Economics

Economics
Max and Stacy give you all the financial news you need as the Global Insurrection Against Banker Occupation gathers pace. Occupy Wall Street, Crash JP Morgan, Buy Silver and DEFINITELY visit MaxKeiser.com!
Updated: 1 hour 3 min ago

U.S. Colleges Continue to Get Ripped Off by Hedge Funds

21-Feb-2017

This post covers a theme I’ve discussed on many occasions over the past several years, namely how “alternative asset managers” are making enormous sums of money by ripping off public pensions as well as college endowments. Send this to anyone who naively tells you we live in a meritocracy. The sad truth of the matter, is we operate within an economy which incentivizes all of the worst types of behavior, where people can earn millions of dollars a year while failing…

Read the rest here.

Over-Regulation Has Criminalized the Practice of Medicine

21-Feb-2017

The average person has little exposure to the criminalization of everyday enterprise in America via over-regulation and outsized penalties for even accidental violations of rules and regulations. One field that continues to be burdened with excessive/counter-productive regulations and outsized penalties is the practice of medicine.

I received the following email from a physician correspondent:

“As you will see, physicians have to deal with the federal government’s increasingly crazy and copious rules (like which patients they can screen for disease and how often).

The following is an email ad I received for an expensive service that provides no benefit to the ill and injured of America. It’s bureaucratic nonsense.”

Here is the email ad:

Can you afford a $1.1 million penalty and a 50-year exclusion from Medicare? That’s what one New Jersey provider is facing. And he’s not alone. In the last couple of months a facility in Utah is now under a 30-year exclusion, and a New York physician is now excluded from Medicare for five years.

These penalties and exclusions not only affect those providers that are intentionally fraudulent. Even an innocent mistake can land you in serious legal and financial hot water. Being tagged as “excluded” by the Office of the Inspector General (OIG) can crush your practice — especially considering the new guidelines that went into effect just a couple of days ago (on Feb. 13th).

Tomorrow, a leading healthcare attorney will walk you through the new exclusionary rules that just took effect so that you can really understand what will keep you off of the OIG’s hit list.

Here are just a few of the practical, easy-to-implement tactics you’ll receive by attending this 60-minute online training:

–Determine specifically who you should screen (individuals and entities) and how often

–Avoid being placed on the list for lack of compliance if there is a match on your team

–Find out what other legal actions can have collateral damage resulting in exclusion

–Learn how to get reinstated onto Medicare after an exclusion period expires

–Head off the top “flags” that lead to exclusions

–Master documentation requirements making your files audit-proof

–And so much more…

To make matters worse, if you employ an excluded employee (even accidentally), any funds paid to them must be paid back to Medicare/Medicaid promptly, and if you don’t take action quickly enough your entire practice could be at risk. Are you really ready to lose serious revenue by getting thrown out of Medicare and your other private insurers?

Don’t take the chance. Invest just 60 minutes of your time and attend this step-by-step, plain-English online training session that will provide you with the tools you need to protect yourself, your staff and your practice. Don’t wait, sign up today.

This is just the tip of the iceberg of healthcare compliance costs and penalties that are far more punishing that the “crimes.” If you wonder why America pays the highest cost per person for uneven healthcare coverage and care, take a look at this chart of the administrative system that has mushroomed into an incredibly costly bureaucratic monster that provides zero care.

Add layer after layer after layer of new complex regulations to the practice of medicine, and soon enough you need millions of paper-pushing employees to monitor compliance, enforce compliance, pursue administrative and criminal charges of non-compliance, file claims and counter-claims, defend the innocent from false accusations, write hundreds of pages of new regulations, and so on.

Yes, there is a place for common-sense regulations, and procedures to vet caregivers and track standards of care, etc.

But the system is now so onerous and out of control that the practice of medicine now requires far more attorneys and compliance-regulatory-paper-pushers than it does doctors and nurses.

This is but one example of America’s obsessive penchant for criminalizing and over-regulating everyday life. No wonder America has over 20 million people with felony convictions, many for drug-related offenses that should have been treated as medical conditions (such as addiction).

In America, every “crime” deserves a heavy and often-life-destroying penalty–even non-compliance “crimes” committed by overworked innocents.

This criminalization of everyday life is not just insanely costly and insanely counter-productive–it’s insanely punitive. It is the output of a sick society, a sick culture and a sickness-unto-death system of governance.

