Joseph P. Hawranek, Ph.D. , a23
Vertical Legacy – FMA – Founding Member Affiliate
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“When the people fear their government, there is tyranny. When the government fears the people, there is liberty.” Thomas Jefferson
“We have in this country one of the most corrupt institutions the world has ever known. I refer to the Federal Reserve Board. This evil institution has impoverished the people of the United States and has practically bankrupted our Government. It has done this through the corrupt practices of the moneyed vultures who control it.” Louis T. McFadden, Chairman of the House Banking and Currency Committee, 1932
“If we all did the things we are really capable of doing, we would literally astound ourselves….” Thomas Edison
“I find out what the world needs. Then I go ahead and try to invent it.” Thomas Edison
If you are underemployed, unemployed, out of work, out of benefits or running out of benefits – read on, this is written with you in mind. This article will provide evidence that the jobs are gone and not coming back in the near future. In addition, every opening has at least three and up to eight applicants depending on the discipline. Finally, the economic situation is getting worse not better. This is bad news but there is a solution found in Part II of this article
The nation and Europe are in a Depression but not out business. Life goes on. It will be different. The approach taken in this article is to split it into two parts – Part I – The Problem and Part II – The Solution. In Part I, an analysis of the history of unemployment in the US and Europe is examined; the history of poverty and labor participation rate under Obama is shown; the BLS labor statistics are examined to determine the real unemployment rate; an analysis of job movements was made to prove that jobs are moving offshore and not coming back ; the relationship of Agenda 21 to unemployment was examined; a comparison of 1932 to 2014 economies is made to show comparable depressions; and the QE program analysis was made to show that it had nothing to do with unemployment but did help the banks. The jobs are gone, we are in a depression but there is a solution that is covered in Part II. In Part II, The Solution, discusses a way to employment – start your own business in a rapidly growing industrial segment. This article shows you a direction where you can create your own business with limited resources, some coaching from others, with the effort provided by you that allow you to create your own financial independence. Now let us look at the facts concerning the problem.
Part I – The Economy and Unemployment
The Problem: Recent History of Unemployment
The recent history of unemployment in the US and Europe is best shown using a series of charts. They show that the current depression is in both the US and Europe. This article concentrates on the US but the unemployment is in the free world. I believe the unemployment situation is going to get worse before it gets better. See the charts below and draw your own conclusion. They come from the Lyndon LaRouche, EIR publication, Worse than Weimer, November 12 2013. Below you will find the charts.
- Exhibit 1: Youth Unemployment in Europe
- Exhibit 2: Youth Unemployment in the United States, 2013
In addition, there is a similarly bad employment scenario for the United States.
Finally, we have the results that show that manufacturing jobs are gone and services such as health care are dramatically increasing. Many of these jobs are now part time because of Obamacare. The employer must keep the hours below 30 hours or he has to buy insurance or pay a fine. Further, the employment rate drop indicates that some people are discouraged and dropping out of the unemployment lines as well as jobs declining.
- Exhibit 3: Employment by Activity (Services and Goods Manufacturing)
- Exhibit 4: Poverty Explodes Under Obama
- Exhibit 5: Employment Rate Drops From 67% to 63%
Source: Federal Reserve
Exhibit 3, Employment by Activity (Services and Goods Manufacturing)
It is apparent from the above that both Europe and the US are in bad shape with respect to employment. The youth are in the worse shape with up to 60% unemployed. This level of unemployment we will shortly see is comparable to the depression of 1932 period. It will cause social unrest and riots that are already starting in Europe. Further, the nature of employment has changed from manufacturing high paying industry jobs to lower paying service industry jobs with fewer hours. This means that the poverty level will increase. The above charts show that it has already occurred. In Exhibit 4, Poverty Explodes under Obama and this gives insight into what is happening. People who are looking for work generally look in the discipline that they left. However, now they are finding that those jobs are gone and after 27 months of looking, many give up and stop looking. At that point, the government removes them from the rolls of the unemployed.
