Saturday, May 23, 2015

Criminal Financial System, Gold Fraud, Middle East on Fire, China Warns US Again


4_jpgBy Greg Hunter’s USAWatchdog.com  
The bankers have done it again.  They committed an enormous global crime and only paid a fine.  JP Morgan, Barclays, Citigroup, Royal Bank of Scotland and UBS will pay $5.8 billion in penalties for rigging the $5.3 trillion a day currency market.  Once again, nobody will go to jail, even though all these big banks plead guilty to criminal charges for rigging the Forex market.  UBS received immunity from criminal prosecution because it blew the whistle on the crime.  I did not know a bank can be a criminal and the humans running it be exempt from charges.  This means the masterminds will pay nothing, and the fines will be paid by shareholders.  Why should you care?  This is a sign that the system is extremely weak and is being propped up by pure fraud and manipulation.  My friend Gregory Mannarino says that the $5.8 billion fine is nothing and is the cost of doing business.  Mannarino told me this is just a show to make people think the system is safe and regulated and points out,“There is a need to keep confidence in the financial system.”   Mannarino says if the fine was nearly $6 billion, how do you know the bankers didn’t make $600 billion in this fraud.”  Again, nobody at the banks goes to jail and shareholders pay the fines.
Guess what?  UBS is a whistleblower in a new case coming up, and this time, it involves some of the same big banks and price rigging in the precious metals market.  That’s right, gold and silver prices are being rigged, and the Justice Department is probably going to fine some more bankers.  Might I remind you that several big banks paid fines after admitting to rigging the LIBOR interest rate markets.  Hundreds of trillions of dollars in interest rates are set off LIBOR.  Let’s see, interest rates have been rigged, currency markets have been rigged and precious metals markets are being rigged.  Are you getting the picture of how dire it must be that all markets are rigged in some way?  This past week, Rob Kirby said, “The markets are a crime scene.”  This is not an exaggeration.  There is proof in terms of fines, penalties and widely reported cases that all markets are rigged in some way, and governments will not jail any of these bankers!  Not a single big name banker has gone to jail for massive global fraud.  What could go wrong?
In the latest “there is no recovery” news, look no further than the Federal Reserve.  In last month’s Fed meeting, policymakers said they would not raise interest rates in June.  According to USA Today, it is because of “the economy’s recent sluggish performance.”  There is NO RECOVERY and the Fed knows it.
It looks like a crisis has been averted off the coast of Yemen.  Iran has agreed to UN inspections of a cargo ship carrying humanitarian aid to Yemen.  Iraq is not that lucky.  Ramadi has fallen to ISIS.  So has the ancient city of Palmyra in Syria.  With these defeats, ISIS get new equipment and tanks as they are abandoned by retreating Iraq forces.  The US policy in Iraq is turning into a disaster, and, yet, the Presidents top priority is “climate change,” also known as “global warming.”  That is the top “security threat.”
We also found out this week that there is major cooperation between Iran and al-Qaeda.  Of course, ISIS is an even more radical offshoot of al-Qaeda.  You would never know that if you only listened to the mainstream media such as USA Today.  Their front page headline about new information gathered in the Bin Laden raid talks of “Love letters.”  The headline should read “Bin Laden Intel Shows Iran and al-Qaeda Working Together for Years.”  
Finally, China is, once again, telling the US to back off in the South China Sea.  This time because of a U.S. spy plane taking pictures of the islands they are building in the middle of nowhere.  It has always been international waters, but now China is claiming a large chunk of it.
Join Greg Hunter as he talks about these stories and more in the Weekly News Wrap-Up.

Friday, May 22, 2015

The Coming Crash of All Crashes – but in Debt

money-stock-1980-2011
By Martin Armstrong and originally published at armstrongeconomics.com
Why are governments rushing to eliminate cash? During previous recoveries following the recessionary declines from the peaks in the Economic Confidence Model, the central banks were able to build up their credibility and ammunition so to speak by raising interest rates during the recovery. This time, ever since we began moving toward Transactional Banking with the repeal of Glass Steagall in 1999, banks have looked at profits rather than their role within the economic landscape. They shifted to structuring products and no longer was there any relationship with the client. This reduced capital formation for it has been followed by rising unemployment among the youth and/or their inability to find jobs within their fields of study. The VELOCITY of money peaked with our ECM 1998.55 turning point from which we warned of the pending crash in Russia.
Long-Term Capital Managment

