Word to the Wise: 2013

i am not worried about inflation at this juncture. globalism and technology keep wages low and enable enormous resource recoveries. no shortages in sight!

what i was trying to state is that the fed at this point must keep interest rates very low to help encourage final demand and allow the government to service the debt.

however, when the next major financial/economic downturn begins the most probable fed and treasury action will be to bring out helicopter ben.
real printing of money. as we discussed some time ago. it is currently illegal for the treasury to print money. they must borrow money to finance the government deficit.

at some point in time, i suspect that the law will change and the treasury will have no choice but to make the borrowers happy and the lenders hysterical.

patience. it is not happening in the foreseeable future but it seems almost inevitable. what should be done now is not federal Keynesian handouts, but rather constructive infrastructure projects. transportation, energy, bio-tech, medical, etc... that could allow real job growth and a genuine recovery. not the very weak programs that our geniuses in WDC are promoting.

only real change can spur a recovery in the job and other markets. bulling up stocks was a good short term strategy but it has limited value to many sectors of the economy...

Thanks

The Fed has been doing what Congress should have

the fed made cheap money available.
they cannot increase velocity. need velocity and wage inflation to create inflation... not in the cards for now.

When you have an aggregate decline in demand which happens after financial bubbles and crashes it makes sense for all individuals to cut back on their own, thus a demand decline

The fed has made money cheap enough as to encourage people to spend because dollars will be worth less later and that includes those dollars held by China

no evidence that inflation would result. see japan over last 20 years. free money and deflation... the monetarists in chicago are long dead.
cheap money is creating artificial pricing mechanisms in many markets. including the so-called wealkth effect in the stock markets...agreed so why worry about inflation instead of damage to the economy?

But the ideal solution is collective demand increase which only the fed govt can achieve,

demand will increase when confidence increases and when people have job security.. in a global economy (china india etc..) that may not be possible.

this is complicated by the level of debt the government has already but it is the only solution to try to kick start things. Otherwise you have what we have a wandering around which in 5 or 10 years will sort itself out but will damage those in the 50 plus group as they will be without incomes and young people whose careers will be permanantly adversely affected. A lost decade. Unfortunately the rest of the world is not going to just stand still.

deleveraging in the private sector is ongoing and proceeding very slowly...

There is no job growth because if you ask businesses there is no anticipated demand

The idea that people are not interested in jobs is simple bull, they just don’t exist

why pay full wages in the US when we can get almost everything from software etc. offshore at 30% of the cost...so what should we all do slit our throats and roll over and die, if you think we can say to 99% suck it up and suffer and have no economic and political consequences ….

We have kids in this neighborhood who are graduating from Princeton and other like schools who are without jobs

I have many many friends who are mid career and flat out on their asses, you may recall that when we met with Zalmie you met Mike palumbo, he is the former CFO of Delta, cant get a position, and I have other friends with similar backgrounds who are just SOL. I could run thru a list of them. There are a whole group of 50-60 plus year olds that are coming to realize there is never going to be a way back for them.

party is over. globalization and technology has made many people obsolete. Horrible thought and not true, what kind of world is that?

In addition to the crash there have been structural changes to the economy that exacerbate these difficulties, I would suggest you read Stieglitz’s book the Price of Inequality to gain a fuller picture of how we are turning into a banana republic. The jobs that are “created” are low lwage temp jobs, not the basis on which you keep a Republic stable.

the next crisis will force a helicopter ben to actually print money and change the rules of the game. at normal interest rates, say 5%, the treasury would have 5% of 17 T of interest. $850B per year. not sustainable. that is why japan with 2.5 times our debt.gdp ratio must keep interest rates at zero...
but ours is a reserve currency and that will be impossible for much longer...

find assets, like corn fields in Ethiopias to preserve wealth!! Don’t buy the inflation argument for now, bigger worry is deflation and this last paragrgph is inconsistent with your first one

Subject: "The Economic Recovery Of 2013"

time to taper and let the market surge upwards!

