EBT

The Retail Death Rattle

Off the keyboard of Jim Quinn

Published on The Burning Platform on January 20, 2012

Death-Rattle

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“I was part of that strange race of people aptly described as spending their lives doing things they detest, to make money they don’t want, to buy things they don’t need, to impress people they don’t like.”Emile Gauvreau

If ever a chart provided unequivocal proof the economic recovery storyline is a fraud, the one below is the smoking gun. November and December retail sales account for 20% to 40% of annual retail sales for most retailers. The number of visits to retail stores has plummeted by 50% since 2010. Please note this was during a supposed economic recovery. Also note consumer spending accounts for 70% of GDP. Also note credit card debt outstanding is 7% lower than its level in 2010 and 16% below its peak in 2008. Retailers like J.C. Penney, Best Buy, Sears, Radio Shack and Barnes & Noble continue to report appalling sales and profit results, along with listings of store closings. Even the heavyweights like Wal-Mart and Target continue to report negative comp store sales. How can the government and mainstream media be reporting an economic recovery when the industry that accounts for 70% of GDP is in free fall? The answer is that 99% of America has not had an economic recovery. Only Bernanke’s 1% owner class have benefited from his QE/ZIRP induced stock market levitation.

The entire economic recovery storyline is a sham built upon easy money funneled by the Fed to the Too Big To Trust Wall Street banks so they can use their HFT supercomputers to drive the stock market higher, buy up the millions of homes they foreclosed upon to artificially drive up home prices, and generate profits through rigging commodity, currency, and bond markets, while reducing loan loss reserves because they are free to value their toxic assets at anything they please – compliments of the spineless nerds at the FASB. GDP has been artificially propped up by the Federal government through the magic of EBT cards, SSDI for the depressed and downtrodden, never ending extensions of unemployment benefits, billions in student loans to University of Phoenix prodigies, and subprime auto loans to deadbeats from the Government Motors financing arm – Ally Financial (85% owned by you the taxpayer). The country is being kept afloat on an ocean of debt and delusional belief in the power of central bankers to steer this ship through a sea of icebergs just below the surface.

The absolute collapse in retail visitor counts is the warning siren that this country is about to collide with the reality Americans have run out of time, money, jobs, and illusions. The most amazingly delusional aspect to the chart above is retailers continued to add 44 million square feet in 2013 to the almost 15 billion existing square feet of retail space in the U.S. That is approximately 47 square feet of retail space for every person in America. Retail CEOs are not the brightest bulbs in the sale bin, as exhibited by the CEO of Target and his gross malfeasance in protecting his customers’ personal financial information. Of course, the 44 million square feet added in 2013 is down 85% from the annual increases from 2000 through 2008. The exponential growth model, built upon a never ending flow of consumer credit and an endless supply of cheap fuel, has reached its limit of growth. The titans of Wall Street and their puppets in Washington D.C. have wrung every drop of faux wealth from the dying middle class. There are nothing left but withering carcasses and bleached bones.

The impact of this retail death spiral will be vast and far reaching. A few factoids will help you understand the coming calamity:

  • There are approximately 109,500 shopping centers in the United States ranging in size from the small convenience centers to the large super-regional malls.
  • There are in excess of 1 million retail establishments in the United States occupying 15 billion square feet of space and generating over $4.4 trillion of annual sales. This includes 8,700 department stores, 160,000 clothing & accessory stores, and 8,600 game stores.
  • U.S. shopping-center retail sales total more than $2.26 trillion, accounting for over half of all retail sales.
  • The U.S. shopping-center industry directly employed over 12 million people in 2010 and indirectly generated another 5.6 million jobs in support industries. Collectively, the industry accounted for 12.7% of total U.S. employment.
  • Total retail employment in 2012 totaled 14.9 million, lower than the 15.1 million employed in 2002.
  • For every 100 individuals directly employed at a U.S. regional shopping center, an additional 20 to 30 jobs are supported in the community due to multiplier effects.

The collapse in foot traffic to the 109,500 shopping centers that crisscross our suburban sprawl paradise of plenty is irreversible. No amount of marketing propaganda, 50% off sales, or hot new iGadgets is going to spur a dramatic turnaround. Quarter after quarter there will be more announcements of store closings. Macys just announced the closing of 5 stores and firing of 2,500 retail workers. JC Penney just announced the closing of 33 stores and firing of 2,000 retail workers. Announcements are imminent from Sears, Radio Shack and a slew of other retailers who are beginning to see the writing on the wall. The vacancy rate will be rising in strip malls, power malls and regional malls, with the largest growing sector being ghost malls. Before long it will appear that SPACE AVAILABLE is the fastest growing retailer in America.

