians and bankers had added another $600 billion of debt, a 150% increase in 10 years. By 1991 our beloved leaders had added another $2.6 trillion of debt, another 160% increase in 10 years. By 2001 another $2.2 trillion had been accumulated, only a 60% increase due to the end of the Cold War and a one-time tax surge from the Dot.com stock bubble. Bush’s worldwide War on Terror, expansion of the police state, tax rebate stimulus idiocy, and expansion of the welfare state (Medicare Part D) drove the national debt up by another $2.2 trillion in just eight years, a 40% increase.

The insane amassing of debt since 2008 has put a final nail in the coffin of the ridiculous Keynesian theory, as the Federal government has increased annual spending by 35% over the last five years and the economy is still moribund. Our fearless leaders have driven the national debt from $7.8 trillion to $16.7 trillion in less than five years, a 110% increase. The country continues to add $2 to $3 billion of debt per day. Consider how insane it is that we now accumulate more debt in half a year than we did cumulatively over the first 182 years of our existence as a country. And our elected, or should I say selected, leaders, cheer on the intellectually bankrupt academics like Bernanke whose only solution to every crisis is to print moar and then lie to the American people about his true purpose, act as if annually spending $1 trillion more than we collect while knowing there are over $200 trillion of unfunded promises to fulfill is a reasonable and realistic way to manage the national finances. Any sane person knows our current path will lead to ruin. When you need to issue new debt in order to honor old debt, the end is in sight.

The multitude of insane responses to a financial crisis created by a few greedy psychopathic bankers will be looked upon by historians with contempt and scorn. Future generations will wonder “What were they thinking?” Trillions in wealth were vaporized due to the actions of a small secretive league of highly educated, egocentric psychopaths whose warped sense of morality led them to pillage the wealth of the nation through fraudulent financial products, bribing regulatory agencies, stabbing clients and competitors in the back, and peddling lies, propaganda and misinformation to the public through their captured media mouthpieces. Not only haven’t any predator bankers been thrown in jail, but these villains have grown their parasitic entities to enormous proportions while paying themselves obscene billion dollar bonuses. Jon Corzine stole $1.2 billion directly from the accounts of his customers to cover his gambling losses and he remains free to laze about in one of his five gated mansions. The largest banks on earth have been caught red handed forging mortgage documents, rigging LIBOR, front running the muppets with non-public economic information, insider dealing, and using their HFT supercomputers to manipulate the markets at their whim. Government spy agencies regularly use the U.S. Constitution like toilet paper while accumulating electronic dossiers on every citizen in the country. The rule of law does not exist for the ruling class.

Only in a world gone insane would we be celebrating Wall Street generating all-time high profits through the use of accounting fraud and Bernanke filling their coffers with trillions of interest free money while bilking senior citizens out of $400 billion per year of interest income through his dastardly ZIRP “save a Wall Street banker” scheme. Bernanke has stolen close to $2 trillion from the bank accounts of little old ladies since 2008 and given it to Jamie Dimon, Lloyd Blankfien and the rest of the Wall Street scumbags. While Wall Street and the crony capitalist mega-corporations report record profits, Main Street is left with 5 million less full-time jobs than they had in 2007 and a real unemployment rate exceeding 20%. While the government has insanely reported a recovering economy since mid-2009, the food stamp rolls have grown from 33 million to 47 million. The ruling class cheers the record highs in the stock market that overwhelmingly benefit the top .1% because they are the .1%. Meanwhile, the average schmuck out in the hinterlands is paying double the price they were paying for gas in 2009 and their everyday living costs are rising by greater than 5% annually. Luckily for the financial elite, the average American would rather watch Honey Boo Boo than try to understand the evilness of Federal Reserve created inflation. The economic recovery storyline is obliterated by the fact that real household income is still 9% below its 2008 peak and amazingly 8% below its 2000 level.

Since the 2009 low, the household net worth of the wealthiest 7% has grown by 28%, while the other 93% have seen their net worth decline by a further 4%. The profits accrue to those who run the show, buy the politicians, write the laws, command the media propaganda machine and control the currency. As a sane person in this insane world I’m flabbergasted that there is virtually no outrage at the perpetrators of these crimes against humanity. Americans have earned the moniker – ignorant masses. Bread and circuses have won the day in our declining empire. The oligarchs thank you.

