By Stephen Wellman
Only four US Treasury Statement line items practically wipe out net tax revenues YTD. Below are the four line items which are Defense Vendor, which is just a portion of the overall Defense outlays. Also there are the three so called “entitlements” as some media pundits call it, Social Security, Medicare and Medicaid. It’s only welfare if the amount you paid in is exceeded by the amount you take out. Still, who cares! The following four line items account for a lot of Treasury outlays and they will only grow in size as the population matures and retires and as the Neo-Cons move us towards more perpetual war. War is funded by debt because as you can see below tax revenues don’t go too far! The Four Horsemen of the Apocalypse are:
Next is net debt for YTD and it is more than a TARP at $735BIL, but nothing much to write home about this month as you can see it has been a negative net debt event so far -$35BIL. There will be some massive increases coming as there always are every year and we have four more months left in this fiscal year FY2014 and outlays have not abated at all.
DEBT-O-RAMA
A page literally right out of the US Fed Flow of Funds Z.1 report shows outstanding debt levels still at record highs as far back as 1982, especially for the Federal government and business and consumers (see blue arrows).
I note that the spread in the ratio between outstanding debt between Federal and State and Local is the largest ever at 4.2 in 2013. Contrast that to times of relative good economics, pre-2007 crash, like 2006 when government revenues were boosted by the real estate boom the ratio was at 1.8.
The ratio has really taken off dramatically since 2011 whereby you notice State and Local government without printing presses have cut outstanding debt each year while the Federal government has increased outstanding debt heavily in comparison. Those increased Federal debt levels are making funds available for States and I am sure strings are attached.
Clearly there isn’t a real recovery if business and consumers are holding record outstanding debt levels. If you require more debt to consume then that is an indication that wages are not keeping up with spending. If businesses must accumulate more debt to provide goods and services then their sales, hence revenues are suffering. If the Federal government has to subsidize more business and EBT via more debt then where is the recovery?
Now we move to … who is borrowing and who is lending. It looks like the Household sector is back into borrowing again and corporations are borrowing at record levels since the crash. Also the financial sectors are back into positive territory after some major negatives as are Brokers and Dealers. No doubt that has nothing to do with the stock market bubble.
Now we move to who is lending and here we get a new line item that has rocketed to the top of all the numbers. Guess who? The US Fed calls itself “Monetary Authorities”. Look at the red box below and you can see where the supposed recovery gets its juice. Also notice the Household Sector lending has dried up!
Interesting to see how Brokers and Dealers have reversed course on lending in a huge way in 2013 (see blue box), but as the borrowing section shows Brokers and Dealers are stepping up their borrowing as of 2013. Curious to see if that trend increases for 2014. We will know some of that data by the next Z.1 release on June 5th.
http://www.federalreserve.gov/RELEASES/z1/Current/z1.pdf
While overall indebtedness rises …
How much have Fed policies cost savers? Try $757.9 billion
by Richard Barrington
MoneyRates.com Senior Financial Analyst, CFA
April 21, 2014
A year ago, there was $9.427 trillion on deposit at U.S. banks. Over the past year, average money market rates have ranged from 0.08 percent to 0.10 percent. Inflation, meanwhile, was 1.5 percent over that same period. Because inflation grew faster than the average bank rate, consumers lost purchasing power. Adjusting that $9.427 trillion upward for interest earnings but then downward to account for the inflation rate yields a net loss in purchasing power of $122.5 billion. When this loss is added to the purchasing power losses from the previous four years, the total comes to $757.9 billion — the effective price of the Fed’s low-rate policies.
http://www.money-rates.com/research-center/cost-of-fed-rates-2014.htm
ZIRP in action … Lost purchasing power for the elderly who are poor and on fixed incomes forces HUMAN ACTION whereby eating cat food and suicide are real solutions. Would Janet Yellen change anything if she knew how many elders, like her, were now destitute and committing suicide? I doubt she ever thinks of her policies in those terms as she is well insulated from the “public rabble” at her FOMC HQ! Apparently Congress has little sympathy either otherwise these economic conditions and the hardships they have wrought on the elderly population would not exist. Perhaps this is a clue:
Then this CDC stat for suicide trends for US males …
You can see clearly that the two elderly men age groups from 45-64 has risen dramatically since 2006 to historic highs since 1991 CDC data. I think the trend will get worse before it gets better.
“It is the baby boomer group where we see the highest rates of suicide,” said the C.D.C.’s deputy director, Ileana Arias. “There may be something about that group, and how they think about life issues and their life choices that may make a difference.”
The rise in suicides may also stem from the economic downturn over the past decade. Historically, suicide rates rise during times of financial stress and economic setbacks. “The increase does coincide with a decrease in financial standing for a lot of families over the same time period,” Dr. Arias said.
