Jerry Jackson

Posts Tagged ‘Economic’

US Taxpayers Could Pay For European Bailout

In Economics, Human Rights, Police State, Society on October 19, 2011 at 8:17 pm

The U.S. is coming to Europe’s financial rescue.

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So far, America’s role is fairly limited. But if thecrisis continues to grow and the U.S. takes on a wider role, U.S. consumers and taxpayers could feel a bigger impact. The biggest exposure could come from America’s status as the single largest source of money for the International Monetary Fund.
The latest round of American financial assistance came Thursday with a promise by the Federal Reserve to swap as many dollars for euros as European bankers need. In the short run, those transactions won’t have much impact because the central banks are simply swapping currencies of equal value. If the move helps avert a wider crisis, it could help spare the global economy from another recession.


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But over the long term, consumers could feel the impact of central bankers flooding the financial system with cash, according to John Ryding, chief economist at RDQ Economics.


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QE is the End of America as We Know It

In Activism, Economics, Human Rights, Police State, Society on March 21, 2011 at 9:30 pm


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Each time we begin to approach the end of an announced QE period, the nervous jitters of financial markets start to set in. Will Bernanke continue with QE (n+1) or won’t he? Now it’s true that professional traders live and die by their ability to front run rumor and perception, but for long term investors who fret over such decisions, it demonstrates a fundamental lack of understanding of what QE really is. To put it succinctly, QE is an economic deal with the Devil. Once it is begun in earnest there can be no turning back. It must be played to its ultimate conclusion.In Bernanke’s 2009 interview on 60 Minutes, he suffered a momentary lapse into honesty and stated that Quantitative Easing was effectively money printing. So why then the complicated euphemism of Quantitative Easing? Because that is what modern central banking sponsored economics is all about – the intentional obfuscation of otherwise simple economic principles to cause the eyes of normal people to glaze over. Once accomplished, the central bankers (and their financial community brethren) are able to pursue policies that greatly benefit themselves but are devastating to everyone else. .
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Long term investors who worry about whether QE will continue clearly recognize the fact that everything is now correlated to the Fed’s balance sheet. What they don’t understand is how QE is related to the larger economic cycle and its mission of preventing economic recessions.
Keeping the tent inflated
Sometimes physical analogies are the most helpful in understanding complex relationships. Let’s think of the economy as a large inflated tent. The extent of the tent’s inflation is the health of the economy. Under normal economic conditions the tent is fully inflated. In the course of time, events take place that cause the need for a correction to the economic system. New technology can come along which obsoletes old industries, bad investments and debt must be liquidated etc. When this happens a free market economy will correct itself. Capital tied up in failed industries will be reallocated and invested in new businesses. New jobs will ultimately be created and people will go back to work. Of course this reorganization takes place over time and this is what a recession is – a healing process for the economy. In our tent we can think of this as a tear that forms in the fabric. While this hole is being repaired, air escapes and the tent begins to sag a little. The extent of the drooping is the extent of the recession. Once fixed, the tent and the economy go back to normal.
QE is a wholly different method of keeping the tent propped up. It does not repair the hole, but rather attempts to keep the tent inflated by pumping more air in than is escaping through the hole. This is the new money being created and pushed into the economy to offset the credit destruction in the banking system. This is a dynamic process that must be maintained. The catch is that the hole doesn’t just stay a fixed size. The tear begins to lengthen allowing greater amounts of air to escape. The economic tent begins to sag until the volume of air being pumped in is increased to overcome the outflow. This is why QE can never end. To stop now, with such a large hole, would result in a severe and frightening recession. The tent would lose a tremendous amount of air in the time it takes to make such an extensive repair.This process continues until eventually the hole is so large that the tent collapses around the massive flow of pumping air. This is the ultimate fate of money printing as policy – a currency crisis – the endless flow of new money loses purchasing power faster than it can be created. We are left with an inflationary depression in which savings are decimated and the standard of living of most Americans is dramatically lowered.
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QE is economic central planning
When an institution such as the Federal Reserve is allowed to create as much money as it wants and do with it whatever it pleases, without any oversight or transparency, then the free market and its self correcting mechanisms no longer exist. How can capital from failed business and banks be reallocated to more efficient uses when these institutions are bailed out and not allowed to fail? Prices and interest rates are the nervous system of a free market economy. They are the feedback mechanisms that direct all of the individual participants to behave in the most productive and efficient manner. There can no free market when prices and interest rates are de-linked from supply and demand. We are now a centrally planned economy run by our central bank.