The blame doesn’t rest solely on the shoulders of the evil men running the show. They have only done what we allowed them to do. From top to bottom our society has hopped on the crazy train. The lack of national morality, sense of civic duty, inter-generational responsibility, and willful ignorance regarding sensible financial policies has led us to a tipping point. Decades of feckless self-serving political leadership making entitlement promises they could never honor to win votes, combined with a parasitic financial class peddling debt to millions of witless, narcissistic, math challenged, materialistic morons, has left the country in debt up to its eyeballs with no escape other than cataclysmic default. Michael Lewis documents the bleeding out of our society in his recent book:

“The people who had the power in the society, and were charged with saving it from itself, had instead bled the society to death. The problem with police officers and firefighters isn’t a public sector problem; it isn’t a problem with government; it’s a problem with the entire society. It’s what happened on Wall Street in the run-up to the subprime crisis. It’s a problem of taking what they can, just because they can, without regard to the larger social consequences. It’s not just a coincidence that the debts of cities and states spun out of control at the same time as the debts of individual Americans. Alone in a dark room with a pile of money, Americans knew exactly what they wanted to do, from the top of the society to the bottom. They’d been conditioned to grab as much as they could, without thinking about the long-term consequences. Afterward, the people on Wall Street would privately bemoan the low morals of the American people who walked away from their subprime loans, and the American people would express outrage at the Wall Street people who paid themselves a fortune to design the bad loans.”Michael Lewis – Boomerang

The insanity of our debt accumulation in relation to our pathetic economic growth is clearly evident to even an Ivy League educated economist or a bubble headed CNBC anchorwoman. Since 1971 nominal GDP has grown by a factor of 14. Over this same time frame total credit market debt (household, corporate, government) has grown by a factor of 32. Real GDP (even using the fraudulent BLS manipulated CPI) has only expanded by a factor of 3.5 since 1971. The exponential growth model is clearly failing, with debt going hyperbolic, while GDP has stagnated.

us-debt-and-gdp

Since 2007 real GDP has gone up $500 billion while total credit market debt has gone up by $6 trillion. Only an insane society would allow itself to be convinced by the perpetrators of the financial crimes that collapsed our economic system that accelerating the level of debt in our system will resolve the dilemma of Too Big to Trust banker insolvency. Transferring the immense losses of greedy sham capitalist gambling addicts from their insolvent balance sheets onto the balance sheets of the taxpayer has allowed the criminals to retain and expand their wealth, while sovereign states shift the pain and suffering onto the backs of the sinking middle class. This is a worldwide phenomenon perpetuated by central bankers at the behest of their crony capitalist co-conspirators. They call it capitalism when the scams, dodges and swindles work and the profits accrue to the schemers. When the gamblers and extreme risk addicts roll craps they use their crony capitalist connections, bought with blood money, to socialize their losses. The game is rigged and your owners don’t care about your hopes and dreams or your children’s future. They care about their own wealth and lifestyles of luxury. When the richest 300 people in the world have a greater net worth than the poorest 3 billion people on earth, a sane person realizes a chaotic end of the existing social order beckons.

“All over the world people borrowed vast sums of money they could never repay. The honest toting up, and taking, of the losses is being delayed. There’s a reason for this. The bad debts are owed, largely, to big banks. The big banks (even bigger than they were at the start of this crisis) and the people who own them enjoy a wildly disproportionate amount of political influence. And so, even now, five years into this mess, we remain at the mercy of the failed financial institutions that sit at the center of our capitalism. Geithner & Bernanke, along with their European counterparts, are doing everything in their power to prevent banks from failing. But the effect of this new financial order is bizarre: capitalism for everyone but the capitalists. Ordinary workers remain fully exposed to the increasingly harsh collisions in the marketplace while the highest paid financial elites ride protected by a passenger airbag.” Michael Lewis – Boomerang

Clearly we’ve entered the final phase of our debt financed orgy of narcissistic materialism and self-absorbed avarice. The unsustainability of our course is a fact. Our society has gone mad en-masse but we are only recovering our sanity one by one. The global financial system is insolvent. A fractional reserve fiat money based system requires continuous growth or it collapses. The global banking system is overleveraged and real global growth is stagnant. Central bankers are not smart men. They have one response to every crisis – print!!! Bernanke and his fellow banker cronies are printing at hyper-speed in order to prop up the terminally ill mega-banks. Bernanke feigns confusion at the fact that his QE to infinity and ZIRP have only benefitted his banker puppet masters and the richest .1%, while further impoverishing senior citizen savers and the working middle class.

