I haven't been able to get to this testimony, just scanning it, but this is important.
Maybe you are of a mind to create an account and write up an overview on this hearing and testimony, along with the consequences of.
One of the reasons EP came into being is economic fiction. It's drives me nuts and let's face it, Cable TV is like a long infomercial. It's bad enough swimming through government stats, making heads and tails out of them, only to later see some "revision" that's as wide as the Mississippi....or major missing data pieces.
I'm pointing out that when one talks about wage deflation, they normalize it to CPI, or at best PPP.
I understand you are extending the gold standard and comparing it, but for information sake, for our readers, others, quoting wage deflation numbers, one needs to quantify that you are using your gold analysis, not official metrics, to claim wages have fallen by 87%.
My gold standard calculation is more complex: borrowing from a recent post by FOFOA ("Red Alert: Gold backwardation!!!") currencies compete for gold in much the same way as cereal makers compete for dollars. From the standpoint of owners of gold the question is exactly the same as the owners of dollars: how much purchasing power is represented by my hoard?
Which is to say, for the owners of gold, wages are denominated in gold, not dollars. And, a preference is implied, as in the calculation of cereal purchase, for the currency providing the best "value" - that is, the currency which offers the most wage for the least price. The owners of gold "shop" currencies for the best currency deal. Thus, when wages fall 87 percent in gold terms, this is simply another way of saying the purchasing power of gold has increased 7-fold.
Why is this important?
It confirms what I believe about this crisis: we are in a classic 1930s-style depression, and have been in a depression since 2001. The deflation has been horrific, but concealed behind the deliberately misleading veil of dollar prices. It is precisely during bouts of such deflation that the purchasing power of gold rises.
That seems to be an ongoing agenda....don't ya know, U.S. workers just "earn too much" and in order to make them "competitive", we need to reduce the United States to a 3rd world slave labor pool.
They have been at this via a variety of methods...
and duh, hello, you're destroying the United States itself with this agenda...
what do they think a national economy is even for?
Super elites/rich/MNCs as some sort of playing card on which to gamble?
"And that, in a nutshell, was the reason for the worldwide financial crisis - the mispricing of assets, mostly mortgage-backed securities, based on fictional financial models."
Ahhh....that is the official reason, but not the real reason.
The real and simple reason is a profound Ponzi and pyramid scheme, spanning across the planet, involving marking securtized debt as an asset, then generating notes based upon that (placed in the liability column), which is purchased by other banks, financial institutions, pension funds, hedge funds, pooled investment vehicles, etc., which in turn issues other financial instruments...say ABCP, or other notes, or ETNs, etc., any of a thousand or more types of credit derivatives, based upon that debt, all of which are marked as assets, and then on and on and on.
Hence the entire "shadow banking system" -- which, with the American bailouts and Euro bailouts and other regions' bailouts -- has become the mainstream system.
Nope, the ultra-deleveraging, which comes after the ultra-leveraging, which bequethed Earth all those debt-financed billionaires and trillionaires, has just begun....
I stopped reading financial "news" sites long ago. Either they publish cheerleader stories or apocalyptic doom & gloom. But people seem to like this sort of financial science fiction?
Anyhow some weeks ago I read here a post about the recession won't end until the private sector is finished with the credit cycle. Thus I want to draw your attention to the testimony of Richard Koo to the US Financial Services Committee. He terms it a "balance sheet recession". And the only way out is for the US government to substitute private sector deleveraging with fiscal policies. Very good testimony. He's close to economic enlightenment: MMT ;-)
The link: http://financialservices.house.gov/Media/file/hearings/111/Koo%207_22_10...
I think we all know financial "news" sites put up daily happy feel good buzz headlines to explain why the stock market went up.
Now it's this report. There is no good news in this report. The U.S. needs at least 125,000 jobs created each month just to keep up with population growth.
Who else is tired of feel good buzz headlines in the financial press which are completely divorced from economic reality, often even corporate reality on a particular stock.
Stop disbelieving in social revolution. Yes, it is so far-fetched now. The warning signs of upheaval are everywhere you look if you use analysis and pay attention. In 2007, I said the yellow warning signals were flashing. The same signals are blinking red. By modern, I mean the history after England's Glorious Revolution (Cromwellian).
- No society can continue to fight military misadvantures indefinitely without the old regieme's destruction
- No modern social structure can tolerate a rigid class structure with 2 tiers
- No modern society can survive prolonged banking crises without worldwide war
- Intellectual classes of society can never remain in constant open revolt
- Capitalist societies do not regress to feudalism. There are 2 paths: socialism or fascism.
As far as empires go, when trade and manufacturing collapse, so falls the flag. This axiom is true since the Roman Empire. No empire is capable of surviving whose borders are not defensible.
