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No One Gets Out Of Here Alive

NO ONE GETS OUT OF HERE ALIVE

“The seasons of time offer no guarantees. For modern societies, no less than for all forms of life, transformative change is discontinuous. For what seems an eternity, history goes nowhere – and then it suddenly flings us forward across some vast chaos that defies any mortal effort to plan our way there. The Fourth Turning will try our souls – and the saecular rhythm tells us that much will depend on how we face up to that trial. The saeculum does not reveal whether the story will have a happy ending, but it does tell us how and when our choices will make a difference.”  – Strauss & Howe – The Fourth Turning

As we wander through the fog of history in the making, unsure who is lying and who is telling the truth, seemingly blind to what comes next, I look to previous Fourth Turnings for a map of what might materialize during the 2nd half of this current Fourth Turning. After a tumultuous, harrowing inception to this Crisis in 2008/2009, we have been told all is well and are in the midst of an eleven-year economic expansion, with the stock market hitting all-time highs.

History seemed to stop and we’ve been treading water for over a decade. Outwardly, the establishment has convinced the masses, through propaganda and money printing, the world has returned to normal and the future is bright. I haven’t bought into this provable falsehood. Looking back to the Great Depression, we can get some perspective on our current position historically.

The Dow is up 450% since its 2009 low, which is the metric used by the establishment to prove their money printing solutions have succeeded in lifting the country from the depths of despair and depression.

…click on the above link to read the rest of the article…

THE TRUCKING “BLOODBATH” CONTINUES AS 4,500 TRUCKERS LOSE THEIR JOBS

THE TRUCKING “BLOODBATH” CONTINUES AS 4,500 TRUCKERS LOSE THEIR JOBS

The federal government’s jobs report has confirmed that truckers are losing their jobs by the thousands. According to preliminary payroll numbers reported by the Bureau of Labor Statistics last week, around 4,500 trucking jobs were eliminated in the month of August alone.

The worst part is that we can expect that number to get worse in the coming months. According to Business Insider, this is the first time the agency reported a slash in trucking payrolls since March, when 1,200 truckers lost their jobs. That’s also the biggest drop since April of 2018 when approximately 5,500 trucking jobs were lost.

Indicators from the trucking industry have been sour in 2019. In the first half of the year, around 640 trucking companies went bankrupt, according to industry data from Broughton Capital LLC. That’s more than triple the number of bankruptcies from the same period last year — about 175. –Business Insider

One trucking company’s profits plunged recently adding more fuel to the recession fires.  USA Truck reported $2.5 million in net income in the second quarter of 2018. In Q2 2019, it reported $1,000 in profit, according to a separate report from Business Insider. The trucking industry is indeed going through a “bloodbath.”


Not a number you see very much in quarterly earnings: USA Truck’s 2q profit fell to … $1,000.

https://www.arkansasonline.com/news/2019/jul/26/freight-carrier-s-net-falls-to-1-000-20/#.XT2j3bcyRE8.twitter …Arkansas-based freight carrier’s profit plummets to $1,000 from $2.5 millionUSA Truck Inc. on Thursday reported a second-quarter profit of $1,000, a fraction of the trucking company’s reported profit from a year ago. arkansasonline.com


Of course, the news gets even bleaker the further you look. New truck orders sank to a nine-year low in July, according to ACT Research. But that number rebounded slightly in August, with a 6% month-over-month bump.

 …click on the above link to read the rest of the article…

Writing on the Wall

Writing on the Wall

Not Adding Up

One of the more disagreeable discrepancies of American life in the 21st century is the world according to Washington’s economic bureaus and the world as it actually is.  In short, things don’t add up.  What’s more, the propaganda is so far off the mark, it is downright insulting.

Coming down from the mountain with the latest data tablet… [PT]

The Bureau of Labor Statistics (BLS) reports an unemployment rate of just 3.7 percent.  The BLS also reports price inflation, as measured by the consumer price index (CPI), of 1.8 percent.  Yet big city streets are lined with tents and panhandlers grumble “that’s all” when you spare them a dollar.