The anger at the true Wall Street malefactors manifested itself in the Tea Party movement and Occupy Wall Street movement, but both efforts were quickly hijacked by neo-con right wingers and socialist left wingers for their own ideological purposes. The existing social order continues to hold the reins of power, but their grip is growing precarious. The anger, dismay and resentment in the country simmer beneath the surface. The average person senses that all is not well, but most absurdly continue to believe the lies and propaganda spewed at them on a daily basis by the ruling class and their corporate media pawns. When the next shoe drops and billions of stock market and housing wealth are wiped out again, the national anger will sweep away the corrupt social order in a torrent of blood and retribution. Innocent and guilty alike will suffer the consequences. Michael Lewis is somewhat perplexed by the lack of outrage and violence so far.

“A lot has happened. And yet, given the provocation, it’s amazing how little has happened. No one on Wall Street has been shot, or even jailed – and the existing social order has not been seriously challenged. There’s a reason for this, too. The anger arising from the financial crisis finds no natural channel. In another era – an era before catastrophic experiments with radical socialism and nationalism – we would be watching market capitalism being displaced by something far uglier. But today there is no natural place for anger to flow, and so the anger flows haphazardly, like raindrops down a windowpane. The only political ideology that anger benefits these days is anarchy. From the point of view of those who enjoy political stability, it’s a stroke of luck that anarchists have no natural talent for organizing themselves. But how long will it take them to learn?”  Michael Lewis – Boomerang

Staying sane in a society gone mad is not easy. Millions of people believe themselves to be sane, but they have really just adapted to an insane society, so they appear sane within the warped paradigm of that insane society. The truly sane people appear to be insane in an insane society. It’s enough to drive a man crazy. The immense forces of normalcy bias and social inertia have led millions to refuse to understand the mathematical certainty of the coming collapse. The worldwide banking system is like a great white shark that needs to keep moving or it dies. Exponential growth and continuous credit expansion have been the essential ingredients to expanding the American empire, but the growth has stopped, while the debt keeps growing. Infinite growth on a finite planet is impossible. As natural resources deplete and become more expensive to obtain, while the planet’s population continues to grow, the fractional reserve banking system and the nation states who continue to pile up trillions in debt will suddenly suffer a catastrophic collapse. We are in the end stages of a confidence game. Your government will not give you warning. We need to come to our senses one by one, until there are enough sane people to tip the scales in our favor. I’ve concluded that I live in a dishonest, insane, intolerable world and consider it my duty to spread discontent among those I can reach. I’m a dangerous man in the eyes of our corporate fascist surveillance state. So be it.

“The most dangerous man, to any government, is the man who is able to think things out for himself without regard to the prevailing superstitions and taboos. Almost inevitably he comes to the conclusion that the government he lives under is dishonest, insane and intolerable, and so, if he is romantic, he tries to change it. And even if he is not romantic personally he is apt to spread discontent among those who are.”H.L. Mencken

In Part 2 of this article I will attempt to figure out why mass insanity has gripped the world and ponder what might happen when sanity returns.

order non hybrid seeds

PENNSYLVANIA – KING OF UNFUNDED GOVERNMENT DRONE PENSION PLANS

The Wall Street shysters and their mouthpieces on CNBC have gleefully ripped Meredith Whitney and her prediction of thousands on municipal bankruptcies. Her timing was early. She didn’t realize that Bernanke would bow down to his masters and produce a 100% stock market gain by pumping $2.5 trillion of free money into the veins of the Wall Street addicts. His actions have solved nothing. Municipalities across the land have unfunded pension and health benefits in excess of $4.5 trillion. And this calculation is based upon annual investment gains of 8%. That’s hysterical when long term bonds yield 2.5% to 3.5% and stocks are priced to deliver 3% over the next ten years. Using a true investment rate of 3% to 4% reveals a true unfunded liability in excess of $6 trillion.

It seems Pennsylvania is ground zero for unfunded pensions and my Township is one of the worst examples of governmental incompetence in the state. How could one state account for 25% of ALL the public pension plans in the entire country? I guess we’ve cornered the market on dumbass public officials, greedy government union drones, and a delusional populace that can’t understand basic math. The Governor and the legislature know that government pension obligations are a looming fiscal disaster. What actions did they take when they passed the 2014 budget last week? NOTHING!!! There are elections coming up in November. You can’t get re-elected by telling voters the truth or getting government union employees mad. This is why we’re doomed. No politician has courage. Greedy government drones will never willingly give up what was promised them by slimy politicians. The average voter thinks money grows on trees. When the next financial crisis hits and wipes 30% to 40% out of these pension plans, accounting fraud and underfunding of these pensions will come home to roost. Meredith’s predictions will come true as municipalities declare bankruptcy and government workers end up with 20% of what they were promised.

