Economy, Banks, Gold, and other stuff.

[DOR]

Record numbers of families on food stamps. (23,087,886 households in January receiving average monthly $274.04) SNAP Monthly Data

Average monthly Supplemental Nutrition Assistance Program (SNAP) payment in the latest (January) data was down 1.2% from a year earlier, according to the table you cited. Must have forgotten that part, eh?

The National School Lunch Program reached 677,000 fewer children in January 2013 than in January 2012 (-2.1%). There were 27.1 million fewer lunches served (-4.5%), and 196,000 fewer people enrolled in the WIC (women-infants-children) Supplemental Nutrition program (-2.2%) and spending on RA-SNAP (from the Recovery Act) was $180.7 million lower (-26.8%).

But, that doesn’t support the story that Americans are a bunch of freeloaders, does it?

. . . . .

LESS people [sic] actually working now than a year ago but again more statistical manipulation of unemployment figures occurs here.

In March 2012, the (seasonally adjusted) number of Americans employed was 142.034 million. One year later, that figure was 143.286 mn, up 1.252 mn or +0.9%. For reference, the labor force rose by 817,000 (+.5%) and the population by 2.246 mn (+0.7%).

Private employment was up 1.8% (sa) and 1.9% (nsa).

= = = = =

Keep deluding yourself if you want to . . .

[snapper]

Yet the number of families is up? To me that just shows more inconsistencies in the system of reporting figures to facts. You count employment as part time sure - I can accept those numbers have risen marginally. Bernanke has spent getting on for $2trillion to get how much? And he's going to keep going until it reaches 6.4? Seriously?

[doppelganger]

Shops actually ran out of gold as our public went beserk yesterday.

[DOR]

Yet the number of families is up? To me that just shows more inconsistencies in the system of reporting figures to facts. You count employment as part time sure - I can accept those numbers have risen marginally. Bernanke has spent getting on for $2trillion to get how much? And he's going to keep going until it reaches 6.4? Seriously?

Number of families up . . .
Supplement per family down . . .
You have a problem comprehending that?

- - - - -

Employment: Sorry!

If you wanted to discuss full-time, please say so, since “employment” has a very specific meaning in economics and statistics.

Full time employment, March 2012: 115,290,000
Full time employment, March 2013: 115,903,000
Difference: +613,000 or +0.5%.

The low point in US civilian employment (seasonally adjusted) was December 2009, when there were 137.96 million jobs. The latest figure is 143.286 million. That’s an increase of 5.326 million over the course (thus far) of the depression.

[snapper]

Well bravo for the Government and the Fed! How much have they spent on 'stimulus packages' and QE to achieve such wonderful performance? The deficit last year was over $1trillion and Obama has no intention of attempting to deal with it which mean that the Fed cannot stop QE.

Not that it's as rosy as you paint it: "Record 89,304,000 Americans 'Not in Labor Force' -- 296,000 Fewer Employed Since January" http://cnsnews.com/news/article/reco...ployed-january

As for astralis 'conspiracy theory'; "According to today's data from the US Mint, a record 63,500 ounces, or a whopping 2 tons, of gold were reported sold on April 17th alone, bringing the total sales for the month to a whopping 147,000 ounces or more than the previous two months combined with just half of the month gone." US Mint Sells Record 63,500 Ounces Of Gold In One Day | Zero Hedge

[Doktor]

Gold is dropping in value, they will re-buy later when the price will be lower.

Sounds smart to me.

[DOR]

Well bravo for the Government and the Fed! How much have they spent on 'stimulus packages' and QE to achieve such wonderful performance? The deficit last year was over $1trillion and Obama has no intention of attempting to deal with it which mean that the Fed cannot stop QE.

Not that it's as rosy as you paint it: "Record 89,304,000 Americans 'Not in Labor Force' -- 296,000 Fewer Employed Since January" Record 89,304,000 Americans 'Not in Labor Force' -- 296,000 Fewer Employed Since January | CNS News

As for astralis 'conspiracy theory'; "According to today's data from the US Mint, a record 63,500 ounces, or a whopping 2 tons, of gold were reported sold on April 17th alone, bringing the total sales for the month to a whopping 147,000 ounces or more than the previous two months combined with just half of the month gone." US Mint Sells Record 63,500 Ounces Of Gold In One Day | Zero Hedge

In the past five years, the US economy has grown by $2.3 trillion, in real terms. The EuroZone shrank during that period by $50 billion.

Given the differences in unemployment in these two places, and the massive knock-on to families and society in general, I’d say that spending pretty much trumps austerity in the best textbook experiment to date.

To wit,

[snapper]

In the past five years, the US economy has grown by $2.3 trillion, in real terms. The EuroZone shrank during that period by $50 billion.

