“The Canadian “U6″ is around 14% while the official is now edging past 7.5 percent. Canada calculates that number but doesn’t publish it to the mainstream media.

The jobless rate increased to 7.5 percent from November’s 7.4 percent and the recent low of 7.1 percent in September, Statistics Canada said today in Ottawa. Employment (CANLNETJ) rose by 17,500, the first gain in three months. Over the past six months, the number of jobs has grown by 7,400, compared with a gain of 191,800 in the first half of 2011.

The labor market may stay stalled in 2012 with unemployment averaging 7.4 percent, according to a Bloomberg News survey of economists taken last month. Prime Minister Stephen Harper said “the news isn’t all good” in today’s report, speaking to reporters in Edmonton, Alberta.

“Job growth has cooled,” said Doug Porter, deputy chief economist with BMO Capital Markets in Toronto, by telephone. “I wouldn’t at all be surprised if we are averaging 10,000 jobs a month, which won’t cut into the unemployment rate at all” over the next six months, he said. Source: (3) Bloomberg

As is with the USA, these numbers are sugar coated and do not portray the reality.

In the US, they have different measures. While the government uses what is known as the U3 rate of 8.6%, news media always ignores the more realistic U6 rate that now stands at 15.6%

The US U6 rate is defined as follows and is a much more accurate measure of counting people not working or under-employed:
” Total unemployed, PLUS all persons marginally attached to the labor force, PLUS total employed part time for economic reasons, as a percent of the civilian labor force PLUS all persons marginally attached to the labor force.” Source: http://www.bls.gov/news.release/empsit.t15.htm

In other words, those who have given up looking, are working part time and want full time work, or whose benefits have run out are NOT counted in the almost bogus rate presented by both government and the main stream media. The question becomes, what is Canada’s REAL unemployment rate comparable to the American U6 rate?

The Canadian “U6″ is around 14% while the official is now edging past 7.5 percent. Canada calculates that number but doesn’t publish it to the mainstream media. Indeed, 70% of Canadians are astute enough to know that the country’s economic problems are being papered-over by the people in charge.?? Source: (2) montreal gazette

The headline numbers on employment, for example, reflect neither the types of jobs (full-time salary/benefits v. part-time/self-employed) being “added” to the economy. It’s important to read the entire report.

Likewise with GDP numbers, consumer spending is highly dependent on available credit (as opposed to actual disposable income). Household debt levels have shot through the roof because too many people are struggling to make ends meet by increasing their debt load.

?The situation is particularly acute in BC where real incomes have fallen -6% since the 80s, while the cost of housing has increased +149% during the same period.????

References:

(1) BLS

(2) montreal gazette

(3) Bloomberg

“The environmental movement has turned into an ideological struggle replete with a military style hierarchy of policy makers and fund raisers. They invent what if scenarios and as each is defeated they throw out another to hyperventilate their followers.

Politicians such as Obama defer to this hysteria instead of getting to the facts of the matter. Obama will have to choose between his union base or the enviro-loon idealists. I’m guessing he knows that long term his bread and butter is from moderates and his union base so do not be surprised in the pipeline is approved within the next two months.

Protesting the development of the pipeline because it could result in spills is a ridiculous argument. Failure to develop the pipeline could result in greater catastrophe’s reminiscent of Exxon if we transport the oil by ship or other environmental issues are at play should we ship the oil by rail or truck. Any way you look at it, their are environmental costs and risks. The fact is, the pipeline is the safest and most environmentally friendly means of transportation. Environmentalists should actually be supporting Keystone for the very same environmental reasons they profess to maintain when they protest its development.

Economics needed

Anyone that has any understanding of the economics of producing bitumen also understand that the only way to be viable long term is to take an integrated approach. Meaning that the economics are very poor without upgrading. The spread between light and heavy is very volatile and is dependant on seasonal markets (ie asphalt during summer roasd building) and feedstock requirements for refiners. Refiners prefer heavy when the spread is high and lighter feedstock when the spread is low. The refiners in the US have been preparing for a long time to take heavier feeds. While we in Canada have been sitting on our thumbs. They have distracted us with the phoney CO2 problem, have been critizing us while they prepared to take our so called dirty oil.

There were once 7 upgraders for Alberta in the planning stages but the oil runup and collapse in 2008 put all those projects on hold. Who do you think controlled the prices? If you think these things happen by accident then you are truly naive and deserve your fate. The Americans have tied up Canadian companies by integrating with them by taking investment in our upstream production in exchange for their downstream refing assets. If this was such a bad investment then why is Cenovus, husky et al tied into american refining assets. Its the only way to stay in the game. But it is also puts the control in American hands. Wake up people before its too late.

“America is very close to a destructive tipping point,” co-authors Glenn Hubbard and Peter Navarro warn in their new book Seeds of Destruction. “We must change how we conduct our politics and economics…or we will inevitably go the way of all once-great nations and suffer an irreversible decline.” — by Aaron Task

Hubbard, dean of Columbia Business School, joined Dan Gross and I to discuss the “major structural imbalances” facing America, chief among them being the government’s profligate spending.

Hubbard, you may recall, was chairman of the President’s Council of Economic Advisers during George W. Bush’s first term. As you might expect, he is a strong advocate of smaller government and lower taxes. But Hubbard and Navarro, a business professor at UC Irvine, are also harshly critical of Bush’s “gross mismanagement” of the fiscal stimulus bequeathed to his administration by President Clinton. Specifically, Hubbard chastises his former boss for the creation of a new unfunded federal mandate, Medicare Part D.

But if Bush was a big spender, President Obama is “taking it to a whole other level,” Hubbard says, citing the familiar critiques of ObamaCare and Financial Reform and “excess government spending” in general.

In short, Hubbard believes Obama inherited a mess but has made it worse with nearly every one of his major policy initiatives and general governing philosophy.