My township of Towamencin is singled out in this article as an example of a municipality that has screwed its 17,600 residents by promising its police, firemen and other government workers more than they can ever deliver, without jacking up taxes significantly on the citizens. I pulled up the details of the Towamencin pension plan and annual budget at these links:

http://www.auditorgen.state.pa.us/Reports/Pension/munTowamencinTwpPPP071012.pdf

http://www.towamencin.org/documents/finance/2013_Proposed%20Budget.pdf

According to these reports the Towamencin pension plan is only 61% funded. A township with a $16 million annual budget owes $9.5 million to its workers. It’s assets have an actuarial value of $5.8 million. Of course, all of these figures are complete bullshit because they are based on an 8% annual return on the invested assets. Using the 3% they will actually achieve, the plan is underfunded by $5 to $6 million. That is $800 per household in the township. What is it with politicians and promising public employees gold plated benefits that far exceed what people in the real world receive? In the early 2000’s the annual pension payments for Towamencin were in the $100k per year range. Then Tom “code red” Ridge and the idiots in Harrisburg passed the “No Government Drone Left Behind” law and set in motion a future fiscal disaster of epic proportions.

The population of Towamencin has not budged since 2000. The annual pension payment has gone from less than $100k per year to over $900k per year. It now accounts for 6% of the annual budget and 11.5% of the general fund budget. It is on automatic pilot and will exceed $1.2 million in three years. This is before the inevitable stock market implosion. After the 30% to 40% losses, the annual required contribution will ramp up to $1.5 million as their tax revenues contract. The politicians that run this township have a history of delusional fantasies. They borrowed millions and used eminent domain to build a $500,000 bridge to nowhere. They wiped out five baseball fields and a quaint antique mall with the delusion of a retail paradise. The bridge is beautiful. It leads from one massive vacant weed infested parcel to another vacant parcel. They did build a massive brand new municipal building for the government drones. They poured millions into a pool that losses patrons every year and operates at a loss. These brilliant financial moves have led to annual debt service of $1.7 million, or 11% of their budget. By 2015 the pension and debt service costs will account for over 20% of the annual budget.

Math is hard. Politicians are toadies. Government union employees are greedy. The taxpayers are on the hook for the promises made by toadies to greedy government drones. Reality will smack all of these delusional morons. The obligations cannot be honored because it’s mathematically impossible. Taxes would need to double in order to honor the unfunded liabilities. If the government drones don’t accept large cuts in their pension and health benefits, municipalities will go bankrupt and the drones will be screwed even worse. The parable of the scorpion and the frog will play out because unions NEVER accept reductions in their benefits. It’s their nature.

 

 

ADRIFT AT SEA

 “In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule.”
Friedrich Nietzsche

 

The big story this past week, besides the annual State of the Delusion speech by Barack “It won’t add a cent to the deficit” Obama, was the fate of the passengers on the Carnival Triumph as their skyscraper sized ship was left adrift at sea for days without power. This 900 foot long, 100,000 ton goliath is one of the largest passenger cruise liners in the world, carrying 3,400 passengers and 1,100 crew members in luxurious splendor through warm Gulf of Mexico seas to sun drenched exotic isles. These ships are practically floating countries, with passengers treated to an endless American buffet of never ending quantities of bacon, sausage, biscuits, gravy, fried chicken, mashed potatoes, waffles, pizza, cheesecake, soda, beer and the rum drink of the day. It’s as if all 3,400 passengers have a SNAP card with no limit. There are retail stores, restaurants, bars, ice skating rinks, movie theaters, showplaces, and staff waiting on you hand and foot. No cash changes hands. You charge everything to your room number and then just pay with one of your 13 credit cards at the conclusion of your voyage into debt. Then you pay 18% interest on the 25 Funky Monkeys you consumed for the next 14 years. Cruising captures the essence of America as we traverse our voyage to hell.

The ordeal at sea of the Carnival Triumph and the leadership displayed by the Carnival management and executive officers is a microcosm of our declining empire. The $420 million Carnival Triumph was put into service in 1999 and has run continuously for the last fourteen years, with only periodic dry dock maintenance. These massive ships are replenished within hours of docking and depart within twelve hours of dumping their 3,400 passengers back onshore. The CEO and top management of Carnival care only about ROI and whether their stock options are vested. Their goal is to bilk the passengers out of as much cash as possible, while paying their foreign slave labor crew members as little as possible. The ships are registered in foreign countries for tax purposes and the crew members are mostly from third world countries. Carnival executives and shipboard officers have a history of recklessness, mismanagement, and willingness to endanger its passengers in its greedy thirst for short term profits. Ask the families of the 32 passengers killed in the sinking of the Costa Concordia.

