singular_me
10th March 2015, 06:54 AM
the fed reserve said it would stop its QEs when the unemployment falls below 6.5%... 5.5% meaning that we are in for a credit crunch ???
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10th March 2015
On Friday, we learned that the official “unemployment rate” has fallen to 5.5 percent. Since an unemployment rate of 5 percent is considered to be “full employment” by many economists, many in the mainstream media took this as a sign that the U.S. economy has almost fully “recovered” since the last recession.
In fact, according to the Wall Street Journal, some Federal Reserve officials believe that “the U.S. economy is already at full employment“. But how can this possibly be? It certainly does not square with reality. Personally, I know people that have been struggling with unemployment for years and that still cannot find a decent job. And I get emails from readers all the time that are heartbroken because they are suffering through extended periods of unemployment.
So what in the world is going on? How can the government be telling us that we are nearly at “full employment” when so many people can’t find work? Could it be possible that the government numbers are misleading?
It is my contention that the official “unemployment rate” has become so politicized and so manipulated that it is essentially meaningless at this point. The following are 10 reasons why…
#1 Since February 2008, the size of the U.S. population has grown by 16.8 million people, but the number of full-time jobs has actually decreased by 140,000.
#2 The percentage of working age Americans that have a job right now is still about the same as it was during the depths of the last recession. Posted below is a chart that shows how the employment-population ratio has changed since the beginning of the decade. Does this look like a full-blown “employment recovery” to you?…
#3 The primary reason for the decline in the official “unemployment rate” is the fact that the government now considers millions upon millions of long-term unemployed workers to “no longer be in the labor force”. Just check out the following numbers…
more
http://theeconomiccollapseblog.com/archives/nearly-full-employment-10-reasons-unemployment-numbers-massive-lie
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Negative Interest Rates – Brain-dead Thinking that Will Implode the World
The entire problem we have with this proposal of negative interest rates first put forth by Larry Summers, is that this is another means for bankers to make a fortune through theoretical stimulus that will never reach the public. This crazy idea will have a DEFLATIONARY drag on the entire economy and threaten to tear the entire system apart for it is presented on behalf of a single group – the money center banks..
Now we look at government. The deficits have not stopped. They all borrow more every year. The crisis hits because they are now addicted to low rates. What happens when rates rise? Central Banks can try to manipulate short-term rates, but they cannot manipulate long-term. That is why the Fed was buying back 30 year bonds trying to create a shortage of long-term so in theory others would lend long-term. That totally failed as everything the Fed has done. Why? Because they act ONLY indirectly and assume the banks will act as they intend. The banks have not lowered car loans or credit card fees and rates in proportion to the decline in rates at the Fed. They have pocketed the difference.
Central Banks act ONLY indirectly, and not directly. They count on banks lending. In the USA, the banks did not lend and instead they went to the Fed and demanded they be paid interest on excess reserves. The Fed complied and pays them 0.25% for excess reserves. The banks can pay ZERO and make money without risk and use the balance for trading.
This entire exercise is brain-dead and it will not end very nicely. All they are doing is wiping out pension funds and the elderly. All those years of advice save for retirement are proven to be total bullshit when banks can convince governments that people should be paying them for the privilege to trade wildly with their money. What a deal. Thank you Larry.
more
http://armstrongeconomics.com/2015/03/10/negative-interest-rates-brain-dead-thinking-that-will-implode-the-world/
---------------
10th March 2015
On Friday, we learned that the official “unemployment rate” has fallen to 5.5 percent. Since an unemployment rate of 5 percent is considered to be “full employment” by many economists, many in the mainstream media took this as a sign that the U.S. economy has almost fully “recovered” since the last recession.
In fact, according to the Wall Street Journal, some Federal Reserve officials believe that “the U.S. economy is already at full employment“. But how can this possibly be? It certainly does not square with reality. Personally, I know people that have been struggling with unemployment for years and that still cannot find a decent job. And I get emails from readers all the time that are heartbroken because they are suffering through extended periods of unemployment.
So what in the world is going on? How can the government be telling us that we are nearly at “full employment” when so many people can’t find work? Could it be possible that the government numbers are misleading?
It is my contention that the official “unemployment rate” has become so politicized and so manipulated that it is essentially meaningless at this point. The following are 10 reasons why…
#1 Since February 2008, the size of the U.S. population has grown by 16.8 million people, but the number of full-time jobs has actually decreased by 140,000.
#2 The percentage of working age Americans that have a job right now is still about the same as it was during the depths of the last recession. Posted below is a chart that shows how the employment-population ratio has changed since the beginning of the decade. Does this look like a full-blown “employment recovery” to you?…
#3 The primary reason for the decline in the official “unemployment rate” is the fact that the government now considers millions upon millions of long-term unemployed workers to “no longer be in the labor force”. Just check out the following numbers…
more
http://theeconomiccollapseblog.com/archives/nearly-full-employment-10-reasons-unemployment-numbers-massive-lie
-------------------
Negative Interest Rates – Brain-dead Thinking that Will Implode the World
The entire problem we have with this proposal of negative interest rates first put forth by Larry Summers, is that this is another means for bankers to make a fortune through theoretical stimulus that will never reach the public. This crazy idea will have a DEFLATIONARY drag on the entire economy and threaten to tear the entire system apart for it is presented on behalf of a single group – the money center banks..
Now we look at government. The deficits have not stopped. They all borrow more every year. The crisis hits because they are now addicted to low rates. What happens when rates rise? Central Banks can try to manipulate short-term rates, but they cannot manipulate long-term. That is why the Fed was buying back 30 year bonds trying to create a shortage of long-term so in theory others would lend long-term. That totally failed as everything the Fed has done. Why? Because they act ONLY indirectly and assume the banks will act as they intend. The banks have not lowered car loans or credit card fees and rates in proportion to the decline in rates at the Fed. They have pocketed the difference.
Central Banks act ONLY indirectly, and not directly. They count on banks lending. In the USA, the banks did not lend and instead they went to the Fed and demanded they be paid interest on excess reserves. The Fed complied and pays them 0.25% for excess reserves. The banks can pay ZERO and make money without risk and use the balance for trading.
This entire exercise is brain-dead and it will not end very nicely. All they are doing is wiping out pension funds and the elderly. All those years of advice save for retirement are proven to be total bullshit when banks can convince governments that people should be paying them for the privilege to trade wildly with their money. What a deal. Thank you Larry.
more
http://armstrongeconomics.com/2015/03/10/negative-interest-rates-brain-dead-thinking-that-will-implode-the-world/