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The great contradiction of what is called a depression is that all the wealth and riches are there. In the great depression eggs were plowed in to the ground on one coast while people starved on the other. All the resources were there including the labour force. There was a failure in imagination. It is like a house with full cupboards where a mother failed to find a way to feed all her children but overfed one bullying overgrown giant nephilim of a child. That is not a wise strong mother or a good government. Riches, ignorance and greed stultify good conscience. Democracy is the worst form of human Government except for all the others, said Churchill. The blessing on the poor is co-operation in the good conscience of the kingdom of God.
Matthew 5:3 Blessed are the poor in spirit: for theirs is the kingdom of heaven.

Another way to look at a depression is like constipation. A laxative word is required for the tightwads.
Deuteronomy 15:11 For the poor shall never cease out of the land: therefore I command thee, saying, Thou shalt open thine hand wide unto thy brother, to thy poor, and to thy needy, in thy land. Democracy is the worst form of human government, except for all the others, but truth is divine government. The truth is incontrovertible. Panic may resent it, ignorance may deride it, malice may distort it, but there it is.”
Winston Churchill Speech in the House of Commons (1916-05-17). Deuteronomy 32:4 states that “He is the Rock, his work is perfect: for all his ways are judgment: a God of truth and without iniquity, just and right is he.”

“What is especially frustrating is that supporters of 0% interest rates have a stark example of the policy’s failure staring them in the face: Japan. Following the bursting of its credit bubble in 1990, Japan eventually brought its equivalent of the Fed rate down to a then-unprecedented 0.25%. The nation proceeded to suffer a “Lost Decade” of economic stagnation that has never really ended. ” — Michaelson, WSJ

Many people are beginning to think that what is needed is a completely new way of looking at the basic concepts of wealth, commodity, production, and currency. We are so stuck in this current model that we’ve forgotten that “debt” is an abstract number written on a piece of paper. We’ve been convinced of its legitimacy, so we don’t question it. Some benefit from this arrangement, but the majority do not.

Just as in law, where what is perfectly legal one day can be made illegal the next, nothing is written in stone in the economic world. If an extortionist convinces you that you need to pay him, you will, but in a just world, he would be thrown in jail immediately. If you were conditioned to accept the extortionist’s claim as legitimate, the laws would change in his favor, and you would get used to it.

Gambling was a crime for many centuries, and then a few decades ago it became a legitimate form of leisure. The way we think about the creation of wealth reflects this change in attitude. The word “industry” has become confused with the idea of making money from bets; when throughout history it has meant the production of goods and/or the processing of materials for the production of goods.

We no longer think of usury as a crime, in fact it is almost considered standard business practice. Usury is not only about creating debt through the charging of interest, but as Ezra Pound defined it: “Usury is a charge made for the use of money regardless of production and often regardless of the possibility of production.”

The High Costs of Very Low Interest Rates by John Michaelson

The prevailing view among economists, policy makers and Federal Reserve Board governors is that a zero or near-zero short-term interest rate stimulates the economy—the lower the rate, the better. It is time to re-examine this conventional wisdom. In fact, lowering interest rates too much may not stimulate recovery, but actually slow it. Yes, there are benefits from zero rates, but not nearly enough to outweigh their pernicious consequences.

In the first place, the Fed’s policy of zero or near-zero interest rates means negligible returns on savings. Consumers thus have less to spend and those nearing retirement need to save more. The owners or managers of pension plans, foundations, trusts and the like must also make higher contributions to make up for lower investment earnings in order to meet their obligations. In the case of public pension plans, these higher contributions contribute to local and state fiscal crises.

Meanwhile, banks are able to make adequate returns by borrowing at near-zero rates and investing almost risk free and without effort in longer-term government debt, federal government-guaranteed debt, or in relatively riskless investment-grade debt—all at 3% to 4%. They have little incentive to go out and make loans to job-creating businesses that might have a higher yield but entail significant risk and effort.

In human terms, the Fed’s policy means emergency room nurses in Texas work longer hours to make up for low yields on CDs, dairy farmers in Iowa forgo equipment purchases to save more for retirement, charities for the homeless in Manhattan reduce services as foundations cut grants, and local governments from Albany to Sacramento close libraries to fund pension plan deficits.

The Fed and the U.S. Treasury are unable for many reasons to directly inject sufficient capital into the banking system to restore it to health. Thus the primary goal of the Fed’s policy is to provide nearly free capital to banks as a backdoor way of recapitalizing them. Secondarily, the low interest rate policy is intended to stimulate consumption, increase lending and spur investments to create jobs. Read the rest

What does the bible say about interest and usury?

Zekiel speaks plainly against usury: “Oppresses the poor and needy, commits robbery, does not restore the pledge, lifts up his eyes to the idols, commits abomination, lends at interest, and takes increase; shall he then live? He shall not live. He has done all these abominable things; he shall surely die; his blood shall be upon himself “(Ezekiel 18:12-13). ” Also, the Law of Moses says much:

“If thou lend money to any of my people that is poor by thee, thou shalt not be to him as an usurer, neither shalt thou lay upon him usury “(Exodus 22:25).

“Thou shalt not give him thy money upon usury, nor lend him thy victuals for increase” (Lev. 25:37).

“Thou shalt not lend upon usury to thy brother; usury of money, usury of victuals, usury of any thing that is lent upon usury “(Deut. 23:19).

“He that putteth not out his money to usury, nor taketh reward against the innocent. He that doeth these things shall never be moved” (PS. 15:5).

For people who so-called predicted this downturn (probably predicted it 1 year ago), they certainly are missing the real threat. No it’s no inflation, it’s deflation. Ever wonder why the US dollar is increasing in value while everything else crashes in price? (housing, oil, and all other commodities?). It’s called deflation, and something much worse than inflation. Cash is king and everyone is trying to get some, that is why the dollar is going up in value. Inflation will come, but only after deflation runs it’s course. The people who so-called predicted this in bay-street are just the band-wagon group, that predicted it after it already had started.

