Category Archives: Economy

Hang onto your wallets: Negative interest, the war on cash, and the $10 trillion bail-in

Remember those old ads showing a senior couple lounging on a warm beach, captioned “Let your money work for you”? Or the scene in Mary Poppins where young Michael is being advised to put his tuppence in the bank, so that it can compound into “all manner of private enterprise,” including “bonds, chattels, dividends, shares, shipyards, amalgamations . . .”? Continue reading

Another phony payroll jobs number

The Bureau of Labor Statistics announced Friday that the US economy created 271,000 jobs in October, a number substantially in excess of the expected 175,000 to 190,000 jobs. The unexpected job gain has dropped the unemployment rate to 5 percent. These two numbers will be the focus of the financial media presstitutes. Continue reading

US on the road to becoming a Third World country

On January 6, 2004, Senator Charles Schumer and I challenged the erroneous idea that jobs offshoring was free trade in a New York Times op-ed. Our article so astounded economists that within a few days Schumer and I were summoned to a Brookings Institution conference in Washington, DC, to explain our heresy. In the nationally televised conference, I declared that the consequence of jobs offshoring would be that the US would be a Third World country in 20 years. Continue reading

How Obama could beat the debt ceiling and go out a hero

On November 3, the US government will again run out of money due to a debt ceiling artificially imposed by Congress. This is the third time in four years that a radical faction has taken the country to the brink of default to extort concessions that are at best only marginally related to the budget. Continue reading

Killing off community banks: Intended consequence of Dodd-Frank?

At over 2,300 pages, the Dodd Frank Act is the longest and most complicated bill ever passed by the US legislature. It was supposed to end “too big to fail” and “bailouts,” and to “promote financial stability.” But Dodd-Frank’s “orderly liquidation authority” has replaced bailouts with bail-ins, meaning that in the event of insolvency, big banks are to recapitalize themselves with the savings of their creditors and depositors. The banks deemed too big are more than 30% bigger than before the act was passed in 2010, and 80% bigger than before the banking crisis of 2008. The six largest US financial institutions now have assets of some $10 trillion, amounting to almost 60% of GDP; and they control nearly 50% of all bank deposits. Continue reading

Freedom Rider: French workers show how to fight

Workers in the United States have learned some painful lessons: that they live on less than their peers in much of Europe and are woefully insecure in their jobs and retirements—if they have jobs and retirement plans, at all. What U.S. workers have not learned—or have forgotten—is how to fight. They can take some tips from the French, who “throw down the gauntlet at any mention of job loss or pay cuts.” Continue reading

Friday’s payroll jobs report

The 142,000 September payroll jobs reported Friday (2 Oct 2015) by the Bureau of Labor Statistics is too small to be consistent with the still high stock averages or the alleged economic recovery. Moreover, the BLS says that it over-estimated the July and August payroll jobs by 59,000. Continue reading

Time for the nuclear option: Raining money on Main Street

Predictions are that we will soon be seeing the “nuclear option”—central bank-created money injected directly into the real economy. All other options having failed, governments will be reduced to issuing money outright to cover budget deficits. So warns a September 18 article on ZeroHedge, titled “It Begins: Australia’s Largest Investment Bank Just Said ‘Helicopter Money’ Is 12-18 Months Away.” Continue reading

Finland and India workers send a message

When a country faces economic problems, it immediately calls for an austerity program to deal with the situation. Austerity does not mean that the wealthy will have to surrender their jet planes or their yachts, or use of personal expenses as tax write-offs. Continue reading

Near zero percent US federal funds rate since December 2008

Low rates benefit investors at the expense of savers, retirees and pensioners without paychecks needing income especially harmed. At near zero percent for nearly seven years, virtually none is forthcoming for most people. Continue reading

The age of finance capital and the irrelevance of mainstream economics

Despite the fact that the manufacturers of ideas have elevated economics to the (contradictory) levels of both a science and a religion, a market theodicy, mainstream economics does not explain much when it comes to an understanding of real world developments. Indeed, as a neatly stylized discipline, economics has evolved into a corrupt, obfuscating and useless—nay, harmful—field of study. Harmful, because instead of explaining and clarifying it tends to mystify and justify. Continue reading

The boss who fought for the working class

He was born into poverty in New Hampshire in 1811. Continue reading

Whither the economy?

The great problem with corporate capitalism is that publicly owned companies have short time horizons. Unlike a privately owned business, the top executives of a publicly owned corporation generally come to their positions late in life. Consequently, they have a few years in which to make their fortune. Continue reading

Quantitative easing for people: The UK Labour front-runner’s controversial proposal

Dark horse candidate Jeremy Corbyn, who is currently leading in the polls for UK Labour Party leader, has included in his platform “quantitative easing for people.” Continue reading

Where is Neo when we need him?