The engine room fire that disabled the Triumph was not an isolated instance. This was the fourth engine room fire on a Carnival owned ship resulting in a loss of power, the others being the Tropicale in 1999, the Carnival Splendor in 2010, and the Costa Allegra in 2012. The Carnival Triumph should not have been at sea. It had been plagued with mechanical problems for weeks prior to the engine fire. Voluntarily taking the ship out of service would have hurt the 1st quarter earnings per share of this public company, therefore the leadership of Carnival told the engineers to patch it up and get it back out on the seas. Two weeks prior to the engine room fire the Carnival Triumph experienced propulsion issues that caused it to be five hours late returning to its Galveston home port on January 28, 2013 and delaying the ship’s departure for its next cruise until 8:00 pm that night. The ship departed, but the problems had not been fixed. The Associate Press reported a story about that cruise that provides a different assessment than the public relations drivel released the corporate office:

An email informed Debbi Smedley and other passengers that the propulsion problem would prevent them from docking at two ports. “Due to the limited cruising speed, our itinerary will be impacted. Depending on the progress of the repairs, we will either visit Progreso or Cozumel,” stated the email, signed by Vicky Rey, vice president of guest services. Smedley said the ship was in poor condition overall. During her five-day cruise, a water line broke in the hallway ceiling near her cabin, and a separate sewer line broke outside the main dining hall, she said. Metal was protruding from handrails on the staircases, and the elevators often did not work. Rather than docking in Progreso for only a few hours as planned, the ship stayed in the port for two days, and cruise workers repeatedly told passengers they were waiting for parts to fix a mechanical problem, according to Smedley.

Carnival’s public relations machine then admitted to an electrical problem with the ship’s alternator in the last voyage before the fire, but claimed it was repaired. What they didn’t reveal is that it was a Coast Guard inspection that revealed there was a short in the high voltage connection box of one of the ships generators causing damage to cables within the connection box. A directive with a compliance due date of February 27, 2013 was issued following the inspection requiring that “the condition of the ship and its equipment shall be maintained to conform with the regulations to ensure that the ship in all respects will remain fit to proceed to sea without danger to the ship or persons on board.” The Coast Guard Marine Information Safety and Law Enforcement System showed that this deficiency remained unresolved at the time of the subsequent fire and loss of power while at sea on February 10. So you have a company PR maggot lying and you have another useless Department of Homeland Security branch not enforcing regulations that are supposed to protect passengers. This is par for the course in our corporate fascist states of America today.

Shit Happens

George: Aha. Aha. Could it be because you don’t want him to know that you have a friend who pees in the shower, is that it?!

Elaine: No, that’s not it!

George: Oh, I think it is! I think that’s exactly what it is!

Elaine: Why couldn’t you just wait?

George: I was there! I saw a drain!

Elaine: Since when is a drain a toilet?!

George: It’s all pipes! What’s the difference?!

George Costanza would have enjoyed sailing on the Carnival Triumph as passengers were left to piss in showers and shit in red plastic bags for days. It finally became socially acceptable to pee in the shower. Most of the ship’s electrical power went down after the engine room fire, causing extensive breakdowns of vital shipboard mechanical systems, including taking out sanitary systems. Passengers reported sewage sloshing around in hallways, flooded rooms and trouble getting enough to eat. Passengers waited in line for three hours to get a lousy hot dog. On the lower decks sewage came up through the shower drain, pooling in the sinks and flowing into the hallways. The allegory of the poor people on the lower decks being inundated with feces and living in wretched conditions, while the rich people living in luxury on the upper decks are blissfully ignorant of the fate of their fellow passengers is so easy to apply to our society in this day and age. The 1% glory in their stock market gains, while 20% of U.S. households are on food stamps.

These direct quotes from passengers and pictures taken onboard this voyage from hell provide a taste of what our future portends:

“We have to urinate in the shower. They’ve been passed out plastic bags to go to the bathroom. There was fecal matter all over the floor.”

“They’re walking around in a lot of urine and fecal matter, and the sewers are backing up.”

“The sanitation situation was gross and the stench was awful.”

“Just imagine the filth. People were doing crazy things and going to the bathroom in sinks and showers.”

“A lot of people were crying and freaking out.”

