"We Have Reached The Point That Keynes Warned Of In His General Theory" | Zero Hedge

"We Have Reached The Point That Keynes Warned Of In His General Theory"

Now that new warnings about failing central bank policy are emerging every single day, from Deutsche Bank, Citigroup and Bank of America, among others, here courtesy of Bloomberg's Christopher Maloney is a brand new one, one which take a different angle, and suggests that none other than Keynes predicted just the "dead end" outcome that the world finds itself in right now.

Here is the full warning from Bloomberg's Chris Maloney

We have arguably reached the point that Keynes warned of in his General Theory where demand for money and credit to satisfy what he labeled “non-speculative” motives has been more than satisfied; which brings us to this week’s money supply report. 

The main beneficiary of growth in available money and credit since the Fed combined ZIRP and QE in the end of 2008 has been financial markets. An example is the outsized aggregate percentage growth in U.S. equity markets compared to the tepid pace for GDP.

As the default response (incorrectly labeled “Keynesian”) of the Federal Reserve to any sign of economic or market stress seems to be ever more “stimulus” this trend is likely to continue; the greater near-term risk for UST rates is for a rally, not a sell off.

M2 measure of the money supply grew at 6.8% y/y clip in May, its fourth m/m yearly increase in a row and its fastest increase since Oct. 2013.

Yet more money and credit would be superfluous as we have likely passed the point where the demand for money to satisfy what Keynes labeled “non-speculative” motives is sated.

He wrote such demand, once sated, is no longer responsive “to any influence except the actual occurrence of a change in the general economic activity and the level of incomes” (pp.194-197) both  of which have been muted, at best.

In the ZIRP/QE-era we have seen demand for money for what Keynes labeled the “speculative-motive” take the reins, as this demand “usually shows a continuous response” to changes in the prices of bonds and debts (p.197).

Such speculative demand is a bottomless pit and dangerous lure; it also engenders an explosion in outstanding debt, highlighted by the surge of debt issued by the U.S. Federal govt post-recession.

M2’s monthly y/y growth averaged 6.3% from the end of 1999 to the beginning of 2009; since then it has increased to 6.5%, and still the prevailing sentiment is against any tightening of monetary policy.

At this point it is likely central bankers are “pushing on a string,” positively affecting prices for the financial markets’ flavor of the month but doing nothing for actual economic activity.

* * *

At this rate of collapsing faith in monetary policy, very soon it will be "contrarian" to say that central banks actually have any idea what they are doing.

Immigration Economics: Illegal Aliens Are Our Bread and Butter - The Great Recession Blog

Illegal Aliens Are Our Bread and Butter

Have you ever wondered why politicians make some immigration illegal and then turn a blind eye to illegal immigration wherever it is happening … for decades? What about why they talk so much about building walls to keep out the vast hoards, rather than simply arresting the much smaller number of people who hire illegal immigrants? Surely drying up the jobs that are available to illegal immigrants would be much more economical than building a thousand-mile wall. This article will tell you why we make some immigration illegal and then turn a blind eye to it.

Have you also wondered why politicians make it illegal for millions of people to enter the country and then eventually support naturalizing those people who broke the laws these very politicians made? This article will answer that, too.

First, I’ll state that immigration is largely about economics; and by that I do not simply mean that people are coming to the U.S. to gain economic opportunity, though, of course, they are. Nor do I simply mean immigrants are taking jobs away from Americans, though, of course, they are. Nor am I going to talk about the welfare costs that come with migrant workers because those get discussed a lot.

I want to talk about a major economic factor in the immigration issue that is the elephant in the room that no one is talking about, and it’s not just a GOP elephant. Immigration economics has a dark underbelly that neither party will ever bring up. Since immigration reform is one of the major planks of the Republican’s top candidate for the presidency, there is no time like the present to talk about the elephant.

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The Federal Reserve has brought back “taxation without representation” – Sovereign Man

The Federal Reserve has brought back “taxation without representation”

In February 1768, a revolutionary article entitled “No taxation without representation” was published London Magazine.

The article was a re-print of an impassioned speech made by Lord Camden arguing in parliament against Britain’s oppressive tax policies in the American colonies.

Britain had been milking the colonists like medieval serfs. And the idea of ‘no taxation without representation’ was revolutionary, of course, because it became a rallying cry for the American Revolution.

The idea was simple: colonists had no elected officials representing their interests in the British government, therefore they were being taxed without their consent.