Given the differences in unemployment in these two places, and the massive knock-on to families and society in general, I’d say that spending pretty much trumps austerity in the best textbook experiment to date.

Firstly I think such a comparison based on 'austerity versus stimulus' would be too simplistic. I know Krugman likes to paint it that way but it's simply not true that Europe hasn't done a version of QE - albeit on a smaller scale. As you know the UK has actively engaged in QE but leave that aside. In the eurozone, where by the Maastrict Treaty bail outs were officially not permitted they have HAD to engage in bail outs 6 times so far (Ireland, Portugal, Greece 1 and 2, Cyprus and Spanish banks) and each bailout - although technically a 'loan' - actually represents a loosening of policy. Then you have LTRO 1 and 2 where credit was made available to banks below even ECB interest rates and direct ECB purchases of Italian and Spanish bonds on the secondary market. So it is NOT 'all austerity' in the eurozone as you would paint it - if it had been the euro would have fractured. There are other differences also such as the average leverage rates of banks which is far higher in the eurozone than in the US.

However relating to the US in particular where you say growth has been $2.3 trillion, in real terms. Actually I'd call that a pretty awful return in any event. The Bush and Obama 'stimulus packages' combined are worth over $1.5 trillion and are possibly by the Fed keeping interest rates and bond yields at artificially low rates - the Fed balance sheet has grown over $3 trillion. But of course the deficit and the debt continue to grow at a rate of over $1 trillion per year... to me for this to have been 'success' the US would now be in state where it could look to decrease the deficit - that after all is the purpose of 'going for growth'. In fact in reality all the US has done is tried to create bubbles - real growth has nothing to do with this. Sure the US has taxed more and borrowed more and printed more to try to create an illusion of recovery by creating bubbles but is still no nearer even attempting a balanced budget. The growth needed to do that is not there. Nor has the deficit declined or the debt gone away. Success? Not really.

[DOR]

snapper,

The austerity vs. stimulus debate is at the core of serious macroeconomic discussions these days, for several reasons. First, it is extremely urgent. Second, it is very important. And third, we have in front of us the rarest of all economic experiments: one where highly similar conditions are met with diverse policy responses. Economists are drooling over their Old Boy ties to get at this one.

The reason Europe is, belatedly, shifting gears; and the reason Japan finally is moving forward; is because they can see that what is working in the US is not what they've been doing.

But, if you’re following the debate as closely as your posts seem to suggest, you know all this. So, I have to wonder why you won’t accept that the main topic of half the serious scholarly economic journals is exactly this debate.

Didn’t you know?

. . .

And, you must be aware that the Maastricht Treaty has been honored more in the breech than in the observance, and for a very long time.

And, you must be aware that in comparison to other large economies – the EU and Japan – the $2.3 trillion in real growth the US has registered since 2007 is stunningly good.

So, what’s exactly is the point of saying that being the only major economic region in the world to actually turn in positive results is “a pretty awful return” ? Did you mistakenly think we had just been through a typical recession, and should by now have come out strongly and gone right back into the next one, just as we did over and over in the 1950s—1980s?

[snapper]

DOR Sir (I presume) I do follow the debate as much as I can in my spare time and because my family are investors. I am aware of the main arguments, or schools of thought, that are employed to justify what is going on and to criticise what it going on. I suppose my analysis of the 'truth' (relatively speaking) just comes out that this neo- Keynesian and Macro-monetarism - for both are being employed albeit in different measures in different places - boils down to piling up a load of debt that it now seems they can confiscate when they please (a la Cyprus) and theft by devaluation. If that makes me an 'Austrian' so be it. The actual US 'stimulus' + QE is nearer $10 trillion since 2008 - to try to create bubbles!

I never supported the bank bailouts. I have not supported ANY bailout in Europe as it means a loss of sovereignty and therefore democracy. Countries and electorates should be free to decide for themselves - even to make mistakes, though I would advocate a 'sound money' policy. But in Europe they are using the economics for political reasons.

In the US Obama is doing much the same only trying to con people that the economy is getting better. Hell if throwing newly printed cash at a broke business or country was all it took we'd all be rich! It doesn't work but I suppose your answer to the eurozone is MORE money to bankrupt countries. Mine is let them go and let the market find a true price for their currency. In the US the $ is only supported by QE, they cannot stop printing and ultimately it will be devalue to loss of confidence and default. The yuan then becomes the world reserve currency but Obama and Bernanke are praying for a miracle that isn't coming. The whole point of 'splurge' is to create enough growth to start dealing with deficits. Not a glimpse of a hope there.

I suppose basically I just come from the other side of the fence. I agree it is a most interesting experiment - I only wish it were hypothetical and not as dangerous as it is.