“We are trapped aboard a floating petri dish without power, air conditioning, or fresh water.”

“It’s degrading. Demoralizing, and then they want to insult us by giving us $500″

 Disgust: Guests were being forced to defecate into plastic bags and place it outside their rooms as toilets on board the Triumph backed up following the electrical failure Foul: Passengers on board the Carnival Triumph reported that floors were being flooded with raw sewage from overflowing bathrooms

 Where's my charger: After days without power a generator was airlifted unto the ship today and many people took the opportunity to charge their phones

After reading a number of articles describing what happened before, during and after the engine fire aboard the Carnival Triumph, the parallels between this Ship of Horrors and our Ship of State become self-evident. You have the CEO and top executives of Carnival only concerned about their wealth, power and control of the company. Rather than thinking long term and making decisions that might be detrimental to their short term quarterly earnings, but insure the long –term financial health and reputation of the company, their decision was driven by their true masters on Wall Street. Instead of taking the ship off-line to make vital repairs and  necessary investments, they just papered over signs of an imminent disaster and turned to public relations spin and propaganda as there preferred course of action. When disaster “suddenly” struck, the management and executive officers were unprepared, slow to react, and more concerned with their reputations than about the health, safety and welfare of the passengers. Much more could have been done to alleviate the misery of the 3,400 passengers. Carnival could have had a large generator helicoptered onto the deck and used to produce enough electricity to run some lights, ventilation, refrigeration and toilets. It appears that this ship had two engine rooms and only one was damaged by fire. They could have restarted the undamaged engine room and would have had enough power for most normal functions in the cabins of the ship, and probably some capability to propel the ship towards port. The disgraceful lack of urgency and refusal of top management to attempt every possible solution to this crisis is a lesson to be learned by passengers and citizens alike. They don’t care about you.

Rev. Wendell Gill’s experience onboard the Triumph provides a glimpse into our future. He immediately recognized the leadership of the ship was non-existent and it would be up to people helping people if they were to make it through the ordeal:

“What you had was a tale of two ships. You seldom saw a deck officer. I never saw the captain. Some of the people in the upper areas had plenty of air, but down below, it was unlivable. It was like a sauna of sewage. It was the people on the boat that saved Carnival. In an adverse situation, most people will rise to help — that’s just the human spirit.”  

Reverend Gill and his wife noticed that no one from Carnival was stepping up to help the elderly and sick get around. The Gills, along with other concerned passengers, decided to take matters into their own hands, carting mattresses and bedding up from the lower decks. They witnessed the worst side of human nature in the inaction of Carnival leadership, along with some people becoming drunk, disorderly and fighting over food. But they also witnessed people coming together under difficult circumstances, with many in the upper cabins sharing their space with those from the lower uninhabitable decks. The passengers created their own shanty town of tents on deck and in the cooler hallways. The vast majority of people acted like decent human beings. Kindness, sharing, and helping one another won the day. This voyage through hell is a precursor of what lies ahead for everyone in this country. When vital systems fail, the lights go out, and your beloved government leaders are nowhere to be found, how will you fare? Don’t count on someone from the government to lead when we are set adrift in a sea of chaos created by them. The politicians, bankers and bureaucrats will be scrambling to save themselves. Your family, friends, and neighbors will be the only people you can rely on. Your caring government doesn’t really care about you.

Cruisin for a Bruisin      

“Sometimes people don’t want to hear the truth because they don’t want their illusions destroyed.” Friedrich Nietzsche

The similarities between the horrific voyage of the Carnival Triumph and the tragic voyage of the dysfunctional ship of state we call America are many. We have a ruling class consisting of the President, Congress, Judiciary, Central bankers, Media titans, and goliath corporation CEOs who care not for the citizens of this country. You are ignorant peasants in their eyes. They only care about maintaining and expanding their wealth, control and power through the complete capture of our financial markets, political system and media propaganda to the masses. The health and welfare of the peasants isn’t even on their radar screen. The ruling class steering this ship of fools have no interest in the truth or the best long –term interests of the country. The vast majority of the passengers on this impaired listing ship prefers to believe the propaganda and lies spewed by the captain and his minions. They prefer the illusion of safety and security to the truth about the real condition of this ship. When the engines of this ship come to a grinding halt, their illusions will be shattered. Big government will come up small when it counts. The government propaganda and public relations will be revealed as nothing but hot putrid air and fecal matter.