In addition, good people of sound mind and honest intentions are racking up debt like never before.  Mortgage debt recently topped $9.4 trillion. If you didn’t know, this eclipses the 2008 high of $9.3 trillion that was notched at the precise moment the credit market melted down.

Total American household debt, which includes mortgages and student loans, is about $14 trillion – roughly $1 trillion higher than in 2008.  Credit card debt, which is over $1 trillion, is also above the 2008 peak.  To be clear, these debt levels are not signs of economic strength; rather, they are signs of impending disaster.  Moreover, they’re signs that American workers have been given a raw deal.

US CPI, “core” CPI and total consumer credit outstanding. 

How is it that the economy has been growing for a full decade straight, but the average worker has seen no meaningful increase in his income?  Have workers really been sprinting in place this entire time?  How did they end up in this ridiculous situation?

US mortgage debt outstanding and real household wages (real hourly earnings of production and non-supervisory employees) [PT]

 …click on the above link to read the rest of the article…

No, Autos Are Not “Cheaper Now”

No, Autos Are Not “Cheaper Now”

According to the BLS, inflation in the category of “New Vehicles” has been practically non-existent the past 21 years.

Longtime readers know I’ve long turned a skeptical gaze at official calculations of inflation, offering real-world analyses such as The Burrito Index: Consumer Prices Have Soared 160% Since 2001 (August 1, 2016) and Burrito Index Update: Burrito Cost Triples, Official Inflation Up 43% from 2001 (May 31, 2018).

Official claims that grossly understate real-world inflation is a core feature of debt-serfdom and neofeudalism: we’re working harder and longer and getting less for our earnings every year, but this reality is obfuscated by official pronouncements that inflation is 2%–barely above zero.

Meanwhile, quality and quantity are in permanent decline. New BBQ grills rust out in a few years, if not months, appliance paint is so thin a sponge and a bit of cleanser removes the micron-thick coating, and on and on in endless examples of the landfill economy, as new products are soon dumped in the landfill due to near-zero quality control and/or planned obsolescence.

Free-lance writer Bill Rice, Jr. recently analyzed shrinkflation, the inexorable reduction in quantity:

What Does Your Toilet Paper Have to Do With Inflation?

Manufacturers have been engaging in “shrinkflation,” leaving consumers paying more for less, but stealthily.In the guest post below, Bill looks at new car prices, and finds that official inflation for “new vehicles” from November 1983 to November 2013 measured only 43.8 percent… while actual car inflation (based on archived price records in Morris County, NJ) is 4.85 times higher than official CPI “new vehicle” inflation.

Prices for new cars sky-rocketed over 30 years (or did they?)

A lesson in ‘hedonic adjustments’

 …click on the above link to read the rest of the article…

Here’s The Proof: How The CPI Is Underrepresenting Food Inflation By 40%

Here’s The Proof: How The CPI Is Underrepresenting Food Inflation By 40%

The “muzzle” on reported inflation has policymakers and analysts perplexed.

As Joseph Carson, former director of economic research at Alliance Bernstein writes in his follow up to a “New Working Theory on Inflation“, numerous economic explanations and theories have been offered, and policymakers are considering making changes to their operating price-targeting framework. Yet, before any decisions are made policymakers should consider all of the factors that could be keeping a “muzzle” on published inflation.

Here are two:

First, a little more than 20 years ago the Bureau of Labor Statistics (BLS) introduced a number of new measurement techniques in the estimation of consumer inflation (see Boskin Commission). So the current business cycle, which started in 2009, is the second consecutive cycle in which these new procedures have been employed.

Statistical changes have been made to account for product substitution, a greater degree of quality changes in products and services and faster introduction of new outlets or ways in which people shop. The introduction of new variables in the estimation of inflation alters the pattern and at various times the rate of change as well.

Prior to their implementation, analysts and government statisticians estimated that the potential reduction in core inflation from all of these statistical changes would range from one-half to a full percentage point. Yet, all of those estimates were looking backwards and there is no guidance from the statistical agencies of the scale of the reduction in reported inflation after implementation.

Odds are high that the impact on reported inflation varies year to year, with some years at the upper end of range of estimate and others at the lower end.

