The Problem is Money ..... Duh!

If you take a minute to understand how our money is created, the perversity and corruption in our system will become clear. And, when I say system, I mean our monetary system to be sure, but also our entire system of government as it functions today.

Most of our money starts out in life as debt. When the Federal Government of the United States of America decides that it needs money that it otherwise does not have, it issues debt ….. bonds.  Those bonds are sold at auction by the Treasury Department.  Much if not most all of these bonds are purchased by a group of twenty or so large, mostly Wall Street banks designated by The Federal Reserve Bank as "Primary Dealers".

Interestingly, The Federal Reserve Bank or "The Fed" as it is commonly known is not an agency of the Federal Government of the United States of America as one would reasonably expect by virtue of it's name.  It rather is a privately held institution, owned in large part by ..... wait for it ..... the "Primary Dealers.  The Federal Reserve Bank adds or subtracts money from the economy by trading government bonds with the "Primary Dealers", mostly always at a profit to the "Primary Dealers".

Purchasing bonds from the "Primary Dealers" injects cash into the economy as the Federal Reserve simply makes a journal entry into it’s own computer system for it's own account, and in so doing it deposits a sum of money which did not exist one instant before and thus some number of billions of dollars of new money is born out of thin air.  It only dies when the Fed subsequently sells those bonds back into the economy, thus drawing cash out of the economy, or when the government pays that money back by redeeming it's previously issued bonds.  In other words, that money is for the most part immortal.

The Federal Government of the United States of America then pays the required interest on this debt out of tax revenue.

Lately the Federal Reserve Bank has on occasion been buying the bonds back from the "Primary Dealers" the very next day following their original purchase by the "Primary Dealers" from the Treasury Department.  This enables these preferred banks to buy the next batch of new bonds and then subsequently resell them to the Federal Reserve Bank at another profit whenever the Federal Government of the United States of America again decides that it needs to spend some money that it does not have.  Usually, that would be tomorrow.

This is the nuts and bolts of the proceedure commonly referred to as "Monetizing The Debt".

Here is where it gets real interesting ..... at least to me.  Congress is empowered by the Constitution to “coin” money without ever having to fool around with The Fed, issuing bonds, debt or making interest payments. U.S. Constitution - Article 1 Section 8 begins as follows: The Congress shall have Power To ….. some stuff you should probably take the time to read ….. Clause 5, “Coin Money, regulate the Value thereof” ….. and then some other stuff you should probably also take the time to read.  Congress punted on that right with the passage of The Federal Reserve Act of 1913, which Act created The Federal Reserve Bank as a privately held institution.

Were the Federal Government of the United States of America or any other nation in the world for that matter, to simply make it's own entry into it’s own account at it's own bank, rather than the privately owned institution that it now banks with, there would be no debt, no sale of bonds and no need to pay any subsequent interest payments out of tax receipts.

There most certainly would be instances of inflation, which would most certainly be underreported by a legion of governmental economists kept on the payroll, in one way or another, for purposes of massaging numbers in an effort to obscure the true rate of inflation in a cynical effort to evade accountability to the American people.  BUT ..... how is any of that different from what we have today?

The hidden benefit here is of course that there would be no insider profits to be had for the "Primary Dealers”.  Which profits they are presently using for the purchase of among other things, legislation that suits their own special interests, largely to the detriment of the American people.  That last part there is just my opinion.

Were we to simply cut out the middle man by chartering a bank that is wholly owned by the American people through the Federal Government of the United States of America and let it give birth to it's own money, a lot of our problems, most notably our debt, would become a whole lot more manageable.

Doesn't that strike you as an ever so much better approach?  It certainly worked for Andrew Jackson.

 

To quote Voltaire on the anniversary of 9/11

 

 

 

 

 

 

A good thing to bear in mind while listening to another dumb-ass President agitating for another dumb-ass war.

 

September 11, 2001

 

Building 7 goes down.

Can you say, "Controlled demolition"?

We knew you could.

Click below in order to .....

 

 

To Quote Buckminster Fuller over and over and ...

 

We are called to be architects of the future, not its victims.”

