Rev 18:3-4 KJV For
all nations have drunk of the wine of the wrath of her fornication, and the
kings of the earth have committed fornication with her, and the merchants of
the earth are waxed rich through the abundance of her delicacies. (4)
And I heard another voice from heaven, saying, Come out of her, my
people, that ye be not partakers of her sins, and that ye receive not of her
plagues.
Federal Reserve Confusion
Road to Economic Disaster
Rev 17.1-19.6 presents the history of the
world's great economic system from John's day until its demise just prior to
the Millennium. Rev 18.3-4 presents a picture of its activities during the
Tribulation. At that time God's people will be advised to get clear of the
world's economic system.
The "mystery of lawlessness" is now
being restrained (2Th 2.7). So its effects are not as overwhelming as they will
be. But in the economic sphere, much irrational lawlessness is currently
present. David Stockman explains an aspect of this.
"The Cacophony Of Fed
Confusion,"
David Stockman Warns Will Lead To
"Economic Calamity"
|
Zero Hedge http://bit.ly/1pfpFyn
Submitted by Tyler Durden on 03/19/2014 20:22
-0400
"We never should have painted ourselves so
deep in this QE corner in the first place," chides David Stockman,
"because the whole predicate [of Fed policy] is false." The author of
The Great Deformation holds nothing back in this brief 3-minute primer of
everything is wrong with the American economic system (and the CNBC anchors
definitely did not want to hear). "We are already at peak debt and forcing
more into the economy didn't work," and won't work as is merely funds Wall
Street's latest carry trade to nowhere and fiscal irresponsibility in
Washington. Simply put, "the private credit channel of monetary
transmission is busted," so the Fed is exploiting the only channel it has
left - "the bubble channel."
"There is a massive bubble inflating on
Wall Street"
It's hump-day, grab a wine cooler and listen to
3 minutes of almost uninterrupted truthiness
And here is David on The Keynesian Endgame...
Even the tepid post-2008 recovery has not been
what it was cracked up to be, especially with respect to the Wall Street
presumption that the American consumer would once again function as the engine
of GDP growth. It goes without saying, in fact, that the precarious plight of
the Main Street consumer has been obfuscated by the manner in which the state’s
unprecedented fiscal and monetary medications have distorted the incoming data
and economic narrative.
These distortions implicate all rungs of the
economic ladder, but are especially egregious with respect to the prosperous
classes. In fact, a wealth-effects driven mini-boom in upper-end consumption
has contributed immensely to the impression that average consumers are clawing
their way back to pre-crisis spending habits. This is not remotely true.
Five years after the top of the second
Greenspan bubble (2007), inflation-adjusted retail sales were still down by
about 2 percent. This fact alone is unprecedented. By comparison, five years
after the 1981 cycle top real retail sales (excluding restaurants) had risen by
20 percent. Likewise, by early 1996 real retail sales were 17 percent higher
than they had been five years earlier. And with a fair amount of help from the
great MEW (measurable economic welfare) raid, constant dollar retail sales in
mid-2005 where 13 percent higher than they had been five years earlier at the
top of the first Greenspan bubble.
So this cycle is very different, and even then
the reported five years’ stagnation in real retail sales does not capture the
full story of consumer impairment. The divergent performance of Wal-Mart’s
domestic stores over the last five years compared to Whole Foods points to
another crucial dimension; namely, that the averages are being materially
inflated by the upbeat trends among the prosperous classes.
For all practical purposes Wal-Mart is a proxy
for Main Street America, so it is not surprising that its sales have stagnated
since the end of the Greenspan bubble. Thus, its domestic sales of $226 billion
in fiscal 2007 had risen to an inflation-adjusted level of only $235 billion by
fiscal 2012, implying real growth of less than 1 percent annually.
By contrast, Whole Foods most surely reflects
the prosperous classes given that its customers have an average household
income of $80,000, or more than twice the Wal-Mart average. During the same
five years, its inflation-adjusted sales rose from $6.5 billion to $10.5
billion, or at a 10 percent annual real rate. Not surprisingly, Whole Foods’
stock price has doubled since the second Greenspan bubble, contributing to the
Wall Street mantra about consumer resilience.
