Jim Quinn * The Burning Platform
After digesting the opinions of the shills, shysters and scam artists, I am ready to predict that I have no clue what will happen during 2013. The weekend weather last week was a perfect analogy for attempting to forecast the future. The professional highly educated meteorologists predicted sunny warm weather, just as the PhD Wall Street paid economist mouthpieces assure the multitudes 2013 will be the year when zero interest rates and $1.2 trillion deficits will finally lead to sunny economic skies. Instead, the weekend was overcast and damp. As I was writing this article and watching the miraculous Baltimore Ravens comeback against Denver, I received a two minute warning from my wife. I had to pick up my son and his buddies at the Montgomery Mall. As I pulled the car out of the garage, I backed out into fog that was thicker than pea soup. I’ve driven the roads to the Montgomery Mall hundreds of times, but the fog was so thick I couldn’t see ten feet ahead. I drove hesitantly, wondering what might be just over the horizon or what might dart out from a side street. I see 2013 as a year of maneuvering through thick fog with startling apparitions lurking to surprise us and force a deviation in our normal course. As I proceeded cautiously through the murky mist there were few cars on the roads and the strip centers and fast food joints resembled haunted houses and grave yards. I expected to see Dracula, Frankenstein’s monster, and Wolfman panhandling on the corners.
The fog of uncertainty is engulfing the nation, making consumers hesitant to spend and businesses reluctant to hire or invest. It was like being in a commercial real estate horror film, with SPACE AVAILABLE, NOW LEASING, and STORE CLOSING signs startling me everywhere I turned. The trip took a spooky turn as I passed branches of those zombie banks – Bank of America and Citigroup. They don’t even know they’re already dead. I finally arrived at the Mall passing thousands of empty parking spaces with a few cars huddled close to the zombie starring in Night of the Retailing Dead – Sears. In the miasma, the few visitors appeared to be automaton like consumers programmed to shuffle through the mall and buy things they don’t need with money they don’t have. To say the road ahead for this country in 2013 is foggy would be an epic understatement. Let’s hope it doesn’t have a Nightmare on Elm Street like ending.
Virtually all of the mainstream media, Wall Street banks and paid shill economists are in agreement that 2013 will see improvement in employment, housing, retail spending and, of course the only thing that matters to the ruling class, the stock market. Even among the alternative media, there seems to be a consensus that we will continue to muddle through and the day of reckoning is still a few years off. Those who are predicting improvements are either ignorant of history or are being paid to predict improvement, despite the overwhelming evidence of a worsening economic climate. The mainstream media pundits, fulfilling their assigned task of purveying feel good propaganda, use the 10% stock market gain in 2012 as proof of economic recovery. The facts prove otherwise:
- Real GDP, using a dramatically understated inflation rate, has barely grown by 1% in 2012. Using a true measure of inflation, the GDP was -2% during 2012. Even this pitiful growth was generated by 0% interest rate deals for subprime auto loans through Ally Financial (85% owned by you the taxpayer) and 7 year 0% home furnishing financing deals through GE Capital and the other government subsidized Too Big To Control Wall Street banks. The Federal government chipped in by guaranteeing FHA subsidized 3% down payment loans on houses and handing out billions in loans to students so they can find themselves, keep the unemployment rate down, get drunk, and if they graduate – enter debt servitude for decades.
- The number of people who have left the workforce since last December (2.2 million) almost matched the number of newly employed (2.4 million), as the labor participation rate has collapsed to a three decade low of 63.6%. The propagandists attempt to peddle this dreadful condition as a function of Baby Boomers retiring. This is obliterated by the fact the 55 to 69 age bracket has added 4 million jobs since Obama became president, while the younger age brackets have lost 3 million jobs. The working age population has grown by 13 million since 2007 and there are 4 million less people employed.
- Another 1.5 million Americans were forced onto food stamps during 2012, bringing the total increase to 17 million since Obama assumed office. With 47.5 million depending on assistance to feed them, a full 20% of all households in the U.S. are dependent on this program, costing taxpayers $76 billion, versus $34 billion in 2008. Another 4.8 million have joined the ranks of the disabled since 2009, with a dramatic surge when the 99 week unemployment benefits began to run out. These trends are surely signs of recovery.
