Gallup – September 2016: “Free enterprise is in free fall”

Gallup CEO Jim Clifton has his finger on America’s economic pulse.  For millions of American families, financial security has weakened appreciably..

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The Invisible American –  by Jim Clifton, Gallup – Sep 20, 2016

Excerpts:                                                                                                                                         The percentage of Americans who say they are in the middle or upper-middle class has fallen 10 percentage points, from a 61% average between 2000 and 2008 to 51% today.

[snip]

Ten percent of 250 million adults in the U.S. is 25 million people whose economic lives have crashed.

What the media is missing is that these 25 million people are invisible in the widely reported 4.9% official U.S. unemployment rate.

Let’s say someone has a good middle-class job that pays $65,000 a year. That job goes away in a changing, disrupted world, and his new full-time job pays $14 per hour — or about $28,000 per year. That devastated American remains counted as “full-time employed” because he still has full-time work — although with drastically reduced pay and benefits. He has fallen out of the middle class and is invisible in current reporting.

[snip]

There are three serious metrics that need to be turned around or we’ll lose the whole middle class.

  1. According to the U.S. Bureau of Labor Statistics, the percentage of the total U.S. adult population that has a full-time job has been hovering around 48% since 2010this is the lowest full-time employment level since 1983.
  2. The number of publicly listed companies trading on U.S. exchanges has been cut almost in half in the past 20 years — from about 7,300 to 3,700. Because firms can’t grow organically — that is, build more business from new and existing customers — they give up and pay high prices to acquire their competitors, thus drastically shrinking the number of U.S. public companies. This seriously contributes to the massive loss of U.S. middle-class jobs.
  3. New business startups are at historical lows. Americans have stopped starting businesses. And the businesses that do start are growing at historically slow rates.

Free enterprise is in free fall — but it is fixable. Small business can save America and restore the middle class.

Gallup finds that small businesses — startups plus “shootups,” those that grow big — are the engine of new economic energy. According to the U.S. Small Business Administration, 65% of all new jobs are created by small businesses, not large ones.

Here’s the crisis: The deaths of small businesses recently outnumbered the births of small businesses. The U.S. Census Bureau reports that the total number of business startups and business closures per year crossed for the first time in 2008. In the nearly 30 years before that, the U.S. consistently averaged a surplus of almost 120,000 more business births than deaths each year. But from 2008 to 2011, an average of 420,000 businesses were born annually, while an average of 450,000 per year were dying.

Bottom line: The two most trusted institutions in the U.S. are the military and small business. Most people know about our military’s importance, but not as many appreciate the role small business plays in creating the majority of new jobs and in national security itself.

America needs small business to boom again. Small businesses are our best hope for badly needed economic growth, great jobs and ultimately accelerated human development. When we get small business to boom, we can save America, restore our middle class and once again lead the world.

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The answer… is not more government-inspired solutions.

The answer lies within a powerful, decentralized, citizen-centered solution:

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 2017 –  $75,000 per U.S. citizen                                                         The Leviticus 25 Plan 2017 (1676)

 

 

BIS: China facing full blown banking crisis

The Bank for International Settlements (BIS), Basal, Switzerland, has just issued a chilling warning on China, and warns of global implications.

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China facing a full blown financial crisis, world’s top financial watchdog warns 

The Telegraph – 19 September 2016 (excerpts):

China has failed to curb excesses in its credit system and faces mounting risks of a full-blown banking crisis, according to early warning indicators released by the world’s top financial watchdog.

A key gauge of credit vulnerability is now three times over the danger threshold and has continued to deteriorate, despite pledges by Chinese premier Li Keqiang to wean the economy off debt-driven growth before it is too late.

The Bank for International Settlements warned in its quarterly report that China’s “credit to GDP gap” has reached 30.1, the highest to date and in a different league altogether from any other major country tracked by the institution. It is also significantly higher than the scores in East Asia’s speculative boom on 1997 or in the US subprime bubble before the Lehman crisis.

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China’s total credit reached 255pc of GDP at the end of last year, a jump of 107 percentage points over eight years. This is an extremely high level for a developing economy and is still rising fast .Outstanding loans have reached $28 trillion, as much as the commercial banking systems of the US and Japan combined. The scale is enough to threaten a worldwide shock if China ever loses control. Corporate debt alone has reached 171pc of GDP, and it is this that is keeping global regulators awake at night.

