America Remains In A Depression

So says James Rickards, here:

“We don’t have to worry about a recession — we are in a depression,” says James Rickards. “If you take the classic definition of a sustained, long-term downturn with economic growth below trend, then we are in the midst of a depression,” says the senior managing director of Tangent Capital and author of “Currency Wars.” Rickards doesn’t see Fed Chairman Ben Bernanke as having the solution to the economic malaise gripping the county.

Real GDP per capita through 1/1/11 bears this out (I think this gets updated through 1/1/12 this summer in the big annual GDP revision):

The peak to trough decline was 5.1% January 2007 to January 2009.

The metric remains 2.6% off peak.

Barry Ritholtz Is Against The World Religion Of Gold

Barry Ritholtz here recently had some fun with the goldbugs, whom he ridicules as devotees of a "religious cult".

The piece is regrettably inflammatory. Doesn't he know he's writing off the whole world as a bunch of religious kooks in this temper tantrum? That's pretty much what ideologues do when reality won't cooperate with their theories, but surely he must know that sovereigns and central banks the world over continue to build their hoardes of gold year upon year, now approaching 32,000 tonnes and 20% of all the stuff ever pulled out of the ground. That's quite the foundation for the edifice of the worldwide church of gold.

In fact, many of the central banks in particular have been on a tear recently, acquiring the stuff in quantities not seen in 30 years. Evidently they are to a man possessed by the Oracle of Au (pronounced "Ow"). But try as they may to acquire new gold reserves, no one of them yet even comes close to the chief priest bowing and scraping before the barbarous relic, namely the USA, the number one holder of gold in reserve to the tune of 8,134 tonnes (not to be confused with tons). 

That even the USA with all its fiat money still considers this gold to be the most sublime of all currencies can be seen in its own gold issues. Gold Eagles, in one ounce sizes down to tenth ounce, are denominated from $50 down to $5. It says so right on the coins. (I understand if you don't believe me because you haven't seen one. They are expensive these days.) I myself haven't seen one of these things in my change at Walmart recently, or anywhere else, but theoretically you could. In various places around the country they are in fact found in Salvation Army kettles from time to time, usually around the time of a holiday formerly known as "Christmas".

There is a reason for what appears on a Gold Eagle: The US government has decreed that gold is money, and that the price of gold cannot fall. It has fixed the price at $42.22 per troy ounce since 1973, and it hasn't fallen since. The one ounce $50 Gold Eagle thus closely approximates this valuation, as it should if America wants to maintain its credibility as the leader of the free world and the spokesman for truth, justice and the, well, American way. The excess, in case you were wondering, is simply a small bonus in exchange for providing the world with both its security and its reserve currency, both of which are quite costly to the inhabitants of the land of the free.

Over our long history, the price of gold has indeed risen despite the best efforts of "manipulators" to stop it from doing so. For a long time the price of gold had been ruthlessly kept down at $20.67, from the War Between the States to FDR, but suddenly became $35 when the greatest Democrat ever saved us from the bad old ways. Not to be outdone, however, the great Republican Richard Nixon managed to make gold higher still, at $42.22, where it has stood ever since.

See, the price of gold hasn't ever fallen in America, it's only risen, just like Jesus. It's God's will. It is our manifest destiny.

That said, more people these days do need to come to accept the reality of this defacto gold standard to which our benevolent government all too secretly adheres. Younger generations of mockers actually have arisen among us who need to repent of their intemperate outbursts against gold and believe in the Gold Gospel once again. Instead of denying the reality of this kingdom of gold, which is really present here and now in the sacramental dollar, they need to wake up and consider the future possibilities of our great civilization and its gold religion.

Perhaps then there would be more public support for all these central bankers who print funny money to drive gold prices higher, especially for our own Ben Bernanke at the Federal Reserve who far excells all others at this. What he really needs most right now is more public encouragement to use that funny money like our competitors do in the world. Like them, we need to start augmenting our gold reserves once again using funny dollars to buy gold just as they are doing using, say, funny yuans. After all, this is actually a divinely sanctioned practice, what the Bible calls making use of "unrighteous mammon". You can look it up, it's right in there. Ben really needs to get on this right away. It should be a matter of his monetary policy to drive up the price of gold by hoarding it. Who knows, maybe we can even get our tonnage back up where it used to be after WWII, around 20,000 tonnes, and just think, all it will cost us is some paper and ink.

