Monday, April 6, 2015


As of this writing, the DOW is up 165 points, regardless of the fact that every bit of economic news that has come over the last week has been catastrophic in nature. It is so bad, that even MSM outlets like CNBC and Forbes have commented on how divested from reality our economy and many an economist seems to be. It's like look looking at chocolate ice cream and convincing everyone around you it's really vanilla.
It would appear that a shadow government is now firmly in control of this country, thanks in part to an uneducated public more interested in the Kardashians than their own well being. On John Oliver last night, he interviewed about a dozen people off the street who either had no idea who Ed Snowden was or mixed him up with Julian Assange. Tell the public that the government is looking at their "dick pics" however and watch the rage fly. The sad part is some of these people vote which is why we have the dumbest idiots running things now.

Friday, the jobs report cratered, which even by the overinflated numbers still sucked. Remove the 100,000 phantom jobs that do not exist and you really have nothing to crow about. Housing has fallen for seven straight months, and like clockwork, massive downward revisions were given on Friday to government figures from the last two months which are somehow worse than guesswork considering their margin of error is in the stratosphere (usually around 40%). The figures show the worst labor conditions in three years and the worst housing market since 2009. So what did the DOW do? Up , up, up it went till it was just a speck in the sky. Unbelievable. People like myself and other writers of economics have started to notice that this is unsustainable and sooner or later, this whole house of cards will collapse and take the entire world economy down with it.

This is from Forbes Magazine:

Since the mid-1990s, the U.S. economy and stock market has experienced three different bubbles: the 1990s Dot-com bubble, the mid-2000s housing bubble, and now another bubble that includes stocks, bonds, tech startups, certain segments of the housing market, higher education, and much more. I believe that this new bubble is creating what I call a “Bubblecovery” or a bubble-driven temporary economic recovery that will end in another crisis.

The U.S. Federal Reserve also created a Bubblecovery in the early-2000s to recover from the Dot-com bust, which led to the housing bubble. After the housing bubble burst, the Fed inflated the post-2009 Bubblecovery. After each bubble/Bubblecovery ends, the Fed simply inflates another bubble to recover from the last one. In essence, the U.S. economy and stock market has been in a bubble cycle for the past two decades. Each time, the bubble gets larger, and the Fed has to keep re-inflating it to avoid the economic Depression that would occur if asset prices were allowed to find their true value.

In other words, just like Japan, we have been altering the market for several decades but eventually, this won't work anymore. And when it does, the explosion will be global.

The incessant push to inflate our economy and financial markets has created an unprecedented situation in which stocks have been trading at overvalued levels for a record length of time. Nearly every stock market valuation indicator is giving the same reading: stocks are currently at levels that preceded other major historic busts.

For example, look at the Cyclically Adjusted P/E Ratio (CAPE), or the price-to-earnings ratio based on average inflation-adjusted earnings from the previous 10 years. The 1929 Stock Market Crash and 1970s stagnation occurred after the CAPE rose over 20 – a level that indicates stock market overvaluation. Incredibly, the CAPE has remained over 20 for much of the past two decades, aside from a few short months during the Global Financial Crisis. Without constant Fed intervention, there is no doubt that the U.S. stock market would have corrected violently like it has in the past.

Awesome. You would think this level of danger would make economists scream from the high heavens. But if you look at 90% of them, not one is saying anything about a recession or a depression, which seems to be rapidly approaching. Jobs are disappearing and well paying ones are becoming extinct. What will happen when the average public can no longer afford to keep even a poor level of living? Collapse that's what.

However, just because it is not being mentioned in the MSM for the most part doesn't mean the Powers That Be don't because they seem to be getting ready for just such a problem. Recently, the military held exercises called Jade Helm that simulated what a military take over would look like. This is from about Jade Helm and odd purchasing orders:

A new Homeland Security purchase order listed on FedBizOpps raises an eyebrow or two.

Over the course of 9 pages (PDF), the technical requirements call for an arsenal of specialized weaponry for training and deployment against crowds.

On top of a wide range of gas and chemical grenades, rubber bullets and other riot rounds, the purchase calls for “controlled noise and light distraction devices
including flash bangs which set off a 175 dB sound with 6 – 8 million candelas light bursts in 10 milliseconds.

So why are the Feds prepping to take on crowds?
The collection of equipment provides a diverse range of toys with which authorities could push back crowds and potentially intimidate.

Are there more riots coming? Is widespread civil unrest only a matter of time? Is it related to martial law exercises like Jade Helm 15?

There is one fundamental flaw in this reasoning as everyone I know in the military would never participate in such a blatant power grab leading to an inevitable civil war. Recent studies say that should that happen, we would have a 40% chance of success, which is pretty good actually.
Other societies like Greece and Iceland are bucking the trend as well. Iceland is going to prevent banks from creating money out of whole cloth meaning debt cycles would forever end as the banks couldn't lend out more money than they actually have. A central bank would have the only power to do that, which may prevent banking crashes from happening, or just lead one bank to cause all the problems rather than dozens. Time will tell if it works.
Greece on the other hand is seriously thinking about telling the EU to go blow and going back to the drachma as well as nationalizing the banks. As of right now they either have to pay back the EU or face the wrath of a people who elected them to do the exact opposite of what the EU wants, which is of course more austerity regardless of the fact that it hasn't worked at all for six years now. Greek politicians know that if they renege on their campaign promise to end the austerity, new election will happen and possibly an overthrow of the government by a pissed off crowd. Here's what one official said recently:
“We are a Left-wing government. If we have to choose between a default to the IMF or a default to our own people, it is a no-brainer,” said a senior official.
The EU has refused to address any of the public's issues with low pay and high unemployment and instead is just saying GIMME MONEY at the top of their lungs, unaware that you can't get blood from a stone. This country is facing similar issues as our jobs have gone away only to be replaced with slave labor ones.
We can only hope that what Iceland and Greece do change the narrative and work giving us hope that there is a path out of this hole we have dug for ourselves. The alternative is the end of the world as we know it.

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