The reason this death spiral cannot be reversed is simply a matter of arithmetic and demographics. While arrogant hubristic retail CEOs of public big box mega-retailers added 2.7 billion retail square feet to our already over saturated market, real median household income flat lined. The advancement in retail spending was attributable solely to the $1.1 trillion increase (68%) in consumer debt and the trillion dollars of home equity extracted from castles in the sky, that later crashed down to earth. Once the Wall Street created fraud collapsed and the waves of delusion subsided, retailers have been revealed to be swimming naked. Their relentless expansion, based on exponential growth, cannibalized itself, new store construction ground to a halt, sales and profits have declined, and the inevitable closing of thousands of stores has begun. With real median household income 8% lower than it was in 2008, the collapse in retail traffic is a rational reaction by the impoverished 99%. Americans are using their credit cards to pay their real estate taxes, income taxes, and monthly utilities, since their income is lower, and their living expenses rise relentlessly, thanks to Bernanke and his Fed created inflation.

The media mouthpieces for the establishment gloss over the fact average gasoline prices in 2013 were the second highest in history. The highest average price was in 2012 and the 3rd highest average price was in 2011. These prices are 150% higher than prices in the early 2000′s. This might not matter to the likes of Jamie Dimon and Jon Corzine, but for a middle class family with two parents working and making 7.5% less than they made in 2000, it has a dramatic impact on discretionary income. The fact oil prices have risen from $25 per barrel in 2003 to $100 per barrel today has not only impacted gas prices, but utility costs, food costs, and the price of any product that needs to be transported to your local Wally World. The outrageous rise in tuition prices has been aided and abetted by the Federal government and their doling out of loans so diploma mills like the University of Phoenix can bilk clueless dupes into thinking they are on their way to an exciting new career, while leaving them jobless in their parents’ basement with a loan payment for life.

The laughable jobs recovery touted by Obama, his sycophantic minions, paid off economist shills, and the discredited corporate legacy media can be viewed appropriately in the following two charts, that reveal the false storyline being peddled to the techno-narcissistic iGadget distracted masses. There are 247 million working age Americans between the ages of 18 and 64. Only 145 million of these people are employed. Of these employed, 19 million are working part-time and 9 million are self- employed. Another 20 million are employed by the government, producing nothing and being sustained by the few remaining producers with their tax dollars. The labor participation rate is the lowest it has been since women entered the workforce in large numbers during the 1980′s. We are back to levels seen during the booming Carter years. Those peddling the drivel about retiring Baby Boomers causing the decline in the labor participation rate are either math challenged or willfully ignorant because they are being paid to be so. Once you turn 65 you are no longer counted in the work force. The percentage of those over 55 in the workforce has risen dramatically to an all-time high, as the Me Generation never saved for retirement or saw their retirement savings obliterated in the Wall Street created 2008 financial implosion.

To understand the absolute idiocy of retail CEOs across the land one must parse the employment data back to 2000. In the year 2000 the working age population of the U.S. was 213 million and 136.9 million of them were working, a record level of 64.4% of the population. There were 70 million working age Americans not in the labor force. Fourteen years later the number of working age Americans is 247 million and only 144.6 million are working. The working age population has risen by 16% and the number of employed has risen by only 5.6%. That’s quite a success story. Of course, even though median household income is 7.5% lower than it was in 2000, the government expects you to believe that 22 million Americans voluntarily left the labor force because they no longer needed a job. While the number of employed grew by 5.6% over fourteen years, the number of people who left the workforce grew by 31.1%. Over this same time frame the mega-retailers that dominate the landscape added almost 3 billion square feet of selling space, a 25% increase. A critical thinking individual might wonder how this could possibly end well for the retail genius CEOs in glistening corporate office towers from coast to coast.

This entire materialistic orgy of consumerism has been sustained solely with debt peddled by the Wall Street banking syndicate. The average American consumer met their Waterloo in 2008. Bernanke’s mission was to save bankers, billionaires and politicians. It was not to save the working middle class. You’ve been sacrificed at the altar of the .1%. The 0% interest rates were for Jamie Dimon and Lloyd Blankfein. Your credit card interest rate remained between 13% and 21%. So, while you struggle to pay bills with your declining real income, the Wall Street bankers are again generating record profits and paying themselves record bonuses. Profits are so good, they can afford to pay tens of billions in fines for their criminal acts, and still be left with billions to divvy up among their non-prosecuted criminal executives.

Bernanke and his financial elite owners have been able to rig the markets to give the appearance of normalcy, but they cannot rig the demographic time bomb that will cause the death and destruction of our illusory retail paradigm. Demographics cannot be manipulated or altered by the government or mass media. The best they can do is ignore or lie about the facts. The life cycle of a human being is utterly predictable, along with their habits across time. Those under 25 years old have very little income, therefore they have very little spending. Once a job is attained and income levels rise, spending rises along with the increased income. As the person enters old age their income declines and spending on stuff declines rapidly. The media may be ignoring the fact that annual expenditures drop by 40% for those over 65 years old from the peak spending years of 45 to 54, but it doesn’t change the fact. They also cannot change the fact that 10,000 Americans will turn 65 every day for the next sixteen years. They also can’t change the fact the average Baby Boomer has less than $50,000 saved for retirement and is up to their grey eye brows in debt.

