Why “The Fed Can’t Save Us”: The Simple Explanation From Austrian Business Cycle Theory

By Robert P. Murphy of Mises Institute The Fed Can’t Save Us In December, the Fed hiked its target for the federal funds rate, which is the interest rate banks charge each other for overnight loans of reserves. Since 2008 the Fed’s target for the Fed Funds Rate had been a range of 0 percent – 0.25 percent (or what is referred to as zero to 25 “basis points”). But last month they moved that target range up to 0.25 – 0.50 percent. Ending a seven-year period of effectively zero percent interest rates. From our vantage point, we already see carnage in the financial markets, with the worst opening week in US history. This of course lines up neatly with standard Austrian business cycle theory, which says that the central bank can give an appearance of prosperity for a while with cheap credit, but that this only sets the […] Read More

23 Percent Of Americans In Their Prime Working Years Are Unemployed

Did you know that when you take the number of working age Americans that are officially unemployed (8.2 million) and add that number to the number of working age Americans that are considered to be “not in the labor force” (94.3 million), that gives us a grand total of 102.5 million working age Americans that do not have a job right now?  I have written about this before, but today I want to focus just on Americans that are in their prime working years.  When you look at only Americans that are from age 25 to age 54, 23.2 percent of them are unemployed right now.  The following analysis and chart come from the Weekly Standard… Here’s a chart showing those in that age group currently employed (95.6 million) and those who aren’t (28.9 million): “There are 124.5 million Americans in their prime working years (ages 25–54). Nearly one-quarter of […] Read More

2016 Is “Terminal Phase of Most Destructive Ponzi Scheme” in History

This article was written by SGT and was first published at SGTreport.com. Editor’s Comment: Most anyone who follows the economic news already knows that the signs of collapse are all over the wall, but what numbers and statistics on paper can’t convey is the pain that ordinary people are going to feel as a result of the financial decisions being made by central banks, and the actions being taken by indifferent Wall Street players. The consequences of the 2008 economic collapse have been bad enough, though for the most part they have been subtle and hidden from view. However, the next round may well be bad enough that no one can turn away from the suffering and displacement that more economic chaos will bring. It is obvious enough who has sown the next wave, and even more plain to see who will be paying the price. 2016 Will Be […] Read More

The Lost Home Owner: “Soaring House Prices And Lack of Decently Paid Jobs” Affect Young

If it seems like the youngest generation of adults are missing out on starting their lives, and becoming real grown-ups… it might be because they are. And despite what you might be thinking, it’s not just a case of fixation on vapid social media, cultural decline or laziness among millenials that is to blame. There is definitely a problem with the economic realities of the day that is making a major contribution to this growing problem as well. The destruction of opportunity has been perhaps the biggest consequence of the economic crisis of 2008, and it continues to undermine the majority of Americans. Housing and rent prices have soared, along with other sharp increases in the cost of living. Meanwhile, student loan debt has been absolutely crushing (and threatens to topple the economic system once again) and college graduates have been mismatched with a severe shortage of good jobs […] Read More

Why The Federal Reserve Should Be Audited

Submitted by John Crudele via NYPost.com, It is time for a comprehensive audit of Janet Yellen ’s Federal Reserve – and not just for the reasons presidential candidate Rand Paul and others have given. The Fed needs to be audited to see if its ruling body has broken the law by manipulating financial markets that are outside its jurisdiction. A thorough investigation of the Fed will show once and for all if its former chief Ben Bernanke and current Chairwoman Yellen should go to jail. I know, that’s a bold statement coming as it does on Sept. 1, 2015, with Wall Street still in half-bloom. But it won’t be so preposterous some day in the future if the stock market suffers a full-blown economy-busting collapse and Congress and everyone else are looking for scalps. The Fed should be audited as a brokerage firm would be — its financial holdings, […] Read More

“Bernanke & Greenspan Have Destroyed America” Schiff & Maloney Warn “People Don’t Realize What Is Coming”

Ali and Frazier, Laurel and Hardy, Mayweather and Pacquiao, Liesman and Santelli, and now Schiff and Maloney. Peter and Mike join clash of the titan-like to discuss their investment strategies and expose the charts the government doesn’t want you to seeas “people like Bernanke are taken seriously still and the people that did predict [the crisis] are dismissed as lunatics half the time.” The wide-reaching conversation covers everything from gold and stocks to The Fed and The Dollar – Bernanke “took the coward’s way out because all he did was exacerbate the problems to postpone the day of reckoning.” The air is coming out of the bubble, they warn, “Bernanke and Greenspan have absolutely destroyed America. People don’t realize what is coming…” Full interview here: Full transcript below: Mike: I was in Puerto Rico a little while back and Peter Schiff invited me over to his house and we […] Read More