[DOR]

DOR Sir (I presume) I do follow the debate as much as I can in my spare time and because my family are investors. I am aware of the main arguments, or schools of thought, that are employed to justify what is going on and to criticise what it going on. I suppose my analysis of the 'truth' (relatively speaking) just comes out that this neo- Keynesian and Macro-monetarism - for both are being employed albeit in different measures in different places - boils down to piling up a load of debt that it now seems they can confiscate when they please (a la Cyprus) and theft by devaluation. If that makes me an 'Austrian' so be it. The actual US 'stimulus' + QE is nearer $10 trillion since 2008 - to try to create bubbles!

I never supported the bank bailouts. I have not supported ANY bailout in Europe as it means a loss of sovereignty and therefore democracy. Countries and electorates should be free to decide for themselves - even to make mistakes, though I would advocate a 'sound money' policy. But in Europe they are using the economics for political reasons.

In the US Obama is doing much the same only trying to con people that the economy is getting better. Hell if throwing newly printed cash at a broke business or country was all it took we'd all be rich! It doesn't work but I suppose your answer to the eurozone is MORE money to bankrupt countries. Mine is let them go and let the market find a true price for their currency. In the US the $ is only supported by QE, they cannot stop printing and ultimately it will be devalue to loss of confidence and default. The yuan then becomes the world reserve currency but Obama and Bernanke are praying for a miracle that isn't coming. The whole point of 'splurge' is to create enough growth to start dealing with deficits. Not a glimpse of a hope there.

I suppose basically I just come from the other side of the fence. I agree it is a most interesting experiment - I only wish it were hypothetical and not as dangerous as it is.

Madam snapper (I'm told),

The financial big boys siezed sovereignty from national governments long, long ago. Hence, there shouldn't be any concern that whatever sovereignty might still be left is at risk.

No serious economist suggests that the absence of stimulus in America would have left us better off, not a one. Higher unemployment, lower economic activity and chaos in the markets. What kind of person would have the cold, heartless world view that focuses with debts due decades from now, rather than hunger today?

How much stimulus would be acceptable to the right wing? Enough for two meals a week, instead of five? 12% unemployment, rather than 7%?

How much?

--David

[cyppok]

documentary from
The Secret World Of Gold | Zero Hedge

[snapper]

Madam snapper (I'm told),

The financial big boys siezed sovereignty from national governments long, long ago. Hence, there shouldn't be any concern that whatever sovereignty might still be left is at risk.

No serious economist suggests that the absence of stimulus in America would have left us better off, not a one. Higher unemployment, lower economic activity and chaos in the markets. What kind of person would have the cold, heartless world view that focuses with debts due decades from now, rather than hunger today?

How much stimulus would be acceptable to the right wing? Enough for two meals a week, instead of five? 12% unemployment, rather than 7%?

How much?

--David

David, I know the French have recently started calling both married and unmarried Ladies 'Madame' but I'll stick to the old style thanks - Mademoiselle.

The financial big boys siezed sovereignty from national governments long, long ago. Hence, there shouldn't be any concern that whatever sovereignty might still be left is at risk.

That is quite a claim you are making when you consider it. If this is true then our Governments are almost meaningless since the "financial big boys siezed sovereignty from national governments long, long ago". What does it matter then how I vote? If this is true 'democracy' is a sham... Well don't worry, I agree. Obama would have bailed out the banks just as much as Bush did and in the UK Cameron would have done exactly what Brown did in regard to the banks. But I never supported the bank bailouts, I don't believe in 'too big to fail' (and jail!) and all the 'crony capitalism' that such actions illustrate. As the saying goes "Capitalism without bankruptcy is like Christianity without Hell"; if you are not allowed to go bankrupt what is the incentive to do good business? It's a license to do whatever you want without regard - only the public pays. I reject such a system entirely. I therefore oppose the seizure of Government by the 'financial big boys'. Such a Government-private corporate alliance is symptomatic of certain forms of Government we remember from 1930s Europe. Doing well in business depends on who you know and bribe or 'contribute' to. As regards sovereignty obviously if 'my' Government doesn't represent me but only represents the 'financial big boys' then I need to reclaim the Government to have any hope of sovereignty.

No serious economist suggests that the absence of stimulus in America would have left us better off, not a one. Higher unemployment, lower economic activity and chaos in the markets. What kind of person would have the cold, heartless world view that focuses with debts due decades from now, rather than hunger today?

