Paul Craig Roberts explains the origins of Labor Day versus what it is today. Most Americans know little of the story ...including the blogger, who hopes you will also visit his preceeding post with an additional little known story of U.S. history.

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Labor Day

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June , 2016 | Original Here | If you wish to receive his newsletter via email go to Original and sign up at bottom.

Paul Craig Roberts

Labor Day—what is it? Perhaps not many Americans any longer know, so here is my explanation.

In my time Labor Day was the unofficial end of summer, because school began after Labor Day.

Today school begins almost a month before. When I was in school that would not have been possible, especially in the South. The schools were not air-conditioned. If school had started in August no one would have showed up. It was difficult enough getting through May before school was out in June.

As most Americans probably thought of Labor Day as the last summer holiday, now that Labor Day has lost that role, what is Labor Day? The holiday originated as an apology capitalists tossed to labor to defuse a standoff.

Workers understood that labor was the backbone of the economy, not Wall Street moguls or bankers in their fine offices. Workers wanted a holiday that recognized labor, thus elevating labor in public policy to a standing with capital. Some states created labor day holidays, but it wasn’t until 1894 that Labor Day was made a federal holiday.

Congress created the federal holiday in response to the murder of strikers by US Army troops and federal marshalls during the Pullman strike of 1894. The factory workers who built Pullman railway cars lived in the company town of Pullman. George Pullman provoked a strike by lowering wages but not the rents charged in the company town.

President Grover Cleveland relied on Attorney General Richard Olney to restore capitalist control. Olney, a former railway attorney, sent in the federal violence to break up the strike. Olney still received a retainer from his railway company that was larger than his salary as US Attorney General. So we know whose side he was on. The presstitute media portrayed the beaten down strikers as unpatriotic foreigners, and the strike leader, Eugene Debs, was sentenced to federal prison. The experience radicalized Debs and turned him into a socialist.

The obvious injustice created more sympathy for labor than capitalists could stomach, so Congress defused the situation by creating Labor Day. President Cleveland washed his hands of the blood on them by signing the legislation.

Officially what we are celebrating on the first Monday of September is American labor, but what is really being celebrated is the success of capitalists again flummoxing the people and avoiding a real social revolution.

The labor movement, which gave us Labor Day, is no longer with us. The American labor movement died about ten years after the death of its most famous leader, George Meany of the AFL-CIO. Meany, born in 1894, died in 1980.

I remember when labor was at the center of politics and policy. There was even a field of economics called “labor economics.” The political influence of labor ended with the offshoring of US industrial and manufacturing jobs. For years US capitalists tried to avoid a fair shake for labor by locating their facilities in Southern states that had right to work laws. But with the collapse of the Soviet Union and the change in attitude of India and China toward foreign capital, capitalists learned that they could increase profits by using foreign labor offshore to produce the goods and services that they sold to Americans. The difference in labor costs flowed directly into profits, executive bonuses, and shareholder capital gains.

Free market economists, who live in a make-believe world, pretend that the lower labor costs flow into lower US consumer prices and that consumers beneift despite the loss of well-paying jobs. The problem with free market economics is that a priori reasoning takes precedence over empirical fact. For free market economists, the way the world should be prevails over the way that the world actually is.

As a consequence of jobs offshoring, industrial and manufacturing cities became semi-ghost towns with declining populations. Municipal and state governments, deprived of tax base, found themselves under duress to make pension payments. To avoid immediate bankruptcy, cities such as Chicago sold off public assets such as 75 years of parking meter revenues for a one time payment.

The Democratic Party, which had been the countervailing power against the Republican business party, was deprived of union funding as the jobs that paid union dues were no longer in America. By moving production offshore, capitalists turned the Democrats into a second capitalist political party dependent on funding from the business sector.

Today we have one party with two heads. The competition between the parties is about which party gets to be the whore for the capitalists for the next political term. As Democrats and Republicans swap the whore function back and forth, neither party has an incentive to do anything different.

The offshoring of high productivity, high value-added US jobs has destroyed the labor movement. How much luck will labor leaders have organizing people who hold part-time jobs as waitresses, bartenders, hospital orderlies, and retail clerks? As I have pointed out for years in my reports on the monthly payroll jobs reports, the United States now has the labor profile of a Third World country. The absence of jobs that can support an independent existence and family life is the reason that more Americans aged 24-34 live at home with parents than live independently. The absence of jobs is the reason the labor force participation rate has declined for years. The absence of jobs that pay sufficiently to provide discretionary income is the reason the economy cannot grow.

Looking at last Friday’s BLS payroll report, the jobs are in the lowly paid, part-time service sector. The goods producing sector of the economy lost 24,000 jobs. The jobs are in retail trade, health care and social assistance, waitresses and bartenders, and government which is tax supported employment.

Whether Washington policymakers realize it or not, the American work force smells like India’s of a half centruy ago. Whatever deranged Hillary and her neoconservatives claim, there is no evidence in the compositon of the US labor force that the US is a superpower. Indeed, what the employment statistics show is that the United States is a third world country, a country whose leaders are so out of their minds that they are picking fights with first world countries—Russia and China.

The United States of America is on its last legs. As there is no willingness to recognize this, nothing can be done about it. America’s last function is to cause World War 3 in which all of us will expire.

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For any of those who think that Colin Kaepernick is some kind of a traitor and/or a disgrace to America, read the real truth below. It exposes a little known event in American history which took place when the young United States decided to grab Canada from the British Empire. It is something never mentioned in U.S. schools.

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Colin Kaepernick Is Righter Than You Know: The National Anthem is a Celebration of Slavery

Before a preseason game on Friday, San Francisco 49ers quarterback Colin Kaepernick refused to stand for the playing of “The Star-Spangled Banner.” When he explained why, he only spoke about the present: “I am not going to stand up to show pride in a flag for a country that oppresses black people and people of color. … There are bodies in the street and people getting paid leave and getting away with murder.”

Twitter then went predictably nuts, with at least one 49ers fan burning Kaepernick’s jersey.
Almost no one seems to be aware that even if the U.S. were a perfect country today, it would be bizarre to expect African-American players to stand for “The Star-Spangled Banner.” Why? Because it literally celebrates the murder of African-Americans.