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But here’s the really insidious part of QE that almost no one in the general public understands: A free society cannot exist independent of free markets. There is a disequilibrium that occurs between the two and over time one will win out over the other. And so here we are, stuck in a decaying economic system that prevents resources from being used in their most efficient manner. We simply can no longer compete with freer markets in other parts of the globe. We are saddled with the weight of central economic planning much like the old Soviet Union was. There will be no recovery and no rush of new jobs created. We will live under the burden of a burgeoning Federal government that operates completely independent of the will of its citizens. It is now beholden only the money manufacturers at the Federal Reserve and will spend money as fast as Bernanke can add zeros to its account.The problems we are experiencing have been a long time in the making. They began in earnest in 1913 with the formation of the Federal Reserve. It’s taken several generations for the Federal government and its central bank to usurp the world’s monetary system and as such few have noticed. But what’s different now is that we have hit the knee in the curve, the point at which events start to accelerate dramatically as we approach the end of the line. Those who understand QE realize that America as we knew it is already gone. Over the next decade the rest of America will become painfully aware of that fact as well.

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Bank Economist Warns of ‘Food Price Riots in the UK’

In Activism, Economics, Human Rights, Society, World News on March 10, 2011 at 2:14 am

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A senior economist at the worldwide bank HSBC has warned of civil unrest in Britain if food prices continue to soar. Speaking on Jeff Randall Live, senior global economist Karen Ward cautioned that the UK could experience the kind of food riots seen in other countries.

“Even in the developed world I think we have very, very low wage growth, so people aren’t getting more in their pay packet to compensate them for food and energy, and I think we could see social unrest certainly in parts of the developed world and the UK as well.”

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Globalism Pushing Middle Class Standard of Living Down to Third World Levels

In Economics, Society, World News on February 28, 2011 at 7:11 pm

From now on, whenever you hear the term “the global economy” you should immediately equate it with the destruction of the U.S. middle class.  Over the past several decades, the American economy has been slowly but surely merged into the emerging one world economic system.  Unfortunately for the middle class, much of the rest of the world does not have the same minimum wage laws and worker protections that we do.  Therefore, the massive global corporations that now dominate our economy are able to pay workers in other countries slave labor wages and import the products that they make into the United States to compete with products made by “expensive” American workers.  This has resulted in a mass exodus of manufacturing facilities and jobs from the United States.

Global Economic Crisis

Global Economic Crisis

But without good, high paying jobs the U.S. middle class cannot continue to be the U.S middle class.  The only thing that the vast majority of Americans have to offer in the economic marketplace is their labor.  Sadly, that labor has now been dramatically devalued.  American workers now must directly compete for jobs with millions upon millions of workers on the other side of the world that toil away for 15 hours a day at slave labor wages.  This is causing jobs to leave the United States at an almost unbelievable rate, and it is putting tremendous downward pressure on the wages of millions of jobs that are still in the United States.

So when you hear terms such as “globalization” and “the global economy”, it is important to keep in mind that those are code words for the emerging one world economic system that is systematically wiping out the U.S. middle class.

A one world labor pool means that the standard of living for the U.S. middle class will continue falling toward the standard of living in the third world.

We keep hearing about how the U.S. economy is being transformed from a “manufacturing economy” into a “service economy”.  But “service jobs” are generally much lower paying than “manufacturing jobs”.  The number of good paying “middle class jobs” in the United States is rapidly decreasing.  So how can the U.S. middle class survive in such an environment?

What makes things even worse for manufacturers in the United States is that other nations often impose a “value-added tax” of 20 percent or more on U.S. goods entering their shores and yet most of the time we do not reciprocate with similar taxes.

But whenever someone mentions how incredibly unfair and unbalanced our trade agreements with other nations are, they are immediately labeled as a “protectionist”.

Well, someone should be looking out for U.S. interests when it comes to trade, because the current state of the global economy is ripping the U.S. middle class to shreds.

Right now, the United States consumes far more wealth than it produces.  This nation buys much, much more from the rest of the world than they buy from us.  This is called a “trade deficit”, and it is one of the most important economic statistics.  The U.S. runs a massive trade deficit every single year, and it is wiping out our national wealth, it is destroying our surviving industries and it is absolutely shredding middle class America.

We cannot allow tens of thousands of factories to continue to leave the United States.  We cannot allow millions of jobs to continue to be “outsourced” and “offshored”.  We cannot allow tens of billions of dollars of our national wealth to continue to be transferred into foreign hands every single month.

The truth is that the global economy is bad for America.  The following are 23 facts which prove that globalism is pushing the standard of living of the middle class down to third world levels…. Read the rest of this entry »

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