Posted on 15th September 2014 by Administrator in Economy |Politics |Social Issues

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Posted on 13th September 2014 by Administrator in Economy |Politics |Social Issues

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“Facts are stubborn things, but statistics are pliable.” ― Mark Twain

I never believe government manufactured numbers. They will always be adjusted, massaged, and manipulated to achieve a happy ending for the propagandists attempting to control and fleece the sheep. Yesterday, the government produced retail sales numbers for August that were weak and the corporate MSM propaganda machine immediately threw up bold headlines declaring how strong these numbers were. Positive stories were published on the interwebs and Wall Street hack economists were rolled out on CNBC, where the bubble headed bimbos and prostitutes for the status quo like Jim Cramer and Steve Liesman declared the recovery gaining strength. Woo Hoo.

If everyone else is whipping out that credit card, why aren’t you? Credit card debt has reached a new post recession high. They tell me consumer confidence is soaring. Forget about the 92 million working age Americans supposedly not in the labor force. Forget about real household income hovering at 1999 levels. Forget about median household net worth still 30% lower than 2007. Forget about what you see with your own two eyes in malls, strip centers and office parks as you motor around our suburban sprawl empire of debt. Those Store Closing, Space Available, and For Lease signs mean nothing.

I didn’t get a chance to peruse the commerce department drivel until this morning. They put out unadjusted data and adjusted data. Shockingly, the adjusted data is always rosier than the unadjusted data. I wonder why? I can understand the rationale for adjusting month to month data due to holidays and calendar events. But I still don’t trust the adjustments. There should not be a major difference when comparing year over year data. The adjusted data should reflect the same relationship to the unadjusted data on a year over year basis. Well guess what? It appears our friendly government drones may be pumping the current data to give the appearance of recovery. Here are my observations after taking a look at the government propaganda report:

  •  The unadjusted retail sales were only 3.2% higher than last August. Considering government reported inflation of 2%, that is a pretty shitty result. But have no fear. The “ADJUSTED” retail sales for August were 5.0% higher than last August. WTF? Guess which number gets reported to the sheep?
  • Hysterically, your government drones consider lending deadbeats $40,000 for seven years with no money down to drive away with a GM deathtrap SUV as a retail sale. The billions in subprime auto loans led to an 8.8% YoY surge in “ADJUSTED” auto sales. It seems the unadjusted number only went up 5.3%.
  • When you back out the Federal Reserve/Wall Street pumped auto sales, which will ultimately result in billions of written off bad debt (you’ll pick up the tab), unadjusted retail sales were only 2.7% higher than last August. With real inflation of 5% or more, real retail sales are negative on a year over year basis.
  • Despite financing deals of 4 years with no interest, furniture and electronics retail sales were flat versus last August. If there really is a housing recovery and 2.1 million more Americans are employed versus last August how could these discretionary sales be flat, and negative on an inflation adjusted basis?
  • Grocery store sales were up only 2.1% over last year. Even the government is reporting 2.7% food inflation in the last year. We all know it is closer to 10%, so people are actually reducing the amount of food they are buying. That is a sure sign of an economic recovery.
  • Clothing store sales were flat and department store sales were negative versus last August. So much for the back to school storyline. I do believe August is back to school time. The Sears and JC Penney Bataan Death March trudges toward bankruptcy.
  • What did surge was sales at restaurants and bars. They soared by 6.8% versus last August. We already know Darden, Yum Brands and McDonalds have reported dreadful results, so either the government is lying, soaring food prices are being passed on to customers, or people are so depressed by this awesome economic recovery they are drinking themselves into a stupor.

As a side note on the accuracy of this government data, in a previous role at IKEA, when I was a much younger man, I was responsible for filling out the monthly government retail surveys for the Census Bureau. The government drones collecting this data do not check it. They do not require proof that it is right. It is self reported by retailers across the country. Filling out this crap for the government was about as low on my priority list as whale shit. If I was really busy, I’d make the numbers up, scribble them on the form and put it in the mail. The numbers the government are accumulating are crap. And then they massage the crap. And then they publish the crap as if it means something. It’s nothing but crap.

When you see the headlines touting strong retail sales, you need to consider what you are actually seeing in the real world. RadioShack will be filing for bankruptcy within months. Wet Seal will follow. Sears is about two years from a bankruptcy filing. JC Penney’s turnaround is a sham. They continue to lose hundreds of millions every quarter and will be filing for bankruptcy within the next couple years. Target and Wal-Mart continue to post awful sales results and have stopped expanding. And as you drive around in your leased BMW, you see more Space Available signs than operating outlets in every strip center in America.

My anecdotal proof of this relentless slow motion retail trainwreck is twofold. We received our second 30% off discount coupon from Kohl’s in the last three weeks. We are so indifferent to these constant offers that we didn’t even use the first one. I have to wear dress clothes to work every day, so I went over to Kohl’s this morning when they opened at 8:00 am to get some dress shirts and pants.

The parking lot was an oasis of empty spots and there were maybe 5 customers in the entire store. I went to the mens’ section and was shocked to see about two dozen 60% to 80% off racks. There are usually two or three racks. The store was overflowing with summer merchandise. Summer is over. The store should have been overflowing with Fall merchandise. They are clearly in the midst of an inventory disaster. I found excellent dress shirts on the 70% off rack. Everything I bought was at least 50% off, even before my 30% coupon and another $10 menswear coupon.