Few people know this because we only ever sing the first verse. But read the end of the third verse and you’ll see why “The Star-Spangled Banner” is not just a musical atrocity, it’s an intellectual and moral one, too:

No refuge could save the hireling and slave
From the terror of flight or the gloom of the grave,
And the star-spangled banner in triumph doth wave
O’er the land of the free and the home of the brave.

“The Star-Spangled Banner,” Americans hazily remember, was written by Francis Scott Key about the Battle of Fort McHenry in Baltimore during the War of 1812. But we don’t ever talk about how the War of 1812 was a war of aggression that began with an attempt by the U.S. to grab Canada from the British Empire.

However, we’d wildly overestimated the strength of the U.S. military. By the time of the Battle of Fort McHenry in 1814, the British had counterattacked and overrun Washington, D.C., setting fire to the White House.

And one of the key tactics behind the British military’s success was its active recruitment of American slaves. As a detailed 2014 article in Harper’s explains, the orders given to the Royal Navy’s Admiral Sir George Cockburn read:

Let the landings you make be more for the protection of the desertion of the Black Population than with a view to any other advantage. … The great point to be attained is the cordial Support of the Black population. With them properly armed & backed with 20,000 British Troops, Mr. Madison will be hurled from his throne.

Whole families found their way to the ships of the British, who accepted everyone and pledged no one would be given back to their “owners.” Adult men were trained to create a regiment called the Colonial Marines, who participated in many of the most important battles, including the August 1814 raid on Washington.

Then on the night of September 13, 1814, the British bombarded Fort McHenry. Key, seeing the fort’s flag the next morning, was inspired to write the lyrics for “The Star-Spangled Banner.”

So when Key penned “No refuge could save the hireling and slave / From the terror of flight or the gloom of the grave,” he was taking great satisfaction in the death of slaves who’d freed themselves. His perspective may have been affected by the fact he owned several slaves himself.

With that in mind, think again about the next two lines: “And the star-spangled banner in triumph doth wave / O’er the land of the free and the home of the brave.”
The reality is that there were human beings fighting for freedom with incredible bravery during the War of 1812. However, “The Star-Spangled Banner” glorifies America’s “triumph” over them — and then turns that reality completely upside down, transforming their killers into the courageous freedom fighters.

After the U.S. and the British signed a peace treaty at the end of 1814, the U.S. government demanded the return of American “property,” which by that point numbered about 6,000 people. The British refused. Most of the 6,000 eventually settled in Canada, with some going to Trinidad, where their descendants are still known as “Merikins.”
Furthermore, if those leading the backlash against Kaepernick need more inspiration, they can get it from Francis Scott Key’s later life.

By 1833, Key was a district attorney for Washington, D.C. As described in a book called Snowstorm in August by former Washington Post reporter Jefferson Morley, the police were notorious thieves, frequently stealing free blacks’ possessions with impunity. One night, one of the constables tried to attack a woman who escaped and ran away — until she fell off a bridge across the Potomac and drowned.

“There is neither mercy nor justice for colored people in this district,” an abolitionist paper wrote. “No fuss or stir was made about it. She was got out of the river, and was buried, and there the matter ended.”

Key was furious and indicted the newspaper for intending “to injure, oppress, aggrieve & vilify the good name, fame, credit & reputation of the Magistrates & constables of Washington County.”

You can decide for yourself whether there’s some connection between what happened 200 years ago and what Colin Kaepernick is angry about today. Maybe it’s all ancient, meaningless history. Or maybe it’s not, and Kaepernick is right, and we really need a new national anthem.

Wall Street tells it like it is!!! Just what is the underpinning of the sudden pitch upward of the Standard&Poor 500, the Dow Jones Industrial, and the Nasdaq? What are they smoking? Or are they just stupid? Fed chief Janet Yellen keeps saying that there is 100% employment in the U.S. ...ignoring the 23% of Americans who have wanted a job but finally gave up because there simply weren't any. The remaining "middle class" jobs pay very little, so those folks have little money to spend on frivolous things. Thus, it is increasingly likely that the fat cats of the stock markets will soon find themselves in a monumental market crash. Don't you go down with them. Sell everything but quality gold and silver producers.

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At Ports, a Sign of Altered Supply Chains

Flat import activity indicates how retailers are adjusting as customers shop online
 

Cargo containers were stacked on the docks at the Port of Los Angeles in February. U.S. ports are on pace to handle 2.2% more imports this year, the slowest rate of growth since 2011. Photo: Patrick T. Fallon for The Wall Street Journal

By ERICA E. PHILLIPS and ROBBIE WHELAN
Updated Aug. 29, 2016 6:12 p.m. ET

This summer, dockworkers, truckers and railroads geared up for a surge of retail goods passing through U.S. ports that hasn’t occurred.

Imports are flat at major seaports on both coasts heading into peak shipping season, the stretch in late summer and early fall when retailers usually load up on imported toys, clothing and other merchandise to sell to holiday shoppers. If the trend holds, it will be the second year in a row without a traditional peak.

Economists say subdued activity on the docks is a sign of how retailers are slimming down their supply chains as more of their customers shop online. Companies such as Target Corp. , Lowe’s Cos. and J.C. Penney Inc. are pivoting away from maintaining stores brimming with merchandise. Instead, they are housing more goods in warehouses where they can quickly ship to stores or fulfill online orders.

It is a shift that has caught the transportation sector off guard. Ports from New York to Georgia to California have spent billions of dollars to upgrade equipment and deepen harbors to handle an expected flood of imports that has yet to materialize. Shipping lines are scrapping vessels and cutting back service on unprofitable routes. Trucking companies bought tens of thousands of new big rigs as recently as 2015, many of which sit idle today.

“My drivers say, ‘Boy, we’ve never seen it so slow,’ ” said Fred Otterbein, who heads the Savannah, Ga., office of port trucking company First Coast Logistics Inc. “It may be the new normal.”

U.S. ports are on pace to handle 2.2% more imports this year, the slowest rate of growth since 2011, according to Hackett Associates LLC, a consulting firm. In July, when shipping volumes typically start their peak-season ramp-up, imports fell at the nation’s two busiest port complexes, in Southern California and New York. The National Retail Federation estimates that August and September will continue the trend, with import volumes down slightly for both months from the same period last year.