Michael Ramirez Cartoon

Speaking of fecal matter, President Obama’s State of the Union address, which was watched by 33 million (down from 52 million in 2009) believers, was a perfect reflection of the thinking that led to the Carnival Triumph disaster. The reality facing the country is: $220 trillion of unfunded entitlement liabilities; a $16.5 trillion national debt; annual deficits exceeding $1 trillion; 48 million citizens on food stamps; 11 million people on SSDI; a true unemployment rate of 23%; true inflation exceeding 5%; record high gasoline prices; 0% interest rates for senior citizen savers; free money for criminal bankers provided by their sugar daddy Bernanke; not one criminal prosecution of a Wall Street executive for the greatest financial fraud in history; a war department that spends $1 trillion per year and fights undeclared wars around the world; a chief executive that invokes dictatorial executive orders to murder Americans with his fleet of predator drones and imprison citizens indefinitely without charges; and a bureaucratic nightmare called Obamacare that will drive up deficits, drive up healthcare costs for every family, enrich the healthcare industrial complex, drive doctors into retirement, and drive small businesses into bankruptcy.

Rather than deal with this reality, Obama chose the Carnival Cruise Line method of public relations, misinformation, denial and delusion. He has embraced the Big Lie concept as if he had created it. With a straight face he proposes “investments” in infrastructure, new jobs programs, new education initiatives, more green energy projects, pollution control schemes, bailing out more underwater mortgages, and raising the minimum wage, all done for the children – and it won’t add one cent to the deficit. Instead of leveling with the American people and explaining the dire economic issues confronting our nation that require sacrifice, reality based thinking, and tough choices, we got more platitudes, class warfare, divide and conquer, phantom spending cuts, disingenuous twisting of the truth, intellectual dishonesty and fuzzy math. Public relations spin created by Madison Avenue maggots and pronounced grandly by corrupt puppet politician hacks will not prevent the catastrophic engine failure that will leave this country adrift in a sea of its own feces.

Our cruise of illusions and delusions is headed for troubled water. The math challenged citizens on this ship have been enjoying the 24 hour pizza buffet without the labor required to pay for the bounty. When your leaders boldly lie and tell you we don’t have a spending problem, refer to proposed spending increases as “investments”, and hail $1.6 trillion of spending cuts that did not happen, you’ve got a ship that will be signaling SOS in the imminent future. Both political parties are laughable in their blathering about spending cuts as Bush and his Republican cronies drove spending from $1.9 trillion in 2001 to $3.0 trillion in 2008 with their unfunded wars, unfunded new entitlements (Medicare Part D), Wall Street bailouts, and creation of police state agencies (DHS); while Obama and his Democrat co-conspirators have driven spending up to $3.8 trillion in four years with new unfunded entitlements (Obamacare), expansion of warfare in the Middle East (they sit on top of “our” oil), $800 billion stimulus handouts, $60 billion hurricane relief pork handed out for $25 billion of uninsured losses, and bailing out banks, auto companies, homeowners, and other gamblers who took undo risks and lost to the tune of hundreds of billions. Politicians and the inhabitants of this country have forgotten there are consequences to their actions and inactions.

Carnival Cruise Line is trying to buy off the passengers with refunds and $500 bribes to keep them quiet and sedated, while protecting their continued hundreds of millions in profits and million dollar bonuses for their executives. The ruling class in the United States has bought off the American people with entitlement promises that can’t possibly be honored, food stamps, SSDI, tax rebates, homebuyer tax credits, loan modification programs, Cash for Clunkers, payroll tax cuts, $1 trillion of taxpayer financed student loans, taxpayer financed subprime auto loans, and a myriad of other handouts designed to keep the masses sedated, while the ruling class continues to pillage the national wealth. It’s as if the entire country has been charging their food, drinks, excursions, and purchases to their room number and the bill has reached $16.5 trillion, rising by $3 billion per day. This voyage is reaching an end and the bill is coming due. The engine is on fire but the captain is telling us all is well. Eventually, everyone will know the captain lied.

Everybody knows that the dice are loaded
Everybody rolls with their fingers crossed
Everybody knows that the war is over
Everybody knows the good guys lost
Everybody knows the fight was fixed
The poor stay poor, the rich get rich
That’s how it goes
Everybody knows
Everybody knows that the boat is leaking
Everybody knows that the captain lied
Everybody got this broken feeling
Like their father or their dog just died

Leonard Cohen – Everybody Knows

 

survival seed vault

INCOMPREHENSIBLE

When I read stories like the one below and the information about how much people have saved for their retirement, I’m flabbergasted by the delusional, utterly ridiculous behavior of American consumers. We know for a FACT that 60% of all workers in the country have less than $25,000 of total savings. Many have absolutely nothing saved. Even better, over 25% of all 401k participants have borrowed against their 401k plan as of the end of 2010. This data is for people with jobs. How about the 88 million people who aren’t in the labor market? I wonder how much savings they have. In order to retire at 65 and live above the poverty line, people need to have saved at least a couple hundred thousand dollars. Those who retired in the 1980s and 1990s had equity in their homes, many had defined benefit pensions, and could rely on Social Security and their savings.