Meanwhile gold continues to work for us in season and out of season, in good times and in bad. Our reserves have seen us through thick and thin, whether it's been the boom times under Reagan/Bush/Clinton or the misery index years of Jimmy Carter or the new depression years of Barack Obama. Our gold is still there, just like the flag. It hasn't rusted, shrunk in the rain, or even tarnished. Good as gold as they say. Things might be even better if we had more of it, but you've got to be thankful for your blessings, thankful for what you do have.

The truth is, even in the very worst of circumstances imaginable gold has performed miracles for people. A few well-placed gold coins not that long ago meant the difference between some of our fellow countrymen coming here or going to the gas chambers. Ask them and their progeny if escaping an apocalypse wasn't "just fine", even if they were penniless afterward.

No, the only suckers when it comes to gold have been those who let theirs go when misguided government came looking for it. Some of those babies confiscated in 1933 now fetch $300,000. The rest appreciated in value in their melted down form in the government's vault, but only 6600%. You could go to Harvard today with just 120 of those ounces. In the present banks and governments across the globe are finding the collateral gold provides rather more reliable than US Treasuries in a pinch, which is why they keep acquiring it. Evidently we haven't yet understood the message that this sends. 

It's true in a sense that gold is a rejection of government control, but only in the sense of its opposite, self-control, which is what in America is the unique basis of our form of government. It was an idea bequeathed to us by Protestantism, and also by Plato, both of which are unhappily out of favor. But seeking to control your own destiny, which is what many foreigners are doing by acquiring gold, is actually the sincerest form of flattery of what the United States used to stand for. Free from the control of a reserve currency, there's no telling what others in the world may accomplish without us. But under a universal currency, there's no telling what we could still accomplish together. 

The Nation: Bill Clinton Wrecked The Economy, Not David Stockman

So Robert Sheer, here:

It wasn’t Stockman who wrecked the economy. It was Bill Clinton who deregulated the too-big-to-fail banks, and it was George W. Bush and Barack Obama who bailed them out. But even Paul Krugman, who knows how bad things are and yet manages to be charitable in appraisals of his Princeton colleague Ben Bernanke, dismisses Stockman’s critique as “cranky old man stuff. ...” ...

Herein is a lesson that the bankers should have been taught back during the Clinton presidency when, as Stockman writes, the principle of a bailout for Wall Street’s hustlers “was reinforced by the Fed’s unforgivable 1998 bailout of the hedge fund Long-Term Capital Management.”

That fiasco’s enablers—Alan Greenspan, Robert Rubin and Lawrence Summers—and the more disastrous ones to follow were crowned “The Committee to Save the World” on Time magazine’s Feb. 15, 1999, cover and are still welcomed in those polite circles where truth-teller Stockman is being treated as a pariah.

Ben Bernanke Is Trying But Failing Miserably At Money Printing

And it's not exactly his fault.

Historically in the postwar period, the increase in Total Credit Market Debt Outstanding (TCMDO) has closely shadowed the increase in Total Net Worth, seemingly helping to finance it, until the late great recession when for the first time, and very briefly, net worth flagged below the level of the debt owed. (Ignoramuses in the Doomosphere everywhere cried "Insolvency" at the time, not understanding the meaning of the term "net"). Ex post facto, net worth has made a dramatic upswing while the debt owed has increased at a much reduced rate by historical standards. To quote a famous president, "That doesn't make any sense."