There is nothing in a caterpillar that tells you it's going to be a butterfly.”

“God, to me, it seems, is a verb, not a noun, proper or improper.”

“Controlled time is our true wealth.”

“Our power is in our ability to decide.”

“Man knows so much and does so little.”

“Truth is a tendency.”

“The end move in politics is always to pick up a gun.”

 “By 2000, politics will simply fade away. We will not see any political parties.”

Oopsies on that last one.

“Pollution is nothing but the resources we are not harvesting. We allow them to disperse because we've been ignorant of their value.”

 “How often I found where I should be going only by setting out for somewhere else.”

 “I have spent most of my life unlearning things that were proved not to be true”

A problem adequately stated is a problem well on its way to being solved.”

 

Sometimes a chart or two, maybe some maps are all you need

 

Our last post of charts was probably our all-timer for calls.

Probably/mostly because the posting around here has been less than haphazard for a good long while.

Some of you were worried that I had gone out and got me a job.

Like somebody's gonna hire me.

Anyway ..... we continue. 

As always clicking the image will mostly take you to the source article from which it was taken.

 

On that military gear coming to a county near you thing .....

 

I'll post it again despite it being just a post or two below mostly because I think it matters.

One outcome is predictable.

 

 

The above was taken from an economist piece that concludes, "This is not because they are trigger-happy but because they are nervous. The citizens they encounter have perhaps 300m guns between them, so a cop never knows whether the hand in a suspect’s pocket is gripping a Glock.

I don't disagree.

The ignored issue here is the fact that the citizenry is equally nervous, as the following is the image that Cops are aggressively projecting to the American people on a daily basis.

 

 

Why the facemasks?

Here are two other reasonable questions.

 

   and    

 

The Economist also doesn't care much to consider this next issue.

 

I'm not relying much on the Economist's numbers on "Death by Police Shootings" for perfect accuracy as I wish there was better sourcing.

As an aside, I frequently come away from The Economist with that same thought ... but I digress.

I mostly believe it though because of this.

 

 

 

 

 

 

If you go through all the numbers in the linked pieces above, they don't always add up real well as these charts come from different years and sources, but the message holds regardless of the details.

Compared to any other country in the world, we put an extraordinary number of people in prison relative to our population.

Your intuition is correct however as high incarceration rates have led to a reduction in crime ..... at least on the outside.

I linked all of the charts below to the same University of Chicago research paper which offers it's own batch of charts as I thought it was the best thing out there.

    

 

 

Lying Al Sharpton among others will tell you that America's criminal justice system is racist because Black and Hispanic People are significantly more likely to run afoul of the law than are White People.

He is absolutely right about that second part.

 

Maybe not so much there on that first part.

The following statistics are taken from the 2005 edition of The Color of Crime by Jared Taylor.

Apologies for making you read, but I found the following summary to be significantly better than any five charts I could assemble.

Click anywhere below to link up to the entire work.

 

The Color of Crime

Race, Crime, and Justice in America — Second, Expanded Edition, 2005

Major Findings: 

Police and the justice system are not biased against minorities.

Blacks are seven times more likely than people of other races to commit murder, and eight times more likely to commit robbery.

When blacks commit crimes of violence, they are nearly three times more likely than non-blacks to use a gun, and more than twice as likely to use a knife.

Hispanics commit violent crimes at roughly three times the white rate, and Asians commit violent crimes at about one quarter the white rate.

The single best indicator of violent crime levels in an area is the percentage of the population that is black and Hispanic.

Interracial Crime

Of the nearly 770,000 violent interracial crimes committed every year involving blacks and whites, blacks commit 85 percent and whites commit 15 percent.

Blacks commit more violent crime against whites than against blacks. Forty-five percent of their victims are white, 43 percent are black, and 10 percent are Hispanic. When whites commit violent crime, only three percent of their victims are black.

Blacks are an estimated 39 times more likely to commit a violent crime against a white than vice versa, and 136 times more likely to commit robbery.

Blacks are 2.25 times more likely to commit officially-designated hate crimes against whites than vice versa.

Gangs

Only 10 percent of youth gang members are white.