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15 Facts About The Imploding U.S. Economy That The Mainstream Media Doesn’t Want You To See | Zero Hedge

15 Facts About The Imploding U.S. Economy That The Mainstream Media Doesn’t Want You To See

Submitted by Michael Snyder via The Economic Collapse blog,

You are about to see undeniable evidence that the U.S. economy has been slowing down for quite some time.  And it is vital that we focus on the facts, because all over the Internet you are going to find lots and lots of people that have opinions about what is going on with the economy.  And of course the mainstream media is always trying to spin things to make Barack Obama and Hillary Clinton look good, because those that work in the mainstream media are far more liberal than the American population as a whole.  It is true that I also have my own opinions, but as an attorney I learned that opinions are not any good unless you have facts to back them up.  So please allow me a few moments to share with you evidence that clearly demonstrates that we have already entered a major economic slowdown.  The following are 15 facts about the imploding U.S. economy that the mainstream media doesn’t want you to see…

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The Ron Paul Institute for Peace and Prosperity : Fascism: A Bipartisan Affliction

Fascism: A Bipartisan Affliction




If neoconservatives and progressives truly understood fascism, they would stop using the word as a smear term. That is because both groups, along with most political figures and commentators, embrace fascist ideas and policies.

Fascism’s distinguishing characteristic is a “mixed economy.” Unlike socialists and communists who seek to abolish private business, fascists are content to let business remain in private hands. Instead, fascists use regulations, mandates, and taxes to control business and run (and ruin) the economy. A fascist system, then, is one where private businesses serve politicians and bureaucrats instead of consumers. Does the modern American economy not fit the definition of fascism?

Fascism benefits big businesses that can afford the cost of complying with government regulations, unlike their smaller competitors. Big businesses, which have more political influence then entrepreneurs or small businesses, also significantly benefit from government subsidies. In order to maintain their power, big businesses finance the “deep state” — the network of lobbyists, journalists, think tanks, bureaucrats, and congressional staffers who work behind the scenes to shape government policy.

Obamacare is an example of fascism that is often mislabeled as socialism. Obamacare did not create a government-run “single payer" system as would exist under socialism. Instead, Obamacare extended government control over health care via mandates, regulations, and subsidies. The most infamous part of Obamacare — the individual mandate — forces individuals to purchase a product from a private industry.


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Frustrations of Telling the Truth -- Paul Craig Roberts - PaulCraigRoberts.org

Frustrations of Telling the Truth

Paul Craig Roberts

Some readers who read the sample of appreciation expressed for my columns (http://www.paulcraigroberts.org/2016/06/07/quarterly-call-for-your-support/ ) want to know about the abuse.

Why not.

Some examples: If I criticize the Israeli government for abusing Palestinians and stealing their country, the Israel Lobby accuses me of being an anti-semite who wants to repeat the holocaust. In the same batch of emails, anti-semites denounce me for being too easy on Israel and covering up for the Jewish conspiracy against mankind.

When I write about the One Percent using the government to loot the economy, I receive emails blaming me because I worked for Reagan “who started it all by cutting tax rates for the rich.”
These people have no conception of supply-side economics, its purpose, success, and the way it prepared the way for Reagan to negotiate the end of the Cold War. At one point in their lives they read a left-wing screed against Reagan, and that is the extent of their understanding. But they are full of blind hate.

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Where Do Matters Stand? -- Paul Craig Roberts - PaulCraigRoberts.org

Where Do Matters Stand?

Paul Craig Roberts

On the eve of World War II the United States was still mired in the Great Depression and found itself facing war on two fronts with Japan and Germany. However bleak the outlook, it was nothing compared to the outlook today.

Has anyone in Washington, the presstitute Western media, the EU, or NATO ever considered the consequences of constant military and propaganda provocations against Russia? Is there anyone in any responsible position anywhere in the Western world who has enough sense to ask: “What if the Russians believe us? What if we convince Russia that we are going to attack her?”

The same can be asked about China.

The recklessness of the White House Fool and the media whores has gone far beyond mere danger. What do the Russians think when they see that the Democratic Party intends to elect Hillary Clinton president of the US? Hillary is a person so crazed that she declared the president of Russia to be “the new Hitler” and organized through her underling, neocon monster Victoria Nuland, the overthrow of the democratically elected government of Ukraine. Nuland installed Washington’s puppet government in a former Russian province that until about 20 years ago was part of Russia for centuries.

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How Fascism Comes to America | International Man

How Fascism Comes to America 

I think there are really only two good reasons for having a significant amount of money: To maintain a high standard of living and to ensure your personal freedom. There are other, lesser reasons, of course, including: to prove you can do it, to compensate for failings in other things, to impress others, to leave a legacy, to help perpetuate your genes, or maybe because you just can't think of something better to do with your time.