I live in a relatively upscale suburban area and still this Kohl’s is an absolute disaster. Their gross margin is going to be hammered. Profits are going to implode. Kohl’s has always been a favorite retailer of the middle class. Decent quality at reasonable prices. Their comp store sales were between positive 5% and 15% for years, until the 2008 financial collapse. Their struggles since then coincide with the decline of middle class incomes and the fake jobs recovery. The fact that they are spiraling downward flies in the face of the propaganda being spewed by the government and media.There is no recovery for the average American.

My second data point happened on Thursday. An accident on the Turnpike forced me to take Lincoln Drive and Germantown Pike home from work (1 hour and 55 minutes of agony). I hadn’t taken this route in about six months. Germantown Pike winds through the Chestnut Hill section of Philly. This is an artsy fartsy area with boutique retail, chic outlets, and fancy restaurants. The upper middle class frequents the area. The retail stores were always open, occupied and busy.

Not anymore. I saw dozens of empty storefronts, Space Available, and For Lease signs. The open stores had no customers. The trendy eating establishments had few patrons. Even the yuppie latte drinking areas are beginning to crumble. Every office park I passed had Space Available signs in front. The amount of vacant retail and office space in this country is too vast to comprehend and is being under-reported by the real estate whores whose job it is to rent space. Ignoring the facts and the truth doesn’t change the facts and the truth.

Do you believe the government and the corporate media, or do you believe your own two eyes?

You can ignore the government reported happy talk. When retailers and restaurants report their actual sales and profits, the truth shall be revealed. It will set you free.



Posted on 10th September 2014 by Administrator in Economy |Politics |Social Issues

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The chief Golfer of the United States is taking time out from night putting with Reggie Love to address the nation tonight. It’s funny, but I don’t know anyone who favors going to war again in Iraq to defeat some terrorist group created by the CIA and armed by the U.S. in our other war in Syria. But our beloved corporate media propaganda machine has conveniently published a poll that shows Americans overwhelmingly want us to go to war with a group who didn’t exist six months ago, but are now an existential threat to our freedoms and very existence as a nation. McCain and the rest of the Fox News Neo-Cons assure us that ISIS is pouring over our southern borders to blow us all up.

If you ever needed more proof that One Party runs this country, this bullshit episode of fear mongering takes the cake. You know this poll was manufactured on the eve of Obama’s war speech to give the sheep confidence this is the right thing to do. The military industrial complex was in danger of seeing falling profits. They need a new enemy. Everything Obama touches turns to shit domestically. He needs a wag the dog war to distract the sheep from his immigration debacle, his Obamacare clusterfuck, his $1 trillion deficits that have destroyed the middle class, his jobless jobs recovery, his housing recovery without home buyers, and a myriad of other fuckups.

Make no mistake about it, Obama is proposing war in Iraq. If you shoot missiles and use aircraft to blow shit up, you are at war. According to the Constitution, only Congress can declare war. But Obama and the feckless politicians in Washington DC piss on the Constitution. President Executive Order will do as he wishes. Everyone in Washington DC loves war. They love creating non-existent threats. When did the JV team become so dangerous? Why did we arm these same Muslims in Syria when trying to depose Assad for the Saudi/Qatar pipeline to Europe? Where did ISIS get all their money to get all that military equipment? Qatar, Saudi Arabia, Israel, U.S????

So Obama is going to propose that we spend billions blowing up the billions in military equipment that we shipped over to Iraq in the last ten years. Who benefits from this circular clusterfuck? Arms dealers and debt peddlers. Who runs this country? Wall Street and the military industrial complex, that includes the millions of government workers and the politicians in the pockets of the banks and corporations.

Does anyone actually believe the results of this poll? Are the sheep in this country really that stupid? Are they really that fearful of a bunch of ragheaded camel jockeys in a country 10,000 miles from our shores? What do they think we will achieve by blowing up this faction of radical Muslims? Another faction of radical Muslims will just appear in another six months. Is this exactly what TPTB want? Obama doing this on the eve of 9/11 is a disgusting display of playing upon the fears of the ignorant masses. I truly despise the man.

This country already adds $2 billion per day to the national debt. We already have $200 trillion of unfunded promises on the books. We already spend $1 trillion per year on the military. And the majority of Americans want to ramp up our intervention in the affairs of other countries? Is it because we have been so successful in Iraq, Afghanistan, Libya, Syria, Egypt, Ukraine, Yemen and Iran?  This is beyond the comprehension of any rational thinking human being. Living in the midst of morons, criminals, liars, propagandists, and greedy fucks during the decline of this warfare/welfare state is surreal and infuriating. I just want to scream when I think of the idiocy playing out across this world.

WSJ/NBC Poll: Almost Two-Thirds of Americans Back Attacking Militants

President Barack Obama will lay out plans on Wednesday to combat the militant group Islamic State to an American public that has grown increasingly hawkish.

Almost two-thirds of participants in a new Wall Street Journal/NBC News poll believe it is in the nation’s interest to confront the group, known as ISIS and as ISIL, which has swept through Syria and northern Iraq and recently beheaded two U.S. journalists. Only 13% saw no national interest in acting.

In addition, some 40% in those polled said any U.S. military action against ISIS should be limited to airstrikes, and an additional 34% backed both airstrikes and committing U.S. ground troops to the battle–a remarkable mood swing for an electorate that just a year ago recoiled at Mr. Obama’s proposal to launch airstrikes against Syria.


Obama Lays Out Broad Strategy for Years of War Against ISIS

White House Denies ‘Mission Creep’ as War Expands

by Jason Ditz, September 09, 2014

All of the specifics won’t be available until Wednesday night, but those who were given a “preview” of President Obama’s strategy for the ISIS war say he is laying out a massive undertaking to wipe out the militant group worldwide.

Brookings President Strobe Talbott says that the administration presented ISIS as a “unique danger, not just for the region, but for the world,” and one that the US could only respond to by exterminating it.