With over 15% of all 25 to 34 year olds living in their parents’ basement and those under 25 saddled with billions in student loan debt, the traditional increase in income and spending is DOA for the millennial generation. The hardest hit demographic on the job front during the 2008 through 2014 ongoing recession has been the 45 to 54 year olds in their peak earning and spending years. Combine these demographic developments and you’ve got a perfect storm for over-built retailers and their egotistical CEOs.

The media continues to peddle the storyline of on-line sales saving the ancient bricks and mortar retailers. Again, the talking head pundits are willfully ignoring basic math. On-line sales account for 6% of total retail sales. If a dying behemoth like JC Penney announces a 20% decline in same store sales and a 20% increase in on-line sales, their total change is still negative 17.6%. And they are still left with 1,100 decaying stores, 100,000 employees, lease payments, debt payments, maintenance costs, utility costs, inventory costs, and pension costs. Their future is so bright they gotta wear a toe tag.

The decades of mal-investment in retail stores was enabled by Greenspan, Bernanke, and their Federal Reserve brethren. Their easy money policies enabled Americans to live far beyond their true means through credit card debt, auto debt, mortgage debt, and home equity debt. This false illusion of wealth and foolish spending led mega-retailers to ignore facts and spread like locusts across the suburban countryside. The debt fueled orgy has run out of steam. All that is left is the largest mountain of debt in human history, a gutted and debt laden former middle class, and thousands of empty stores in future decaying ghost malls haunting the highways and byways of suburbia.

The implications of this long and winding road to ruin are far reaching. Store closings so far have only been a ripple compared to the tsunami coming to right size the industry for a future of declining spending. Over the next five to ten years, tens of thousands of stores will be shuttered. Companies like JC Penney, Sears and Radio Shack will go bankrupt and become historical footnotes. Considering retail employment is lower today than it was in 2002 before the massive retail expansion, the future will see in excess of 1 million retail workers lose their jobs. Bernanke and the Feds have allowed real estate mall owners to roll over non-performing loans and pretend they are generating enough rental income to cover their loan obligations. As more stores go dark, this little game of extend and pretend will come to an end. Real estate developers will be going belly-up and the banking sector will be taking huge losses again. I’m sure the remaining taxpayers will gladly bailout Wall Street again. The facts are not debatable. They can be ignored by the politicians, Ivy League economists, media talking heads, and the willfully ignorant masses, but they do not cease to exist.

“Facts do not cease to exist because they are ignored.”Aldous Huxley

 

Trying to Stay Sane in an Insane World: Part 3

Off the keyboard of Jim Quinn

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Published on The Burning Platform on August 25, 2013

Cuckoos_Nest

Discuss this article at the Economics Table inside the Diner

In Part 1 of this article I documented the insane remedies prescribed by the mad banker scientists presiding over this preposterous fiat experiment since they blew up the lab in 2008. In Part 2 I tried to articulate why the country has allowed itself to be brought to the brink of catastrophe. There is no turning back time. The choices we’ve made and avoided making over the last one hundred years are going to come home to roost over the next fifteen years. We are in the midst of a great Crisis that will not be resolved until the mid-2020s. The propagandists supporting the vested interests continue to assure the voluntarily oblivious populace the economy is improving, jobs are plentiful, inflation is under control, and housing is recovering. Bernanke and his band of merry money manipulators, Obama and his gaggle of government apparatchiks, and their mendacious mainstream media mouthpieces have enacted radical measures in the last five years that reek of desperation in their effort to give the appearance of revival to a failing economic system. Stimulating the net worth of bankers and connected corporate cronies through engineered stock market gains has not trickled down to the peasants. Our owners try to convince us it’s raining, but we know they’re pissing down our backs. Our Crisis mood is congealing.

“But as the Crisis mood congeals, people will come to the jarring realization that they have grown helplessly dependent on a teetering edifice of anonymous transactions and paper guarantees. Many Americans won’t know where their savings are, who their employer is, what their pension is, or how their government works. The era will have left the financial world arbitraged and tentacled: Debtors won’t know who holds their notes, homeowners who owns their mortgages, and shareholders who runs their equities – and vice versa.” The Fourth Turning – Strauss & Howe – 1997

The core elements of this Crisis have been discernible for decades. The accumulation of private and public debt; the civic, moral, and intellectual decay of our society; the growing power of the corrupt corporate fascist surveillance state; growing wealth inequality created by crony capitalist skullduggery; the peak in cheap easily accessible oil; and global disorder caused by overpopulation, scarce resources, religious zealotry, and war; combine in a toxic brew of unimaginable pain, anguish and tragedy. The Crisis began in September 2008 and the sole purpose of the deceitful establishment has been to avert a catastrophe that is destined to extinguish the wealth, power and control they’ve treacherously procured over the last few decades.

