Sep 26 2013: Minneapolis Fed President on monetary stimulus – “… whatever it takes … no matter how unconventional..”

Narayana Kocherlakota, current President of the Minneapolis
Federal Reserve Bank, said in a speech (9-26-13):                                                 “Doing whatever it takes in the next few years will mean something different. It will mean that the FOMC is willing to continue to use the unconventional monetary policy tools that it has employed in the past few years. Indeed, it will mean that the FOMC is willing to use any of its congressionally authorized tools to achieve the goal of higher employment, no matter how unconventional those tools might be.

Moreover, doing whatever it takes will mean keeping a historically unusual amount of monetary stimulus in place—and possibly providing more stimulus—even as: Interest rates remain near historic lows. Economic growth rises above historical averages. Per capita employment begins to rise appreciably. Asset prices rise to unusually high levels, leading to concerns about “bubbles.” The medium-term inflation outlook rises temporarily above 2 percent. It may not be easy to stick to this path.”

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Well, now we’re talking….

Kocherlakota certainly deserves credit for his frank acknowledgements that maintaining liquidity is paramount to forestalling a deflationary crisis.

However, the Fed’s 4½ year policy of aiming their high-powered liquidity hoses at the financial services industry (primarily the big Primary Dealers) is a proven failure. The trillions of dollars they have showered on the PD’s and other ‘connected’ players has not generated economic growth.  Real (inflation-adjusted) Median Household has been sliding for 5 years.  Economic liberty for the large majority of Americans had been in decline.

It is time to shift gears and provide direct credit extensions to U.S. citizens.

The Leviticus 25 Planthe $64,000 solution.

The central planning disaster – 101 million working age Americans out of work

The Federal Reserve and the U.S. big-government central planners have thrown trillions of dollars ‘at’ the economic crisis over the past 4 1/2 years.  And here’s where things stand in the labor market:

More Than 101 Million Working Age Americans Do Not Have A Job                           The Economic Collapse Blog  –   Excerpts courtesy of ZeroHedge 4-8-13

“According to the U.S. Bureau of Labor Statistics, there are 11,742,000 working age Americans that are officially unemployed.

In addition, the U.S. Bureau of Labor Statistics says that there are 89,967,000 working age Americans that are “not in the labor force”.  That is a new all-time record, and that number increased by a whopping 663,000 during the month of March alone.

When you add 11,742,000 working age Americans that are officially unemployed to the 89,967,000 working age Americans that are “not in the labor force”, you come up with a grand total of 101,709,000 working age Americans that do not have a job…. … an absolutely staggering statistic.

And anyone that tells you that “a higher percentage of Americans are working today” is telling you a complete and total lie.  During the last recession the percentage of working age Americans with a job fell dramatically, and since then we have not seen that number bounce back at all.  In fact, this is the very first time in the post-World War II era that we have not seen the employment-population ratio bounce back after a recession.  At this point, the employment-population ratio has been under 60 percent for 49 months in a row…”

Employment-Population Ratio 2013

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America’s Economic Plan for the Future – The Leviticus 25 Plan

$64,000 per U.S. citizen – credit extension at 0% interest. 75% goes into a Family Account (FA) and 25% goes into a Medical Savings Account (MSA). As an example: A family of four would receive $256,000: $192,000 deposited into the Family Account, $64,000 into the family’s Medical Savings Account.
Recapture provision overview: Participants give up income tax refunds each year for 5 years. Participants also give up Means Tested Welfare benefits, Income Security benefits, unemployment insurance benefits, SSI, and SSDI benefits for a 5 years period.
Medicaid, Medicare, VA, Tricare, FEBH healthcare benefits remain in place, but the deductible goes up to $2500 / person / year for 5 years.
The Recapture Provisions return over 50% during the first 5 years. Dynamic inertia and positive feedback generate sufficient ‘follow-on’ return to fully fund the plan over a 10-15 year period.
The only plan in America that delivers meaningful real-time benefits and pays for itself,
The Leviticus 25 Plan.                                                                                                       Full document – September 2013 revision        
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“Wealth gap” closer – The Leviticus 25 Plan levels the playing field.

The Federal Reserve instituted QE1 in March of 2009.  For the average American family, Real Median (inflation-adjusted) Household Income has been in a hard alide ever since.

For the wealthy…?  See below

Richest 1% earn biggest share since 1920s…                                                              Sep 10, 2013  By Paul Wiseman (Excerpts)

WASHINGTON (AP) – The gulf between the richest 1 percent and the rest of America is the widest it’s been since the Roaring ’20s.

The very wealthiest Americans earned more than 19 percent of the country’s household income last year – their biggest share since 1928, the year before the stock market crash. And the top 10 percent captured a record 48.2 percent of total earnings last year.