What started out as an “emergency” humanitarian campaign to save people trapped on Mount Sinjar, most of whom weren’t trapped there to begin with, has escalated in a matter of weeks into an open-ended war with ISIS that even the most optimistic Pentagon planners say is going to take years.

While he publicly hasn’t confirmed the plans yet, expanding the war from Iraq into neighboring Syria also seems a foregone conclusion at some point, as officials have been downplaying the idea that they could stop ISIS in one country without stopping them planet-wide.

A global war with no strategy for victory and no end in sight certainly wasn’t what the American public were presented with when the campaign began, but White House officials continue to deny that “mission creep” is occurring.

Mission creep has long been a very slow process of escalating the goals of a war, but the administration still hasn’t made it clear that what they’ve set out so far is the totality of the war’s goals, and perhaps more disconcertingly, it’s escalated at a pace far beyond any reasonable definition of “creep.”

The White House tried to pass off the expansion of the war into Anbar as protecting the Baghdad Airport, on the notion that if the Haditha Dam was destroyed it might conceivably threaten the airport, just under 200 miles downstream and not actually built along the shoreline.

But wiping out ISIS in multiple countries and putting something more pro-US in its place is a far broader goal than “keeping the embassy safe” or some other platitude about why the new war was launched, and the scariest part is we aren’t even sure that’s where it’ll finish off, with officials tacking new goals on seemingly every couple of days. Obama’s Wednesday speech will in no way resemble his start of the war speech, and his speech a few weeks down the road will probably be starkly more bellicose, as the war keeps expanding.

Via Anti-War.com




Posted on 5th September 2014 by Administrator in Economy |Politics |Social Issues

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The Wall Street jackoffs all expected an increase in jobs of 200,000 to 250,000 for August. I guess being off by 30% to 40% is considered accurate for an Ivy League educated economist making over $1 million per year. The manipulated, massaged, seasonally adjusted, excel spreadsheet employment data has been released for public consumption by our keepers. They will now tell you what you are supposed to believe regarding the fake numbers. Maybe the weather was too warm for hiring. Maybe it rained or didn’t rain. Maybe ISIS and the looming threat of terrorist attack is deterring employers from hiring. It couldn’t have anything to do with Obamacare, Federal Reserve policies, government regulations and taxes, or the fact that families have 40% less net worth today than they had in 2007.

It’s actually far worse than the reported headline. One survey says 142,000 jobs were added. Of course the BLS excel spreadsheet birth/death adjustment added 102,000 jobs to the calculation, the highest adjustment for August in history. We all know small businesses are hiring like mad before full implementation of Obamacare after the elections. The broader population survey shows that only 16,000 more people were employed in August than in July. The MSM is silent about that number. The sheep must be kept sedated.

And now for the best part. While reporting horrifically bad employment numbers, our beloved BLS drones also reported the unemployment rate dropping to 6.1%, the lowest rate in six years. Glory be!!! The economy must be booming and workers must be so ecstatic they are spending like there’s no tomorrow. What? Retail sales have been declining? How can this be? It sure smells like someone took a shit under the bed and won’t admit it. But let’s ignore the cognitive dissonance you are feeling and dig into the bullshit BLS numbers to get a few kernels of truth:

  • The labor force participation rate fell to its 36 year low of 62.8%. There are 248.2 million working age Americans and only 146.4 million of them are employed. What are the other 101.8 million working age Americans doing? The labor participation rate in 2007 was over 66%. It was 67% in 2000.
  • Here is a Common Core Math question for you. If the number of working age Americans goes up by 206,000 and the number of employed Americans only goes up by 16,000, how could the unemployment rate FALL from 6.2% to 6.1%? I know. That’s a real puzzler unless you can learn to think like a government lackey or a politician. You see, according to the BLS, in the midst of a supposed economic recovery, 268,000 Americans just willingly decided to leave the workforce because they no longer need a job. There are now 92.3 million people who are so financially well off that they have left the workforce and do not want a job. The laughability of these figures is off the fucking charts.

  • Since the start of Obama’s economic recovery 6.5 million Americans have found jobs (mostly part-time and shitty service jobs), while over 10 million have left the workforce. Presto!!!! – an unemployment rate plunging from 10% to 6%. I love government math. I wish I could use it in my everyday life. I’d be a multi-millionaire without working.

To show you how warped and fucked up our economic system has become, as soon as the terrible employment numbers were released the stock market futures rallied. The greedy fucks and their HFT supercomputers feed off the carcasses of the middle class like vultures. We are living in an era of storylines. The Deep State attempts to paint the rosiest picture, while real people in the real world become more impoverished by the day. Every storyline is crushed by reality. It wasn’t the weather. There is no jobs recovery. There is no real GDP growth. QE and ZIRP have not benefited you or anyone not in the top .1%. Everything you are told by the government, Wall Street or the MSM is a lie. Will the sheep ever revolt? I don’t think so. The iPhone 6 is coming out next week and the NFL season kicked off last night. How about them Seahawks?

We’re doomed.



Posted on 5th September 2014 by Administrator in Economy |Politics |Social Issues

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You won’t be getting this situation report from the American Corporate Media Propaganda Machine. You judge who is telling the truth.

Via Vineyard of the Saker

September 4th 23:53 UTC/ZULU Ukraine SITREP: Maybe, just maybe?

Many major developments to report today.  First, though I was trying very hard to contain my excitement over the past days, the level of success the Novorussian Armed Forces (NAF) against the Junta Repression Forces (JRF) appears to be absolutely amazing and, should Mariupol fall, which appears to be likely, I would speak of a strategic victory, something which I am normally extremely reluctant to do, especially when speaking to a force which only recently was a volunteer militia force.  How could that possibly have happened?