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“It is becoming increasingly evident that central banks have been overburdened for far too long,” [Claudio Borio, BIS Chief Economist].

The BIS said one troubling development is a breakdown in the relationship between interest rates and currencies in global markets, what it describes as a violation of the iron law of “covered interest parity”.

The concern is that banks are displaying a highly defensive reflex, and could pull back abruptly as they did during the Lehman crisis once they smell fear. “The banking sector may become an amplifier of shocks rather than an absorber of shocks,” said Hyun Song Shin, the BIS’s research chief.

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Yet it is China that is emerging as the epicentre of risk. The International Monetary Fund warned in June that debt levels were alarming and “must be addressed immediately”, though it is far from clear how the authorities can extract themselves so late in the day.

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Preemptive action to insulate U.S. citizens is needed – now.

The global banking system danced the world into the Great Financial Crisis of 2007-2010, at which time global Central Banks ‘created’ trillions of dollars of liquidity to bail them out of their massive capital holes. And now, another major credit crisis is erupting, and another  massive financial storm is brewing.

It is time to grant U.S. citizens direct access to liquidity – the same direct access that was provided to Wall Street’s financial sector during 2007-2010 – to eliminate debt at ‘ground level’ in America, before the next financial shock waves tear into the U.S. economy.

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 2017 –  $75,000 per U.S. citizen                                                   The Leviticus 25 Plan 2017 (1673)

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

 

 

2009: The U.S. big government $831 billion ‘stimulus plan’ – How’d that work out?

The American Recovery and Reinvestment Act of 2009 (ARRA) authorized $787 billion in ‘stimulus’ spending to revive the U.S. economy – later revised upward to $831 billion in ‘stimulus’ spending.

The money was fire-hosed out through some 27 government agencies, with the lofty expectation that it would generate a significant, long-lasting economic recovery with significant trickle-down benefits to American families

Here is a modest sampling of the agencies involved, courtesy of Propublica:            Smithsonian ($25 million)                                                                                              National Endowment for the Arts ($50 million)                                                                 NASA ($513 million)                                                                                                            U.S. Agency for International Development ($38 million)                                       Department of State ($564 million)

The U.S. government also airmailed out hundreds of billions of dollars, direct to major banks, via the Troubled Asset Relief Program (TARP), and the Federal Reserve transfused, direct to Wall Street’s financial sector, over $1.2 trillion via the Fed’s “secret liquidity lifelines.”

The results – anemic.

The economy is limping along with GDP barely scratching the 1.2% growth level.

American families are mired in poverty, according to Feeding America reports:

Poverty Statistics in the United States[i]

In 2014:

  • 46.7 million people (14.8 percent) were in poverty.
  • 15.5 million (21.1 percent) children under the age of 18 were in poverty.
  • 4.6 million (10 percent) seniors 65 and older were in poverty.
  • The overall national poverty rate according to the Supplemental Poverty Measure is 15.3 percent, as compared with the official poverty rate of 14.8 percent.[ii]
  • Under the Supplemental Poverty Measure, there are 48.4 million people living in poverty, nearly 2 million more than are represented by the official poverty measure (46.7 million).[iii]

Very Low Food Insecurity & Food Insecurity in the US[iv]

In 2014:

  • 48.1 million Americans lived in food insecure households, including 32.8 million adults and 15.3 million children.
  • 14 percent of households (17.4 million households) were food insecure.
  • 6 percent of households (6.9 million households) experienced very low food security.

Tent Cities Full of Homeless People are Booming – all across America (ZeroHedge)

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Big government solutions have been, thus far, a travesty. 

It is time to grant U.S. citizens the same ‘direct access’ to liquidity that as provided to Wall Street banks during the financial crisis (2007-2010).

The Leviticus 25 Plan 2017 –  $75,000 per U.S. citizen                                                   The Leviticus 25 Plan 2017 (1662)

Sep 2016: Wall Street vs Main Street – after seven years of economic recovery

The U.S. Treasury pumped several hundred billion dollars into the Wall Street banking sector through its Troubled Asset Relief Program (TARP) in late 2008 to sweep billions of dollars worth of sewage-grade mortgage debt off bank books and onto the Fed’s own balance sheet at the start of the economic crisis.  It went on to also purchase equity positions in various banks to help restore bank capital requirements.

