Have the Last 5 Years Been Worse than the Great Depression?

By WashingtonsBlog: What Do Economic Indicators Say? We’ve repeatedly pointed out that there are many indicators which show that the last 5 years have been worse than the Great Depression of the 1930s, including:

• The housing slump

• The bank charge off rate

• The collapse in world trade

• The withdrawal of short-term credit

• The level of inequality between rich and poor (too much inequality destroys economies)

• The interconnectedness of financial systems and economies worldwide (interconnectedness leads to financial instability)

• Runaway spending and greed

Mark McHugh reports:

Velocity of money is the  frequency with which a unit of money is spent on new goods and services.   It is a far better indicator of economic activity than GDP, consumer prices, the stock market, or sales of men’s underwear (which Greenspan was fond of ogling).  In a healthy economy, the same dollar is collected as payment and subsequently spent many times over.  In a depression, the velocity of money goes catatonic.  Velocity of money is calculated by simply dividing GDP by a given money supply.  This VoM chart using monetary base  should end any discussion of what ”this” is and whether or not anybody should be using the word “recovery” with a straight face:

In just four short years, our “enlightened” policy-makers have slowed money velocity to depths never seen in the Great Depression.

Fallacy Of Redistribution Has Grave Economic Impact

By THOMAS SOWELL: The recently discovered tape on which Barack Obama said back in 1998 that he believes in redistribution is not really news. He said the same thing to Joe the Plumber four years ago.
But the tape's surfacing may serve a useful purpose if it gets people to thinking about the consequences of redistribution.
Those who talk glibly about redistribution often act as if people are just inert objects that can be placed here and there, like pieces on a chess board, to carry out some grand design.
But if human beings have their own responses to government policies, then we cannot blithely assume that government policies will have the effect intended.
The history of the 20th century is full of examples of countries that set out to redistribute wealth and ended up redistributing poverty. The communist nations were a classic example, but by no means the only example.
In theory, confiscating the wealth of the more successful people ought to make the rest of the society more prosperous. But when the Soviet Union confiscated the wealth of successful farmers, food became scarce. As many people died of starvation under Stalin in the 1930s as died in Hitler's Holocaust in the 1940s.

How can that be? It is not complicated. You can only confiscate the wealth that exists at a given moment. You cannot confiscate future wealth — and that future wealth is less likely to be produced when people see that it is going to be confiscated.

Cartel Dumped 2x Annual US Silver Production on Market in 15 Min to Smash Silver Under $35

By The Doc: After silver exploded through $35 on this today’s COMEX open, we wrote this morning that should silver hold $35 through today’s weekly close, the metal would quickly run to $37-$37.50 early next week as a massive short squeeze developed.
The cartel understood the predicament they were in and responded with a massive paper dump on the market to stuff price back below $35.
Between 10:35 and 10:50am EST, an astonishing 62.5 million ounces of paper silver were indiscriminately dumped on the market to induce the sell-off- nearly twice US annual silver production of 36 million ounces!!

Must. Not. Allow. Silver. To. Close. Over. $35.
Perhaps there is something to those rumors of JP Morgan silver derivatives losses triggered with silver over $36? Source

“How High Can Gold Go?” "There Is No Telling" James Grant Tells CNBC

Today’s AM fix was USD 1,773.75, EUR 1,361.28, GBP 1,089.19 per ounce.
Yesterday’s AM fix was USD 1,760.00, EUR 1,360.33 and GBP 1,088.03 per ounce.
Gold fell $2.10 or 0.12% in New York yesterday and closed at $1,768.40. Silver dropped to $34.084 in London, but rallied back higher later in the session and finished with a gain of 0.03%.

Gold is slightly higher today and is being supported by investor concerns not just about ‘stimulus’ but about “open ended” QE or ‘QE to infinity’.

Gold and silver have this week consolidated on their recent sharp gains which is a healthy development as there were concerns that the markets were getting ahead of themselves.

Tumor Ridden Mice Cause France and Kucinich Stand Against Monsanto

Following the release of a peer-reviewed piece of research linking the consumption of Monsanto's Roundup-containing GMO crops to tumors and organ damage, the French government is now calling for a health agency investigation. Seeking to analyze the research and potentially ask European authorities to protect human health and abandon the use of GMO crops, France's Agriculture Minister and others are now sounding the alarm.

Eurozone economic woes suggest ECB's Draghi Plan isn't enough to stem debt crisis

Private business activity in the eurozone plunged at the fastest rate in more than three years, while consumer confidence also sank, according to “dismal” economic data that doused hopes the European Central Bank bond-buying plan would unleash a wave of optimism. 

By Louise Armitstead: Markit’s Purchasing Managers’ Index (PMI) dropped from 46.3 to 45.9 in August, well below the 50 level that marks growth. The European Commission’s confidence index sank to 25.9, it’s lowest level for 40 months.

The data showed the further development of a “two-speed” economy in the eurozone. Markit said Germany’s private sector rose to 49.7 in September, from 47 in August – a five-month high. But in France activity sank to 44.1 from 48 in August – the sharpest decline since April 2009.

Separately, Italy slashed its GDP forecast for this year. Rome said the economy was likely to shrink by 2.4pc, rather than the 1.2pc contraction that was forecast.

There was relief as Spain raised €4.8bn (£3.8bn) at a bond auction – comfortably beating its €4.5bn target. But traders said the enthusiasm showed the view that Spain was moving towards a bail-out, rather than a recovery.

Greece’s coalition leaders failed again to agree on how to reach €11.5bn of austerity cuts needed to secure the country’s next cash injection. Sources said the leaders disagreed on €2.5bn of cuts. 