Despite all the debt naysayers out there, total credit market debt is not increasing at anything like it should be, and appears to be disconnected to a significant degree from the recent increase in total net worth, which is up 29% since its nadir at the beginning of 2009, or $14.7 trillion. For the whole five year period from July 2007 (the last time TCMDO doubled, going back to 1999) to July 2012, TCMDO increased at a rate of just 12% and real GDP increased just 2.9%, whereas TCMDO increased at a rate of 100% between 1949 and 2007 on average every 8.25 years. The shortest doubling times have included two periods of 6 years each, one of 6.75 years, one of 8 years, one of 9.5 years, one of 10 years, and one of 11.5 years. The very worst real GDP performance of all of those was for a 6 year doubling period when we got 14% real GDP, nearly 5 times better than we're getting now. All the rest posted real GDP of between 23% and 56%.

It is evident that Ben Bernanke's quantitative easing program (right scale) anticipated the leveling off of TCMDO (left scale). Clearly he expected the troubled banks to need a push to keep the credit money creation process going, but didn't understand how fruitless it would be. One notes that he has added about $2 trillion to the monetary base from the middle of the late great recession. By contrast, TCMDO is up (only!) $9 trillion from the beginning of 2007. By historical standards TCMDO should be up $25 trillion by now if TCMDO is to double again in ten years from 2007. And it should be up a lot more than even $25 trillion by now if it's to double sooner than ten years. At the average doubling time of 8.25 years, the $49.8 trillion of TCMDO in July 2007 should hit $99.684 trillion by October of 2015 if the postwar pattern is to continue. Instead, at the current rate of growth in TCMDO, it's going to take an unprecedented 27 years to double it, unless of course there are limits to borrowing to fuel growth, as many are beginning to tell us. In either event one can only assume there will be only pathetic real GDP growth going forward, if there is any at all.

Clearly something is horribly amiss in the transmission process of credit money creation for the first time in the postwar. Seemingly gargantuan quantities of money from the Fed through the process of quantitative easing should be seeding the banks who in turn should be creating massive amounts of credit way beyond the $9 trillion so far created. Instead, the banks are doing something else with it, by-passing the normal distribution channel. Some of the seed money is being held back to comply with increased capital requirements, to be sure, but more appears to be going directly into household net worth creation through investment gains from the stock market, enriching a very few bondholders, shareholders and banking industry players through the private trading desks of the banks, a unique development by historical standards made possible only since 1999 with the abolition of Glass-Steagall through the Gramm-Leach-Bliley Act. As an act of Congress, Ben Bernanke can't do much about that even if he is the most powerful man in the country.

In the absence of a creative policy change from the Fed whereby Congressional intent would be thwarted and money would actually reach the marketplace through a different avenue than the uncooperative banks, one must conclude that the Fed thinks it necessary to continue the various easing schemes because it judges the banks to be still too fragile to risk stopping them. That would be putting the best construction on the matter, to borrow a phrase from Luther's catechism. Either that, or the Fed itself has been completely captured by the bankers.

Big Whoop: Final Report Of Q4 2012 GDP Comes In At +0.4%

(click the images, as always, to enlarge)

The report from the Bureau of Economic Analysis is here:

Real gross domestic product -- the output of goods and services produced by labor and property located in the United States -- increased at an annual rate of 0.4 percent in the fourth quarter of 2012 (that is, from the third quarter to the fourth quarter), according to the "third" estimate released by the Bureau of Economic Analysis. In the third quarter, real GDP increased 3.1 percent.

The pathetic performance is being hailed as good news. It is, like when the guy with the drill stops boring holes in your head, but only good relative to the first awful estimate.

This final revision is a huge revision up from the first estimate of -0.1% and the second of +0.1%. Suddenly growth in the 4th quarter is 4 times better than it was just a month ago. Yet even at that these are remarkable depths for US GDP to be in when the recession is supposed to be long over since 2009.

Speaking of which, it was said by Ben Bernanke back then, here in July 2009, that growth of 2.5% was necessary to keep the unemployment rate constant. So why is unemployment coming down? Even after today we still have growth roundable to zero in Q4, but the unemployment numbers magically came down anyway, from 8.1% last August to 7.7% in February 2013. If weak GDP is having a long term affect on unemployment, I don't see it. Even today's annual averages in the 1.8% and 2.2% range in the report for the last two years do not support Bernanke's assertion in 2009. Unemployment has come down despite such anemic growth rates. And if anything, we should have seen a gradual uptick in unemployment over the last two years because GDP has been insufficient to keep it constant. I don't think Bernanke really knows what he's talking about, and just makes this stuff up to mollify people at the time as he pursues his only real goal: keeping the banks afloat. Everything else is just for public consumption.

