Pentagon Unilaterally Grants Itself Authority Over ‘Civil Disturbances’

Long Island Press
June 1, 2013

U.S. Troops in Afghanistan (Photo: Senior Airman Sean Martin, U.S. Air Force)

The manhunt for the Boston Marathon bombing suspects offered the nation a window into the stunning military-style capabilities of our local law enforcement agencies. For the past 30 years, police departments throughout the United States have benefitted from the government’s largesse in the form of military weaponry and training, incentives offered in the ongoing “War on Drugs.” For the average citizen watching events such as the intense pursuit of the Tsarnaev brothers on television, it would be difficult to discern between fully outfitted police SWAT teams and the military.

The lines blurred even further Monday as a new dynamic was introduced to the militarization of domestic law enforcement. By making a few subtle changes to a regulation in the U.S. Code titled“Defense Support of Civilian Law Enforcement Agencies” the military has quietly granted itself the ability to police the streets without obtaining prior local or state consent, upending a precedent that has been in place for more than two centuries.

Click here to read the new rule

The most objectionable aspect of the regulatory change is the inclusion of vague language that permits military intervention in the event of “civil disturbances.” According to the rule:

Federal military commanders have the authority, in extraordinary emergency circumstances where prior authorization by the President is impossible and duly constituted local authorities are unable to control the situation, to engage temporarily in activities that are necessary to quell large-scale, unexpected civil disturbances.

Bruce Afran, a civil liberties attorney and constitutional law professor at Rutgers University, calls the rule, “a wanton power grab by the military,” and says, “It’s quite shocking actually because it violates the long-standing presumption that the military is under civilian control.”

Read the entire article

Obama to sign U.N. Firearms Treaty Despite Senate's Rejection

SIC SEMPER TYRANNIS!!!
Mark Matheny
June 1, 2013




This from Infowars

Photo: ZeroOne

President Barack Obama will soon sign an international arms trade treaty previously rejected by the United States Senate.

The United Nations Arms Trade Treaty (ATT) establishes regulations for international arms sales. Categories of firearms listed in the treaty includes tanks, artillery, and small arms such as handguns. The U.N. General Assemblypassed the treaty on April 2nd with a vote of 153-4, with the United States voting in favor. Obama intends to sign the treaty on June 3rd.

On March 23rd, Senator James Inhofe (R-Okla.) introduced an amendment to prevent the U.S. from entering into the treaty. It passed by a vote of 53 to 46.

Sen. Patrick Leahy (D-Vt.) introduced another amendmentto ensure “that the United States will not negotiate or support treaties that violate Americans’ Second Amendment rights under the Constitution of the United States.” This amendment passed in the Senate by a voice vote.

Signatories of the treaty are encouraged to keep records on the recipients of imported arms and to introduce domestic legislation to support the treaty’s requirements, according to the National Rifle Association Institute for Legislative Action.

Due to the Senate’s response to the treaty, Obama’s signature will be symbolic at best. According to Article II, Section 2, Clause 2 of the U.S. Constitution, the President “shall have Power, by and with the Advice and Consent of the Senate, to make Treaties, provided two thirds of the Senators present concur.”

The Fed's Advisory Council Admits We're Hit!!!! - Like a Soup Sandwich!!!

SIC SEMPER TYRANNIS!!!
Mark Matheny
June 1, 2013

Peter Schiff explains how the so-called "recovery" being pushed by the administration, through the media is really just an illusion.


Schiff Report

A rise in the stock market gives Americans the illusion that recovery is here, but printing money by the Fed does not constitute a healthy recovery in the real sense of the word.

Real data is showing a weakening in the U.S. economy.

The Federal Advisory Council published a report stating essentially that the Fed's monetary policy has not been effective, and that it has only inflated asset bubbles that have given the illusion of a healthy and recovering economy. Once the money printing stops, it will bring on disaster.

So basically folks - WE'RE HIT!!! LIKE A SOUP SANDWICH!!!