It is true that wages will fall, but not across the board. Wages will fall in the areas that have too many people looking for jobs, in this case I suspect that most of that 16% are people who were working factory jobs, and the factory closed. Waterloo Region here in Ontario has around 10% unemployment from factory closures, but thousands of high-tech job openings. The skills don’t match, so factories in the area may be able to reduce wages (if their unions will let them), but the technology sector is constantly increasing wages to try to keep employees from going to Seattle or Silicon Valley. If the net change turns out to be positive or negative will depend on the area, and how far wages fall for the jobs that have a glut of eligible workers now available.

The following article is an excerpt from Elliott Wave International’s free report, 20 Questions With Deflationist Robert Prechter. It has been adapted from Prechter’s June 19 appearance on Jim Puplava’s Financial Sense Newshour. To read the entire conversation, access the 20-page report here.

Jim Puplava: Bob, I want to pick up from last September. Since then we’ve had several quarters of positive economic growth. Asset classes rose substantially, CPI turned positive, gold has hit a new record, oil is close to $80 a barrel. I guess a lot of our listeners would like to know, have these events altered your views on deflation?

Robert Prechter: No, because we forecasted these events, and we forecasted them at the bottom in March and April of 2009. On February 23 in the Elliott Wave Theorist, I said that we were almost at the bottom; that ideally the S&P should get down in the 600s before turning up; and that the Dow was going to rally from that low up to about 10,000. We put that target out a few days after the low. The main thing we said at the time was that it was going to be only a partial retracement, in other words a bear market rally. By the end of it, we said people would be bullish on the economy, there would be positive economic numbers, investors would think we have made the turn, the Fed would take credit for having saved the financial system, and there would be optimism across the board. All of this has happened. And going into April 2010, few people in the fundamentalist or technical camp were looking for a downturn.

The final thing I said was that Obama’s popularity would rise into that peak, and on that one I was wrong. His ratings couldn’t even bounce during that period, which I found very surprising. But both Obama and George Bush’s popularity trends followed the real value of stocks, not the inflated dollar price of the stock market, which I find interesting.

As far as inflation and deflation go, we had deflation during the down cycle in 2008. Commodities fell hard, the stock market fell hard and real estate fell hard. But the recovery that we were looking for in the first quarter of 2009 was expected to be a reflationary, and it was. You saw a decline in credit spreads. You saw a rise from the lows in commodity prices and stock prices. All of that is perfectly normal. These are just waves ebbing and flowing. But the long-term trend is still down, and as this cycle matures we are going to see more and more evidence of deflation.

Editor’s Note: The article you are reading is just one small excerpt from Elliott Wave International’s FREE report, 20 Questions With Deflationist Robert Prechter. The full 20-page report includes even more of Prechter’s insightful analysis on fiat currency, gold, the Fed, the Great Depression, financial bubbles, and government intervention. You’ll learn how to protect your money — and even profit — in today’s environment. Read ALL of Prechter’s candid answers for FREE now. Access the free 20-page report here.

It seems today everyone has come to weigh a plan for the economy (even the Pope). This week, as G8 leaders gathered to argue about the best ways to heal the economic ills facing the world, the Vatican presented their own plan: share and be nice to each other.

The idea of economic and social cooperation (in fact, a description of reality that is all around us but rarely noticed) has been around for centuries. It was first observed by the ancients. It was first mentioned with rigor by the late medieval monks working in Spain. They gave scientific precision in the classical period and is the basis of progress in social theory in the 20th century.

In fact, it is an essential part of the case for freedom. It was the basis for the creed of our ancestors that they could rid themselves of tyrannical rule and still not descend into poverty and chaos. Failure to understand this idea is at the root of the pervasive bias against freedom and free enterprise in our time of the false “left versus right” paradigm.

According to the 144-page document released by The Vatican, called Charity In Truth, capitalism should not be like Tennyson’s nature, all red teeth and claws . The Pope says the economy “depends on the co-operation of the human family. ” Indeed, the Pope is not a fan of “pure” market by greed. He said that the idea of the market “must be shielded from influences of a moral character, has led man to abuse the economic process in a thoroughly destructive way.”

Many will likely scoff at the idea of a Catholic Pope’s analysis of the world economy or might dismiss the notion of “morality in markets.” Other might also condemn the Vatican in wielding economic advice, and admonish them to stay in their own area, that being organized religion. The reality of the situation is that the Pope is actually ahead of the curve, and religions like Christianity have been on the forefront of economic analysis since Day 1, since it is pervasively true that capitalism is a social system of trading relationships between individuals rather than a central authority delegating individuals.

The division of labor, also known as the law of comparative advantage or the law of comparative cost, and also known as the law of association are probably the single greatest contribution that economics has made to human understanding. This law – a law like gravity, not a law like the speed limit – is a description of why people cooperate and why pervasive conditions led to this cooperation. If you can take a few minutes to learn, you will understand how societies function and grow even richer without the visible hand to direct its path. You’ll also see how the criticism that the market economy led to a strong domination of the weak is a sham.

It seems the media and general populace, the latter being burned by business models based solely upon greed, has made its impasse about two years ago when the financial scandals started pouring in. While there is still a sacred place for competition in the economic model, it is becoming increasingly clear that, at many levels, homo economicus was made for cooperation. Rather than being governed by a kind of pure law of the jungle, the most prosperous economies are those where people work together.

This law of division of labor shows how it is that people can become self-sufficient and above poverty, physically and in every other sense, by working together rather than working in isolation. People working in this arrangement do not only gain an emotional level of satisfaction by helping others in their community, but also gain by amasssing goods and services (ie. wealth).

Dikes of the Netherlands and paddy agriculture in South Asia were the first examples of cooperation for mutual benefit. Only by working together, farmers could create huge complexes of drainage and irrigation, and this complex built in turn of local governments that have led to other benefits.
Moreover, they gain more than the sum of their parts; through cooperation and exchange, we can produce more than if we work in isolation. This applies in the simplest of economic parameters as well as more complex. Indeed, it appears that successful organizations are led by a core of people who always tend to cooperate on the one hand, stimulate each other to greater success, while non-co-operators are victims ostracized and left to run themselves.