Government Labor Statistics
The government distorts the unemployment indexes to make themselves appear to look better. I believe that we now live in a fascist state where the politicians in power, who backed by the financial establishment, will do anything, say anything to maintain those reins of power that comes to office holders. Accordingly, the Bureau of Labor Statistics numbers distort the data. Let us look at their definitions and see where they lead. The table below, Exhibit 6, Bureau of Labor Statistics Definitions, provides some insight into what is really going on
|U-1||Persons unemployed 15 weeks or longer, as a percent of the civilian labor force|
|U-2||Job losers and persons who completed temporary jobs, as a percent of the civilian labor force|
|U-3||Total unemployed, as a percent of the civilian labor force (official unemployment rate)|
|U-4||Total unemployed plus discouraged workers, as a percent of the civilian labor force plus discouraged workers|
|U-5||Total unemployed, plus discouraged workers, plus all other persons marginally attached to the labor force,|
|as a percent of the civilian labor force plus all persons marginally attached to the labor force|
|U-6||Total unemployed, plus all persons marginally attached to the labor force – short term discouraged workers,|
|plus total employed part time for economic reasons, as a percent of the civilian labor force|
|plus all persons marginally attached to the labor force|
|Shadow Stats Definition|
|True U6||U6 (BLS) plus long term discouraged workers (dropped from U-6 BLS in 1994)|
Exhibit 6, Bureau of Labor Statistics Definitions
One can easily see the BLS defined Unemployment in a manner that fits the needs of the politicians rather than the taxpayer. For example, they drop people from the rolls of not being interested in employment when they get discouraged and they only report Total Employment as a percent of the labor force, U-3. This is a major under estimation of the total employment problem in America. John Williams, ShadowStats, provides a far better estimate of unemployment. His number is 23%, which I believe is more representative of the actual state of the economy. Figure 7, Who You Gonna Believe, provides a comparison of the alternatives.
Is There Anything that Indicates Things Are Getting Better?
Right now, the answer to the question is, no. Let us examine what is happening this year in two industries, Retailing (services) and Manufacturing (goods creation).
Retail Stores Closings
The following firms have announced store closings for this year. There are more closings than this but these are the big firm announcements. I have included the number of announced store closings by each. They are Staples – 225, Office Depot – 500, Radio Shack –1100, DOTS -300, Albertsons – 26, Safeway -72 in Chicago, Abercombie and Fitch – 180, Barnes and Noble – 223, J C Penney – 33 plus 2,000 employees, Toys R US – 100, Sears and Kmart – 500, Ruby Tuesday – 30, Ralphs – 15, Blockbuster – 300, Aeropostale – 175. This is not a complete list and some closings will be over the next two years. However, it shows the trend.
So what? What does 3,779 store closings do to the labor market? Let us estimate how many people will be laid off. The companies usually do not announce these numbers because of the bad publicity. However, we can estimate them. Large retail stores do about $100 million / year in sales. Not all of the above stores are large but many are larger than this. This includes Sears, and supermarket stores whose large stores exceed that number. The 3,779 announced store closings represent many service jobs. How many jobs is this? A reasonable figure to use with overhead is about $150,000 / employee. Thus, this represents about 3 million more lost jobs that will not come back soon. The owners reason that the land is worth more than the business return so they will sell the property and the facility. In addition, these stores are being dramatically impacted by the internet as Americans gradually switch to ordering goods online rather than visiting the store.
The number of already lost jobs is in the millions here but the table below shows that the trend is expanding. As bad as these outsourcing numbers look, it is only the tip of the projected iceberg. According to the U.S. Department of Labor and Forrester Research, Inc., outsourcing is expected to expand in numbers and scope. See Exhibit 8, Number of US Jobs Moving Offshore. The source is “Lovetoknow – Jobs and Careers”. http://jobs.lovetoknow.com/Facts_and_Figures_on_Outsourcing
Exhibit 8, Number of U.S. Jobs Moving Offshore
This represents another 3 million jobs lost. Further, it now appears as if business are beginning to be managed from overseas – see the above table. Also, note from the table that services such as legal, art design and sales are now being performed overseas – because of the internet.
