A New Recession and a New World Devoid of Washington’s Arrogance? — Paul Craig Roberts
June 25, 2014 | Original Here Go here to sign up to receive email notice of this news letter
A New Recession and a New World Devoid of Washington’s Arrogance?
Paul Craig Roberts
June 25, 2014. A final number for real US GDP growth in the first quarter of 2014 was released today. The number is not the 2.6% growth rate predicted by the know-nothing economists in January of this year. The number is a decline in GDP of -2.9 percent.
The negative growth rate of -2.9 percent is itself an understatement. This number was achieved by deflating nominal GDP with an understated measure of inflation. During the Clinton regime, the Boskin Commission rigged the inflation measure in order to cheat Social Security recipients out of their cost-of-living adjustments. Anyone who purchases food, fuel, or anything knows that inflation is much higher than the officially reported number.
It is possible that the drop in first quarter real GDP is three times the official number.
Regardless, the difference is large between the January forecast of +2.6 percent growth and the decline as of the end of March of -2.9 percent.
Any economist who is real and unpaid by Wall Street, the government, or the Establishment knew that the +2.6 percent forecast was a crock. Americans’ incomes have not grown except for the one percent, and the only credit growth is in student loans, as those many who cannot find jobs mistakenly turn to “education is the answer.” In an economy based on consumer demand, the absence of income and credit growth means no economic growth.
The US economy cannot grow because corporations pushed by Wall Street have moved the US economy offshore. US manufactured products are made offshore. Look at the labels on your clothes, your shoes, your eating and cooking utensils, your computers, whatever. US professional jobs such as software engineering have been moved offshore. An economy with an offshored economy is not an economy. All of this happened in full view, while well-paid free market shills declared that Americans were benefiting from giving America’s middle class jobs to China and India.
I have been exposing these lies for a decade or two, which is why I am no longer invited to speak at American universities or to American economic associations. Economists love the money that they receive for lying. A truth teller is the last thing that they want in their midst.
An official decline of -2.9 percent in the first quarter implies a second quarter GDP decline. Two declines in a row is the definition of recession.
Imagine the consequences of a recession. It means that years of unprecedented Quantitative Easing failed to revive the economy. It means that years of Keynesian fiscal deficits failed to revive the economy. Neither fiscal nor monetary policy worked. What then can revive the economy?
Nothing except to force the return of the economy that the anti-American corporations moved offshore.
This would require credible government. Unfortunately, the US government has been losing credibility since the second term of the Clinton regime. It has none left.
Today no one anywhere in the world believes the US government except the brain dead Americans who read and listen to the “mainstream media.” Washington’s propaganda dominates the minds of Americans, but produces laughter and scorn everywhere else.
The poor US economic outlook has brought America’s two largest business lobbies–the US Chamber of Commerce and the National Association of Manufacturers (or what is left of them) into conflict with the Obama regime’s threat of further sanctions against Russia.
According to Bloomberg News, beginning tomorrow (June 26), the business groups will run advertisements in the New York Times, Wall St Journal, and Washington Post opposing any further sanctions on Russia. The US business organizations say that the sanctions will harm their profits and result in layoffs of American workers.
Thus, America’s two largest business organizations, important sources of political campaign contributions, have finally added their voice to the voices of German, French, and Italian business.
Everyone, except the brainwashed American public, knows that the “crisis in Ukraine” is entirely the work of Washington. European and American businesses are asking: “why should our profits and our workers take hits in behalf of Washington’s propaganda against Russia.”
Obama has no answer. Perhaps his neocon scum, Victoria Nuland, Samantha Powers, and Susan Rice can come up with an answer. Obama can look to the New York Times, Washington Post, Wall Street Journal, and Weekly Standard to explain why millions of Americans and Europeans should suffer in order that Washington’s theft of Ukraine is not endangered.
Washington’s lies are catching up with Obama. German chancellor Merkel is Washington’s complete whore, but German industry is telling Washington’s whore that they value their business with Russia more than they value suffering in behalf of Washington’s empire. French businessmen are asking Hollande what he proposes to do with their unemployed workers if Holland goes along with Washington. Italian businesses are reminding that government, to the extent that Italy has one, that uncouth Americans have no tastes and that sanctions on Russia mean a hit to Italy’s most famous and best recognized economic sector–high style luxury products.