The appearance of stability is illusory, as the civic fabric of the country continues to tear asunder. Record high stock markets do not trickle down. The debt engineered stock market gains enrich the .1% at the expense of the working class. Bernanke’s “wealth effect” theory is a charade. He has backed the country into a corner with no escape for the prisoners of his QE prison (he’ll escape to collect his Wall Street paycheck in January). He knows that without the combined $300 billion per month being pumped into the veins of zombie U.S., European and Japanese insolvent zombie banks by central bankers, the worldwide financial system will implode. He blathers on about tapering while awaiting the next government manufactured crisis to give him an excuse to continue or increase his money printing exercise. Control P is the only key on Bennie’s laptop. To think dropping trillions of dollars into the laps of Wall Street will somehow stimulate Main Street is beyond laughable. Some ideas are so ridiculous that only intellectuals and academics could possibly believe them.

The masters of propaganda seem baffled that their standard operating procedures are not generating the expected response from the serfs. They have failed to take into account the generational mood changes that occur during Fourth Turnings. Propaganda loses its effectiveness in proportion to the pain and distress being experienced by the citizenry. Goebbels’ propaganda enthused and motivated the German people during the 1930s as Hitler re-armed, scrapped the Versailles Treaty and took over countries, as well as when he was conquering Poland and France in the early phase of World War II. Propaganda didn’t work so well when the U.S. Air Force was obliterating Dresden, Hitler was hunkered down in his bunker about to put a bullet in his skull, and the Russians were on the outskirts of a burning Berlin. Propaganda works when the people want to believe the falsehoods. When the cold harsh reality slaps them in the face, propaganda no longer works.

    Propaganda Working Well                   Propaganda Not Working So Well

  

The American Empire propaganda machine continues to gyrate but the gears are getting clogged with the gunk of mistruths revealed. Even the willfully ignorant masses are beginning to realize they have been screwed by those running the show. After five years of debt bankrolled “no Wall Street banker left behind solutions” and Keynesian crony capitalist handouts, real median household income is 8% lower, there are 5 million less full-time jobs, there are 19 million more Americans on food stamps, gasoline prices hover near all-time high levels, health insurance premiums are skyrocketing, local, state and Federal taxes relentlessly rise, and the national debt has gone hyperbolic – up by $6.7 trillion in five years.

This 67% increase is more debt than the country accumulated in the 214 years from its founding in 1789 through 2003. The $6.7 trillion of new debt, along with Bernanke printing almost $3 trillion of new fiat dollars and handed to his puppet masters on Wall Street, have generated a pitiful $1.8 trillion of GDP growth. We know Main Street has not benefitted from this insane expansion of our empire of debt. But, someone benefitted.

Shockingly, those who profited from the actions of Bernanke, Obama, Congress, and the U.S. Treasury are the very same malevolent predators that created the financial disaster and prompted the emergency response in the first place. QE to infinity has not been a failure. It has done exactly what it was designed to do. In September 2008 every major Wall Street bank was insolvent. Orderly bankruptcy under existing law was the solution. The richest, most powerful men in the world would have seen vast amounts of their illicitly acquired wealth vaporized. Hundreds of billions in bad debt would have been written off, with no lasting impact on the average American. A brief violent depression would have ensued, but with the bad debt purged from the system and only prudent sensible bankers left, the economy would have rapidly recovered. Instead, a small cadre of financial elite hatched a plan to preserve their ill-gotten gains through accounting fraud, and manipulation of monetary and fiscal policy.

Bernanke and Paulson compelled the pocket protector wearing accounting weenies at the FASB to allow Wall Street banks to mark their assets to make believe rather than market. Bernanke then proceeded to buy up toxic assets from the Wall Street banks, providing a never ending flow of QE heroin injected directly into the veins of Wall Street bankers, and paying .25% on all deposits made by the Wall Street banks. Bernanke didn’t do this so the banks could make loans to John and Susie Q Public and small time entrepreneurs with great business ideas. He did it so Wall Street could repair their insolvent balance sheets on the backs of American taxpayers. The $2 trillion of excess reserves parked at the Federal Reserve by Wall Street banks is “earning” $5 billion of risk free profits for the Too Big to Trust autocrats. Wall Street has generated billions of additional accounting entry “profits” by pretending their future losses on worthless loans will be minimal. Lastly, the “Bernanke Put” allows the Wall Street traders to use their HFT supercomputers and advanced notice of economic data to front run the muppets and syphon billions of risk free trading profits from the real economy. The chart below reveals all you need to know about the true purpose of Bernanke’s QEfinity.