To be sure, the 10-to-1 growth difference
between the two companies involves factors such as the healthy food fad, that
go beyond where their respective customers reside on the income ladder. Yet
this same sharply contrasting pattern is also evident in the official data on
retail sales.
That the consumption party is highly skewed to
the top is born out even more dramatically in the sales trends of publicly
traded retailers. Their results make it crystal clear that Wall Street’s myopic
view of the so-called consumer recovery is based on the Fed’s gifts to the
prosperous classes, not any spending resurgence by the Main Street masses.
The latter do their shopping overwhelmingly at
the six remaining discounters and mid-market department store chains—Wal-Mart,
Target, Sears, J. C. Penney, Kohl’s, and Macy’s. This group posted $405 billion
in sales in 2007, but by 2012 inflation-adjusted sales had declined by nearly 3
percent to $392 billion. The abrupt change of direction here is remarkable:
during the twenty-five years ending in 2007 most of these chains had grown at
double-digit rates year in and year out.
After a brief stumble in late 2008 and early
2009, sales at the luxury and high-end retailers continued to power upward,
tracking almost perfectly the Bernanke Fed’s reflation of the stock market and
risk assets. Accordingly, sales at Tiffany, Saks, Ralph Lauren, Coach,
lululemon, Michael Kors, and Nordstrom grew by 30 percent after inflation
during the five-year period.
The evident contrast between the two retailer
groups, however, was not just in their merchandise price points. The more
important comparison was in their girth: combined real sales of the luxury and
high-end retailers in 2012 were just $33 billion, or 8 percent of the $393
billion turnover reported by the discounters and mid-market chains.
This tale of two retailer groups is laden with
implications. It not only shows that the so-called recovery is tenuous and
highly skewed to a small slice of the population at the top of the economic
ladder, but also that statist economic intervention has now become wildly
dysfunctional. Largely based on opulence at the top, Wall Street brays that
economic recovery is under way even as the Main Street economy flounders. But
when this wobbly foundation periodically reveals itself, Wall Street petulantly
insists that the state unleash unlimited resources in the form of tax cuts,
spending stimulus, and money printing to keep the simulacrum of recovery alive.
Accordingly, the central banking branch of the
state remains hostage to Wall Street speculators who threaten a hissy fit
sell-off unless they are juiced again and again. Monetary policy has thus
become an engine of reverse Robin Hood redistribution; it flails about
implementing quasi-Keynesian demand–pumping theories that punish Main Street
savers, workers, and businessmen while creating endless opportunities, as shown
below, for speculative gain in the Wall Street casino.
At the same time, Keynesian economists of both
parties urged prompt fiscal action, and the elected politicians obligingly
piled on with budget-busting tax cuts and spending initiatives. The United
States thus became fiscally ungovernable. Washington has been afraid to disturb
a purported economic recovery that is not real or sustainable, and therefore
has continued to borrow and spend to keep the macroeconomic “prints” inching
upward. In the long run this will bury the nation in debt, but in the near term
it has been sufficient to keep the stock averages rising and the harvest of
speculative winnings flowing to the top 1 percent.
The breakdown of sound money has now finally
generated a cruel endgame. The fiscal and central banking branches of the state
have endlessly bludgeoned the free market, eviscerating its capacity to
generate wealth and growth. This growing economic failure, in turn, generates
political demands for state action to stimulate recovery and jobs.
But the machinery of the state has been
hijacked by the various Keynesian doctrines of demand stimulus, tax cutting,
and money printing. These are all variations of buy now and pay later—a
dangerous maneuver when the state has run out of balance sheet runway in both
its fiscal and monetary branches. Nevertheless, these futile stimulus actions
are demanded and promoted by the crony capitalist lobbies which slipstream on whatever
dispensations as can be mustered. At the end of the day, the state labors
mightily, yet only produces recovery for the 1 percent.
Related
Notes State-Wrecked: The Corruption of Capitalism in
America Mark Pernice By DAVID A. STOCKMAN Published: March 30, 2013 378
Comments GREENWICH, Conn.The Dow Jones and Standard & Poor’s 500 indexes
reached ...
I2C 140320a aa Rev 18v3to4 Fed Confusion / I2C
/ 140320 1541 / Rev 18:3-4 Federal Reserve Confusion / Road to Economic
Disaster