Keiser Report: Debt Death Camps

RT News
June 1, 2013



In this episode of the Keiser Report, Max Keiser and Stacy Herbert the many ways to skin a debt cat: from Iceland where foreign unsecured creditors have been stiffed; to Greece where debtor prisons are under consideration; and to Spain where citizens were steered into Bankia shares before collapsing 99 percent in value; and, finally, the UK where inflation is the preferred debt/death camp option. In the second half, Max talks to George Galloway about Scottish independence, Rocky Marciano at the Senate hearings and the problem with unilateral socialism in a cold water Cuba.

ENEMY OF THE STATE?

Ohio Liberty Coalition
June 1, 2013

Justin Binik-Thomas is the new face of the enemy of the state? Hardly.

Mr. Binik-Thomas spoke with Greta VanSusteren on May 15th, 2013. This unassuming Cincinnati Tea Party member represents himself and our movement well as he asks some very simple questions that our government refuses to answer. Why did the IRS single him out and include his name on a questionnaire sent to another Tea Party group seeking tax-exempt status? What information are they keeping on him? Will it affect his business and livelihood? Considering the IRS involvement in implementing and enforcing Obamacare rules and regulations, will this affect his ability to keep his personal health information confidential? Will this affect his ability to receive health care if he is considered a danger of some kind? We can only imagine the worst because the government refuses to give him an answer.

Notwithstanding the egregious violation to his individual rights, this is a great reminder of the power of the individual. An honest regular guy persecuted by a powerful government can help open the eyes of the sleepy masses and a disinterested media when he is unafraid to stand and be heard. What was intended by this government to chill the spirit of the individual into submission has backfired.

This article was first published on May 15, 2013

Obama Appoints Monsanto VP To Food Safety Czar

TheTruethSeeker

May 30, 2013

Monsanto fox now in charge of food safety hen house Former … Former Monsanto vice president Michael Taylor may be responsible for more … Yet he has recently been appointed by Obama to be the U.S. food safety czar.

Mark Levin Decimates IRS For Targeting Him, Reveals His Complaint Led To Investigation

Mediaite
May 31, 2013

Conservative radio host Mark Levin told his audience Friday that he became a target for more than just liberal haters last year—the IRS was hot on his trail—and a letter he wrote might have spearheaded the investigation into the IRS’s treatment of conservative political groups.

Levin’s attorneys were contacted by the IRS about multiple Tea Party Groups he is involved with, leaving Levin astounded at the “way over the top” questions he was being asked that “violated” his first amendment rights. Levin claims the agency purposely burdened him in order to prevent him from gaining tax exemption status.

Levin turned his infuriation into anger, revealing to his audience an inside account of a complaint he wrote to the IRS in March 2012, later blasting IRS Director of Exempt Organizations division, Lois Lerner, who confessed to intentionally targeting conservative groups for audits in the lead up to the 2012 election. Levin told his listeners that after sending his letter to the Treasury Department, he got a surprise call from two agents for an interview to going through his complaint.

Levin noted that these two Treasury officials were “armed” and defended packing heat by claiming “we’re law enforcement.”

Levin concluded that these two men were the “equivalent of FBI for the Treasury department.”

Listen courtesy of The Mark Levin Show:

Originally published May 11, 2013

Global Elite Fears: Currency Wars and Deflation

August Forecast & Review
May 29, 2013

Sys­temic eco­nomic decline begets credit con­trac­tion, leading to defla­tion, cur­rency wars and finally, phys­ical war.

In 2002, one noted econ­o­mist wrote “Ignore the ghost of defla­tion.” Another stated that “Defla­tion is an overblown worry.”

On November 21, 2002, then-Fed Gov­ernor Ben Bernanke spoke to the National Econ­o­mists Club in Wash­ington, D.C. about “Defla­tion: Making Sure ‘It’ Doesn’t Happen Here. He started with this premise: “With infla­tion rates now quite low in the United States, how­ever, some have expressed con­cern that we may soon face a new problem – the danger of defla­tion, or falling prices.”

Now, of all people, Bernanke knew full well that the mea­sure of defla­tion is not falling prices, but rather the con­trac­tion of overall credit which may or may not prompt falling prices. The rest of his speech argued against falling prices but did little to address credit contraction.

