"If Something Rattles This Ponzi Scheme, Life In America Will Change Overnight" (ZeroHedge)

 

Submitted by Tyler Durden on 09/30/2014 21:13 -0400

• Census Bureau
• Medicare
• National Debt
• Obamacare

inShare4

Submitted by Michael Snyder of The Economic Collapse blog,

I know that headline sounds completely outrageous.  But it is actually true.  The U.S. government is borrowing about 8 trillion dollars a year, and you are about to see the hard numbers that prove this.  When discussing the national debt, most people tend to only focus on the amount that it increases each 12 months.  And as I wrote about recently, the U.S. national debt has increased by more than a trillion dollars in fiscal year 2014.  But that does not count the huge amounts of U.S. Treasury securities that the federal government must redeem each year.  When these debt instruments hit their maturity date, the U.S. government must pay them off.  This is done by borrowing more money to pay off the previous debts.  In fiscal year 2013, redemptions of U.S. Treasury securities totaled $7,546,726,000,000 and new debt totaling $8,323,949,000,000 was issued.  The final numbers for fiscal year 2014 are likely to be significantly higher than that.

So why does so much government debt come due each year?

Well, in recent years government officials figured out that they could save a lot of money on interest payments by borrowing over shorter time frames.  For example, it costs the government far more to borrow money for 10 years than it does for 1 year.  So a strategy was hatched to borrow money for very short periods of time and to keep "rolling it over" again and again and again.

This strategy has indeed saved the federal government hundreds of billions of dollars in interest payments, but it has also created a situation where the federal government must borrow about 8 trillion dollars a year just to keep up with the game.

So what happens when the rest of the world decides that it does not want to loan us 8 trillion dollars a year at ultra-low interest rates?

Well, the game will be over and we will be in a massive amount of trouble.

I am about to share with you some numbers that were originally reported by CNS News.  As you can see, far more debt is being redeemed and issued today than back during the middle part of the last decade...

2013

Redeemed: $7,546,726,000,000

Issued: $8,323,949,000,000

Increase: $777,223,000,000

2012

Redeemed: $6,804,956,000,000

Issued: $7,924,651,000,000

Increase: $1,119,695,000,000

2011

Redeemed: $7,026,617,000,000

Issued: $8,078,266,000,000

Increase: $1,051,649,000,000

2010

Redeemed: $7,206,965,000,000

Issued: $8,649,171,000,000

Increase: $1,442,206,000,000

2009

Redeemed: $7,306,512,000,000

Issued: $9,027,399,000,000

Increase: $1,720,887,000,000

2008

Redeemed: $4,898,607,000,000

Issued: $5,580,644,000,000

Increase: $682,037,000,000

2007

Redeemed: $4,402,395,000,000

Issued: $4,532,698,000,000

Increase: $130,303,000,000

2006

Redeemed: $4,297,869,000,000

Issued: $4,459,341,000,000

Increase: $161,472,000,000

The only way that this game can continue is if the U.S. government can continue to borrow gigantic piles of money at ridiculously low interest rates.

And our current standard of living greatly depends on the continuation of this game.

If something comes along and rattles this Ponzi scheme, life in America could change radically almost overnight.

In the United States today, we have a heavily socialized system that hands out checks to nearly half the population. In fact, 49 percent of all Americans live in a home that gets direct monetary benefits from the federal government each month according to the U.S. Census Bureau.  And it is hard to believe, but Americans received more than 2 trillion dollars in benefits from the federal government last year alone.  At this point, the primary function of the federal government is taking money from some people and giving it to others.  In fact, more than 70 percent of all federal spending goes to "dependence-creating programs", and the government runs approximately 80 different "means-tested welfare programs" right now.  But the big problem is that the government is giving out far more money than it is taking in, so it has to borrow the difference.  As long as we can continue to borrow at super low interest rates, the status quo can continue.

But a Ponzi scheme like this can only last for so long.

It has been said that when the checks stop coming in, chaos will begin in the streets of America.

The looting that took place when a technical glitch caused the EBT system to go down for a short time in some areas last year and the rioting in the streets of Ferguson, Missouri this year were both small previews of what we will see in the future.

And there is no way that we will be able to "grow" our way out of this problem.

As the Baby Boomers continue to retire, the amount of money that the federal government is handing out each year is projected to absolutely skyrocket. Just consider the following numbers...

-Back in 1965, only one out of every 50 Americans was on Medicaid.  Today, more than 70 million Americans are on Medicaid, and it is being projected that Obamacare will add 16 million more Americans to the Medicaid rolls.

-When Medicare was first established, we were told that it would cost about $12 billion a year by the time 1990 rolled around.  Instead, the federal government ended up spending $110 billion on the program in 1990, and the federal government spent approximately $600 billion on the program in 2013.

-It is being projected that the number of Americans on Medicare will grow from 50.7 million in 2012 to 73.2 million in 2025.

-At this point, Medicare is facing unfunded liabilities of more than 38 trillion dollars over the next 75 years.  That comes to approximately $328,404 for every single household in the United States.

-In 1945, there were 42 workers for every retiree receiving Social Security benefits.  Today, that number has fallen to 2.5 workers, and if you eliminate all government workers, that leaves only 1.6 private sector workers for every retiree receiving Social Security benefits.

-Right now, there are approximately 63 million Americans collecting Social Security benefits.  By 2035, that number is projected to soar to an astounding 91 million.

-Overall, the Social Security system is facing a 134 trillion dollar shortfall over the next 75 years.

-The U.S. government is facing a total of 222 trillion dollars in unfunded liabilities during the years ahead.  Social Security and Medicare make up the bulk of that.

Yes, things seem somewhat stable for the moment in America today.

But the same thing could have been said about 2007. The stock market was soaring, the economy seemed like it was rolling right along and people were generally optimistic about the future.

Then the financial crisis of 2008 erupted and it seemed like the world was going to end.

Well, the truth is that another great crisis is rapidly approaching, and we are in far worse shape financially than we were back in 2008.

Don't get blindsided by what is ahead.  Evidence of the coming catastrophe is all around you.

Average:

Poverty In The Black Community Is The Result of Culture Not Racism (AmericanThinker.com)

 

By Patricia L. Dickson

I have often been accused by friends (black, white and all others in between) of being too logical, to the point that I am inhibited from seeing other people’s point of view ( I am not sure if that is a compliment or insult). They say that I enter into discussions with the false assumption that others are just as logical and rational as I am. I have been told this so often that I have conceded that perhaps they are telling the truth (they know me well enough to make such claims). Because I have finally accepted the charge against me, I often consult friends on matters that I find perplexing.

A black female friend and I once discussed how our historically unemployed (lazy) relatives often claimed that we were rich simply because we had things that they did not. I said to her that surely they understood that we worked for everything that we have. Her response to me was that they did not understand how we acquired what we had. I told her that it was illogical for someone not to correlate money or possessions with work, and I refused to believe it. Well, a short time later, my friend’s comments proved true.