YELLEN’S VICE
Is it really nothing but “rules”? We have “rules” for everything handed down by our government and our religions and in terms of the physics of living on the planet Earth there are even rules. A good “rule” of thumb is to heed the rule of gravity and not jump off a cliff, but it seems our leaders in government and money have decided to do precisely that. When jump off a cliff financially and monetarily you do so by abandoning “rules”.
Recently Prof Taylor at Stanford handed out this monetary authority “rule” from now Chairwoman Janet Yellen. At the time this was written, in 2012, her title was Vice Chair. Now in Miami that takes on a whole other connotation!
It seems at the US Fed as at every governmental institution and banking industry that “rules” are meant to be broken. Below you read that in 1999 even the Taylor Rule got changed from the way it was calculated in 1993. This has been the hallmark of Economic and economists for years now and precisely why Economics is not a science. Even Mises way back in 1947 understood this and even wrote a book he titled “Planned Chaos”. There are certain mathematical formulas in chemistry and physics that have been the same for decades if not centuries, yet when it comes to defining human economic behavior the math is just not durable. There are incessant everlasting debates just on the data about CPI. There is one data point for CPI that is “core” and some with inflators and deflators and some that do not include costs for food and oil because they claim those prices are too volatile.
I am sure that Prof John Taylor, the originator of the Taylor Rule, can explain why the Taylor Rule was altered in 1999, but then he readily admits that there are circumstances when the US Fed has abandoned policy and rules as is the case over the past five years since the last major monetary crisis. In fact there still are very few that would concede that what happened in 2007 was a monetary crisis. They will swear, in front of Congress even, that it was a “banking crisis”! None of the elite Money Kings will ever use the word “money” and the word “crisis” in the same sentence much less together! Since our monetary system is based on “fraud” and since the 2007 “crisis” was based on “fraud” then it was a “money crisis”.
If F=M then F+M=C, where “F” is fraud and “M” is money and “C” is crisis.
In fact there a number of “new economists” that will tell you that money is really anything we say it is. If we all agree that sea shells are money again then shells are money. True enough, but the people who are telling us we must use a US Dollar to transact all local business as well as foreign business are the ones with enough nuclear weapons that they could destroy the entire planet, or so we are told. In reality then money is whatever the handlers of the US military want it to be. There is talk now that the US centric IMF want to make IMF SDRs money for international trade. Once again America has the most bombs so we get to tell the rest of the world what is money and what isn’t. Only now it seems even our military is handicapped in many situations and has gotten so expensive to even conduct a tiny war that the “handlers” of our military are trying to elude to other money diversions that do not require so much “hardware” of the military type. It seems the IMF has made SDRs for a reason. If Iraq or Grenada made up their own SDRs how long would they have before the Marines landed? Yet just how different is an SDR from a US Dollar? It’s still paper only instead of being backed by the debt of the USA it is backed by a basket of debt from other countries and economic unions.
Still, those nuclear weapons exist because of certain hard and fast “rules” of physics. The “bomb” will go off every time it is detonated. That’s why the military buys bombs because they have an awesome record of “going off” when they want them to. It’s been “time tested” …
Here is the “bomb” in the 1960s …
And now here in the 2000s …
Those “bombs” are still being ridden more than forty years later!
Yet the Taylor Rule cannot last six years (1993-1999) at the US Fed before it gets changed. Why? Is economics and money so unbalanced that there is never a rule that is unchanged? What good are “rules” if they can be changed at the whim of an elitist? Even Prof Taylor has said that the US Fed has abandoned the Taylor Rule since interest rates have been too low for too long.
We all have witnessed the “Rule of Law” get changed over the past five years. It seems when it comes to Wall Street the “Rule of Law” does not apply and fraud is legal. What we have learned is that if you are Jamie Dimon, CEO of JP Morgan, you do not go to jail. If you are just an average citizen who commits fraud then you do go to jail. Even over at the FASB accounting rules that were rules in the 2006 are now no longer applicable in 2014.
What good are rules?
THE 1% CLUB
Tell all the 99%ers over at Occupy Wall Street they voted for them! Next time an OWSer is at a voting booth maybe they should check out the Congress Millionaires list to see if they are voting the 1% into power again. Only seven Senators are from the ranks of the 99%ers. Out of the entire 535 Congress members only 37 are from the 99%!
Now if only we could measure the Congressional NR “Nepotism Rate”. I have a feeling those 535 Congress members generate an awful lot of the wages for their friends, family and business associates. Just look how our VP operates in that department …
Remember “hope and change”?