If you found value in this content, please join me in seeking solutions by becoming a $1/month patron of my work via patreon.com.

[KR1035] Keiser Report: Ingredients for a New Global Crisis

21-Feb-2017

We discuss an EU blinded by hate and a currency unpegging from the dollar . . . watch what happens. In the second half Max continues his interview with Nomi Prins, author of ‘All the Presidents’ Bankers’, about Trump’s cabinet and advisers of the Goldman Sachs swamp.

Putin Gold Buying Is Back – Buys One Million Ounces In January

21-Feb-2017

Russia Gold Buying Returns – Adds Substantial One Million Ounces To Reserves In January

Russia gold buying returned in January with the Russian central bank buying a very large 1 million ounces or 37 metric tonnes of gold bullion.

The increase in the gold reserves came after Russia did not buy a single ounce in December – a move seen as potentially a signal or an olive branch to the U.S. and the incoming Trump administration.


It also came after Russia had accelerated its gold buying in the final months of the Obama Presidency. October 2016 saw an increase of 1.3 million ounces or 48 metric tonnes and this was the largest addition of gold to the Russian monetary reserves since 1998. Indeed, it was the biggest monthly gold purchase in this millennium for the Russian central bank.

November 2016 saw another increase of 1 million ounces. Some analysts saw the increased Russian gold buying as a parting ‘gift’ and warning shot by Putin and Russia to his rival outgoing President Obama and the monetary and financial elites in the U.S.

Russian gold reserves increased a very large 199.1 tonnes in 2016 alone.

Read full story here…

Interested in learning more about physical gold and silver?
Call GoldCore and speak with a Gold and Silver Specialist today!

The Billionaire-Owned, Corporate Media is as Worthless as Ever

20-Feb-2017

Rather than focus its journalistic energy on chronicling the economic insecurity plaguing so many of our fellow Americans, the billionaire-owned corporate media appears entirely obsessed with chattering endlessly about Russia conspiracy theories and domestic coup plots. Instead of looking in the mirror and admitting how its countless errors and propaganda pushing led to multiple humanitarian disasters over the last couple of decades, the oligarch-owned mainstream media insist upon a narrative that Trump the individual is at the root of our problems, as opposed to an entrenched executive branch with excessive power. This is because the mainstream media isn’t actually concerned about our cancerous, systemic metastasizing statism, it merely doesn’t want Trump in charge of it. I, on the other hand, want to dismantle that unconstitutional state entirely and transfer power to the American people where it belongs — self-government. Does anyone actually think for a second the media would be this adversarial if Hillary won?

Read the rest here.

There’s a Difference: Fake News and Junk News

20-Feb-2017

The mainstream media continues peddling its “fake news” narrative like a desperate pusher whose junkies are dying from his toxic dope. It’s slowly dawning on the media-consuming public that the MSM is the primary purveyor of “fake news”– self-referential narratives that support a blatantly slanted agenda with unsupported accusations and suitably anonymous sources.

Many of these Fake News Narratives are laughably, painfully bogus: that President Trump is a Russian tool, to take a current example. (That President Obama was a tool of the neocon Deep State–no mention of that. According to the MSM, America doesn’t even have a Deep State–har-har…the joke’s on you if you are credulous enough to swallow this risible absurdity.)

But the real danger isn’t fake news–it’s junk news. Junk News (the title of a 2009 book by an Emmy Award–winning journalist– Junk News: The Failure of the Media in the 21st Century) —is related to Junk Science and Junk Food.

Junk science is presented as “science” but cherry-picks data to support a specific but unstated agenda–an agenda that requires downplaying or overlooking conflicting data.

One common example of junk science is the approval of new medications by the FDA. If you actually dig into Phase III data, you may well find that the “benefits” of the new wonder-drug are barely above statistical chance, and the potential interactions with commonly prescribed (or imbibed) drugs are ignored.

This is how we end up with medications with an unfortunate side-effect: deathfrom misadventure, addiction, in combination with other commonly prescribed meds, etc.

(For more junk science, check out how meds going off-patent magically get FDA approval for additional –and immensely profitable– patent protection.)

Junk food is now so ubiquitous we lose sight of its core qualities: it is “food” in the sense of being digestible, but it is harmful above very small, occasional doses. It is not “food” in the context of natural food or healthy food–in those contexts, “junk food” must be placed in parentheses because it doesn’t qualify as “food.”