The Pope’s timed release of his report was well-planned, for if it was released two years ago, when the Vatican began to prepare for this economic letter, most of the world would have dismissed the idea that greed was bad. ‘In those days,’ markets were unethical engines of prosperity. The so called free markets made the moral versions of capitalism as the lofty high-tax Nordic countries and denigrated. Indeed, crony capitalism is the true naked entity cloaked under the “capitalist” paradigm.

Critics of capitalism (also called state corporatism), including the Socialists and other anti-capitalists, often argue that crony capitalism is the inevitable result of any capitalist system. Jane Jacobs described it as a natural consequence of collusion between the government and those managing the business; since businesses make money and money leads to political power, business will inevitably use their power to influence governments. Indeed, much of the impetus for reform of campaign financing in the United States and other countries is an attempt to prevent economic power being used to gain political power.

A Christian concept of corporatism is traced to Saint Paul who in I Corinthians 12:12-31 uses the human body as a metaphor for the “Body of Christ” (the Church) whereby each part is integrated with a functional role.[12] Christian notions of brotherhood of people also sponsored the concept of a family connection of humans into groups.

During the Middle Ages, the Roman Catholic Church sponsored the creation of various institutions including brotherhoods, monastaries, religious orders, and military associations, especially during the Crusades to sponsor connection between these groups. In Italy, various function-based groups and institutions were created in the Middle Ages, such as universities, guilds for artisans and craftspeople, and other professional associations. The creation of the guild system is a particularly important aspect of the history of corporatism because it involved the allocation of power to regulate trade and prices to guilds, which is an important aspect of corporatist economic models of economic management and class collaboration.

Now, after the crash of all those focusing on the greed of banks and hedge funds, the Pope has an audience prepared to listen. Moreover, the mainstream media couldn’t predict the biggest bear market in 100 years; how do you expect them to anticipate what will unfold next? Watch this quick video clip from financial analyst and sought-after speaker Steven Hochberg about why you should challenge the consensus view about “the free market.”

Maybe the Vatican really is saying that the world should be like a giant Sweden. Maybe it is that sharing with the poor does not make us poorer, but that this increases the number of rich people. Maybe it is that being ethical, cooperative, and helping others to succeed is not failure. maybe this is what it takes to make the world more efficient and a little more better place to live.

A new passport requirement set by the United States Homeland Security department has been watched very closely by officials and interested laymen for the past few years that will likely make life extremely more difficult for the Canadian economy, but particularly those industries reliant on consumers and tourists from the United States spending their hard earned dollars in the Northern economy at places like Casinos and tourist venues. Indeed, these venues were primarily established to recoup declining revenues generated by a dwindling manufacturing sector.

The new passport requirement is set to decimate these industries when it comes into effect in June, 2009. Since only 20 to 30 per cent of Americans have valid passports, it is likely that the people who do not have them will not be travelling to Canada or Mexico as previous until they obtain one. The industries currently reliant on Americans travelling to Canada and Mexico for business, tourism, and pleasure purposes will no longer be able to engage in these activities unless they have passports or risk law enforcement sanctions.

“That longest and friendliest border in the world is now an invisible Berlin Wall,” Mike Bradley told CBC News, responding to the new requirement that travellers carry a secure document to enter the U.S. by land. It is the latest in a series of security measures implemented since the terror attacks on New York and Washington D.C. on Sept. 11, 2001.

As the NY Times reports, the new passport rules brings worry to tourism areas such as Niagara Falls where they say the new rules could discourage millions of visitors from coming to one of the nation’s most majestic and romantic tourist attractions and result in billions of dollars a year in lost revenue (NY times, 2009). Other affected regions of the country going whose tourism industries will likely be decimated will be Windsor, Ontario, and Sarnia, Ontario, Canada.

“I think there will be an impact,” John Winston, general manager of Tourism London, warned yesterday. “It is just another barrier for people to go through if they want to go back to the U.S.” Especially hard hit could be bus tours, which rely on people on moderate incomes and seniors for business, Winston said. The London region relies on the U.S. and other countries for about 12% of its tourism business, he added (Cnews, 2009).

All signs are pointing to a total economic, political, and social collapse in the United States, but also in Canada once the full effects of the economic crisis spreads to its norther neighbor as the US economy slows to a halt. Since Canada depends mainly on the United States for its economic well being, any kind of economic collapse of the United States would immediately obliterate the Canadian economy. Indeed, during the Great Depression, Canada was affected more negatively than the United States. Canada was hit hard by the Great Depression. Between 1929 and 1939, the gross national product dropped 40% (compared to 37% in the US).

Unemployment reached 27% at the depth of the Depression in 1933. Many businesses closed, as corporate profits of $396 million in 1929 turned into losses of $98 million in 1933. Families saw most or all of their assets disappear, and their debts become heavier as prices fell. Canadian exports shrank by 50% from 1929 to 1933. Worst hit were areas dependent on primary industries such as farming, mining and logging, as prices fell and there were few alternative jobs (Wikipedia, 2009).

Few Americans have a passport

“The concern is over people who May not have the financial resources and do not have passports, but would slip across the border and go to Marineland for the day with their families and return to the night,” he says.

An estimated 41 per cent of Canadians have a passport, but only about 20 percent of Americans have one.

The Anchor Bar in Buffalo, NY, has always been a favorite for local Hangout and Canadians. Ivano Toscani, his host and chief executive, is the hope, Canadians are still in place after the border, the existing rules.

“The proximity of Canada, I know we have many Canadian friends come here all the time, especially when we have a football match in progress,” he said.

Americans return must also present one of the new documents proving their identity and citizenship. However, Ron Smith, head of the U.S. Customs and Border Protection in Detroit, said his department plans to give a break to ignore passengers for an indefinite period.