Military situation:

I think that there is a second expression which now can be used without exaggeration: all the signs are that the JRF have reached their breaking point: this is the moment when a military force suddenly and completely collapses, like a damn which blows out under the pressure of water.  The JRF is not retreating on one, two or even three directions, it is retreating everywhere (except north of Lugansk).  Entire battalions are leaving the front under orders of their battalion commanders and without the approval of the Junta leaders.  At least one such battalion commander is already being judged for desertion.  The entire Ukie leadership seems to be in a panic mode, especially Iatseniuk and Kolomoiski, while the Nazis are mad as hell at the Poroshenko administration.  There are constant rumors of an anti-Poroshenko coup by outraged Nazi nationalists.  And then, there are the absolutely staggering Ukrainian losses.  There is one such list which I reader sent me who, according to my reader, was published on Zero Hedge, but I could not find it there.  I did find it here though:

Ukrainian forces casualties and losses 2 May – 21 August
Total: 32.702
Dead and wounded: 20.274
Prisoner, deserters and missing: 12.418
Destroyed or captured materiel:
I. Aviation
- 16 Su-25 (one captured 7 July)
- 7 Su-24
- 2 MiG-29
- 1 AN-30
- 6 drones
- 2 AN-26
- 2 IL 76
I.a Helicopters
- 20 attack and transport Mi-24, Mi-17 y Mi-8
II. Ground forces materiel
Tanks Total: 347 ( 68 captured )
- 319 T-64 ( 65 captured )
- 2 T-64 Bulat
- 7 T-72 ( 3 captured )
- 19 T-84-U Oplot
Armored vehicles Total: 602 ( 119 captured )
- 163 BMP Infantry Fighting Vehicle, tracked ( 69 capturados )
- 125 BMD IFV Paratroopers, tracked ( 9 captured )
- 312 BTR Armored Personnel Carrier, wheeled ( 39 captured )
- 2 BRDM Scout Vehicle, wheeled ( 2 captured )
Artillery Total: 180 ( 122 captured pieces )
- 4 SO-203 2S7 “Pion” 203mm
- 5 SAU 2S3 “Acacia” 152mm (1 captured )
- 30 SAU 122 2S1 Gvozdika 122mm ( 25 captured )
- 2 Mortars 2S4 Tyulpan 240mm(2 captured
- 6 Mortars SAU Nona 120mm (6 captured )
- 21 Antiaircraft guns ZU 23-2 ( 18 captured )
- 24 Rocket launcher Grad 122mm ( 24 captured )
- 11 Rocket launcher Uragan 220mm (4 captured )
- 45 howitzer D-30 122mm ( 10 captured )
- 32 mortars82mm ( 32 captured )
Trucks and cars Total: 153 (124 captured )
- 5 Hummer
- Jeep
- 25-66 GaZ
- Staff car
- Mobile crane
- 1 ZIL 131
- 2 KrAZ
- 58 Ural trucks
- 69 Kamaz trucks
- 4 UAZ 469
Last edited by von Junzt; 23 Aug 14 at 07:42. 

Now I am not endorsing this list since I don’t even know who made it up or on what basis.  But I will say that it is consistent with this list and it is also consistent with this one (thanks to GM for the link!!).   Finally, this list is also consistent with all the footage shown on the various video hosting sites such as YouTube.  I will even add that this list is clearly incomplete since it was made before the biggest Ukie losses occurred.  But let’s not look at the exact numbers, let’s look at the suggested magnitude.  This tells us that:

  • 40,000+ Ukrainian soldiers have died.
  • 600+ armored vehicles have been lost.
  • 200+ artillery pieces have been lost (probably many more in reality).
  • Most of the Ukie aviation in flying condition has been lost.

If, as it appears likely, the real number of dead JRF soldiers is anywhere near the 30’000+40’000+ figure, then this is something absolutely unique in modern warfare.  There might be an exception to this I have missed, but as far I can know in every single conflict since WWII (and including WWII), civilians have died in far greater numbers than combatants.  This is also absolutely true of NAF soldiers who have died in far smaller numbers than Novorussian civilians.  So unless these figures are completely off the mark, and I see no reason to believe this, the Junta forces were absolutely massacred in an horrible butchery which cannot completely be explained by the superb fighting skills of the Novorussians: clearly the Junta has used these forces as cannon fodder with not even a modicum of care, nevermind support, for them.  Yes, the Novorussians had God, morale, common sense, the Truth, the GRU, history, decency, international law, covert support from Russia and whatever else on their side but that does not explain the mind-boggling casualty figures of the Ukie side.

To me a life is a life, and a Ukie life is no less precious than a Russki life.  Yes, I am delighted and relieved that the JRF were defeated and that the horrors which the Novorussians had to live through will possibly end soon.  But I feel heartbroken and immensely said for the thousands of innocent Ukrainians who were used by their Junta and sent to die in the process of a criminal operation whose goal was the ethnically cleanse the entire Donbass of its population.  And I am proud and happy by the way Russia and the Novorussians have treated the Ukie deserters and POWs.  Even the worst ones, the artillery crews, which were shown videos of whom they murdered and of what they destroyed, they were confronted with their victims and sometimes they were ordered to work to rebuilt, as much as can be, the buildings which they had destroyed (some broke down in complete hysterics, by the way).  But they were no shot, tortured, mistreated in any way.  They received medical attention, they were washed, clothed, fed and eventually sent back home.  I consider that treatment another huge moral victory for the Russian Orthodox side whose effects it will take many years to fully access.

