Thursday, September 27, 2007

Lies, Lies and More Lies

Lies, Lies and More Lies

“According to the most recent Mortgage Bankers Association survey, the foreclosure crisis is deepening. States like California, Nevada, Florida, Arizona, Michigan, Ohio, and Indiana saw foreclosure rates skyrocket in the last quarter, and the problem is expected to get worse before it gets better, according to Doug Duncan, MBA's chief economist. We will see delinquencies and foreclosures rise for another quarter or so. Home prices are falling as rates are resetting higher, making it difficult for people to refinance,' said Duncan in a conference call with The problem lies mainly with subprime borrowers, who are defaulting in increasing numbers. In the last quarter, 14.82 percent of subprime borrowers were behind on their loans. In comparison, 2.6 percent of prime loans were more than 30 days past due. According to the MBA, the infamous 2/28 adjustable rate mortgage and depressed economic conditions are key factors in the foreclosure crisis. With more ARM resets expected for this year and next, it is likely that the foreclosure rate will only continue to increase in coming quarters.” Current Foreclosure Crisis Deemed the Worst in U.S. History Sept 14, 2007

While George W Bu$h and his minions are telling folks the economy is “robust” and expanding (it is true profits are up for many corporations but that is due to the low wages they pay to outsourced workers overseas) increasing numbers of AmeriKKKans are finding it harder and harder to make ends meet, as the proverbial ends get farther and farther apart. The Bu$h administration lies with every passing day about everything. It has gotten to the point if anyone asks you how do you know when George W Bu$h is lying, you say any time he opens his mouth. For example the real unemployment picture is worse than the government’s Bureau of Labor monthly statistics report. They severely under report the number of jobless AmeriKKKans. This is because they do not count the chronically unemployed, those folks who have been out of work for six months or longer. While this has been a practice for decades it is more acute now because Bu$h wants to keep the masses in the dark about real conditions in AmeriKKKa. The slumping employment picture has been exacerbated by the housing and mortgage industry collapse. “Reflecting the housing market turmoil—including sharply diminished home sales, rising inventories, and falling prices—construction employment fell 22,000, driven largely by a decline in residential contractors. Related losses also occurred among financial institutions that deal with mortgage lending. Putting these sectors together, EPI's residential index fell by 28,000 jobs in August, and is down 127,000 since April 2006.”
While these figures may not mean much to you, they are another verifiable indication the US economy is in trouble. In addition to the economy sputtering and the US employment rate declining, the cost of living is skyrocketing. Wages for most AmeriKKKan workers have remained stagnant for years, but to hear Bu$h tell it, things are going grate. “Census data show median household income fell 3.8 percent or $1,700, from 1999 to 2004, according to economist Jared Bernstein of the Economic Policy Institute (on whose board I serve.) And this drop occurred during a period when average productivity rose three percent per year.
Moreover, as economist Jeff Madrick has observed in his book ‘Why Economies Grow’ , the reality is worse because prices of commodities that make us middle class are rising much faster than inflation generally: housing, college education, health care, and also child care. These very rapid price increases are offset by falling costs of consumer electronics, basic food, and clothing, creating misleadingly low inflation measures. It's great that shirts are cheaper than a decade ago, and that we all have cell phones. But that doesn't exactly substitute for a house, an affordable college education, or health care. According to economist Bernstein, whose study covers the years 1991-2002, households in the middle fifth of the economy increased their incomes (not adjusted for inflation) by 41 percent. Inflation during that period, as measured by the government's Consumer Price Index, went up 33 percent. That implies real living standards rose by a not very impressive 8 percent during more than a decade. But hold on. During the same period, housing, healthcare, education, and child care went up 46 percent, or more than incomes. We cannot afford the big things we need and comfort ourselves with gadgets. The cheaper laptop, plasma TV, and GPS screen in your car make it appear statistically that living standards are not falling as much as they are.” Stagnant Wages? Made in USA by Robert Kuttner
This is the direct result of the US central bank ramping up their printing presses churning out billions of worthless dollars which cause prices to rise. The Fed is flooding the country with paper dollars which is causing a rise on everything. But the Bu$h administration figures on the Consumer Price Index do not count the things that impact us most on a daily basis such as food and energy costs. Fortunately more and more people are beginning to catch on and see things as they are, “our” government is lying to us! “As I reported recently, the head of the San Diego auto dealers' trade group attribute softness in auto sales in San Diego, and the loss of 1,300 auto-related jobs, to (a drum roll, please!) slower housing sales. That's borne out by what AutoNation (an) CEO Mike Jackson has been saying for several months: The slowdown in housing is having an impact on his business. ‘...The overall malaise, if you will, is people coming to terms with higher payments for their homes and not sure what their home worth is,’ he said on his company's earnings call in April. Last time I looked, automobiles were a big part of the economy and any slowdown there still causes its own ripples as the price of life continues to rise.”
To add injury to the insult of being lied to, the Fed’s decision to reduce interest rates is bound to impact the economy and many have predicted they have elected to throw the US dollar under the bus to save the Wall Street investment banks. While reduced interest rates may and the operative word here is may stimulate borrowing and a reduction in loan payments, in the long run the Fed concomitant policy of printing more money will cause the US dollar to devalue even more. “The dollar has hit a series of new lows against the euro since the U.S. Federal Reserve cut interest rates by a larger-than-expected half percentage point last week. Disappointing U.S. economic data have underlined the possibility of more cuts. Lower interest rates, used to jump-start an economy, can weaken a currency as investors transfer funds to countries where their deposits and fixed-income investments bring higher returns.”
We see that now as the dollar has been eclipsed by the Euro and is on even par with the Canadian dollar. Some economists call this hyperinflation. This means we will have to spend even more US dollars to pay for the foreign goods we are buying from China, Japan and other places. “The strength of a currency in the world markets is largely dependent on the fundamental health of the country and the interest rate being offered. The more fiscally secure the country, generally the lower the rate. The opposite is also true. Financially weak countries require a higher rate of return to remain competitive against other currencies... In the case of the U.S.A, with its ballooning deficits, a reduction in the Fed fund rate now makes the USD (Chart 1) even less attractive compared to other major world currencies and accelerates downward pressure. In mid-September, the dollar broke through $0.80 for the first time. This crossing of the major long-term support level was a clear signal that the market anticipated a drop in the Fed rate and that the draining attraction for the dollar was gaining momentum... Continued failing in the dollar has the opposite reaction to commodities. A lower USD helps drive up the cost of raw material prices which produces long-term inflationary pressure (see Chart 2). Gold is the most sensitive to this pressure and generally the first to react. This precious metal, after months of consolidation, has finally broken out and is now expected to reach $745 by year-end.”
Honest economists (is that an oxymoron?) know what is really going on, but the media talking heads are shilling for Bu$h’s version of Reaganomics which is drowning the nation in debt. Most of us aren’t into the stock and bond markets and have very little interest in what is going on. We need to start paying attention. The point I’m making is the ruling class and their government puppets are lying to the people to cover their behinds because their policies are causing fiscal ruin to the nation. Check out what David Walker the head of the General Accountability Office has to say about the situation at Both political parties are causing run away inflation, and they have triggered a recession (the Fed is trying to slow it down by lowering interest rates) which has been aggravated by the collapse of the housing industry. The thing is, they knew this was going to happen when they did it. They did it on purpose ! This is part of the ongoing war on working class AmeriKKKans. Don’t go for the okey-doke. The US economy is in trouble, brace yourself by reducing your debt load and scaling back on your spending. The best thing you an do is stop believing the lies the government and the corporate mind control apparatus are tell you.



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