The slowdown extends to the nation’s highways and railroads. Freight carried by road and rail fell 2.6% in July compared with the same month in 2015, the 17th consecutive month of year-over-year declines, according to data company Cass Information Systems Inc.
 
“The running joke going around is that flat is the new growth,” said Jett McCandless, chief executive of transportation-technology startup project44.

Freight volumes are stagnating despite strong consumer spending, which rose for a fourth-straight month in July. The problem for traditional retailers: More of those dollars are being spent online, or on entertainment and services such as health care.

Many retailers are stuck with large amounts of unsold goods as a result, reducing their need to import more merchandise. Even after a year of attempting to slim down inventories, retailers’ ratio of inventories to sales, a measure of excess stocks, touched 1.5 in June, close to a seven-year high, according to the Census Bureau. In their most recent earnings reports, Target and Lowe’s reported inventories up more than 4% over the same period last year.

J.C. Penney is placing “slightly smaller orders…or holding back quite a bit” to reduce inventories, Mike Robbins, J.C. Penney’s executive vice president for supply chain, told investors in June. The company has reduced the size of some orders at the beginning of major shopping seasons by as much as 70%.

The focus on reducing inventories is proving to be a drag on growth because it signals that businesses are spending less, and might be pessimistic about future demand. Inventory drawdowns cut second-quarter growth by 1.26 percentage points, to just 1.1%.

Shipping lines are struggling to plan their routes as order volumes become more difficult to predict, said Niels Erich, spokesman for a group of 15 major shipping lines known as the Transpacific Stabilization Agreement. In the past, carriers could count on the peak summer months to make up for slower winter trade.

“Now that doesn’t exist in the same way, it’s all kind of flat,” he said.

Some analysts expect retailers to place last-minute orders closer to the holidays, which could make up for some of the softness in imports that ports are experiencing now. J.C. Penney, for one, expects to place smaller orders for certain products that typically sell strongly throughout the holiday shopping season, Mr. Robbins said.

If those orders materialize, they could come in via air, usually the fastest mode of freight transportation, analysts say.

Long term, retailers will need to step up imports as they run through inventories, particularly if consumer demand stays strong. But a return to double-digit percentage growth at the ports appears unlikely, said Jock O’Connell, an international trade economist.

“What’s really going to drive import trade is simply the domestic demand for goods,” he said.

Write to Erica E. Phillips at erica.phillips@wsj.com and Robbie Whelan at robbie.whelan@wsj.com

Paul Craig Roberts begins this all to true issue with this paragraph: "Acquaintances of my generation are puzzled by the disappearance of the American left. They remember when there was far less war, far less monopoly capitalist theft, a less rich and powerful elite, less police violence against civilians, less militarization, less privatization and deregulation, fewer attacks on the social safety net, less propaganda from the media, and yet, despite the milder state of affairs, the leftwing was present raising hell about it all." NB, The bloger is of the very same generation, and he too laments the disappeance of the left just when we need it most.

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What Became of the Left? — Paul Craig Roberts 

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August 19, 2016 | Original Here | If you wish to receive his newsletter via email go to Original and sign up at bottom.

What Became of the Left?

Paul Craig Roberts

Acquaintances of my generation are puzzled by the disappearance of the American left.

They remember when there was far less war, far less monopoly capitalist theft, a less rich and powerful elite, less police violence against civilians, less militarization, less privatization and deregulation, fewer attacks on the social safety net, less propaganda from the media, and yet, despite the milder state of affairs, the leftwing was present raising hell about it all.

For fifteen years, and more if we go back to the Clinton regime’s destruction of Yugoslavia, the US has been engaged in wars on populations in seven—eight counting Yugoslavia/Serbia—countries, causing millions of deaths, disabled, and dislocated peoples. A police state has been created, the US Constitution stripped of its protective features, and massive crimes committed under both US and international law by three administrations. These crimes include torture, transparent false flag events, naked aggression (a war crime), spying without warrants, and murder of US citizens. Yet, the leftwing’s voice is barely heard.

Clearly, my acquaintances are beginning to miss the challenge to explanations and the country’s direction that the left formerly provided. I know how they feel. We used to be pushed along by biases and stereotypical thinking, and the left was there to rattle our cage. Now we are pushed along by propaganda and there is no countervailing force except a few Internet voices.

I remember telling the audience in the Q&A session after my Frank M. Engle Lecture in 1992 that I never realized how much we would miss US Supreme Court Justices Brennan and Marshall.

Today we need a leftwing far more desperately than we did when we had one. Today governments considered democratic have the powers of a dictatorship. In the United States, for example, habeas corpus has been erased from both law and Constitution. Even worse, White House officials can create lists of citizens to be murdered without due process of law. These are the powers of a dictator. Yet, these attributes of dictatorship are now institutionalized and go unremarked.

One would think that the dispossessed American workers, whose jobs and financial security have been moved offshore and given to foreigners, would be protesting in the streets like the French do. But not a peep. When presidential candidate Ross Perot warned American workers of what was about to happen to them, they did not have enough confidence to vote for him. Have the dispossessed American workers gained enough sense—or is the problem a lack of leadership—to vote for Trump who acknowledges the job loss that is eroding the prospects of the 99 percent? If Trump does not intend to deliver or is incapable of delivering, we are still better off because a failure to deliver raises the awareness of the people.

From the standpoint of the left, there is a perfect environment for them in present day America. So where is the left?

Here is my answer to the question. The left suffered a tremendous blow when the Soviet Union collapsed. The Soviet collapse deprived the left of its belief that there was an alternative to American “democratic capitalism.” The Soviet collapse also disheartened the left because the collapse removed any constraint on Washington’s unilateralism. With China shaking off Mao and moving into the capitalist camp, there was no one to pick up the torch.

People are puzzled why the left goes along with the government’s explanations of what appear to be orchestrated false flag terror events. If people of no political persuasion, such as architects and engineers, physicists, nano-chemists, firemen and first responders, airline and military pilots, challenge on the basis of evidence the official account of 9/11, why does the leftwing defend the account of a government that in other circumstances the left distrusts 120%? The left knows that Tonkin Gulf was an orchestration for war, that Saddam Hussein had no “weapons of mass destruction,” that Iran had no nukes. The left knows that the government lies through its teeth, so why does the left believe the government’s improbable conspiracy theory of 9/11?

