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The U.S. Economy Is Now Dangerously Detached From Reality

by Brandon Smith from Alt-Market

Recently I was asked to give a presentation on the current state of the global economy to a local group of concerned citizens here in Northwest Montana.  I was happy to oblige but when composing my bullet points I realized that, in truth, there were no legitimate economic numbers to examine anymore.  You see, financial analysts have traditionally used multiple indicators of employment, profit, savings, credit, supply, and demand in their efforts to divine the often obscured facts of our financial system.  The problem is, nearly every index we used in the past, every measure of capital flow and industry, is absolutely useless today.

We now live in an entirely fabricated fiscal environment.  Every aspect of it is filtered, muddled, molded, and manipulated before our eyes ever get to study the stats.  The metaphor may be overused, but our economic system has become an absolute “matrix”.  All that we see and hear has been homogenized and all truth has been sterilized away.  There is nothing to investigate anymore.  It is like awaking in the middle of a vast and hallucinatory live action theater production, complete with performers, props, and sound effects, all designed to confuse us and do us harm.  In the end, trying to make sense of the illusion is a waste of time.  All we can do is look for the exits…

There is some tangible reality out there, but it is difficult to find, and there are few if any mainstream numbers to verify.  One has to remember always that the fundamental world of money and trade revolves around real people and real circumstances.  No matter how corrupt our economic system is, as long as there are human beings, there will always be supply and demand that cannot be hidden.  We have to look past the “official numbers” and look at the roots of trade.  Where has demand fallen?  Where has supply diminished?  Where are the tangible goods and needs and how have they changed?

Let’s first start with the mainstream version of our system, looking at each aspect of the economy that no longer represents the truth of our situation…

Employment, Savings, And Debt

Much of this information is old news to those of us in the Liberty Movement, who tracked the progress of the global collapse long before the general public even knew of its existence.  However, it is useful to take a step back and look at the basic picture every once in a while.

According to numbers issued by the Department of Labor, weekly unemployment reports have dropped to a five year low, and the overall employment rate is holding at 7.9%.  This would seem to be a vast improvement over the dreadful bloodletting in the system only a few years ago.  Has the private Federal Reserve and the Obama Administration really done it?  Have they turned back the tide on the greatest fiscal crisis the U.S. has seen since the Depression?

No.  They haven’t.

They have only changed how the data is disseminated to the public. In order to understand how the employment statistics con is being engineered, it is important to understand the difference between “Adjusted” and “Unadjusted” numbers.

Labor Department data is “seasonally adjusted”, using a series of statistical assumptions including something called “Trend Cycle Analysis”.  Trend Cycle Analysis is, basically, a sham, but a sham put together in a very complex and confusing manner.  If you ask a mainstream economist what it is, you’ll likely get a three hour long dissertation filled with financial babble and very little concrete explanation.  So let me break it down as simply as I can…

Imagine that you are going to estimate how much profit you plan to make in a particular month, but you don’t just consider your current pay rate and pop it into a calculator; you also throw in the possibility of a few pay raises, an inheritance from a grandma who might kick the bucket, and, your exaggerated expectations of the entire year’s profit on top of that.  You may also take into account future bad weather, a mugging, a nuclear war….whatever.  All hypothetical situations not based in reality.  Basically, you decide that a particular trend in your income is inevitable, then, mold your statistical analysis around that assumption.

When your real profit numbers come in (the unadjusted numbers) and they do not meet your expectations, you simply change them according to what you believe SHOULD have happened.  If you insist that your profits are going to go up for the year, and they go down for a couple months instead, you change the variables you use to calculate the statistical average so that the results match your expectations, assuming that it will all balance out in the end.

Now, this sounds utterly insane for the common person out there trying to make a living.  If you ran your household this way, without accepting the cold hard unadjusted numbers in front of you, you’d find yourself broke and on the street in no time.  Unfortunately this is EXACTLY how our government handles most financial data; by coming to a final conclusion before hand, and then forcing the numbers to fit that conclusion.

This is why in February of 2013, “adjusted” first week unemployment rate was reported at 366,000 – a 5000 person drop from the week before.  A seeming improvement in the trend.  But, unadjusted numbers came in at 386,176 – a 16,000 person spike from the week before.  When one examines real unemployment numbers, he finds that the divergence between the adjusted and unadjusted statistics is growing larger with each passing quarter.  That is to say, the contradiction is becoming so blatant between the hard numbers and the Labor Department’s fantasy numbers that one must question whether or not the government is lying to us outright about the state of the economy (hint – they are lying).

