WSJ: “Worst economic recovery by far since WWII”

The Fed’s dance with ‘heavy liquidity flows’ targeting Wall Street’s financial sector has not generated any type of meaningful economic growth. Results, in fact, have been ‘tepid.’

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A Fine Fed MessWSJ Aug 22-23, 2015

The U.S. is still growing, but corporate profits are far from booming. Growth in the first half of the year came in at a paltry 1.5%, and so far the third quarter doesn’t look like it will rebound as smartly as it did in 2014. To put it another way, the long promised economic takeoff to a faster growth plane above 3% a year is still receding like a desert mirage.

One lesson here is that the Fed’s great monetary experiment since the recession ended in 2009 looks increasingly like a failure. Recall the Fed’s theory that quantitative easing (bond buying) and near-zero interest rates would lift financial assets, which in turn would lift the real economy.

But while stocks have soared, as have speculative assets like junk bonds and commercial real estate, the real economy hasn’t. This remains the worst economic recovery by far since World War II, and we’ll be watching to see if financial assets now fall to match the slow real economy.

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The debt-logged world is starved for liquidity.  It is time to ‘re-target liquidity infusions to recharge economic acceleration.

The Leviticus 25 Plan 2015 –  $70,000 per U.S. citizen                                                  The Leviticus 25 Plan 2015 (1141)

 

 

In its defense, the Fed is dealing with the cards it has been dealt… what it needs now is a legitimate road back to financial sanity.

The U.S. Federal Reserve is functioning under the heavy strain of debt – public and private.  It has been the policies of the Federal government, and state governments, however, and not the Federal Reserve, that blew up nation’s public balance sheet.

The Fed did not pass massive government programs, riddled with fraud and waste.  The Fed did not create social welfare structures which reward ‘non-work’ and penalize industriousness and output. That was Congress.

The Fed did not create heavy-handed policies which hinder, and in many cases suffocate, healthy business climates.  Law makers in city, state and federal government did that.

The Fed, however, does need to rethink its approach to economic revitalization.

The Federal Reserve, along with their other Central Bank partners around the globe, believe they have their hands tied – with no feasible way to abandon their present ‘zero-interest-rate-policies’ (ZIRP) and, in some cases, ‘negative-interest-rate-policies’ (NIRP).

They see no way to ‘normalize’ rates and restore a more sensible – and far less dangerous – monetary environment.

There is, of course, a feasible and efficiently ‘clean’ way to normalize rates.  But it first requires massive debt elimination at ground level.

Widespread debt elimination among the citizenry would effectively mitigate the negative impact of rate normalization moves.

Debt is deflationary.  Massive debt creates severe, relentless deflationary pressures.  Debt elimination is critical moving forward with price discovery in the credit markets, economic growth, and a restored free-market environment.

And lastly, it must all be accomplished in an orderly fashion, and carried out in a way that will scale back the role of government in managing and controlling the everyday life of citizens.

We need a new plan…..

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The Leviticus 25 Plan is a dynamic economic initiative providing direct liquidity benefits for American families, while at the same time scaling back the role of government in managing and controlling the affairs of citizens.  It is a comprehensive plan with long-term economic and social benefits for citizens and government.

The inspiration for this plan is based upon Biblical principles set forth in the Book of Leviticus, principles tendering direct economic liberties to the people.

“He who will not apply new remedies must expect new evils.” – Sir Francis Bacon

The Leviticus 25 Plan 2015 –  $70,000 per U.S. citizen                                                  The Leviticus 25 Plan 2015 (1139)

 

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Central bank directed ‘trickle-down stimulus’ – disastrous

Global Central Bank balance-sheet-expanding stimulus programs have worked out quite well for major Wall Street banking interests – bailing them out of the massive capital holes they dug for themselves when their leveraged speculation schemes began blowing up in 2007.

Gains enjoyed by the financial system oligarchy have not trickled down to ground level citizens and their families, however….