It is empty calories, garbage that generates a host of chronic illnesses, but not “food” in the sense of being nutritious, life-supporting or healthy.

Junk news is like junk science–cherry-picked to support a corporate agenda–and like junk food in being digestible but toxic. As this brilliant essay explains, the unemployment rate is an premier example of junk news (and junk economics–a thriving subculture of junk science and junk news–just read any Paul Krugman spew for an example.)

Our Miserable 21st Century (Commentary Magazine)

An unemployment rate of 4.7% once meant full employment and rising wages for the laboring class–but alas, now it is just another ginned-up junk-econ/junk-news “statistic” designed to push a bogus narrative: everything is awesome (as the financial security of the bottom 80% swirls the drain).

I’ve updated my Ministry of Propaganda chart to reflect the rise of Junk News:

The key difference between fake news and junk news is plausibility: fake news is innuendo, anonymous sources, and risibly false accusations presented as “fact” (heh); junk news is, like junk science, supported by carefully cherry-picked “data” that has been selected to support the corporate-Deep State narrative being pushed by the corporate mainstream media.

Media junkies on the tragic path to extinction believe the junk news, non-junkies see through the manipulation. If you think it’s “progressive” to support war-mongering, neoliberal exploitation and “support our values” social-justice distractions — sorry, you’re a junkie addicted to toxic smack. You’re doomed if you can’t get the corporate mainstream media monkey off your back.

If you’re ready to kick your addiction to junk (i.e. corporate Deep State-approved) news, read this twice: Our Miserable 21st Century.

If you found value in this content, please join me in seeking solutions by becoming a $1/month patron of my work via patreon.com.

Check out both of my new books, Inequality and the Collapse of Privilege ($3.95 Kindle, $8.95 print) and Why Our Status Quo Failed and Is Beyond Reform ($3.95 Kindle, $8.95 print). For more, please visit the OTM essentials website.

Gold The “Ultimate Insurance Policy” as “Grave Concerns About Euro” – Greenspan

20-Feb-2017

“The eurozone isn’t working …” warns Greenspan

“I view gold as the primary global currency” said Greenspan

“Significant increases in inflation will ultimately increase the price of gold”

“Investment in gold now is insurance…”

Source: Getty

Alan Greenspan, the former head of the Federal Reserve has warned that the euro may collapse, saying that he has “grave concerns” about its future.

The imbalances in the economic strength of euro area countries make the continued function of the single currency area a primary concern, said former US Federal Reserve chairman Alan Greenspan in an interview (February issue of “Gold Investor”) with the World Gold Council.

He suggests the inequality is largely down to a north/south geographical divide which means the division between the northern and southern EU countries is too big. The bloc’s more prosperous nations such as Germany consistently fund the deficits of those in the south, and that simply can’t go on, said Greenspan.

“The European Central Bank (ECB) has greater problems than the Federal Reserve. The asset side of the ECB’s balance sheet is larger than ever before, having grown steadily since Mario Draghi said he would do whatever it took to preserve the euro,” he said.

“And I have grave concerns about the future of the euro itself… The eurozone is not working”, added Greenspan.

Greenspan, chairman of the Federal Reserve from 1987 and 2006 has consistently been critical of the eurozone and the European Monetary Union (EMU). He has long maintained that the eurozone was doomed to fail because the impact of the divergent cultures and economies in the bloc has been grossly underestimated.

Read full story here…

Interested in learning more about physical gold and silver?
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The Mother Of All Financial Bubbles

19-Feb-2017

We are now living under the biggest financial asset bubble in history.

Yet, those in power responsible for creating it are doing their utmost to downplay the risks and soothe the masses with a false “Everything is fine” narrative.

Make no mistake, though; when this bubble bursts, it is going to be unimaginably destructive.

Click here to read the full article

HBOS: A Faustus for our times

19-Feb-2017

Over the course of a few years, HBOS banker, Lynden Scourfield, with the help of ‘turnaround’ expert, David Mills, smashed and grabbed hundreds of millions of pounds worth of assets from otherwise viable businesses in the United Kingdom. So a court found when they sentenced the men to decades behind bars. Together the gang of men and one woman shook down companies as personal ATMs in order to finance a life of debauchery in coastal Spain. Double Down talks to Ian Fraser, author of Shredded: Inside RBS: The Bank that Broke Britain, about his role in uncovering this massive crime and why it is that no regulators, politicians or the Serious Fraud Office were interested in the then alleged fraud when they were made aware of it. Today the HBOS gang have been jailed, but will the victims ever receive compensation?