The answer, I think, is that with the demise of Marxism, the left’s only hope is that the peoples oppressed by the West will rise up. The left finds huge emotional satisfaction in 9/11 as blowback of the oppressed against the oppressor. This is why the left clings to the official story of 9/11. And to the stories of other “terrorist events,” such as Orlando and Nice despite the lack of any real evidence in behalf of the stories.

I can remember when the American left, if told that a large truck traveling at a reported 56 miles per hour had mowed down 185 people and, then, being shown in the immediate aftermath the truck devoid of a spot of blood, clothing, human flesh, or even a small dent, would have shouted down the obviously false account.

Ask someone who has hit a dog at 56 mph about the blood and damage to the car. Ask someone who has hit a deer and the car is totaled. Ask experts if a large truck hit a person at 56 mph if the person’s body would remain intact and could be viewed lying without any apparant damage or blood in the street.

You don’t need to ask, do you? You see the point. The force of a large truck moving at 56 mph that hits a human is going to splatter that human all over the street. Yet, the Nice photos show no such event.

I can remember when the American left, if told by a Nice police official that the French Minister of the Interior in Paris had ordered Nice authorities not to release and to immediately destroy the entire filming of the alleged terror event from security cameras posted along the entire street where allegedly 185 people were hit by a truck and, additionally, to falsify the police report of the event, the left would have been demanding blood from the authorities, not calling those who do demand explanations “conspiracy kooks.”

Today the American left wants to shut down those who do raise questions about such very strange events in which a few Saudis who could not fly airplanes prevailed over the American National Security State and in which 185 people are allegedly hit by a large truck but the photos show no such results and the Paris officials order the destruction of the recorded evidence and the falsification of the report.

The official story of 9/11 is the justification for the wars. It is difficult to oppose wars when you accept the reason for them. By accepting the government’s 9/11 conspiracy theory, the leftwing killed the antiwar movement.

Why does the left trust the government precisely on those matters that the government uses to justify war and a police state? The answer is that those who challenge the official story deprive the left of the emotional satisfaction that comes from the belief that oppressed peoples are capable of striking back and do strike back. Alexander Cockburn once explained this to me himself. He said that when I report the challenges of experts to the official 9/11 story, I am taking away the dignity of oppressed peoples by assuming that they do not strike back against their oppressors. Alex could not accept the truth, because it meant that the oppressed acquiesced in their oppression.

I understand how Alex saw it. I understand the importance to any movement of hope, and I regret that the left has positioned itself such that facts undermine hope, causing the left to come out against facts.

I offer the left, or the simulacrum that remains, a different hope: trust the power of truth. Don’t defend the oppressor, attack him, and as you attack him your might will grow. People are not forever fools. A time comes when their personal situation contradicts the story fed to them. But if there is no leadership, awareness cannot graduate into revolt.

The West needs a strong leftwing movement with the strength to challenge the lies that are leading the world to a war of extinction of life. I would prefer a reformist left to a revolutionary one, but this is not to say that a revolutionary left is not preferable to what exists today, which is revolutionary neoconservatism without opposition from a countervailing force.

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Paul Craig Roberts is only one year younger than me, and we both got under-graduate degrees in technical universities, his at Georgia Tech, mine at Carnegie Tech. Moreover, we both took six years to get our PhDs, his in economics from from the University of Virginia, after also studying at University of California at Berkeley and Merton College at Oxford University. Thus he became a top knotch economist, becoming Assistant Secretary of the Treasury under Ronald Reagan and an associate editor on the Wall Street Journal before giving up such paying jobs in order to expose the crimes of our government. Less importantly, I became a prize winning physicist after Graduating from Brown University. But in the present situation you will learn more of what you need to know from him than from me. So my readers should peruse PCR's posts that I have reposted today and yesterday. All that I can give you now is how to make money when the stock market crashes ...which is beginning happen as we speak. (See my second reposts below each of PCR's.)

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How Long Can Economic Reality Be Ignored? — Paul Craig Roberts

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August 10, 2016 | Original Here | If you wish to receive his newsletter via email go to Original and sign up at bottom.

How Long Can Economic Reality Be Ignored?

Paul Craig Roberts

Trump and Hitlery have come out with the obligatory “economic plans.” Neither them nor their advisors, have any idea about what really needs to be done, but this is of no concern to the media.

The presstitutes operate according to “pay and say.” They say what they are paid to say and that is whatever serves the corporations and the government. This means that the presstitutes like Hitlery’s economic plan and do not like Trump’s.

Yesterday I listened to the  say how Trump pretends to be in favor of free trade but really is against it, because he is against all the free trade agreements such as NAFTA, the Trans-Pacific and Trans-Atlantic partnerships. The presstitutes don’t know that these are not trade agreements. NAFTA is a “give away American jobs” agreement, and the so-called partnerships give away the sovereignty of countries in order to award global corporations immunity from laws.

As I have reported on many occasions, the Oligarchs’ government lies to us about everything, including economic statistics. For example, we are told that we have been enjoying an economic recovery since June, 2009, that we are more or less at full employment with an unemployment rate of 5% or less, and that there is no inflation. We are told this despite the facts that the “recovery” is based on the under-reporting of the inflation rate, the unemployment rate is 23%, and inflation is high.

GDP is measured in current prices. If GDP rises 3% this year over last year, the output of real goods and services might have risen 3% or prices might have gone up by 3% or real output might have dropped but is masked by price increases. To know what really happened the nominal GDP number has to be deflated by the amount of inflation.

In times past we could get a reasonable idea of how the economy was doing, because the measure of inflation was reasonable. That is no longer the case. Various “reforms” have taken inflation out of the measures of inflation. For example, if the price of an item in the inflation index goes up, the item is taken out and a cheaper item put in its place. Alternatively, the price rise is called a “quality improvement” and not counted as a price rise.

In other words, by defining inflation away, price increases are transformed into an increase in real output.

