No Economy For Americans

[Crewleader]

Sept.9, 2014

by Paul Craig Roberts

The Dow Jones stock average closed Friday at 17,137, despite the fact that the payroll jobs report was a measly 125,000 new jobs for August, an insufficient amount to keep up with the growth in the working age population.

The low 125,000 jobs figure is also inconsistent with the Bureau of Economic Analysis’ second estimate of second quarter 2014 US GDP growth of 4.2 percent–a figure beyond the capability of the present-day US economy.

Clearly, the economic numbers are out of sync with one another. They are also out of sync with reality.

One of the reasons the stock market average is high is the massive liquidity the Federal Reserve has pumped into the banking system since 2008. Instead of going into consumer inflation, the money went into stock and bond price inflation.

Another reason for the artificial high stock market is the multi-trillion dollar buy-back of their own stock by US corporations. Many of these corporations have even borrowed from the banks in order to drive up their share prices with heavy purchases, thus maximizing executive bonuses and the values of stock options for board members. In effect, they are looting their own firms by loading the companies with debt in order to drive up executive and board incomes.

The stock market’s rise is not because consumer incomes and real retail sales are growing. Real family median incomes have been falling, and real retail sales, at best, are flat.

Let’s look at the composition of the pathetic 125,000 new jobs, and then we will examine whether these jobs are real or make-believe. (Keep in mind that payroll jobs include part-time jobs and that the number of payroll jobs is not the number of people employed, because many Americans make ends meet by working two and even three jobs.)

http://www.marketoracle.co.uk/Article47258.html

[AdHocSolver]

1. The stock market is a Ponzi scheme enabled by repeal of the Glass-Steagall Act...

Last edited Wed Sep 10, 2014, 11:00 PM - Edit history (1)

...and aided and abetted by the Federal Reserve.

The Federal Reserve keeps bank interest rates low on deposit accounts, thus stealing the value of depositors' assets, and providing Wall Street with cheap (essentially, free) money to artificially pump up the stock market, just by throwing money at it.

The corporate insiders give themselves bonuses and stock options to make huge profits off of the "improvement" in the stock prices, and corporations merge to eliminate competition, while improving profit margins by eliminating now "redundant" employees from the newly merged company.

The way the inflation numbers are calculated is a joke. Anyone who has been buying fruits and vegetables for the past 15 years is aware of the significant price hike in essentials such as food.

As long as corporations control world trade through agreements like NAFTA, the WTO, and their ilk, the main requirement to enable the middle and working classes to have control over their lives, the ability to obtain an income through gainful employment, will not happen.

There is NO "global" economy. The general price level in the United States is too high relative to countries such as China, India, and Bangladesh such that Americans cannot survive on the low wage rates in those countries.

The manufacturing of everyday types of goods such as clothes, shoes, appliances, hardware, furniture, tools, and more has to be brought back to the U.S. in order to keep the flow of money circulating within the U.S. economy.

Nothing else will save the U.S. economy from collapse.

Between the loss of jobs (i.e., the loss of income to Americans) and the corporate tax evasion enabled by foreign tax havens, real capital is being drained from the U.S.

Real capital is being replaced by the Federal Reserve with "funny money" that is increasing U.S. debt at an accelerating rate. This is an unsustainable situation.

This will inevitably lead to global economic collapse. In fact, this is the end game for Wall Street and the 1 percent. Then the Corporations will offer to "save" the planet by privatizing everything.

Welcome to the new feudalism.