The bottom line is this: Poroshenko promised a victory in a matter of weeks and his forces suffered one of the most total defeats in the history of warfare.  Can the Ukies rearm?  Yes, to some degree.  Do they still have huge weapons stores?  Yes, but all the (comparatively) better gear has been used by now.  Can they still conduct a 4th, 5th and 6th mobilization?  Possibly.  Though the public mood is ominous at this time.  Can the AngloZionists send them instructors, equipment and money?  Yes.  Will that turn the tide?  Probably not.  Unless the Ukies have held back and secretly trained a large number of soldiers over the past 3-4 months (like the Novorussians have done in Russia) and unless these soldiers are now ready to be sent in, fully equipped and ready to go, I don’t see the JRF bouncing back for a very long time.  But the most likely thing is that this ridiculous “Banderastan” experiment has seriously begun sinking now and that many rats are leaving the ship.  Last, but not least, for the very first time some mentally sane voices are being heard on Ukie TV.

For example, I have seen very interesting footage of a Ukie general (possibly retired) who, speaking in Russian, told a press conference that enough people had died and that it was wrong that people born in the same country, having the same culture and the same language (yes, he really said that!) were killing each other.  He concluded “we are not only tired of shooting, we are tired of killing”.  That kind of talk was never heard only weeks ago on Ukie TV.  Sure, that creep Savik Shuster is still inviting Nazis on his 3 hour long weekly program, but I bet you that he has already made his suitcases and has an exist strategy ready (a move to Israel is what I suspect he will do).

NATO summit: the mouse that roared

It’s too early to call this one since it’s not over yet, but so far hot air and a general impression of irrelevance seems to be the only result from this summit.  First, the US and the UK have announced more sanctions which makes me wonder about the other countries.  Now they say the that US and EU will impose sanctions, but we know that the Czechs and Slovaks have promised to veto any such move.  But even if they do, this will be more of the kind of symbolic nonsense like banning Russian banks (who are leaving anyway) or Russian officials (who now see that as a mark of great honor).  The goofiest idea came from, what else, the British who want to cut Russia off the SWIFT network.  Which makes the Russians wonder how the EU wants to pay for its gas.  Oh, and then there is this 10’000 men rapid reaction force whose creation is supposed to terrify the Kremlin.  Let me tell you, as a military analyst, that rapid reaction forces are – by definition – not something you can use in a conventional war against a continental power like Russia with large number of men, artillery and armor.  That is absolutely laughable.  But even better is this: while the US and EU are discussing the creation of this force, Putin has already given the order to DOUBLE the size of the Russian Airborne Forces which, by the way, are superior (in training, equipment and capabilities) to any comparable western force, bar none.

art: Josetxo Ezcurra

Please understand me right: I am not dismissing NATO at all.  As a militarized political organization its capability for malevolence is immense, but this is primary a problem for the EU countries which, at best, are something between a US protectorate or colony, and who have to put up with the ugly consequences of being subservient to this fully US-controlled supra-national enforcement instrument.  For Russia the problem is the castrating effect NATO has on EU politicians as shown by the grotesquely stupid move by Francois Hollande to cancel (probably only *delay*) the delivery of the Mistrals to Russia.  That kind of nonsense is the real by-product of NATO membership, but that hardly makes NATO a credible military threat.

Speaking of Hollande and his decision to delay the delivery of the Mistrals, the BBC gave some figures of the costs involved for France:

A French diplomat earlier said the contract was suspended until November, and the delay “could cost us 1bn euros”.  The deal is worth 1.2bn euros – and Russia is reported to have paid most of it, so breach of contract would mean France having to reimburse that money.  In addition, France would be liable for an extra 251m-euro penalty payment, French news website LCI reports. 

Of course, the real costs of this debacle is a huge loss of credibility for France and its international image.  It’s is all very well to proudly say “la France! la France!” but when you act as a poodle you get treated like one.  In the polite world of international diplomacy nobody will say much, but everybody will know that everybody knows.  And, of course, none of that hurts Russia one bit.  At the most, the full complex of western “sanctions” against Russia are a short-term mild annoyance and a fantastic opportunity to finally tackle some much delayed and most urgently needed reforms.  Frankly, I think that these sanctions are a blessing and, apparently, so do most Russians (according to recent opinion polls).

The EU – finally getting a little fed up?

There is no doubt that the EU’s abject subservience to AngloZionists has really hurt European economic and political interests.  Not only that, but from an EU point of view, the situation in Banderastan is getting worse and worse and even worse.  There are some signs that both the Poroshenko regime and the EU are finally becoming aware that unless they do something really, really, soon things might get much worse.  And, exactly as Oleg Tsarev had predicted it, as soon as the NAF scored its first major victories the EU and Poroshenko suddenly became interested in negotiations.  And, right on time, Putin offered his peace plan.

Putin’s 7 point peace plan

As peace plans come, this one is pretty much a no-brainer and contains only rather obvious points.  Hardly earth shattering, but still a very good basis, especially when combined with a clear message to the Ukies that Russia is not a part to this conflict and that everything must be negotiated in direct talks with Novorussia.  As for the Novorussians, they have already basically agreed to a slightly amended version of the plan.  Interestingly, so apparently has Poroshenko.  In contrast, Iatseniuk is enraged and apparently wants to built a wall along the Russian border (he really seems off his meds recently).  Finally, it appears that Merkel and the OSCE are fully backing the plan, while Fabius is very reluctantly “not opposed”.