The damage inflicted with the collapse of Russia and the implosion of Long-Term Capital Management in the end of 1998, has demonstrated that the VELOCITY of money has continued to decline. There has been no long-term recovery. This current mild recovery in the USA has been shallow at best and as the rest of the world declines still from the 2007.15 high with a target low in 2020, the Federal Reserve has been unable to raise interest rates sufficiently to demonstrate any recovery for the spreads at the banks between bid and ask for money is also at historical highs. Banks will give secured car loans at around 4% while their cost of funds is really 0%. This is the widest spread between bid and ask since the Panic of 1899.
We face a frightening collapse in the VELOCITY of money and all this talk of eliminating cash is in part due to the rising hoarding of cash by households both in the USA and Europe. This is a major problem for the central banks have also lost control to be able to stimulate anything.The loss of traditional stimulus ability by the central banks is now threatening the nationalization of banks be it directly, or indirectly. We face a cliff that government refuses to acknowledge and their solution will be to grab more power – never reform.

Thursday, May 21, 2015

Student and auto debt fuel credit bubble 2.0

Image result for student loan debt




Student loans carry the highest delinquency rate of all debt classes. Student and auto debt up $1.15 trillion in last decade


A large portion of our recent recovery has come from debt fueled consumption.  The bailouts have been favorable to financial institutions but access to debt for American families has been in segments that are counterproductive to wealth accumulation.  There is no benefit in having access to cheap loans for purchasing a car, an “asset” that loses value immediately after you pull it off the lot.  This is what is going on and we have seen a surge in subprime auto loans which is a double-whammy in slamming your financial future.  The biggest non-housing debt class in the United States is now with student debt.  Student loans are now viewed as the pathway for accessing college.  Over $1.2 trillion in student loans are now outstanding in the US and this debt class has the highest delinquency rate of all debt classes.  What this tells you is that many with student debt are unable to pay their bills.  That is problematic.  But this debt fuels the economy in odd ways.  Let us take a look at the two fastest growing debt fields.
Student debt and auto debt
Back in 2004 there was roughly $250 billion in student debt outstanding and $700 billion in auto loans outstanding.  Today we now have $1.2 trillion in student debt outstanding and $900 billion in auto loans.
That is an increase of $1.15 trillion in student debt and auto debt over this 10 year period.  Plus, most of the growth has come in the form of more student debt.  This is problematic in many ways because many recent college graduates are starting their working lives with the equivalent of a car payment or in some cases, what amounts to a small mortgage:
Auto--Student-Loan-Chart-3-23-15
Debt has a place in any economy.  But we have now become fully reliant on debt to finance virtually all purchases in our economy.  Good luck going to college or buying a car without a loan.  The data backs this up:
more-students-taking-on-debt
In 1993 45% of the graduating class took on student debt.  Today, it is above 70%.  And it should also be noted that the amount of debt in 1993 was nothing compared to what it is today relative to what recent college graduates are earning.  Many struggle to find work and end up working in the low wage sector of the economy.
The most delinquent debt sector of them all
Another problem that is happening is that college graduates are unable to service their debt.  Keep in mind there are a multitude of student debt repayment plans including graduated payments, income based repayments, and also the ability to defer if you go back to school.  However, even with all these outlets people are having a hard time paying their debt back:
delinquent loans
That is not what you want to be seeing and this adds an additional layer of financial strain to the young in our country.  We already know that many are struggling to purchase homes in this economy because of lower wages, higher student debt, and Wall Street crowding out regular families in the single family home market.  In the end, buying a home with a mortgage can serve you well since it is a forced savings account.  Yet many are unable to do this and are forced to pay their student debt and go into debt when buying a car.  These do not help in starting to save money for retirement which Americans are horrible at doing despite the massive stock market rally.
Student debt is a big problem especially with so many working in the low wage segment of the economy:
student-loan-debt-cartoon1-570x399
We need to focus on the issue carefully.  Low cost options like community colleges have weak outreach arms and massively impacted classes.  The for-profits have stepped in with sophisticated marketing operations but poor teaching quality and career placement results that leave much to be desired.  Public education is also getting more expensive and more selective.  So there needs to be a serious dialogue on what we envision for the future of higher education.  There are many online options from reputable schools that have the ability to scale on a massive level (for example with Massive Open Online Courses known as MOOCs).
One thing is certain and that is we are on an unsustainable path when it comes to student debt.