A female relative of mine came to live with me for a short time. One day when I came home from work, she asked me where everyone in the neighborhood was. She said that during the day, she would go outdoors looking for someone to talk to and no one was around. I told her that they were at work, and I asked her how she thought the neighbors could pay for their homes if they did not go to work (just as I was going to work every day). She looked at me with a confused look on her face. Up until that point (she was nearly sixty years old), she had lived in neighborhoods where everyone (including her) received some kind of government check and therefore did not work. She always had someone to shuck and jive with because everyone was at home all day long. She told me that she was bored living in my (middleclass working) neighborhood.

A male relative of mine once tried to play the guilt trip on me in order to get money from me by lamenting about how tired he was of being broke. He told me that I did not know how it felt to be broke because I have always had money. He was in his early fifties and had spent his entire adult life mostly unemployed and in and out of jail for petty crimes. I asked him: did he think that money grew on trees? I told him that I have worked all of my life for everything that I have. He walked away with his tail between his legs.

If poor blacks cannot correlate money and possessions with work, there is no wonder that they think that they are entitled to the same things as working people. Most liberal voters are immature and live in a fantasy world. They believe that everything that working people have fell from the sky, and they somehow were not around to catch some of it. Therefore, they believe that it is not fair that they do not have the same things. Is that why it is so easy for the race baiters to go into these communities and claim that the rich have stolen from them?

Many black conservatives have said that Republicans need to go into the black communities in order to win the black vote. However, my concern is with how our message of hard work will be received by individuals in these liberal bastions who have never witnessed anyone consistently going to work every day.  Liberals have inoculated these individuals against work and responsibility by continuously plying them with government handouts.

I once had a discussion with another black female friend about the unemployment history in the black inner city neighborhoods. I asked her why the blacks in these neighborhoods did not apply for jobs at the establishments that they frequent. She told me that the reason why they did not apply for jobs is that poor blacks do not think that the jobs are for them. I asked her what she meant by for them. She explained that poor blacks have been programmed to believe that jobs are only for white people and not for them, so therefore they do not apply.  I do not know how my friend came to that conclusion; however, it was not long before her statements also proved true.

A young black man was lamenting to me about the lack of job opportunities for black men in corporate America. He told me that although he had a college degree, he was unable to obtain employment. Assuming that he had been applying for jobs, I asked him where he had applied. He told me that he had not applied anywhere. I asked why had he not applied and he said that he did not fit the description that the employers were looking for. He went on to claim that society, through television and movies, portray white men in suits as successful executives, therefore, he concluded that he did not fit the description for corporate America. I will concede that there is some merit to the argument that television and movies portray white businesspersons in suits as successful; however I cannot logically understand why someone would not at least apply for jobs. If poor blacks really believe that jobs are not for them, who is it that taught them that?

Most of the things that individuals are taught comes from the culture in which they were raised, whether it be work ethic, habits, or beliefs. Growing up in the South, my parents could not afford to buy me designer clothes and shoes. After joining the military, I purchased my first pair of designer sneakers and wore them home on my first leave after boot camp and job training.  My older male cousin looked down at my sneakers and asked me what I was doing wearing them. He said that black people were not supposed to wear those type of shoes. It has been over 26 years since he made that statement and I remember it just like it was yesterday. He had been programmed by the culture that he was raised in to think that even if you have the money to purchase something, you were not supposed to have it. I often talk with successful blacks who think that they do not deserve what they have. One black male friend that lives in an affluent neighborhood told me that when he and his family are walking around in the town center, he feels that he is not supposed to be there.

Until the black community looks inward to solve its problems, nothing will change. Many problems in the black community are the result of a self-imposed inferiority complex. That is why it infuriates me so much to hear race baiters telling poor blacks that they are victims. The victim mindset causes complacency and impotence of action in an individual. One reason that the black community has regressed instead of progressed is due to the victim mindset that has caused cognitive blindness and mental paralysis. Blacks cannot continue to blame society for how blacks Americans are perceived.  The black community must examine its culture and its effect on the lives of the individuals in the black community.

Patricia blogs at Christian Commentary (http://patriciascornerblog.com), or contact the author at dicksonpat@sky.com. Follow me on twitter@Patrici5767099.

I have often been accused by friends (black, white and all others in between) of being too logical, to the point that I am inhibited from seeing other people’s point of view ( I am not sure if that is a compliment or insult). They say that I enter into discussions with the false assumption that others are just as logical and rational as I am. I have been told this so often that I have conceded that perhaps they are telling the truth (they know me well enough to make such claims). Because I have finally accepted the charge against me, I often consult friends on matters that I find perplexing.

A black female friend and I once discussed how our historically unemployed (lazy) relatives often claimed that we were rich simply because we had things that they did not. I said to her that surely they understood that we worked for everything that we have. Her response to me was that they did not understand how we acquired what we had. I told her that it was illogical for someone not to correlate money or possessions with work, and I refused to believe it. Well, a short time later, my friend’s comments proved true.

A female relative of mine came to live with me for a short time. One day when I came home from work, she asked me where everyone in the neighborhood was. She said that during the day, she would go outdoors looking for someone to talk to and no one was around. I told her that they were at work, and I asked her how she thought the neighbors could pay for their homes if they did not go to work (just as I was going to work every day). She looked at me with a confused look on her face. Up until that point (she was nearly sixty years old), she had lived in neighborhoods where everyone (including her) received some kind of government check and therefore did not work. She always had someone to shuck and jive with because everyone was at home all day long. She told me that she was bored living in my (middleclass working) neighborhood.

A male relative of mine once tried to play the guilt trip on me in order to get money from me by lamenting about how tired he was of being broke. He told me that I did not know how it felt to be broke because I have always had money. He was in his early fifties and had spent his entire adult life mostly unemployed and in and out of jail for petty crimes. I asked him: did he think that money grew on trees? I told him that I have worked all of my life for everything that I have. He walked away with his tail between his legs.

If poor blacks cannot correlate money and possessions with work, there is no wonder that they think that they are entitled to the same things as working people. Most liberal voters are immature and live in a fantasy world. They believe that everything that working people have fell from the sky, and they somehow were not around to catch some of it. Therefore, they believe that it is not fair that they do not have the same things. Is that why it is so easy for the race baiters to go into these communities and claim that the rich have stolen from them?

Many black conservatives have said that Republicans need to go into the black communities in order to win the black vote. However, my concern is with how our message of hard work will be received by individuals in these liberal bastions who have never witnessed anyone consistently going to work every day.  Liberals have inoculated these individuals against work and responsibility by continuously plying them with government handouts.