When you are most pessimistic, consider the following. The technical infrastructure of oppression is very vulnerable. I would love to describe all vulnerabilities, but
do not want to join the world's largest prison population. Eventually the angry dwarves of left and right will run across what the Son's of Liberty did in the way of organization, and so begins the Flood.
ZeroHedge has a post claiming real Q2 GDP is 1.7%.
Frankly I have no doubt this is true, but I'm not pulling it into factory orders because I haven't been able to find the actual nondurable good inventories numbers the BEA used to calculate Q2 GDP to verify.
I think I ran that show, which is great, as a FMN. The problem is technology has advanced so much and people are now wired to the hilt, with geolocation (GPS too), texting, tweeting, facebooking (I must be the only one on the planet who doesn't do facebook), etc. it's an electronic record, almost to the point of brain farts. All of that data can be number crunched into a behavioral pattern. The problem is, those behavioral patterns, those models, are usually really distorted. They claim correlation when ya know, there is either so much deviation or it's like one study in time and so on....then try to claim their model is "truth". Very minority report.
I would hope Frontline or some other quality documentary group would tackle the new age. This Wall Street Journal article is going into some depth.
It's from 2004 so I assume there have been only more advances in data mining and such, but this Frontline episode called the Persuaders is really interesting. Check out the section on Acxiom and how they try to figure out how to pigeonhole your preferences. http://www.pbs.org/wgbh/pages/frontline/shows/persuaders/
You can spin the economy many ways,this is a good one & I don`t doubt a lot of it.....BUT the real reason why the US economy isnt picking up is because big buisnes,people with the money are sitting on it just to drag Obama down.Let me make it clear....I`m NO Obama fan,but the man was handed a mess & people flat out scapegoat him and the ones that are not,just flat out him for...other ... reasons.Christ people it`s been a year and half,you all are hysterically delirious..... Did I mention that the SALARY of CEO`s went up in all this ? Pretty obvious whats going on.
As we revisit the pro-cyclical effects of the debt-money system, we are well-advised to be clear on the implication of these horrendous insights.
http://economicedge.blogspot.com/2010/03/most-important-chart-of-century...
Thanks, Nathan.
We also need to be clear on the counter-cyclical solution to the massive debt-saturation that is the inevitable result of debt-based money.
The solution to a stable-buying-power based circulating medium system, the money system, is laid out in the proposal of a prominent group of economists in 1939 and available at this link.
The debt-money system is broke, broken and insolvent.
And it's taking the national economy down with it.
So, our choice is monetary sovereignty or extended, debt-deflated, monetarily-contracted insolvency.
There's a lot of truth in both the recent and the '30s history of what was wrong, and is wrong, with what is called here the financial system.
But in reality the system that is broken and insolvent, now as in the '30s , is the monetary system.
Didn't you notice we have a money problem again?
The focus of repairing our economic society does not lie with a fight over the correctness of deficit-spending. It is minimally related to whether those deficits should be funded by debts, or not.
And in sum, the only real solution for the populous
is the restoration of full monetary sovereignty, using the nation's right to create the circulating medium needed to maintain price stability and the fullest possible employment of the people.
The way to accomplish this is spelled out as clearly as can be done in the 1939 paper by an outstanding group of economists, who penned A Program For Monetary Reform with the intention of ending the lawless variability of the supply of circulating medium needed in our national economy.
The rare work of Douglas, Fisher, Graham, Whittlesey and others is available here, in blueprint form.
It saved the part the elites cared about, and screwed the middle class. Soros had it right in that sovereign credit was substituted for private credit, but the middle class took the haircut and are still taking it. Ironically, it was Greenspan who declared that the financial system is broken -- and he helped break it. Reminds one of Colin Powell's famous "Pottery Barn Rule," except that AG does not have to pay for any of it -- AIG execs got their bonus, and the banksters got 100 cents on the dollar. A contract is a contract, except where it is with the American worker and their pension funds. Makes Jimmy Hoffa look like a progressive (though a piker by today's standards). I even miss Huey Long.
A smarter man than me pointed out that ACTUAL negative equity needs to include all costs of selling and buying/renting the next property, which normally would stretch to 6-10%.
You do that and those numbers look a whole lot worse.
Hi Stephen,
I haven't been able to get to this testimony, just scanning it, but this is important.
Maybe you are of a mind to create an account and write up an overview on this hearing and testimony, along with the consequences of.
One of the reasons EP came into being is economic fiction. It's drives me nuts and let's face it, Cable TV is like a long infomercial. It's bad enough swimming through government stats, making heads and tails out of them, only to later see some "revision" that's as wide as the Mississippi....or major missing data pieces.