Nev­er­the­less, he gave two prin­cipal rea­sons on why the U.S. would not expe­ri­ence defla­tion in coming years:

1. The first was the “resilience and struc­tural sta­bility” of the U.S. economy itself.
2. The second was the Fed­eral Reserve System itself.

With an apparent atti­tude of over­con­fi­dence, Bernanke then stated,

“I am con­fi­dent that the Fed would take what­ever means nec­es­sary to pre­vent sig­nif­i­cant defla­tion in the United States and, more­over, that the U.S. cen­tral bank, in coop­er­a­tion with other parts of the gov­ern­ment as needed, has suf­fi­cient policy instru­ments to ensure that any defla­tion that might occur would be both mild and brief.

“…Thus, as I have stressed already, pre­ven­tion of defla­tion remains prefer­able to having to cure it. If we do fall into defla­tion, how­ever, we can take com­fort that the logic of the printing press example must assert itself, andsuf­fi­cient injec­tions of money will ulti­mately always reverse a defla­tion.” [emphasis added]

In 2013, we can look back over the last 11 years to see how accu­rate Bernanke’s analysis was. The Fed’s easy credit poli­cies cre­ated the biggest housing bubble and sub­se­quent bursting since the Great Depres­sion of the 1930′s. It pushed its internal interest rates to near-zero, pumped tril­lions of dol­lars of liq­uidity into the banking system. Even though some eco­nomic improve­ment has been seen in the last three years (in cer­tain sec­tors, at least), our overall economy has sta­tis­ti­cally made very little progress.

Where has all of the Fed’s new money gone?

In the above chart, Zero Hedge shows the dis­tri­b­u­tion of QE money landing in small banks (blue), large U.S. banks (red) and for­eign banks (yellow). (The chart can be enlarged for better viewing) The cor­re­la­tion here is 100 per­cent! For all those who are shaking their fist at domestic banks like JP Morgan Chase, Bank of America, Cit­i­group, etc., they would be shocked to see that con­sid­er­able more didn’t ben­efit U.S. banks at all!

Read the entire article

IRS Has Long History of Political Harassment

JBS.org
May 31,2013

Tax Return that has been selected for an auditShutterstock

JBS CEO Art Thompson's weekly news video update for May 20 - 26, 2013.

In this week's analysis behind the news video, JBS CEO Art Thompson discusses: how Russia's Ministry of Foreign Affairs building is still decorated with the "hammer and sickle" symbol, an indication that the communists are still in control; how the IRS has been used by at least six presidents to harass their political opponents; how the Sixteenth Amendment to enable the IRS was ratified in 1913; and how people who believe they have been harassed or audited by the IRS because of their political bent should notify Congressman Mick Mulvaney of South Carolina athttp://mulvaney.house.gov/.

"Selected for Audit" image via Shutterstock.

Published in News

Oops! Sen. McCain Met Syrian Rebels Accused of Kidnapping

The New American
May 31, 2013

Sen. John McCain (R-Ariz., shown) and his goal of openly intervening in the Syrian conflict on behalf of the foreign-backed rebels — many of whom openly fight under the banner of al-Qaeda — suffered a major setback this week after a public relations stunt backfired in spectacular fashion. Media reports that surfaced Thursday claimed some of the opposition fighters he met and posed for pictures with during a recent trip to Syria were actually extremists. In fact, the radicals are accused of kidnapping Lebanese pilgrims from a village in Aleppo province.

The news, first reported by Al Jadeed and The Daily Starnewspaper in Lebanon, sparked widespread ridicule and criticism of the senator as his office scrambled to deal with the embarrassing negative publicity. It also further confirmed long-held suspicions among lawmakers and analysts that, contrary to claims made by Sen. McCain and others pushing for another open U.S. war in the Middle East, rebel forces might be just as bad as the Assad regime — maybe worse.  

Sen. McCain, who is often at odds with his party and is regularly derided by conservatives as a “RINO,” snuck across the border into Syria to give Western-backed rebel fighters a quick PR boost. He was also hoping the trip would help build support for overt U.S. intervention on behalf of the opposition, which continues to come under fire worldwide. Among the criticism: human rights abuses, firing on civilian protesters, cannibalism, massacres, using chemical weapons, deep ties to terrorist groups, Islamic extremism, openly announcing an ethnic cleansing program aimed at Shia Muslims, mass-murdering Christians, and more. 