Well it seems that your answer is hunger tomorrow! I never supported the bank bailouts but now that their bad debts have been transferred to the public accounts I do not see why good money (and 'magic money' courtesy of QE) should be further thrown at the problem. Greece is broke, let them devalue and go. The US and UK should be honest, default and be damned. Start again and perhaps this time without Central Banks and with some sound money. As for professional economists who don't support this 'stimulus' and QE there are quite a few within the Austrian school. I direct your attention to the Mises Institute.

How much stimulus would be acceptable to the right wing? Enough for two meals a week, instead of five? 12% unemployment, rather than 7%?

How much?

I am not sure that I fit so easily into your compartmentalisation of 'right' and 'left'. To me there is just more Government or less. The GOP who want to subsidise their pet private industries are as bad as the Democrats who in the name of 'social justice' want to keep people as dependency slaves. "It is not an endlessly expanding list of rights ---the "right" to an education; the "right" to health care; the "right" to food and housing. That is not freedom. That is dependency. Those are not rights. Those are the rations of slavery -- hay and a barn for human cattle." Alexis de Tocqueville.

I think I would say it is not for me or the Government to decide (let alone the Fed!) to decide what level of unemployment is correct. Obviously I would prefer no unemployment as would any sane and vaguely feeling person. It is for the market to decide. However by creating and pouring $billions into crony capitalism where some are 'too big to fail' and by taxing those 'free' business's that make an honest profit you are hindering real employment and reducing the profits that otherwise might be used to address the deficits.

--Sara

[snapper]

As for the gold and silver 'collapse', it doesn't 'spook' me one bit. The price has risen for 10 years so it hardly represents a loss for long term holders such as my family. As the price collapse was triggered by selling GLD and SLV, that is paper positions which there is not enough real gold or silver in the world to cover, it is no surprise to hear that there is now a shortage of real gold and silver. Thus the Chinese gold exchange had to close on Friday; Chinese Gold Exchange Sold Out - Begins Importing From Switzerland Personally I have taken advantage of it to buy some gold Maples for myself. Why? Because without investing in gold my family would NEVER have survived the last century where our home was started off in the Austro Hungarian Empire, then became part of Poland and experienced hyper inflation, then became part of the Ukraine under the Soviets (which my grandfather escaped by coming West) and only a few years ago managed to return home. All the time our gold has been in Switzerland... If it had not been the Soviets would have confiscated it and there would have been no point my grandfather escaping. In a world where your home can change countries 3 times in a century and currencies come and go and devalue and rise in value what is the most stable asset? Well gold has not done us badly.

[DOR]

Mademoiselle,

I use the point about sovereignty to counter the notion that “ANY bailout in Europe [as it] means a loss of sovereignty and therefore democracy.”

Markets (read: large financial institutions) rule, OK?

In 1994, James Carville said, “When I die, I want to come back as the bond market. You can intimidate everybody.”

The April 2013 IMF Global Financial Stability Report points out that the world holdings of bank assets alone are 162% of global GDP, and if bonds and equities are added in, the total rises to $259.2 trillion, or 370% of GDP (a mere $70 trillion).

In the US, the comprehensive is 425% of US GDP, in the EU 460% of EU GDP and in Japan 550% of Japanese GDP. Small potatoes, compared to Luxembourg (2,015%), the UK (786%), Denmark (667%) or the Netherlands (663%). See: [ IMF Global Financial Stability Report (GFSR) -- April 2013 -- Table of Contents ]

What does it matter how you vote? Well, do you think there’s a difference between the parties on, say, social issues? The treatment of poor people, women, minorities or AIDS? How about looking at how the tax burden would be divvied up under different leadership? There’s lots of things that matter.

President Obama continued the bank and corporate bailouts started under President Bush. The alternative was too horrible to even contemplate.

. . .

“if you are not allowed to go bankrupt what is the incentive to do good business?”

Ever boycott a company because you didn’t like their ethics?
I have, and when enough people do, it works.

. . .
“Hunger tomorrow”

OK, I’ll buy that. Because, hunger today is real, and hunger tomorrow is one possible scenario, and not the most likely one.

. . .

“Start again.”

Not an option. Break the global economy and hundreds of millions will be pushed to the brink of starvation, and scores of millions, perhaps hundreds of millions will die, or lead short, brutal lives at near-starvation levels. We tried that in the 1930s, and we learned that it’s not a moral option.

You, and I, may not like the steps needed to keep the global financial system afloat, but the alternatives are simply wrong.

. . .

Education, healthcare, food, housing . . . those may, or may not be ‘rights’ as you see them, but they are urgent national interests. Where education, healthcare, food and housing are inadequate, nations fail.

That’s not freedom.
That’s not democracy.
That’s neglect.
And, in my world view, that’s wrong.

. . .

“No” unemployment implies stagnation.
North Korea has “no” unemployment.
It isn’t exactly the optimal economic model.