Of course, we all know that the Ukies and the EU have broken every single agreement they ever committed to since this war started, but this time there is no doubt left whatsoever about the outcome should no negotiated agreement be reached.  And since the Ukies and the EU need this peace plan much more than Russia, they might want to stick to their word this time.  Maybe.

An important thing about this plan is that it contains only immediate to short-term elements.  There is nothing at all in it about any final status for Novorussia or, for that matter, of the rest of the Ukraine.  And this exact how this should be.  Why? Because what is important in this plan is not what it says, but what it implies: “you have lost and we can restart this one anytime we want“.  Yes, I know, neither the Novorussians nor the Russians have said any such thing, but remember that making threats is not the Russian way.  Russians do not promise, they do not threaten – they just act.  And if Obama, Cameron or Hollande are too stupid to understand this, Poroshenko (being, as any other Ukie “oligarch”, a Mafia boss) knows that very well.  I promise you that there is a deep level of mutual understanding between Putin and Poroshenko which no western leader will ever imagine.

The smile which says it all

For all the bullshit about nationalism and politics, they are both Russian strongmen, clan bosses, and even if Poroshenko is a tiny little insect in comparison to Putin, they still have that “clan boss” culture in common and that means that Putin has absolutely no need to make any threats to Poroshenko simply because Poroshenko already knows.  For example, I heard on Ukie TV that Putin had allegedly told an OSCE official that “if he wanted he could take Kiev in two weeks”.  Whether this is true or not (I doubt it – it can be done is less time) is not the point.  The point is that this is exactly the kind of “explanations” which Putin does not need to convey to Poroshenko, but that he might need to “clarify reality” to some western diplomat of the “intellectual caliber” of, say, Hollande or Rasmussen.

So are the Europeans waking up?  Is the Russian strategy to push a wedge between the EU and the US working?  I think that this is too early to tell, but I am becoming cautiously optimistic.  The way Merkel immediately endorsed the “Putin plan” might be a sign that at least Germany is starting to seriously feel the heat.

Tomorrow in Minsk?

Tomorrow will be huge.  Not only is the NATO summit concluding, but the Ukies are meeting with the Novorussians under the watchful eyes of Russia and Belarus.  Apparently topics will range from energy to the peace plan (the EU probably will want guarantees for its gas in exchange for supporting the plan).  The biggest threat now is that the AngloZionists and their Nazi allies in the Ukraine will be very very angry if a deal is made.  Frankly, Poroshenko is taking a big personal risk, but since his situation is already very precarious, he might have figured that an 11th hour “rebranding” of himself as a “peacemaker” might not be the worst possible outcome, especially if the Germans try hard to protect him.  As for the US, it might turn to its time-honored tradition and simply dump Poroshenko.  My biggest concern are the bona fide Nazis a la Iarosh, Timoshenko, Iatseniuk or Tiagnibok who will be absolutely outraged at any deal made with Putin.  Likewise, the oligarchs like Akhmetov and Kolomoiski (who hate each other) will also be furious, as will Hunter Biden.

art: Josetxo Ezcurra

The sad fact is that there is a entire clique of Ukrainian Nazis and oligarchs who much rather continue the war against Russia (because this is, of course, what this is really all about!) to the last Ukrainian soldier if need be rather than accepting a deal, especially a very bitter one like the one presented to Kiev right now.  Because, let’s be honest here, this will be packaged in all sorts of noble and lofty words, but we are talking about a capitulation and not some kind of meaningful compromise, at least form the Ukie point of view.

What the Ukraine really needs right now is a real process of denazification.  There is another “Ukraine” out there, at least potentially if not historically, which could be very different from the Banderastan the AngloZionists have created.  Yes, Ukrainian nationalism is the product of centuries of west European machinations and conspiracies, but this does not mean that it has to forever remain hostage of the hateful forces which have created it.  For one thing, this conflict has constantly obfuscated the fact that most Ukrainians and most Russians want an independent Ukraine to exist.  This will be hard to prove at this point, but I believe that the only region of the ex-Ukraine which really wanted to join Russia was Crimea.  The Donbass would have settled for much less.  I am absolutely convinced that the stupid Nazis really did it to themselves, that blinded by their rabid hatred of everything Russia or Orthodox they simply could not help act the way they did, because it was “in their nature“.  Now it is too late to turn things around, you cannot magically undo that horrible and crazy civil war.  But it might be possible to use the reflexion about the causes and results of this outcome to push for a real denazification of the Ukraine.  After all, no matter how brainwashed they currently are, most Ukrainians will come to realize that it took the crazy Ukie nationalists only 6 months to completely destroy their country and that all that this sick ideology of hatred and ignorance brought them is poverty, violence, humiliation and death.  But I am looking way to far ahead.

Let’s see what tomorrow brings (or not) and then where this might lead us.  What is certain is that even if tomorrow brings a vapid and meaningless NATO summit and a peace deal in Minsk, this will be way way way too early to celebrate.  At best, it will be one first step in the right direction, but only one step on a long and still very dangerous road.

Stay tuned, I will try to keep you informed the best I can.

Kind regards,

The Saker



Posted on 2nd September 2014 by Administrator in Economy |Politics |Social Issues

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This chick keeps being in the wrong place at the wrong time. Does journalism actually exist anymore or is it just propaganda and lies?

Hat tip Boston Bob



Posted on 31st August 2014 by Administrator in Economy |Politics |Social Issues

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The two charts below are about one year old. The current average cost of a Big Mac is $4.80 in the United States according to the Economist. The price has risen by 5.3% since last July and 11% since the beginning of 2013. Meanwhile, the government drones at the Bureau of Lies and Shams tell us that inflation is only up by 2% since last July and up only 3.5% since the beginning of 2013. Which figures do you think are more reflective of what you are paying in the real world? I grocery shop every Sunday morning and I know for a fact my bill is up by 30% since the beginning of 2013.