And you can put that in your Easter basket, and crack it. 

"Babes Shall Rule Over Them. And The People Shall Be Oppressed."

"And I will give children [to be] their princes, and babes shall rule over them.

"And the people shall be oppressed, every one by another, and every one by his neighbour: the child shall behave himself proudly against the ancient, and the base against the honourable."

-- Isaiah 3:4f.

"Ben Bernanke and other central bankers, like promiscuous parents, compensate and indulge political leaders acting irresponsibly in their stewardship of national economies.

"Sooner or later spoiled children turn out badly, and economies juiced with too much money have their bubbles, inflation and collapse.

"This will all end badly."

-- Peter Morici, Smith School of Business, University of Maryland, here

Gold To Oil Ratio Skyrockets to 20.11

The sale on oil relative to gold just got much better.

The action, however, is mostly on the side of gold, which is movin' on up because of Obama's re-election.

He aims to tax and spend, but the US House stands in the way of that, which takes some of the pressure off the need to borrow money or print it, which is negative for gold. But with Ben Bernanke serving at his pleasure at the Fed, dollar devaluation through quantitative easing is still positive for gold and negative for the dollar.

Gold doubled under Obama's first term, from $850 the ounce to $1,730 today. I wouldn't be surprised to see that happen again.

$3,400 the ounce in 2016?

Just the thought of it makes my nose bleed.

Neither ObamaCare Nor Ben Bernanke Go Away If . . .

Neither ObamaCare nor Ben Bernanke go away if . . . you vote Democrat.

It is astonishing that Republicans are not saying this more loudly, which is a good and strong reason to doubt their sincerity about getting rid of either ObamaCare or Ben Bernanke. But it is what it is.

Politics is the art of the possible, not the art of the ideal.

There are no lost causes, because there are no won causes.

Obama had a complete grip on power for two years and squandered it, and the Tea Party stopped him cold in 2010.

You can do it again in 2012.

The Blue Tie Club: The Enemies of the People's Money

Romney Would Replace Ben Bernanke

Read about here at USA Today.

Q2 2012 Annual Rate Of GDP, Third Estimate, Revised Down To 1.3 From 1.7

The BEA reports, here:

Real gross domestic product -- the output of goods and services produced by labor and property located in the United States -- increased at an annual rate of 1.3 percent in the second quarter of 2012 (that is, from the first quarter to the second quarter), according to the "third" estimate released by the Bureau of Economic Analysis. In the first quarter, real GDP increased 2.0 percent.

The GDP estimate released today is based on more complete source data than were available for the "second" estimate issued last month. In the second estimate, the increase in real GDP was 1.7 percent (see "Revisions" on page 3).

The third estimate indicates that the economy was growing in the second quarter 24 percent less well than thought in the second estimate, and 35 percent less well than thought in the first quarter.

As an annualized rate of growth, today's report of 1.3 percent represents more slowing since 2011, which represented slowing from 2010 after the depression of 2008 and 2009. Clearly the trend continues down despite unleashing the full force of economic stimulus, all of it borrowed and running up the debt in the process while monetary policy of the Federal Reserve has robbed savers in broad daylight, savers who depend on a free market in interest rates which Ben Bernanke, the appointee of George Bush and Barack Obama, has done everything he can to subvert. He is as much the enemy of the people as Bush and Obama have been. 

The Fed recently embarked on so-called QE To Infinity And Beyond because it knew what was coming in this report.

It is high time America shouted NO to this cabal. Mitt Romney is the most likely person to right this ship commanded by these pirates.