I have a personal experience that I will relate at this point. I am a retired consultant who specialized in large communications networks. On one of my assignments, I worked with a very large global Construction company that had major engineering resources in Asia, Poland and the US. They operated three shifts on their designs for large projects and worked the organization as a single team. The designs could be anything from manufacturing plants to dams. Each shift they moved the design to the different team. Upon implementing this philosophy, the result was that there were major engineering layoffs in the US – roughly two thirds of the staff. I saw empty buildings on both coasts. This is beginning to happen in all transnational firms. They have no national allegiance. The US taxing systems enable and encourage this type of operation.
For instance, GE paid no taxes last year and did it legally under the law. The key to understanding their technique is that companies only pay taxes when they repatriate profits back to the US. This is an incentive for these firms to keep the revenue and taxes off shore. Financially, it is better for them to invest overseas, hire more people overseas and only repatriate the taxable income when the Congress makes “special deals” for them to return the taxable revenue to the US. This has happened about every five years for the last 15 years. Why pay 39.5% when you can invest overseas and pay only 15% when you return the taxable income?
This should give you some insight into why Apple, Intel, Motorola each has created $1 billion plants in China and Walmart has 500 manufacturing plants in China? This collectively probably represents a million workers. It pays to do so because our Congress created laws to help them make money overseas and keep it over there. This is a clear example of fascism in action. How it affects you personally is that the “Jobs are Gone” and not coming back. This is fascism at work. Mussolini, who created the first fascist state said, “Fascism should be called corporatism”, and he was right.
US Government Tax Policies and Agenda 21 Policies
The Rockefeller Influence
It is not generally known but David Rockefeller founded by financing in the background and using his gophers as front men, the Council on Foreign Relations (CFR), Tri-Lateral Commission and the Club of Rome (CoR). These very influential “private clubs” influence the UN and the Congress. They are all organized with inner and outer circles of members. Yes, this is the organizational method of the illuminati. The outer circle members are the “public” members. The outer circles act on “suggestions” of the inner circle. The membership of the inner circles is not published. I want to review the Club of Rome as background since it is relevant to the Agenda 21 discussion that follows.
The CoR was founded by “group of world citizens, sharing a common cause, for the future of humanity.” This is a commendable charter. Now let us look at some of the members: George Soros, Henry Kissinger, Bill Gates, Zbighniew Brzezinski, Queen Beatrix, Mikael Gorbachev, Al Gore, Maurice Strong, and David Rockefeller. These New World Order advocates want to run the world from the UN. Brzezinski is the “man behind the scenes” for David Rockefeller. The Club of Rome is operated as a think tank that creates reports that are fed as “suggestions” to the UN and sovereign governments. They advocate the “Limits of Growth” because of resources, “global warming”, “population containment” and anything else that affects their goal of achieving one world government and the New World Order. What is the common thread that unites these men? I do not know but it is not money since most are very rich and there are some billionaires among them. On the other hand, it might be political “power” because that is the incentive that often draws sociopaths to a common cause.
What does Agenda 21 have to do with unemployment? It turns out a lot. People are now awaking to this evil New World Order dream of running the world though the UN. People
around the world are waking up and complaining. An Australian Politician, Ann Bressington, does a very nice job by Exposing Agenda 21 and New World Order in her speech to the Australian Parliament, http://www.youtube.com/watch?v=WrdmjBAX0E0
Ms. Bressington points out in her speech (these are her expressed views) that -
- The Origin of the environmental movement was in 1968 at the Club of Rome
- The purpose was to “formulate a crisis” that would unite the world and condition us to global solutions for local problems
- In a document underwritten by the Club of Rome, called the “First Global Revolution”, Alexander King and Bertrand Schneider (pp104-105) stated that they were
- “. . . searching for a new enemy to unite us, we came up with the idea that pollution, the threat of global warming, water shortages, famine and the like would require a global response.”