But I'll put aside those lesser motives, which I tend to view as psychological foibles. Basically, money gives you the freedom to do what you'd like – and when, how, and with whom you prefer to do it. Money allows you to have things and do things and can even assist you to be something you want to be. Unfortunately, money is a chimera in today's world and will wind up savaging billions in the years to come.

As you know, I believe we're well into what I call The Greater Depression. A lot of people believe we're in a recovery now; I think, from a long-term point of view, that is total nonsense. We're just in the eye of the hurricane and will soon be moving into the other side of the storm. But it will be far more severe than what we saw in 2008 and 2009 and will last quite a while – perhaps for many years, depending on how stupidly the government acts.

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On Death And Taxes: "The Greed Of The Government Can Never Be Overstated" | Zero Hedge

On Death And Taxes: "The Greed Of The Government Can Never Be Overstated"

Submitted by Jeremiah Johnson (nom de plume of retired Green Beret of the United States Army Special Forces) via SHTFPlan.com,

Readers, you’re awake to the horrors of the Federal Government, our rapidly-declining GDP and ever-increasing debts.  Trillions of dollars have been stolen, in the form of appropriations and programs that funnel directly from the tax-base: the fat “cash-cow” that the government suckles from.  The taxes are life-sustaining to the government juggernaut, managed by the ever self-serving “representatives” of Congress who approve pay raises for themselves, immunity from prosecution from (what was formerly) insider trading, and exonerate themselves from any and all ethics violations.

Taxes keep the government going, keep the system emplaced and you the citizen in your place, from birth to death.  The websiteivn.us reports the breakdown for the federal government’s feedings:

Personal income taxes               47.4%

Corporate income taxes             34.1%

Social insurance taxes                9.9%

Tariffs/gas taxes/fees                 8.5%

Ben Franklin summarized the position of the average citizen two centuries ago:

“In this world nothing can be said to be certain, except death and taxes.”

Franklin was correct; however, he should have reversed the order, because taxes can both bring on death and still haunt the deceased after their passing.  The best example of this is the death tax, where a person’s estate is assessed after their death.  Their heirs better pay the tax man!  Yes, how exactly does all of that work?  The deceased individual worked all of their lives, paying income taxes both federal and state, paying off their house and mortgage, paying their property tax.

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Only Two Countries Do This Appalling Thing - And The U.S. Is One Of Them | Zero Hedge

Only Two Countries Do This Appalling Thing - And The U.S. Is One Of Them

Submitted by Nick Giambruno via InternationalMan.com,

This story may unnerve you...

It’s the story of how Eritrea, a tiny, mostly unheard-of country in East Africa, and the United States, do the same awful thing.

Extortion and Threats of Violence

Nearly every country in the world bases its tax system on residency rather than citizenship. If you’re an Italian citizen, and you leave Italy to live and work in Dubai, you don’t have to pay taxes on the income you earn abroad to the Italian government.

But Eritrea levies a 2% flat tax on its citizens who live abroad. If you’re an Eritrean citizen, you have to pay taxes to the Eritrean government, no matter where you live and work.

The media has condemned this as “extortion” and a “repressive” measure by an “authoritarian” government.

The UN has even weighed in. In Resolution 2023, the UN Security Council condemned Eritrea for “using extortion, threats of violence, fraud and other illicit means to collect taxes outside of Eritrea from its nationals.”

You might be wondering, “What’s the controversy? Eritrea is getting criticized, and rightly so.”

That brings us to the only other country on the planet with a similar tax system… the United States.

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EBT Card Outage? 8 Days Into June And Many Americans Are Still Waiting For Food Stamp Money | Zero Hedge

EBT Card Outage? 8 Days Into June And Many Americans Are Still Waiting For Food Stamp Money

Submitted by Michael Snyder via The Economic Collapse blog,

Widespread reports continue to pour in from all over the nation of “glitches” with the food stamp system.  It is eight days into the month and large numbers of people still have not received their benefits, and in other instances it is being reported that EBT cards are simply not working correctly.  So what in the world is going on here?  On downdetector.com there are scores of reports of problems with the EBT system from people all over the nation.  Could this simply be another example of government incompetence, or is something else at work here?

I had heard some rumblings about this over the past few days, but I had not really taken them seriously until I read an article from highly respected author Ray Gano…

It interesting over the weekend I got several emails telling me about cell phones being down, internet being down, and get this, EBT cards not working and having no money associated to them.

This is a concern because when the US Government has payment failures, then there is possibly something happening that the press is not telling you about.

Now, we know that computers have problems and that states, counties and cities run on computers. But what is interesting is that since the beginning of 2016, The US government has had over 2,700 reports on downdetector.comshowing that they have been late loading the money onto these EBT cards.

