The 2008 Financial Crisis Never Ended: Program to Destroy Independent Middle Class Continues

Which Do you Prefer? End the FED

15 Signs That The Middle Class In The United States Is Being Systematically Destroyed

#1 78 million Americans are participating in the “gig economy” because full-time jobs just don’t pay enough to make ends meet these days.

#2 In 2011, the average home price was 3.56 times the average yearly salary in the United States.  But by the time 2017 was finished, the average home price was 4.73 times the average yearly salary in the United States.

#3 In 1980, the average American worker’s debt was 1.96 times larger than his or her monthly salary.  Today, that number has ballooned to 5.00.

#4 In the United States today, 66 percent of all jobs pay less than 20 dollars an hour.

#5 102 million working age Americans do not have a job right now.  That number is higher than it was at any point during the last recession.

#6 Earnings for low-skill jobs have stayed very flat for the last 40 years.

#7 Americans have been spending more money than they make for 28 months in a row.

#8 In the United States today, the average young adult with student loan debt has a negative net worth.

#9 At this point, the average American household is nearly $140,000 in debt.

#10 Poverty rates in U.S. suburbs “have increased by 50 percent since 1990”.

#11 Almost 51 million U.S. households “can’t afford basics like rent and food”.

#12 The bottom 40 percent of all U.S. households bring home just 11.4 percent of all income.

#13 According to the Federal Reserve, 4 out of 10 Americans do not have enough money to cover an unexpected $400 expense without borrowing the money or selling something they own.

#14 22 percent of all Americans cannot pay all of their bills in a typical month.

#15 Today, U.S. households are collectively 13.15 trillion dollars in debt.  That is a new all-time record.

Read More: http://theeconomiccollapseblog.com/archives/15-signs-that-the-middle-class-in-the-united-states-is-being-systematically-destroyed

Welcome To The Third World, Part 28: The “Bottom Half” “Bolsters” The Economy By Going Into Debt

the rich already have all the stuff they need and are now just letting the cash accumulate as it comes in from stock dividends and executive salaries, while everyone else is borrowing to hold onto what they have.

This of course doesn’t work in the long run because interest payments eventually eat whatever raises the working-class borrower gets in even a strong economy. When the inevitable recession hits, the debt remains while income falls, pushing millions of people over the edge.

This happened in 2008 with mortgages and will soon happen with the mini-bubbles of auto, credit card and student loans. At which point the rich will re-deploy all the cash they’ve accumulated to buy up the assets the rest will have to sell at deep discounts.

This kind of “harvesting” sounds more like pre-revolution France than the modern society outlined in economics textbooks. Which means the eventual reaction of the harvested might not fit the relatively docile patterns of the recent past.

Read More: https://www.dollarcollapse.com/bottom-half-bolsters-economy-depleting-savings/

 

Four Charts Prove The ‘Economic Recovery’ Is Just A Fed-Induced Entitlement Program For The Wealthy

Federal Reserve Logo

“Economic recovery” in America no longer means what it used to mean.  Historically “economic recovery” was largely characterized by job and wage growth, distributed across the income spectrum, and a rebound in GDP growth to north of ~3%-5%.  These days, the notion of “economic recovery” has been hijacked by the Fed and bastardized in such a way that they celebrate “asset bubbles” rather than real growth in economic output.

Presented as ‘exhibit A’, here is the Fed’s modern-day definition of “economic recovery” (chart per Bloomberg):

Of course, digging a little deeper you quickly realize that the problem is even worse than what the data in the chart above might suggest.  While overall average wage growth has been anemic since 2009, to say the least, it has been almost nonexistent for those on the bottom end of the income spectrum.

Soaring markets helped the top 1 percent of Americans increase their slice of the national wealth to 39 percent in 2016, according to the Fed’s Survey of Consumer Finances. The bottom 90 percent of families held a one-third share in 1989; that’s now shrunk to less than one-quarter.

The current one has helped millions of people find work; it’s also benefited asset-owners far more than people who trade their labor for a paycheck. Income distribution, already the most unequal in the developed world, is getting worse. And that’s starting to influence everything from America’s spending habits to its elections.

In fact, those in the bottom quintile of wage earners in the U.S. basically haven’t experienced wage growth, on a real basis, since the late 1970’s whereas those in the top quintile have nearly doubled theirs.

Of course, none of this should be particularly surprising to those who are paying attention as the top quintile of earners are the only ones financially positioned to benefit from Yellen’s economic recovery asset bubbles…

Meanwhile, the growing wealth disparity has seemingly put America on a collision course with political chaos as fringe candidates on both the Left and Right increasingly promise to have an ‘easy’ solution for the seemingly inescapeable economic plight of the poorest households.

Unfortunately, the sad truth just might be that there is no solution, absent some transformational technological advancements, and that the U.S. has just reached the maturity phase of it’s ‘business cycle’…and while the Fed may try to cover up that fact by repeatedly blowing assets bubbles, per the charts above, they’re only making the problem worse with each successive iteration.

The Banking Secret that Neither Economists Nor Laypeople Know … Which Makes the Fatcats Richer, While Destroying the Real Economy

The Dollar Meets Darkside of the Moon | Unite Or Die
Private Banks – Not the Government or Central Banks – Create 97 Percent of All Money

Who creates money?

