Category Archives: History

This article appeared online at TheNewAmerican.com on Tuesday, October 30, 2018:  

The national debt of the United States government jumped by $1.3 trillion during the fiscal year ending September 30. The gap between the government’s spending and its income for that fiscal year was $779 billion, a jump of $113 billion over the year before. And now, the U.S. Treasury has announced how it’s going to manage all this: It’s going to issue new debt in the amount of $1.34 trillion, a 146 percent increase from 2017 and the highest amount of new debt issued since 2010.

Said the Treasury:

This article was published by The McAlvany Intelligence Advisor on Friday, October 26, 2018: 

Most people think of the Fed as an indispensable institution without which the country’s economy could not properly function. What most people don’t realize is that the Fed – created by the Morgans and the Rockefellers at a private club off the coast of Georgia – is actually working against their own personal interests.

Want proof? Try the multiple selloffs on Wall Street since the beginning of October. Some people blame them on October. After all, it’s the month when sell-offs happen. It’s in the tides. It’s in the moon’s cycles. It’s a spooky month. Etc., etc.

Others, looking slightly deeper at possible causes, blame them on trade “disputes,” China’s intransigence, the murder in Saudi Arabia, the rise in oil and gas prices, the “caravan” of dissidents headed for the U.S.’s southern border, the rash of fake bomb attacks, fill in the blank.

They came closer to the truth when they considered

This article appeared online at TheNewAmerican.com on Friday, October 19, 2018: 

Thanks to efforts by the Chinese communist government to rein in the country’s horrendous national debt (300 percent of the country’s total annual output of goods and services), the Chinese economy was already slowing. According to “official” numbers released earlier this week (always questionable if not outright false), the economy grew by 6.5 percent in the third quarter on an annualized basis, down from 6.7 percent in the second quarter, and down from 12.2 percent just eight years ago.

The panic among top Chinese communist officials is palpable:

This article was published by The McAlvany Intelligence Advisor on Wednesday, October 17, 2018: 

There was a moment in the 1981 film Chariots of Fire when Eric Liddell was bumped onto the grassy infield during a quarter mile race. Once he recovered, he was 30 yards behind the pack of runners. Let Simon Burnton of The Guardian tell the story:

In Stoke on Trent in July 1923, in a race run over a quarter of a mile, England saw just how true this was. At the first bend he tripped over the legs of the English runner JJ Gillies, falling off the track. By the time he was back on his feet, the last of the other runners was 30 yards away and moving fast, but Liddell attacked them with such pace that he finally overtook Gillies three yards from the line to win before collapsing, spent, to the ground.

 

“The circumstances in which Liddell won the event made it a performance bordering on the miraculous,” wrote The Scotsman. “Veterans, whose memories take them back 35 years, and in some cases even longer, in the history of athletics, were unanimous in the opinion that Liddell’s win in the quarter-mile was the greatest ever track performance that they had ever seen.”

The U.S. economy, as astonishing as its performance is, is no Eric Liddell. JJ Gillies [the federal government] is just too far ahead.

On Monday, the White House officially announced

This article appeared online at TheNewAmerican.com on Tuesday, October 16, 2018:  

The White House just officially announced the final numbers for Fiscal Year 2018, which ended September 30. They are ugly: The gap between revenues and spending widened to $779 billion over the previous year, a jump of $113 billion (or 17 percent), despite increased revenues. This is the third consecutive year of rising deficits, with no apparent end in sight.

The White House blamed the usual suspects: the rising costs of “entitlement” benefits (i.e., Social Security, Medicare, Medicaid, and others) and increasing interest costs to service the rising national debt.

Those interest costs increased by one-quarter this year over last, from $263 billion in 2017 to $325 billion in 2018. By 2020, the Congressional Budget Office (CBO) estimates that interest costs will increase by another 50 percent, to nearly $500 billion.

There is no more talk of how the expanding economy will throw off revenues sufficient to start shrinking the national debt. Now, according to Office of Management and Budget (OMB) Director Mick Mulvaney, the best that can be hoped for is some eventual shrinking of the government’s annual deficits:

This article was published by The McAlvany Intelligence Advisor on Monday, October 8, 2018:  

William McChesney Martin served as the ninth and the longest-running chairman of the Federal Reserve, from April 1951 to January 1970. He served under five presidents. But when people think of him, they remember him saying that:

Our purpose [at the Fed] is to lean against the winds of deflation or inflation, whichever way they are blowing.

 

The Federal Reserve … is in the position of the chaperone who has ordered the punch bowl removed just when the party was really warming up.

It’s not known if he was trying to be funny or merely ironic. But history records that the last 12 economic U.S. expansions were doused when the Fed raised interest rates, ending the parties.

The current Fed chair, Jerome Powell, is in full party mode. Last week he made an astonishing four public appearances, serving as the Number One (well, Number Two) cheerleader for the Trump economy. He called the economy “remarkably positive,” “extraordinary,” and its outlook “particularly bright.”

Added Powell on Tuesday:

This article was published by The McAlvany Intelligence Advisor on Friday, October 5, 2018:  

Conor Lynch is a New York City liberal whose writings have appeared on Salon, AlterNet, Counterpunch, and openDemocracy. But in his latest blog at TheWeek.com, he left all that baggage behind and instead focused on the harbingers for a downturn in the U.S. economy. He wrote:

This article appeared online at TheNewAmerican.com on Thursday, October 4, 2018:

The bright blue sky that represents the U.S. economy got a little brighter on Wednesday with the release of ADP’s jobs report for September. Not only did the 230,000 new jobs beat forecasters’ estimates, ADP also adjusted upward August’s jobs numbers by 5,000. That means that since the first of the year, the booming U.S. economy has added nearly two million new jobs. Mark Zandi, chief economist at Moody’s Analytics, which partners with ADP in its jobs reporting, declared that “this labor market is rip-roaring hot.”

