QE Up-Ticks, False, Masking Toxic Waste/"Assets," Buying Time, Waiting for Death

Per John Mauldin:

...Lance Roberts of Streettalk Advisors (with me looking over his shoulder) created an index that combines a number of economic indexes in an effort to build an index that is not subject to single (or double) indicators. The Streettalk/Mauldin Economic Output Index is composed of a weighted average of the following indexes:

Chicago Fed National Activity Index
Chicago PMI
The Streettalk ISM Composite Index
Richmond Fed Manufacturing Survey
Philly Fed Survey
Dallas Fed Survey
Kansas City Fed Survey
The National Federation of Independent Business Survey
Leading economic indicators

Note that there are six regional and national indicators, plus the NFIB survey, which is national. Lance's index is not driven by one region or index or survey. When the combined indicator falls below 30, it has always indicated either that we are in a recession or about to be in one. The chart is overlaid, below, against GDP and LEI (leading economic indicators) – both tend to have a fairly high correlation to our Economic Output Composite Index. And LEI is currently supported by the yield spread and money supply (more on that below).

A few quick notes before the chart. First, note the increases in the index with the onset of QE1 and QE2 and the sharp drops when QE ends. The red at the end of the chart is the recent drop, and it takes us into recession territory. Recessions are indicated by gray bands

QE Up-Ticks, False, Masking Toxic Waste/"Assets," Buying Time, Waiting for Death

Streettalk/Mauldin Economic Output Index

via The Streettalk/Mauldin Economic Output Index.

Also, visit: JohnMauldin.com

Why do I bother? What does the title of this post ("QE Up-Ticks, False, Masking Toxic Waste/"Assets," Buying Time, Waiting for Death") have to do with the Streettalk/Mauldin Economic Output Index and particularly with the text I've quoted from John Mauldin?

Does the squeaky wheel ever get the grease? Not if the people are deaf. We have all been deaf at times. Some of the people are deaf all of the time.

The reason I'm going to write what I'm about to is because nowhere in the mainstream do I read one iota of even the beginnings of the economic solutions. The beginnings are available though. Even the entire solution is available. The problem, the obstacle, is greed. The greed of the greediest of the greedy is blocking nearly everyone's ears. That's why they are deaf. I won't give a long sermon about it.

Suffice it to say that those who 1) have acquired the most for self and 2) use what they've acquired to do more of the same, it would be detrimental to their selfish, greedy cause were the masses to catch on to how to be organized as a whole society of humanity such that everyone, and I mean everyone, would have everything needed and finally even wanted.

To the more mundane though, look at the right end of the graph. You will notice how low things were when "Quantitative Easing" (QE) began. QE was bailouts and stimulus spending by the Federal Reserve via the US Treasury. Notice how things went up, then down, then more QE, then up, and now down again. It's been a roller-coaster ride.

Now, there are those who say that such spending, no matter what, is wrong. I disagree completely, which brings me to the point. If the QE had not been for bailouts but had been 100% for real stimulus in sectors where huge employment would have occurred, the whole ride would have ended on the high. There would not have been the return back down. The economy is not subject to that kind of gravity, so to speak. The only gravity of a type is the greed of a few.

Where did the money go? All of it actually went to bailouts in one form or another. All of it, directly and indirectly, went to masking the toxic assets, the deliberately bad bets, of a very few. There were a handful of sleight-of-hand carrots tossed to "infrastructure" projects and the like just to keep the people from getting the scent of the stinking trail leading to the banksters' hidden coffers full of the ill-gotten gains from dead men's bones.

The Federal Reserve, using the US Treasury (hence the future earnings of the American workers), pumped money into all of its base around the world. Those technically broke institutions then speculated wildly with it (in truly unsustainable "investments") and/or parked it at the Fed where they earned interest (again to be paid for via the future earnings of the American workers).

That system is sheer evil. Do I really need to say that? Even if I do, most ears remain block. Most eyes remain wide open but unseeing.

Here's the truth and whether anyone else likes it or not. The entire system called commercial banking is completely unnecessary and is, in fact, a drain and a drag upon productivity and growth, especially in the best areas.

The fact is that just as easily as the Fed can create money with interest attached payable to bond-holding tyrants, the US Treasury can, and does, create coinage that is not interest-bearing. That coinage could just as easily be paper notes or secure/encrypted cyber-bits.

Now, many anarcho-capitalists will run around like chickens with their heads cut off claiming that such printing or creation is inflationary. Well, it doesn't have to be, and besides, there are different types of inflation in this sense.

First, there is monetary inflation. QE has caused huge monetary inflation in a sense. It has increased the monetary supply, except for the fact that the money is not circulating. Technically, it's "in circulation," but it is largely parked at the Fed, not moving (circulating) in the commonsense meaning. This sort of inflation, monetary inflation, is moot, unless the money starts moving. If it moves too much with so much of it (all of it that is parked), the economy will not be able to absorb it with increased productivity for a while. More money will chase a yet-stagnant number of goods and services. Due to a lack of pre-planning, there will be a short lag time before the other kind, the real kind, of inflation will kick in. That's price inflation — the one regular people care about. People bid up the price of scarce goods. The more money there is in general spread about relative to wanted and needed goods and services, the higher the prices those goods and services will command. Everything will become more expensive even while more people have more money. That's an inflationary spiral.