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The Colossal Failure Of Central Bank ‘Trickledown’

ZeroHedge 9/23/2015 –  Excerpts:

Actual labor utilization and output in Japan remains on the decline. At least when the earthquake and tsunami devastated the Japanese economy in 2011 it was a temporary setback; QQE, on the other hand, has clearly been a more or less permanent, depressive influence.

ABOOK Sept 2015 Japan Wages

….Actual labor utilization and output in Japan remains on the decline. At least when the earthquake and tsunami devastated the Japanese economy in 2011 it was a temporary setback; QQE, on the other hand, has clearly been a more or less permanent, depressive influence.

ABOOK Sept 2015 Japan Hours

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Japan’s best QQE efforts have led to a staggering national debt (245% of GDP) and economic stagnation.

Central Banks are spinning their wheels – and the economic ice is growing dangerously thin.

It is time to re-target their liquidity flows in a way that will eliminate debt at ground level and strengthen global economic foundations.

The Leviticus 25 Plan 2015 –  $70,000 per U.S. citizen                                                  The Leviticus 25 Plan 2015 (1136)

 

 

U.S. citizens losing ground on ‘economic freedom’…

As government ‘grows’ – freedom declines.

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U.S. drops to 16th on ‘economic freedom’ list, behind Canada, Chile

Wall Street Examiner 9-14-15  –  Excerpts:

The United States, ranked second in worldwide economic freedom as recently as 2000, has plummeted to 16th, according to a new report of world economies.

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“The United States, once considered a bastion of economic freedom, now ranks 16th in the world after being as high as second in 2000,” said the report issued Monday morning.

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Overall, he added, “Economic freedom breeds prosperity and economically free countries like Canada offer the highest quality of life while the lowest-ranked countries are usually burdened by oppressive regimes that limit the freedom and opportunity of their citizens.”

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There is one plan in America that reduces the scope and control of government and restores economic liberty.

This plan grants U.S. citizens the same access to liquidity that was so generously awarded during the financial crisis years to major commercial and investment banks as: Morgan Stanley, Citigroup, Goldman Sachs, JP Morgan Chase, Bank of America, State Street, Barclays, UBS, and many others…

The Leviticus 25 Plan 2015 –  $70,000 per U.S. citizen                                                  The Leviticus 25 Plan 2015 (1132)

 

Atlanta Fed GDP forecast for Q3: anemic

America’s lethargic economy just sputtered down a couple notches. The country with everything going for it is inching along at ‘crawl speed,’ economically.

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Atlanta Fed Cuts Q3 GDP Forecast To A Paltry 1.2%

ZeroHedge 08/28/2015 –  Excerpts: .

 The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the third quarter of 2015 is 1.2 percent on August 28, down from 1.4 percent on August 26. The forecast for real GDP growth in the third quarter decreased by 0.2 percentage points following this morning’s personal income and outlays report from the U.S. Bureau of Economic Analysis. The slight decline in the model’s forecast was primarily due to some weakness in real services consumption for July, which lowered the model’s estimate for personal consumption expenditures from 3.1 percent to 2.6 percent for the third quarter.

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What does America need to get ‘up and moving’ again?

Economic liberty – and the power of free market dynamics.                                       Massive debt reduction / elimination at the family level.                                               Positive re-incentives for work and enterprise.                                                        Reduction in the scope and control of government over the daily affairs of citizens.  America needs a plan that reignites powerful economic growth and generates massive government surpluses:

The Leviticus 25 Plan 2015 –  $70,000 per U.S. citizen                                                  The Leviticus 25 Plan 2015 (1125)

 

 

 

 

 

 

 

 

Central planning and the current anemic U.S. job market…

Central planning ‘money pumpers’ at the Federal Reserve and U.S. Treasury showered major banking interests and insurers with trillions of dollars of ‘instant cash’ and emergency loans, credit-guarantees, and various other liquidity-funneling maneuvers over the past seven years.

Wall Street roared higher and the banking sector recovered from its self-inflicted subprime gut wounds…

Meanwhile, in main street America, real median household income has been stagnant for the past decade, rent costs are rising.

Service sector and part-time jobs account for a significant share of the rosey BLS jobs reports every month.  Real jobs, or what are traditionally known as “breadwinner jobs,” are faltering.