Wednesday, May 20, 2015

‘We the People’ Need to Circle the Wagons: The Government Is on the Warpath

By John W. Whitehead and originally published at rutherford.org  

“The government is merely a servant―merely a temporary servant; it cannot be its prerogative to determine what is right and what is wrong, and decide who is a patriot and who isn’t. Its function is to obey orders, not originate them.” ― Mark Twain
How many Americans have actually bothered to read the Constitution, let alone the first ten amendments to the Constitution, the Bill of Rights (a quick read at 462 words)?
Take a few minutes and read those words for yourself—rather than having some court or politician translate them for you—and you will be under no illusion about where to draw the line when it comes to speaking your mind, criticizing your government, defending what is yours, doing whatever you want on your own property, and keeping the government’s nose out of your private affairs.
In an age of overcriminalization, where the average citizen unknowingly commits three crimes a day, and even the most mundane activities such as fishing and gardening are regulated, government officials are constantly telling Americans what not to do. Yet it was not always this way. It used to be “we the people” telling the government what it could and could not do. Indeed, the three words used most frequently throughout the Bill of Rights in regards to the government are “no,” “not” and “nor.”
Compare the following list of “don’ts” the government is prohibited from doing with the growing list of abuses to which “we the people” are subjected on a daily basis, and you will find that we have reached a state of crisis wherein the government is routinely breaking the law and violating its contractual obligations. 
For instance, the government is NOT allowed to restrict free speech, press, assembly or the citizenry’s ability to protest and correct government wrongdoing. Nevertheless, the government continues to prosecute whistleblowerspersecute journalistscage protesters, criminalize expressive activities, crack down on large gatherings of citizens mobilizing to voice their discontent with government policies, and insulate itself and its agents from any charges of wrongdoing (or what the courts refer to as “qualified immunity”).
The government may NOT infringe on a citizen’s right to defend himself. Nevertheless, in many states, it’s against the law to carry a concealed weapon (gun, knife or even pepper spray), and the average citizen is permitted little self-defense against militarized police officers who shoot first and ask questions later.
The government may NOT enter or occupy a citizen’s house without his consent (the quartering of soldiers). Nevertheless, government soldiers (i.e., militarized police) carry out more than 80,000 no-knock raids on private homes every year, while maiming children, killing dogs and shooting citizens.
The government may NOT carry out unreasonable searches and seizures on the citizenry or their possessions. NOR can government officials issue warrants without some evidence of wrongdoing (probable cause). Unfortunately, what is unreasonable to the average American is completely reasonable to a government agent, for whom the ends justify the means. In such a climate, we have no protection against roadside strip searches, blood draws, DNA collection, SWAT team raids, surveillance or any other privacy-stripping indignity to which the government chooses to subject us.
The government is NOT to deprive anyone of life, liberty or property without due process. Nevertheless, the government continues to incarcerate tens of thousands of Americans whose greatest crime is being poor and brown-skinned. The same goes for those who are put to death, some erroneously, by a system weighted in favor of class and wealth.
The government may NOT take private property for public use without just compensation. Nevertheless, under the guise of the “greater public interest,” the government often hides behind eminent domain laws in order to allow megacorporations to tear down homes occupied by less prosperous citizens in order to build high-priced resorts and shopping malls.
Government agents may NOT force a citizen to testify against himself. Yet what is the government’s extensive surveillance network that spies on all of our communications but a thinly veiled attempt at using our own words against us?
The government is NOT allowed to impose excessive fines on the citizenry or inflict cruel and unusual punishments upon them. Nevertheless Americans are subjected to egregious fines and outrageous punishments for minor traffic violations, student tardiness and absence from school, and generally having the misfortune of being warm bodies capable of filling privatized, profit-driven jails.
The government is NOT permitted to claim any powers that are not expressly granted to them by the Constitution. This prohibition has become downright laughable as the government continues to claim for itself every authority that serves to swell its coffers, cement its dominion, and expand its reach.