[Since] the recession officially ended in June 2009, the top 1 percent have enjoyed the benefits of rising corporate profits and stock prices: 95 percent of the income gains reported since 2009 have gone to the top 1 percent.

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The last 4 years have also ushered in a growing economic disparity among various social classes:  Race, income, education increasingly polarize…

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The Leviticus 25 Plan levels the playing field and treats everyone the same, regardless of race, wealth, education.

It does not redistribute wealth.                                                                                           It does not promote envy and covetousness.                                                                    It does not antagonize race relations.

The Leviticus 25 Plan does something that no other plan has been able to accomplish.  It treats everyone the same.  It delivers real-time benefits and economic liberty to American families.  And it pays for itself over 10-15 years.

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America’s Economic Plan for the Future – The Leviticus 25 Plan

$64,000 per U.S. citizen – credit extension at 0% interest. 75% goes into a Family Account (FA) and 25% goes into a Medical Savings Account (MSA). As an example: A family of four would receive $256,000: $192,000 deposited into the Family Account, $64,000 into the family’s Medical Savings Account.

Recapture provision overviewParticipants agree to give up income tax refunds each year for 5 years. Participants also agree to give up Means Tested Welfare benefits, Income Security benefits, unemployment insurance benefits, SSI, and SSDI benefits for a 5 years period.

Medicaid, Medicare, VA, FEBH healthcare benefits remain in place, but the deductible goes up to $2500 / person / year for 5 years.

The Recapture Provisions return over 50% during the first 5 years. Dynamic inertia and positive feedback generate sufficient ‘follow-on’ return to fully fund the plan over a 10-15 year period.

The Leviticus 25 Plan would restore economic liberty, reduce the scope of government, re-ignite real economic growth, generate real tax revenue growth (federal, state, local), and make a real difference in peoples’ lives.

The Leviticus 25 Plan is the only plan in America that would deliver meaningful real-time benefits –  and pay for itself over a 10-15 year period.

The Leviticus 25 Plan. Full document – September 2013 revision

 

 

Aug 30, 2013: Feb owns 31.89% of the bond market. Trouble ahead for American families…

The Federal Reserve, through it’s regularly scheduled Permanent Open Market Operations (POMO), continues to buy up marketable Treasury securities on the open market.  These purchases are accomplished through its Primary Dealer network.  And the money that the Fed pays out for these purchases generally flows right into the equity markets, since the PDs do not want to sit on U.S. paper (Dollars).

Excerpts from ZeroHedge 8-30-13:

  • Last week the Fed owned $1.663 trillion in ten year equivalents, or 31.59% of total
  • This week the Fed owned $1.678 trillion in ten year equivalents, or 31.89% of total

In other words, the Fed’s holdings of the Treasury market, expressed though the correct 10 Year equivalent basis not the completely wrong total notional, rose by a whopping 0.3% in one week!

For much more on this, see here.

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And what does this mean for American families…?                                                      Answer:  Best case scenario – Creeping inflation.                                                           And worse case scenario – Galloping inflation.

Either way, American families will lose… as their Real (inflation-adjusted) Median Household Income continues to slide. And it is going to get worse.

The Leviticus 25 Plan would provide a massive ‘offset’ to the damage from all this through its benefits of massive debt elimination at the family level in America.

There is no other plan in America to address these issues and provide real-time benefits, direct, to U.S. citizens.

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America’s Economic Plan for the Future – The Leviticus 25 Plan
The Leviticus 25 Plan has undergone an inflation-adjustment upgrade (the September revision).
$64,000 per U.S. citizen – credit extension at 0% interest. 75% goes into a Family Account (FA) and 25% goes into a Medical Savings Account (MSA). As an example: A family of four would receive $256,000: $192,000 deposited into the Family Account, $64,000 into the family’s Medical Savings Account.
Recapture provision overview: Participants give up income tax refunds each year for 5 years. Participants also give up Means Tested Welfare benefits, Income Security benefits, unemployment insurance benefits, SSI, and SSDI benefits for a 5 years period.
Medicaid, Medicare, VA, FEBH healthcare benefits remain in place, but the deductible goes up to $2500 / person / year for 5 years.
The Recapture Provisions return over 50% during the first 5 years. Dynamic inertia and positive feedback generate sufficient ‘follow-on’ return to fully fund the plan over a 10-15 year period.
The only plan in America that delivers meaningful real-time benefits and pays for itself.

 

 

 

5 1/2 years of Fed balance sheet expansion – and the price we pay…

The Federal Reserve embarked on their initial round of direct monetization of the debt (aka ‘printing’ or ‘balance sheet expansion”) in the form of QE1 during March 2009.     And the U.S. Dollar began a 5½ year slide against hard assets like gas and gold.

In March 2009, according to Consumer Reports, the average price of a gallon of gasoline in the U.S. was $2.05.

And now in September 2013, 5½ years later, the average price of that same gallon of gasoline in the U.S. is 3.61.