You’d have to be blind, deaf and dumb to not realize who Bernanke is really working for. But it seems the majority of people in this country don’t care, don’t understand or don’t want to know the truth, as long as the ATM keeps spitting out twenty dollar bills, there are still Cool Ranch Doritos on the shelf at the Piggly Wiggly, and the EBT card gets recharged on the first of the month.

“The mischief springs from the power which the monied interest derives from a paper currency which they are able to control, from the multitude of corporations with exclusive privileges which they have succeeded in obtaining…and unless you become more watchful in your states and check this spirit of monopoly and thirst for exclusive privileges you will in the end find that the most important powers of government have been given or bartered away….” ― Andrew Jackson

Parasite on a Parasite on a Parasite

  

“This is by no means a new idea, nor is it the least bit radical; it is deeply conservative and highly traditional. It was Aristotle who first defined the economy as an exchange of goods and services for money, commerce as a parasite on the economy (where those who create nothing extract a share by trading) and finance a parasite on commerce (which extracts a share by switching money from hand to hand – a parasite on a parasite). A typical US politician, such as the president, who counts financial companies such as Goldman Sachs among his top campaign donors, could be characterized as a parasite on a parasite on a parasite – a worm infesting the gut of a tick that is sucking blood from a vampire bat, if you like.” – Dimitri Orlov – The Five Stages of Collapse

The bastardized form of capitalism that passes for our economic system today is based upon a parasitic relationship between Too Big To Trust Wall Street banks, powerful mega-corporations, connected wealthy cronies, and bloodsucking politicians, with the American people as the debt bloated host. The parasites have put the host on life support in critical condition. It took forty years, since Nixon unleashed immoral bankers and devious politicians by decoupling our currency from gold, but the financialization and gutting of America through the false promises of globalization is almost complete. The quaint days of the 1950s and 1960s, when the country was supported by an economy that produced goods, invested in productive assets and citizens who saved money to buy things they desired, are long gone. The insane concepts espoused in the mid-1960s that created our current day welfare/warfare state required Americans to stop using their brains and start using their credit cards. The degenerate Wall Street banking cabal were thrilled to oblige by providing vast sums of debt to the government and the masses. Constant  war, uncontrolled materialism, and an ever expanding welfare state is the triple crown of profits for unscrupulous bankers and corporate CEOs. Once the inconveniant anchor of gold was cut loose by Nixon, the bankers and politicians were free to guide the U.S. Titanic towards its ultimate destination.

The decades long shift from a productive manufacturing society based on savings and investing in productive capital assets to a predatory consumption society based on borrowing and spending has enriched the Wall Street financial elite and destroyed the working middle class. An economy where 25% of its GDP was produced by manufacturing products allowed all boats to rise. A hard working middle class family had a chance to move up the social ladder. An economy where more than 20% of its GDP is dependent upon parasitical financial intermediaries that produce nothing and add no value creates the extreme wealth inequality we have in our society today. Only the yachts rise in such a society. The shift has been slow and methodical and we’ve crossed the point of no return. The propaganda being spewed by the mainstream corporate media and the connected crony capitalists like Jeffrey Immelt about a U.S. based manufacturing revival is designed to pacify the distracted masses. The pillaging by the FIRE sector will continue until the host is deceased.

The growth as a percentage of our GDP in business & professional services from 5% of GDP in 1970 to 12% today provides further evidence of a country in a downward spiral. The country wastes billions hiring “experts” (lawyers, accountants, consultants) to interpret the millions of pages of indecipherable laws, regulations and tax codes created by politicians used to control, monitor, tax and bilk the masses. The 3,300% increase in spending on healthcare and education since 1970 has created tens of millions of sickly functional illiterates. The corporate food conglomerates mass produce processed poison, Madison Avenue maggots peddle the poison to the masses through relentless Bernaysian propaganda marketing, creating nauseatingly obese human beings, and then the corporate healthcare conglomerates treat the dozens of diseases created by this insane process with their drugs, while corporate profits soar ever higher. We all know that superstar corporate CEOs like Jack Welch, Jamie Dimon, Angelo Mozillo, and Mark Zuckerberg deserve hundreds of millions in compensation for adding so much value to our everyday lives. How would we survive without a Best Buy credit card through GE Capital at 21% interest, or a JP Morgan created credit default swap sold to customers and then shorted, or a subprime negative amortization liar loan used to purchase a $750,000 McMansion, or having a place to post every inane thought we have so employers and the NSA can keep up to date on our status.