Obama Ranks Fourth Best For Stock Market Since WWII, George W. Bush Worst

November on November of term (Obama to last data available), dividends reinvested in the Standard and Poor's 500 Index, adjusted for inflation, annual rates of return:

1948--1952 Harry S. Truman  17.84 percent

1992--2000 Bill Clinton           15.27 percent

1952--1960 Eisenhower           13.54 percent

2008--2012 Barack Obama      12.66 percent

1988--1992 Bush The Elder     10.76 percent

1960--1968 Kennedy/LBJ          9.40 percent

1980--1988 Ronald Reagan        8.98 percent

1976--1980 Jimmy Carter           2.60 percent

1968--1976 Nixon/Ford             -3.09 percent

2000--2008 Bush The Younger -6.12 percent.

The Number One Reason To Elect Romney Is That He'd Fire Ben Bernanke

"I would like to select ... a new person to that chairman position, someone who shared my economic views, someone that I thought was sympathetic to the needs of our nation," he said. ... "I don’t think QE2 was terribly effective; I think a QE3 and other Fed stimulus is not going to help this economy," he said. "I think that is the wrong way to go."

(Romney here August 23rd)

Bernanke Claims Large Scale Asset Purchases Of $3.35 Trillion Yielded 2 Million Jobs

Among other farcical things.

Transcript here:

[I]n late 2008 the Federal Reserve initiated a series of large-scale asset purchases (LSAPs). In November, the FOMC announced a program to purchase a total of $600 billion in agency MBS and agency debt.  In March 2009, the FOMC expanded this purchase program substantially, announcing that it would purchase up to $1.25 trillion of agency MBS, up to $200 billion of agency debt, and up to $300 billion of longer-term Treasury debt.  These purchases were completed, with minor adjustments, in early 2010. In November 2010, the FOMC announced that it would further expand the Federal Reserve's security holdings by purchasing an additional $600 billion of longer-term Treasury securities over a period ending in mid-2011.

About a year ago, the FOMC introduced a variation on its earlier purchase programs, known as the maturity extension program (MEP), under which the Federal Reserve would purchase $400 billion of long-term Treasury securities and sell an equivalent amount of shorter-term Treasury securities over the period ending in June 2012. The FOMC subsequently extended the MEP through the end of this year.  By reducing the average maturity of the securities held by the public, the MEP puts additional downward pressure on longer-term interest rates and further eases overall financial conditions.

How effective are balance sheet policies? After nearly four years of experience with large-scale asset purchases, a substantial body of empirical work on their effects has emerged. Generally, this research finds that the Federal Reserve's large-scale purchases have significantly lowered long-term Treasury yields. For example, studies have found that the $1.7 trillion in purchases of Treasury and agency securities under the first LSAP program reduced the yield on 10-year Treasury securities by between 40 and 110 basis points. The $600 billion in Treasury purchases under the second LSAP program has been credited with lowering 10-year yields by an additional 15 to 45 basis points.  Three studies considering the cumulative influence of all the Federal Reserve's asset purchases, including those made under the MEP, found total effects between 80 and 120 basis points on the 10-year Treasury yield.  These effects are economically meaningful.

Importantly, the effects of LSAPs do not appear to be confined to longer-term Treasury yields. Notably, LSAPs have been found to be associated with significant declines in the yields on both corporate bonds and MBS. The first purchase program, in particular, has been linked to substantial reductions in MBS yields and retail mortgage rates. LSAPs also appear to have boosted stock prices, presumably both by lowering discount rates and by improving the economic outlook; it is probably not a coincidence that the sustained recovery in U.S. equity prices began in March 2009, shortly after the FOMC's decision to greatly expand securities purchases. This effect is potentially important because stock values affect both consumption and investment decisions.

While there is substantial evidence that the Federal Reserve's asset purchases have lowered longer-term yields and eased broader financial conditions, obtaining precise estimates of the effects of these operations on the broader economy is inherently difficult, as the counterfactual--how the economy would have performed in the absence of the Federal Reserve's actions--cannot be directly observed. If we are willing to take as a working assumption that the effects of easier financial conditions on the economy are similar to those observed historically, then econometric models can be used to estimate the effects of LSAPs on the economy. Model simulations conducted at the Federal Reserve generally find that the securities purchase programs have provided significant help for the economy. For example, a study using the Board's FRB/US model of the economy found that, as of 2012, the first two rounds of LSAPs may have raised the level of output by almost 3 percent and increased private payroll employment by more than 2 million jobs, relative to what otherwise would have occurred.  The Bank of England has used LSAPs in a manner similar to that of the Federal Reserve, so it is of interest that researchers have found the financial and macroeconomic effects of the British programs to be qualitatively similar to those in the United States.