I'm pointing out that when one talks about wage deflation, they normalize it to CPI, or at best PPP.
I understand you are extending the gold standard and comparing it, but for information sake, for our readers, others, quoting wage deflation numbers, one needs to quantify that you are using your gold analysis, not official metrics, to claim wages have fallen by 87%.
My gold standard calculation is more complex: borrowing from a recent post by FOFOA ("Red Alert: Gold backwardation!!!") currencies compete for gold in much the same way as cereal makers compete for dollars. From the standpoint of owners of gold the question is exactly the same as the owners of dollars: how much purchasing power is represented by my hoard?
Which is to say, for the owners of gold, wages are denominated in gold, not dollars. And, a preference is implied, as in the calculation of cereal purchase, for the currency providing the best "value" - that is, the currency which offers the most wage for the least price. The owners of gold "shop" currencies for the best currency deal. Thus, when wages fall 87 percent in gold terms, this is simply another way of saying the purchasing power of gold has increased 7-fold.
Why is this important?
It confirms what I believe about this crisis: we are in a classic 1930s-style depression, and have been in a depression since 2001. The deflation has been horrific, but concealed behind the deliberately misleading veil of dollar prices. It is precisely during bouts of such deflation that the purchasing power of gold rises.
you mean by your theoretical "gold standard" calculations, not adjusted to CPI.
But bottom line, deflating the dollar has been a strategy mentioned many times, also to deflate the debt.
Notice how the U.S. workforce is almost an afterthought by so many? Should be first up in consideration and used to be.
But, they just won't stop. The sheer stupidity of such suggestions boggles the imagination...
That seems to be an ongoing agenda....don't ya know, U.S. workers just "earn too much" and in order to make them "competitive", we need to reduce the United States to a 3rd world slave labor pool.
They have been at this via a variety of methods...
and duh, hello, you're destroying the United States itself with this agenda...
what do they think a national economy is even for?
Super elites/rich/MNCs as some sort of playing card on which to gamble?
"And that, in a nutshell, was the reason for the worldwide financial crisis - the mispricing of assets, mostly mortgage-backed securities, based on fictional financial models."
Ahhh....that is the official reason, but not the real reason.
The real and simple reason is a profound Ponzi and pyramid scheme, spanning across the planet, involving marking securtized debt as an asset, then generating notes based upon that (placed in the liability column), which is purchased by other banks, financial institutions, pension funds, hedge funds, pooled investment vehicles, etc., which in turn issues other financial instruments...say ABCP, or other notes, or ETNs, etc., any of a thousand or more types of credit derivatives, based upon that debt, all of which are marked as assets, and then on and on and on.
Hence the entire "shadow banking system" -- which, with the American bailouts and Euro bailouts and other regions' bailouts -- has become the mainstream system.
Nope, the ultra-deleveraging, which comes after the ultra-leveraging, which bequethed Earth all those debt-financed billionaires and trillionaires, has just begun....
I stopped reading financial "news" sites long ago. Either they publish cheerleader stories or apocalyptic doom & gloom. But people seem to like this sort of financial science fiction?
Anyhow some weeks ago I read here a post about the recession won't end until the private sector is finished with the credit cycle. Thus I want to draw your attention to the testimony of Richard Koo to the US Financial Services Committee. He terms it a "balance sheet recession". And the only way out is for the US government to substitute private sector deleveraging with fiscal policies. Very good testimony. He's close to economic enlightenment: MMT ;-)
The link: http://financialservices.house.gov/Media/file/hearings/111/Koo%207_22_10...
I think we all know financial "news" sites put up daily happy feel good buzz headlines to explain why the stock market went up.
Now it's this report. There is no good news in this report. The U.S. needs at least 125,000 jobs created each month just to keep up with population growth.
Who else is tired of feel good buzz headlines in the financial press which are completely divorced from economic reality, often even corporate reality on a particular stock.
Stop disbelieving in social revolution. Yes, it is so far-fetched now. The warning signs of upheaval are everywhere you look if you use analysis and pay attention. In 2007, I said the yellow warning signals were flashing. The same signals are blinking red. By modern, I mean the history after England's Glorious Revolution (Cromwellian).
- No society can continue to fight military misadvantures indefinitely without the old regieme's destruction
- No modern social structure can tolerate a rigid class structure with 2 tiers
- No modern society can survive prolonged banking crises without worldwide war
- Intellectual classes of society can never remain in constant open revolt
- Capitalist societies do not regress to feudalism. There are 2 paths: socialism or fascism.
As far as empires go, when trade and manufacturing collapse, so falls the flag. This axiom is true since the Roman Empire. No empire is capable of surviving whose borders are not defensible.