Smith told the Observer newspaper in Sarnia, Ont., That persons who are not entitled to documents will be given a written notice explaining the new rules and sent on their way.

An official of the Agency for protection of borders of the United States told CBC News has its own border guards will be lenient with people who forget their passport as a first step, but not for long. ”

U.S. Customs and Border Protection Commissioner Jayson P. Ahern is listed on the site of the agency, saying that officials “will be practical and flexible in implementing [the new rules] using the same approach to compliance has informed that its worth in other changes our borders are the last two years. ”

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Remiscent of proposed border amnesty changes that the Bush administration was trying to railroad down the throat of Congress, the Governor of California stated his opinion voicing opposition to increased immigration and lax border controls. Seeing Mexico is such a drastically different county in terms of social, health, environmental, and economic standards, it is unwise to further open the already porous border that the Amnesty Program would have done. The problem with the current situation is that NAFTA essentially makes the borders extremely porous in both economic and immigration facets.

In the economic area, corporations are allowed to take legal action – potentially overriding sovereign countries’ legal precendents — over their right to profit from that market. In the immigration front, NAFTA, by permitting heavily-subsidized US corn and other agri-business products to compete with small Mexican farmers, has driven the Mexican farmer off the land due to low-priced imports of US corn and other agricultural products. Some 2 million Mexicans have been forced out of agriculture, and many of those that remain are living in desperate poverty. These people are among those that cross the border to feed their families. (Meanwhile, corn-based tortilla prices climbed by 50%. No wonder many so Mexican peasants have called NAFTA their ‘death warrant (Common dreams, 2006).

In a nutshell, NAFTA, the ficticious free trade agreement once labelled as a “new international structure, not simply a trade agreement” by former Secretary of State and murderer, Henry Kissinger, is a method to force countries to lower their standards built up over decades of court and legal struggles. These countries signed up to NAFTA and the World Trade organization are indeed starting to realize the full effects of so called “free trade,” which is in fact a permit to allow countries to dump their slave labor goods on their markets.

The following article is excerpted from a new book on gold and silver produced by Robert Precht, founder and CEO of the technical analysis and research firm Elliott Wave International. For the rest of this fascinating 40-page eBook, download it free here.
Have you ever traveled abroad and took a look at the local currency and wondered how the citizens of this country would take seriously what looks like “Monopoly money?” I have news for you: You use the same thing. Monopoly money is money at which the government has a monopoly. It is the currency of the realm because the state, it is illegal to use another type.

Promissory notes issued by a state and declared the only legal tender are always doomed to depreciate to worthlessness because of the natural incentives and forces associated with governments. A state cannot resist a method of confiscating assets, particularly one that is hidden from the view of most voters and subjects. By extension, it is unreasonable to advocate a standard for such notes, which is simply a state’s promise that its currency will always be redeemable in a specific amount of something valuable, such as gold. A gold standard of this type is only as good as the political promises behind it, reducing its value to no more than that of paper. It could be argued, in fact, that a state-sponsored gold standard is far more dangerous than none at all, as it imbues citizens with a false sense of security. Their long range plans are thus built upon an unreliable promise that the monetary measuring unit will remain stable. Later, when the government’s “IOU-something specific” becomes, as Colonel E.C. Harwood put it, “IOU nothing in particular,” reliability disappears and the arbitrary reigns. Although the populace tends to retain its confidence in the currency for awhile thereafter, the ultimate result is chaos.

The only sound monetary system is a voluntary one. The free market always chooses the best possible form, or forms, of money. To date, the market’s choice throughout the centuries, wherever a free market for money has existed, has been and remains precious metal and currency redeemable in precious metal. This preference will undoubtedly remain until a better form of money is discovered and chosen. Until then, prices for goods and services should be denominated not in state fictions such as dollars or yen or francs, but in specific weights of today’s preferred monetary metal, i.e., in grams of gold. Anyone might issue promissory notes as currency, but the acceptance of such paper certificates would then be an individual decision, and risks of loss through imprudence or dishonesty would be borne by only a few individuals by their own conscious choice after considering the risks. Critical to the understanding of the wisdom of such a system is the knowledge that private issuers of paper against gold have every long run incentive to provide a sound product, just as do producers of any product. As a result, risks would be minimal, as the market would provide its own policing. Thievery and imprudence will not disappear among men, but at least such tendencies in a free market for money would not have the potential to be institutionalized, as they are when a state controls the currency. From a macroeconomic viewpoint, occasional losses resulting from dishonesty or imprudence would be extremely limited in scope, as opposed to the nationwide disasters that state controlled paper money has facilitated throughout history, which have in turn had global repercussions. As Elliott Wave Principle put it, “That paper is no substitute for gold as a store of value is probably another of nature’s laws.”

That being said, it is also true, and crucial to wise investing, that markets come in both “bull” and “bear” types. Being a “gold bug” at the wrong time can be very costly in currency terms. For nearly three decades, gold and silver’s dollar price trends have confounded the precious metals enthusiasts, who for the entire period have argued that soaring gold and silver prices were “just around the corner” because the Fed’s policies “guarantee runaway inflation.” Yet today, 29 years after the January 1980 peaks in these metals and despite consistent inflation throughout this time, their combined dollar value (weighting each metal equally) is still 40 percent less than it was then.

It is all well and good to despise fiat money, but it is hardly useful to sit in gold and silver as if no other opportunities exist. In contrast to the one-note approach, which has had an immense opportunity cost since 1980, competent market analysis can help you make many timely and profitable financial decisions in all markets, including gold and silver.

For more in-depth, historical analysis and long-term forecasts for precious metals, download Prechter’s FREE 40-page eBook on Gold and Silver.

So called “free trade” has done nothing but create an ultra rich and ultra poor working class, all the while the middle class has been shafted down the black hole of poverty. What mainstream economists do not tell the formerly industrialized nations of the world when they are trying to sell the benefits of free trade is who came up with this theory. Indeed, it is the same person who worked for the British East India Company; a company which forced opium onto the Chinese and started the deadly “opium wars” of the late 1800s. Below is an ultra interesting article that all Christians would approve of.

