SP 500 and NDX Futures Daily Charts - The Rape of the American Mind

“He who dictates and formulates the words and phrases we use, he who is master of the press and radio, is master of the mind. Repeat mechanically your assumptions and suggestions, diminish the opportunity for communicating dissent and opposition. This is the formula for political conditioning of the masses.

The big lie and monotonously repeated nonsense have more emotional appeal in a cold war than logic and reason.

The continual intrusion into our minds of the hammering noises of arguments and propaganda can lead to two kinds of reactions. It may lead to apathy and indifference, the I-dont-care reaction, or to a more intensified desire to study and to understand. Unfortunately, the first reaction is the more popular one.  Confusing a targeted audience is one of the necessary ingredients for effective mind control."

Joost Meerloo, The Rape of the Mind

 

There is going to be another financial crisis within the next two years, and it will be global, and it may be much more consequential than the other two or three we have seen since the Fed embarked on this course of its long and checkered career.

 

It is also avoidable, and in their quiet, private moments the really good economists can see it coming.  Why don't they say anything?  Ennui of the bureaucrat, entropy of an inability to change, and the credibility trap of failed ideologies in a failing empire. 

 

They did not get to where they are by 'rocking the boat.'  And so they will be quiet, unless they see some advantage in it for them, most ordinarily in a pay for say.

 

Not so for the financiers and their minions.  They will not be quiet, alas.  The more badly they behave, the louder they seem to become.

 

They are short term, and almost infantile in the self-centered reasoning.  Although a child is limited by lack of faculty and experience, the speculator is hampered by vanity, a self-imposed lack of human development, and an almost obsessive preoccupation with drinking, favorite objects, and teats.  

 

They see something and they want it, they know only what they can feel in the desire of the moment, morally they are undeveloped, and when they make a mess they cry loudly, until an adult comes to clean it up for them.  But unlike a child they have no gratitude, no sense of their own dependency, or natural affection for others.

 

Have a pleasant evening

 

Gold Daily and Silver Weekly Charts - The Careless Few and Their Tower of Babel

Gold and silver marked time today, after the fairly heavy handed smackdown from last Friday in honor of our Non-Farm Payrolls report.

 

There was some small bleeding of bullion out of the bucket shop's warehouses as noted in the reports below, but little else of note. 

 

I am reassured by some very serious people that the West's gold is not flowing East.  It is merely disappearing from here, and apparently reappearing as imports into China, Russia, the Mideast, and India there. 

 

There is nothing to see here, so move along.  Our gold is going nowhere, and their gold is apparently just apparating, like Harry Potter.  Although Harry could not have managed such a nice lingering illusion of paper as he scooted off with our gold into the Vanishing Cabinet on the Thames.  Wingardium leviosa!

 

The trick is to concentrate intently on the details, to become mesmerized by them, and to ignore all the rest.  Remember the Three D's: Destination, Determination and Deliberation.  Germany can't get their gold back?  Gold is stupid, and they don't need it.  And so moving right along...

 

I am looking into this news that HSBC is closing seven of their customer gold vaults in London.  I am a bit behind the curve today for personal obligations.  I do not know if this signifies anything yet.  But I do suspect that this will open up quite a bit of useful closet space for the globally careless few who are simply flocking in droves to London real estate like flies to honey, or whatever other propensities that flies may have.

 

I have guest posted a rather good summary of the US economic situation by C. K. Michaelson titled The Minority Report which you can read here.

 

There was also intraday commentary about the state of economic and public policy thought here.  I made some revisions to the chart of the continuum of economic and political philosophy and you may wish to take a look at it, to see if it is now a bit clearer. 

 

Putting a great deal of information and concepts into a meaningful but simple and concise format is always the most difficult challenge.  Especially when the modern impulse is to expend the greatest amount of complexity and mostly irrelevant detail on the simplest of canards.  The currency and class wars are growing this into a thriving cottage industry in support of our export of frauds and domestic deceptions.

 

One thing that struck me today is that, although we may be in difficult economic straits, we are certainly blessed with some of the most skillful and ardent professional liars in the world, if not in all of history. 

