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Author Topic: Money  (Read 8402 times)

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Re: Money
« Reply #450 on: November 09, 2018, 01:21:02 pm »
Agelbert NOTE: Before you read this truth filled article, you need to understand TWO irrefutable causal bits of reality that Charles Hugh Smith does not wish to discuss (probably BECAUSE he is a Libertarian/Capitalist  ;)).

ONE. The Fed knew EXACTLY what it was doing in gaming, with malice aforethought, the housing (and stock prices too, but the issue here is housing) price numbers UP while simultaneously gaming the CPI DOWN in regard to (MOSTLY) the housing cost component in the BLS cost of living calculations. Otherwise, the true ROT in the main street economy (caused DIRECTLY, do not pass go, do not collect $200, by the Parasitical Wall Street Fed bubbled up economy) would have been exposed.

Here is the evidence of the Grand Larceny CRIME the Chronies of the Parasitical Oligarchs = Fed Gang has been committing since Greenspan began the CPI low balling fun and games during the Reagan CROOKS and LIARS Administration:

Everybody is well aware that the BLS (Bureau of Labor Statistics) uses hedonics–like substituting hamburger for steak when the price of steak rises– to suppress CPI.

While not even including Internet Security in the CPI, the BLS underweights items like health care and education costs which are inflating far faster than the officials who make the rules for these indices want to see. So those items are suppressed.

The Fed’s favored PCE from the BEA uses even more suppression techniques,.

The BLS’s biggest suppression technique is to overweight the housing component of CPI, and then refuse to measure it accurately.

This 3 year old article applies even more today.

by Lee Adler • August 19, 2015


This Chart Shows How Badly CPI Understates Inflation:

The BLS suppresses its inflation gauges first and foremost by excluding asset prices, where most monetary inflation has been expressed for the past 6 years. Conventional economics theory does not consider rising asset prices to be inflation. Economists call rising asset prices “appreciation” and then conveniently ignore asset inflation and the disastrous consequences of asset inflation. Instead, conventional economics focuses on the inflation of consumption goods, favoring measures that do not accurately measure even consumer price inflation. The CPI was never intended to measure inflation per se. It was intended to index government benefits and therefore is incentivized to keep the number as low as possible.

Link to the above, reality based, article. 🕵️ 🧐 👍

TWO. The root of the ROT is not "rentier cartels"; it is CAPITALISM. Capitalism, by definition (to amass Capital), is a system where more power is granted to those who will do whatever it takes, no matter how egregious, no matter how socially irresponsible or damaging to the health of workers AND/OR the environment, to amass pecuniary wealth. This power ALWAYS is used to corrupt the government attempting to regulate, on behalf of we-the-people, this unrestrained Profit over People and Planet Capitalist activity. The logical end of a system that rewards more and more concentration of wealth with more and more political power is OBVIOUSLY a few RENTIER CARTELS controlling EVERYTHING! The GOAL of the Capitalist is not just amassing wealth; the ultimate goal is TOTAL POLITICAL (not just pricing) POWER through MONOPOLY. Capitalism is fundamentally the enemy of Democracy, equal rights, equal opportunities, or a level economic competitive playing field.

Charles Hugh Smith does not want to go there. BUT, he makes good points.

IF the frontal attack on we-the-people on behalf of fascists everywhere had not been ushered in (MOSTLY during the Reagan Administration and continued, without ANY PAUSE, through Bush daddy, Clinton, Shrub, Obama and Trump), we would not be in such a dire economic and environmental situation today.

What do I mean by that? I mean the ACTUAL inflation published reality would have corrected all the FAKE "increases" in GDP and FORCED the Government, and any business that provided Cost of Living adjustments to wages, to PAY the middle class reality based wages to keep up with the galloping inflation (CAUSED BY printing electronic money to inflate house and stock prices while leaving we-the-people on the hook for the tab) the Fed was, and still is, engaging in.

Also, the "profits" of the S&P 500 would have NOT been anywhere near the financial statement happy talk BS that goosed the Stock market. In fact, the reality of the STAGNATION of actual inflation adjusted profits would have ushered in reality based price discovery. IOW, the market SHOULD HAVE stagnated or trended down.

The problems we face would have been clearly defined, giving people of good will the motive to back common sense government measures for the good of the biosphere in general and humanity in particular.