By PAUL CRAIG ROBERTS

The American economy has gone away. It is not coming back until free trade myths are buried six feet under.

America’s 20th century economic success was based on two things. Free trade was not one of them. America’s economic success was based on protectionism, which was ensured by the union victory in the Civil War, and on British indebtedness, which destroyed the British pound as world reserve currency. Following World War II, the US dollar took the role as reserve currency, a privilege that allows the US to pay its international bills in its own currency.

World War II and socialism together ensured that the US economy dominated the world at the mid 20th century. The economies of the rest of the world had been destroyed by war or were stifled by socialism [in terms of the priorities of the capitalist growth model. Editors.]

The ascendant position of the US economy caused the US government to be relaxed about giving away American industries, such as textiles, as bribes to other countries for cooperating with America’s cold war and foreign policies. For example, Turkey’s US textile quotas were increased in exchange for over-flight rights in the Gulf War, making lost US textile jobs an off-budget war expense.

In contrast, countries such as Japan and Germany used industrial policy to plot their comebacks. By the late 1970s, Japanese auto makers had the once dominant American auto industry on the ropes. The first economic act of the “free market” Reagan administration in 1981 was to put quotas on the import of Japanese cars in order to protect Detroit and the United Auto Workers.

Eamonn Fingleton, Pat Choate, and others have described how negligence in Washington DC aided and abetted the erosion of America’s economic position. What we didn’t give away, the United States let be taken away while preaching a “free trade” doctrine at which the rest of the world scoffed.

Fortunately, the U.S.’s adversaries at the time, the Soviet Union and China, had unworkable economic systems that posed no threat to America’s diminishing economic prowess.

This furlough from reality ended when Soviet, Chinese, and Indian socialism surrendered around 1990, to be followed shortly thereafter by the rise of the high speed Internet. Suddenly, American and other first world corporations discovered that a massive supply of foreign labor was available at practically free wages.

To get Wall Street analysts and shareholder advocacy groups off their backs, and to boost shareholder returns and management bonuses, American corporations began moving their production for American markets offshore. Products that were made in Peoria are now made in China.

As offshoring spread, American cities and states lost tax base, and families and communities lost jobs. The replacement jobs, such as selling the offshored products at Wal-Mart, brought home less pay.

“Free market economists” covered up the damage done to the US economy by preaching a New Economy based on services and innovation. But it wasn’t long before corporations discovered that the high speed Internet let them offshore a wide range of professional service jobs. In America, the hardest hit have been software engineers and information technology (IT) workers.

The American corporations quickly learned that by declaring “shortages” of skilled Americans, they could get from Congress H-1b work visas for lower paid foreigners with whom to replace their American work force. Many US corporations are known for forcing their US employees to train their foreign replacements in exchange for severance pay.

Chasing after shareholder return and “performance bonuses,” US corporations deserted their American workforce. The consequences can be seen everywhere. The loss of tax base has threatened the municipal bonds of cities and states and reduced the wealth of individuals who purchased the bonds. The lost jobs with good pay resulted in the expansion of consumer debt in order to maintain consumption. As the offshored goods and services are brought back to America to sell, the US trade deficit has exploded to unimaginable heights, calling into question the US dollar as reserve currency and America’s ability to finance its trade deficit.

As the American economy eroded away bit by bit, “free market” ideologues produced endless reassurances that America had pulled a fast one on China, sending China dirty and grimy manufacturing jobs. Free of these “old economy” jobs, Americans were lulled with promises of riches. In place of dirty fingernails, American efforts would flow into innovation and entrepreneurship. In the meantime, the “service economy” of software and communications would provide a leg up for the work force.

Education was the answer to all challenges. This appeased the academics, and they produced no studies that would contradict the propaganda and, thus, curtail the flow of federal government and corporate grants.

The “free market” economists, who provided the propaganda and disinformation to hide the act of destroying the US economy, were well paid. And as Business Week noted, “outsourcing’s inner circle has deep roots in GE (General Electric) and McKinsey,” a consulting firm. Indeed, one of McKinsey’s main apologists for offshoring of US jobs, Diana Farrell, is now a member of Obama’s White House National Economic Council.

The pressure of jobs offshoring, together with vast imports, has destroyed the economic prospects for all Americans, except the CEOs who receive “performance” bonuses for moving American jobs offshore or giving them to H-1b work visa holders. Lowly paid offshored employees, together with H-1b visas, have curtailed employment for older and more experienced American workers. Older workers traditionally receive higher pay. However, when the determining factor is minimizing labor costs for the sake of shareholder returns and management bonuses, older workers are unaffordable. Doing a good job, providing a good service, is no longer the corporation’s function. Instead, the goal is to minimize labor costs at all cost.

Thus, “free trade” has also destroyed the employment prospects of older workers. Forced out of their careers, they seek employment as shelf stockers for Wal-Mart.

I have read endless tributes to Wal-Mart from “libertarian economists,” who sing Wal-Mart’s praises for bringing low price goods, 70 per cent of which are made in China, to the American consumer. What these “economists” do not factor into their analysis is the diminution of American family incomes and government tax base from the loss of the goods producing jobs to China. Ladders of upward mobility are being dismantled by offshoring, while California issues IOUs to pay its bills. The shift of production offshore reduces US GDP. When the goods and services are brought back to America to be sold, they increase the trade deficit. As the trade deficit is financed by foreigners acquiring ownership of US assets, this means that profits, dividends, capital gains, interest, rents, and tolls leave American pockets for foreign ones.

The demise of America’s productive economy left the US economy dependent on finance, in which the US remained dominant because the dollar is the reserve currency. With the departure of factories, finance went in new directions. Mortgages, which were once held in the portfolios of the issuer, were securitized. Individual mortgage debts were combined into a “security.” The next step was to strip out the interest payments to the mortgages and sell them as derivatives, thus creating a third debt instrument based on the original mortgages.