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[KR1034] Keiser Report: Trump Implosion That Wasn’t

18-Feb-2017

In this episode of the Keiser Report, Max and Stacy discuss the Trump implosion that wasn’t. In the second half, Max interviews Nomi Prins, author of All the Presidents’ Bankers, about Trump’s cabinet and advisers of the Goldman Sachs swamp.

The Washington Post Actually Takes Russian Government Money (Unlike the Websites It Helped Slander)

17-Feb-2017

Earlier this week, Tucker Carlson interviewed the Washington Post’s Erik Wemple and brought up the fact that the paper regularly receives money from the Russian government to publish propaganda known as “native advertising” within the contents of the newspaper. This was news to me…

Read the rest here.

President of US Mint AP: Trump Tariff Could Divorce Physical Silver From Spot Prices!

17-Feb-2017

Roy Friedman, President of US Mint Authorized Purchaser Manfra, Tordella, & Brookes Joined the Show This Week For A Fascinating Discussion On the Inner Workings of the US Physical Silver Bullion Market.
Friedman Discusses The Coming Asset Reallocation, Physical Silver Bullion Shortages, & Trump: Could The Donald Be the Catalyst That Finally Separates the Paper and Physical Silver Markets?

This Is How the Status Quo Unravels

17-Feb-2017

The politics of the past 70 years was all about horsetrading who got what share of the growing pie: the “pie” being cheap energy, government revenues and consumption, sales and profits.

Horsetrading over a growing pie is basically fun. There’s always a little increase left for the losers, so there is a reason for everyone to cooperate in a broad political consensus.

Horsetrading over a shrinking pie is not fun. Everybody is shrilly demanding their piece of the pie should either grow or be left untouched; any cuts must come out of someone else’s slice.

Everyone turns on their most compelling emotion-based defense: “we wuz promised” is a reliable standard, as is “we need more money to defend the nation from the rising threat of XYZ.” “Help those in need” plays the heartstrings effectively–as long as the “help” comes out of somebody else’s pocket.

Everyone sharpens their knives, the better to carve a slice off somebody else’s slice of the pie. A passive-aggressive free-for-all ensues as everyone reacts with aggrieved defensiveness to any attempt to diminish their slice, even as they launch shrill attacks on everyone else’s defense.

As the pie shrinks, the motivation to join a broad consensus vanishes like mist in Death Valley.

Any cooperation is merely a brief tactical move designed to carve a big chunk off another player’s slice. Once that’s accomplished, the alliance quickly splinters as the survivors battle over the meager spoils.

Any victory is temporary, as a new alliance will arise to decimate the previous winner. Winners in the zero-sum game of divvying up a shrinking pie merely set themselves up as the juicy target for the next ferocious attack by the resentful losers.

Political survival boils down to masking the cuts behind illusory “victories” and bogus projections of solvency. Some modest policy tweak will be heralded as “saving Social Security,” meanwhile the end result is a reduction in the purchasing power of whatever benefits remain.

You may well get “what we wuz promised” but it will only buy 50% of what it did a few years ago, after taxes, inflation and “adjustments” are factored in.

Every compromise will be projected to restore solvency to imploding entitlement programs, but it will all be illusion. In two years, insolvency will rear its ugly head again.

The debts, unfunded liabilities, demographics and diminishing pools of income to tap are beyond policy tweaks and minor cuts. Take a look at these charts to grasp the unwelcome realities: sorry, we can’t “grow our way out of debt” because the debts and unfunded liabilities are simply too large and expanding at too fast a rate.

Here’s the current federal spending pie: 55% is entitlements and interest. Both of those are set to soar as the populace ages and interest rates rise.

Massive, ever-expanding deficits will push federal debt much higher, pushing interest rates up. Everybody wants to raise taxes on “the rich,” but a funny thing happens when tax revenues soar above a threshold–the economy spirals into recession, and employment, profits and tax revenues all plummet, forcing even higher deficits.