I once had a discussion with another black female friend about the unemployment history in the black inner city neighborhoods. I asked her why the blacks in these neighborhoods did not apply for jobs at the establishments that they frequent. She told me that the reason why they did not apply for jobs is that poor blacks do not think that the jobs are for them. I asked her what she meant by for them. She explained that poor blacks have been programmed to believe that jobs are only for white people and not for them, so therefore they do not apply.  I do not know how my friend came to that conclusion; however, it was not long before her statements also proved true.

A young black man was lamenting to me about the lack of job opportunities for black men in corporate America. He told me that although he had a college degree, he was unable to obtain employment. Assuming that he had been applying for jobs, I asked him where he had applied. He told me that he had not applied anywhere. I asked why had he not applied and he said that he did not fit the description that the employers were looking for. He went on to claim that society, through television and movies, portray white men in suits as successful executives, therefore, he concluded that he did not fit the description for corporate America. I will concede that there is some merit to the argument that television and movies portray white businesspersons in suits as successful; however I cannot logically understand why someone would not at least apply for jobs. If poor blacks really believe that jobs are not for them, who is it that taught them that?

Most of the things that individuals are taught comes from the culture in which they were raised, whether it be work ethic, habits, or beliefs. Growing up in the South, my parents could not afford to buy me designer clothes and shoes. After joining the military, I purchased my first pair of designer sneakers and wore them home on my first leave after boot camp and job training.  My older male cousin looked down at my sneakers and asked me what I was doing wearing them. He said that black people were not supposed to wear those type of shoes. It has been over 26 years since he made that statement and I remember it just like it was yesterday. He had been programmed by the culture that he was raised in to think that even if you have the money to purchase something, you were not supposed to have it. I often talk with successful blacks who think that they do not deserve what they have. One black male friend that lives in an affluent neighborhood told me that when he and his family are walking around in the town center, he feels that he is not supposed to be there.

Until the black community looks inward to solve its problems, nothing will change. Many problems in the black community are the result of a self-imposed inferiority complex. That is why it infuriates me so much to hear race baiters telling poor blacks that they are victims. The victim mindset causes complacency and impotence of action in an individual. One reason that the black community has regressed instead of progressed is due to the victim mindset that has caused cognitive blindness and mental paralysis. Blacks cannot continue to blame society for how blacks Americans are perceived.  The black community must examine its culture and its effect on the lives of the individuals in the black community.

Patricia blogs at Christian Commentary (http://patriciascornerblog.com), or contact the author at dicksonpat@sky.com. Follow me on twitter@Patrici5767099.

The US Ponzi Economy (ZeroHedge.com)

 

 

Submitted by Tyler Durden on 09/21/2014 17:21 -0400

Excerpted from John Hussman's Weekly Market Comment,

When the most persistent, most aggressive, and most sizeable actions of policymakers are those that discourage saving, promote debt-financed consumption, and encourage the diversion of scarce savings to yield-seeking financial speculation rather than productive investment, the backbone that supports a rising standard of living is broken.

...

Meanwhile, financial repression by the Federal Reserve has held interest rates at zero, discouraging savings while encouraging and enabling households to go more deeply into debt. Various forms of deficit-financed government assistance and unemployment compensation have also been used to make up the shortfall, allowing consumption, and by extension, corporate revenues and profits, to be sustained. As long-term economic prospects have deteriorated, the illusion of prosperity has been maintained through soaring indebtedness, coupled with yield-seeking speculation in risky assets that has repeatedly (albeit not always immediately) been followed by crashes throughout history

The U.S. Ponzi Economy is one where domestic workers are underemployed and consume beyond their means, household and government debt make up the shortfall, corporate profits expand to a record share of GDP as competitive pressures are reduced and cheap goods and labor are outsourced, corporations both accumulate the debt of other companies and issue new debt of their own, primarily to repurchase their own shares at escalating valuations, our trading partners (particularly China and Japan) become our largest creditors and accumulate trillions of dollars of claims that can effectively be traded for U.S. property and future output, Fed policy encourages the yield-seeking diversion of scarce savings toward speculation in risky securities, and as with every Ponzi scheme, everyone is happy as long as nobody seeks to be repaid.

Buybacks are not a return of capital to shareholders – they are partly a leveraged speculation on shareholder’s behalf, partly a strategy to enhance per-share earnings by reducing share count, and partly a way to reduce the dilution from stock-based compensation to corporate insiders. Moreover, repurchases move in tandem with corporate debt issuance, which is another way of saying that the history of stock buybacks is one of companies using debt to buy their stock at overvalued prices.

Keep in mind also that corporate share repurchases have no tendency to concentrate at points of depressed valuation, and but have instead been most aggressive at points that have historically represented severe overvaluation.

*  *  *

An important note on the equity markets

We’re observing a continued deterioration in market internals at extremely elevated valuations, much as we observed in July 2007 (see Market Internals Go Negative). Credit spreads have widened in recent weeks, breadth has deteriorated (resulting in weakness among the average stock despite marginal new highs in several major indices), and downside leadership is also increasing. As a small example that illustrates the larger point, despite the marginal new high in the S&P 500 last week, the NYSE showed more declines than advances, and nearly as many new 52-week lows as new 52-week highs. About half of all equities traded on the Nasdaq are already down 20% from their 52-week highs and below their 200-day averages. Small cap stocks have also weakened considerably relative to the S&P 500.

Indeed, though it’s not a signal that factors into our own measures of market internals (and we also wouldn’t put much weight on it in the absence of deterioration in our own measures), it’s interesting that Friday also produced a “Hindenburg” signal as a result of that lack of internal uniformity: both new highs and new lows exceeded 2.5% of issues traded, the S&P 500 was above its 10-week average, and breadth as measured by advance-decline line is deteriorating.

One can certainly wait for greater internal deterioration before raising concerns, but my impression is that this confirmation is likely to emerge in the form of a steep, abrupt initial decline (which we call an “air pocket”). That isn’t a forecast, but an observation based on prior instances of deteriorating uniformity following extended overvalued, overbought, overbullish periods. This time may be different. Needless to say, we aren’t counting on that.

The chart below shows the cumulative NYSE advance-decline line (red) versus the S&P 500.

While the divergence is not profound, similar and broader divergences are appearing across a wide range of asset classes and security types, and it’s the uniformity of those divergences – not simply the extent – that contains information that suggests that investor risk preferences are subtly shifting toward risk aversion.

h/t A.N.

Average:

4.8

Your rating: None Average: 4.8 (10 votes)

Which is worse? (Freerepublic.com)

To: Kaslin

NBA vs NFL

• 36 have been accused of spousal abuse
• 7 have been arrested for fraud
• 19 have been accused of writing bad checks
• 117 have directly or indirectly bankrupted at least 2 businesses
• 3 have done time for assault
• 71 cannot get a credit card due to bad credit
• 14 have been arrested on drug-related charges
• 8 have been arrested for shoplifting
• 21 currently are defendants in lawsuits and
• 84 have been arrested for drunk driving.