Most people assume that money is created by governments … or perhaps central banks.

In reality – as noted by the Bank of England, Britain’s central bank – 97% of all money in circulation is created by private banks.

Bank Loans = Creating Money Out of Thin Air

But how do private banks create money?

We’ve all been taught that banks first take in deposits, and then they loan out those deposits to folks who want to borrow.

But this is a myth …

The Bank of England the German central bank have explained that loans are extended before deposits exist … and that the loans create deposits:

The above is from an official video released by the Bank of England.

The Bank of England explains:

Whenever a bank makes a loan, it simultaneously creates a matching deposit in the borrower’s bank account, thereby creating new money.

The reality of how money is created today differs from the description found in some economics textbooks:

  • Rather than banks receiving deposits when households save and then lending them out, bank lending creates deposits.

***

One common misconception is that banks act simply as intermediaries, lending out the deposits that savers place with them. In this view deposits are typically ‘created’ by the saving decisions of households, and banks then ‘lend out’ those existing deposits to borrowers, for example to companies looking to finance investment or individuals wanting to purchase houses.

***

In reality in the modern economy, commercial banks are the creators of deposit money …. Rather than banks lending out deposits that are placed with them, the act of lending creates deposits — the reverse of the sequence typically described in textbooks.

***

Commercial banks create money, in the form of bank deposits, by making new loans. When a bank makes a loan, for example to someone taking out a mortgage to buy a house, it does not typically do so by giving them thousands of pounds worth of banknotes. Instead, it credits their bank account with a bank deposit of the size of the mortgage. At that moment, new money is created. For this reason, some economists have referred to bank deposits as ‘fountain pen money’, created at the stroke of bankers’ pens when they approve loans.

***

This description of money creation contrasts with the notion that banks can only lend out pre-existing money, outlined in the previous section. Bank deposits are simply a record of how much the bank itself owes its customers. So they are a liability of the bank, not an asset that could be lent out.

Similarly, the Federal Reserve Bank of Chicago published a booklet called “Modern Money Mechanics” in the 1960s stating:

[Banks] do not really pay out loans from the money they receive as deposits. If they did this, no additional money would be created. What they do when they make loans is to accept promissory notes in exchange for credits to the borrowers’ transaction accounts.

Monetary expert and economics professor Randall Wray explained to Washington’s Blog that:

Bank deposits are bank IOUs.

Read More: www.washingtonsblog.com/2017/03/entire-banking-system-based-fraud.html

How The Federal Reserve Is Setting Up Trump For A Recession, A Housing Crisis And A Stock Market Crash

Yellen Says Raise the Rates

By Michael Snyder, on March 13th, 2017

Most Americans do not understand this, but the truth is that the Federal Reserve has far more power over the U.S. economy than anyone else does, and that includes Donald Trump.  Politicians tend to get the credit or the blame for how the economy is performing, but in reality it is an unelected, unaccountable panel of central bankers that is running the show, and until something is done about the Fed our long-term economic problems will never be fixed.  For an extended analysis of this point, please see this article.  In this piece, I am going to explain why the Federal Reserve is currently setting the stage for a recession, a new housing crisis and a stock market crash, and if those things happen unfortunately it will be Donald Trump that will primarily get the blame.

On Wednesday, the Federal Reserve is expected to hike interest rates, and there is even the possibility that they will call for an acceleration of future rate hikes

Economists generally believe the central bank’s median estimate will continue to call for three quarter-point rate increases both this year and in 2018. But there’s some risk that gets pushed to four as inflation nears the Fed’s annual 2% target and business confidence keeps juicing markets in anticipation of President Trump’s plan to cut taxes and regulations.

During the Obama years, the Federal Reserve pushed interest rates all the way to the floor, and this artificially boosted the economy.  In a recent article, Gail Tverberg explained how this works…

With falling interest rates, monthly payments can be lower, even if prices of homes and cars rise. Thus, more people can afford homes and cars, and factories are less expensive to build. The whole economy is boosted by increased “demand” (really increased affordability) for high-priced goods, thanks to the lower monthly payments.

Asset prices, such as home prices and farm prices, can rise because the reduced interest rate for debt makes them more affordable to more buyers. Assets that people already own tend to inflate, making them feel richer. In fact, owners of assets such as homes can borrow part of the increased equity, giving them more spendable income for other things. This is part of what happened leading up to the financial crash of 2008.

But the opposite is also true.

When interest rates rise, borrowing money becomes more expensive and economic activity slows down.

For the Federal Reserve to raise interest rates right now is absolutely insane.  According to the Federal Reserve Bank of Atlanta’s most recent projection, GDP growth for the first quarter of 2017 is supposed to be an anemic 1.2 percent.  Personally, it wouldn’t surprise me at all if we actually ended up with a negative number for the first quarter.

As Donald Trump has explained in detail, the U.S. economy is a complete mess right now, and we are teetering on the brink of a new recession.

So why in the world would the Fed raise rates unless they wanted to hurt Donald Trump?

Read More: theeconomiccollapseblog.com/archives/how-the-federal-reserve-is-setting-trump-up-for-a-recession-a-housing-crisis-and-a-stock-market-crash