Meanwhile, contagion was continuing to creep as Fitch warned that Finland’s prized AAA credit rating was not immune. The credit rating agency said: “If the crisis leads the government to deviate significantly from its current path of fiscal consolidation without addressing the need for reforms, we believe it would increase the risk to the long-term sustainability of its finances, thereby putting downward pressure on our sovereign ratings on Finland.”  Source

The i-Krug - Pater Tenebrarum

A Cell Phone Will Save the US Economy

It appears it is after all not Scott Sumner who 'saved the US economy' by urging the helicopter pilot to create even more money ex nihilo than hitherto. What will save us instead is Apple, or rather, its latest product, the iPhone 5. Who needs Bernanke when this wondrous device stands ready to pull the economy up by its bootstraps?

A story has made the rounds lately – propagated by 'economist' (we should use the term loosely…) Michael Feroli at JP Morgan, that sales of the iPhone „could potentially add from one-quarter to one-half of a percentage point to the growth rate of U.S. gross domestic product in the final quarter of the year”.

If were to assume that he is correct, then this would mainly tell us is how useless a statistic GDP actually is. However, there are some reasons to doubt the results delivered by his abacus. According to a Bloomberg article:

“Here’s Feroli’s math: Assume sales of previous-generation iPhones continue “at a solid pace,” while the new model from Apple (AAPL) sells about 8 million units in the last three months of 2012. Assume the average selling price for the new models is about $600. (True, people who get the new phone as part of a calling plan pay less than the sticker price, but the sale gets reported to the government for what it would have cost on a stand-alone basis.)

Out of that $600, about $200 is the imported cost, leaving $400 as the value captured in the U.S. Multiply $400 times 8 million and you get a pop of $3.2 billion, which is enough to boost the annualized growth rate of the economy by one-third of a percentage point. Feroli, the bank’s chief U.S. economist, expects the U.S. economy to grow at an annual rate of about 2 percent in the fourth quarter, and says the iPhone will “limit the downside risk” to that projection.“

Britain finds itself bollocks-free at last - The Slog

If the Prime Minister doesn’t call a referendum on the EU now, he will become a laughing stock

While a thousand other  more distracting things were going on, two days ago a meeting between 11 EU foreign ministers in Warsaw (not including the UK) demanded ‘ a new future for Europe’.  The Ministers called for a single, elected head of state for Europe, and a new defence policy….under the control of a new pan-EU foreign ministry which “could eventually involve a European army”.
In a direct insult to Great Britain, the Group of 11 declared that, in order to “prevent one single member state from being able to obstruct initiatives”, it was essential to put an end to existing national vetos over foreign and defence policy. Be under no illusions: as Bruno Waterfield wrote in today’s Daily Telegraph, ‘this would give the EU the power to impose a decision on Britain if it was supported by a majority of other countries’.
The move was led via aggressive lobbying from Berlin.

The plan, which far beyond Germany has the strong support of France, Italy, Spain, Poland, Holland, Austria, Belgium, Denmark, Luxembourg and Portugal, means that a British referendum on EU membership must now be an inevitability.

“For Europe to be a truly strong actor and global leader it needs a strong institutional setup,” said Germany’s Herr Westerwelle, and Sikorski of Poland, “It needs a directly elected president who personally appoints the members of his ‘European government’.”
Or ‘hers’, of course.

John Mauldin and Jim Rickards discuss the Looming Debt Crisis and the Fiscal Abyss!

The Eurozone Purchasing Managers Index (PMI) points to a European recession, according to Markit Economics. Meanwhile a successful bond auction in Spain brought lower than expected yields. Is Europe on a "choose your own disaster" track? We talk to our guest co-host, Jim Rickards, Senior Managing Director at Tangent Capital Partners, and John Mauldin, President of Millennium Wave Advisors, about Europe's fiscal future.

The Gentleman's Guide To Forum Spies (spooks, feds, etc.)

Submitted by Sid: An extensive guide as to how government shills operate. Websites such as AboveTopSecret.com (mentioned in the article) and GodLikeProductions.com have users employing these tactics on a regular basis.

With this information in your possession you will now have a checklist to help you figure out the Shills in the crowd.

Quote: 1. COINTELPRO Techniques for dilution, misdirection and control of a internet forum
2. Twenty-Five Rules of Disinformation
3. Eight Traits of the Disinformationalist
4. How to Spot a Spy (Cointelpro Agent)
5. Seventeen Techniques for Truth Suppression
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COINTELPRO Techniques for dilution, misdirection and control of a internet forum..

There are several techniques for the control and manipulation of a internet forum no matter what, or who is on it. We will go over each technique and demonstrate that only a minimal number of operatives can be used to eventually and effectively gain a control of a 'uncontrolled forum.'

Technique #1 - 'FORUM SLIDING'

Volcker on Lehman, the Fed's increased power and Dodd Frank

Former Federal Reserve Chairman Paul Volcker told Impact Players host Robert Wolf that the Fed emerged from the financial crisis with stronger powers and that he had concerns the Fed went to the edge of its legal authority. Volcker also contends the U.S. is the best point of hope for the world economy. Wolf is the former CEO of UBS Americas and outside advisor and major fundraiser for President Obama. Source

Hacktivism: New front in war on capitalism - Afshin Rattansi

Christine Lagarde from the International Monetary Fund (IMF) tells us why Greece and Spain need to be burned to the ground and sold off to save them. Britain decides to appoint a sewage expert to destroy all of UK art. We also talk to Brian Knappenberger, director of the film We Are Legion: The Story of the Hacktivists, about the new front for the 99% fighting capitalism. These and much more are all reviewed in this edition of Double Standards with Afshin Rattansi. Source