Can you guess which organization this is?
Is it the NBA or NFL?

highlight between here > Neither, it’s the 535 members of the United States Congress. < and here for the answer.

Educational 'Reforms' Are Crushing Our People (americanthinker.com)

 

By E. Jeffrey Ludwig

We see social engineering now at the center of all educational reform.  Whether at the local level or, as is now more and more the case, at the federal level (Race to the Top moneys to support Common Core), the meta-purpose is a new social engineering whereby the individual teacher, the individual student, or even the individual principal is moved away from center stage.

Systemic reorganization of educational institutions pretends to have as its highest goal "efficiency," where students move smoothly toward their goals without setbacks, failures, or unnerving attacks on their self-esteem.  A new meta-control by the master puppeteers of management infrastructure working alongside software curriculum creators is the basis for a new partnership.  The roles of individual actors within the schools – student, counselor, teacher, or even principal – become supporting cast, so to speak, for the overarching goals set by this partnership.

Even the widespread use of technology to provide the students with computers and new software to facilitate learning, while useful, merely creates an appearance of structure over a dumbing down and settling into mediocrity or worse: total contempt for and disintegration of learning and mental process for the vast majority of people.  The individual student does not have to think; rather, the program he or she is using takes him or her step-by-step, inexorably to the correct answer.  This serves the agenda of the master puppeteers mentioned above.  They will tighten their controls and the dependence of others who are struggling in the schools.

Controversy over implementation is superficial and tends to obscure the totalitarian impulse behind their machinations.  For example, Michael Bloomberg and William “Bill” de Blasio are successive mayors of New York City.  Both are statists.  Both believe that the government should organize most facets of human experience and suppress individualism in the schools and other segments of society.  Both want to dumb down the schools in the context of a gung-ho spirit of reform.  There is to be an illusion of progress and success despite an ongoing downgrading and dilution of educational achievement and motivation.

The weaknesses, failures, and ultimately the path of doom that we find in education has not been and cannot be remediated by the measures of so-called reform taken during the past twenty-five to forty years, of which Common Core(CCSS) is only the most recent.  Before Common Core, we had No Child Left Behind (NCLB).  Before that, we had outcomes-based programs combined with school-to-work paradigms.  All these schemes resulted in an unprecedented influx of federal money into state education systems.

Under Common Core, state and local control is compromised as never before.  Standardized testing across the curricula is establishing new standardized goals and norms for curricular content.  New teacher evaluation frameworks à la Danielson and others are being implemented nationwide, with an unsurprising similarity of criteria for determining teacher effectiveness.  Extending the length of the school day or the number of years the youth spend in school is standard in the national mantra of “reform.”

Common Core State Standards has followed No Child Left Behind as the central federal initiative in education.  But unlike NCLB, Common Core was not instated by legislation to be reviewed by our representatives with a response from the public, but as a fait accompli imposed on the public by a vast strategy implemented by government bureaucrats concentrated in the U.S. Dept. of Education, NGOs (that have a stake in consulting, providing curricula, and analyzing test composition and results), software developers of educational software, and educational book publishers (often participating in corporate conglomerates with the software developers).

Additionally, schools have become one-stop social agencies in many cases, with clinics to deal with mental and physical health problems, pregnancy and abortion counseling centers, and social and emotional learning (SEL) programs to teach more primitive personalities the meaning of the Golden Rule.  Thus, in loco parentis has given way to the reverse formula, where families are called upon to support the mission of the schools instead of schools supporting the mission of the family.

Disruptive behavior in the schools has increased exponentially during the past 30 years.  Testing is often an alternative to education rather than simply a part of the educational process – questions are created and scored in order to assure certain outcomes (i.e., percentages who will pass).  The teachers’ grade books have become publicly available (typically, all grades have to be published on the internet using programs like Skedula or Pupil Path), thereby undermining some of the teachers' authority and control.  Teachers have been reduced to being “facilitators.”  This is the new “f-word” to describe the essence of the teacher’s role.

The teacher as authority and the student knowing his or her place in the universe have been partially invalidated.  The teacher as friend, mentor, and big brother or sister is increasingly perceived as the most desirable interpersonal model.  A more reserved relatedness of teacher to student has given way to the “new informality" (a "give me five" mentality).  Grade inflation to gratify the endless demand for self-esteem-building is seen as encouragement rather than self-seeking deception.  Goals like making a living or rising to new standards of excellence are downgraded in favor of an enhanced "sense of self."

These many “meta-changes” are being embraced by the entire spectrum of political positions; both red and blue states have accepted the premises and goals of NCLB and CCSS, with only a few exceptions.  Yet I would propose that these reforms or “irreversible changes” are exercises in futility, and could possibly lead to the mental and physical enslavement of the population instead of leading to, as Alexis de Tocqueville envisioned, a thoughtful and responsible democratic citizenry.  Ultimately, the changes taking place in education have evolved from a leftist/statist/fascistic worldview – a totalitarian impulse.  The pre-eminence of systemic thinking as opposed to focus upon the individual student and teacher – i.e., the classroom – for reform and improvement tends in the direction of Aldous Huxley’s Brave New World.  It seems a barren vision of a vast army of clones and drones satisfied with their ignorance and lockstep conformity.  Further, it betrays the federalism enshrined in the Tenth Amendment of our Constitution.  And it attempts to replace an ideal of individual freedom before a just God with the ideal of collective rights before an all-knowing government.

The public schools are making guinea pigs of our children.  It is amazing to this writer that the outcomes are not even worse than they are.  But the definite lines of hope for education are fading fast; an era of extreme educational decline is coming upon us unless we begin to retrench four decades of reform and get back to some basic ideas, principles, information, and goals that we have lost sight of.  Knowledge, rationality, and compassion based on Judeo-Christian values must be reaffirmed as the determinative values of education going forward.

Jeff Ludwig has taught at Harvard, Penn State, Juniata College, CUNY, and for 21 years in the New York Public High Schools.  His latest book, The Catastrophic Decline of America’s High Schools:  New York City Schools, A Case Study, will be out later this year or early 2015.

We see social engineering now at the center of all educational reform.  Whether at the local level or, as is now more and more the case, at the federal level (Race to the Top moneys to support Common Core), the meta-purpose is a new social engineering whereby the individual teacher, the individual student, or even the individual principal is moved away from center stage.

Systemic reorganization of educational institutions pretends to have as its highest goal "efficiency," where students move smoothly toward their goals without setbacks, failures, or unnerving attacks on their self-esteem.  A new meta-control by the master puppeteers of management infrastructure working alongside software curriculum creators is the basis for a new partnership.  The roles of individual actors within the schools – student, counselor, teacher, or even principal – become supporting cast, so to speak, for the overarching goals set by this partnership.