 …click on the above link to read the rest of the article…

The Fourth Turning & War of the Worlds

THE FOURTH TURNING & WAR OF THE WORLDS

Image result for fake news cnn Image result for illegal immigrant invasion

Image result for bomb hoax Image result for fourth turning war

“In retrospect, the spark might seem as ominous as a financial crash, as ordinary as a national election, or as trivial as a Tea Party. The catalyst will unfold according to a basic Crisis dynamic that underlies all of these scenarios: An initial spark will trigger a chain reaction of unyielding responses and further emergencies. The core elements of these scenarios (debt, civic decay, global disorder) will matter more than the details, which the catalyst will juxtapose and connect in some unknowable way. If foreign societies are also entering a Fourth Turning, this could accelerate the chain reaction. At home and abroad, these events will reflect the tearing of the civic fabric at points of extreme vulnerability – problem areas where America will have neglected, denied, or delayed needed action.” – The Fourth Turning – Strauss & Howe

The paragraph above captures everything that has happened, is happening, and will happen during this Fourth Turning. It was written over two decades ago, but no one can deny its accuracy regarding our present situation. The spark was a financial crash. The response to the financial crash by the financial and governmental entities, along with their Deep State co-conspirators who created the financial collapse due to their greed and malfeasance, led to the incomprehensible election of Donald Trump, as the deplorables in flyover country evoked revenge upon the corrupt establishment.

The chain reaction of unyielding responses by the left and the right accelerates at a breakneck pace, with absolutely no possibility of compromise. A new emergency or winner take all battle seems to be occurring on a weekly basis, with the mid-term elections as the likely trigger for the next phase of this Fourth Turning.

…click on the above link to read the rest of the article…

The Coming Inflation Threat: The Worst Of Both Worlds

Sandusky Register

The Coming Inflation Threat: The Worst Of Both Worlds

Expect falling asset inflation, but rising cost inflation
Inflation is a funny thing: we feel it virtually every day, but we’re told it doesn’t exist—the official inflation rate is around 2.5% over the past few years, a little higher when energy prices are going up and a little lower when energy prices are going down.

Historically, 2.5% is about as low as inflation gets in a mass-consumption economy like the U.S. that depends on the constant expansion of credit.

But even 2.5% annually can add up if wages are stagnant. According to the Bureau of Labor Statistics (BLS), what cost $1 in January 2009 now costs $1.19. https://www.bls.gov/data/inflation_calculator.htm

That 19% decline in the purchasing power of dollars is tolerable as long as wages go up by 20% over the same period, but for many American households, wages haven’t kept pace with official inflation.

While the nominal hourly wages keep rising, adjusted for inflation, wages have stagnated for decades.  Here’s a chart based on BLS data that shows median weekly earnings adjusted for official inflation rose $6 a week after five years of decline:

But stagnant wages are only part of the inflation picture: official inflation under-represents real-world inflation on several counts.

First, the weightings of the components in the Consumer Price Index (CPI) are suspect.  Many commentators have explored this issue, but the main point is the severe underweighting of expenses such as healthcare, which is only 8.67% of the CPI but over 18% of the U.S. Gross Domestic Product (GDP).

Second, the “big ticket” components—rent/housing, healthcare and higher education—are under-reported for those who have to pay the unsubsidized cost.  The CPI reflects minor cost decreases in tradable commodity goods such as TVs and clothing that are small parts of the family budget, while minimizing enormous expenses such as college tuition and healthcare that can cost $20,000 annually or more.

…click on the above link to read the rest of the article…

Amid Market Rout, Decade of “Financial Repression” Ends, Capital Preservation Suddenly is a Thing

Amid Market Rout, Decade of “Financial Repression” Ends, Capital Preservation Suddenly is a Thing

This will dog the stock market going forward.

Fixed-income investors – a financially conservative bunch buying Treasury securities, FDIC-insured CDs, and similar products that largely eliminate risk – have been getting crushed for a decade: Except for brief periods when inflation dipped to near zero or below zero, their minuscule returns have been eaten up by inflation, or worse, they lost money after inflation, as was the case with shorter-term Treasuries and just about all savings products. But it has ended.

