Paul Craig Roberts: Fed Laundering Treasury Bonds in Belgium, Real GDP was Negative & More

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On the steep drop in GDP growth of a paltry .1% in the first quarter, Dr. Paul Craig Roberts says, "What I find most amusing about this is they had to claim some real growth in the first quarter; so, they eked out .1%. Now we know they got that by rigging the inflation number they used to deflate the gross domestic product (GDP). The real GDP in the first quarter, properly deflated, was negative and probably also in the fourth quarter. Most likely, this coming quarter, they are not going to be able to hide the fact that it is negative. . . . I am convinced the first quarter was negative, and I don't see how it could possibly go positive in the second quarter."

On Fed Head Janet Yellen's rosy outlook on the economy, Dr. Roberts, who holds a PhD in economics, debates, "I don't see how she can see that the economy is going to start growing. What is going to make it grow? Why should investors invest money when consumers don't have any money? There are not retail sales. I think it is just part of the rah, rah talk. Everywhere else in the world is going down the tube. So, what's going to push the American economy up?--Nothing that I know of."

Join Greg Hunter of as he goes One-on-One with former Assistant Treasury Secretary Dr. Paul Craig Roberts.

It needs to be remembered that tapering is not selling. They, the Fed, have reduced their rate of purchasing (the Belgian theory aside; very interesting theory). They believe their modeling told them that they could get away with slowing the purchasing.

The real problem was, and remains, the lack of velocity of money in the real economy. That's what's been acting as the main drag on the economy.

We have a goofy currency issued as debt rather than debt-free. We should be using debt-free money spent into the economy by the government fixing up all of the degraded infrastructure and creating new and better, needed infrastructure.


Tom Usher

There's plenty we could be doing to rev things up without causing inflation.

As for the lack of Russian rockets, the US private sector is loving it. They want to quickly replace Russia as the source.

With the Ukrainian pro-Kiev "oligarchs" who control the steel industry in Eastern Ukraine having ordered their employees to attack back against the pro-Russia forces, things are very much up in the air.

Don't forget that Vladimir Putin openly called for the independence referenda to be postponed but wasn't listened to, unless you think behind the scenes he was saying to go ahead. I think he was not encouraging them behind the scenes but rather really wanted to deescalate.

Apparently Russia has all the steel making capacity it needs without Eastern Ukraine's, which has reportedly been selling its steel to Europe anyway. The threat of the loss of steel sales to Europe was reportedly part of the argument the Ukrainian steel billionaires used to convince the steel workers to get out there against the separatists/independence movement.

I've noticed that the pro-Russian media, such as RT, hasn't reported on the steel workers actions as of the time stamp of this post (at least that I know of; I've been following it fairly closely).


We are hearing news (New York Times, CBC Radio, etc) of the Ukrainian tycoon Rinat Akhmetov mobilising his workers into the streets of cities in the Donetsk region to disperse the pro-autonomy movement (termed by many in the east as a movement for "federalisation", i.e. decentralisation, of Ukraine’s governing structures). The inaccurate or misleading reporting that this development is receiving urgently obviously requires some serious attention and interpretation.

Here is a brief comment by email from Boris Kagarlitsky on May 17:

This is yet another lie. I’m really impressed by the level of disinformation even in the “serious” Western press on the Ukrainian crisis. It is more than anything we ever had in the USSR, more than George Orwell imagined. Akhmetov’s workers were sacked for taking part in pro-federalization demonstrations which led to strikes and now there are a few mines and factories of Akhmetov taken over by workers and opolcheniye (people’s militia). This is why now Akhmetov is trying to form his own paramilitary formations to prevent further takeovers by Donetsk Republic and workers.

A brief report, dated May 5, from the Russian-language website journal that Boris helps to publish, Rabkor (Worker Correspondent) explains there is a growing wave of protest and calls for nationalisation of the properties of precisely such figures as Rinat Akhmetov.

Renfrey Clarke has provided me with his views of the recent, reported mobilisations of steelworkers:

Trying to work out what’s happening in places like Ukraine from articles in the New York Times has overtones of Plato’s cave. This assertion in the Times article is plain wrong: “Russia itself exports steel, so it has never been a significant market for the output of the Donetsk region”.

What we can say is that the miners and steelworkers have entered the political picture in a massive and organised (though not yet independent) way. The NYT has tried to spin this as a blow against the autonomy movement. But it seems that in the cities where the steelworkers have come into the streets, they are clearing out police as well as the Donetsk People’s Republic. It’s quite obvious that the Kiev regime has no sway in the region.

Rinat Akhmetov has tried to act as a conduit between the Kiev authorities and the autonomist movement. He also seems to have played some kind of role in this latest development. But the notion that he exercises any kind of control over the political responses and actions of the worker masses of the region is far-fetched.

Akhmetov couldn’t possibly have called thousands of workers into action (if, indeed, these are the numbers that have appeared) if the workers were not already inclined in their own minds to taking over their cities. A mass mobilisation of workers is a tiger that oligarchs like Akhmetov have small chances of riding.

The suggestion that the miners and steelworkers were necessarily at cross purposes with the Donetsk People’s Republic is speculative. My reading of the situation is that the workers of the Ukrainian Donbass hate the Kiev regime and have a deep fear of its austerity plans. They want as little to do with it as possible, even though there seems to be no broad sentiment for incorporation into Russia. If the May 11 referendums in Donetsk and Luhansk were an unscientific opinion poll, they at least established that the desire for autonomy is powerful and widespread.

There is an historical resonance of these latest events that goes back to the huge Donbass miners’ strikes against Gorbachev* in 1989. That period also saw the Donbass miners move into political action in a big way, though it served the political goals of the pro-capitalist elements in the Soviet bureaucracy of the time.

Now the rulers in Kiev, and the neo-cons in Washington, could be faced with a phenomenon of similar scope. Historical justice! Needless to say, their chances of successfully imposing an austerity program in the Ukrainian Donbass at present are negligible.

* Mikhail Gorbachev was the seventh and last head of state of the Soviet Union, 1988 to 1991. He tried but failed to lead the Soviet Union through a stage of reform of its political and economic institutions that would permit accelerated capitalist investment but retain a heavy overseer role by the Soviet state, similar to what has evolved in China.

Here is what the editors of the New York Times think about the situation in the east, from a May 12 editorial:

But the gathering rumble of violence accompanying the [autonomy] votes is serious and is driving the Ukrainian crisis in a direction that before long no one — not President Vladimir Putin of Russia, not authorities in Kiev, not the West — will be able to control. . . . The fact that the referendums were held despite Mr. Putin’s urging last week that they be postponed suggests that events are already developing a momentum of their own.

Source: Discussion: The political rebellion in eastern Ukraine

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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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