- The Agenda 21 creation team searched for and found an un-offensive term that could be used globally used the “The First Global Revolution” document. They ended up choosing “Sustainable Development”.
- Agenda 21 is about
- Controlling every aspect of our lives;
- How we eat, what we eat;
- How we move around;
- Food production, the amount of food and where we live;
- She quotes Dixie Ray, former Washington state governor
- “Agenda 21 seeks to establish a mechanism for transferring wealth from citizens to the third world.” (emphasis added)
- “Fear of environmental crisis will be used to create a World Government and UN central direction.”
- She quotes Mikhael Gorbachev, member of Club of Rome, who
- In 1987 said, “We are moving toward a New World Order of Communism, and we shall never turn off that road.” (emphasis added)
- In 1996, “Monetary and Economic Review” (p.5), “The environmental crisis will be the international disaster that will unlock the New World Order, One World Government.” (Emphasis added)
- She quotes from the 1992 “Earth Summit” document written by Maurice Strong, communist, globalist, elitist, member of the Club of Rome and Gorbachev that they hoped this document would be adopted as the “New World Religion”. This is the “Summit” that created Agenda 21 document. (emphasis added)
This shows the origin of Agenda 21 was all communist, globalist and New World Order advocates advocating centralized world government controlled by the UN.
Let us look at Agenda 21 itself. It is a large 300 page 40 chapter document with four main sections. The relevant section for the “unemployed today is Section IV”. It is the mechanism used to move jobs off shore.
Section I: Social and Economic Dimensions is directed toward combatting poverty, especially in developing countries . . . achieving a more sustainable population. (This is where the New World Order population control stems)
Section II: Conservation and Management of Resources for Development Includes atmospheric protection. . . . (Global warming justification stems from this.)
Section III: Strengthening the Role of Major Groups includes the roles of children, youth, women,
Section IV: Means of Implementation: Implementation includes science, Technology transfer, education and International institutions and financial mechanisms. (Emphasis added)
There is only one-way to have Science and Technology transfer off shore, it is through “job transfers”. This has been accomplished throughout the last 20 years after 1992 when Agenda 21 was created. Today, we have massive unemployment in the US and Europe as a result. The goods are still being manufactured but overseas no longer in the US or Europe. The goods are now imported goods. Someone at the CoR and Agenda 21 decided it was better to help third world countries at the expense of first world nations and now we are seeing the results. I note here that because the costs of manufacture overseas is lower than the US, then the transnational firms make more money by manufacturing overseas and these CoR men are principal capitalists in those firms.
People around the world are waking up and complaining but they do not know what caused the unemployment. This paper documents the source as Rockefeller who founded the Club of Rome, the Club of Rome report, “The First Global Revolution”, the 1992 Earth Summit that led to the 330 page Agenda 21 document that has been followed by the Club of Rome and Council on Foreign Relations New World Order advocates ever since. The source of unemployment is 20 years of following the Agenda 21 direction.
The Federal government and the FED are in lock step on interest rates for the simple reason that if interest rates go up, the payments on the Federal debt will go up and soon engulf the entire tax revenue base. The debt is so huge that if the interest rate went to 5% or 6%, which is normal, the interest alone could make the nation insolvent.
Exhibit 9, Interest Rates, shows what is happening and what is going to happen.
Exhibit 9, Interest Rate Trend: Fed Rate – CPI
The reader should note that Negative real interest rates during Arthur Burns Chairmanship led to stagflation – no GDP growth and increased inflation. We are currently in such a period. Paul Volcker’s solution of “tough love” was raising the interest rates hard. However, he did not have to contend with the debt levels that we currently have. As a result, this cannot be done and you should expect to see further Quantitative Easing to keep interest rates down, which forces us to extend stagflaflation.