Entitlement program deficits are exploding higher, and all the conventional policy fixes are like building sand castles to stop a tsunami.

The problem is global: as we consume the cheap energy, what’s left to extract and refine is more expensive, so energy costs rise. As the population ages, entitlements soar. As the “growth fixes everything” model fails under the burden of skyrocketing debts, the harsh reality becomes unavoidable:

We haven’t “grown” at all. What we’ve done is borrow from future generations to create the illusion of growth.

Here’s another look at debt: the global bond market has soared from $10 trillion to $100 trillion.

Fragmentation, discord, discontent, class war: this is the inevitable result of a shrinking pie. Our political, social and economic systems have no history or memory of how to navigate this systemic Degrowth successfully. Everyone will blame someone else for the insolvency and failure, and that is not a recipe for successful adaptation.

Here’s a taste of what lies ahead:

Welcome to the new dark ages, where only the wealthy can retire

As I always say, don’t focus on retiring comfortably; focus on working comfortably.

If you found value in this content, please join me in seeking solutions by becoming a $1/month patron of my work via patreon.com.

Check out both of my new books, Inequality and the Collapse of Privilege ($3.95 Kindle, $8.95 print) and Why Our Status Quo Failed and Is Beyond Reform ($3.95 Kindle, $8.95 print). For more, please visit the OTM essentials website.

Every Citizen Should Own 3.5 Ounces of Gold Bullion – Central Bank

17-Feb-2017
  • Central bank governor has “dream” for every citizen to own at least 100 grams of gold bullion
  • Governor of Central Bank of Kyrgyzstan said the central bank had sold around 140 kilos of gold bullion to the domestic population already
  • Central Asian country’s central bank continues to diversify into gold bullion
  • “Gold can be stored for a long time … doesn’t lose its value for the population as a means of savings”
  • “I’ll try to turn the dream into reality faster…”

The Governor of the Central bank of Kyrgyzstan has told Bloomberg News in an interview that it is his “dream” for every citizen in his country to own at least 100 grams (3.5 ounces) of gold as a way to protect their savings.

Diversifying one’s savings so that they are not solely held in fiat paper or electronic currencies in frequently vulnerable banks in a vulnerable banking and financial system is prudent advice in these uncertain times.

Indeed, there is a strong case to be made that the policies of most central banks in recent years have led to a massive debt bubble and the risk of another financial crisis, currency wars and currency debasement on a grand scale.

Hence, it was very refreshing to hear the actual governor of a central bank passionately advocate and proactively helping his fellow citizens to protect their savings by diversifying and having an allocation to physical gold.

Read full story here…

Interested in learning more about physical gold and silver?
Call GoldCore and speak with a Gold and Silver Specialist today!

The Road to Hell Was Paved with College Safe Spaces

16-Feb-2017

There are many obvious things to be concerned about when it comes to Trump (his love affair with Goldman Sachs, support of civil asset forfeiture and a statist mentality overall), so why are we being manipulated into focusing all our outrage on a largely invented conspiracy theory that he is some sort of Putin stooge?

The reason is both extremely simple and extraordinarily clever. The main reason Russia is such an obsession within the fake “resistance,” is because it’s a way to demonize Trump while defending the police state apparatus. In other words, it prevents well-meaning people from taking Trump to task on issues that really matter. This way, they can simply distract with Russia noise and continue to loot and pillage society at large. It’s genius really. You create a fake yet salacious narrative and rally the gullible public around it in order to distract from real domestic problems. This way you can be “anti-Trump,” while at the same time being pro-Wall Street fraud, corporatism, war, unconstitutional spying, and the national security state. This is your “resistance” as it stands today.

Read the rest here.

Political Consensus Is Splintering into Class Wars

16-Feb-2017

In years past, we spoke of class war between the haves and the have-nots. It’s no longer that simple. Now the traditional political consensus is splintering into multiple class wars between overlapping camps of the protected and the unprotected, those who’ve been promised entitlements and privileges that are no longer affordable and those expected to pay more taxes.

In the modern era, the phrase Class War is rooted in the socialist/Marxist concept that the conflict between labor (the working class) and capital (owners of capital) is not just inevitable—it’s the fulcrum of history. In this view, this Class War is the inevitable result of the asymmetry between the elite who own/control the capital and the much larger class of people whose livelihood is earned solely by their labor.