These same methods are used by the government to calculate progress in the housing market, disposable income, etc.

The claim of “recovery” in the jobs market simply doesn’t jive with other indicators, like 2012 Christmas retail, which had the worst showing since the crash in 2008 (and these are still mainstream numbers!):

http://www.foxnews.com/us/2012/12/26/us-holiday-retail-sales-growth-weak…

Average household savings continue to scrape the bottom of the barrel, indicating that the public is not spending or withholding cash.  They are simply broke:

And the overall GDP of the U.S. contracted in the fourth quarter of 2012 for the first time in three years (again, according to official numbers, meaning the reality is much worse):

http://money.cnn.com/2013/01/30/news/economy/gdp-report/index.html

The downturn in consumption and industry also seems to be supported by the Baltic Dry Index, a measure of global shipping and rates.  The BDI has fallen to near historic lows THREE TIMES in the past year, which to my knowledge, has never happened before.  In the past, the BDI has been a strong prophetic indicator of future market volatility.  Usually, around a year after a severe decline in the index, a dangerous economic event takes place.  The BDI made its first sharp drop to all time lows at the end of January 2012, exactly a year ago.

U.S. household debt was recently reported to have fallen to a 29 year low, but the ratio used by the Federal Reserve applies a statistic for disposable income that is derived from the Trend Cycle boondoggle method.  While markets cheer, the truth is, the only reason household debt obligations have fallen at all is because bank lending and credit issuance remains frozen.  Consumer debt falls when there is no money to borrow.  In fact, the Federal Reserve actually pays large banks NOT to lend to the public; an activity which was exposed by Dennis Kucinich in 2009 on the House Committee on Oversight and Government Reform.  An activity that continued through 2012:

http://economix.blogs.nytimes.com/2012/07/31/the-fed-should-stop-paying-banks-not-to-lend/

Keep in mind, one of the primary arguments the Federal Reserve used when promoting the bailout concept was that it would “free up credit markets” so that lending could pick up again and fuel a recovery, and yet, at the same time, they were paying banks to NOT lend.

Meanwhile, the supposed job recovery has produced an astonishing increase in welfare recipients in the U.S., including a record 46 million Americans on foodstamps (approximately 15% of our population):

http://www.nbcnews.com/business/report-15-americans-food-stamps-980690

If we are to apply any “trend” to our calculations on overall economic health, then we should include the extreme level of government handouts, and poverty levels which are now at all time highs.  The facts are undeniable; the number of people who have much less than they did in 2008 has grown.  How then could the U.S. be considered “in recovery”?

National Debt And The Fiat Lie

With the Dow Index hovering near highs of 14,000 our system truly looks to be on a rocket ship to pre-2008 money market bliss.  In a mere five years we have returned to equity spikes that stagger the mind and the wallet.  At least, that’s how it all appears…

What needs to be taken into account, though, is the amount of fiat money being created by the Federal Reserve, and how much of that printed pixie dust currency is fueling our magical flight to Neverland.  Since 2008, our official national debt has increased from $10 trillion to $16.4 trillion, and some estimate $17 trillion to $18 trillion by the end of 2013 (unless, of course, a collapse occurs).  Which means our national debt, which took decades to reach the $10 trillion mark, will have nearly doubled in only six years!

So, what has a doubling of our national debt in such a short span of time bought us?  Well, credit markets remain frozen, property markets remain stagnant, poverty is at historic levels, welfare recipients are at epic highs, and consumer activity and GDP is back at 2008 lows.  Where did all that printed money go?  Where was it spent?  To answer that question, we only need to find what area of the economy has seen the most positive (or fantastical) activity.  What sector is seeing a massive boost while the rest tumbles?

I suggest that a large portion of QE1 through QE3 has gone to prop up the stock market, and nothing else.  I suggest that American taxpayers are fronting the bill for the equities bonanza we see today.  I suggest that the Dow is being used as a Red Herring to distract the populous for as long as possible while real assets are being snapped up and hoarded by international banks and foreign entities.  I suggest that we are being leached dry and that the parasites are almost ready to move on…

When will it all end?  Perhaps sooner than many people think.  The decision by D.C. to delay talks on the so-called “Fiscal Cliff” until March may not be coincidence.  Extensive cuts in federal spending are absolutely necessary and cannot be dismissed forever, but, because the last vestiges of our system that still operate do so through government money, such cuts will cause immediate damage to the economy, including possible default and dollar devaluation.  Refusal to make cuts will result in credit downgrades, currency inflation, and a loss of the greenback’s world reserve status.  There is no “right” way out of this quandary.