McCain has long been claiming that the U.S. government would be able to identify and vet the “good” elements among opposition fighters before overtly sending heavy military weapons. In an ironic twist, however, even his own staff was apparently unable to do so. According to the Lebanese paper, among the rebels who Sen. McCain met were men identified by two survivors as kidnappers involved in holding Shia pilgrims hostage.

One image of the senator, for example, reportedly featured Mohammad Nour, fingered as the top spokesman and photographer for the Northern Storm brigade (Asifat al Shamal) responsible for the kidnappings. Another man who reportedly met with McCain, Abu Ibrahim, was also implicated by freed hostages as part of the kidnapping operation. Some non-governmental organizations involved in the senator’s trip are now claiming that Ibrahim may be dead, but the brigade’s supposed new leader did indeed meet with McCain, the groups admitted.

Other news reports, however, say Ibrahim is actually still the commander of the kidnapping rebel brigade in question. The group, which McCain met with in Syria, according to organizers, has been holding nine hostages for over a year amid intense negotiations. The two who were released are confident that the man pictured with McCain was indeed among the kidnappers.  

Read the entire article

25 Signs That Military Veterans Are Being Treated Like Absolute Trash Under The Obama Administration

Matheny's Note: Here is what Kissinger said once concerning U.S. Soldiers : "Soldiers are just dumb animals to be used as pawns in foreign policy". Is it any wonder that Obama the Puppet President for the New World Order would think any different?

American Dream

May 31, 2013

Why does the Obama administration treat our military veterans like human garbage?  Every year on Memorial Day and Veterans Day, Barack Obama and our other politicians make very nice speeches, but the truth about how they feel about our veterans can be seen in how they are treated every single day.  In the United States today, there are well over half a million veterans that have been waiting for at least 125 days to have their benefit claims processed.  Many of them will ultimately have their claims sent back or denied just so a government employee somewhere can get a bigger bonus.  Meanwhile, conditions at VA facilities all over the country are absolutely abysmal, and many veterans have to wait more than half a year just to get an appointment at one of those facilities. 

Once you start looking into how this country really treats military veterans, it becomes easier to understand why 22 military veterans commit suicide in America every single day.  Our vets have a higher rate of unemployment, a higher rate of poverty, a higher rate of homelessness, a higher rate of depression and a higher rate of divorce then the general population.  It is a crying shame.  One of the ways that any society is judged is by how it treats military veterans, and the truth is that America has failed miserably.  This has been particularly true since Barack Obama has been in the White House.

The following are 25 signs that military veterans are being treated like absolute trash under the Obama administration…

1. The average claim for veteran benefits takes more than half a year to be processed.

2. The Department of Veterans Affairs has a backlog of more than half a million overdue claims for benefits that are at least 125 days old.

3. In 2009, the number of veterans that had been waiting for more than a year to have their benefits approved was 11,000.  Today, that number has soared to245,000.

4. Thousands upon thousands of military veterans that are waiting for their claims to be processed are dealing with absolutely horrible injuries…

Of those who have sought VA care:

• More than 1,600 of them lost a limb; many others lost fingers or toes.

• At least 156 are blind, and thousands of others have impaired vision.

• More than 177,000 have hearing loss, and more than 350,000 report tinnitus — noise or ringing in the ears.

• Thousands are disfigured, as many as 200 of them so badly that they may need face transplants. One-quarter of battlefield injuries requiring evacuation included wounds to the face or jaw, one study found.

5. At one VA hospital in Wisconsin, one military veteran with a broken jaw that was seeking treatment still had not had his jaw fixed after a month and a half.