- Real average hourly earnings were flat in 2012, and have fallen 1.5% since Obama became president. The average middle class worker is making less than they were forty years ago. Using a true measure of inflation would reveal the true devastation wrought on the middle class. As the things we need (food, energy, shelter, education, healthcare) have grown more expensive and the things we are brainwashed to buy (iGadgets, HDTVs, luxury autos, bling) by the masters of propaganda have been made easily accessible through credit, the middle class has enslaved themselves in chains of debt. The declining average wages since 1973 have forced families to have both spouses work outside the home, with the consequence of more divorces, children raised by strangers, and the proliferation of depressed human beings. The lost real income has been replaced by credit card, auto, mortgage, and student loan debt.
The reason Bernanke, Geithner, Obama, Wall Street, corporate titans, and media pundits focus their attention on the stock market is because they are looking out for their fellow 1%ers. The working middle class, once the backbone of this country, own virtually no stocks. The 88% stock market increase since March 2009 hasn’t benefitted the middle class one iota. The Federal Reserve engineered stock market recovery has benefitted moneyed bankers and wealthy corporate executives, the very people who collapsed the worldwide financial system and received the bailouts when they should have gone to jail.
Those who continue to tout a non-existent economic recovery have focused on the manufactured stock market and housing recovery, extrapolating those trends without understanding how it has been achieved. A master plan implemented through the collusion of the Federal Reserve, Treasury Department, Executive branch, Wall Street cabal, and corporate media conglomerates has created the illusion of recovery. Make no mistake about it, those in power held clandestine meetings and had covert discussions that will never see the light of day in transcripts or recordings. They developed a strategy to save themselves, their fellow cronies, and the corporate interests that run this country. They threw the middle class, senior citizens, and young people under the bus in their sordid determination to retain their power, wealth and control. Their multi-faceted scheme has been rolled out as follows:
- Reduce interest rates to 0% so Wall Street banks could borrow for free and reinvest in Treasuries, therefore earning risk free profits so they could rebuild their non-existent capital. The Wall Street banks also used the free money to generate trading profits using their HFT supercomputers, with only the occasional glitch (JP Morgan London Whale $9 billion slipup, Corzine blowing up his firm and stealing $1.2 billion from ranchers & farmers). The ability to borrow at 0% has spurred these financial institutions to make 0% loans to subprime auto buyers and offer 7 year 0% interest deals on behalf of furniture, electronics, and appliance retailers. This Keynesian solution is supposed to spur demand and generate new jobs. The reality is that Bernanke’s ZIRP has transferred $400 billion of annual interest income from savers and senior citizens to the Wall Street bankers, while setting the table for more massive bad debt write-offs when the millions of subprime borrowers default.
- The Federal Reserve and the Treasury Department forced the FASB to scrap mark to market accounting, allowing the Wall Street banks to fraudulently value their worthless assets. The Federal Reserve than tripled their balance sheet from $900 billion to $2.95 trillion by purchasing almost $1 trillion of toxic mortgage debt from the Wall Street banks at full face value of the debt. The Fed purchased Treasuries to artificially lower mortgage rates and attempt to spur a housing recovery.
- The Wall Street banks have purposely manipulated the foreclosure process and restricted the inventory of foreclosures available to purchase. In conjunction with Fannie Mae and Freddie Mac, large inventories of foreclosed properties have been sold in bulk to connected Wall Street firms at above market prices and positioned as rental properties. The FHA has done their part by guaranteeing 3% down payment mortgages and putting taxpayers on the hook for the billions in losses to come. Fannie and Freddie have already lost $200 billion of taxpayer money since 2008 on behalf of the Wall Street banks. The concerted effort to restrict the supply of homes available for sale resulted in the price of homes sold rising in 2012. Those in power are attempting to resuscitate the millions of heavily indebted underwater home occupiers at the expense of the young and frugal who would buy when home prices dropped to a clearing level. The same people who created the first housing bubble are attempting to re-inflate it as a solution to our economic woes.
- Despite the fact that individual investors have pulled billions out of the stock market over the last three years, the stock market has managed to approach all-time highs. This has been the lynchpin of their plan. The sole purpose of every QE initiated by Bernanke has been to elevate the stock market. Academics like Bernanke and Krugman sell the “wealth effect” storyline to the masses as a way to spur consumer spending. The only wealth effect is to shift the wealth of the working middle class to the ruling class who own the stocks and control the markets. As each QE has further enriched the 1%, the inflationary impact on energy, food, and clothing has destroyed the lives of millions in the middle class who own virtually no stocks. The gap between the uber-rich ruling class and the peasants has never been wider.
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