Gas has risen by 76%.  Or, on an annualized basis, 13.8% per year.                          And this is part of the reason why “Real (inflation-adjusted) Median Household Income” has been dropping for the past 5 1/2 years.

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In March 2009, gold was quoted at $922 / oz.                                                            Today, on September 9, 2013, gold closed at $1386.

Price report                                                                                                             Tuesday, March 31, 2009:  Gold Price Close $922.60
Monday, September 9, 2013:  Gold closing price:  $1386

Gold rose 50.3% during that time, or 9.1% on an annualized basis.                              And that is the effect of currency debasement on hard assets.

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Regular Americans are getting ‘skinned,’ and there’s no end in sight.

It’s time to change course.

The Leviticus 25 Plan.

 

Debt and serfdom in America… and the utter failure of big-government ‘solutions’

So how is America faring … after 5 years of ‘the best and brightest minds’ in the U.S. government and the Federal Reserve allocating trillions of dollars toward ‘managing’ an economic recovery….?

Here’s how…

Excerpts from Charles Hugh Smith of OfTwoMinds blog                                     Accessed from ZeroHedge May 16, 2013

The numbers of Americans drawing benefits from the state are astounding: almost 11 million people drawing lifetime disability from Social Security (The Number Of US Citizens On Disability Is Now Larger Than The Population Of Greece);

Social Security (SSA) has 61 million beneficiaries as of March 2012; Medicare had 49.4 million beneficiaries in 2012, and Medicaid has over 50 million beneficiaries (another source puts the current number at 58 million, but the Kaiser Family Foundation says roughly 7 million “dual-eligibles” receive both Medicaid and Medicare, so let’s use the data point of 50 million Medicaid-only recipients.)

This aligns fairly well with the 48 million drawing SNAP (food stamp) benefits: Food stamp Recipients Hit Record (Zero Hedge). Those qualifying for one program likely qualify for the other.

This means roughly 110 million people are drawing significant direct benefits from the Federal government (central state) while the number of full-time workers is 116 million–about a 1-to-1 worker-beneficiary ratio.

The problem is two-fold: the entitlement programs are running massive deficits even though the Baby Boom has barely started to enter the programs, and the number of workers earning enough to pay significant income taxes is remarkably limited.

As I detailed in The Fraud at the Heart of Social Security (January 17, 2011), the program paid out $707 billion in 2010 and collected $631 billion in taxes, a $76 billion shortfall for 2010. The current program (2012) cost is $817 billion, a leap of $100 billion in a few short years as Baby Boomers flood into the program.

Of the roughly 142 million workers in the U.S., 38 million earn less than $10,000 per year, 50 million earn less that $15,000 a year and 61 million earn less than $20,000 annually. All these numbers are drawn directly from Social Security Administration payroll data.   100 million wage earners, or 2/3 the entire workforce, earn less than $40,000 per year.   Most of the heavy-lifting in terms of paying income taxes falls to about 30 million people, the top 20% of wage earners.

As for debt-serfdom, the status quo has widely distributed huge debt loads via home mortgages and student loans.

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Debt and serfdom in America – there is no end in sight.                                     America’s big government solutions have been a miserable and dramatic failure.

We need decentralization and economic revitalization – through direct credit extensions to U.S. citizens.

We need the only plan in America that delivers economic liberty, with real benefits to citizens, and pays for itself.                                                                                                 The Leviticus 25 Plan.

 

 

Global debt – massive, expanding; “There is no real way out.”

The global sovereign debt load was recently headlined (ZeroHedge 7-22-13 ):

Euroarea: 92.2%, up from 88.2% a year ago                                                         Greece: 160.5%, up from 136.5% a year ago                                                               Italy: 130.3%; up from 123.8% a year ago                                                                    Portugal: 127.2%, up from 112.3% a year ago                                                         Ireland: 125.1%, up from 106.8% a year ago                                                             Spain: 88.2%, up from 73.0% a year ago                                                                      Netherlands: 72.0%, up from 66.7% a year ago

Total global credit market debt is eye-popping, as Kyle Bass recently warned:        “when the globe is at 360% credit market debt-to-GDP, there is no real way out.”  ( ZeroHedge 8-4-13)

Governments have been responding with various programs of Quantitative Easing (Central Bank balance sheet expansion or, as it’s also known, ‘printing’).

Debt is deflationary.  And global debt levels are sufficiently high, that if Central Banks were to ‘curtail’ QE activities in any meaningful way, the result would be deflationary chaos.

They must ‘print’ – and that means a continuing “competitive devaluation” among the world’s various paper currencies.  And that means “inflation.

Middle class and lower class citizens in America will get slowly ‘roasted’ in the process.

………………………………………………………………………………………………………………              It is time for a plan that will provide direct liquidity and debt relief benefits to U.S. citizens.

The Leviticus 25 Plan.