6. Today, it takes military vets an average of seven months to get an appointment at a VA facility.

7. Many VA facilities are in absolutely horrific condition.  A while back, ABC News conducted an investigation of conditions at VA facilities across the United States.  What ABC News discovered was absolutely shocking.  The following are just a few of the things that they found during the course of their investigation…

*Bathrooms filthy with what appeared to be human excrement

*Dirty linens from some patients mixed in with clean supplies

*Examining tables that had dried blood and medications still on them

*Equipment used to sterilize surgical instruments that had broken down

*Some patients were forced to beg for food and water

*Veterans that were neglected so badly that they developed horrific bedsores and dangerous infections

8. As I have written about previously, applying for veteran benefits is extremely complicated, and VA employees are actually paid bonuses for denying claims…

The truth is that we have made it extremely difficult for our military veterans to claim the benefits that we have promised them.  Vets have to fill out an absurdly complicated 23 page application and if they make even one small mistake their applications can be stonewalled for years.  The U.S. Veterans Administration actually has a policy under which they pay large bonuses to employees that meet certain application processing goals.  This explains why approximately 70% of the claims submitted to the Veterans Administration are refused or sent back to be redone.  In fact, using the Freedom of Information Act, one local NBC stationwas able to learn that $250,000 was paid in bonuses to VA employees who work inside the Poff Federal Building in Roanoke, Virginia in just one year alone.

9. Large numbers of military veterans that legitimately should be getting benefits are having their claims denied by the federal government.  Just check out the following example from a Veterans Today article…

In one case, we found a veteran with 40 percent of his brain removed found to be healthy and employable.  He was also missing his right arm.  The physician who examined him over looked the arm and failed to note the cognitive degeneration the traumatic brain injury had caused.

10. Last year, more than 85,000 military veterans were treated for sexual abuse that they suffered while serving in the military.  40 percent of them were men.

11. According to a recent Defense Department survey, approximately 14,000 men in the U.S. military were sexually assaulted by other men during 2012.

12. According to the Washington Post, there is an epidemic of sexual assaults being committed by military recruiters.  The Pentagon is pledging to do something about the problem…

“The secretary has made it clear that we will spare no effort to rid our military of sexual abuse,” said George Little, the Pentagon press secretary. “The fact that there have been problems of sexual abuse during the recruiting process is simply intolerable.”

13. The number of active members of the U.S. military that are killing themselves now exceeds the number that are dying on the battlefield.

14. Since the beginning of the Iraq War, twice as many members of the Texas National Guard have killed themselves as have been killed in combat.

15. According to one recent study, 22 military veterans kill themselves in the United States every single day.

16. At this point, combat veterans account for about 20 percent of all suicides in the United States.

17. The unemployment rate for military veterans is significantly higher than for the population as a whole.  This is especially true for younger veterans.

18. On any given night, approximately 200,000 military veterans are homeless in the United States.

19. All over America, monuments that honor military veterans are crumbling and falling apart.  For much more on this, please see this article.

20. Under the Obama administration, many military veterans have had to pay to have their medals shipped to them.  For example, one soldier actually had to pay a 21 dollar shipping fee to get his Purple Heart.  The following is from the Huffington Post…

War comes with an incalculable human cost. And apparently a shipping fee of about $21.

Retired Sgt. Major Rob Dickerson says that’s the price he was forced to pay when his Purple Heart — the medal issued to soldiers wounded in action — arrived at his door, C.O.D.

Instead of being awarded the military honor in a formal ceremony, the vet with 29 years in the service was handed his award, and a shipping invoice, by a FedEx deliveryman outside his Sioux Falls, S.D., home.

21. In some areas of the country the U.S. Department of Veterans Affairs has been caught banning the words “God” and “Jesus” during funeral services for veterans.

Read the entire article

Record unemployment, low inflation underline Europe's pain

Reuters
May 31, 2013

By Robin Emmott and Ingrid Melander

BRUSSELS/PARIS | Fri May 31, 2013 10:07am EDT

(Reuters) - Unemployment has reached a new high in the euro zone and inflation remains well below the European Central Bank's target, stepping up pressure on EU leaders and the ECB for action to revive the bloc's sickly economy.

Joblessness in the 17-nation currency area rose to 12.2 percent in April, EU statistics office Eurostat said on Friday, marking a new record since the data series began in 1995.

With the euro zone in its longest recession since its creation in 1999, consumer price inflation was far below the ECB's target of just below 2 percent, coming in at 1.4 percent in May, slightly above April's 1.2 percent rate.

That rise may quieten concerns about deflation, but the deepening unemployment crisis is a threat to the social fabric of the euro zone. Almost two-thirds of young Greeks are unable to find work, exemplifying southern Europe's 'lost generation'.