The Consumer Price Index (CPI) rose 2.3% in September (2.27%), compared to September a year ago, the Bureau of Labor Statistics reported this morning. This was down from the 2.9% increase in July. These numbers are volatile, but the trend is pretty clear: Outside of the Oil Bust and a few quarters during the Financial Crisis, inflation is a fixture in the US economy:

The CPI without food and energy – “core CPI” – rose 2.2% in September. Cost of shelter rose 3.3%. Cost of transportation services rose 4.0%. So prices are going up as measured by CPI.

What has changed is that interest rates and yields are also going up, and they’re now higher than inflation as measured by CPI across nearly the entire spectrum of US Treasury securities – and if you shop around, across many CDs too.

This ends a decade of “financial repression” — a condition when the Fed repressed interest rates below the rate of inflation.

The chart below shows the US Treasury yield curve across the maturity spectrum, from 1-month to 30 years, at the close yesterday. The 1-month yield, at 2.18%, was the only yield still below the rate of inflation. The 3-month yield at 2.27% is right on top of CPI (green line). Every Treasury security with a maturity longer than three months is beating inflation.

…click on the above link to read the rest of the article…

Americans Live In A World Of Lies

Americans Live In A World Of Lies

The US government and the presstitutes that serve it continue to lie to us about everything. Today the Bureau of Labor Statistics told us that the unemployment rate was 3.9%. How can this be when the BLS also reports that the labor force participation rate has declined for a decade throughout the length of the alleged economic recovery and there is no upward pressure on wages from full employment. When jobs are plentiful, people enter the labor force to take advantage of the work opportunities. This raises the labor force participation rate. When employment is full—which is what a 3.9% unempoyment rate means—wages are bid up as employers compete for scarce labor. Full employment with no wage pressure and no rise in the labor force participation rate is impossible.

The 3.9% unemployment rate is not due to employment. It results from not counting discouraged workers who have ceased to search for jobs because there are no jobs to be had. If an unemployed person is not actively searching for a job, he is not counted as being in the labor force. The way the unemployment rate is measured makes it a hoax.

The government tells us that there is essentially no inflation despite the fact that prices have been rising strongly—the price of food, the price of home repairs, the price of drugs, the price of almost everything. Two years ago the American Association of Retired People’s Public Policy Institute reported that the average retail drug price has been increasing “at a worrying pace of 10 percent a year, and about 20 drugs have astoundingly had their prices quadruple since just December. Sixty drugs doubled over the same period. Turing Pharmaceuticals, headed by Martin Shkreli, is one of the most pronounced examples of this kind of behavior.

…click on the above link to read the rest of the article…

 

America’s Debt Dependence Makes It An Easy Economic Target

America’s Debt Dependence Makes It An Easy Economic Target

There is a classic denial tactic that many people use when confronted with negative facts about a subject they have a personal attachment to; I would call it “deferral denial” — or a psychological postponing of reality.

For example, point out the fundamentals on the U.S. economy such as the fact that unemployment is not below 4% as official numbers suggest, but actually closer to 20% when you factor in U-6 measurements including the record 96 million people not counted because they have run out of unemployment benefits. Or point out that true consumer inflation in the U.S. is not around 3% as the Federal Reserve and the Bureau of Labor Statistics claims, but closer to 10% according to the way CPI used to be calculated before the government started rigging the numbers.  For a large part of the public including a lot of economic analysts, there is perhaps a momentary acceptance of the danger, but then an immediate deferral — “Well, maybe things will get worse down the road, 10 or 20 years from now, but it’s not that bad today…”

This is cognitive dissonance at its finest. The economy is in steep decline now, but the mind in denial says “it could be worse,” and this is how you get entire populations caught completely off guard by a financial crash. They could have easily seen the signs, but they desperately wanted to believe that all bad things happen in some illusory future, not today.

There is also another denial tactic I see often in the world of politics and economics, which is what I call “paying it backward.” This is what people do when they have a biased attachment to a person or institution and refuse to see the terrible implications of their actions.