There is an answer to it, and that's a monetary supply in the right quantity, spread properly, and circulated at the right rate to match productivity and growth. That's a planned economy. "Planned economy" is a dirty term to the laissez-faire capitalists. However, those laissez-faire capitalists want each dollar to represent the vote of the consumer. Where a planned economy does not have to be a central-planning Stalinist dictatorship is where the locals vote not with each dollar but with their needs and wants in mind and after open discussions about everything that matters. So, both are democracies. The difference is that the former (the laissez-faire capitalist) is weighted toward those who have acquired more for self: the greediest of the greedy have the greatest vote or say. Those (such as the Good Samaritan and Jesus Christ) who are more inclined to care about others including total strangers, have little to no say.

So, we have the money not bearing interest (debt-free, tax-free money). We have the people having equal say about the direction of the economy. We have a combination of centralized/decentralized structure. We have the supply of funds matched exactly to real productivity and rate-of-flow of those funds. That last aspect would be managed in near real-time via computer software and hardware networking, which would get better and better at it.

What are the limits on economic growth under this scenario? The only physical limits are the physical bounds of the universe. I absolutely guarantee that poverty and hunger and homelessness and pollution and many other ills will become things of the past and in rather short order relative to how long it will take otherwise. Frankly, if we don't do the right things, we'll never get there.

The name of the notes that don't bear interest and that are issued tax-free is "United States Notes." They have been issued in the past but not quite in the way I've described.

With United States Notes, the National Debt of the US, which requires hundreds of billions of dollars in taxes to pay to the "lenders" each year, immediately would be paid in full to all but the fraudsters. That governmental borrowing has always been known by the elitists to be nothing more than a giant scam sucking the life out of the working class, and now more and more, everyone else with very few exceptions. It's been a self-defeating exercise on the part of the plutocrats though. They have been shooting themselves in the feet all along. How well the working class is doing is really relevant to how well everyone else ultimately does, but visionaries the plutocrats are not.

What do we hear rather than the solutions? We hear the deficit hawks. We hear the gold bugs. We hear the Keynesians. It goes on and on that way because it serves the greedy that via the media, the people be mentally contained within the box, so to speak. Thinking outside the box is not allowed.

It's a bit ironic that one of John Mauldin's newsletters is "Outside the Box." I wish he'd really do it. He's stuck in one. It's really rather conventional. He straddles the phony liberal-conservative spectrum, even tossing in a measure of libertarianism every once in awhile — no lefty anarchism allowed though. It keeps the Hayek fans reading. They have more mammon to spend.

Don't get me wrong. I understand the game. I just want to break it up, permanently. I'm a spoiler, "would-be" in the eyes of the plutocrats. They have no intention of allowing my voice to be heard.

I'm no Robin Hood though. You can't steal stolen goods by returning them to the rightful owners. The rightful inheritance of the whole of Creation does not belong to the liars and takers. It belongs to the truthful and sharers. That's the real law.

Come on, John. You can do better. We can all do better than live in the bankster-provided box.

Tell Ron Paul. Tell the "alternative news" casters: Max Keiser and Alex Jones. Bill Still already knows much of this, as does Andrew Gause. Ellen Brown certainly grasps a great deal of it and has many associated ideas concerning public banking. Michael Hudson could probably supply a great deal of depth to the discussion. He has been one of the leading lights in economic "thinking outside the box." William Hogeland understands the historical battle between the American haves and have-nots. William has written a great series about that, that is published on NewDeal 2.0. Nouriel Roubini needs to hear it. Rob Johnson should be discussing it globally via INET (Institute for New Economic Thinking). Stephen Zarlenga has outlined many policy and program ideas that are much in line with my thinking.

I believe a number of people will comprehend it. As to whether or not they'll act upon it, that's up to them:

  1. Birgitta Jonsdottir
  2. Danny Schechter
  3. David Stockman
  4. Dean Baker
  5. Doug Henwood
  6. Edward Harrison
  7. Gareth Porter
  8. George Galloway
  9. Gerald Celente
  10. Henry C K Liu
  11. James K. Galbraith
  12. Jane Hamsher
  13. Janet Tavakoli
  14. Jeff Cohen
  15. Joseph Stiglitz
  16. Mark Weisbrot
  17. Medea Benjamin
  18. Michael Rectenwald
  19. Mike Whitney
  20. Nicole Foss
  21. Nomi Prins
  22. Norman Solomon
  23. Paul Craig Roberts
  24. Paul Jay
  25. Paul Krugman
  26. Paul Street
  27. Ralph Nader
  28. Robert Kuttner
  29. Robert Oak
  30. Robert Pollin
  31. Robert Reich
  32. Scott Horton
  33. Stacy Herbert
  34. Stephen Lendman
  35. Steve Keen
  36. Vandana Shiva
  37. Warren Buffett
  38. William K. Black
  39. Yves Smith

The list is very, very far from exhaustive. It's just my way of trying to get some people's attention on this overarching matter before it's too late for billions of souls. To one degree or another, the people listed and mentioned in the paragraph above the list, are movers and shakers in the "alternative" and/or mainstream world. If enough of them start talking and writing about a thing, it will get some mainstream exposure. If they press it enough in a coordinated manner, it will get full mainstream-coverage and change many hearts and minds. Then it will stand a chance.

I would have included more people; but frankly, I didn't want to include people I haven't read or heard enough to perhaps recognize their faces if I were to meet them on the street (big perhaps). As for names, I'm pre-Alzheimer's, maybe not even pre. We could fund the cure for that too.

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  • Tom Usher

    About Tom Usher

    Employment: 2008 - present, website developer and writer. 2015 - present, insurance broker. Education: Arizona State University, Bachelor of Science in Political Science. City University of Seattle, graduate studies in Public Administration. Volunteerism: 2007 - present, president of the Real Liberal Christian Church and Christian Commons Project.
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