Despite what some special interest groups have suggested to the contrary, the problems we’re experiencing today did not arise because the Constitution has outlived its usefulness or become irrelevant, nor will they be solved by a convention of states or a ratification of the Constitution.
No, as I document in my new book Battlefield America: The War on the American People, the problem goes far deeper. It can be traced back to the point at which “we the people” were overthrown as the center of the government. As a result, our supremacy has been undone, our authority undermined, and our experiment in democratic self-governance left in ruins. No longer are we the rulers of this land. We have long since been deposed and dethroned, replaced by corporate figureheads with no regard for our sovereignty, no thought for our happiness, and no respect for our rights.
In other words, without our say-so and lacking any mandate, the point of view of the Constitution has been shifted from “we the people” to “we the government.” Our taxpayer-funded employees—our appointed servants—have stopped looking upon us as their superiors and started viewing as their inferiors. Unfortunately, we’ve gotten so used to being dictated to by government agents, bureaucrats and militarized police alike that we’ve forgotten that WE are supposed to be the ones calling the shots and determining what is just, reasonable and necessary.
Then again, we’re not the only ones guilty of forgetting that the government was established to serve us as well as obey us. Every branch of government, from the Executive to the Judicial and Legislative, seems to be suffering this same form of amnesia. Certainly, when government programs are interpreted from the government’s point of view (i.e., the courts and legislatures), there is little the government CANNOT do in its quest for power and control.
We’ve been so brainwashed and indoctrinated into believing that the government is actually looking out for our best interests, when in fact the only compelling interesting driving government programs is maintain power and control by taking away our money and control. This vital truth, that the government exists for our benefit and operates at our behest, seems to have been lost in translation over two centuries dominated by government expansion, endless wars and centralized federal power.
Have you ever wondered why the Constitution begins with those three words “we the people”? It was intended to be a powerful reminder that everything flows from the citizenry. We the people are the center of the government and the source of its power. That “we” is crucial because it reminds us that there is power and safety in numbers, provided we stand united. We can accomplish nothing alone.
This is the underlying lesson of the Constitution, which outlines the duties and responsibilities of government. It was a mutual agreement formed by early Americans in order to ensure that when problems arose, they could address them together.
It’s like the wagon trains of the Old West, comprised of individual groups of pioneers. They rarely ventured out alone but instead traveled as convoys. And when faced with a threat, these early Americans formed their wagons into a tight circle in order to defend against invaders. In doing so, they presented a unified front and provided protection against an outside attack. In much the same way, the Constitution was intended to work as an institutionalized version of the wagon circle, serving as a communal shield against those who would harm us.
Unfortunately, we have been ousted from that protected circle, left to fend for ourselves in the wilderness that is the American frontier today. Those who did the ousting—the courts, the politicians, and the corporations—have since replaced us with yes-men, shills who dance to the tune of an elite ruling class. In doing so, they have set themselves as the central source of power and the arbiters of what is just and reasonable.
Once again we’re forced to navigate hostile terrain, unsure of how to protect ourselves and our loved ones from militarized police, weaponized drones, fusion centers, Stingray devices, SWAT team raids, the ongoing military drills on American soil, the government stockpiling of ammunition, the erection of mass detention centers across the country, and all other manner of abuses.
Read the smoke signals, and the warning is clear: It’s time to circle the wagons, folks. The government is on the warpath, and if we are to have any hope of surviving whatever is coming at us, we’ll need to keep our wits about us and present a unified front. Most of all, we need to restore “we the people” to our rightful place at the center of government. How we do that depends largely on each community’s willingness to get past their partisan politics and blind allegiance to uniformed government officials and find common ground.
To put it a little more bluntly, stop thinking like mindless government robots and start acting like a powerhouse of citizens vested with the power to say “enough is enough.” We have the numbers to stand our ground. Now we just need the will.

