The state of the US economy

Worth a read. 

Paul Craig Roberts at his blog
The State of the Economy

The story line is going out that the economic boom is weakening and the Federal Reserve has to get the printing press running again.  The Fed uses the money to purchase bonds, which drives up the prices of bonds and lowers the interest rate.  The theory is that the lower interest rate encourages consumer spending and business investment and that this increase in consumer and business spending results in more output and employment. 

The Federal Reserve, European Central Bank, and Bank of England have been wedded to this policy for a decade, and the Japanese for longer, without stimulating business investment.  Rather than borrowing at low interest rates in order to invest more, corporations borrowed in order to buy back their stock.  In other words, some corporations after using all their profits to buy back their own stock went into debt in order to further reduce their market capitalization!  

Far from stimulating business investment, the liquidity supplied by the Federal Reserve drove up stock and bond prices and spilled over into real estate.  The fact that corporations used their profits to buy back their shares rather than to invest in new capacity means that the corporations  did not experience a booming economy with good investment opportunities. It is a poor economy when the best investment for a company is to repurchase its own shares.

Consumers, devoid of real income growth, maintained their living standards by going deeper into debt.  This process was aided, for example, by stretching out car payments from three years to six and seven years, with the result that loan balances exceed the value of the vehicles.  Many households live on credit cards by paying the minimum amount, with the result that their indebtedness grows by the month. The Federal Reserve’s low interest rates are not reciprocated by the high credit card interest rate on outstanding balances. 

Some European countries now have negative interest rates, which means that the bank does not pay you interest on your deposit, but charges you a fee for holding your money.  In other words, you are charged an interest rate for having money in a bank.  One reason for this is the belief of neoliberal economists that consumers would prefer to spend their money than to watch it gradually wither away and that the spending will drive the economy to higher growth.

What is the growth rate of the economy?  It is difficult to know, because the measures of inflation have been tampered with in order to avoid cost-of-living adjustments for Social Security recipients and the payment of COLA adjustments in contracts........

Some of the dirty tactics used by the USA on nations it wants brought down

Will Venezuela prevail and come out stronger or will it go under?  Only time will tell.


From Misión Verdad translated and published at TeleSur
US Pressures, Threatens Against Venezuela Debt Restructuring

The U.S. Treasury has organized an assault via U.S. banks withholding notes of credit U.S. oil refineries need to be able to pay for Venezuela’s crude oil.

The U.S. Treasury Department has threatened holders of Venezuelan bonds that it would be problematic for them to deal with Venezuela’s executive Vice President Tareck El Aissami and the country’s Economy Minister Simon Zerpa, also head of finance for Venezuela’s State oil company PDVSA. El Aissami and Zerpa are Venezuela’s main financial negotiators and the U.S. government applied sanctions against the two fo them this year.

The development followed President Nicolas Maduro invitation to Venezuela’s creditors last week to meet in Caracas on Nov. 13 for talks on restructuring payment of US$60 billion of Venezuela’s bonds.

A financial terror campaign on steroids
Venezuela’s debt payments this year anticipate projections for payment of around US$8 billion in 2018 which will now be restructured.
Even though creditors are not forbidden under General License 3 of President Donald Trump’s Aug. 3 decree from participating in talks on Venezuela’s bonds, the U.S. Treasury has now said that any deal with El Aissami and Zerpa, both on the U.S. Treasury’s list of Specially Designated Persons, could be problematic, without referring directly to negotiations as such or to whether a possible agreement might break U.S. law. The U.S. Treasury went on to note that possible penalties for U.S. citizens could mean up to 30 years in prison or fines of up to US$5 million. In the case of financial institutions, the fines could go up to US$10 million.

In coordination with the U.S. Treasury pronouncements, Venezuela’s opposition media have supplemented the U.S. threats with “anonymous statements” supposedly implying that creditors are not planning to participate in the Nov. 13 meeting in Caracas allegedly on account of lack of comfortable facilities for the investors and fears about violence in Venezuela’s capital.

Along with news of this latest U.S. threat against Venezuela, international financial media also reported that on Nov. 8 a creditor of PDVSA’s 2017 bonds asked the International Swaps and Derivatives Association to determine whether the oil company had fallen into non-payment which would activate insurance payouts for credit non-compliance.

The Venezuelan authorities announced on Nov. 3 the start of the procedure to pay US$1.1 billion in capital and interest on the 2017 bond that expired on Nov. 2......

Million Masks March

Live feedhere  

13 US cities in bankruptcy yet world's self appointed policeman spends billions of $s on wars far away from home where defeat after defeat is the only outcome

Suicidal ... just like Rome was before its fall.
This list is from early this year.  By now, there might be additional cities on that list and many more planning to file for bankruptcy.

From PBS:
Which American municipalities have filed for bankruptcy?  
Across the country, from Vallejo, Calif. to Detroit, Mich., some cities that cannot repay their debts have taken the extreme step of declaring municipal bankruptcy.