Economists and policymakers including Germany's finance minister, Wolfgang Schaeuble, have said the greatest menace to the unity of the euro zone is now social breakdown from the crisis, rather than market-driven factors.

In France, Europe's second largest economy, the number of jobless rose to a record in April, while in Italy, the unemployment rate hit its highest level in at least 36 years, with 40 percent of young people out of work.

"I've sent CVs everywhere, I come to the unemployment agency every day, for 3 or 4 hours to look for work as a truck driver and there's never anything," said 42-year old Djamel Sami, who has been unemployed for a year, leaving a job agency in Paris.

Thousands of demonstrators from the anti-capitalist Blockupy movement cut off access to the ECB in Frankfurt on Friday to protest against policymakers' handling of Europe's debt crisis.

Some economists believe the ECB, which meets on June 6, will have to go beyond another interest rate cut and consider a U.S.-style money printing program to breathe life into the economy.

"We do not expect a strong recovery in the euro zone," said Nick Matthews, a senior economist at Nomura International in London. "It puts pressure on the ECB to deliver even more conventional and non conventional measures."

In the past, the euro zone has needed economic growth of around 1.5 percent to create new jobs, according to Carsten Brzeski, an economist at ING. With the Organisation for Economic Cooperation and Development forecasting this week that the euro zone economy would contract by 0.6 percent this year, unemployment is set to worsen long before it turns around.

"We do not see a stabilization in unemployment before the middle of next year," said Frederik Ducrozet, an economist at Economist at Credit Agricole in Paris. "The picture in France is still deteriorating."

5.6 MILLION YOUNG JOBLESS

ECB President Mario Draghi, whose pledge to buy the bonds of governments in trouble helped protect the euro zone from break-up last year, has so far left the onus on governments to reform.

A majority of economists polled by Reuters do not expect the ECB to cut its deposit or main refinancing rates soon, although the OECD this week called for the bank to consider printing money for asset purchases to revive growth.

ECB policymaker Ignazio Visco said on Friday it stood ready to take further action but that monetary policy alone could not solve the euro zone's economic problems.

The Commission, the EU's executive, told governments this week they must focus on reforms to outdated labor and pension systems to regain Europe's lost business dynamism, shifting the policy focus away from debilitating budget cuts towards growth.

EU leaders are expected to put the problem of joblessness at the forefront of a summit in Brussels at the end of June.

European Council President Herman Van Rompuy, who chairs the meetings, said last week youth unemployment was one of the most pressing issues for the 27-nation European Union as a whole.

Ministers from France, Italy and Germany called this week for urgent action to tackle youth unemployment, with Schaeuble describing it as a "battle for Europe's unity" and warning of revolution if Europe's welfare model is abandoned.

In April, 5.6 million people under 25 were unemployed in the European Union, with 3.6 million of those in the euro zone.

Even if governments take on unions and vested interests to enact reforms, they will take time to produce benefits.

"For the next two to three years it all looks like a dead-end road," said an unemployed sales manager in Paris who gave his name as Dany. "I don't see how things can improve as long as we are not united to face the pressure from Asia and Latin America."

(Additional reporting by Martin Santa; Editing by Catherine Evans)

Armed Federal Agents Patrol Tea Party Rallies Judge Napolitano questions why DHS is showing up armed to Tea Party demonstrations against the IRS.

12160.info
May 31, 2013

Armed Federal Agents Patrol Tea Party Rallies

Judge Napolitano questions why DHS is showing up armed to Tea Party demonstrations against the IRS.

Armed and out-of-uniform Department of Homeland Security agents showed up last week at peaceful Tea Party protests that arose from the IRS scandal. Judge Andrew Napolitano weighed in on the troubling news this morning on Fox and Friends.

Gretchen Carlson asked whether this is legal and if this is yet another example of bullying tactics by the Obama administration. Judge Napolitano said the only recourse people have is to put political pressure on President Obama to end this practice, arguing that local police departments are more than capable of monitoring peaceful Tea Party rallies.