Even the widespread use of technology to provide the students with computers and new software to facilitate learning, while useful, merely creates an appearance of structure over a dumbing down and settling into mediocrity or worse: total contempt for and disintegration of learning and mental process for the vast majority of people.  The individual student does not have to think; rather, the program he or she is using takes him or her step-by-step, inexorably to the correct answer.  This serves the agenda of the master puppeteers mentioned above.  They will tighten their controls and the dependence of others who are struggling in the schools.

Controversy over implementation is superficial and tends to obscure the totalitarian impulse behind their machinations.  For example, Michael Bloomberg and William “Bill” de Blasio are successive mayors of New York City.  Both are statists.  Both believe that the government should organize most facets of human experience and suppress individualism in the schools and other segments of society.  Both want to dumb down the schools in the context of a gung-ho spirit of reform.  There is to be an illusion of progress and success despite an ongoing downgrading and dilution of educational achievement and motivation.

The weaknesses, failures, and ultimately the path of doom that we find in education has not been and cannot be remediated by the measures of so-called reform taken during the past twenty-five to forty years, of which Common Core(CCSS) is only the most recent.  Before Common Core, we had No Child Left Behind (NCLB).  Before that, we had outcomes-based programs combined with school-to-work paradigms.  All these schemes resulted in an unprecedented influx of federal money into state education systems.

Under Common Core, state and local control is compromised as never before.  Standardized testing across the curricula is establishing new standardized goals and norms for curricular content.  New teacher evaluation frameworks à la Danielson and others are being implemented nationwide, with an unsurprising similarity of criteria for determining teacher effectiveness.  Extending the length of the school day or the number of years the youth spend in school is standard in the national mantra of “reform.”

Common Core State Standards has followed No Child Left Behind as the central federal initiative in education.  But unlike NCLB, Common Core was not instated by legislation to be reviewed by our representatives with a response from the public, but as a fait accompli imposed on the public by a vast strategy implemented by government bureaucrats concentrated in the U.S. Dept. of Education, NGOs (that have a stake in consulting, providing curricula, and analyzing test composition and results), software developers of educational software, and educational book publishers (often participating in corporate conglomerates with the software developers).

Additionally, schools have become one-stop social agencies in many cases, with clinics to deal with mental and physical health problems, pregnancy and abortion counseling centers, and social and emotional learning (SEL) programs to teach more primitive personalities the meaning of the Golden Rule.  Thus, in loco parentis has given way to the reverse formula, where families are called upon to support the mission of the schools instead of schools supporting the mission of the family.

Disruptive behavior in the schools has increased exponentially during the past 30 years.  Testing is often an alternative to education rather than simply a part of the educational process – questions are created and scored in order to assure certain outcomes (i.e., percentages who will pass).  The teachers’ grade books have become publicly available (typically, all grades have to be published on the internet using programs like Skedula or Pupil Path), thereby undermining some of the teachers' authority and control.  Teachers have been reduced to being “facilitators.”  This is the new “f-word” to describe the essence of the teacher’s role.

The teacher as authority and the student knowing his or her place in the universe have been partially invalidated.  The teacher as friend, mentor, and big brother or sister is increasingly perceived as the most desirable interpersonal model.  A more reserved relatedness of teacher to student has given way to the “new informality" (a "give me five" mentality).  Grade inflation to gratify the endless demand for self-esteem-building is seen as encouragement rather than self-seeking deception.  Goals like making a living or rising to new standards of excellence are downgraded in favor of an enhanced "sense of self."

These many “meta-changes” are being embraced by the entire spectrum of political positions; both red and blue states have accepted the premises and goals of NCLB and CCSS, with only a few exceptions.  Yet I would propose that these reforms or “irreversible changes” are exercises in futility, and could possibly lead to the mental and physical enslavement of the population instead of leading to, as Alexis de Tocqueville envisioned, a thoughtful and responsible democratic citizenry.  Ultimately, the changes taking place in education have evolved from a leftist/statist/fascistic worldview – a totalitarian impulse.  The pre-eminence of systemic thinking as opposed to focus upon the individual student and teacher – i.e., the classroom – for reform and improvement tends in the direction of Aldous Huxley’s Brave New World.  It seems a barren vision of a vast army of clones and drones satisfied with their ignorance and lockstep conformity.  Further, it betrays the federalism enshrined in the Tenth Amendment of our Constitution.  And it attempts to replace an ideal of individual freedom before a just God with the ideal of collective rights before an all-knowing government.

The public schools are making guinea pigs of our children.  It is amazing to this writer that the outcomes are not even worse than they are.  But the definite lines of hope for education are fading fast; an era of extreme educational decline is coming upon us unless we begin to retrench four decades of reform and get back to some basic ideas, principles, information, and goals that we have lost sight of.  Knowledge, rationality, and compassion based on Judeo-Christian values must be reaffirmed as the determinative values of education going forward.

Jeff Ludwig has taught at Harvard, Penn State, Juniata College, CUNY, and for 21 years in the New York Public High Schools.  His latest book, The Catastrophic Decline of America’s High Schools:  New York City Schools, A Case Study, will be out later this year or early 2015.

11 Ways You Know You Live In A Country Run By Idiots

Zero Hedge ^ | 9/92014 | Tyler Durden

Posted on ‎9‎/‎9‎/‎2014‎ ‎4‎:‎36‎:‎19‎ ‎PM by VA Voter

1. If you can get arrested for hunting or fishing without a license, but not for being in the country illegally, you live in a country run by idiots.

2. If you have to get your parents’ permission to go on a field trip or take an aspirin in school, but not to get an abortion, you live in a country run by idiots.

3. If you have to show identification to board an airplane, cash a check, buy liquor or check out a library book, but not to vote on who runs the government, you live in a country run by idiots.

4. If the government wants to ban stable, law-abiding citizens from owning gun magazines with more than ten rounds, but gives 20 F-16 fighter jets to the crazy leaders in Egypt, you live in a country run by idiots.

5. If, in the largest city, you can buy two 16-ounce sodas, but not a 24-ounce soda because 24-ounces of a sugary drink might make you fat, you live in a country run by idiots.

6. If an 80-year-old woman can be stripped searched by the TSA but a woman in a hijab is only subject to having her neck and head searched, you live in a country run by idiots.

7. If your government believes that the best way to eradicate trillions of dollars of debt is to spend trillions more, you live in a country run by idiots.

8. If a seven year old boy can be thrown out of grade school for saying his teacher’s “cute,” but hosting a sexual exploration or diversity class in grade school is perfectly acceptable, you live in a country run by idiots.

9. If hard work and success are met with higher taxes and more government intrusion, while not working is rewarded with EBT cards, WIC checks, Medicaid, subsidized housing and free cell phones, you live in a country run by idiots.

10. If the government’s plan for getting people back to work is to incentivize NOT working, with 99 weeks of unemployment checks and no requirement to prove they applied but can’t find work, you live in a country run by idiots.

11. If being stripped of the ability to defend yourself makes you more “safe” according to the government, you live in a country run by idiots.