Tuesday, May 19, 2015

Collectivists Hate Individuality, Tribalism And ‘Fast And Furious 7′?



By Brandon Smith and originally published at alt-market.com
Sometimes in the liberty movement — with discussions of potential collapse, war, revolution, social destabilization, etc. — it is easy to get so caught up in the peripheral conflict between the elites and the citizenry that we forget what the whole thing is really about. That is to say, we tend to overlook the very core of the conflict that is shaping our epoch.
Some would say that it is a simple matter of good versus evil. I don’t necessarily disagree, but good and evil are not defined methodologies; rather, they are inherent archetypes — facts born in the minds and hearts of all men. It’s a gift of comprehension from something greater than ourselves. They are felt, rather than defined, and attempts by institutions (religious, scientific, legal or otherwise) to force morality away from intuitive reason and into a realm of artificial hierarchical and mathematical standards tend to lead only to even more imbalance, destruction, innocent deaths and general immorality.
There have been many nightmare regimes throughout history that have claimed to understand and obey moral “laws” and standards while at the same time having no personal or spiritual connection to those standards. In other words, some of the most heinous acts of immorality are often stamped with the approval of supposedly moral social and governmental institutions.
This is why a person who calls himself a moral Christian, a moral Muslim, a moral atheist, a moral legislator, a moral conservative, a moral liberal, a moral social justice warrior, etc. is not necessarily a person who ultimately acts with moral conviction. It is not enough for one to memorize and follow the code of a belief system or legal system blindly. One must also understand the tenets of inborn natural law and of the human soul that make those codes meaningful (if they have retained any meaning), or he will eventually fall prey to the vicious calamities of dogma and the collective shadow.
If I were to examine the core methodologies that are at odds in our society today, I would have to say that the whole fight comes down not only to good versus evil, but to collectivism versus individualism. The same demands of understanding also apply to this dichotomy.
Nearly all human beings naturally gravitate toward social structures. This is not under debate. The best of us seek to work with others for the betterment of our own position in terms of survival and success, but also the betterment of our species as a whole, if possible. Beyond this, people often find solace and a sense of epiphany when discovering connections to others; the act of recognition and shared experience that is in itself a religious experience. This is what I would call “community,” as opposed to “collectivism.”
Collectivism is a bastardization and manipulation of the inherent desire most people have to build connections to those around them. It takes the concept of community to the extreme end of the spectrum, and in the process, removes all that was originally good about it. In a collectivist system, individualism becomes a threat and a detriment to the functionality of society. In a community, individualism is seen as a valuable resource that brings a diversity of ideas, skills and unique views, making the group stronger. Collectivism believes the hive mind is more efficient. Community believes voluntary action and individual achievement makes society healthier in the long run.
Our culture in general today is being bombarded with messages that aggrandize collectivism and stigmatize community and individualism. This is not by mere chance; it is in fact a program of indoctrination. I came across a rather strange and in some ways hilarious example of this while sifting through the propaganda platform known as Reuters.
As most liberty movement activists are well aware, Reuters is a longtime haven for Fabian socialists who despise honest reporting (to them media is a means of controlling the populace, not informing it) and who consistently inject concepts of collectivist (i.e., globalist) ideology into their articles.
The Reuters opinion piece linked here and written by Lynn Stuart Parramore presents itself as a kind of social examination of film and its reflection of the decline of American civilization. Rather oddly, the film chosen as a litmus test was “Fast And Furious 7.” Yes, that’s right. The “Fast and Furious” franchise apparently contains social commentary so disturbing to Reuters’ contributing “cultural theorists” that they felt compelled to write a short thesis on it.
First, I would like to point out that when I first read the article the original title was “‘Fast decline of postwar America & furious desire to cling to ‘family.’”
It appears that Reuters has since “amended” the title to stand out a little less as a collectivist expose. Just to be clear, I have no interest in discussing the content of the “Furious 7″ film. My commentary will focus not on the film but on Reuters’ commentary regarding the film...if that makes sense to you.
So what about the newest Furious film has the collectivists so concerned? As the article states, “something alarming lurks at the heart of ‘Furious 7.'” The film’s depiction of America as an economically wounded nation in which good men cannot find a means to make an honest and adequate living doesn’t seem to bother them as much as the response of the main characters to such circumstances. The article almost revels in the postwar degradation of American living standards, outlining how fiscal decline has led to the disruption of the American family and posits that the golden era of the 1950’s economic boom is a relic, erased by the rise of a severe “haves and have-nots” division in the American class sphere. This is, of course, a decidedly simplistic view that appeals more to Marxists than to anyone with true knowledge of the breakdown of the U.S.