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1.4 Million Manufacturing Jobs Lost – Zero Hedge Aug 7, 2015

the “New Economy” – since December 2014, the US has lost 1.4 million manufacturing workers. These have been replaced almost one to one, with new waiters and bartenders.

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Record 94 Million Americans Not In The Labor Force; Participation Rate Lowest Since 1977

ZeroHedge 9/4/2015  – Excerpts:

According to the BLS, the main reason why the unemployment rate tumbled to the lowest since April 2008 is because another 261,000 Americans dropped out of the labor force, as a result pushing the total number of US potential workers who are not in the labor force, to a record 94 million, an increase of 1.8 million in the past year, and a whopping 14.9 million since the start of the second great depression in December 2007.

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Total 2015 Job Cuts To Be Biggest Since 2009: Challenger

ZeroHedge  9/3/2015  – Excerpts:

Moments ago Challenger reported August job cuts, which at 41,186 were a 60% drop from the 115,730 reported last month (the highest since September 2011), which however was driven by a one-time mass layoffs last month in military staffing. Putting August in its correct perspective, the number was 2.9% higher than the same month a year ago, when 40,010 planned job cuts were announced. So far in 2015 employers have announced 434,554 job cuts: that is up 31 percent from the 332,931 planned layoffs in the first eight months of 2014. What is worse, and what reveals the true picture of the economy, is that with monthly totals averaging 54,319, 2015 job cuts are on track to exceed 650,000 for the year, which would be the highest year-end tally since 2009 (1,272,030).

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Big government is not the answer to America’s jobs dilemma.

We need to return to a citizen-directed economy, instead of a central planning, government-directed economy.

And U.S. citizens must be granted the same direct access to liquidity that was granted to Morgan Stanley, Citigroup, Bank of America, Merrill Lynch, JP Morgan, Goldman Sachs, and the like.

One plan delivers.

The Leviticus 25 Plan 2015 –  $70,000 per U.S. citizen                                                  The Leviticus 25 Plan 2015 (1119)

 

 

 

 

 

 

“Helicopter money” would be mayhem – apart from an orderly plan which restores economic liberty…

The world is waking up to the critical need for access to liquidity at ground level.

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Citigroup Chief Economist Thinks Only “Helicopter Money” Can Save The World Now

ZeroHedge 8/29/2015 – Excerpts:                                                                          “Citigroup’s chief economist Willem Buiter – [concludes] that a global recession is imminent and nothing but a major blast of fiscal spending financed by outright “helicopter” money from the central banks will avert the deepening crisis..”.

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Liquidity most assuredly is needed at ground level – to effect debt elimination and  restore free market dynamics.

Liquidity must be targeted in a manner which provides direct access to citizens – to restore true economic liberty,

It must properly reduce the scope of government intrusion and control over the daily affairs of citizens. It must re-incentivize a healthy work ethic and reduce dependence on government.

There is one comprehensive economic plan that does it right.

The Leviticus 25 Plan 2015 –  $70,000 per U.S. citizen                                                  The Leviticus 25 Plan 2015 (1116)

State and local governments – and the looming debt crisis

The next crisis “nobody saw coming”  – Charles Hugh Smith  8-6-2015            Excerpts:                                                                                                                           Take a look at this chart of state and local government debt. As we noted yesterday, nominal GDP rose about 77% since 2000. So state and local debt rose at double the rate of GDP. That is the definition of an unsustainable trend.

As noted earlier in the week, state and local taxes have soared 75%. While this would be no big deal if wages and salaries had risen by 75% in the same time frame, but earnings have barely kept pace with inflation (38% since 2000).
So state and local taxes have risen at a rate twice that of wages/salaries. State and local governments can keep raising taxes, but where’s the money going to come from?

 

State and local government expenditures have risen faster than inflation or GDP.

Here is the context that matters: household income. This is median real income, i.e. adjusted for inflation.

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This problem is not going to magically disappear.  Something needs to change.

America needs a new economic acceleration plan – one that will unleash the power of economic liberty, debt relief, and free market dynamics.