Are We in a Depression? – Comparison of 1932 to 2014
I believe that we are in a depression dating from 1Q08. I believe this because of a direct comparison that I have done between the two periods. I believe that the government is wrong in not admitting it because you cannot solve any problem until you recognize it as a problem. Consequently, the citizens in the form of unnecessarily high unemployment rates are receiving the brunt of the problem – the jobs are no longer here. Exhibit 10, Comparison of Depressions: 1933 and 2014, provides a factual appraisal of the unemployment situation today.
The above comparison provides an insight that today’s depression is very close to that of 1933 in the measure of unemployment. If 47 million were not on food stamps, we would have food lines and riots. A number of items are sobering. Specifically, the deflation of house prices and the forecast that by 2015 we will be in the same state as Greece gives one pause for thought. I believe that when the credit bubble “pops”, the current situation will be much worse than 1932.
In 1932, the US was still a nation of farmers and thus people could raise and can their own food. Today most people live in cities. In 1932, people paid cash for things including their homes. Today we live in a credit world. As a result when the credit bubble pops, people will lose assets such as cars, houses and things like that because they will have no way to pay and the banks will come to collect. Now, before we go forward to Part II – The Solution, we need to briefly review the Stock Market and Quantitative Easing results since they were supposed to increase employment and have not.
The Stock Market
The ideas in this section came from Bill Bonner’s recent article in his Rogue Economist newsletter. He laughed at the market because every time that news was bad, the market climbed. Thus, he showed that bad news is good news when it comes to investing in this controlled market. He used the ideas of Braden Copeland, Editor, Building Wealth.
This section directly attacks the allegation that we cannot be in a depression – “Look what the market has done!” I submit that in a controlled market, you can make it do anything that you want it to do.
When the unemployment rate shot from 7% to 10 %, the FED’s challenge was to get stocks to keep moving higher whatever the bad news. That makes people feel good about their investments and have extra money even in their state of unemployment. It also brings new “sheep” into the market for the “shearing” that is, in my mind, is planned. All bad news drove up the market. If unemployment goes up – the debate in Congress is negative, retail sales over Christmas season are down, manufacturing news is negative – - – it has not mattered. Stocks kept moving higher.
Here is a chart of the stock market performance during this period that shows what has happened during this economic period that I call a depression.
This FED’s mechanical manipulation of the market via their QE to infinity methodology must end at some point and we are close to that point.
This is a recap on Bad News becoming Good News for the Market.
- Unemployment went from 7% to near 10% between December 2008 and March 2009
- QE1 was launched to correct that – $660 billion – Rally was 40%
- How it worked – The FED buys back distressed Mortgage Backed Securities (MBS) from banks that they own at LIST and creates money to be deposited in the banks. The banks increase their equity by getting rid of bad debt at list and putting real assets in the form of dollars on their balance sheets.
- 60% went to US banks and 40% to European banks. It was started in 2011-$600 billion in bond buying – Rally was 30%.
- US banks were to put ½ into market
- Us banks were to deposit ½ back to FED for interest at about 1 %
- Unemployment officially untouched but actually continued to rise.
QE 1-QE Stopped – Market Dropped 13%
- Unemployment was untouched
- Balance sheets of bankers improved from 60:1 toward their 10:1 goal
QE2 – Started in 2010 and stopped in 2011. When QE 2 – Stopped – Market dropped 20% when Congress was debating the debt ceiling.
QE “Operation Twist”
Unemployment untouched during the “Twist”. QE “Operation Twist” started at the end of 2011 – selling short-term bonds and buying long-term bonds. This is important since the FED can control the interest rates on short-term bonds but not long-term bonds.
Unemployment was untouched officially but actually rose to the official 8% and actual 23% rate. QE3 was started in 2013 – $85 billion per month to force interest rates close to zero until unemployment fell below 6.5%. This is $1.02 trillion /year. S&P index went up 42%.