Hispanics are 19 times more likely than whites to be members of youth gangs. Blacks are 15 times more likely, and Asians are nine times more likely.

Incarceration

Between 1980 and 2003 the US incarceration rate more than tripled, from 139 to 482 per 100,000, and the number of prisoners increased from 320,000 to 1.39 million.

Blacks are seven times more likely to be in prison than whites. Hispanics are three times more likely.

 

If you want our opinion ..... even if you don't ..... issues having to do with incarceration rates, exploding prison population, prison safety and busted budgets at every level of government can all be traced to one pervasive public policy mistake.

 

THE WAR ON DRUGS

 

  

  

 

 

Although ...

 

That was 1997,  I would guess it's not much different now, but I dunno.

I'd love to do more, but I was just informed that I gotta clean the basement for a party.

As an aside ...

 

That's all for today.

 

To quote Dick Cavett

 

 

 

 

 

Surplus Military Gear Has Come To A County Near You

 

The New York Times has put together a very well done county by county interactive on the vast array of military eqquipment finding it's way into the weapons cache of your local police force.

Might make you wonder just exactly who it is they're gearing up for.

Click the image below for this fine bit of work from The New York Times.

 

 

Bout time those guys did some actual reporting.

 

Figures Don't Lie. But Then Again, Liars Will Figure.

 

So, I’m sitting here in front of my screen fooling around on Linkedin instead of paying the bills, when I see that Pulse has recommended a piece penned by some guy in the investment business, titled American’s Sour Mood on the Economy Doesn’t Square with the Fact. 

 

Sigh!

 

I know this has been the chronic theme proffered by the professional shills appearing on your TV set morning, noon and night for some time now. I had been getting pretty good at ignoring them.

 

At first I was doing a pretty good job of ignoring this guy as well.

 

But finally ….. I succombed ….. 

 

So in order to rebut this guy, I start to pull together some updated versions of charts I have collected in the past, and in so doing, I stumble across a Quartz piece titled Seven Charts That Leave You No Choice But To Feel Optimistic About The US Economy, and just that quick …..

 

We begin.

 

As almost always, clicking on the charts will link you up to the piece from which they were taken.

 

The Headline Unemployment Rate is hovering just above 6%. 

 

Pasted Graphic 1.tiff

 

The formula for calculating the rate of unemployment is as follows; 

 

Unemployment Rate = Number of Unemployed / Total Labor Force.

Total Labor Force = Number of Employed People +  Number of Unemployed People.

An unemployed person for purposes of the above calculation is defined by the Bureau of Labor Statisics as follows: person who had no employment during the reference week, was available for work, except for temporary illness, and had made specific efforts to find employment some time during the 4 week-period ending with the reference week. Persons who were waiting to be recalled to a job from which they had been laid off need not have been looking for work to be classified as unemployed. 

So, people are counted as unemployed for purposes of calculating the rate of unemployment only if they are in the labor force.  And as such, unemployed workers who have quit seeking work are no longer counted for purposes of calculating the unemployment rate.

Got that?

As you can see below, labor force participation is in decline, if not freefall. 

Pasted Graphic 3.tiff

 

"What do it mean?"

 

 

 

If you have quit looking for work in favor of going on disability, you no longer count in the calculation.

 

And the total number of them that have gone on disability is going nowhere but up.

 

People who have gone on disability are for the most part not looking for work and thus counted as part of the labor force.

 

Fewer people in the labor force means ..... lower unemployment for purposes of calculating the headline number.

 

Pasted Graphic 6.tiff  

 

 

  Pasted Graphic 16.tif

 

 

Pasted Graphic 18.tiff

 

 

 

A significant percentage of the improvement in the rate of unemployment is directly attributable to the increase in "disabled" Americans.

 

Maybe there are more people on disability because we now provide help to people with honest disabilities that we have overlooked or ignored before.

 

But it strikes me that there might be more to it than just that.

 

Pasted Graphic 36.tiff

 

 

In case you were wondering how the unemployed are able to afford eating?

 

Pasted Graphic 9.tiff

 

 

Nope, that's old news.  

 

Food lines are passe' as they are very bad for the fiction that all is well with the economy.