---

Australian scientist calls for ‘heads to roll’ over adjusted temperature data (WUWT)

 

Anthony Watts / 2 days ago August 26, 2014

Yesterday we posted on BoM’s bomb on station temperature trend fiddling. where BoM claimed the trend difference was a result of a station move. Apparently, BoM can’t even keep track of their own station histories! Today, Dr. Jennifer Marohasy writes: Who’s going to be sacked for making-up global warming at Rutherglen?

She writes: HEADS need to start rolling at the Australian Bureau of Meteorology. The senior management have tried to cover-up serious tampering that has occurred with the temperatures at an experimental farm near Rutherglen in Victoria. Retired scientist Dr Bill Johnston used to run experiments there. He, and many others, can vouch for the fact that the weather station at Rutherglen, providing data to the Bureau of Meteorology since November 1912, has never been moved. Senior management at the Bureau are claiming the weather station could have been moved in 1966 and/or 1974 and that this could be a justification for artificially dropping the temperatures by 1.8 degree Celsius back in 1913.

The temperature record at Rutherglen has been corrupted by managers at the Australian Bureau of Meteorology.

Surely its time for heads to roll!

…
The unhomogenized/raw mean annual minimum temperature trend for Rutherglen for the 100-year period from January 1913 through to December 2013 shows a slight cooling trend of 0.35 degree C per 100 years. After homogenization there is a warming trend of 1.73 degree C per 100 years. This warming trend is essentially achieved by progressively dropping down the temperatures from 1973 back through to 1913. For the year of 1913 the difference between the raw temperature and the ACORN-SAT temperature is a massive 1.8 degree C.

…

In the case of Rutherglen the Bureau has just let the algorithms keep jumping down the temperatures from 1973. To repeat the biggest change between the raw and the new values is in 1913 when the temperature has been jumped down a massive 1.8 degree C.In doing this homogenization a warming trend is created when none previously existed.

The Bureau has tried to justify all of this to Graham Lloyd at The Australian newspaper by stating that there must have been a site move, its flagging the years 1966 and 1974. But the biggest adjustment was made in 1913! In fact as Bill Johnston explains in today’s newspaper, the site never has moved.

Surely someone should be sacked for this blatant corruption of what was a perfectly good temperature record.

more here: http://jennifermarohasy.com/2014/08/whos-going-to-be-sacked-for-making-up-global-warming-at-rutherglen/

The Stunning Charts Showing Just How Much Richer The Rich Have Gotten While The Poor Drown In Debt (Zerohedge)

 

Submitted by Tyler Durden on 08/21/2014 19:59 -0400

• Census Bureau
• Purchasing Power

inShare9

The Fed's epic wealth redistribution scheme has gotten so simple, even a 5 year old Census Bureau employee gets it.

In the latest Household Wealth report by the government agency, the Census found that for the period ended 2011 the rich got richer (and would get much richer in the subsequent 2.5 years), while the poor, i.e. the majority of the US population, got poorer. In fact, not only did the poor get poorer, but the first quintile of the US population, or the bottom 20% by net worth, certainly not by representation as it happens to be the most populated, saw a decline in net worth from negative $905 in 2000 to negative $6,029, in other words debt.  Remember this chart showing that the rich have assets and the poor have debt...

... Well here it is again, this time with numbers populated from the Census Bureau:

In the meantime the rich have gotten ridiculously rich. The numbers, for 2011, are straightforward: the median net worth of the top 20% rose 0.4% to $630,754, and has increased by $61,379 in net worth since the year 2000. A simple infographic showing this:

A time lapse at the change in net worth across all cohorts. Of note: the 4th and 5th quintiles have done well. Everyone else, not so much. In fact, the median net worth for all households declined by 6.8% ot $5,046 between 2000 and 2011!

This is how the Census phrases it:

Median net worth increased between 2000 and 2011 for households in the top two quintiles of the net worth distribution (the wealthiest 40 percent), while declining for those in the lower three quintiles (the bottom 60 percent), according to new statistics released today by the U.S. Census Bureau. The result was a widening wealth gap between those at the top and those in the middle and bottom of the net worth distribution. Each quintile represents 20 percent, or one-fifth, of all households.

According to Distribution of Household Wealth in the U.S.: 2000 to 2011 and associated detailed tables, median household net worth decreased by $5,124 for households in the first (bottom) net worth quintile and increased by $61,379 (or 10.8 percent) for those in the highest (top) quintile (Figure 1). Median net worth of households in the highest quintile was 39.8 times higher than the second lowest quintile in 2000, and it rose to 86.8 times higher in 2011. (Figure 2).

The report also details a widening of the wealth gap for households sharing the same demographic characteristics, such as age, race and Hispanic origin, and educational attainment of the householder. For example, the median net worth for non-Hispanic whites in the highest quintile was 21.8 times higher than for those in the second-lowest quintile in 2000; in 2011, this had increased to 31.5 times higher. For blacks, the ratio increased from 139.9 to 328.1, and for Hispanics, the increase was from 158.4 to 220.9.

As noted above, keep in mind that this data is only through 2011. Based on historical data, and as we have reported previously total household net worth surpassed previous records in mid 2013 and is currently in uncharted territory courtesy entirely of the relentless engineered rise in the Fed-manipulated stock market. In fact, based on Q1 data, total household net worth is at a record high of $81.8 trillion, with the bulk of it, or $67 trillion, derived from financial assets.

Which means that in the interim two years the rich not only got even richer, but have now surpassed all previous records.

And by implication, America's poor, that 20% on the net worth scale which is far greater than 20% in terms of population and that has only debt to show and no assets, are currently so deep in debt, there is no wonder the US economy is a complete disaster to all but the choice few who comprise the top quntile, and to the paid economists and pundits who make money by cheerleading the "growing" US economy to its final resting place.

But nowhere is the "financialization" of the US economy more evident than in this chart showing the relative net worth ratio of quntile to the next quintile right below it. Quote Census: "The distribution of net worth became more spread out between 2000 and 2011. The ratio of median net worth of the highest quintile to the second quintile increased from 39.8 to 86.8 between 2000 and 2011, and the ratio of the highest quintile to the third quintile increased from 7.7 to 9.2. The ratio of the highest quintile to the fourth quintile was 3.0 in 2000 and showed no statistically significant change over this period." 

The surge took place precisely as the last credit bubble peaked and then burst. "Ironically" the richest did not get nearly as hurt as everyone else.

It is safe to say that the net worth ratio of the top quntile to the second higher is now, 2014, well over 100%. And to thin it was just 40% at the beginning of the century.

Here Census does a curious detour, because in addition to just wealth quntiles it also looks at wealth distribution by race. And while it is no surprise that in absolute terms rich whites are richer than rich blacks or hispanics, with a net worth at the end of 2011 of $754,244, $229,041 and $250,462 respectively...