Cities file for bankruptcy under Chapter 9 of the Bankruptcy Code. Yet before a city can declare Chapter 9 bankruptcy, the city must establish it is eligible to do so according to state law.

Chapter 9 bankruptcy is relatively rare. We’ve listed the cities and towns that have filed for Chapter 9 bankruptcy since 2008 on the map below.

According to bankruptcy attorney Karol Denniston, when a city owes money to its employees, pensioners, and creditors, these debts constitute a contract — similar to a business taking out a loan. If the debts cannot be repaid, a municipality may consider bankruptcy as a last resort to negotiate reduced financial liabilities.

But unlike individuals and corporations, cities are not always allowed to declare bankruptcy.

Bankruptcy is a federal process. In turn, a state must give its cities, towns, counties, and other municipalities — governmental administrative districts like irrigation authorities or hospital districts — the right to petition the federal government to restructure their debts.

Without permission from the state, the federal government granting a bankruptcy petition for a municipality would violate a state’s authority and therefore, the 10th amendment......

Similarities between Enron in its dying days and the America of today

Ever wondered if America will go the way of Enron? Remember how the "too big to fail"  Enron went bankrupt in the shortest possible time?  When Enron fell, thousands of Enron employees had no clue that they were working for a company which was just a house of cards. Most Americans are also clueless to the fact that their country has been hollowed out with the never-ending wars and that the top 1% (as usual) will be the only survivors and the rest will be left out in the cold not knowing what happened.   
There are so many similarities between Enron and what's happening in today's America.  Watch the documentary and see for yourselves.

BTW, please watch any long vids in my blog by clicking on the title at the top within the vid which will take you to YouTube so the YouTube poster can get the view count.



Below is a listing of top 10 energy companies that went bankrupt.
Andrew Topf writing at OilPrice:
 Running a multi-billion dollar energy company isn’t easy. Just ask the executives in the corner suites of some of the energy companies that have gone bust over the years. Some, like Enron, were brought down because of insider malfeasance. A few, like ATP, blamed damaging government policies, while others went off the rails due to market forces that left the company and its shareholders flat-footed, deep in debt, and eventually broke. Here are the bankruptcies that will be etched into the tombstones of failed energy fortunes for time immemorial.

1.    Enron. Bankrupt December 2, 2001. Assets $65.5 billion
Enron grew from a simple pipeline company into the world’s largest energy trader by using the Internet to buy and sell natural gas and electric power to help utilities and industrial power users hedge against price fluctuations. By 2000, Enron was worth an astonishing $68 billion, but when the U.S. Securities and Exchange Commission started investigating, it was revealed that much of the money was based on shady accounting practices and un-recorded losses. In one year, Enron’s stock price plummeted from more than $90 to less than $1, resulting in $11 billion in shareholder losses. The subsequent bankruptcy remains the largest in U.S. history. CEO Kenneth Lay and fellow Enron executive Jeffrey Skilling were convicted in 2006 of fraud and conspiracy. Lay died from a heart attack while awaiting sentencing. Skilling is still in prison........

USA spent $52.6 B on intelligence gathering

That figure is for this year alone.
How much of that figure goes into surveillance of Muslim immigrants, I wonder.
What I can't understand for the life of me is why the West  does  not either put a complete halt to immigration of Muslims or at least reduce the numbers drastically instead of letting their own countries go into bankruptcy  by spending such huge amounts of money to gather intelligence on the immigrants they have imported but are now suspicious that these same people might have terrorist links or are jihadis themselves? Isn't it better to cut off the snake's head, instead of nipping at its tail?

Here's something else to chew on:  Do you think the various surveillance organizations and corporations will ever want Muslim immigration to be curbed by even 1%?  If immigration of Muslims is either halted or cut, wouldn't it mean the end of their own spying careers and the end of such companies?

America the madhouse of the world .... Judge rules Detroit bankruptcy unconstitutional

What is it ... Detroit down and out for good or do we still get to see its gore and blood flowing freely?

...An Ingham County judge says Thursday's historic Detroit bankruptcy filing violates the Michigan Constitution and state law and must be withdrawn.

But Attorney General Bill Schuette said he will appeal Circuit Judge Rosemarie Aquilina’s Friday rulings and seek emergency consideration by the Michigan Court of Appeals. He wants her orders stayed pending the appeals, he said in a news release.

In a spate of orders today arising from three separate lawsuits, Aquilina said Gov. Rick Snyder and Detroit emergency manager Kevyn Orr must take no further actions that threaten to diminish the pension benefits of City of Detroit retirees.

“I have some very serious concerns because there was this rush to bankruptcy court that didn’t have to occur and shouldn’t have occurred,” Aquilina said.

“Plaintiffs shouldn’t have been blindsided,” and “this process shouldn’t have been ignored.”.....

Bankrupt Cities and counties and the reason why

The list here is missing many more cities.