 

Our modern food lines are much improved as they are far less obvious to the naked eye.

 

Pasted Graphic 7.tiff

 

 

 

But wait a minute. What about all those jobs the Obama Administration has created?

 

 

Pasted Graphic 10.tiff

 

 

I'm not impressed yet.

 

Mostly because ...

 

Pasted Graphic 11.tiff

 

 

But why so few full time jobs and so many part time jobs?

 

Pasted Graphic 14.tiff

 

 

To be crude about it, it's mostly because part time workers are cheaper, and sales suck.

 

But, there is some good news, car sales are back.

 

Pasted Graphic 19.tiff

 

 

Except .....

 

Car sales as reported in the press tend to be wholesale numbers.

 

Dealer inventories are also up dramatically.

 

GM channel stuffing.jpg

 

 

GM isn’t alone when it comes to this issue, as unsold inventory abounds all over the world regardless of manufacturer.

Definitely click on the photo below for a pretty quick, little piece on automobile manufacturers channel stuffing their supply system.

 

Pasted Graphic 23.tiff

 

 

Pasted Graphic 24.tif   Pasted Graphic 25.tiff

 

Oh well, that’s good news for me as I have to buy a car for a boy soon.

 

I’m thinking there should be some good deals on cars this fall.

 

 

Anyway, stocks are on fire, business must be good.

 

   Pasted Graphic 28.tiff

 

 

Except, the balance sheet of the Federal Reserve Bank has expanded nearly dollar for dollar with the increased value of the S&P 500.

 

Pasted Graphic 29.tiff

 

 

As has margin debt for NYSE member firms.

 

Pasted Graphic 30.tiff

 

 

And …

 

Pasted Graphic 31.tif

 

 

Well, it doesn’t take a rocket surgeon to figure this one out.

 

Corporate management is adding debt in order to buyback shares and in so doing are driving the surge in the stock market.

 

“But why would they do that?” You might well ask.

 

Management is compensated for increasing market cap rather than for running a profitable entity. 

 

All you need to know about “Corporate America” in one chart.

 

Pasted Graphic 34.tiff

 

 

Oh, and by the way, CEOs now earn on average, from 273 to 331 times the average worker’s pay depending on how you calculate stuff.

 

Pasted Graphic 35.tiff

 

Form your own opinion.

 

I got mine.

 

Gotta scoot.

 

 

To quote Gerald Celente

 

 

 

Sometimes a map or some number of maps with a chart or two thrown in, is all you need

 

Because we’re a mite out of practice, we’re gonna ease into this thing today with some simple stuff.

President Obama continues to block the Keystone Pipeline project.

 

And yet, Canadian oil exports to the United States continue to expand.

 

How’s it getting there?

Rail.

 

Wait a minute ..... where have I seen a chart like this before?

Of course, it looks just like Michael Mann/Al Gore's famed "Hockey Stick" chart!

Oh well, at least the profits were real ..... in both cases.

 

Silly political reporters spent a couple days arguing about “ugly politics”, the “Green” wing of the Democrat Party and how they are killing jobs all over the country.

Your Uncle Roany, cynic that he is, is inclined to consider a different possibility and wonders who owns the Rail Cars delivering all that oil. 

Mostly, it’s the Burlington Northern Santa Fe Railroad.

 

Burlington Northern Santa Fe Railways is 22% owned by Berkshire Hathaway since 2009.

You might have noticed that shipments of oil by rail took off big time in 2010.

Speaking of rich guys, Berkshire Hathaway’s largest shareholder is of course Warren Buffett.

 

Just sayin'.

 

Who, as an aside through Berkshire Hathaway, also bought a 1% interest in Suncor, a huge player in the Canadian Oil Sands just last summer.

In the interest of full disclosure, your Uncle Roany is about to get back into COS.

Speaking of oil, Russia is about to end up with about as much Ukraine as Putin feels like having despite the best efforts of the Neocon/Lib imbeciles running amok over at the CIA/State Department, as Europe will cave on the issue, leaving the pathetic little man in the White House with even more egg on his face than usual.

Here are the only two pieces of information you need in order to discern the fate of Ukraine.