What rot.

Eight million fewer full-time jobs exist today than in 2007. Is he saying there would be ten million fewer had the Fed not intervened?

That's only $1.675 million per job.

Wouldn't it have been more efficient simply to have dropped the cash from helicopters in our backyards?

That way all ten million of us could have enjoyed a cool $335K each. A prudent man could easily live on that for 10 years or more.

Instead we're all suckin' wind out here.

Can We Call It A Depression Yet?

2008 GDP in 2005 dollars didn't recover until 2011, and only just barely so. 

Per the latest revisions from the Bureau of Economic Analysis here, real GDP in 2005 chained dollars:

2008 $13.162 trillion

2009   12.758

2010   13.063

2011   13.299

2012   13.558.

I've written that I think we had a depression starting in 2008 when GDP declined from the previous year 2007, and that the depression ended based on reports of real GDP, but perhaps looked at from the point of view of chained 2005 dollars the depression ended just last year and not in 2010 as I've maintained previously.

Al Lewis for MarketWatch here disagrees:

The Great Depression that Federal Reserve Chairman Ben Bernanke claims to have averted has been part of the background radiation of our economy since at least 2008.

It’s just that like radiation — it’s invisible.

We’ve called it the recovery, the jobless recovery, the slogging recovery and more recently the fading recovery. We’ve measured modest growth in our nation’s gross domestic product to record that our so-called Great Recession ended in June 2009. And now we are saying that if this disappointing growth suddenly disappears, as currently feared, we will be in a new recession.

There is nothing more depressing than hearing about a new recession when you haven’t fully recovered from the last one. I take heart in suspecting that in a still-distant future, historians will look back with clarity and call this whole rotten period a depression.


Lewis' remarks at least show that calling what we've been through a "depression" is now possible in polite company.

I'd call that . . . progress!

Noted Progressive Calls Second-Great-Depression-Excuse For TARP "Crap"

Dean Baker, here:

[T]he commonly claimed "second Great Depression" scenario is, to use a technical economic term, "crap."  The first Great Depression, by which I mean a decade of double-digit unemployment was not locked in stone by the mistakes made at its onset. There was nothing that would have prevented the government from having the sort of massive stimulus spending that eventually got us back to full employment (a.k.a. World War II) in 1931 instead of 1941 and without the war. The fact that we remained in a depression for more than a decade was due to inadequate policy response.

Don't you see? There are no problems which Keynesian monetarism cannot solve, it's just that FDR didn't practice them then,  and that Obama is not practicing them now.

Otherwise Baker makes the case for clearing the system the quick and dirty way, the way free markets are supposed to work:

The place to look for insight on this question is Argentina, which went the financial collapse route in December of 2001. This was the real deal. Banks shut, no access to ATMs, no one knowing when they could get their money out of their bank, if they ever could.

This collapse led to a plunge in GDP for three months, followed by three months in which the economy stabilized and then six years of robust growth. It took the country a year and a half to make up the output lost following the crisis.

While there is no guarantee that the Bernanke-Geithner team would be as competent as Argentina's crew, if we assume for the moment they are, then the relevant question would be if it is worth this sort of downturn to clean up the financial sector once and for all. I'm inclined to say yes, but I certainly could understand that others may view the situation differently.


Once again, the domestic analogy would be 1920, but that's so, I don't know, modern.

Ben Bernanke Sure Is Lucky

Somehow he got the European Central Bank to commit to quantitative easing for a change instead of having to do it again himself.

It buys Ben a bunch of time, and gives him cover during the perilous political season when direct Federal Reserve action would look especially political. Maybe it even frees him up to do a little bit more, on the theory that he can always credit any success we experience to European action, not to his, saying a rising tide lifts all boats, and rot like that.

Crafty devil.