The net result of this financial maneuvering was that the 60:1 debt to equity ratio of the FED banks and European banks started coming down to about roughly today’s 10:1 ratio. However, this is without counting derivatives as debts.
The 10:1 ratio is closer to the correct goal. In my mind, this was the real purpose of this exercise. The nonsense about increasing employment was a diversion and a means of selling the action to the public.
Stock Market Depression Message
The stock market message during this depression is clear – the best approach for stock market investors is to assume that bad news must be good news. Why? The FED manipulates the market that way.
Official unemployment has not been materially affected. However, the actual unemployment has grown. The government used the lower BLS number and dropped people from the rolls to make the unemployment number appear lower. In fact, it rose during this period. The BLS U3 (8.6%} was used and not BLS U6 (15%). I believe that the ShadowStats number of 23% for U6 is closer to the truth than the BLS 15% number.
For those who invested in US stocks and stayed the course in this crazy ride up on bad news, you benefitted. However, it makes no economic sense. Further, I believe a massive sell-off is imminent.
The FED has reached its goal of 10:1 debt to equity ratio for its member banks using the QE subterfuge. In addition, its FED banks made an average return of 41% during the last
12 months. Since the banks had “free money” and knew the market was going up, they should have made money. Remember, they own the FED.
The FED Action in the Future
Things are now subject to change. The FED recently announced that it was on a time line for increasing short-term rates (March 19. 2014) – within seconds, the S&P sold off 1%. Two weeks later Janet Vellen, FED chairperson (see chart and Mother Theresa Moment), told two stories about individuals who could not find jobs. She then said that “considerable slack” existed in the job market and that stimulus would be required for “some time”. Stocks have been in a rally mode ever since.
Unemployment did not change in the face of historically massive stimulus. The stimulus was intended to dress up the banker’s balance sheets but not affect employment. This shows where the $1.6 trillion went. The bankers have “feathered their nests at the expense of the taxpayers”.
Conclusions made in this paper thus far are:
- We have been in a Depression since 1Q 2008.
- The jobs are gone and not coming back since the Agenda 21 direction was followed to move technology and science off shore.
- The FED and Bankers in the FED cartel have benefitted from the $1.6 trillion poured into them but the taxpayers have added that to the nation’s debt.
- Currently we have 23% unemployed or 36 million, 47 million on food stamps, the jobs are gone and people are running out of benefits.
- We are close to the end in the market, the economy and our ability to add debt.
- Life goes on. The economy goes on but the industry growth sectors change.
- Salvation for the unemployed and underemployed is not in the normal set of companies or the government because they are continuing to lay off people.
- The solution is in the individual to use his strengths to create his own business and become independent of the centralized system of corporations and government put in place by the New World Order Agenda 21 followers.
This provides a challenge. What does an unemployed or underemployed person who is out of work, out of options and out of benefits do? The answer is that he must rely on himself. He must rely on his own knowledge, resources, abilities and hard work to create his own business and become financially independent. The opportunities will be in industries that did not exist just 5 to 10 years ago but are growing exponentially today. It provides virtually unlimited opportunities if you choose the industry correctly.
In Part II – The Solution, we will show how that can be accomplished. First, you must realize that the job is not there so you must create and choose your own job. You will need to assess your personal capital in the form of knowledge, training, ability to change, and ability to get along with people. You then should choose an industry that is growing, has opportunities for you to contribute something that uses your expertise and provides you an opportunity to make as much as you made before.
In Part II, we will introduce you to three industries that use the internet, and a way for you to capitalize your abilities and make money from home. You can get one on one help, group help, training, and aid in creating your own business. Some of the advantages of your own business are that you can work from home, capitalize your knowledge, belong to the fastest growth industry in the world and meet people who are in similar situations to you and want to “fire their boss” or “be their own boss.
Copyright © Raven Communications, 2014
To go to Part II – The Solution – click here.