Today you have 55 year old people with $25,000 of liquid assets earning .15%, underwater homes, no pension plans, and $15,000 of credit card debt. They cannot afford to retire. They will stay in the labor market until the day they die. This is not good news for the Millenials.

What I find incomprehensible is that Americans ramped up their spending in the 1st quarter of 2012 and their savings rate in back at a four year low of 3.9%. With the data about retirement savings being so pitiful consumers SHOULD BE saving 10% of their disposable income like they did in the early 1980s. Going further into debt in order to enjoy going out to dinner two times per week is about the stupidest thing anyone could do. And our leaders, media and Ivy League trained economists actually encourage this delusional foolish behavior. Can this many Americans be this stupid? What are they thinking? Are they counting on the government to come to their rescue when they are 75 years old, broke, homeless, and begging?

I find myself shaking my head and talking to myself when I see this data and watch the behavior of the majority. We’re surely doomed.   

Delaying retirement: 80 is the new 65

NEW YORK (CNNMoney) — A quarter of middle-class Americans are now so pessimistic about their savings that they are planning to delay retirement until they are at least 80 years old — two years longer than the average person is even expected to live.

It sounds depressing, but for many it’s a necessity. On average, Americans have only saved a mere 7% of the retirement nest egg they were hoping to build, according to Wells Fargo’s latest retirement survey that polled 1,500 middle-class Americans.

While respondents (whose ages ranged from 20 to 80) had median savings of only $25,000, their median retirement savings goal was $350,000. And 30% of people in their 60s — right around the traditional retirement age of 65 — that were surveyed had saved less than $25,000 for retirement.

As a result, many people aren’t in a hurry to quit their day jobs.

Three-fourths of middle-class Americans expect to work throughout retirement. And this includes the 25% of Americans who say they will “need to work until at least age 80” before being able to retire comfortably.

The 2012 Retirement Confidence Survey: Job Insecurity, Debt Weigh on Retirement Confidence, Savings

March 2012 EBRI Issue Brief #369 Paperback, 36 pp. PDF, 1,585 kb Employee Benefit Research Institute,  2012

Download Issue Brief PDF

Executive Summary

  • Americans’ confidence in their ability to retire comfortably is stagnant at historically low levels. Just 14 percent are very confident they will have enough money to live comfortably in retirement (statistically equivalent to the low of 13 percent measured in 2011 and 2009).
  • Employment insecurity looms large: Forty-two percent identify job uncertainty as the most pressing financial issue facing most Americans today.
  • Worker confidence about having enough money to pay for medical expenses and long-term care expenses in retirement remains well below their confidence levels for paying basic expenses.
  • Many workers report they have virtually no savings and investments. In total, 60 percent of workers report that the total value of their household’s savings and investments, excluding the value of their primary home and any defined benefit plans, is less than $25,000.
  • Twenty-five percent of workers in the 2012 Retirement Confidence Survey say the age at which they expect to retire has changed in the past year. In 1991, 11 percent of workers said they expected to retire after age 65, and by 2012 that has grown to 37 percent.
  • Regardless of those retirement age expectations, and consistent with prior RCS findings, half of current retirees surveyed say they left the work force unexpectedly due to health problems, disability, or changes at their employer, such as downsizing or closure.
  • Those already in retirement tend to express higher levels of confidence than current workers about several key financial aspects of retirement.
  • Retirees report they are significantly more reliant on Social Security as a major source of their retirement income than current workers expect to be.
  • Although 56 percent of workers expect to receive benefits from a defined benefit plan in retirement, only 33 percent report that they and/or their spouse currently have such a benefit with a current or previous employer.
  • More than half of workers (56 percent) report they and/or their spouse have not tried to calculate how much money they will need to have saved by the time they retire so that they can live comfortably in retirement.
  • Only a minority of workers and retirees feel very comfortable using online technologies to perform various tasks related to financial management. Relatively few use mobile devices such as a smart phone or tablet to manage their finances, and just 10 percent say they are comfortable obtaining advice from financial professionals online.