"The Economic Recovery Of 2013"

By: Zero Hedge | Monday, December 9, 2013 at 08:54 pm EST

On Friday, it was announced that the unemployment rate had fallen to "7 percent", and the mainstream media responded with a mix of euphoria and jubilation. For example, one USA Today article declared that "with today's jobs report, one really can say that our long national post-financial crisis nightmare is over." But is that actually the truth? As you will see below, if you assume that the labor force participation rate in the U.S. is at the long-term average, the unemployment rate in the United States would actually be 11.5 percent instead of 7 percent.

There has been absolutely no employment recovery. The percentage of Americans that are actually working has stayed between 58 and 59 percent for 51 months in a row. But most Americans don't understand these things and they just take whatever the mainstream media tells them as the truth.

And of course the reality of the matter is that we should have seen some sort of an economic recovery by now. Those running our system have literally been mortgaging the future in a desperate attempt to try to pump up our economic numbers. The federal government has been on the greatest debt binge in U.S. history and the Federal Reserve has been printing money like crazed lunatics. All of that "stimulus" should have had some positive short-term effects on the economy.

Sadly, all of those "emergency measures" do not appear to have done much at all. The percentage of Americans that have a job has stayed remarkably flat since the end of 2009, median household income has fallen for five years in a row, and the rate of homeownership in the United States has fallen for eight years in a row. Anyone that claims that the U.S. economy is experiencing a "recovery" is simply not telling the truth. The following are 37 reasons why "the economic recovery of 2013" is a giant lie...

#1 The only reason that the official unemployment rate has been declining over the past couple of years is that the federal government has been pretending that millions upon millions of unemployed Americans no longer want a job and have "left the labor force". As Zero Hedge recently demonstrated, if the labor force participation rate returned to the long-term average of 65.8 percent, the official unemployment rate in the United States would actually be 11.5 percent instead of 7 percent.

#2 The percentage of Americans that are actually working is much lower than it used to be. In November 2000, 64.3 percent of all working age Americans had a job. When Barack Obama first entered the White House, 60.6 percent of all working age Americans had a job. Today, only 58.6 percent of all working age Americans have a job. In fact, as you can see from the chart posted below, there has been absolutely no "employment recovery" since the depths of the last recession...

#3 The employment-population ratio has now been under 59 percent for 51 months in a row.

#4 There are 1,148,000 fewer Americans working today than there was in November 2006. Meanwhile, our population has grown by more than 16 million people during that time frame.

#5 The "inactivity rate" for men in their prime working years (25 to 54) has just hit a brand new all-time record high. Does this look like an "economic recovery" to you?...

#6 The number of working age Americans without a job has increased by a total of 27 million since the year 2000.

#7 In November 2007, there were 121.9 million full-time workers in the United States. Today, there are only 116.9 million full-time workers in the United States.

#8 Middle-wage jobs accounted for 60 percent of the jobs lost during the last recession, but they have accounted for only 22 percent of the jobs created since then.

#9 Only about 47 percent of all adults in America have a full-time job at this point.

#10 The ratio of wages to corporate profits in the United States just hit a brand new all-time low.

#11 It is hard to believe, but in America today one out of every ten jobs is now filled by a temp agency.

#12 Approximately one out of every four part-time workers in America is living below the poverty line.

#13 In this economic environment, there is intense competition even for the lowest paying jobs. Wal-Mart recently opened up two new stores in Washington D.C., and more than 23,000 people applied for just 600 positions. That means that only about 2.6 percent of the applicants were ultimately hired. In comparison, Harvard offers admission to 6.1 percent of their applicants.

#14 According to the Social Security Administration, 40 percent of all U.S. workers make less than $20,000 a year.

#15 When Barack Obama took office, the average duration of unemployment in this country was 19.8 weeks. Today, it is 37.2 weeks.

#16 According to the New York Times, long-term unemployment in America is up by 213 percent since 2007.

#17 Thanks to Obama administration policies which are systematically killing off small businesses in the United States, the percentage of self-employed Americans is at an all-time low today.

#18 According to economist Tim Kane, the following is how the number of startup jobs per 1000 Americans breaks down by presidential administration...

Bush Sr.: 11.3

Clinton: 11.2

Bush Jr.: 10.8

Obama: 7.8

#19 According to the U.S. Census Bureau, median household income in the United States has fallen for five years in a row.