Corporate-Profits-GDP-081613

The corpulent populace have been so dumbed down by the public educational system run by social engineers and union teachers, along with the 24/7 corporate media propaganda inundating them since childhood, they are content to stare into their boob tubes, play with their iGadgets, or read what a friend of a distant relative ate for breakfast, on Facebook. The government provides enough welfare handouts to keep the increasingly larger lower classes from rioting by borrowing $1 trillion per year from future unborn generations. When the middle class shows signs of discontent regarding their declining wages and lack of jobs, the government and the military industrial complex use the bogeyman of impending terror threats and evil foreign dictators to wage undeclared wars and distract the willfully ignorant masses. Plus, there are always fantasy football leagues, paying $300 to take your family to watch drug enhanced millionaire baseball players not run out a ground ball at a $1 billion taxpayer financed stadium, shopping at a suburban ghost mall with one of your nine credit cards to dull the pain of a meaningless pathetic life, or watch eight year old Honey Boo Boo dress like whore and parade before adult judges on the Discovery Channel. Our choice to ignore the basic mathematics of our lives has resulted in creating a nation of sub-humans wandering through life like zombies in a bad horror movie.

“Anyone who cannot cope with mathematics is not fully human. At best, he is a tolerable subhuman who has learned to wear his shoes, bathe, and not make messes in the house.” ― Robert A. Heinlein

And we owe it all to the bankers and politicians that have procured undue influence over the political, economic, and financial mechanisms that control the country. The 2008 financial collapse, systematically created by the pathologically egomaniacal financial elite who are programmed to thrust their vampire squid blood funnels into every potential pot of untapped wealth in the world, should have led the American people to tear down their criminal enterprise and throw the treacherous predators into prison. Instead, the fearful masses begged the Wall Street bankers and the pandering politician flunkies in Washington D.C. to steal more of their money. The bankers won again.

“They have been able to pay off politicians with political campaign funds and have been granted informal and unspoken yet complete immunity from prosecution, setting the scene for even bigger confiscations of investor capital. With the risk of legal repercussions so small and the temptation to steal so large, why would any of them not take advantage? What do they have to do to stop people from entrusting them with their savings? Put up neon signs that say, “We steal your money”?” – Dimitri Orlov – The Five Stages of Collapse

This capturing of unwarranted power by an unelected group of rich powerful men through deceitful means has left the country at the mercy of these psychopaths as their increasingly desperate measures insure the ultimate destruction of wealth across the planet. There are four central bankers (U.S., EU, Japan, China) who are the front men for the oligarchs. They are empowered with control over 70% of all the money on the planet. Do you think they have your best interests at heart? The financial crisis was caused by excessive levels of debt, created to benefit the issuers of the debt and the politicians who used the debt to promise voters more goodies than they could ever possibly deliver. Those politicians would be long gone before the IOUs came due, but the promises got them re-elected and made them rich. The “solutions” put forth by our owners since 2008 to solve our debt crisis have been to create debt at an even more rapid pace. Total credit market debt in the U.S. has surged by $6 trillion since 2007 to $57 trillion, 345% of GDP (it was 150% in 1970). The entire world is awash in un-payable levels of debt as reckless central bankers and gutless politicians know only one response to every crisis they cause – PRINT!!!

The decline in U.S. household debt has been solely due to write-offs, as the bad debt was shifted from reckless households and gluttonous bankers to the government books, where those who prudently abstained from the debt orgy are now on the hook for trillions of newly created unfunded obligations. Despite a moribund economy, with the lowest percentage of the population employed since 1983, consumer spending tanking, interest rates rising, gas prices near record highs, and poverty levels at all-time highs, corporate profits are off the charts. It seems the “solutions” implemented by the Ivy League MBA financial elite bankers and bureaucrats have had the desired result – enrichment of the criminal class who financialized the nation. The establishment and their media propaganda machine have somehow convinced a vast swath of Americans to believe that record profits accruing to the largest corporations in the world and stock market gains accruing to the 1% are beneficial to their lives. It’s a testament to the power of propaganda that people can be convinced to cheer on their own downfall as they are dehumanized and enslaved by the plantation owners who run this country.