IN THE MEANTIME … Two of the most untrustworthy humans on the planet and honorary 1%ers that contributed a great deal to our demise monetarily and militarily and economically will be holding a conference in Dallas, Texas Monday, today, to brainstorm monetary and economic ideas …
Panels are set on the impact of monetary policy on growth and the role and future of the Federal Reserve. Panelists include the current presidents of the Federal Reserve Banks in Dallas and San Francisco along with other business leaders and scholars.
What are the chances that the panel on the future of the Federal Reserve which consist of Federal Reserve presidents will recommend that the Federal Reserve be given more power? What are the chances that they recommend more cowbell?
Which two corrupt human beings are leading this discussion?
GEORGE W BUSH
BEN BERNANKE
Oh great! Why not invite Larry Summers, Alan Greenspan and Robert Rubin too??? Let’s make it a full house!!! Aces over queens!!!
In the days of our Founding Fathers all of the people leading this panel, including the two hosts would have been shot for Treason. Maybe they should discuss that …
EMPIRE
The heart of our national dysfunction is Empire. The fact that our “elected” government leaders can even consider “saving face” in the Ukraine by shipping our own limited liquefied resources across the Atlantic is nothing more than the most absurd grandiosity and hubris of Empire Think!
This same US and British Empire Think even moves us to the Human Empire. That is the ultimate hubris. That is the belief that the Human Empire and its enormous hubris can destroy the Earth. Maybe the human invention of nuclear weapons and nuclear power(Fukushima, Chernobyl) is the Earth’s plan to get rid of humans rather than the human’s plan to get rid of Earth! Maybe mutating viruses and plagues and hyper infectious disease is the Earth’s plan to get rid of humans! Maybe we are just Human Dinosaurs destined to extinction by our own infinite hubris.
Empire and Hubris are synonymous. Can Empire exist without hubris?
The concept of hubris in democratic Athens was a concept that defined the Greeks’ morality. It represented the concept that the poor were as respectable as the rich and that the rich should not flaunt their greatness. The Law of Hubris was somewhat limited in scope and drastically limited in direct application. However, the centrality of the Law of Hubris – violating the Law of Hubris constituted a violation against all of Athens and the law superseded assault in prosecution – demonstrates that the Greeks considered the subduing of hubristic acts to be of vital importance for the maintenance of a democracy based on laws.
I refer more to the financial beatings that our Congress and the US Fed are handing out to the Middle Class. Still QE no matter is a phenom from politics just as hyperinflation is. Who was it that gave the US Fed its legitimacy? Who signed the Federal Reserve Act into law and who has been giving the Federal Reserve more and more power?
Amazon has some QE for sale!
AMAZON QE
Take your pick … The same as the US Fed does. The stock market is inflated and so are food and gas and medical costs while non-Wall Street wages are deflated unless you are a union worker on a public works project guaranteed by the Davis Bacon Act. Either way politics or our politicized monetary system guarantees you will suffer from both!
WRAPOLA
WHO CARES? Let’s all just get high … pass out the Kona Gold! The government on all levels needs more tax revenues and what better way to institute new revenues than legalizing everything illegal and then taxing it???? Prohibition worked right?
Remember this?
That led us to this …
And then to this …
Finally we got this …
Plus this …
It is amazing how the top two charts look very similar and how they both grew exponentially from 1971. Clearly by now we Americans have seen it all. Wishy washy all the way to flat out lies and con games from the White House to CONgress to Wall Street to Lockheed Martin and back again. The same list of “usual suspects” gets regurgitated decade in and decade out! The corruption never ends and the only difference between the corruption of 1913 and 1971 and today is the faces and names.
Where better to see that than that venerable institution of corruption … JP Morgan? Legacy? We don’t need no stinkin’ legacy …
MARKET BURNOUT!!
It gets tiresome seeing JP Morgan and the other humungous US bank cartel in every nook and cranny of the global markets every day and every year. It doesn’t matter anymore if it is copper futures, gold futures, Facebook shares, IBM shares, G Fund or Vanguard or Freddie Mac … JP MORGAN is every “frickin” where!!!!!
Here below we see JPM registered as the holder of securities for the Queensland Local Government Superannuation. They sold 2.066 million shares of a tiny ASX listed gold exploration company named Kidman Resources (KDR:ASX). Now I do not own any of these shares and never have and I have no plans to ever buy any, but as I peek at different ASX listed companies over the years I constantly see these behemoth US banks everywhere. Even though it is Acorn Capital reporting this change of interest we can see it is actually JP Morgan who holds the shares for the Queensland Local Government retirement fund or as they call it is AussieLand … “Superannuation”! Suppa!!!
So what was JP Morgan’s fee for that transaction and long term buy and hold on behalf of Queensland government employees? I don’t know about the fees, but the value of the trade was around $186,000A!