Reuters takes issue with “Furious 7″ because of what it refers to as the “1950’s fantasy” narrative it clings to, in which the heroes long for a return to the middle-class dream, turning away from the corrupt structure of the system and reverting to the “tribalism” of families and posses. The “myth of the posse,” they state, “ignores the interconnectedness of the broader society” and “the idea of a common culture of citizenship recedes into the background, as does faith in a society based on shared principles of justice.”
I find this conclusion rather fascinating in its collectivist bias. We are led to believe by Parramore’s article that it is the “Ayn Randian” code of contemporary economics and market efficiency that has led America astray. To put it simply, the free market did this to us.
This is the great lie promoted ad nauseam by collectivists today — collectivists who would like to divert blame for economic failure on more individualistic market ideals. The reality is that America has NOT supported free market methods for at least a century. The advent of parasitic central banking as an economic core in the Federal Reserve and constant government intervention and regulation that have only destroyed small business rather than kept large businesses in check has caused the very negative financial environment that Parramore at least recognizes as the source of our ills. Corporations themselves exist only because of government regulatory license, after all, but you won’t ever catch Reuters criticizing that.
It was collectivism and the rise of the statist model that bled America dry, not free-market methods that have not existed in this country for more than 100 years. The delusion that free markets are the problem was the same delusion that helped bring down Occupy Wall Street; the movement failed in part because its foundational philosophy was built on disinformation that rang false with otherwise sympathetic people.
So an action movie presents a competing model to collectivism, because collectivism has always been the problem, despite what Reuters has to say. That model is a return to classic human community in the form of family and “tribalism” where regular individuals matter, a point the Reuters article subtly mocks as a “fantasy.” But here we find the collectivists using the kind of rhetoric one would come to expect from social Marxists. The article continues:
"When the personal posse replaces civic spirit, and the us-against-them mentality prevails, monsters can breed…"
"This is what is now happening in many corners of the world, where neglected groups have formed posses positively bloodthirsty in their quest to assert that they matter on the global stage to show they are not just victims of a rigged game…"
I’m not exactly sure what “bloodthirsty groups” Parramore is referring to as “posses,” but I suspect this is a reference to the rise of ISIS, among others. And here we find the Fabian socialist-style propaganda at play.
You see, the Fabian ideology is the driving force behind globalization — the same globalization that triggered the vast downward slide in American prosperity; the same globalization that has generated anger and dissension among the downtrodden and poverty-stricken; the same globalization that has created artificial economic interdependency among nations and the domino effect of fiscal crisis around the globe; and the same globalization that has led to the predominance of covert agencies, covert agencies which have been funding “bloodthirsty posses” like ISIS for decades. And the source philosophy behind globalization has always been collectivism — the “interconnectedness of broader society” that Parramore proclaims as lost in the pages of the “Furious 7″ screenplay.
Parramore ends with a stark warning to us all:
"… a return to tribal instincts and the letting go of the broader common bonds and the welfare of the greater human family has a dark side. It is ultimately a dangerous road to travel."
Those of us who support the idea of localized community (i.e., tribalism) and the value of the individual over the arbitrary collective are, supposedly, playing with fire; and we should be scared, very scared. We would not want to be labeled as “bloodthirsty monsters” hell-bent on disturbing the tranquility of the “greater human family.” Oh, boy.
When I read this kind of agenda-based garbage, I am reminded of the insanity of slightly more open social Marxists, such as feminists, who have through dishonorable tactics conjured an atmosphere of collective and legal pressure designed not to present a better argument, but to make all opposing arguments a sin against the group. That is to say, social Marxists do not have a better argument, so their only option is to make rational counterarguments socially taboo or even illegal.
If you want to know where social Marxism (collectivism) is headed, this is it: the labeling of individualistic philosophies as dangerous thought crimes and tribal communities as time bombs waiting to explode in the face of the wider global village. They desperately hope to conquer the world by dictating not only national boundaries and civil liberties, but the very moral code by which society and individuals function. They wish to bypass natural law with fear, fear that the collective will find you abhorrent and barbaric if you do not believe exactly as they believe. Individualism will one day be the new misogyny.
Think of it this way: If an undoubtedly forgettable movie like “Furious 7″ can’t even portray a fictional step away from the abyss of collectivist cultism without a prophecy of doom from Reuters, then is anyone really safe from these lunatics?