The same thing happens to the measure of unemployment. Unemployment simply isn’t counted by the reported unemployment rate. No matter how long and hard an unemployed person has looked for a job, if that person hasn’t job hunted in the past four weeks the person is not considered to be unemployed. This is how the unemployment rate is said to be 5% when the labor-force participation rate has collapsed, half of American 25-year-olds live with their parents, and more Americans age 24-34 live with parents than independently.

Finanial reporters never inquire why government statistics are designed to provide an incorrect picture of the economy. Anyone who purchases food, clothing, visits a hardware store, and pays repair bills and utility bills knows that there is a lot of inflation. Consider prescription drugs. AARP reports that the annual cost of prescription drugs used by retirees has risen from $5,571 in 2006 to $11,341 in 2013, but their incomes have not kept up. Indeed, the main reason for “reforming” the measurement of inflation was to eliminate COLA adjustments to Social Security benefits. https://www.rt.com/usa/334004-drug-prices-doubled-years/

Charles Hugh Smith has come up with a clever way of estimating the real rate of inflation—the Burrito Index. From 2001 to 2016 the cost of a burrito has risen 160 percent from $2.50 to $6.50. During these 15 years the officially measured rate of inflation is 35 percent.

And it is not only burritos. The cost of higher education has risen 137% since 2000. The Milliman Medical Index shows medical costs to have risen far above official inflation from 2005 to 2016. The costs of medical insurance, trash collection, you name it, are dramatically higher than the official rate of inflation. http://www.oftwominds.com/blogaug16/burrito-index8-16.html

Food, tuiton and medical costs are major outlays for households. Add zero interest on savings to the problem of coping with major cost increases when real incomes are stagnant and falling. For example, grandparents cannot help grandchildren with their student loan debt when zero interest rates force grandparents to draw down their savings in order to supplement essentially frozen Social Security benefits during a time of high inflation. Savings are being taken out of the economy. Many families exist by paying only the minimum payment on their credit card balance, which means that their debt grows monthly.

Real economists, if there were any, looking at the real economic picture would see an economy collapsing into widespread debt deflation and impoverishment. Debt deflation is when consumers after they service their debts have no discretionary income left with which to drive the economy with purchases.

The reason that Americans have no income from their savings is that public authorities put the welfare of a handful of “banks too big to fail” above the welfare of the American people. The enormous liquidity created by the Federal Reserve has gone into the financial system where it has driven up the prices of financial instruments. There has been a stock market recovery but not an economic recovery.

In the past liquidity implied economic growth. When the Federal Reserve loosened monetary policy, the increase in consumer demand caused an increase in the output of goods and services. Stock prices would rise anticipating higher profits. But in recent years financial markets have not been driven by fundamentals, which are adverse, but by the liquidity that the Federal Reserve has pumped into the banking system in order to save a handful of over-sized banks and insurance giant AIG, all of which should have been allowed to fail. The liquidity had to go somewhere and it went into the prices of stocks and bonds, causing a tremendous asset inflation.

What sense does it make to have zero interest rates when high inflation is eating away the real value of money? What sense does it make to have high price/earnings ratios when the consumer market cannot expand? What sense does it make to have a stable dollar when the Federal Reserve has created far more dollars than the economy has created goods and services? What sense does it make to undermine the financial condition of pension funds and insurance companies with zero interest rates, leaving them with no fixed income hedge against the stock market?

It makes no sense. We are in a trap in which collapse seems the only way out. If interest rates reflected the real rate of inflation, the hundreds of trillions in derivatives would blow up, the stock market would collapse, unemployment could not be hidden with under-measurement, budget deficits would rise. What would public authorities do?

When crisis hits, what happens to corporations that used profits and borrowed money, that is, debt, to buy back their own stocks in order to keep the price high and, thereby, executive bonuses high and shareholders happy and disinclined to support takeovers? Chaos and its companion Fear take over from Contentment. Hell breaks loose.

Is more money printed? Does the money find its way into consumer prices? Do we experience simultaneously massive inflation and massive unemployment?

Don’t expect the presstitutes, the politicians, or Wall Street to confront any of these questions.

When the crisis occurs, it will be blamed on Russia or China.

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The Felder Report speaks for itself. Speaking separately is my silver and gold companies at 9:50am EDT today. The top four are companies that I own shares in, which process and sell gold and/or in the case of SLW, silver. (UEC is a uranium company.) Note that a little arithmetic leads to the fact that the average of my four gold and silver companies at this point in morning is 34 times the (then) upward movement of the DowJones (DJI). Now at 11:35am, the gold and silver companies are beaten down a bit by the stock market criminals who can borrow as much cash as they need to do this kind if faking. However, at the moment I am composing this, the Dow is MINUS 44! I sure hope that the readers of my blog will learn something from these things before it's too late.

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The Felder Report

It’s earnings season once again and it looks as if, as a group, corporate America still can’t find the end of its earnings decline since profits peaked over a year ago. What’s more analysts, renowned for their Pollyannish expectations, can’t seem to find it, either.

So I thought it might be interesting to look at what the stock market has done in the past during earnings recessions comparable to the current one. And it’s pretty eye-opening. Over the past half-century, we have never seen a decline in earnings of this magnitude without at least a 20% fall in stock prices, a hurdle many use to define a bear market.

Blogger's advice: If you read this far but fail to read my preceding post, you will only know half of the evidence that the stock markets are doomed to crash.

Oh how our government lies! But when it comes to the economy, the bigger the lies the bigger will be the crash. Here I'm talking about the stock market. And the only good news is that the banksters and stock market riggers will "go down with the ship" due to their own greedy ignorance. However, you honest folks with small savings should either sell all now ...or actually make money during the crash by buying into companies that already own large quantities of silver and gold ore which they can melt into those precious metals whenever the demand increases. (I provide you with several tried and trusted such companies in my second blog below.)

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Another Phony Jobs Report — Paul Craig Roberts

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August 8, 2016 | Original Here | If you wish to receive his newsletter via email go to Original and sign up at bottom.

Another Phony Jobs Report

Paul Craig Roberts

As John Williams has made clear, the monthly payroll jobs number consists mainly of an add-on factor of 200,000 jobs. These jobs are a product of the assumption in the Birth-Death Model that new business ventures create more unreported new jobs than the unreported job losses from business failures. If we subtract out this made-up number, July saw a gain of 55,000 jobs, not enough to keep up with population growth. Even the 55,000 figure is overstated according to John Williams’ report: “The gimmicked, headline payroll gain of 255,000 more realistically should have come in below zero, net of built-in upside biases.”