Dissent with Washington and Washington’s two-bit puppet rulers in Europe is spreading. The latest poll in Germany reveals that three-quarters of Germany’s population reject permanent NATO bases in Poland and the Baltic states. The former Czechoslovakia, currently Slovakia and the Czech Republic, although NATO members, have rejected NATO and American troops and bases on their territory. Recently, a German minister said that pleasing Washington required giving free oral sex for nothing in return.
The strains that Washington’s morons are putting on NATO might break the organization apart. Pray that it does. NATO’s excuse for existence disappeared with the Soviet collapse 23 years ago. Yet, Washington has increased NATO far beyond the borders of the North Atlantic Treaty Organization. NATO now runs from the Baltics to Central Asia. In order to have a reason for NATO’s continued expensive operation, Washington has had to construct an enemy out of Russia.
Russia has no intention of being Washington’s or NATO’s enemy and has made that perfectly clear. But Washington’s military/security complex, which absorbs about $1 trillion annually of US hard-pressed taxpayers’ money, needs an excuse to keep the profits flowing.
Unfortunately the Washington morons picked a dangerous enemy. Russia is a nuclear armed power, a country of vast dimensions, and with a strategic alliance with China.
Only a government drowning in arrogance and hubris or a government run by psychopaths and sociopaths would pick such an enemy.
Russia’s President Vladimir Putin has pointed out to Europe that Washington’s policies in the Middle East and Libya are not merely total failures but also devastatingly harmful to Europe and Russia. The fools in Washington have removed the governments that suppressed the jihadists. Now the violent jihadists are unleashed. In the Middle East the jihadists are at work remaking the artificial boundaries set by the British and French in the aftermath of World War I.
Europe, Russia and China have Muslim populations and now must worry if the violence that Washington has unleashed will bring destabilization to regions of Europe, Russia and China.
No one anywhere in the world has any reason to love Washington. Least of all Americans, who are being bled dry in order that Washington can parade military force around the world. Obama’s approval rating is a dismal 41 percent and no one wants Obama to remain in office once his second term is complete. In contrast, two-thirds of the Russian population want Putin to remain president after 2018.
In March the poling agency, Public Opinion Research Center, released a report that Putin’s approval rating stood at 76 percent despite the agitation against him by the US financed Russian NGOs, hundreds of fifth column institutions that Washington established in Russia during the past two decades.
On top of US political troubles, the US dollar is in trouble. The dollar is kept afloat by rigged financial markets and Washington’s pressure on its vassal states to support the dollar’s value by printing their own currencies and purchasing dollars. In order to keep the dollar afloat, much of the world will be inflated. When people finally catch on and rush into gold, the Chinese will have it all.
Sergey Glazyev, an adviser to President Putin, has told the Russian president than only an anti-dollar alliance that crashes the US dollar can halt Washington’s aggression. That has long been my opinion. There can be no peace as long as Washington can print more money with which to finance more wars.
As the Chinese government stated, it is time to “de-Americanize the world.” Washington’s leadership has totally failed the world, producing nothing but lies, violence, death, and the promise of more violence. America is exceptional only in the fact that Washington has, without remorse, destroyed in whole or part seven countries in the new 21st century. Unless Washington is replaced with more humane leadership, life on earth has no future.
Update to the Update: The Attack on Gold — Paul Craig Roberts
April 16, 2013 | Find Original Here
Tuesday, April 16. The orchestrated attack on bullion in the paper
gold market took the spot prices of gold and silver down on Friday and
Monday, but actual physical purchases rose during this period. The sales
were of paper claims, not of real metal.
The demand for physical possession of bullion rose so strongly that
large wholesalers such as www.tulving.com and large retailers such as
Gainesville Coins reported sold out items. Also, dealers raised the
premiums above the spot price that is charged for coins. From Friday to
Monday the premium on Silver Eagles at the large online retailer,
Gainesville Coins, rose from $3.75 to $5.99 above the spot price of
silver. The percentage increase in premium was larger than the
percentage decline in the silver price. Thus, the price of a silver one
Troy ounce coin did not drop despite the drop in the spot price. Today
(April 16) the price of a silver eagle purchased with a credit card from
retailer Gainesville Coins is $30.36. You would never know that the
market had fallen out.