Their artfulness in distorting the facts, and in sweeping inconvenient facts aside by exploiting relatively inconsequential details, is almost astonishing. And their shameless diligence in the pursuit of wealth through deception is almost herculean.

We truly excel in our treachery, and as a nation, we can certainly be proud of it, of making good look false, black as white, of murder as human kindness, and the most ruthless and self-serving plunder and repression as the finest expression of the human spirit.

 

As Michael Parenti said, 'The enormous gap between what US leaders do in the world and what Americans think their leaders are doing is one of the great propaganda accomplishments of the dominant political mythology.'

 

Never have so many, sacrificed so much, for such an undeserving and deceitfully careless few. 

 

Better call Saul.

 

Have a pleasant evening.

 

 

 

 

 

SP 500 and NDX Futures Daily Charts - The Great Pause

Remarks may be a bit brief and sporadic at times this week.

Have a pleasant evening.

 

 

 

C. K. Michaelson: The American Economy - A Minority Report

Some Assembly Required
A Minority Report
by C. K. Michaelson

The jobs report is all about inflation and interest rates and only incidentally about workers and jobs. Economists claim, with little evidence, that mother nature or the universe or Keynes' ghost has an immutable law decreeing that a certain level of unemployment triggers a certain amount of inflation. Right now they pretend that 5.5% unemployment is the tipping point for this see-saw. If unemployment edges lower than that, inflation will pick up. In fact, hyperinflation may well appear, magically, overnight. It's called NAIRU – the Non-Accelerating Inflation Rate of Unemployment. The idea was first introduced as NIRU (non-inflationary rate of unemployment) in 1975. which was supposedly an improvement over the "natural rate" of unemployment made up Milton Friedman in 1968.

The idea is that as employers create more jobs, they have to compete for workers by offering higher wages, workers can demand higher wages for making the same number of widgets or threaten to go down the street and make widgets for the next guy. And to pay the higher wages, companies have to raise the price of widgets. The customers – who are the workers when they are not at work – will spend the extra wage income on the higher priced widgets and pretty soon they'll want more money for their labor. Round and round it goes and the first thing you know we're the Wiemar Republic.

Many things wrong with this idea, the biggest being the rather quaint pretense that today's American worker any clout when it comes to wages. First there's the huge number of workers who are AWOL from the labor pooI right now. And if the workers unite (ha)! to demand more wages, the companies will just move the jobs to Bangladesh or some other right-to-work place. Oh, wait, they already did, except for baristas, burger flippers and bedpan bangers.

If there is such a thing as NAIRU, it obviously isn't 5.5%, for wages went up a whopping 0.1% with the latest 0.2% fall in unemployment.

And then there's the definitional problem: What is unemployment? How big is the work force and who are all those guys sitting on the bench waiting to get into the game?

For that matter, what is employment? Is working 17 hours a week at Wally World or 22 hours a week at Macky D's 'employment'?

What would full employment look like, the kind that might, just might, lead to wage inflation? Would all workers who wanted a job have a job and would that job be commensurate with their skill and experience? Would that job provide the hours and wages they need to provide a decent life for themselves and their families – or would their kids still qualify for free breakfast and lunch at school and go to the emergency room for their healthcare?

Some data: There are 92,898,000 Americans currently not working. We have a 62.8% labor force participation rate, a 37 year low. Just last month another 390,000 Americans became invisible to the BLS. Officially, there are 8.7 million people who were actively searching for work last month, plus another 6.5 million people who didn’t look last month but who say they want a job. Plus another 6.6 million who want to work full-time but can only get a part-time job. That’s nearly 22 million people who are unemployed or underemployed.

The unemployment rate for blacks is nearly twice the national average.

American added 58,700 waiters and bartenders – pretty much earning minimum wage or less - as part of those 300,000 new jobs.

The unemployment rate would have been unchanged at 5.7% - safely out of the inflationary swamp – if the labor force participation rate had stayed steady. The big improvement didn't come from jobs, it came from despair of ever finding a job.

We're still about 1 million full-time jobs short of where we were pre-recession, and that's not even adjusting for population growth. All told, we're still about 4 million jobs away from the economy being okay;. At this rate we'll break even in September 2016.

Go Recovery!