Obama must be praying like hell it works long enough and well enough to keep everyone afloat for three more months.

Q2 2012 GDP, First Estimate, Up Only 1.5 Percent. Q1 Revised Up To 2 Percent.

The Bureau of Economic Analysis report may be found here. The customary summer revision of the data going back several years is also part of the release, here.

The revised real GDP numbers going back to 2008 are something of a stunner, revealing no real GDP growth in any year from 2008 at 2.5 percent or above.

I am reminded of this statement attributed to Ben Bernanke three years ago today at Reuters, here:

It takes GDP growth of about 2.5 percent to keep the jobless rate constant, Bernanke noted. But the Fed expects growth of only about 1 percent in the last six months of the year.

"So that's not enough to bring down the unemployment rate," he said.


Since we haven't had annual GDP growth of 2.5 percent for going on five years, declining unemployment obviously has had nothing to do with government action, but rather with the growing number of people not counted as unemployed. Headline unemployment is based on the answer to the question "Did you look for work in the last four weeks?" and if you answered "No" you are not counted as unemployed even if you are.

Americans have dropped out in massive numbers because they are tired of beating their heads against a wall of mismatched skills, massive age discrimination, cheaper foreign labor and inhospitable government policy toward business, and they no longer count, quite literally.

It's no surprise really. 50 million abortions since 1973 haven't counted either. And while a gunman killing a dozen or more in a theatre makes big news for a few days, a similar number of illegals dying in a truck crash a few days later doesn't.

The message of the "modern" world is that lives are expendable, especially unemployed lives, who are now nothing more than "depreciating assets".

How The World Will End: The Myrmikan Edition

Good stuff from Daniel Oliver, here, describing how the banking system has become the key institution through which American-style fascism expresses itself:

[T]his is why politicians engage in complicity with the bankers to lower interest rates: first, because money flowing into sovereign debt enables them to spend more money and, second, because the promise of higher asset prices makes for happier voters. But none of this adds to wealth, merely the perception and distortion of wealth.

Moreover, Bernanke’s thesis is not working: the transmission mechanism into higher general assets prices is broken. The banks are insolvent. They flee from one safe haven to another. As Herbert Hoover once lamented: “capital is acting like a loose cannon on the deck of a ship in the middle of a storm.” The banks buy Treasuries not for the income, but because they can pledge them as collateral for more credit, which they require to remain liquid. They are pushed into taking sovereign duration risk because they are too weak to take business risk.

When the market does finally overpower the manipulations, sovereign debt markets will pop, interest rates will rise, the banks will tumble along with the markets they have rigged, and then the real witch-hunts will begin. It is this outcome, not more rounds of money printing, that will send gold up vertically in terms of the major currencies. The current inflation/deflation seesaw is merely the prelude to debt failure and currency revaluation.

Bernanke Helps Banks Recapitalize By Paying Interest On Excess Reserves

That's the nice formulation of what's been happening since 2008 in banking from Mish today, here, taking inflationists like Michael Pento to the woodshed:

The simple fact of the matter is Pento has no idea how bank lending works in the real world. 

There is no other way to state it. If banks thought they had good credit risks, they would lend (provided of course they were not capital impaired).

Moreover, by paying interest on reserves, Bernanke is slowly recapitalizing banks over time. Would Bernanke easily give that up? Well he hasn't so far. Nor has he even dropped a hint of it.

The Federal Reserve can talk all it wants about fulfilling its too many and misguided missions, and it does so, incessantly, and I would say purposefully in order to divert your attention from the real mission. Nor is this done without the full approval of the political class in America, which profits from the arrangement.

The one thing you can be sure of is that the one mission the Federal Reserve has is to watch out for its own in the Federal Reserve banking system. Recapitalizing the banking system whose failures have cost the banking industry north of $88 billion is the Fed's #1 priority.

Our country is of the bankers, by the bankers, and for the bankers. If you can't find work or refinance your house, dat's tough, Anwar. Dhey are on a meession from Gad. The banks must be saved at all costs, which is why the taxpayers are on the hook for everything in the Fascist States of America.

Who is recapitalizing YOU?