In other words, the 255,000 jobs are the product of a virtual reality created by a faulty model and manipulations of seasonal adjustments. Williams says the real rate of unemployment is not the claimed 4.9% figure but 23%.

Even if we assume that 255,000 jobs were created in July, the news remains bad, because the jobs claimed are mainly lowly paid part time jobs without benefits and provide insufficient income to support an independent existence. This is why so many employed young people
continue to live at home with their parents.

The labor force participation rate, a measure of labor market strength, is far below where it was 22 years ago. The low participation rate is inconsistent with the claimed 4.9% rate of unemployment. 

Real GDP growth has been flat since 2009. The government produces the illusion of growth by understating inflation.

The conclusion is that Washington lies about the economy just as it lies about everything else.

The liquidity provided by the Federal Reserve, the European Central Bank, Bank of Japan, and Bank of England inflates the prices of stocks and bonds and keeps the stock market near its high. The inflated stock market creates the impression that the economy is strong. But, of course, if the economy were strong, interest rates would not be zero.

The house of cards will not forever stand.

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The graph below explains a major factor driving Warren Buffett's conclusion that the major stock markets are due to crash. The Margin Debt (red) is the amount of BORROWED money used by the denizens of the markets to trick "moms and pops" to renew buying shares. The blue line is the actual value of the Standard&Poors 500 over time. Clearly, mom and pop are no longer wealthy enough to be in the makets at all. Indeed they barely have enough for food and shelter ...if they are lucky ones. The red trace shows the bottoms of the stock market crashes of 2001 and 2009. And those paying attention are certain that the comming crash will soon be far deeper than it's predecessors (perhaps -70%!). Fortunately the real losers will be the banksters and market manipulators who actually believe that they are safe from any impending crash because of the recent anouncement of 255,000 new payroll jobs. As Paul Craig Roberts put it in the post above, "the 255,000 jobs are the product of a virtual reality created by a faulty model and manipulations of seasonal adjustments," whereas the truth of the matter is that 23% of all working-age Americans who have tried hard to find jobs but finally gave up, are now treated as though they don't exist in the statistics of U.S. payroll jobs. In the meantime, if you have savings at a bank or a 401K you can, and should, buy gold and silver mining companies. Some are not as good as others, but here are some that we have been making good money with: OR, FNV, AEM, SLW, and RGLD (all on the NYSE). All have done well this year ...even given that the banksters sell them furiously in order to push upward the major stocks, which they imagine mom and pop will now buy into (dream on!). When the crash finally comes, gold and silver well fly in proportion to the banksters' markets dive.

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If you follow Warren Buffett’s methodology, stocks are significantly overvalued

Brian Kelly | @BKBrianKelly

Thursday, 4 Aug 2016 | 10:11 AM ET

Adam Jeffery | CNBC

Warren Buffett

When I turned bearish in January 2016 I missed three critical elements that caused the S&P 500 to grind toward record highs. First, a sufficient number of other investors did not share my skepticism about the global economy. Second, I misjudged investor faith in central bankers. Third, I underestimated the continued global appetite for yield bearing stocks. However, in recent days a host of big money investors have been vocally bearish. Does this mean the herd is turning and that I may have just been early? Perhaps, but what are these investors seeing that has led them to embrace my skepticism? Risk versus reward.

Big money understands that investing is more about balancing risk and reward than about being "right." Investing is a game of probability, and since nobody has a crystal ball, the best we can all do is make educated guesses and place bets when the odds are in our favor. The odds may no longer be in equity investor's favor.

Warren Buffett is one of the biggest investors in the world and his preferred method for valuing the stock market is now suggesting that U.S. stocks are significantly overvalued. Buffett has stated that using Total Market Capitalization to GDP is "probably the best single measure of where valuations stand at any given moment." For those who want to dig deeper into this valuation metric the website Gurufocus.com is a great resource.

Currently, the ratio of Total Market Cap (as measured by the Wilshire Total Market Index) to GDP is 121 percent. There is only one other time since 1971 that this ratio has registered such an overvalued reading…that was in December of 2000. Moreover, GuruFocus has tracked market returns using this indicator and at current levels it suggests the total expected yearly return for U.S. stocks is 0.1 percent, including dividends. The current dividend yield is roughly 2.04 percent, which means this indicator is forecasting that stocks will fall by 2 percent over the next year.

Think about that for a minute. The preferred valuation metric of the world's most successful and wealthiest investor is suggesting that there is little to no upside for stocks. When big money tries to calculate the risk of investing against the reward, a negative return will simply not compute. To my mind, this could be the reason that the likes of high-profile investors Jeff Gundlach and Bill Gross have suggested either selling everything or buying gold.

In addition to the lack of reward, faith in the ability of central bankers to manufacture an economic recovery is being challenged. Over the last few trading sessions the yield on Japanese government bonds have jumped the most since 2013. In the aftermath of the 2013 Japanese yield spike the Japanese stock market fell more than 7 percent

Will history repeat?

Japan has been the laboratory for experimental monetary policy for the better part of 20 years. Recently the head of the Bank of Japan called for a review of current policy to be released in September. The market reaction to this anticipated review has been decidedly negative. The implication is that investors fear the Bank of Japan will admit defeat and no longer engage in market manipulation. I personally have my doubts that it will abandon its policies, but the crisis of faith is catalyst enough for investors to sell. Yet another reason big money is turning bearish.

Finally, the search for yield is showing signs of coming to an end. Since the February 2016 market lows, the iShares Select Dividend ETF (DVY) is up 17.5 percent, but interestingly the lower yielding Spyders ETF(SPY) is up 18.23 percent. To be sure the outperformance of the lower yielding SPY is a recent phenomenon, but cracks in the foundation are appearing.

Big money is turning bearish because the reward does not justify the risk. The market cap of U.S. stocks has far exceeded the value of GDP, typically a sign of negative stock market returns. The recent spike in Japanese yields has shaken investor faith in omnipotent central bankers, while the horn is blowing "Going Home" on the hunt for yield.