In The Matrix in which Americans live, nothing is ever their fault. For example, the current decline in the US stock market is not because years of excessive liquidity supplied by the Federal Reserve have created a bubble so overblown that a mere six stocks, some of which have no earnings commiserate with their price, accounted for more than all of the gain in market capitalization in the S&P 500 prior to the current disruption. Continue reading

Central banks have become a corrupting force

Are we witnessing the corruption of central banks? Are we observing the money-creating powers of central banks being used to drive up prices in the stock market for the benefit of the mega-rich? Continue reading

Trumping the federal debt without playing the default card

In a post on “Sovereign Man” dated August 14, Simon Black argued that Donald Trump may be the right man for the presidency. Continue reading

The US economy continues its collapse

Do you remember when real reporters existed? Those were the days before the Clinton regime concentrated the media into a few hands and turned the media into a Ministry of Propaganda, a tool of Big Brother. The false reality in which Americans live extends into economic life. Continue reading

Massive movement of cash from Fed prior to 9/11

CHICAGO, Il—Although the 9/11 Commission and Federal Bureau of Investigation claimed they thoroughly investigated suspicious “put options” placed against the shares of United and American Airlines, as well as Swiss Re and Munich Re prior to the 9/11 terrorist attacks, they failed to investigate another set of suspicious financial transactions prior to 9/11. Continue reading

The Greek coup: Liquidity as a weapon of coercion

Former Greek finance minister Yanis Varoufakis is now being charged with treason for exploring the possibility of an alternative payment system in the event of a Greek exit from the euro. Continue reading

EU’s Greek debt austerity plan rejected by the IMF

I have maintained since the so-called Greek Debt “crisis” began back in 2010, I believe it was, that the imposition of austerity on Greece could not possibly work and that the only solution was to write down the debt to a level that Greece could service and introduce reforms that loosen the hold the oligarchs have on the Greek economy. The current Greek government has taken the same position, and now the IMF has joined us. Continue reading

How America became an oligarchy

According to a new study from Princeton University, American democracy no longer exists. Using data from over 1,800 policy initiatives from 1981 to 2002, researchers Martin Gilens and Benjamin Page concluded that rich, well-connected individuals on the political scene now steer the direction of the country, regardless of—or even against—the will of the majority of voters. America’s political system has transformed from a democracy into an oligarchy, where power is wielded by wealthy elites. Continue reading

$1.5 quadrillion time bomb

When investing becomes gambling, bad endings follow. The next credit crunch could make 2008-09 look mild by comparison. Bank of International Settlements(BIS) data show around $700 trillion in global derivatives. Continue reading

Greece: Breaking out of the euro prison

Slaying the euro minotaur is not easy. Greeks have been suffering for years now, having learned the hard way that prosperity with shiny euros in their hands was not miraculously just waiting around the corner. What was waiting was a hoard of German bankers, eager to buy up Greek islands for winter vacations, sleazy banks eager to syphon Greek earnings into offshore accounts, and more schemes by high financiers. Continue reading

The ECB’s noose around Greece’s neck

How central banks harness governments

Remember when the infamous Goldman Sachs delivered a thinly-veiled threat to the Greek Parliament in December, warning them to elect a pro-austerity prime minister or risk having central bank liquidity cut off to their banks? (See January 8 post here.) It seems the European Central Bank (headed by Mario Draghi, former managing director of Goldman Sachs International) has now made good on the threat. Continue reading

Death, drugs, and HSBC

How fraudulent blood money makes the world go round

Recent reporting on illegal tax evasion by the world’s second largest bank, HSBC, opens a window onto the pivotal role of Western banks in facilitating organised crime, drug-trafficking and Islamist terrorism. Governments know this, but they are powerless to act, not just because they’ve been bought by the banks: but because criminal and terror financing is integral to global capitalism. Now one whistleblower who uncovered an estimated billion pounds worth of HSBC fraud in Britain, suppressed by the British media, is preparing a prosecution that could blow wide open the true scale of criminal corruption in the world’s finance capital. Continue reading

Swimming with the sharks: Goldman Sachs, school districts, and capital appreciation bonds

Remember when Goldman Sachs—dubbed by Matt Taibbi the Vampire Squid—sold derivatives to Greece so the government could conceal its debt, then bet against that debt, driving it up? It seems that the ubiquitous investment bank has also put the squeeze on California and its school districts. Not that Goldman was alone in this; but the unscrupulous practices of the bank once called the undisputed king of the municipal bond business epitomize the culture of greed that has ensnared students and future generations in unrepayable debt. Continue reading

Whatever became of economists and the American economy?

According to the official economic fairy tale, the US economy has been in recovery since June 2009. Continue reading

Why public banks outperform private banks: Unfair competition or a better mousetrap?

In November 2014, the Wall Street Journal reported that the Bank of North Dakota (BND), the nation’s only state-owned bank, “is more profitable than Goldman Sachs Group Inc., has a better credit rating than JPMorgan Chase & Co. and hasn’t seen profit growth drop since 2003.” The article credited the shale oil boom; but as discussed earlier here, North Dakota was already reporting record profits in the spring of 2009, when every other state was in the red and the oil boom had not yet hit. The later increase in state deposits cannot explain the bank’s stellar record either. Continue reading

Our house of cards

As John Williams ( has observed, the payroll jobs reports no longer make any logical or statistical sense. Ask yourself, do you believe that retailers responded to the very disappointing Christmas season by rushing out in January to hire 46,000 more retail clerks? Continue reading

The December 2014 payroll jobs report

On January 9, the Bureau of Labor Statistics reports that a quarter of a million new jobs were created in December. Continue reading

EU showdown: Greece Takes on the vampire squid

Greece and the troika (the International Monetary Fund, the EU, and the European Central Bank) are in a dangerous game of chicken. The Greeks have been threatened with a “Cyprus-Style prolonged bank holiday” if they “vote wrong.” But they have been bullied for too long and are saying “no more.” Continue reading