When this collapse is initiated, it would certainly behoove all parties involved, including central banks, international banks, and criminal politicians, to have a scapegoat handy for the citizenry to direct their rage at.

Event Horizon Economics

An “Event Horizon” in physics is a moment or singularity in spacetime at which a gravitational pull becomes so great that there is no way to escape it.  It is a point of no return.  I believe America’s economy has reached its own Event Horizon.  Our system is now entirely fiat driven, with very little or no true economy left.  Without constant injections from the Fed, and perpetually low interest rates, the country would implode tomorrow.  This is not recovery.  Actually, I’m not sure what to call it.

Today, independent economic analysts cannot look to the numbers to determine future trends.  Most are fake, and the rest are ugly, and I’m not sure much else can be said in their regard.  Instead, we must now look to events, rather than statistics, because our country has been maneuvered into a position of utmost frailty.  Like an avalanche shelf waiting for that perfectly timed disturbance to trigger its roaring collapse.  All that is needed is a macro-crisis, and it is no great feat for such a thing to be created in our tension filled global environment.

War in Syria and Iran leading to a tripling of energy prices.  Sanctions and strife with North Korea leading to Chinese economic retribution.  Conflict between China and Japan, again leading to Chinese economic warfare and perhaps real warfare.  An opportune “cyber attack” which could be used as an excuse for a market crash and even an internet shutdown.  A “political impasse” between Reps and Dems which leads to a default of U.S. credit.  Any one of these catastrophes could easily occur (with a little nudge from some well placed people) and feed a wider global tragedy.  The important thing to remember is that while this event will be blamed for the breakdown, it was international banks, the Federal Reserve, and elements of our own government that made the domino effect possible.  They put the pieces in place.  The act that knocks them over is secondary.

I have spent the past seven years writing about “potential” threats to our overall system, but these dangers were always just beyond our sight.  Just around the corner.  Today, it is as if the journey is over, and all those threats have materialized right before my eyes as real, and imminent.  I am watching that which I warned of come to fruition, and this is certainly not a pleasant thing.  What is valuable, though, is what we have all done in the Liberty Movement with the time that we had.  From when I began writing for the movement until now, I have seen an overwhelming increase in public awareness.  It may not be obvious to newer activists, but it is there all the same.  While we still face disparaging odds, and millions upon millions of oblivious bystanders, there is, amidst these darker moments, a steadfast community of free men and women forming.  I have full faith in the future.  Much more so than I ever did before.  Our economy may be detached from reality, but our endeavors as individuals will not be.  Our resolve will be the great game changer.  Not fiscal calamity.

Source

A Dangerous Sport: Obama Offers To Reimburse Companies If They Violate Federal Labor Law

A government of laws or of men?

LaborUnionReport (Diary)  | 

Trying to ride two horses with one ass is something that is best left to movie stuntmen (or the very stupid) because, in the end, people get trampled.

However, that is precisely what Barack Obama’s administration is trying to do by telling encouraging defense contractors to violate federal law. Then, as if that weren’t enough, Obama’s Office of Management and Budget is offering to use taxpayer money to not only cover the legal costs (including attorney fees), but employee compensation as well, should the would-be labor law violators be sued.

https://i0.wp.com/www.redstate.com/files/2012/10/Two-horses-one-ass.jpg

Let’s back up for a moment, shall we?

The Worker Adjustment and Retraining Notification Act (The WARN Act) is a federal law. According to the Department of Labor, said federal labor law is to protect workers, their families, and communities

Read more:  A Dangerous Sport: Obama Offers To Reimburse Companies If They Violate Federal Labor Law | RedState.

U.S. Department of Labor backtracks about child labor on farms

image

by Monica Wheelus

Late this afternoon the Labor Department issued this statement concerning youth working on farms:

“The Obama Administration is firmly committed to promoting family farmers and respecting the rural way of life, especially the role that parents and other family members play in passing those traditions down through the generations. The Obama Administration is also deeply committed to listening and responding to what Americans across the country have to say about proposed rules and regulations. As a result, the Department of Labor is announcing today the withdrawal of the proposed rule dealing with children under the age of 16 who work in agricultural vocations. The decision to withdraw this rule – including provisions to define the ‘parental exemption’ – was made in response to thousands of comments expressing concerns about the effect of the proposed rules on small family-owned farms. To be clear, this regulation will not be pursued for the duration of the Obama Administration. Instead, the Departments of Labor and Agriculture will work with rural stakeholders – such as the American Farm Bureau Federation, the National Farmers Union, the Future Farmers of America, and 4-H – to develop an educational program to reduce accidents to young workers and promote safer agricultural working practices.”