For a few weeks in February my bearish view was accurate, but the fullness of time has proved I miscalculated the skepticism of others, the faith in central bankers and when the hunt for yield would end. Perhaps the recent growls from prominent investors is a signal that the herd is turning, but the truth is only time can tell. What is clear to me is that the risk of owning stocks is simply not justified by the reward. I continue to remain defensive on U.S. equities and share the bullish view on gold.

Brian Kelly is founder and managing member of Brian Kelly Capital LLC, a global macro investment firm catering to high net worth individuals, family offices and institutions. He is also the creator of the BKCM Indexes, benchmarks for multi-asset money managers. He's also the author of the "The Bitcoin Big Bang: How Alternative Currencies Are About to Change the World." Kelly, a CNBC contributor, often appears on "Fast Money." Follow him on Twitter @BKBrianKelly.
For more insight from CNBC contributors, follow @CNBCopinion onTwitter.

Today, I (the blogger) amplify Paul Craig Roberts’ piece below. In his second paragraph he provides a link which he says “The person who prepared this …is a bit crude in his language, but his point is nevertheless sound.” However, when I went to this link I spent maybe 15 or 20 minutes watching the video of that person, whose language I thought was OK but who might well have edited out a lot of stuff without losing the high points. I was about to leave this link when I realized that the work of a second photographer of the alleged truck massacre was to follow. It was at a different location and did seem strange. Then there were additioal amateur photographers displaying their work. I think it was the third one that was truly revealing. This woman found herself exactly alongside of the parked truck that was supposed to run over many people a few moments later. This place was not very far from the small town to the west where the truck was supposed to have come from. Yet in this moment it was surrounded by several individuals dressed as police who instead of approaching the truck were looking westward toward where truck had come from. The woman exhibited on her video several times the presence of fireworks in that direction, but she had no sound. However, she overlaid the official gun fire from the TV news, which indeed sounds like fireworks. Later on she checked the differing times of fireworks in the general area and found that the town from which the truck had come was to begin it’s fireworks at that very moment. Of course the official story was that the police told everyone ahead of the (still-parked) truck to run for their lives because there were shots being fired, thus leaving the fireworks/gun-shots behind them, as seen in the official videos. So it is no wonder that “the powers that be” are insisting that all evidence be destroyed. Moreover, if hundreds of family members and friends were actually killed, by now they would be demonstrating in the streets demanding justice. Is that happening? No! I can’t believe that so many people prefer to believe that they are attacked by foregn “terrorists”, when the terrorists are actually our own governments. I leave you with this thought: “Experience hath shewn, that even under the best forms of government those entrusted with power have, in time, and by slow operations, perverted it into tyranny.” -- Thomas Jefferson

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France’s Minister of the Interior Is Withholding All Security Camera Evidence of the Nice Truck Massacre and Demands that the Evidence be Destroyed

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July 26, 2016 | Original Here                                              Go here to sign up to receive email notice of this news letter

France’s Minister of the Interior Is Withholding All Security Camera Evidence of the Nice Truck Massacre and Demands that the Evidence be Destroyed

Obviously, the real evidence does not support the concocted evidence and the official story.
The person who prepared this — https://www.youtube.com/watch?v=MnSNvvpI97M — is a bit crude in his language, but his point is nevertheless sound.

We have not been shown any security camera evidence of the Nice event. Instead, we have seen cell phone video taken by Richard Gutjahr who happens to be married to a former Israeli intelligence agent who is currently an Israeli politician. Amazingly, Gutjahr also happened to be on the scene at the Munich shooting and again furnished the cell phone video and testimony for that event. As former US Representative Cynthia McKinney asked, how did it happen that the same person is performing the same role for both the Nice and Munich events?

Why does the official story have to rely on Gutjahr’s cell phone video when, at least in Nice, there is massive security camera video evidence?

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The carefree times I grew up with in the United States are now lost to young Americans growing up in the U.S. of today. Here John W. Whitehead explains the decent of today's young people into a world where "…the powers-that-be want us to feel powerless to protect ourselves and reliant on and grateful for the dubious protection provided by the American police state." To this he adds: "The tree of liberty is dying."

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Commentary

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There Will Be No Second American Revolution: The Futility of an Armed Revolt

By John W. Whitehead
July 18, 2016

“A standing military force, with an overgrown Executive will not long be safe companions to liberty.”—James Madison

America is a ticking time bomb.

All that remains to be seen is who—or what—will set fire to the fuse.

We are poised at what seems to be the pinnacle of a manufactured breakdown, with police shooting unarmed citizens, snipers shooting police, global and domestic violence rising, and a political showdown between two presidential candidates equally matched in unpopularity.

The preparations for the Republican and Democratic national conventions taking place in Cleveland and Philadelphia—augmented by a $50 million federal security grant for each city—provide a foretaste of how the government plans to deal with any individual or group that steps out of line: they will be censored, silenced, spied on, caged, intimidated, interrogated, investigated, recorded, tracked, labeled, held at gunpoint, detained, restrained, arrested, tried and found guilty.

For instance, anticipating civil unrest and mass demonstrations in connection with the Republican Party convention, Cleveland officials set up makeshift prisons, extra courtrooms to handle protesters, and shut down a local university in order to house 1,700 riot police and their weapons. The city’s courts are preparing to process up to 1,000 people a day. Additionally, the FBI has also been conducting “interviews” with activists in advance of the conventions to discourage them from engaging in protests.

Make no mistake, the government is ready for a civil uprising.

Indeed, the government has been preparing for this moment for years.

A 2008 Army War College report revealed that “widespread civil violence inside the United States would force the defense establishment to reorient priorities in extremis to defend basic domestic order and human security.” The 44-page report goes on to warn that potential causes for such civil unrest could include another terrorist attack, “unforeseen economic collapse, loss of functioning political and legal order, purposeful domestic resistance or insurgency, pervasive public health emergencies, and catastrophic natural and human disasters.”

Subsequent reports by the Department of Homeland Security to identify, monitor and label right-wing and left-wing activists and military veterans as extremists (a.k.a. terrorists) have manifested into full-fledged pre-crime surveillance programs. Almost a decade later, after locking down the nation and spending billions to fight terrorism, the DHS has concluded that the greater threat is not ISIS but domestic right-wing extremism.