The Prison State Of America

Submitted by Chris Hedges via TruthDig, Prisons employ and exploit the ideal worker. Prisoners do not receive benefits or pensions. They are not paid overtime. They are forbidden to organize and strike. They must show up on time. They are not paid for sick days or granted vacations. They cannot formally complain about working conditions or safety hazards. If they are disobedient, or attempt to protest their pitiful wages, they lose their jobs and can be sent to isolation cells. The roughly 1 million prisoners who work for corporations and government industries in the American prison system are models for what the corporate state expects us all to become. And corporations have no intention of permitting prison reforms that would reduce the size of their bonded workforce. In fact, they are seeking to replicate these conditions throughout the society. States, in the name of austerity, have stopped providing prisoners […] Read More

Unemployment Dropped Below 6% — So What’s the Bad News?

Some powerful folks want to see interest rates rise to prevent people from getting jobs and demanding higher wages. The jobs report on Friday showed the economy created 248,000 jobs in September and the unemployment rate fell below 6.0 percent for the first time since the early days of the recession. This is good news for workers. While we are still far from anything resembling full employment, it is getting easier for people to find jobs. If the economy keeps creating jobs at this pace, workers will finally have enough bargaining power to see some real wage gains, thereby getting their share of the benefits of economic growth. But this is also the bad news in the story. There are many powerful people who want to keep these wage gains from happening. Immediately after the jobs report was released, James Bullard, the president of the St. Louis Federal Reserve […] Read More

Mohamed El-Erian Finally Breaks The Silence On Gross’ Departure: “I Was Very Surprised”

It has been a week since Bill Gross dropped a tape-bomb on the fixed-income market and walked away from the firm he founded decades ago. Since then the world and their pet rabbit have commented (most notably David Tepper’s “who cares?”); but one man has been markedly silent… until now. In an interview on Bloomberg TV, former PIMCO Co-CEO Mohamed Al-Erian told Betty Liu that Bill Gross’ “departure – the fact that it happened and how it happened – was a surprise.”   Brief interview here: Full Transcript: BETTY LIU: Well for more reaction on the jobs data I want to bring in Bloomberg View columnist and former PIMCO CEO, Mohamed El-Erian, who joins us a little jetlagged from London. Mohamed, great to see you this morning. Look, you went through the jobs report yourself. And how do you think the Fed is going to interpret this? Does this […] Read More

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

Originally posted by Dr. Eowyn at Fellowship of The Minds blog, 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 […] Read More

30 stats to show to anyone that does not believe the middle class is being destroyed

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 […] Read More

Job = Just Over Broke

If you are fortunate enough to have a job in America today, the phrase “just over broke” probably describes you.  Yes, there are a handful of jobs that certainly pay very well, but most Americans that work for somebody else are just barely making it from month to month.  More than half of all working Americans are living paycheck to paycheck, and more than half of all working Americans make less than $30,000 a year.  That is an amazing statistic but it is actually true.  Once upon a time, anyone that was responsible and that was willing to work hard could get a good job in America.  But now those days are long gone.  Instead, we live at a time when good jobs are disappearing and when the middle class is getting smaller with each passing year.  In some homes, the husband and the wife are both working multiple […] Read More

“There Is No Honest Pricing Left” – The Epochal Error Of Modern Central Banking

Submitted by David Stockman of Contra Corner blog, David Stockman, Director of the Office of Management and Budget under Reagan, former Congressman, and author of the bestseller The Great Deformation: The Corruption of Capitalism in America, discusses his book, the gold standard, bailouts, and the problems the American economy faces today. Mises Institute: In the book, you oppose Bernanke’s view of the Great Depression, which you point out relies heavily on the views of Milton Friedman. David Stockman: Bernanke has cultivated this idea that he is a brilliant scholar of The Great Depression, but that’s not true at all. What Bernanke did was basically copy Milton Friedman’s misguided and very damaging theory that the Federal Reserve didn’t expand its balance sheet fast enough by massive open market purchases of government debt during the Great Depression. Bernanke therefore claimed that monetary stringency deepened and lengthened the depression, but in fact interest […] Read More