…click on the above link to read the rest of the article…

The Real Inflation Rate May Signal That the U.S. Economy is in a Death Spiral

The Real Inflation Rate May Signal That the U.S. Economy is in a Death Spiral

real inflation us economy collapse

Just like a car with a bad cooling system, the U.S. economy may be overheating, and could break down soon. Why?

Aside from trade wars, geopolitical tension, and debt, inflation might stand center-stage as the final nail in the U.S. economic “coffin”.

According to Torsten Slok, the Chief International Economist at Deutsche Bank, inflation “is the mother of all risks here”.

You see, the floundering U.S. dollar, tight labor market, Quantitative Easing and trade wars have all paved the way for rising inflation. And, in a recent survey of global fund managers conducted by Bank of America, 82% expect the CPI index to keep climbing over the next year.

But the “inflation nation” might be overheating, as reported by CNBC:

Earlier this month, inflation numbers came in hotter than anticipated, signaling inflation pressures could be mounting. The Labor Department reported its CPI rose 2.4 percent year on year, its fastest annual pace in 12 months.

Even if you factor out energy and food — factors which the U.S. Government likes to leave out to make the CPI inflation rate more appealing — it’s still 2.1%.

That’s the fastest rise since February 2017, higher than the benchmark of 2%, and still rising. Which begs a serious question…

“What is the real inflation rate?”

The Consumer Price Index (CPI) is a set of methods that track the inflation rate, monitored by the Bureau of Labor and Statistics (BLS).us inflation higher matrix

It was designed to help businesses, individuals and the government adjust for the impact of inflation. It worked well until politicians started messing with the methodology in the 1990’s.

In 2011, John Melloy reported on the “real” inflation rate, calculated with the methodology used before 1980 (bolding ours):

Inflation, using the reporting methodologies in place before 1980, hit an annual rate of 9.6 percent in February, according to the Shadow Government Statistics newsletter.

…click on the above link to read the rest of the article…

Do You Believe in BLS Unicorns

DO YOU BELIEVE IN BLS UNICORNS?

The chart below says there has been 55.6% inflation over the last 20 years. That is just less than a 2.4% annual level of inflation. What a load of bullshit. Let’s look at a couple of categories listed below and do a smell test. Everyone knows the prices of TVs have fallen dramatically, but 99% – I don’t think so. I was able to find the price of a 28 inch Samsung TV in 1997 – $750. The same size Samsung TV costs $200 today. That’s a 73% decrease. The good old BLS says the decrease is really 99% because the new TV does so much more. They call this a hedonic adjustment.

It gets better. The BLS shows the cost of housing up about 56% over the last 20 years. Here are a couple indisputable facts from the same government peddling this inflation drivel. The average new home cost $175,000 in 1997. The average new home in 2017 cost $380,000. For the math challenged, that is a 117% increase. The average monthly rent in 1997 was $576. In 2017 it was $1,021. That is a 77% increase. Housing is the biggest weighting in the CPI calculation. Since using actual cost increases would show at least a 90% increase in housing, the BLS drones created a fake calculation called owners equivalent rent which no one can question. That’s how you fake housing inflation.

And now for the funniest bullshit of them all. According to these fake news aficionados, the cost of a new car has not gone up by one dime in the last 20 years. It seems there is some non-government data that says otherwise. The average price of a new car in 1997 was $19,214. The average price of a new car in 2017 was $33,560. Does that strike you as a 0% increase? The actual increase for the average schmuck living in the real world has been 75%. But those good old hedonic adjustments get you back to 0%.

…click on the above link to read the rest of the article…

Food: What’s In Your Basket? How Fast Are Prices Rising?

The BLS says the CPI rose 2.1% in December from a year ago. Food rose 1.6%. I called the BLS and filled in some numbers.

In CPI Up 0.1 Percent: How Much is the CPI Understated? I disputed the BLS’s year-over-year overall inflation figure of 2.1%, specifically citing housing and the cost of health insurance.

I found the reported food increase reasonable, others didn’t. Whether or not you find the food index believable depends on two things.