Today (Tuesday, April 16) Tulving reported 29% of its bar and coin
bullion categories sold out and had almost no silver coin stock. The
premium over spot on new gold eagles was $63.95. At large online
retailers the premium was $71. Gainesville Coins has no silver Buffalos
and lists shipment of orders to commence when coins are available,
estimated to be May 10.
What I am reporting are facts, not a theory. We have just had two
days of massive sales of paper claims on bullion, but during these days
when the price of gold and silver collapsed under short sales, it was
difficult to get your hands on the metal itself. On telephone orders
you wait in long queues to place an order and are told that delivery
awaits availability.
Listening to the media and to academic economists such as Paul
Krugman, you would think no one any longer wants gold and silver. But
try getting your hands on some.
The physical bullion market, gold especially, is dominated by Asians.
Americans are a minor player. Most Americans still believe in the
almighty dollar, but few Asians do. The Chinese tomorrow would dump
their two trillion of US dollar-denominated assets and purchase gold,
except that the action would drive down the dollar and drive up the gold
price. So, unlike the orchestrated attack on gold, China plays a slow
hand, using the orchestrated attack on gold to acquire the metal at
lower prices.
As I understand it, the open interest or future contracts on COMEX
greatly exceed the bullion available for delivery. This is a paper
market mainly settled in cash, not by taking delivery. If the contracts
had to be settled in bullion instead of cash, the COMEX would fail.
One advantage of growing old is that one gains perspective. I
remember when gold was $35 an ounce and silver $1 an ounce. If memory
serves, until sometimes in the 1960s, a person could still take a paper
dollar to a bank and be given a silver dollar. There were $1 dollar and
$5 dollar silver certificates (paper money) that circulated along with
Federal Reserve currency. At that time banks did not differentiate. A
dollar was a dollar. Silver certificates today have collectors’s value,
but the Federal Reserve currency does not.
If memory serves, sometimes after 1966 if a person presented a silver
certificate to a Federal Reserve Bank, he received one or five ounces
or raw silver in return depending on the denomination of the
certificate, which looked like a Federal Reserve note except it said
Silver Certificate. I have some of these envelopes of little pieces of
silver.
When silver was taken out of US coins in the 1960s and copper was
taken out of the US penny in the early 1980s, despite my opposition as
Assistant Secretary of the US Treasury for Economic Policy, all real
constraints on fiat money were removed.
Today we see the Fed protecting its protection of “banks too big to
fail” with low interest rates by creating enormous sums of money in
order to purchase both Treasury bonds and mortgage backed derivatives.
These Fed purchasers are at the expense of savers and CD and bond purchasers who receive a negative real rate of interest.
Now, to protect its bank rescue policy, the Fed is attempting to
drive down the price of bullion, thus depriving Americans of any way of
protecting their life savings from the inflation that the Fed’s money
printing will ultimately cause.
Save a handful of corrupt banks, screw the American public – that is the Fed’s policy.
Like almost every other American institution, the Fed represents the mega-rich.
Anyone with open eyes can see that it is impossible for the US dollar
to maintain its current exchange value and role as world money when its
supply is being increased by $1,000 billion per year while the world is
ceasing to use the dollar for international payments.
The attack on gold is a desperate attempt to protect the US dollar
from the Fed’s policy of quantitative easing. But the attack on bullion
has apparently failed. The price was driven down, but the demand for
physical possession has hit new highs.
What is it that we really know? What have we learned since the Clinton regime?
We have learned that integrity is rare in the US government, in the
justice system, and in the financial sector. Whatever integrity one can
find in these arenas wouldn’t amount to one ounce of gold.
Americans live in a rigged system in which propaganda determines the
public’s awareness and consciousness. Americans, or most of them, live
in the Matrix.
Since the end of WWII, most foreign governments have been in the
habit of going along with Washington. Only in the aftermath of
Washington’s phony wars based on lies and phony economy based on rigged
statistics is the rest of the world beginning to realize that Washington
is a destabilizing force.
Chavez, the recently deceased leader of Venezuela made the point most
powerfully when he spoke at the UN. Standing at the podium in the
General Assembly, he said that “Satan himself stood here yesterday
speaking as if he owned the world. You can still smell the sulfur.” He
was speaking of George W. Bush, and the entire assembly knew it.
