Currency Warfare, Trade Barriers, The People it Hurts

An excerpt from Bob Chapman's weekly publication.

November 24 2010: A frayed social net, foreclosure crises caused by banks, few jobs available, standards of living to fall, Open currency warfare, FBI finds more insider trading, Bernanke and quantitative easing, toxic economy still poisoning the system.

The social net has become a bit more frayed. Soon extended unemployment benefits will cease and 2 million Americans will have to dip into their savings, if they have any. This is an outgrowth of the effects of free trade, globalization, offshoring and outsourcing. We have lost 8.5 million jobs over the last ten years to this destructive process. We have seen more than 42,000 manufacturing plants leave the country as well. There are now more than 17 million Americans unemployed and the U6 official government unemployment figures 17%. If you remove the bogus birth/death ration, the real figure is 22-5/8%. Over that ten-year period we have lost about 5.5 million manufacturing jobs or about 1/3rd of that labor force. As recent as 1985, 25% of output was in manufacturing, now it is close to 11%. America’s physical infrastructure is in a shambles, so that transnational conglomerates can bring us cheap goods to suppress inflation and bring these companies mega-profits, which they keep stored offshore to bypass taxation. They presently have $1.7 trillion in such profits.

This in part has been caused by deficit spending and the creation of money and credit since August 15,1971, when the US left the gold standard. It is not surprising as a result that 81% of the US economy is considered in poor shape and that the IMF fears a social explosion. You could call this a financial death spiral. There is no question the economy is moribund and the next stage could be dead in the water and that is after QE1 which saw $2.5 trillion enter the economy. The first installment of QE2 is in process and that $600 billion will grow to another $2.5 trillion, to be followed by Q3 and a further injection of another $2.5 trillion. There are those who say QE2 should be eliminated. We wonder if they realize that if it is, that the American economy, and most of the world’s economy will collapse. If we had allowed a severe recession to play itself out in the early 1990s all this would have never happened, but that is not what Wall Street and banking wanted. We should have bitten the bullet three years ago, but the elitists wanted to take the problem at least one step further to be sure the final result would bring about one-world government. Readers, that is what this is really all about.

Video at the link: Nixon on August 15. 1971 discussing amongst other things the decoupling of the US dollar from gold.

We have a foreclosure crisis in real estate of epic proportions caused by the criminal behavior of banks. The use of food stamps reaches an all-time high each and every day. Soon unemployment will be more than 23%. If you want to see where we are headed look at the unemployed figures projected from the 1930s. U3 was 25.2% and U6 was 37.6%. In addition if you use the 1990 methodology the CPI inflation figure is about 4.5%. If you use the 1980 basis real inflation is 8.5%. We have ceased looking at official government figures because very simply, they are bogus and have no connection to reality. The unemployment situation is so bad that millions are filing for disability. That comes after extended unemployment benefits end.

It is not that people do not want to work but that there are simply few jobs available. 8.5 million of our jobs have gone to foreign nations with cheap abundant labor and they won’t return until we erect tariffs on goods and services. As a result 14.3% of adult Americans live in poverty. That is cash income before taxation of $22,000, or less, for a family of five. This does not include existing assets or food stamps or unemployment benefits. This situation is similar to the early 1960s, which was solved by the Keynesian “War on Povertyâ€