 

 

If you’re wondering where the world’s proven oil reserves reside now days, here’s your answer.

Not much has changed in a while.

 

Not much has changed on the consumption side either, except that China continues to expand it's consumption.

 

Along with it's pollution problems.

 

That's all for now.

To quote Tony Kornheiser,

 

 

To quote The Ogster

 

 

 

 

You just couldn't make it up.

 

From Zero Hedge which remains our first read of the day.

The photo to the right is that of State Department Spokesperson Jennifer Psaki. Enjoy the following exchange between Jennifer and Associated press reporter, Matthew Lee during the Q&A following Ms. Psaki's announcement of the State Department's launch of the Third Annual "Free The Press Campaign", in which the Federal Government of the United States of America highlights "journalists or media outlets that are censored, attacked, threatened, or otherwise oppressed because of their reporting."

You just couldn't make it up.
 
I dunno, maybe you could ..... I couldn't.
 

JENNIFER PSAKI: One more announcement for all of you: With World Press Freedom Day around the world on May 3rd, the department will launch its third annual Free the Press campaign later this afternoon in New York at the U.S. U.N. mission. Beginning on Monday and all of next week, we will highlight emblematic cases of imperiled reporters and media outlets that have been targeted, oppressed, imprisoned or otherwise harassed because of their professional work. The first two cases will be announced by Assistant Secretary -- Assistant Secretary Tom Malinowski later at the -- at U.S. U.N. And we invite you of course to follow Tom at Twitter, who has -- on Twitter who, as you all know, was just confirmed several weeks, @Malinowski and to keep up with human rights issues on DRL's website.

With that --

 

Q: Sure. Just on that, reporters who are, what, harassed? I'm sorry --

 

MS. PSAKI: Targeted, oppressed, imprisoned or otherwise harassed.

 

Q: Otherwise harassed. Does that include those who may have been targeted, harassed, imprisoned and otherwise whatever by the United States government?

 

MS. PSAKI: I'm --

 

Q: No?

 

MS. PSAKI: I think you're familiar with our Free the Press campaign, Matt, but --

 

Q: Fair enough. So it does not include those who might have been harassed by --

 

MS. PSAKI: We highlight, as we often do, where we see issues with media freedom around the world.

 

Q: Right, I understand. But you would say that you don't -- the U.S. does not believe that it has a problem with press freedom, or if it does, that it's not nearly as severe as the problems in other countries.

 

MS. PSAKI: We do not. I think we can look at many of the problems --

 

On media press freedom?

Oh. Go ahead. And then we'll go to you, (Paul ?).

Did you have another question on media press freedom, or --

...

 

Q: If I could just go back to the overall, in general, the administration does not regard attempting to prosecute American journalists as an infringement of press freedom?

 

MS. PSAKI: I'm not sure which case you're -- what you're referring to.

 

Q: Well, there's several cases that are out there right now. The one that comes -- springs to mind is the James Risen case, where the Justice Department is attempting to prosecute. I just want to be clear. I'm not trying to --

 

MS. PSAKI: Well, Matt, I --

 

Q: I just want to know if you regard that as an infringement on press freedom or not. And I suspect that you do not, but I want to make sure that that's the case.

 

MS. PSAKI: As you know, and I'll, of course, refer to the Department of Justice, but the leaking of classified information is in a separate category. What we're talking about here, as you all know and unfortunately we have talk about on a regular basis here, is the targeting of journalists, the arrests, the imprisonment for simply exercising their ability to tell the story.

 

Q: Right. I understand that. And we're all, I'm sure, myself and all my colleagues, we're very appreciative of that.

But the reporters in question here have not leaked the information; they simply published it. So is it correct, then, that you don't believe -- you don't regard that as an infringement of press freedom?

 

MS. PSAKI: We don't. I don't have anything more to say on that case.

 

Q: OK.

 

MS. PSAKI: Do we have a new topic?

 

 

Your government at work.

 

 

Cajones defined

 

One unarmed Ukrainian woman stops an entire column of tanks with one hand.

Her left hand at that.

To quote Jordan Morgan

 

 

 

 

 

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