For those that didn’t hear about this controversial bit of legislation.  It would have prohibited anyone under the age of 16 from working in agriculture.  This included the family farm.  Young people across the country would have also not been able to engage in anything related to agriculture that could be deemed as “labor”.  This could have included many projects for 4H and FFA, such as livestock and horticulture.  Millions of dollars in money and scholarships related to these projects are awarded across the United States.  Not being able to participate in this type of activity until the age of 16 would have devastated that aspect of the industry and hindered many from attaining a higher education.

It just isn’t always possible for a farmer or rancher to pay the cost of their child’s tuition.  Family farms are not multimillion dollar operations like the corporations own.  They need the entire family to keep things afloat from year to year and season to season.  They want their children to be educated and come home to help run the business.  It is a business for the family, but it is also a way of life.

Recent rising costs of fuel and supplies have stretched the farm budgets to a breaking point and many are having to sell out just to get out of debt. With the smaller family run farms becoming fewer and fewer, this removal of a large portion of the workforce could have been the nail in the proverbial coffin.

Note: This is not over. It was a strategy to temporarily relieve political pressure. Pay special attention to Agenda 21 and the upcoming Rio+20 meeting.

Source

Obama Ban on Youth Farm Chores Part of Larger Power Grab

Dredging up Dickensian horrors of child labor, the Obama administration has ordered the Labor Department to apply child labor laws to family farms. The new rules would make it illegal for children to perform a large number of labor tasks that have been performed by farm families for centuries. Traditionally, adults and children alike helped with planting and harvesting in the spring and fall, but the federal government is now determined not only to make this a historical footnote, but a criminal offense.

image

Kurt Nimmo
Prison Planet.com
April 25, 2012

Under the rules, children under 18 would be prevented by the federal government from working “in the storing, marketing and transporting of farm product raw materials” and prohibited “places of employment would include country grain elevators, grain bins, silos, feed lots, stockyards, livestock exchanges and livestock auctions.”

In addition to making it far more difficult for families to work their farms, the new rules will revoke the government’s approval of safety training and certification taught by independent groups like 4-H and FFA and replace them with a 90-hour federal government training course, the Daily Caller reports.

In other words, the federal government will forcibly insert itself in the business of teaching animal husbandry and crop management, disciplines traditionally passed on by families and local communities.

Government apparatchiks will now oversee the business of local farming the same way Stalin did when he collectivized farms and “socialized” production at gunpoint in the Soviet Union. Resistance by farmers and peasants to Stalin’s efforts resulted in the government cutting off food rations, which resulted in widespread famine (the “terror-famine in Ukraine” killed around 12 million people) and millions were sent to forced labor camps.

The Labor Department’s effort to further erode the family farm falls on the heels of an unconstitutional executive order Obama issued last year establishing so-called rural councils.

“According to this new executive order, the Obama administration plans to stick its itchy little fingers into just about every aspect of rural life,” the Economic Collapse Blog noted at the time. “One of the stated goals of the White House Rural Council is to do the following….”

Coordinate and increase the effectiveness of Federal engagement with rural stakeholders, including agricultural organizations, small businesses, education and training institutions, health-care providers, telecommunications services providers, research and land grant institutions, law enforcement, State, local, and tribal governments, and nongovernmental organizations regarding the needs of rural America.

Obama’s plan to make life miserable for family farmers coincides with an effort by the United Nations under Agenda 21. Section one of the executive order mentions “sustainable rural communities,” language right out of Agenda 21. (For more on the draconian aspects of Agenda 21 and the plan to roll back modern civilization under the aegis of “sustainability,” see Rosa Koire’s Behind the Green Mask: U.N. Agenda 21.)

The federal government has recently moved to clamp down on family farms. For instance, last year the Department of Transportation proposed new burdensome rules for farmers. Incidentally, DOT Secretary Ray LaHood holds a seat on the newly created White House Rural Council.