When you are most pessimistic, consider the following. The technical infrastructure of oppression is very vulnerable. I would love to describe all vulnerabilities, but
do not want to join the world's largest prison population. Eventually the angry dwarves of left and right will run across what the Son's of Liberty did in the way of organization, and so begins the Flood.
I'm not surprised because I think technically that's what it's going to end up being, but a new report calls it.
ZeroHedge has a post claiming real Q2 GDP is 1.7%.
Frankly I have no doubt this is true, but I'm not pulling it into factory orders because I haven't been able to find the actual nondurable good inventories numbers the BEA used to calculate Q2 GDP to verify.
I think I ran that show, which is great, as a FMN. The problem is technology has advanced so much and people are now wired to the hilt, with geolocation (GPS too), texting, tweeting, facebooking (I must be the only one on the planet who doesn't do facebook), etc. it's an electronic record, almost to the point of brain farts. All of that data can be number crunched into a behavioral pattern. The problem is, those behavioral patterns, those models, are usually really distorted. They claim correlation when ya know, there is either so much deviation or it's like one study in time and so on....then try to claim their model is "truth". Very minority report.
I would hope Frontline or some other quality documentary group would tackle the new age. This Wall Street Journal article is going into some depth.
It's from 2004 so I assume there have been only more advances in data mining and such, but this Frontline episode called the Persuaders is really interesting. Check out the section on Acxiom and how they try to figure out how to pigeonhole your preferences.
http://www.pbs.org/wgbh/pages/frontline/shows/persuaders/
You can spin the economy many ways,this is a good one & I don`t doubt a lot of it.....BUT the real reason why the US economy isnt picking up is because big buisnes,people with the money are sitting on it just to drag Obama down.Let me make it clear....I`m NO Obama fan,but the man was handed a mess & people flat out scapegoat him and the ones that are not,just flat out him for...other ... reasons.Christ people it`s been a year and half,you all are hysterically delirious..... Did I mention that the SALARY of CEO`s went up in all this ? Pretty obvious whats going on.
As we revisit the pro-cyclical effects of the debt-money system, we are well-advised to be clear on the implication of these horrendous insights.
http://economicedge.blogspot.com/2010/03/most-important-chart-of-century...
Thanks, Nathan.
We also need to be clear on the counter-cyclical solution to the massive debt-saturation that is the inevitable result of debt-based money.
The solution to a stable-buying-power based circulating medium system, the money system, is laid out in the proposal of a prominent group of economists in 1939 and available at this link.
http://www.economicstability.org/history/a-program-for-monetary-reform-t...
The debt-money system is broke, broken and insolvent.
And it's taking the national economy down with it.
So, our choice is monetary sovereignty or extended, debt-deflated, monetarily-contracted insolvency.
There's a lot of truth in both the recent and the '30s history of what was wrong, and is wrong, with what is called here the financial system.
But in reality the system that is broken and insolvent, now as in the '30s , is the monetary system.
Didn't you notice we have a money problem again?
The focus of repairing our economic society does not lie with a fight over the correctness of deficit-spending. It is minimally related to whether those deficits should be funded by debts, or not.
And in sum, the only real solution for the populous
is the restoration of full monetary sovereignty, using the nation's right to create the circulating medium needed to maintain price stability and the fullest possible employment of the people.
The way to accomplish this is spelled out as clearly as can be done in the 1939 paper by an outstanding group of economists, who penned A Program For Monetary Reform with the intention of ending the lawless variability of the supply of circulating medium needed in our national economy.
The rare work of Douglas, Fisher, Graham, Whittlesey and others is available here, in blueprint form.
http://www.economicstability.org/history/a-program-for-monetary-reform-t...
You will not be disappointed.
Thanks.
It saved the part the elites cared about, and screwed the middle class. Soros had it right in that sovereign credit was substituted for private credit, but the middle class took the haircut and are still taking it. Ironically, it was Greenspan who declared that the financial system is broken -- and he helped break it. Reminds one of Colin Powell's famous "Pottery Barn Rule," except that AG does not have to pay for any of it -- AIG execs got their bonus, and the banksters got 100 cents on the dollar. A contract is a contract, except where it is with the American worker and their pension funds. Makes Jimmy Hoffa look like a progressive (though a piker by today's standards). I even miss Huey Long.
A smarter man than me pointed out that ACTUAL negative equity needs to include all costs of selling and buying/renting the next property, which normally would stretch to 6-10%.
You do that and those numbers look a whole lot worse.
It's really hard to keep up with all of the various articles of corruption in the U.S.
The New York Times overviewed how Academic administrators are sitting on corporate boards, earning a pretty penny to boot.
Corporations funnel a lot of R&D dollars to Universities, but that said, I believe the ethics, objectivity lines are more than blurred as a result.
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