Monday, May 18, 2015

Yet Another Chart That Whimpers "Recession"

By Charles Hugh Smith and originally published at oftwominds.com
It's worthwhile recalling that mainstream economists, the Federal Reserve, government agencies and the mainstream financial media all deny the economy is in recession until it falls off a cliff.

Back in March I published unambiguously recessionary charts of new orders and per capita energy consumption: New Orders Look Recessionary (March 9, 2015)

Zero Hedge recently published an overview of charts that also spell recession: The US Is In Recession According To These 7 Charts.

Mish has provided evidence that a recession has already started: Household Spending Growth Expectations Plunge; Recession Already Started?

For those who want yet more quantitative evidence of recession, here is another chart, courtesy of longtime contributor B.C. This is a chart of the Chicago Fed's National Financial Conditions Index (NFCI):

Because U.S. economic and financial conditions tend to be highly correlated, we also present an alternative index, the adjusted NFCI (ANFCI). This index isolates a component of financial conditions uncorrelated with economic conditions to provide an update on financial conditions relative to current economic conditions.

The chart also displays the spread between Baa-rated corporate bond yields (Baa bonds are just above junk bonds, which are typically rated BB or lower) and 10-year Treasury bond yields.

Widening spreads between corporate bonds and Treasuries are associated with recessions, as are ANFCI readings above zero. The current reading is .20, a level that correlates to deteriorating financial conditions and the early stages of recessions.

The more dependent the economy is on financialization, the greater the impact of deteriorating financial conditions. To a large degree, the U.S. economy's apparent strength is an illusion based on extremes of financialization: rampant Fed monetization of Treasury debt and mortgages, extremes of leverage and speculation that have inflated asset bubbles that have created a wealth effect that is limited to the top 10% of households, and is highly concentrated in the top .01% of households.



Here is the ANFCI and the Fed Funds rate, which has been near-zero for years. What can we say about an economy that requires zero-interest rates as the New Normal? How can anyone claim this is a healthy, robust economy if tepid expansion depends entirely on unprecedented zero rates, unprecedented Federal Reserve monetization/asset purchases and a highly asymmetric wealth effect that has widened income and wealth inequality?


At this juncture, it's worthwhile recalling that mainstream economists, the Federal Reserve, government agencies and the mainstream financial media all deny the economy is in recession until it falls off a cliff. Only after a recession can no longer be denied will the organs of propaganda concede that the economy is indeed mired in a recession.

When the organs of propaganda finally concede that the economy is in recession, they inevitably fight the last war: whatever worked in the past is repeated, even though the next recession will be an entirely new financial battlefield. Repeating what worked in late 2008-early 2009 will fail, and fail catastrophically, because conditions have changed. 

Sunday, May 17, 2015

Once Saved, Always Saved?

Image result for liferaft on seaBy Fred Butler and originally published at gty.org 

Listen to a discussion about eternal security and you’ll eventually hear this question: “Are you saying that since we’re secure as Christians, we can do whatever we want to?” It’s the “once saved, always saved” idea that says, once you are saved, you’re saved no matter how you may behave.
But the question really misunderstands the biblical teaching about our sin and God’s grace in our lives.


Pursuing Godliness

Christians have struggled over the years with the best way to deal with sin in their lives. That struggle has produced unbiblical doctrines that promise to “aid” Christians along with their own endeavors to obtain personal godliness.
Perhaps you have encountered some of them. One of the more notorious false doctrines is perfectionism. It’s the belief that we can obtain perfect sinlessness in this life. In his book, The Vanishing Conscience, John MacArthur describes the dangers of Christian perfectionism,
Church history is littered with examples of sects and factions who taught various versions of Christian perfectionism. Nearly all these groups have either made utter shipwreck of the faith or been forced to modify their perfectionism to accommodate human imperfection. Every perfectionist inevitably comes face-to-face with clear and abundant empirical evidence that the residue of sin remains in the flesh and troubles even the most spiritual Christians throughout their earthly lives. In order to hang onto perfectionist doctrine, they must redefine sin or diminish the standard of holiness. Too often they do this at the expense of their own consciences. (The Vanishing Conscience, 127)
I have met a few perfectionists in the past. What I have noticed about their teaching is how they relegate sinfulness to only outward behaviors. One perfectionist I spoke with believed as long as he never physically committed adultery, he wasn’t in sin. Thinking about adultery didn’t count as being sinful in his book. I reminded him of Matthew 5:2728 – looking upon a woman to lust isadultery – but he cleverly dismissed the passage as irrelevant.
I quickly discovered similar groups of Christians like the perfectionists. Rather than “dumbing” sin down, they submitted themselves to outward, legalistic codes to obtain godliness. If they failed to keep those codes perfectly, they believed their salvation was in jeopardy.
These errant views of holiness spring from a misunderstanding of the biblical teaching on sanctification.