The Russian leader, Putin, speaking of Washington, has declared that we know what comrade wolf is up to.
The Chinese can see the new military bases that stupid Washington is building in the Chinese area of influence.
A country whose currency is being abandoned as the means of
international settlement, not only by the BRICS but also by puppet
states such as Australia and Japan, has reached the point of absurdity
when it tries to eliminate bullion as a refuge against the depreciating
dollar.
The Federal Reserve and the US Treasury using their dependent bullion
banks, every one of which would be busted if interest rates were not
rigged by the Federal Reserve, have used leverage in the paper market to
drive down the prices of gold and silver; yet, purchases of physical
bullion are outrunning supplies.
What we are witnessing is the failure of a policy of financial corruption.
Integrity is a scarce commodity in the US government. Try to find
much of it. Demonstrating a rare example of integrity, Brooksley Born
resigned as head of the Federal Commodity Futures Trading Commission,
because the Federal Reserve chairman, the US Treasury secretary, and
the SEC chairman prevented her from d[o]ing her statutory duty and
regulating over the counter derivatives. The three morons who prevented
her from doing her duty caused the financial collapse.
Integrity is almost non-existent in the US justice system.
Integrity is totally non-existent in the US financial system. As
Michael Hudson has proven, the financialization of the economy has
destroyed the economy.
With dollars, and now with Washington’s demand Japanese yen and
European euros being printed in profusion, where can people put their
money, at least those who still have some?
Can they put it in bonds when the Federal Reserve is monetizing debt
at $1,000 billion annually and real interest rates are negative?
Can they put it in stocks that are pumped up by banks speculating
with the Fed’s money while retail sales, labor force participation, and
consumer incomes fall?
Safety can only be found in gold and silver, traditional, historical
money that cannot be inflated.This is why bullion is under attack by
Washington.
Readers ask me what they can do to protect themselves and where can they go to make gold and silver purchases.
I am not a registered financial advisor. I do not provide financial advice.
Every person must make their own decision. All I can do is to provide information, which is not guaranteed to be correct.
There are various simple options in contrast with the more demanding
options of the professional trader. A person can accumulate gold and
silver coins and keep them in a home safe or bury them on the property.
A person can purchase shares of the Central Fund of Canada which convey
ownership in a company that owns gold and silver bullion in a vault in
Canada. A person can put money under management with companies that have
a strong component of gold, such as Golden Returns Capital LLC whose
gold depository is in the US.
Or you can decide to go with William S. Kaye (wskaye@pacgrp.com) whose depository is in Hong Kong.
There is GoldMoney, a Channel Islands based depository firm with
storage vaults in London, Switzerland and Asia, and there is
GoldSwitzerland, a Swiss company with its storage vault in Switzerland.
If you want a reading on whether physical gold is being sold or
merely paper shorts, subscribe to John Brimelow
brimelowgoldjottings@gmail.com
This list is not exhaustive. Protecting wealth can be harder than
acquiring wealth. This is especially true for the middle class. The
super rich can lose hundreds of millions of dollars and still be rich.
Gold and silver investments are not my speciality. I am an economist.
I am aware that the US media is a propaganda organization, not a
purveyor of truth. Currently the US is creating 1,000 billion dollars
annually, but the demand for dollars is not growing with the supply.
Therefore, the exchange value of the dollar is at risk. A high and
rising dollar price of bullion is an indication that the exchange value
of the dollar with regard to other currencies is too high.
To protect the dollar from its money printing practice, the Fed has
used naked shorts, its bullion bank dependents, and the presstitute
media to drive down the gold price in the paper market, essentially an
unreal market not inhabited by purchasers of physical metal. If the
dollar’s exchange value takes a visible hit, import prices will rise,
and the Fed will lose control over interest rates.
Meanwhile the demand for bullion possession rises.
The latest disinformation being put out is that bullion dealers,
faced with the collapse of bullion prices, are afraid of the risk of
purchasing bullion to sell to the public. They are going out of business
and not replenishing their stocks. Gold and silver bullion is not
available, because bullion dealers are afraid to stock the metals.
Little doubt that Americans who believe every fairy tale “their”
government tells them will believe this one too. But those who don’t
will observe the long lines waiting to purchase physical metal, not
paper claims, and continue to load up on bullion.