The Federal Reserve then rolled out its big guns and proceeded to transfuse Wall Street’s banking sector with more than $1 trillion through its emergency lending facilities, also known as the Fed’s ‘Secret Liquidity Lifelines.’

The Fed also purchased an estimated $3.5 trillion worth of  government, agency debt, and mortgage backed securities (MBS) through QE1, QE2, and QE3 as part of its interest rate suppression / economic rescue strategy.

One would think that these ‘extraordinary measures,’ as the Fed terms them, would have lit the U.S. economy up and we would be humming along on all cylindars.

Seven years – and here is how things have played out:

First – Wall Street has rebounded nicely…

http://www.marketoracle.co.uk/images/2011/Feb/DowJonesIndustrialAVerage.jpg

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Main Street America, however, has been sputtering…

Slumping GDP – for almost 2 years…

Real GDP: Percent Change from Preceding Quarter

14-15% of Americans depend on Food Stamps for survival...

http://www.trivisonno.com/wp-content/uploads/Food-Stamps-Percent.jpg

Over 100 million people depend on Federal Welfare benefits….

http://www.activistpost.com/wp-content/uploads/2012/08/More-Than-100-Million-Americans-Are-On-Welfare-460x334.png

Labor Force Participation Rate is scraping along at 39 year lows…

Charts courtesy of Jim Quinn – The Burning Platform

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Enough is enough.  It is time to get America moving again – with a new strategy.

It is now high time to grant U.S. citizens the same direct access to liquidity that was provided to Wall Street during the great financial crisis.

The Leviticus 25 Plan 2017 –  $75,000 per U.S. citizen                                                  The Leviticus 25 Plan 2017 (1647)

Is this really the way ‘Central Bank dominated’ economics is supposed to work? – Part 1

Recent financial headlines courtesy of ZeroHedge:

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“Central Banks Now Own $25 Trillion Of Financial Assets”

  1. Central banks own $25tn of financial assets (a sum larger than GDP of US + Japan, and up $12tn since Lehman);
  2. There are currently $12.3tn of negative yielding global bonds (28% of total);
  3. There is currently $8tn of negative yielding sovereign debt (54% of total).                Aug 25, 2016

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Dallas Fed Dead-Cat-Bounce Dies – Economy Contracts For 20th Month In A Row

Having jumped miraculously from -18 to -1.3 in July, August’s Dallas Fed plunged back to -6.2 – contracting for the 20th month in a row. The worse than expected headline data came despite a rise in new orders as the number of employees, average workweek, and capex all plunged into contraction. Hope also tumbled from 18.4 to 7.0 with inventories and new orders expected to slow.   Aug 29, 2016

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Dallas Fed Respondent: “Sometime After The Election, Data Will Show That In 2016 The U.S. Was In Recession”

Sometime after the election, historical data will show that in 2016 the U.S. was in recession.”  Aug 29, 2016

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If The Fed Doesn’t Restart QE, A Yield Curve Inversion (& Economic Dislocation) Is Imminent

QE was never a cure but simply a means to extend and pretend just a bit longer. Could it be the pretending and extending have hit some sort of limit and the Fed fears the next Fed administered “cure” may kill the patient?   Aug 30, 2016

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(So the Bank of Japan is getting set to ‘print’ new reams of paper currency… to buy US Treasuries and earn free interest at the expense of U.S. taxpayers?…)

Record Low Yields On Deck? Abe Advisor Urges Japan To Buy US Treasuries

 “Japan’s monetary authorities should intervene in the currency market not to change the yen’s general course but to discourage speculators” Koichi Hamada, an emeritus professor of economics at Yale University, told Reuters in an interview. “If Japan’s currency intervention is considered manipulation of exchange rates, BOJ buying of foreign bonds is an option for the same objective in a moderate form.”                        Aug 30, 2016

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It is time to gear up – with  a citizen-centered economic plan:

The Leviticus 25 Plan 2017 –  $75,000 per U.S. citizen                                                  The Leviticus 25 Plan 2017 (1643)