... the wealth redistribution within the ranks is far greater among blacks than the other two racial cohorts. In fact, while the ratio of the wealthiest 20% of whites increased only modestly, the increase was somewhat greater for the fifth hispanic quintile, and soared for the richest 20% of all blacks.

From the Census: "the ratio of median net worth of non-Hispanic whites to that of blacks rose from 10.6 to 17.5 between 2000 and 2011, and the ratio of non-Hispanic whites to Hispanics also increased from 8.1 to 14.4. "However, when looking at the highest quintile for these groups, we see that blacks experienced higher relative increases in median net worth than non-Hispanic whites and Hispanics," Census Bureau economist Marina Vornovitsky said.

This is a finding that probably won't be mentioned too often by the president in his populist, race-baiting speeches.

Finally, why is any of this important?

Simple: the trends presented here confirm not only why class animosity within American society is at all time highs, they also explain why without the life support of the Fed, the US economy would crumple.

The chart below, which we have shown before, explains why: with the purchasing power of the poor being funneled to the rich couretsy of the Fed, and as a result of ever greater indebtedness which limits how much more debt they can carry, the poor have no choice but to consume less and less. Something which the US economy has demonstrated vividly to all but the 1% who continue to live, oblivious, in its ivory tower.

Average:

30 Facts That Prove The American Middle-Class Is Being Destroyed (ZeroHedge)

Home

 

Submitted by Tyler Durden on 08/21/2014 21:26 -0400

Submitted by Michael Snyder of The Economic Collapse blog,

The 30 statistics that you are about to read prove beyond a shadow of a doubt that the middle class in America is being systematically destroyed. Once upon a time, the United States had the largest and most prosperous middle class in the history of the world, but now that is changing at a staggering pace.  Yes, the stock market has soared to unprecedented heights this year and there are a few isolated areas of the country that are doing rather well for the moment.  But overall, the long-term trends that are eviscerating the middle class just continue to accelerate. 

Over the past decade or so, the percentage of Americans that are working has gone way down, the quality of our jobs has plummeted dramatically and the wealth of the typical American household has fallen precipitously.  Meanwhile, we have watched median household income decline for five years in a row, we have watched the rate of homeownership in this country decline for eight years in a row and dependence on the government is at an all-time high.  Being a part of the middle class in the United States at this point can be compared to playing a game of musical chairs.  We can all see chairs being removed from the game, and we are all desperate to continue to have a chair every time the music stops playing. The next time the music stops, will it be your chair that gets removed?

And in this economy, you don't even have to lose your job to fall out of the middle class.  Our paychecks are remaining very stable while the cost of almost everything that we spend money on consistently (food, gas, health insurance, etc.) is going up rapidly.  Bloomberg calls this "the no-raises recovery"...

Call it the no-raises recovery: Five years of economic expansion have done almost nothing to boost paychecks for typical American workers while the rich have gotten richer.

Meager improvements since 2009 have barely kept up with a similarly tepid pace of inflation, raising the real value of compensation per hour by only 0.5 percent. That marks the weakest growth since World War II, with increases averaging 9.2 percent at a similar point in past expansions, according to Bureau of Labor Statistics data compiled by Bloomberg.

There are so many families out there that are struggling right now.  So many husbands and wives find themselves constantly fighting with one another about money, and they don't even understand that what is happening to them is the result of long-term economic trends that are the result of decades of incredibly foolish decisions.  Without middle class jobs, we cannot have a middle class.  And those are precisely the jobs that have been destroyed during the Clinton, Bush and Obama years.  Without enough good jobs to go around, we have seen the middle class steadily shrink and the ranks of the poor grow rapidly.

The following are 30 stats to show to anyone that does not believe the middle class is being destroyed...

1. In 2007, the average household in the top 5 percent had 16.5 times as much wealth as the average household overall.  But now the average household in the top 5 percent has 24 times as much wealth as the average household overall.

2. According to a study recently discussed in the New York Times, the "typical American household" is now worth 36 percent less than it was worth a decade ago.

3. One out of every seven Americans rely on food banks at this point.

4. One out of every four military families needs help putting enough food on the table.

5. 79 percent of the people that use food banks purchase "inexpensive, unhealthy food just to have enough to feed their families".

6. One out of every three adults in the United States has an unpaid debt that is "in collections".

7. Only 48 percent of all Americans can immediately come up with $400 in emergency cash without borrowing it or selling something.

8. The price of food continues to rise much faster than the paychecks of most middle class families.  For example, the average price of ground beef has just hit a brand new all-time record high of $3.884 a pound.

9. According to one recent study, 40 percent of all households in the United States are experiencing financial stress right now.

10. The overall homeownership rate has fallen to the lowest level since 1995.

11. The homeownership rate for Americans under the age of 35 is at an all-time low.

12. According to one recent survey, 52 percent of all Americans cannot even afford the house that they are living in right now.

13. The average age of vehicles on America’s roads has hit an all-time high of 11.4 years.

14. Last year, one out of every four auto loans in the United States was made to someone with subprime credit.

15. Amazingly, one out of every six men in their prime working years (25 to 54) do not have a job at this point.

16. One recent study found that 47 percent of unemployed Americans have “completely given up” looking for a job.

17. 36 percent of Americans do not have a single penny saved for retirement.

18. According to one survey, 76 percent of all Americans are living paycheck to paycheck.

19. More than half of all working Americans make less than $30,000 a year in wages.

20. Only four of the twenty fastest growing occupations in America require a Bachelor’s degree or better.

21.  In America today, one out of every ten jobs is filled by a temp agency.

22. Due to a lack of decent jobs, half of all college graduates are still relying on their parents financially when they are two years out of school.

23. Median household income in the United States is about 7 percent lower than it was in the year 2000 after adjusting for inflation.

24. Approximately one out of every four part-time workers in America is living below the poverty line.

25. It is hard to believe, but more than one out of every five children in the United States is living in poverty in 2014.

26. According to one study, there are 49 million Americans that are dealing with food insecurity.

27. Ten years ago, the number of women in the U.S. that had jobs outnumbered the number of women in the U.S. on food stamps by more than a 2 to 1 margin.  But now the number of women in the U.S. on food stamps actually exceeds the number of women that have jobs.

28. If the middle class was actually thriving, we wouldn’t have more than a million public school children that are homeless.

29. If you can believe it, Americans received more than 2 trillion dollars in benefits from the federal government last year alone.

30. In terms of median wealth per adult, the United States is now in just 19th place in the world.

Average:

4.846155

Your rating: None Average: 4.8 (13 votes)

This Is Your Recovery, And This Is Your Recovery Without Drugs (Zerohedge)

 

 

Submitted by Tyler Durden on 08/19/2014 21:01 -0400

Submitted by Jim Quinn via The Burning Platform blog,

“If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks…will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered…. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.” – Thomas Jefferson

Does this chart portray an economic recovery in any way? Wages have been stagnant since the START of the supposed recovery in 2010. Real median household income, even using the highly understated CPI, is on a glide path to oblivion. You just need to observe with your own two eyes the number of Space Available signs in front of office buildings, strip centers and malls across America to realize we have further to fall. Low paying, part-time burger flipping jobs aren’t going to revive this debt saturated economic system. But at least the .1% are enjoying their Federal Reserve created high. Fiat is a powerful drug when administered in large doses to addicts on Wall Street.