In pursuit of ever more profits, financial institutions began betting on the success and failure of various debt instruments and by implication on firms. They bought and sold collateral debt swaps. A buyer pays a premium to a seller for a swap to guarantee an asset’s value. If an asset “insured” by a swap falls in value, the seller of the swap is supposed to make the owner of the swap whole. The purchaser of a swap is not required to own the asset in order to contract for a guarantee of its value. Therefore, as many people could purchase as many swaps as they wished on the same asset. Thus, the total value of the swaps greatly exceeds the value of the assets.*

The next step is for holders of the swaps to short the asset in order to drive down its value and collect the guarantee. As the issuers of swaps were not required to reserve against them, and as there is no limit to the number of swaps, the payouts could easily exceed the net worth of the issuer.

This was the most shameful and most mindless form of speculation. Gamblers were betting hands that they could not cover. The US regulators fled their posts. The American financial institutions abandoned all integrity. As a consequence, American financial institutions and rating agencies are trusted nowhere on earth.

The US government should never have used billions of taxpayers’ dollars to pay off swap bets as it did when it bailed out the insurance company AIG. This was a stunning waste of a vast sum of money. The federal government should declare all swap agreements to be fraudulent contracts, except for a single swap held by the owner of the asset. Simply wiping out these fraudulent contracts would remove the bulk of the vast overhang of “troubled” assets that threaten financial markets.

The billions of taxpayers’ dollars spent buying up subprime derivatives were also wasted. The government did not need to spend one dime. All government needed to do was to suspend the mark-to-market rule. This simple act would have removed the solvency threat to financial institutions by allowing them to keep the derivatives at book value until financial institutions could ascertain their true values and write them down over time.

Taxpayers, equity owners, and the credit standing of the US government are being ruined by financial shysters who are manipulating to their own advantage the government’s commitment to mark-to-market and to the “sanctity of contracts.” Multi-trillion dollar “bailouts” and bank nationalization are the result of the government’s inability to respond intelligently.

Two more simple acts would have completed the rescue without costing the taxpayers one dollar: an announcement from the Federal Reserve that it will be lender of last resort to all depository institutions including money market funds, and an announcement reinstating the uptick rule.

The uptick rule was suspended or repealed a couple of years ago in order to permit hedge funds and shyster speculators to rip-off American equity owners. The rule prevented short-selling any stock that did not move up in price during the previous day. In other words, speculators could not make money at others’ expense by ganging up on a stock and short-selling it day after day.

As a former Treasury official, I am amazed that the US government, in the midst of the worst financial crises ever, is content for short-selling to drive down the asset prices that the government is trying to support. No bailout or stimulus plan has any hope until the uptick rule is reinstated.

The bald fact is that the combination of ignorance, negligence, and ideology that permitted the crisis to happen still prevails and is blocking any remedy. Either the people in power in Washington and the financial community are total dimwits or they are manipulating an opportunity to redistribute wealth from taxpayers, equity owners and pension funds to the financial sector.

The Bush and Obama plans total 1.6 trillion dollars, every one of which will have to be borrowed, and no one knows from where. This huge sum will compromise the value of the US dollar, its role as reserve currency, the ability of the US government to service its debt, and the price level. These staggering costs are pointless and are to no avail, as not one step has been taken that would alleviate the crisis.

If we add to my simple menu of remedies a ban, punishable by instant death, for short selling any national currency, the world can be rescued from the current crisis without years of suffering, violent upheavals and, perhaps, wars.

According to its hopeful but economically ignorant proponents, globalism was supposed to balance risks across national economies and to offset downturns in one part of the world with upturns in other parts. A global portfolio was a protection against loss, claimed globalism’s purveyors. In fact, globalism has concentrated the risks, resulting in Wall Street’s greed endangering all the economies of the world. The greed of Wall Street and the negligence of the US government have wrecked the prospects of many nations. Street riots are already occurring in parts of the world. On Sunday February 22, the right-wing TV station, Fox “News,” presented a program that predicted riots and disarray in the United States by 2014.

How long will Americans permit “their” government to rip them off for the sake of the financial interests that caused the problem? Obama’s cabinet and National Economic Council are filled with representatives of the interest groups that caused the problem. The Obama administration is not a government capable of preventing a catastrophe.

If truth be known, the “banking problem” is the least of our worries. Our economy faces two much more serious problems. One is that offshoring and H-1b visas have stopped the growth of family incomes, except, of course, for the super rich. To keep the economy going, consumers have gone deeper into debt, maxing out their credit cards and refinancing their homes and spending the equity. Consumers are now so indebted that they cannot increase their spending by taking on more debt. Thus, whether or not the banks resume lending is beside the point.

The other serious problem is the status of the US dollar as reserve currency. This status has allowed the US, now a country heavily dependent on imports just like a third world or lesser-developed country, to pay its international bills in its own currency. We are able to import $800 billion annually more than we produce, because the foreign countries from whom we import are willing to accept paper for their goods and services.

If the dollar loses its reserve currency role, foreigners will not accept dollars in exchange for real things. This event would be immensely disruptive to an economy dependent on imports for its energy, its clothes, its shoes, its manufactured products, and its advanced technology products.

If incompetence in Washington, the type of incompetence that produced the current economic crisis, destroys the dollar as reserve currency, the “unipower” will overnight become a third world country, unable to pay for its imports or to sustain its standard of living.

How long can the US government protect the dollar’s value by leasing its gold to bullion dealers who sell it, thereby holding down the gold price? Given the incompetence in Washington and on Wall Street, our best hope is that the rest of the world is even less competent and even in deeper trouble. In this event, the US dollar might survive as the least valueless of the world’s fiat currencies.

Paul Craig Roberts was Assistant Secretary of the Treasury in the Reagan administration. He is coauthor of The Tyranny of Good Intentions.