And then Zandi went and spoiled it all by adding,

This article was published by The McAlvany Intelligence Advisor on Wednesday, October 3, 2018:  

It wasn’t until the death toll following last Friday’s Indonesian earthquake and tsunami reached 800 that the global media began to make it front page news. By Tuesday the toll exceeded 1,200, with many more still buried in dozens of collapsed buildings in the towns of Sigi and Balaroa. Some 62,000 citizens have been displaced either because their homes have become uninhabitable or were flattened.

At least they had some advance warning, but there was little they could do. Most were caught off guard, unprepared. As of this writing, many have gone four days without food.

What was unnerving is the report from the U.S. Treasury just three days later giving advance warning of the economic tsunami preparing to roll over the American economy. Precious few are taking heed. On September 20, the Senate passed another spending bill – $854 billion – calling it a “stopgap” bill to pay the government’s bills until after the midterm elections. It passed 93-7.

This brought the national debt of the United States government to

This article appeared online at TheNewAmerican.com on Tuesday, October 2, 2018: 

The report from the U.S. Treasury coming on the heels of news reports about Indonesia’s earthquake and resulting tsunami is unnerving. According to the Treasury, the government’s national debt jumped in the fiscal year ending September 30 from $20.2 trillion to $21.5 trillion, or by $1.3 trillion. That’s more than a six-percent increase year over year which, if not reined in, will double the national debt to $43 trillion in less than 12 years.

Unlike the Indonesian earthquake and tsunami, however, Americans have had plenty of warning about what’s coming. And yet Senators just voted 93-7 to spend another $854 billion in a “stopgap” measure. Six of those Senators opposing the bill were Republicans (Independent Senator Bernie Sanders was the seventh).

In July, former Representative Ron Paul pointed out that the national debt now exceeds the total economic output of goods and services in the United States in a year, but even that isn’t the whole story: “Social Security and Medicare trust funds will both soon be bankrupt, putting additional strains on the federal budget [and] on American taxpayers.”

That’s because the “reserves” in those trust funds have already been spent by the federal government and have been replaced with promissory notes to be redeemed by the Treasury in the future. The future is now, and as those reserves are tapped, those promissory notes will be redeemed by the Treasury, adding to the national debt.

FirstPost.com said that “a series of natural disasters in Asia have led to massive economic damage [and] human loss”, explaining:

This article was published by The McAlvany Intelligence Advisor on Friday, September 28, 2018: 

The bears are still out there, but their voices are being drowned out by the exuberance of the stock market and the economy. New records are being set almost on a daily basis. Take this from the Conference Board earlier this week, for example. For an economist, Lynn Franco, director of Economic indicators for the Board, was positively giddy:

This article appeared online at TheNewAmerican.com on Thursday, September 27, 2018:

The Conference Board’s report on consumer confidence in September, released earlier this week, caught forecasters by surprise once again. Its Consumer Confidence Index, a barometer that measures the average American consumer’s confidence based on a monthly survey covering 5,000 households, jumped to 138.5 from August’s 134.7. Economists polled by Reuters expected a drop to 132. The baseline is 100, set back in 1985.

As Lynn Franco, director of economic indicators for the Board, noted:

This article appeared online at TheNewAmerican.com on Friday, September 21, 2018:  

The jobless claims report from the Department of Labor (DOL) for the week ending September 15 came out on Thursday, the same day that Wall Street learned of even stronger corporate earnings. This one-two punch drove stock averages to new highs, which continued into Friday.

The report from the DOL was cryptic, and disappointing to economists who had forecast higher claims. Said the DOL: “In the week ending September 15 … seasonally adjusted initial claims was 201,000, a decrease of 3,000 from the previous week. This is the lowest level for initial claims since November 15, 1969.”

Even better was its four-week moving average, which smooths out week-to-week fluctuations: “The 4-week moving average was 205,750, a decrease of 2,250 from the previous week … [and] the lowest level for this average since December 6, 1969.”

Still better is the news that

As President Trump was counting off some of his administration’s accomplishments at a rally in Billings, Montana, on Thursday night, he paused and said the economy is “booming like never before!” The crowd roared, and so they should. Looking at the same numbers, Rick Reider, chief investment officer of BlackRock, the world’s largest investment manager with more than seven trillion dollars under its management, exclaimed:

This article was published by The McAlvany Intelligence Advisor on Wednesday, August 29, 2018:  

In a sudden rhetorical turn, President Donald Trump, who vehemently criticized the North American Free Trade Agreement (NAFTA) as being “a disaster,” now welcomes an agreement to modify that same agreement with the outgoing president of Mexico, Enrique Pena Nieto. The details are skimpy, to be fleshed out more fully on Friday. Friday is the deadline for Nieto to sign it, with the conversation then turning to Canada for its approval and ratification. After that the U.S. International Trade Commission must do an economic analysis of the final agreement before it is presented to Congress for its approval.

One sticking point illustrates the danger of the new agreement that Trump wants to rename as the United States-Mexico Trade Agreement (presumably, USMTA) in case Canada fails to get on board.