The S&P 500 has risen from 666 in March of 2009 to 1,972 today. That is a 196% increase in a little over five years. During this same time, real household income has fallen by 7%. There have been a few million jobs added, while 11 million people have left the labor market. According to Robert Shiller’s CAPE ratio, the stock market valuation has only been higher, three times in history – 1929, 1999, and 2007. He seems flabbergasted by why valuations are so high. Sometimes really smart people can act really dumb.

The Federal Reserve balance sheet was $900 billion before the 2008 financial crisis. Today it stands at $4.4 trillion. The Fed has increased their balance sheet by 220% since the March 2009 market lows. Do you think there is any correlation between the Fed puppets printing $2.4 trillion and handing it to their Wall Street puppeteers, who used their high frequency trading supercomputers and ability to rig the markets so they never lose, and the third stock bubble in the last 13 years? It’s so self evident that only an Ivy League economist or CNBC anchor wouldn’t be able to see it.

Let’s look at the amazing stock market recovery without Federal Reserve heroine pumped into the veins of Wall Street banker addicts. If you divide the S&P 500 Index by the size of the Federal reserve balance sheet, you see the true purpose of QE1, QE2, and QE3. It wasn’t to save Main Street. It was to save Wall Street. Without the Federal Reserve funneling fiat to the .1% banking cabal and creating inflation in energy, food, and other basic necessities for the 99.9%, there is no stock market recovery. The recovery has occurred in Manhattan and the Hamptons. It’s been non-existent for the vast majority of people in this country. The wealth effect and trickle down theory have been disproved in spades. The only thing trickling down on the former middle class from the Fed is warm and yellow.

The entire stock market advance has been created on record low trading volumes and record high levels of monetary manipulation. Even though the Federal Reserve has driven senior citizens further into poverty with 0% interest rates, those with common sense have refused to be lured back into the lion’s den. They have parked record levels of fiat in no interest bank and money market accounts. They are tired of being muppets led to slaughter.

Quantitative easing was supposed to force little old ladies into the stock market and consumers to spend their debased dollars before they lost more value. The spending would revive the dormant economy just as the Keynesian text books promised. It didn’t happen. The peasants haven’t cooperated. Quantitative easing and ZIRP sapped the life from the middle class as their wages have stagnated and their living expenses have skyrocketed. Mission Accomplished by the Fed. Of course, the CNBC bimbos and shills would declare this $10.8 trillion to be money on the sidelines ready to boost the stock market ever higher. I love that storyline. It never grows old.

The MSM, government and Wall Street continue to flog the story about a housing recovery. It’s been nothing but a confidence game based upon the Fed’s easy money and the Wall Street scheme to buy up foreclosed properties with the Fed’s money. The scheme was to artificially boost home prices by restricting home supply through foreclosure manipulation, in order to allow the insolvent Wall Street banks to get out from under their billions in toxic mortgage loans.

Shockingly, the Case Shiller home price index has soared by 25% since 2012 despite first time home buyers being virtually non-existent and mortgage applications plunging to 14 year lows. How could that be? Don’t people need mortgages to buy houses? Isn’t real demand necessary to drive prices higher? Not when Uncle Ben and Madam Yellen are in charge of the printing press. Housing bubble 2.0 has arrived. I wonder if the Federal Reserve balance sheet increase of 50% since 2012 has anything to do with the new housing bubble.

It seems a similar result is obtained when dividing the Case Shiller Index by the size of the Fed’s balance sheet. The real housing market for real people is worse than it was in 2009. The national home price increase has been centered in the usual speculative markets, aided and abetted by the Fed’s easy money, managed by the Wall Street hedge funds, and exacerbated by the late arriving flippers who will be left holding the bag again. The Fed/ Wall Street scheme has priced young people out of the market and has failed to ignite the desired Keynesian impact. Investors/flippers account for 34% of all home sales. Foreigners with no knowledge of value metrics account for 30% of all home sales. The lesson of history is that most people don’t learn the lessons of history. The 2nd housing bubble in seven years is seeking a pin.

If ever you needed proof of the confidence game in its full glory, the chart below from Zero Hedge says it all. Mortgage rates have been falling for the past year, home builders have been reporting soaring confidence about the future, and the National Association of Realtors keeps predicting a surge in home buying any minute now. One small problem. Mortgage applications are in free fall, new home sales are at 1991 levels, and existing home sales are falling. Home prices have peaked and are beginning to roll over. The Wall Street hedgies are all looking to exit stage left. Young people are saddled with over a trillion of government issued student loan debt and millions of older subprime borrowers have been lured into more auto loan debt. Home sales will be stagnant for the next decade.

Quantitative easing will cease come October, unless Yellen and Wall Street can create a new “crisis” to cure with more money printing. By every valuation measure used over the last 100 years, stocks are overvalued by at least 50%. By historical measures, home prices are overvalued by at least 30%. Ten year Treasuries are yielding 2.4%, while true inflation is north of 5%. With real interest rates deep in negative territory, the bond market is even more overvalued than stocks or houses. These simultaneous bubbles have been created by the Federal Reserve in a desperate attempt to keep this debt laden ship afloat. Their solution to a ship listing from too much debt was to load it down with trillions more in debt. The ship is taking on water rapidly.

We had a choice. We could have bitten the bullet in 2008 and accepted the consequences of decades of decadence, frivolity, materialism, delusion and debt accumulation. A steep sharp depression which would have purged the system of debt and punishment of those who created the disaster would have ensued. The masses would have suffered, but the rich and powerful bankers would have suffered the most. Today, the economy would be revived, saving and investing would be generating needed capital for expansion, and banks would be doing what they are supposed to do – lending money to businesses and individuals. Instead, the Wall Street bankers won the battle and continue to pillage and loot the national wealth while impoverishing the masses.

The arrogance, hubris and contempt for morality displayed by the ruling class is breathtaking to behold. They think they are untouchable and impervious to norms followed by the rest of society. They may have won the opening battle, but will lose the war. Discontent among the masses grows by the day. The critical thinking citizens are growing restless and angry. They are beginning to grasp the true enemy. The system has been captured by a few malevolent men. When the stock, bond and housing bubbles all implode simultaneously, all hell will break loose in this country. It will make Ferguson, Missouri look like a walk in the park. I wonder if the occupants of the Eccles building in Washington DC will get out alive.

“It is well enough that people of the nation do not understand our banking and money system, for if they did, I believe there would be a revolution before tomorrow morning.” – Henry Ford

Charts provided by Confounded Interest