The propaganda spewed by the government, bankers, and media is wearing thin on the average American. Only the dumbest of asses can’t figure out that inflation is running at 5% to 10% on everything we need to live our day to day lives. The article below is from one year ago and captures the reality of understating inflation.

Why the ‘Big Mac’s’ Rising Prices Are More Alarming Than Its Fat Content

July 17th, 2013

by James Cornehlsen

Note: I’ve updated my periodic look at the Consumer Price Index (CPI) versus the Big Mac Index to coincide with The Economist’s bi-annual update of the Big Mac Index used for currency values.In a time when price hikes are commonplace, I took a step back and realized that some prices are rising more than others. The price of a Big Mac, for instance, has risen faster than the official rise in consumer prices and has been doing so since the late ’90s. In 1998, the average price of a Big Mac was about $2.50. Today, the average Big Mac is $4.56. If we were using the Consumer Price Index (CPI), the price of a Big Mac today should be about $3.40.

big mac index Believe it or not, the price hikes represented by the Big Mac will impact you more than the saturated fats in popular burger. By understanding the price disparities, you can make better decisions for you and your clients. The rise in the price of the Big Mac foreshadows how the printing of money is eroding the financial system’s arterial walls. The impact is broad based:

  1. Each dollar we own is buying less.
  2. For individuals relying on Social Security, the compensation for inflation is not keeping up with the prices people actually pay.
  3. The price of bonds should be much lower if interest rates fully accounted for the rise of inflation based on the Big Mac.
  4. The official economic growth rate would be lower now if prices were based on the Big Mac index.


Using the Big Mac Index to Measure Inflation


The Economistcreated the Big Mac Index in 1986. The Big Mac Index was created to compare the price of currencies between different countries. The index is based on a theory called purchasing power parity. This theory looks at the same basket of goods in each country and then adjusts for the interest rate one would pay for a loan or get for a savings account. This adjustment for interest rates makes the price of a Big Mac comparable in each country. The Big Mac Index just has one item. However, since the one item contains beef, dairy (cheese), wheat (bun), cost of labor, and the cost of real estate, I believe it is a good representation of prices in the United States and abroad.

Rather than use the Big Mac Index for comparing the value of currencies between countries, let’s take the price of the Big Mac each year within the US to see how it changes over time. You could also use this approach to look at the trend of prices for other countries as well.

By graphing the trend of the Big Mac Index each year since 1986, we see that prices have accelerated much faster than the official prices reported Consumer Price Index (CPI) – Bureau of Labor Statistics. On the Bureau of Labor Statistics’ website, CPI is defined as “a measure of the average change over time in the prices paid by consumers for a market basket of consumer goods and services. The basket includes food & beverages, housing, apparel, transportation, medical care, recreation, education & communication, and other goods & services.” However, there are two broad concerns with the CPI. First, CPI accounts for the substitution effect whereby if the price of beef increases, it is assumed that fewer people will buy beef and will instead buy chicken. Second, there is a “chained” effect, meaning the basket of goods isn’t consistent from one time period to the next. The reason for this is that it is believed people change their spending habits as prices change, which is why the Bureau of Labor Statistics revised CPI to account for substitution and the “chained” effect.

Big Mac comparisons between 1986 and 2012Since 1986, the price of a Big Mac has increased 185% from $1.60 to $4.56 today. During this same time period, the CPI has increased at a much lower rate of 110%. More disconcerting is the effect of the aggressive adjustment of monetary policy by the Federal Reserve, which began in 1999. This policy shift started with the Asian Crisis and Long Term Capital Management, followed by the Internet bubble, housing bubble, and Great Recession, and now the “New Normal” of zero federal funds rates and quantitative easing. In the context of these Fed policies, the rate of price increases for the Big Mac is almost three times greater than the official CPI.

In 1986, $1 would have purchased more than half of a Big Mac. Today you would have to cut the Big Mac into five pieces and only eat one of the five pieces for $1. Consequently, each dollar we have is buying a lot less.


Hidden Cuts to Benefits


Big Mac index vs. CPI So how does this price disparity play out in retirement benefits? Individuals receiving Social Security benefits are provided a cost of living adjustment based on the cost of living index. This index is based on the CPI. If an individual received $1,000 per month in 1999, they are receiving $1,360 today. In contrast, if the Big Mac Index were used, beneficiaries would receive $1,770. By using the CPI, the government is paying out $410 less than they would otherwise pay based on the rise in the price of a Big Mac. Throughout history, it has always been much easier for governments to quietly inflate away their excess liabilities rather than attempt outright cuts and painful austerity. The streets of Europe are a present day example of the social difficulty of outright cuts. By understating inflation, the federal government is effectively reducing the amount owed to retirees and thereby cutting the long-term deficit.


Bond Prices and Inflation


And what about bond prices and inflation? In a normal market, the price of bonds should reflect the rate of inflation. Ed Easterling, founder of Crestmont Research, links inflation to the rate of interest rates. By printing money to buy bonds, the government has pushed the interest rate of a 10-year government bond down to about 2.61%. However, Ed Easterling shows that the 10-year government bond rate should be about 1% above inflation. The current rate of inflation reported by CPI is 1.1%. Adding 1% for the increased risk of holding a bond for 10 years gives you a rate of at least 3.7%, and that’s using official inflation estimates. However, if we base our calculation on the Big Mac Index, inflation is 5.3% and adding 1% to that for the risk of holding a bond for 10 years gets a rate of 6.3%. The current interest rate of a government bond is 2.61%, but if we were to account for inflation as seen by the rise in the price of a Big Mac, the interest rate would be 5.3%. Consequently, if 10-year government bonds were to increase from 2.6% to 6.3%, bond indices would decline by about 32%. In other words, long duration, 10-year government bonds are overvalued by about 32% mainly due to persistent intervention (manipulation) by the Federal Reserve.