The Leviticus 25 Plan is a dynamic economic initiative providing direct liquidity benefits for American families, while at the same time scaling back the role of government in managing and controlling the affairs of citizens.  It is a comprehensive plan with long-term economic and social benefits for citizens and government.

The inspiration for this plan is based upon Biblical principles set forth in the Book of Leviticus, principles tendering direct economic liberties to the people.

The Leviticus 25 Plan 2015 –  $70,000 per U.S. citizen                                                  The Leviticus 25 Plan 2015 (1108)

 

 

 

Dear U.S. Congress – Big government central planning has been a miserable failure…

The Federal Reserve and U.S. Treasury engineered an economic recovery plan in which large financial institutions and insurers were specifically targeted to receive direct liquidity access, while American families received little or nothing in regard to liquidity access.

Your big government economic stimulus schemes and Troubled Asset Relief Program (TARP) did virtually nothing for Main Street America.

Wall Street’s financial sector, following its subprime gambling binge and massive credit default waves, went on to regain its ‘financial health’ quite nicely – thanks to the ‘free money’ extended to it through various debt relief programs and Fed-created liquidity facilities.

The ‘free money’ sloshing around in the banking system began chasing ‘returns’ and equity market prices quickly began inflating and have been getting ‘pumped’ full of hot air ever since.

The Willshire 5000 aggregate market cap / GDP ratio recently punched up through the  133% mark as shown on the chart below:Screen Shot 2015 08 18 at 8.31.39 AM

Meanwhile, U.S. households are still burdened by ‘peak leverage’ – at just under $14 trillion:

(Charts courtesy of David Stockman, ContraCorner 8-22-15)

Main street America got royally fleeced on the the U.S. government’s bailout mania schemes.

Leverage remains sky-high.  More Americans than ever remain dependent on social welfare programs.

While the banks were ‘recovering’ (courtesy of their access to trillions of dollars in free money and credit guarantees – from the Fed) they turned right around and foreclosed on the home loans of millions of families. 14 million American families lost their homes to foreclosure during 2008-2012.

And the battle goes on.  According to RealtyTrac’s recent report covering July 2015:      “There are currently 811,549 properties in U.S. that are in some stage of foreclosure (default, auction or bank owned) …  In July, the number of properties that received a foreclosure filing in U.S. was 7% higher than the previous month and 14% higher than the same time last year.”

You – members of Congress – have done nothing to restore property ownership, promote economic liberty, and revitalize economic growth.

There is one plan that can get America back on its feet again:

The Leviticus 25 Plan 2015 –  $70,000 per U.S. citizen                                                  The Leviticus 25 Plan 2015 (1106)

 

U.S. on the hook to support $3 billion transfer to help make Valdimir Putin ‘financially healthy.’ U.S. citizens receive… ‘zilch’ for their financial needs.

Ukraine owes Vladimir Putin $3 billion, and Putin is demanding payment.

Bank of America Merrill Lynch maintains that the IMF will be stepping in to provide Ukraine with the requisite funds to make Vladimir Putin ‘whole,’ and to de-stress the situation:

The $3bn Russian bond is included in debt restructuring, but Russia will not participate in debt restructuring and will either be paid $3bn from reserves in December or there will be a political decision to agree on an extension, likely without haircuts. We believe the $3bn bond is likely to be classified as sovereign debt and the IMF would likely be forced to pay it (as a holdout) in order to continue the program in December.   Source:  ZeroHedge 8-28-15  Putin To Get $3 Billion From US Taxpayers After Ukraine Bond Debacle

And so, here we have the U.S. government, funneling U.S. taxpayer dollars through the IMF fire-hose to Russia’s Vladimir Putin … to help make Putin ‘financially healthy.’

It is now time to grant U.S. citizens the same access (to their own money) that has been provided to Vladimir Putin – to allow U.S. citizens to also become ‘financially healthy.’

The Leviticus 25 Plan 2015 –  $70,000 per U.S. citizen                                                  The Leviticus 25 Plan 2015 (1104)