But, alas, that did not happen. The Oligarchs 'R' US 😈 👹 💵 🎩(i.e. Rentier Cartels represented by the Fed ) have fooled the majority of Americans with their FAKE PPI, FAKE CPI and FAKE S&P 500 bubblenomics.

The first step in soving a problem is defining it. Most Americans, thanks to the Fed Fascist Cheerleaders for the Capitalist Parasitic Profit over People and Planet 'business model', are incapable of even defining the problem. 

Charles Hugh Smith rightfully exposes the most salient symptoms of the PROBLEM, even if he refuses to recognize that the PROBLEM is the Profit over People and Planet CAPITALIST 'BUSINESS MODEL' , of which the Hydrocarbon Hellspawn Fossil Fuel 🦕🦖 Fascists are an INTEGRAL part.


Why Are So Few Americans Able To Get Ahead?

Fri, 11/09/2018 - 08:52

Authored by Charles Hugh Smith via OfTwoMinds blog,

Our entire economy is characterized by cartel rentier skims, central-bank goosed asset bubbles and stagnating earned income for the bottom 90%.

Despite the rah-rah about the "ownership society" and the best economy ever, the sobering reality is very few Americans are able to get ahead, i.e. build real financial security via meaningful, secure assets which can be passed on to their children.

As I've often discussed here, only the top 10% of American households are getting ahead in both income and wealth, and most of the gains of these 12 million households are concentrated in the top 1% (1.2 million households). (see wealth chart below).

Why are so few Americans able to get ahead? there are three core reasons:

1. Earnings (wages and salaries) have not kept up with the rising cost of living.

2. The gains have flowed to capital, which is mostly owned by the top 10%, rather than to labor ((wages and salaries).

3. Our financialized economy incentivizes cartels and other rentier skims, i.e. structures that raise costs but don't provide any additional value for the additional costs.

It's instructive to compare today's household with households a few generations ago. As recently as the early 1970s, 45 years ago, it was still possible for a single fulltime-earner to support the household and buy a home, which in 1973 cost around $30,000 (median house price, as per the St. Louis FRED database).

As recently as 20 years ago, in 1998, the median house price in the U.S. was about $150,000-- still within reach of many two-earner households, even those with average jobs.

As the chart below shows, real median household income has only recently exceeded the 1998 level-- and only by a meager $1,000 annually. If we use real-world inflation rather than the under-estimated official inflation, real income has plummeted by 10% or more in the past 20 years.

This reality is reflected in a new study of wages in Silicon Valley, which we might assume would keep up due to the higher value of the region's output.The study found the wages of the bottom 90% declined when adjusted for inflation by as much as 14% over the past 20 years:

"The just-released report showed that wages for 90 percent of Silicon Valley workers (all levels of workers except for the top 10 percent) are lower now than they were 20 years ago, after adjusting for inflation. That's in stark contrast to the 74 percent increase in overall per capita economic output in the Valley from 2001 to 2017."

source: Why Silicon Valley Income Inequality Is Just a Preview of What's to Come for the Rest of the U.S.

Meanwhile, the median house price has more than doubled to $325,000 while median household income has stagnated. Please note this price is not adjusted for inflation, like the median income chart. But if we take nominal household income in 1998 (around $40,000 annually) and compare it to nominal household income now in 2018 (around $60,000), that's a 50% increase--far below the more than doubling of house prices.

To raise stagnant incomes, the Federal Reserve and other central banks have attempted to generate a wealth effect by boosting the valuations of risk-on assets such as stocks, bonds and commercial real estate. But the Fed et al. overlooked the fact that the vast majority of these assets are owned by the top 10%--and as noted above, the ownership of the top 10% is concentrated in the top 1% and .1%.

As a result, the vast majority of the wealth effect capital gains have flowed to the top 1%:

Lastly, the cartel structure of the U.S. economy has raised costs while providing no additional value. One example is higher education, a cartel that issues diplomas with diminishing economic value that now cost a fortune, a reality reflected in this chart of student loan debt, which simply didn't exist a generation ago:

Our entire economy is characterized by cartel rentier skims, central-bank goosed asset bubbles and stagnating earned income for the bottom 90%. Given these realities, the bottom 90% are left with few pathways to get ahead in terms of financial security and building secure family wealth.

« Last Edit: November 09, 2018, 02:31:21 pm by AGelbert »
Hope deferred maketh the heart sick: but when the desire cometh, it is a tree of life. Pr. 13:12


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