Propping Up GDP Numbers by Underestimating Inflation


big mac index inflation Lastly, let’s look at Gross Domestic Product (GDP). GDP is the measure used for the growth rate of the overall economy. GDP is adjusted for inflation. An understatement of assumed inflation makes the reported GDP headline number look better, and conversely an overstatement makes the calculated growth rate look worse. Using the Big Mac Index instead of the official CPI would reduce the latest GDP growth rate of 1.8% and cause the report to show that GDP declined. Consequently, economic growth looks stronger using CPI rather than the Big Mac Index.

As a result, investors are being penalized (mostly without their knowledge) with higher inflation, lower income from bonds and certificates of deposit and being led to believe that the economy is growing better than it really is.

The risk of too much debt around the world, but specifically in Europe, is reducing the growth outlook for companies. In China, the government has cut spending to keep inflation in check and their economy is now slowing down. In the last 13 years, three bubbles have emerged, each funded by the government and each artificially lowering interest rates by printing money. Each subsequent contraction has been worse than the last. Why should this latest bout of artificial growth, which is even steeper than the previous three, end differently?

This story originally ran in Dunn Warren Investment Advisors’ December Newsletter.




Posted on 29th August 2014 by Administrator in Economy |Politics |Social Issues

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The sheep have been told their confidence is at a 7 year high by the propaganda peddlers working at the behest of the oligarchy. The sheep are also told that 10 million jobs have been added since the GOTUS played his first round back in 2009. The sheep have been told the record highs in the stock market prove that all is well. If the .1% are doing fantastic, some of the wealth must be trickling down. The sheep are told that QE and ZIRP were really to save Main Street and not the bonuses of Wall Street (at record highs by the way). The sheep are told to fear ISIS, Iran, Assad, Putin, and China. The sheep are told U.S. energy independence is just around the corner and to ignore the fact that gas prices have tripled in the last ten years. The sheep are told drones will keep them safe and the DHS militarizing the police is just for their safety and security. The sheep are told guns are dangerous in their hands, but not in the hands of the government. The sheep passively eat their iGadgets and barely bleat while being led to the slaughter house.

The propaganda machine is working at hyper speed as the wheels fall off this out of control bus. But all the messaging, packaging, and lies can’t change the facts. Ignorance about the facts doesn’t change the facts. The oligarchs are getting pissed. You mindless consumers simply won’t consume as much as you used to, even with 7 year 0% interest subprime auto loans, $1 trillion of government loans to generate consumption disguised as student loans, and five credit card offers per week from the Too Big To Trust Wall Street cabal. WTF is wrong with you?

You’ve ruined the storyline used for months about horrific winter weather being the cause of non-spending in the 1st quarter. Once it stopped being cold you were supposed to spend like drunken sailors again. Just like the old days. How could you spend less in July than you did in June? You’ve only increased your spending by a mere 1.8% so far this year. With real inflation on stuff you need to live running above 5%, you’re actually spending far less than last year. No wonder confidence is skyrocketing.


A little examination into the facts behind the Commerce Department report might shed a little light on the truth about the good old American consumer:

  • 25% of all personal income in the country is either a transfer from the government to someone or from a government job. That is $3.7 trillion taken from producers and given to takers. In 2000 this figure was 21%. The relentless increase in Social Security, Medicare, Medicaid, Veterans Benefits and Other will drive this percentage to 30% by 2020.
  • Real personal income (excluding government transfers) has gone up 2.6% over the last year and this is using the false CPI figure of 1.6% to reach that pitiful number. Using a true inflation figure of 5% yields lower real personal income than last year.
  • These numbers also fail to recognize the 2.2 million increase in population. On a per capita basis, real personal income is up 1.9% in the last year.
  • Senior citizens and conservative savers are earning $120 billion less today than they did seven years ago. All the grandmothers eating cat food thank you Ben and Janet. If interest rates were allowed to adjust to market levels consistent with inflation, savers would be generating $500 billion to $700 billion more interest income that could be used to propel economic growth. Per capita real disposable income was $37,582 in May of 2008. It is currently $37,553. Again, this is using the fake BLS inflation numbers, so it is even far worse.

Is it really a shocker that Americans are spending less? The MSM is so captured by the organizations providing their advertising revenue that their faux journalists don’t even attempt to examine the facts and reach logical conclusions. Their job is to cheer lead and make excuses for why their storyline of improvement never plays out. The snow storyline is history. The surge in consumer confidence storyline has been proven false by the actual spending data. Now we move onto the surge in jobs storyline that is proven false by the personal income data. I’m sure back to school season will be a resounding success. Just wait until the holidays. The consumer will surely be back this year. And the beat goes on.

The chart below tells you all you need to know about why this recovery is false. The people who are supposed to be in their peak earnings and spending years have seen their real household incomes decline dramatically since the END of the recession in June 2009. Think about that for a moment. The only people who’ve seen their real incomes rise are those who no longer spend. I wonder if it is a coincidence that government transfers since June 2009 are up 18% and the grey hairs have seen their incomes rise?

The consumer is not back. They are not coming back. The decades long debt fueled orgy of consumption has long since peaked and we are on the long road to perdition. Confidence can’t cure our disease. More debt to cure a disease caused by too much debt will not save the patient. Our disease is terminal.