Folks, we are now going on 8 days where the Government has not paid the EBT payments so that people have food.

So I went over to downdetector.com myself, and I was stunned to see that reports of EBT outages continue to pour in every hour.  Here are just a few of the recent comments that have been left by people that are still waiting for their food stamp benefits for June…

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It Took $10 In New Debt To Create $1 Of Growth In The First Quarter | Zero Hedge

It Took $10 In New Debt To Create $1 Of Growth In The First Quarter

When the Fed unexpectedly stopped reporting the data for Total Credit Market Instruments in September 2015, the most comprehensive series of total credit in the US economy, there were many screams of disappointment and frustration from US debt watchers. However, this was unnecessary, as all the Fed did was break up the series into its two constituent components: total debt (found here) and total loans (found here).

So today we had a chance to update the total US credit following the release of the Fed's Flow of Funds (Z.1) statement, which is usually parsed for its tracking of changes to household wealth. And while it showed that in  the first quarter the net worth of US residents, mostly the wealthy ones as the bulk of financial assets is held by a small fraction of the total population, rose by $837 billion to $88 trillion mostly as a result of a change in real estate holdings, we were more interest in the aggregate picture.

It wasn't pretty.

As a reminder, according to the latest BEA revision, nominal Q1 GDP was $18.23 trillion, an increase of just $65 billion from the previous quarter or an annualized 0.7% rate, the question is how much credit had to be created to generate this growth. Well, according to the Z.1, total credit rose to a new record high $64.1 trillion. This was an increase of $645 billion from the previos quarter. It means that in the first quarter, it "cost" $10 in new debt to generate just $1 in new economic growth!

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PICTURE OF DECLINE « The Burning Platform

PICTURE OF DECLINE

A population of illiterate, non-thinking morons can’t possibly obtain good paying jobs. This country spends $12,000 per public school student per year on education and this is the outcome? The factual data presented below paints a picture of an empire in rapid decline. We are too far gone. No amount of money or presidential election is going to change this course. We chose this path in the 1960s and now we will reap the consequences.

Education

• In a study of literacy among 20 ‘high income’ countries; US ranked 12^th

• Illiteracy has become such a serious problem in our country that 44 million adults are now unable to read a simple story to their children.

• 50% of adults cannot read a book written at an eighth grade level

• 45 million are functionally illiterate and read below a 5th grade level

• 44% of the American adults do not read a book in a year

• 6 out of 10 households do not buy a single book in a year

Economy

• According to the Pew Research Center, the median income of middle-class households declined by 4 percent from 2000 to 2014.

• The Pew Research Center has also found that median wealth for middle-class households dropped by an astounding 28 percent between 2001 and 2013.

• There are still 900,000 fewer middle-class jobs in America than there were when the last recession began, but the population has grown significantly larger since that time.

• According to the Social Security Administration, 51 percent of all American workers make less than $30,000 a year.

• An astounding 48.8 percent of all 25-year-old Americans still live at home with their parents.

• According to the U.S. Census Bureau, 49 percent of all Americans now live in a home that receives money from the government each month, and nearly 47 million Americans are living in poverty right now.

• In 2007, about one out of every eight children in America was on food stamps. Today, that number is one out of every five.

• The median net worth of families in the United States was $137, 955 in 2007. Today, it is just $82,756.

Ron Paul: "We Do Not Really Have Democracy" in America, 2016 Is a Distraction | The Daily Sheeple

Ron Paul: "We Do Not Really Have Democracy" in America, 2016 Is a Distraction

by Carey Wedler

Former congressman Ron Paul has long been an unabashed critic of American foreign policy, central banking, and corporatism. This election season, the former presidential nominee has consistently, candidlyexpressed his views on the presidential race, often issuing scathing indictments of the two-party system and the authoritarian tendencies of the candidates in the running. On Monday, Ron Paul appeared on MSNBC’s “Morning Joe” to discuss the presidential options Americans are left with, arguing the current campaign quibbles serve as distractions from deeper, more systemic problems.

“Morning Joe” news anchor Mika Brzezinski highlighted disappointments the contentious Libertarian Party nomination of former New Mexico Gary Johnson, who has been criticized not only for lacking a philosophical understanding of libertarianism, but also for selecting an arguable neoconservative, former Massachusetts governor and Council on Foreign Relations member, William Weld, as his running mate.

“I know you don’t feel these candidates who are in — Gary Johnson, Bill Weld — they’re really more than a shrug. Is there any possibility for anyone else at this point?” the anchor asked Paul — sparking a characteristically uncensored response.

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