Meanwhile, the government has been amassing an arsenal of military weapons for use domestically and equipping and training their “troops” for war. Even government agencies with largely administrative functions such as the Food and Drug Administration, Department of Veterans Affairs, and the Smithsonian have been acquiring body armor, riot helmets and shields, cannon launchers and police firearms and ammunition. In fact, there are now at least 120,000 armed federal agents carrying such weapons who possess the power to arrest.

Rounding out this profit-driven campaign to turn American citizens into enemy combatants (and America into a battlefield) is a technology sector that is colluding with the government to create a Big Brother that is all-knowing, all-seeing and inescapable. It’s not just the drones, fusion centers, license plate readers, stingray devices and the NSA that you have to worry about. You’re also being tracked by the black boxes in your cars, your cell phone, smart devices in your home, grocery loyalty cards, social media accounts, credit cards, streaming services such as Netflix, Amazon, and e-book reader accounts.

All of this has taken place right under our noses, funded with our taxpayer dollars and carried out in broad daylight without so much as a general outcry from the citizenry.

It’s astounding how convenient we’ve made it for the government to lock down the nation.

We’ve even allowed ourselves to be acclimated to the occasional lockdown of government buildings, Jade Helm military drills in small towns so that special operations forces can get “realistic military training” in “hostile” territory, and  Live Active Shooter Drill training exercises, carried out at schools, in shopping malls, and on public transit, which can and do fool law enforcement officials, students, teachers and bystanders into thinking it’s a real crisis.

The events of recent years—the invasive surveillance, the extremism reports, the civil unrest, the protests, the shootings, the bombings, the military exercises and active shooter drills, the color-coded alerts and threat assessments, the fusion centers, the transformation of local police into extensions of the military, the distribution of military equipment and weapons to local police forces, the government databases containing the names of dissidents and potential troublemakers—have all conjoined to create an environment in which “we the people” are more distrustful and fearful of each other and more reliant on the government to keep us safe.

Of course, that’s the point.

The powers-that-be want us to feel vulnerable.

They want us to fear each other and trust the government’s hired gunmen to keep us safe from terrorists, extremists, jihadists, psychopaths, etc.

Most of all, the powers-that-be want us to feel powerless to protect ourselves and reliant on and grateful for the dubious protection provided by the American police state.

Their strategy is working.

The tree of liberty is dying.

There will be no second American Revolution.

There is no place in our nation for the kind of armed revolution our forefathers mounted against a tyrannical Great Britain. Such an act would be futile and tragic. We are no longer dealing with a distant, imperial king but with a tyrant of our own making: a militarized, technologized, heavily-financed bureaucratic machine that operates beyond the reach of the law.

The message being sent to the citizenry is clear: there will be no revolution, armed or otherwise.

Anyone who believes that they can wage—and win—an armed revolt against the American police state has not been paying attention. Those who wage violence against the government and their fellow citizens are playing right into the government’s hands. Violence cannot and will not be the answer to what ails America.

Whether instigated by the government or the citizenry, violence will only lead to more violence. It does not matter how much firepower you have. The government has more firepower.

It does not matter how long you think you can hold out by relying on survivalist skills, guerilla tactics and sheer grit. The government has the resources to outwait, out-starve, outman, outgun and generally overpower you.

This government of wolves will not be overtaken by force.

Unfortunately, we waited too long to wake up to the government’s schemes.

We did not anticipate that “we the people” would become the enemy. For years, the government has been warning against the dangers of domestic terrorism, erecting surveillance systems to monitor its own citizens, creating classification systems to label any viewpoints that challenge the status quo as extremist, and training law enforcement agencies to equate anyone possessing anti-government views as a domestic terrorist.

What the government failed to explain was that the domestic terrorists would be of the government’s own making, whether intentional or not.

By waging endless wars abroad, by bringing the instruments of war home, by transforming police into extensions of the military, by turning a free society into a suspect society, by treating American citizens like enemy combatants, by discouraging and criminalizing a free exchange of ideas, by making violence its calling card through SWAT team raids and militarized police, by fomenting division and strife among the citizenry, by acclimating the citizenry to the sights and sounds of war, and by generally making peaceful revolution all but impossible, the government has engineered an environment in which domestic violence has become inevitable.

What we are now experiencing is a civil war, devised and instigated in part by the U.S. government.

The outcome for this particular conflict is already foregone: the police state wins.

The objective: compliance and control.

The strategy: destabilize the economy through endless wars, escalate racial tensions, polarize the populace, heighten tensions through a show of force, intensify the use of violence, and then, when all hell breaks loose, clamp down on the nation for the good of the people and the security of the nation.

So where does that leave us?

Despite the fact that communities across the country are, for all intents and purposes, being held hostage by a government that is armed to the teeth and more than willing to use force in order to “maintain order,” most Americans seem relatively unconcerned. Worse, we have become so fragmented as a nation, so hostile to those with whom we might disagree, so distrustful of those who are different from us, that we are easily divided and conquered.

We have been desensitized to violence, acclimated to a military presence in our communities and persuaded that there is nothing we can do to alter the seemingly hopeless trajectory of the nation. In this way, the floundering economy, the blowback arising from military occupations abroad, police shootings, the nation’s deteriorating infrastructure and all of the other mounting concerns have become non-issues to a populace that is easily entertained, distracted, manipulated and controlled.

The sight of police clad in body armor and gas masks, wielding semiautomatic rifles and escorting an armored vehicle through a crowded street, a scene likened to “a military patrol through a hostile city,” no longer causes alarm among the general populace.

We are fast becoming an anemic, weak, pathetically diluted offspring of our revolutionary forebears incapable of mounting a national uprising against a tyrannical regime.

If there is to be any hope of reclaiming our government and restoring our freedoms, it will require a different kind of coup: nonviolent, strategic and grassroots, starting locally and trickling upwards. Such revolutions are slow and painstaking. They are political, in part, but not through any established parties or politicians.

Most of all, as I make clear in my book Battlefield America: The War on the American People, for any chance of success, such a revolution will require more than a change of politics: it will require a change of heart among the American people, a reawakening of the American spirit, and a citizenry that cares more about their freedoms than their fantasy games.

WC: 1677