  1. What you buy
  2. How you shop

Reader AWC pointed out this BLS article from March of 2017: Prices for meats, poultry, fish, and eggs down 7 percent since August 2015 peak.​

I downloaded the data and started plugging in numbers for December 2017. The index numbers did not match, so I called the BLS. The person directed me to data downloads which I also found on my own. I still could not match the downloaded numbers.

What happened is the data for the the preceding chart was indexed to 2007 but the main index is to 1982.

I asked the BLS agent for year-over-year increases of items and the percentages matched.

CPI Select Food Items

I calculated all but the last row from the March article after verifying percentages with the BLS. The last row was read to me over the phone.

I created the main graph from the above chart.

How Do You Shop?

​Your percentages may vary substantially from the above chart.

Mine are cheaper because I buy items on sale and freeze them. Sale prices fluctuate less than non-sale prices.

Properly wrapped food will last a year or more.

…click on the above link to read the rest of the article…

New President–Same BLS Bullshit

NEW PRESIDENT – SAME BLS BULLSHIT

I spent most of Obama’s presidency obliterating the jobs recovery narrative every month, as millions supposedly left the workforce because their financial situation was so wonderful. The bullshit shoveled by the BLS was nothing but manipulated misinformation then and it is still bullshit now. Just because the president is now Trump, doesn’t make the false narrative about a strong jobs recovery now valid. After a disappointing December jobs report, the cackling and tooting of horns might die down a little, but the propaganda peddlers will somehow spin it as a positive. Buy Stocks!!!!

Candidate Trump railed against the fake data put out by the BLS. He railed about the ridiculously low interest rates manufactured by the Fed. He declared the stock market was a bubble ready to burst. That was over 5,000 points ago. As expected, now that he is el presidente, Trump embraces the fake data, low interest rates and the most overvalued stock market in history. He tweets about the great economy and stock market every day. GDP has risen at a scintillating 2.5% pace in 2017. This is up from 2% in the prior two years, driven by people going further into debt to survive or buy shit they don’t need.

The narrative being propagated by the corporate MSM was this was the best holiday retail season in years. Americans were back to spending like drunken sailors. Trump is making America great again, so why not spend money we don’t have using that little piece of plastic. Those future tax savings will more than pay the bill. Except for a couple nagging questions.

…click on the above link to read the rest of the article…

Yellen Was Right: “Transitory” Factors of “Low” Inflation Are Reversing, with Much More to Come

Yellen Was Right: “Transitory” Factors of “Low” Inflation Are Reversing, with Much More to Come

What’s Boiling Beneath the Surging Inflation?

Consumers are going to shell out more money for the same stuff, that’s for sure. Inflation as measured by the Consumer Price Index jumped 2.2% in September compared to a year ago, the Bureau of Labor Statistics reported this morning. All fingers pointed at energy costs: the index  jumped 10.1% year-over-year. Within it, “motor fuel” prices (gasoline and diesel) jumped 19.2%.

Food prices rose 1.2% year-over-year, kept down by prices for “food at home” – the stuff you buy at the grocery store – which inched up only 0.4% year-over-year in part due to the price war currently tearing into the supermarket sector.

In the chart below of CPI, note the dreadful “Deflation Monster” – one of those rare and brief occasions in the US when the purchasing power of wages actually rose just a tiny bit on a year-over-year basis. It was caused by the energy bust. And it was “transitory”:

In the chart, note how CPI jumped 2.8% in February and then retreated through June. This retreat was brushed off as “transitory” by Fed Chair Janet Yellen and other Fed governors when they vowed to continue raising rates. She had specifically pointed out a few of those “transitory” factors. And they’re now turning around.

One of these factors that Yellen had pointed out was telephone services, which includes the monthly costs that consumers pay for their smartphones. Those costs plunged as a price war among wireless carriers had broken out in 2016. This summer, the price index for telephone services was down around 9% year-over-year. The wireless component plunged as much as 13%. But that consumer bonanza could not last.

…click on the above link to read the rest of the article…

Olduvai IV: Courage
In progress...

Olduvai II: Exodus
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