In Marx’s analysis, the inner dynamics of capitalism inevitably lead to the concentration of capital in monopolies/cartels whose great wealth enables them to influence the government to serve the interests of capital. Subservient to capital, the laboring class must overthrow this unholy partnership of capital and the state to become politically free via ownership of the means of production, i.e. productive assets.

This Class War did not unfold as Marx anticipated. The laboring class gained sufficient political power in the early 20th century to win the fundamentals of economic security: universal public education, labor laws that prohibited outright exploitation, the right to unionize, and publicly funded pensions.

(The alternative explanation for this wave of progressive policies is that prescient leaders of the capital/state class ushered in these reforms as the only alternative to the dissolution of the status quo. Labor reforms began in Germany and Great Britain in the late 19th century Gilded Age, and another wave of reforms were enacted in the decade-long crisis of capitalism in the Great Depression.)

Though the conventional view is that this failure of capitalism to devolve as expected proves Marx’s analysis is without merit, it can also be argued that the state-capital partnership was far more flexible than early Marxists anticipated: sharing enough of the wealth generated in the industrial revolution with the laboring class to enable a stable, productive middle class benefited the state-capital class by creating a new strata of consumers (of goods, services and credit) who greatly enriched industrial and financial capitalists and the state, which could raise unprecedented sums in payroll and income taxes.

Basking in the luxury of hindsight, it’s easy for us in the present day to forget the often-violent struggles between labor and capital that characterized the early 20th century: anarchists bombed Wall Street, and the Powers That Be sent in armed forces to suppress efforts to unionize entire swaths of industrial workers.

While the middle class of professionals, small business owners, traders and entrepreneurs can be traced back to the birth of modern capitalism in the 15th century, the emergence of a mass middle class of tens of millions of wage-earners with the purchasing and borrowing power created by stable employment was a unique feature of 20th century capitalism.

In effect, the middle class was the Grand Truce in the class war: the state’s imposition of regulations and a social safety net on unfettered capital resolved labor and capital’s primary conflict by sharing the output of capitalism’s bounty.

Many assets had to be put in place to enable this vast distribution of wealth to tens of millions of laborers: a cheap, abundant source of energy (fossil fuels—coal, oil and natural gas), an efficient, accessible transportation network, a financial system that could extend credit to millions of households, and a government with the tax revenues and resources to fund public works that were too risky or out of reach for private-sector capital.

In the latter third of the 20th century, the permanence of this version of state-capitalism was unquestioned: laborers would always be able to enter the middle class, and opportunities for advancement would always be open to those with middle class access to education and credit.

There was no compelling reason to believe this consensus was about to fray and potentially dissolve, and no reason to think that rather than being a permanent feature of advanced capitalism, the middle class was a one-off based on cheap energy, surging productivity and the boost-phase of credit expansion.

But now income and wealth inequality are rising sharply, and capital is pulling far ahead of labor, which is creating a vast and quickly-widening divide between the classes.

Class Warfare: It’s More Than Just Income

Fast-forward to today, and an unexpected series of class wars are emerging as this longstanding social contract frays: social mobility has declined, fostering a divide between the traditional working class (also known as the lower-middle class) which finds itself increasingly exposed to the corrosive winds of globalization and neoliberal policies, and the upper-middle class of highly educated professionals and technocrats who have benefited from these policies, securing protected employment in higher education, government and Corporate America.

Commentator Peggy Noonan’s influential essay described America’s nascent class war as pitting the protected class—those with secure pay and benefits —against the unprotected class of those with insecure employment and benefits.

In other words, the divisive economic issue is not simply the quantity of each class’s income and wealth, but the quality of their respective economic security.

For example, if an unprotected household earns $80,000 in wages and $30,000 in benefits in a good year of full employment in benefits-rich jobs, and $30,000 in wages and no benefits in the following not-so-good year of zero-benefits part-time work, their average total earnings are $70,000 per year—a very respectable middle class income.

But compare the difficulties posed by losing healthcare benefits and getting by on a $50,000 decline in wages vs the secure $70,000 earned year-after-year-after-year by a protected household.

Consider the anxieties burdening the insecure household of two workers who cannot count on having benefits and full-time employment, who see their savings or retirement accounts built up in good years drained in bad years. Houses bought in good years are forced into foreclosure in bad years.