“Crime follows money like a shadow. The more money there is within a society, the greater are its social inequalities. Financialization dehumanizes human relationships by reducing them to a question of numbers printed on pieces of paper, and a blind calculus for manipulating these numbers mechanically; those who take part in this abstract dance of numbers dehumanizes others and, in turn, lose their own humanity and can go on to perform other dehumanizing acts. Money is, in short, a socially toxic substance.” – Dimitri Orlov – The Five Stages of Collapse

There is no more revealing statistic than real median household income to gauge the winners and losers from the financialization and dehumanization of America. The real median household income of $52,100 is still 8% below the early 2008 level of $56,600. It is still 5% lower than it was in 1999, before the Federal Reserve/Wall Street bubble blowing wealth destruction machine really got going. In fact, real median household income has only risen 9% in the last 35 years. Prior to that, most families could live comfortably with only one spouse working. I’d be remiss if I didn’t point out that these calculations are based on the fraudulently manipulated CPI figures which are understated by at least 3% per year. Using a true measure of inflation would reveal median household income to be lower today than it was in the mid-1960s. The bottom 80% have seen a decline in their standard of living since the mid-1960s as inflation has robbed them of purchasing power and the financial elite have skimmed the cream off the top of our economic system. The economic gains have accrued to the top 5%, with astronomical gains being amassed by the .1% ruling elite, who have rigged the game in their favor through laws written by their lobbyists, regulatory shenanigans, tax code manipulation, and buying off politicians. Thank you Bob Rubin, Larry Summers, and Phil Gramm for repealing Glass Steagall and stopping any regulation of financial derivatives. Where would the country be without those two courageous acts on your part?

Those in control of the system have succeeded beyond their wildest dreams as 72% of all the wealth in the US is held in the hands of 5% of the population, with 42% of this in the hands of the top 1%. The top 1% now “earn” over 20% of all the income in the U.S., a level exceeded only once before in the 1920s prior to the Great Crash of 1929 and ensuing Depression. During the heyday of middle class upward mobility, from 1950 through 1970, the top 1% earned 10% of all income. Today, the top 1% is dominated by debt peddling bankers creating derivatives of mass destruction, hedge fund egomaniacs in collusion with bankers to syphon capital away from productive ventures, mega-corporation job destroying executives, entertainment personalities, and shyster lawyers preying on the weak and feeble minded. Our insane society heaps accolades on these rich and famous narcissists, who add no value, produce nothing, create economic havoc, and drain the lifeblood from the dying carcass of a once great nation. The nearly extinct middle class owes their fate to the malevolent men that turned the country into a gambling casino of debt, derivatives, delusion and dreams of jackpots that will never materialize. The bankers and their cronies run the casino and the house always wins, as the chart below confirms.

wealth-change-epi

It is mind boggling that we have allowed ourselves to be brainwashed by the ruling class about the tremendous benefits of globalization, efficiency, productivity, and profitability. When academia, the mass media, and government leaders use their power and influence to convince the masses that ever higher mega-corporation profits benefit the well-being of the country, you end up where we are today. Globalization was nothing more than a scheme by our biggest corporations to use labor arbitrage as a way to increase profits. As American jobs were disappeared overseas to countries that allow slave labor conditions and wages, median household income declined.

The banking cabal stepped to the plate and convinced the increasingly poorer middle class to replace that lost income with easily accessible debt. Just whip out that credit card and use your house as an ATM and you still give the appearance of increasing wealth. You might be in debt up to your eyeballs but, by God, at least the neighbors would think you were doing great. Until the foreclosure sign went up in front of your house in 2009. The marriage of corporations outsourcing American jobs to China with consumer debt peddled by the predator banks was a match made in heaven until the country ran out of decent paying jobs, one in six people was on food stamps, and the average middle class family was drowning in debt. People are beginning to wake up to the fact that corporate efficiency and productivity means firing American workers, cutting benefits, and bigger bonuses for corporate executives as their stock price is boosted by the announcement of more layoffs. The country has been gutted by the predator class in their unquenchable thirst for more. Human nature never changes. Greed, desire, avarice and stupidity will always rear their heads, leading to predictable outcomes.

“Indeed, it had not – not when the nation’s most sophisticated corporate financiers and their accountants were constantly at work finding new instruments of deception barely within the law; not when supposedly cool-headed fund managers had become fanatical votaries at the altar of instant performance; not when brokers’ devotion to their customers interest was constantly being compromised by private professional deals or the pressure to produce commissions; and not when the style-setting leaders of professional investing were plunging as greedily and recklessly as any amateur.” – John Brooks

The psychopaths controlling this country have fashioned untenable financial conditions by further weakening an already structurally deficient economic structure that will result in an epic flood of financial destruction destined to destroy the lives of millions in the U.S. and around the globe. Those who put their faith in financialization and interconnected globalization will reap what they have sowed. We will all feast at a banquet of consequences. Encouraging central bankers across the world to print trillions of fiat currency out of thin air as the solution to our debt problem is the ultimate in idiocracy. The unsustainability of this scheme should be evident to even an Ivy League economist. But the dimwitted government apparatchiks, overeducated economists, greedy corporate executives, vacuous media talking heads, and intellectually dishonest journalists cheer on Ben Bernanke and his central banker brethren.