The Sanctifying Spirit


Sanctification is a process by which the Holy Spirit works in believers to gradually move them toward Christlikeness (2 Cor. 3:18). Take note of the word gradually in this definition: The Holy Spirit is gradually moving us toward Christlikeness; it is not an instantaneous work that makes us perfectly sinless. In Christian theology, the idea of the Holy Spirit gradually moving us to Christlikeness is called progressive sanctification. Our godliness is progressive, over a life-time of following Jesus.
The apostle Paul provides a concise description of our sanctification in Romans 6. He does not specifically use the word sanctification in this chapter, but he certainly outlines the concept.
For example, he writes in Romans 6:2 “How shall we who died to sin live any longer in it?” And in 6:6, “Knowing this, that our old man was crucified with Him, that the body of sin might be done away with, that we should no longer be slaves of sin.” And in 6:11, “Likewise you also, reckon yourselves to be dead indeed to sin, but alive to God in Christ Jesus our Lord.”
There are a handful of thoughts we can glean from Romans 6 that help us understand the doctrine of sanctification and answer our question, “Does being a Christian mean we can live anyway we want?” Let’s open our Bibles and look at a few theological points.
First, notice in verses 4 and 5 how Paul describes our relationship with Jesus as identified with His death and “made alive” in His resurrection. That is a reference to our regeneration we discussed in my previous article. God’s divine handiwork imparts a principle of new life in our lives.

Second, in verses 6 and 7, Paul is saying that we now have the power to obey God – a power we never had apart from Christ. Paul writes we have our “body of sin done away with.” The original word in that phrase can have the idea of made inoperative or rendered powerless.
When we were apart from Christ, we had neither a desire nor a willingness to obey God. We were “slaves to sin,” as it says in Romans 6:20. The effort we put forth to be righteous ultimately ended in failure because of our enslavement to sin’s power. Now that we are identified with Christ, sin’s power no longer holds dominion over us. We can now pursue righteousness!
Third, we are never made perfectly sinless, but we do gradually grow in righteousness with a daily life of obedience. In this respect, we put forth cooperative effort with the Spirit, but our cooperation flows out of a changed heart with new desires to obey God.
Paul exhorts us to godly obedience by telling us to present the members of our body as instruments of righteousness (Romans 6:13). His words speak to our whole person both inwardly and outwardly – our thought life, emotions and attitude, as well as our behavior when we interact with the world. For example, we turn our thought life to dwelling upon the Lord, our hands to serving God and others, and our lips to praising God and edifying His people.
Now, does this mean we automatically know how to think and act in a godly way in everything? No. We still carry a lot of baggage from our lives before Christ, and the worse we lived as sinners, the more baggage we will need to unpack. That’s why our sanctification is progressive. In Romans 12:2Titus 3:5, and Colossians 3:10, the Bible describes that work as our renewing process – our spiritual renovation retraining our minds to think like Christians.

The Beginning of a Good Work


So is Paul saying in Romans 6 that if we are saved, we can live anyway we want? The “once saved, always saved” idea? If you look closely at Romans 6:1, Paul is in fact answering that very objection. Do we continue in sin so grace may abound? In other words, “Paul, are you saying since we are saved, we are always secure, no matter what we do?” Paul answers emphatically, No!
His entire argument rests on the fact that our salvation begins and ends with God. He saves us, and then He sanctifies us.
I can imagine someone at this point thinking, “But I struggle a lot with sin.” John MacArthur has an expression I have heard him say often, “Godliness may not be the perfection of your life, but it is the direction of your life.” Our battle with sin will be a lifelong endeavor.
We may struggle for years with leftover sin and experience those occasional setbacks in our walk with Christ. But let us lay hold of a promise Paul wrote in Philippians 1:6: “Being confident of this very thing, that He who has begun a good work in you will complete it until the day of Jesus Christ.”