To take another example: compare the security of a tenured professor in higher education with the insecure zero-benefits earnings of a lecturer whose annual teaching contract is subject to cancelation or modification every year of his/her career.

Not only is the lecturer paid about half the salary of the tenured professor, when the lecturer nears retirement age, he/she has no pension other than Social Security, while the tenured professor has an ample retirement package of pension and healthcare coverage. Both taught the same number of years, but one faces a sunset of poverty or the need to keep working far past the conventional retirement age of 65, while the other can retire comfortably and continue teaching or doing research for satisfaction rather than financial necessity.

The underlying problem is the number of tenured positions is far smaller than the number of qualified candidates. The overproduction of highly educated workers is dividing the middle class into haves and have-nots along new fault lines.

Class Warfare: Economic and Cultural

This widening gap between the Protected and the Unprotected is not just economic; it’s also cultural.

The Mobile Cosmopolitans who secure protected positions have little exposure to the challenges of the unprotected, whom they typically interact with only as an employer giving instructions to maids, nannies, dog-walkers, waiters, etc. Sociologist Charles Murray described this widening cultural gap in his 2012 book Coming Apart: The State of White America, 1960–2010.

Murray made the case that America’s cultural elite—the mobile, highly educated and largely urban upper middle class, i.e. the protected class—is a reservoir of the traditional values (marriage, attending church, setting goals, etc.) that are fading in working-class unprotected America.

Murray posited that various behaviors and associations characterize each class. The working class, for example, volunteers to serve in the U.S. military, while the elites are in civilian positions of power (for example, those who order the working-class volunteers into America’s permanent wars.) The working class attend NASCAR races, the elite class pursues cultural enrichment, and so on.

While many commentators view Murray’s conclusions as overly negative, the recent presidential election has heightened the cultural divide he described between Hillary Clinton’s “deplorables” (who President Obama chided for their attachment to “guns and Jesus”) and the self-described (and oh so morally superior) “progressives.”

(The word is in parentheses because I have suggested that these self-anointed “betters” are at best fake-progressives, as they support exploitive neoliberal policies that are anything but progressive.)

It’s painfully obvious that the economic division between protected and unprotected overlays all too well on Murray’s cultural divisions.

The upper-middle “progressive” class has the sort of social/financial mobility and security—both higher quantities of income and wealth and higher qualities of security–that are out of reach of most of the country’s much larger number of unprotected households.

All the advantages that accrue to the upper-middle class—social mobility, access to higher education minus the crushing burdens of student loan debt, family and social connections that lead to lucrative careers, parents who can afford to give their offspring cars and down payments for homes—are accretive: each reinforces the others.

The intensity of life’s challenges is considerably different for each class. With higher income and greater security (such as having stable healthcare insurance), the protected class can afford to take better care of themselves; they have multiple layers of financial cushions against life’s inevitable difficulties such as layoffs, illnesses that require sick leave/costly procedures, auto accidents, etc.

For the protected elites, the intensity of these challenges is lessened by financial and social resources. Social connections lead to new employment in the same profession, gold-plated healthcare insurance covers most of the costs of illness, and ample auto insurance replaces the wrecked vehicle with minimum disruption.

Meanwhile, to the unprotected household, each of these difficulties is potentially devastating: a secure job may never be replaced, an illness may lead to bankruptcy, and the loss of a reliable vehicle may cripple the household’s ability to get to work and earn the money needed to buy another car.

The social contract of the 20th century established state-funded safety nets for those who experience layoffs and medical emergencies. But these programs were by and large designed to provide temporary aid to those who were “getting back on their feet.”

As the foundations of middle class mobility and security erode, these programs are now morphing into permanent, lifelong welfare systems. This is creating new social stresses and divisions.

The Pitchforks Are Being Sharpened

But this protected vs. unprotected isn’t the only Class War that’s brewing. Many of the protected feel their security is increasingly vulnerable, and others are tired of being tax donkeys. Everyone feels defensive and entitled to their current slice of the pie. As the pie shrinks, few will relinquish their claims voluntarily.

The net result: a shattering of political consensus into warring camps.

In Part 2: The Class War Playbook we show why the shrinking resource pie—of cheap energy, of cheap debt, of labors’ share of the economy, of the low-hanging fruit of globalization—will soon cleave any mass movement into competing classes.