When you see a Bloomberg bimbo interviewing an Ivy League Wall Street economist about the tremendous merits of QE to infinity, you have a millionaire interviewing a multi-millionaire, with both working for corporations owned by billionaires. Their jobs depend upon the sustenance and further enrichment of the establishment. Therefore, they will lie, obfuscate and mislead their audience about the criminality of their bosses and the true consequences of these crimes against humanity. The existing hierarchy will not willingly surrender their control, power and illegitimately acquired wealth. Only the process of economic collapse, war and revolution will end their reign of terror.

We’ve seen it all before. The cycles of human history have provided us with centuries of proof that a few evil men can gain control over a civilization and procure an inordinate amount of wealth and power before ultimately relinquishing it due to their myopic pathological desire to acquire more. Powerful wealthy narcissists are never satisfied with what they have. Their arrogance and hubris will always be their downfall. Their foolish belief in their own omniscience reveals their true ignorance. Their enormous egos and confidence in the linearity of history blind them to their impending demise. Time is no longer on their side. A reckoning will happen within the next decade. Their gated communities and penthouse doormen will not keep them safe.

The American people cannot shirk their responsibility for this ongoing tragedy. The evil men could only pull off this bank heist with the silent consent of the governed. And that is exactly what has happened. The American people have been gradually persuaded through propaganda and fear to willingly give up freedom, liberty and self-responsibility for safety, security and government provided succor. Over the last forty years the Americans people have allowed themselves to be enslaved in debt by bankers, corporations and politicians, who realized all the riches, while binding the citizens in chains made of credit cards and mortgages. Now that the system has reached its breaking point and the further issuance of debt no longer generates the appearance of growth, the ruling class have resorted to more authoritarian measures, all done in the name of protecting us from phantom terrorists and evil dictators. It’s for the children.

Decisions about our economy are made in secret meetings by unelected officials and with sparse details announced with great fanfare by the corporate media. The President, with the full support of the military industrial complex, chooses which dictators are evil and which are good, with each being interchangeable depending upon the circumstances. The iron fist of American democracy attacks countries at will, without a declaration of war as mandated by the U.S. Constitution. Twenty five hundred page laws, indecipherable reams of regulations, and 60,000 pages of tax code are rammed down the throats of Americans without the benefit of even a debate. Each crisis caused by the previous government solution is met with more laws and regulations, designed and written by the very entities they were supposed to control. The farce of party politics is used to give people the appearance of choice, when there is not an iota of policy difference when the opposing party assumes power.

The people are told every situation is too complicated for them to understand and they should let the “experts” solve the problems. Every authoritarian measure used to control dissent among those capable of thinking is done in the name of national security. Edward Snowden is declared a traitor for revealing the traitorous actions of our own government, and the people silently consent. The head of the NSA is caught lying to Congress, and no one cares. The Department of Homeland Security locks down one of the biggest cities in America looking for a teenager and the people cower and beg Big Brother for more protection. The NSA and other secretive government agencies treat the 4th Amendment like toilet paper, and the people feebly respond by breathlessly texting, twittering and facebooking about Anthony Weiner’s cock. The U.S. military desensitizes the masses by conducting live fire exercises in American cities, and the people just change the channel to Bridezillas or I Didn’t Know I Was Pregnant.

Each new economic “surprise”; each new foreign “threat”; each new government “solution” is met with secrecy, spin, and no avenue for the people to impact the decisions made by our owners. The people no longer matter. They can’t change the course of the country through legal means or the ballot box because the system has been captured. It has happened before. The American people are under the mistaken impression we are free. That boat has sailed. Our economic, financial and political systems have been usurped by malicious men posing as gangsters in this saga. We have allowed this to happen. We mistakenly put our trust in bankers, academics and politicians and will suffer the consequences of our choices, just as the German people experienced during the last Fourth Turning.

“What happened here was the gradual habituation of the people, little by little, to being governed by surprise; to receiving decisions deliberated in secret; to believing that the situation was so complicated that the government had to act on information which the people could not understand, or so dangerous that, even if the people could not understand it, it could not be released because of national security.

Each step was so small, so inconsequential, so well explained or, on occasion, ‘regretted,’ that unless one understood what the whole thing was in principle, what all these ‘little measures’… must someday lead to, one no more saw it developing from day to day than a farmer in his field sees the corn growing…. Each act… is worse than the last, but only a little worse. You wait for the next and the next. You wait for one great shocking occasion, thinking that others, when such a shock comes, will join you in resisting somehow.” – Milton Mayer, They Thought They Were Free, The Germans 1933-45

In the fourth and final installment of this seemingly never ending treatise on a world gone insane, I’ll address how the disintigration of trust will ultimately lead to a collapse of the worldwide Ponzi scheme and how the collapse could lead to a rebirth of a society built upon family, community, cooperation, local commerce, compassion, freedom and liberty. I can dream, can’t I?

Knarf plays the Doomer Blues

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