They both agreed that people will hear about this and feel "chilled," and Carlson pointed out that DHS also monitored peaceful Occupy Wall Street demonstrations.

"The government needs to realize its first job is to protect our freedoms. So when it inhibits us from exercising them, it's not doing its job. ... Why do we need a federal police department to track anybody when they're lawfully expressing a political opinion in a public place? That's not a job for the police, that's not a job for the feds," he said.

Why inflation matters: How the Fed is creating real estate inflation and hiding behind inflation data to continue their expansionary ways. OER and Case Shiller divergence.

Mybudget360
May 28, 2013

Inflation matters.  It matters a lot.  Contrary to what you may hear in the mainstream press the Federal Reservehas done everything to stoke the fires of inflation.  The reasons for this include creating asset inflation that is understated in CPI data and also setting up a system where consumption is almost forced upon consumers.  How so?  With negative interest rates consumers are losing money by simply having their money in a savings account.  Even a modest rate of inflation will erode purchasing power when banks are paying zero percent on your hard earned deposits.  Yet this is all part of the design.  Inflation matters because it does encourage spending.  You want to spend today given that your current dollars will lose value tomorrow.  The Fed likes inflation so much that it has reignited the housing market once again while it has expanded its balance sheet to over $3.3 trillion.  Inflation absolutely matters.

 A brief history of inflation on the dollar

What is interesting is the US dollar held steady for nearly 60 years between 1870 and 1933:

Once the gold standard was abandoned, the US dollar has been on a steady decline since the 1930s.  It is an interesting trajectory including the era when Nixon closed the gold window.  We are merely making an observation of the data here.  Without a doubt the US dollar has lost its purchasing power over the decades.  This matters because it has also had a major impact on wages and the standard of living especially for the US middle class.

Adjusting for inflation household wages are back to levels last seen in 1995:

This matters because gas is no longer $1 a gallon and no longer can you work part-time at a minimum wage job and put yourself through college.  Those days are gone.  The cost of living for most Americans has gotten more expensive.  We found out this week that home values are increasing at their fastest pace since 2006.  The annual increase in prices is over 10 percent.  Of course much of this is not coming from wage growth and this should be obvious because of the previous chart.  This is largely coming from the actions being taken on by the Fed which is funneling trillions of dollars into the housing market via negative rates and encouraging the financial sector to speculate once again in housing.

The Fed which relies heavily on CPI data is likely to continue on this road given that inflation as measured by this metric is looking rather timid:

According to the latest data the annual change in inflation is only moving at 1 percent.  But if housing is the biggest line item for Americans and just went up by 10 percent, why is this not reflected in the CPI?  Once again we run into the problem of the CPI using the owners’ equivalent of rent (OER) measure.  This measure missed the last housing bubble and is going to miss it once again.

Just to exemplify how poorly a job OER does on measuring price changes in the housing market let us examine annual changes of OER versus those in the Case Shiller Index:

As you would expect, rents are fairly stable over time since they reflect the actual ability of someone to pay out of net income.  Yet home values can be manipulated by the Fed by the tweaking of interest rates to make housing payments more affordable yet home prices more expensive.  Or in this case, a flurry of investors from Wall Street buying up rentals.  At the end of the day, you are paying more for less.

Inflation absolutely matters and you need to know where to look to see these changes.  The fact that the Fed is pushing on the housing angle again yet is ignoring the divergence between OER and the Case Shiller is troubling.  The lessons should be clear and housing is the biggest expense for Americans.  They fully understand this and continue to stoke thefires of inflation.

Record 10,978,040 Now on Disability

CNS News
May 29, 2013

The total number of people in the United States now receiving federal disability benefits hit a record 10,978,040 in May, up from 10,962,532 million in April, according to newly released data from the Social Security Administration.

The 10,978,040 disability beneficiaries in the United States now exceed the population of all but seven states. For example, there are more Americans collecting disability today than there are people living in Georgia, Michigan, North Carolina, New Jersey or Virginia.

The record 10,978,040 total disability beneficiaries in May, included a record 8,877,921 disabled workers (up from 8,865,586 in April), a record 1,939,687 children of disabled workers (up from 1,936,236 in April), and 160,432 spouses of disabled workers.

Read the entire article