Our complex, interdependent civil society will spawn equally complex and interdependent class conflicts as a result. In short: there won’t be one class war, there will be many, raging across social, political and economic battlefields.

Understanding how these many wars will be waged is critical to surviving them intact.

Click here to read Part 2 of this report (free executive summary, enrollment required for full access)

This essay was first published on peakprosperity.com, where I am a contributing writer, under the title “The Coming Class War”.

Launch of GOLD STANDARD Imminent? – Jim Willie

16-Feb-2017

The Chinese Are Putting in Place a Link Between Oil and Gold.  
The Petro-Dollar has almost completely vanished.
The Gold Standard is Emerging…

 

By Hat Trick Letter Editor Jim Willie:

The Gold Trade Note is gradually coming into view, its form within structured contracts is taking shape as components. the Petro-Dollar has almost completely vanished. The Petro-Yuan is essentially here in its infancy, in rudimentary form. the leap to the Gold Trade Note will be easy, once the pieces are aligned and in place. This new note for usage in secure trade settlement is in the inception process. It will be structured within existing trading vehicles and platforms.

The Russians and Chinese appear to be forming the basis for the payment vehicle within the oil trade. Consider it as a formal reflection of the Iran-India gold for oil trade.

Bilateral Oil for RMB Sale + Shanghai Gold Exchange = Gold Trade Note

This triangle is precisely what China and Russia are doing now. Russian oil & gas is being sold for Chinese Yuan, and then Yuan is traded for Gold at the Shanghai Gold Exchange. The trade is not complex at all. Oil for RMB for Gold, creating a transaction payment in gold terms. The part unclear is posted margin to confirm and seal the transaction. The immediate implication is that the Chinese RMB will have a quasi-gold link. The original model used might have been the Iranian oil sales to India, with payment completed using Turkish gold. Such gold for oil trade appears to have been commonly executed from 2006 to 2010, and likely beyond that date.

The Jackass has been expecting that the Gold Trade Note would be structured in a clever way, using swap contracts in major global commerce. It might be taking form in the triangle cited as the working template. Oil is the biggest commercial trade item. Soon comes the RMB-based contract for crude oil, traded in Shanghai. It will surely cause big waves, a major disruptive event.

STANDARDS AND CYCLES ANEW

The Petro-Dollar system has stood for 45 years. It has decayed into tatters. Its derivative foundation is being liquidated, a long painstaking process. A new disruptive model was forged in 2014 when Iran sold India oil, which was paid in gold, but delivered from Turkey. Gradually emerging is the Gold Trade Note, first in oil payment then later in general payments in shipped goods. It is evolving within the Chinese market from Russian energy sales, all conducted outside the USDollar sphere.

GOLD ENTERS THE TRADE EQUATION:

Click Here For Full Hat Trick Letter Analysis From Jim Willie:

[KR1033] Keiser Report: Trump’s First Hundred Hours

16-Feb-2017

In this episode of the Keiser Report, Max and Stacy discuss fast trains and high-speed rail presidents. In the second half, Max interviews Dr Michael Hudson, author of J is for Junk Economics, about the fake economy, the binned TPP trade deal and Trump: the first hundred hours.

Gold Is Undervalued Say Leading Fund Managers

16-Feb-2017
  • Gold is undervalued according to a record number of fund managers
  • Last time gold was considered undervalued, the price surged
  • BAML surveyed 175 money managers with $543 billion in assets under management
  • 34% of investors believe protectionism is the biggest threat to markets
  • Gold viewed as the best protectionist investment by a third of investors

Gold in USD – 10 Years (GoldCore)

For the third time in a decade fund managers surveyed by Bank of America Merrill Lynch (BAML) believe that gold is undervalued. After the last two occasions the price of gold shot up.

The Bank of America Merrill Lynch Fund Managers survey spoke to 175 money managers with $543 billion in assets under management. It provides key indicators each month of those who run and manage the world’s investments. The news that they are buying gold and believe it is undervalued, is worth paying attention to.

As we often mention the status quo amongst money managers is for them to be bearish about gold, regardless of the price and state of the global economy. But this month, a majority of those surveyed (by a net margin of 15%) believe that gold is a buy, something that hasn’t been seen since January 2009 and January 2015.

Read full story here…

Interested in learning more about physical gold and silver?
Call GoldCore and speak with a Gold and Silver Specialist today!

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