#20 The rate of homeownership in the United States has fallen for eight years in a row.

#21 Back in 1999, 64.1 percent of all Americans were covered by employment-based health insurance. Today, only 54.9 percent of all Americans are covered by employment-based health insurance, and thanks to Obamacare millions more Americans are now losing their health insurance plans.

#22 As 2003 began, the average price of a gallon of regular gasoline was about $1.30. When Barack Obama took office, the average price of a gallon of regular gasoline was $1.85. Today, it is $3.26.

#23 Total consumer credit has risen by a whopping 22 percent over the past three years.

#24 In 2008, the total amount of student loan debt in this country was sitting at about 440 billion dollars. Today, it has shot up to approximately a trillion dollars.

#25 Under Barack Obama, the velocity of money (a very important indicator of economic health) has plunged to a post-World War II low.

#26 Back in the year 2000, our trade deficit with China was 83 billion dollars. In 2008, our trade deficit with China was 268 billion dollars. Last year, it was 315 billion dollars. That was the largest trade deficit that one nation has had with another nation in world history.

#27 The gap between the rich and the poor in the United States is at an all-time record high.

#28 Right now, 1.2 million students that attend public schools in the United States are homeless. That is a brand new all-time record high, and that number has risen by 72 percent since the start of the last recession.

#29 When Barack Obama first entered the White House, there were about 32 million Americans on food stamps. Today, there are more than 47 million Americans on food stamps.

#30 Right now, approximately one out of every five households in the United States is on food stamps.

#31 According to the Survey of Income and Program Participation conducted by the U.S. Census, well over 100 million Americans are enrolled in at least one welfare program run by the federal government.

#32 In 2000, the U.S. government spent 199 billion dollars on Medicaid. In 2008, the U.S. government spent 338 billion dollars on Medicaid. In 2012, the U.S. government spent 417 billion dollars on Medicaid, and now Obamacare is going to add tens of millions more Americans to the Medicaid rolls.

#33 In 2000, the U.S. government spent 219 billion dollars on Medicare. In 2008, the U.S. government spent 462 billion dollars on Medicare. In 2012, the U.S. government spent 560 billion dollars on Medicare, and that number is expected to absolutely skyrocket in the years ahead as the Baby Boomers retire.

#34 According to the most recent numbers from the U.S. Census Bureau, an all-time record high 49.2 percent of all Americans are receiving benefits from at least one government program.

#35 The U.S. government has spent an astounding 3.7 trillion dollars on welfare programs over the past five years.

#36 When Barack Obama was first elected, the U.S. debt to GDP ratio was under 70 percent. Today, it is up to 101 percent.

#37 The U.S. national debt is on pace to more than double during the eight years of the Obama administration. In other words, under Barack Obama the U.S. government will accumulate more debt than it did under all of the other presidents in U.S. history combined.

Fortunately, it appears that most Americans are not buying into the propaganda. According to a new CNN survey, the percentage of Americans that believe that the economy is getting worse far exceeds the percentage of Americans that believe that the economy is improving...

Americans views on the state of the nation are turning increasingly sour, according to a new national poll.

And a CNN/ORC International survey released Friday also indicates that less than a quarter of the public says that economic conditions are improving, while nearly four in ten say the nation's economy is getting worse.

Forty-one percent of those questioned in the poll say things are going well in the country today, down nine percentage points from April, and the lowest that number has been in CNN polling since February 2012. Fifty-nine percent say things are going badly, up nine points from April.

Word to the Wise

Sunday, December 15, 2013

Fwd: Re: "The Economic Recovery Of 2013"

"The Economic Recovery Of 2013"

Tuesday, November 12, 2013

bubble theories

Friday, November 8, 2013

options

Wednesday, November 6, 2013

gold

Friday, November 1, 2013

gold

Thursday, October 31, 2013

SPY and AMZN

Sunday, October 27, 2013

Re: stock market very toppy

stock market very toppy

Monday, July 29, 2013

abdallah TM

Tuesday, April 30, 2013

The Warnings Behind the Numbers - NYTimes.com

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