In Late May, the DOT proposed a rule change for farm equipment, and if it this allowed to take effect, it will place significant regulatory pressure on small farms and family farms all across America – costing them thousands of dollars and possibly forcing many of them out of business,” writes Mike Opelka. “The Federal Motor Carrier Safety Administration (FMCSA), part of the Department of Transportation (DOT), wants new standards that would require all farmers and everyone on the farm to obtain a CDL (Commercial Drivers License) in order to operate any farming equipment. The agency is going to accomplish this by reclassifying all farm vehicles and implements as Commercial Motor Vehicles (CMVs).”

Late last year, House Republicans moved to prevent the EPA from further burdening farmers with a rule that would ban “farm dust.” Outrage in response to the proposed regulation came fast and furious and EPA boss Lisa Jackson was forced to back down as Democrats complained that the government was not targeting small family farms with the proposed regulation.

A concerted effort by the federal government to attack small family farms cannot be denied. Infowars.com has covered dozens of efforts, including the attack on Rawesome Foods in California, numerous efforts by the feds to attack raw milk and dairy farmers (including attacks by the FDA on Amish farmers), and a recent effort by the Department of Natural Resources in Michigan to destroy open-range pig farms.

In addition to attempting to micromanage – and run out of business – family farms through federal labor regulations, the government is trying to insert itself in the relationship between parents and their children.

The ongoing attacks on family farming are not merely misguided efforts by control freak bureaucrats. They are part of a larger “comprehensive plan of action” to be taken globally, nationally and locally by organizations of the United Nations to institute “sustainable development,” a philosophy designed to bring humanity under tight control of the global elite.

As George H. W. Bush said on September 11, 1990, the plan is “based entirely on social control mechanisms.” For the elite, controlling food – especially healthy and natural food produced by family farms – is a primary objective in their plan for global conquest.

Source

Rural kids, parents angry about Labor Dept. rule banning farm chores

GUTHRIE, TX - OCTOBER 24: Cole Hatfield tends to his show steers on the 6666 Ranch October 24, 2007 in Guthrie, Texas on October 24, 2007. (Photo by Rick Gershon/Getty Images)

By Patrick Richardson Journalis

A proposal from the Obama administration to prevent children from doing farm chores has drawn plenty of criticism from rural-district members of Congress. But now it’s attracting barbs from farm kids themselves.

The Department of Labor is poised to put the finishing touches on a rule that would apply child-labor laws to children working on family farms, prohibiting them from performing a list of jobs on their own families’ land.

Under the rules, children under 18 could no longer work “in the storing, marketing and transporting of farm product raw materials.”

“Prohibited places of employment,” a Department press release read, “would include country grain elevators, grain bins, silos, feed lots, stockyards, livestock exchanges and livestock auctions.”

The new regulations, first proposed August 31 by Labor Secretary Hilda Solis, would also revoke the government’s approval of safety training and certification taught by independent groups like 4-H and FFA, replacing them instead with a 90-hour federal government training course.

Rossie Blinson, a 21-year-old college student from Buis Creek, N.C., told The Daily Caller that the federal government’s plan will do far more harm than good.

“The main concern I have is that it would prevent kids from doing 4-H and FFA projects if they’re not at their parents’ house,” said Blinson.

“I started showing sheep when I was four years old. I started with cattle around 8. It’s been very important. I learned a lot of responsibility being a farm kid.”

In Kansas, Cherokee County Farm Bureau president Jeff Clark was out in the field — literally on a tractor — when TheDC reached him. He said if Solis’s regulations are implemented, farming families’ labor losses from their children will only be part of the problem.

“What would be more of a blow,” he said, “is not teaching our kids the values of working on a farm.”

The Environmental Protection Agency reports that the average age of the American farmer is now over 50.

“Losing that work-ethic — it’s so hard to pick this up later in life,” Clark said. “There’s other ways to learn how to farm, but it’s so hard. You can learn so much more working on the farm when you’re 12, 13, 14 years old.”

John Weber, 19, understands this. The Minneapolis native grew up in suburbia and learned the livestock business working summers on his relatives’ farm.

He’s now a college Agriculture major.

“I started working on my grandparent’s and uncle’s farms for a couple of weeks in the summer when I was 12,” Weber told TheDC. “I started spending full summers there when I was 13.”

“The work ethic is a huge part of it. It gave me a lot of direction and opportunity in my life. If they do this it will prevent a lot of interest in agriculture. It’s harder to get a 16 year-old interested in farming than a 12 year old.”

Weber is also a small businessman. In high school, he said, he took out a loan and bought a few steers to raise for income. “Under these regulations,” he explained, “I wouldn’t be allowed to do that.”

Child Labor Laws | Farming | Department of Labor | The Daily Caller.

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