The 1960s were the decade in which my parents grew up. Their parents were the so-called, Greatest Generation and I, for one, think that term is appropriate, given that childhood was the Great Depression and their early adulthood has been the fight against Second World War, a series of experiments almost beyond my hands. Generation X’s parents grew up in an era of increased military-industrial complex, in which people could reasonably expect to obtain gainful employment and remain at it throughout their lives.

This means several things:

One, the American education was the envy of the world. You simply could not get a better education than that provided by a U.S. institution. Colleges were not crowded even when only a small minority went to college, so if you were to post-secondary education in the United States, you were set.

Now, when the US is compared with other countries like Korea and Europe, the US education system is the laughing stock of the world. Indeed, children in Korea spend, on average, about 10 hours per day in school and in after school classes.

Second, real worker compensation had never been higher. No matter what you did in life, you could find a factory job that you pay a salary high enough that you can do whatever. In the 1960s and 1970s, this was especially true when many low-skill positions were prevalent throughout the economy, but are now sent to slave labor countries or staffed by immigrant workers who will “do work that Americans won’t do.” Now, average wages have been declining on a steady pace. Compared to many western world countries, average wages in the United States lags far behind many.

The average salary of U.S. $ 33,195 only compares very poorly against the average wages of Germany at $ 50,445, $ 46,541 in the United Kingdom, France $ 45,879, $ 45,839 in Japan and even $ 38,259 in Ireland, once thought to be one of the poorest nations due to the old economy destroyed by the famine of the potato. Indeed, as the world economy becomes increasingly “globalized,” foreign countries take advantage of cheap labor to build their U.S. products. Americans are becoming low wages “Chinese” work for the rich States such as Germany and Japan to build their products.

Third, although the Soviet threat was real, it was removed. Although the Cold War was terrifying in its own way, it never evolved into a struggle against war and there has never been any kind of direct attack on American soil. The Vietnam War was underway, but it is literally across the globe, and was largely out of the eye of the media, or much more controlled than today’s world of blogs and instant communication.

Four, the art of marketing and consumption has been in its heyday. Look at the sophistication of advertising in the 1960s and compare now. There were a few small evolutionary steps, of course, but the psychological advantage of today blows away marketing quite what you find in those days.

Five, house prices in real dollars was extremely low compared to today. The price of a house since 1960, has increased at a much faster rate than inflation, a bull that is perhaps finally being run slowed or reversed, after many years of incredible growth. Thus, someone who bought a house in 1960, fell into a motley investment.

Six. Employers have taken long-term care of their employees. If a person has worked in a factory for thirty years, the company guaranteed them a pension that would enable them to live the rest of their lives in a comfortable fashion. If you took care of the business, he took care of you.

Under these assumptions, my parents could buy a house (rather cheap) when they were younger than I am now just on the wages earned by one of them working a seasonal job at the factory (which paid very well). Because of this factory work, they now receive a nice retirement after never put anything in their own retirement plan.

Does this seem like modern Western World economic reality? It certainly seems there is nothing like it was. Most realities is more like this:

Most job treat you as an independent contractor instead of a true team member, which means that you must save for my own retirement rather than a pension plan. Also, there are houses that are extremely expensive, even in relatively cheap, the area where most live (in cities). There is no “fall back” plan in the form of abundant low skill labor that anyone can do. The decline in jobs that most know only offer to make minimum wage, which is much less than a real living wage in the United States.

Most parents regularly offer “advice” on how to manage finances on the basis of theire assumptions that their childhood and early adult life. Their suggestions are that you should buy a house when you are married and young and purchase all sorts of leisure products. Indeed, their hearts are definitely in the right place, and they talk about things they believe to be true, but they are not true for the aftermath generation – if we took their advice, most would be in the poor house.

So what is the solution? If you have any advice given by your parents – or anyone at all (including most people) – the untold suggestions would be to examine the assumptions they believed in concerning what their experiences brought them. Indeed, this generation certianly will not have the same experiences.

What Is The Solution To The Growing Trade Imbalances Threatening Your Livelihood?

Warren Buffett’s plan proposes creating a market for import certificates that would represent the right to import a certain dollar amount of goods into the United States from other countries. These certificates would be issued to US exporters in an amount equal to the dollar amount of the goods they export, and can be sold to importers, who must purchase them in order to legally import goods. The price of an import certificate is set by free-market forces, and therefore ultimately is dependent on the balance between imported and exported goods through supply and demand.

What are some Immediate Solutions and Strategies to Safeguard Your Money Now?

Some of the best advice for those seeking to safeguard their existing assets would be to invest in safe, durable, long-term, moderate return investments, but do not visit a so called financial advisor. Many of these ‘advisors’ are nothing but petty salesmen who have little or no experience in the real world. Having been a victim of the financial investment firm Edward Jones, many people have chosen their own investment strategies by researching these topics themselves, or seeking the help of on-line investment houses.

Companies are charging hundreds and even thousands for access to 2-3 hours’ worth of mediocre education from their own experts. If anyone has actually paid for the education, they quickly realize that in order to continue and get the “expanded education” they need to continue to spend! It’s all a vicious cycle to separate you from your hard earned pay checks without actually providing you with worthwhile material.

There is only one place where you have access to over 150 experts and 500 hours of seminars, for one price and that’s INO TV. INO TV gives its 30,000 members access to massive amounts of educational material that has been handpicked to provide you with the most for the least. If you’ve been duped in the past, here is your way to get back at those companies… learn something and stretch your pay check!

Visit the education page of INO TV to learn more.

Full access to INO TV will not cost you thousands, and won’t cost you hundreds. Yes, access to the world’s top experts, streaming on demand, and new authors being added monthly, will not cost you a month’s salary.

It’s important that you continue to design your trading methods that fit your lifestyle (not your parent’s), and with INO TV you can do that with access to hundreds of experts who have done it before and want to show you their strategies.