My question to all the local government employees over in Queensland is why would you be okay with a gigantic US bank like JP Morgan getting paid fees when it should be a law that only Aussie based banks can be registered holders of Aussie based shares collecting Aussie dollar based fees in Australia? JP Morgan will not keep whatever fees it extracts from your hard earned wages in Australia to support Aussie business or the Queensland government. JP Morgan cares not one iota whether you and your family survive and neither do they care about your country of your government.
It should be crystal clear to anyone who witnessed TARP in 2008 that any US bank, especially JP Morgan, cares nothing for governments or its citizens. JP Morgan cares about only one thing and that is JP Morgan! JP Morgan does not care about climate change other than to charge carbon fees for selling you carbon credits so you can pretend your massive consumption is as guilt free as possible. JP Morgan only cares about US citizens who cannot feed themselves for the fees they charge for their EBT card services. JP Morgan profits off not only “other people’s money” but also that other OPM … “other people’s misery”!
JP Morgan has only one goal and it is to strip as much capital off those who produce actual usable goods and services as it possibly can in order to make as much profit as its CEO can jam into his offshore insurance based tax free account! Jamie Dimon and his legions of devout employees only care about their bank accounts. If these people cared about the country or the citizens of the world then they would volunteer to establish a more equitable monetary system that preserves long term value. They would insist on capital markets that supported price discovery not price rape! You must consider that “actions speak louder than words” when dealing with monopolies and the actions of JP Morgan and its employees are about the continuing demise of the Middle Class and the extraction of fees from every square inch of the Earth no matter how distasteful or unethical.
If I were to ever have to do business with or compete against JP Morgan I would no doubt need to read the following book in order to prepare myself for monetary mortal combat …
“I am sure that if the devil existed, he would want us to feel very sorry for him.” ― Martha Stout, The Sociopath Next Door: The Ruthless Versus the Rest of Us
While the author claims 1 in 25 “ordinary” Americans are sociopaths I would guess the ratio at JP Morgan is more like 24.8 out of 25! Maybe I am being too generous … Seriously, does anyone go to work there with the goal of making the world a better place? Or do they go there to make a fecesload of money as fast as possible with the least amount of hard labor or constructive economic input?
Then if you ever have to meet with Jamie Dimon on any level whether it is at the JP Morgan HQ or at an artsy fund raiser in the Hamptons or over at the Oval Office then you have to make this next book required reading as well …
As the book “The Sociopath Next Door” explains …
How do we recognize the remorseless? One of their chief characteristics is a kind of glow or charisma that makes sociopaths more charming or interesting than the other people around them. They’re more spontaneous, more intense, more complex, or even sexier than everyone else, making them tricky to identify and leaving us easily seduced. Fundamentally, sociopaths are different because they cannot love. Sociopaths learn early on to show sham emotion, but underneath they are indifferent to others’ suffering. They live to dominate and thrill to win.
I mean … come on … I am 99.8% sure when Jamie Dimon looks in the mirror every morning before getting in his limousine and helicopter to go to work he says, “Man, you are one sexy frickin’ BIG ASS WINNER-R-R! YOU ROCK … YOU THE MAN-N-N!!!!” He taps his hair touches his tie and he is off … kickin’ ass and dominating the world! I mean … come on … to even remotely qualify as a CEO of a major global bank you have to have graduated from Sociopath U with a 5.0, on the Mean Dean’s List with a Magna Cum Louder!!!!! It is insane that in this insane world insanity is Job One!
Now … show of hands please … after all that and knowing how bad JP Morgan has been throughout history and knowing what predators they are across the globe who here has a JP Morgan or Chase bank account or a JP Morgan Chase credit card? I do not … and that choice was made consciously to make sure I do not support JP Morgan, so I do not reward JP Morgan with my hard earned capital. You need to make a conscious decision to quit supporting banks and companies that are based in NYC. These entities care not for your community and they move your community based capital to NYC where they benefit not you and your family or your neighborhood. You must think and act local in all your business and banking actions wherever possible. Abandon the multi-national global sociopaths and their socio-dominated businesses. In the end we are all the 100% but they are not only the 1%, but they are the 1 in 25 also! How can it not be?
“Indifference to me, is the epitome of all evil.” – Elie Wiesel, Auschwitz inmate
“Over the years, many in the public have become numb to news of financial corruption, partly because too many of these stories involve banker-on-banker crime.” – Matt Taibbi, Rolling Stone
“Those who fight corruption should be clean themselves.” – Vladimir Putin, elected Russian oligarch
“The corruption in reporting starts very early. It’s like the police reporting on the police.” – Julian Assange, Wikileaks founder
“Our country is now taking so steady a course as to show by what road it will pass to destruction, to wit: by consolidation of power first, and then corruption, its necessary consequence.” – Thomas Jefferson, Founding Father, 3rd US President
“The duty of youth is to challenge corruption.” – Kurt Cobain, Nirvana