The U.S. Economy: Stand by for more worse news

[joepistole]

Look Enron was regulated by the government. It's that simple. Energy companies are highly regulated. You pretending Enron was working in a unregulated free-market is specious bullcrap. Everything from health and safety to our money itself is regulated by the government.

In your fantasy world. There was millions and millions and millions of lines of code regulating Enron. That this didn't matter is exactly why we need LESS reliance on incompetent overpaid governmental 'regulators' (most of whom couldn't care one way or the other as they have no skin in the game and at the end of the day, they'll get their paychecks) and more reliance on free-market solutions to develop regulations, ones that actually work and are implemented by people who actually have skin in the game.

Yes, I know, it's impossible for you to imagine a free society where free people actually work with one another to figure out real world solutions to problems like corrupt CEOs without someone sticking a gun to the back of someone elses' head.

That's your box.

The very concept must seem alien to you. You probably think we 'just need MOAR governmental regulation. Moar government. Never mind it's K-12 is an utter failure. Never mind it imprisons the largest population of non-violent Citizens in human history (putting the Soviet Gulags to shame). Never mind it's the largest polluter in human history. Never mind it's the largest consumer (and waster) of limited energy in human history. Never mind it makes up phony wars to waste trillions and trillions on supporting the MIC by murdering everything from women and children to the planet's various ecosystems. Never mind it's central bank caused the Great Depression and now led us into the next Greater Depression. Never mind it's sold trillions and trillions and trillions of of T-bonds to bail out the richest criminal banking crooks in human history. Never mind it's illegally spying on each and every one of our communications.

No, never mind all that.
We just need MOAR governmental regulations. That'll fix everything.
We get millions and millions and millions of lines of regulation each year, but we just need MOAR.

Prove it.

I can go onto Ebay right now and put something up for sale. Prove my actions are more regulated than that of the CEO of Enron.

Again, you're simply full of specious post-hoc justifications of your normalization biases. You happened to be born into the US Republic and are alive in 2015 and so this seems to make sense to you. You're no different from a Slave owner of the 1800s or a Peon from the 1500s or Roman Citizen or Roman Slave of the 100s. You simply normalized to the world you were born into and that is that.

That's your box.

They were buying deregulation - freedom from regulation. That's what allowed them to rig the market. There was.

Ebay is more heavily regulated than Enron was. And nobody is playing with millions on Ebay - predators don't waste much time on mosquitoes. So you're safe - like the penny jar on the counter.

Actually, both of you have it wrong. What happened with Enron is simply corruption. It has nothing to do with regulation or the lack of regulation. Enron's management created a fraudulent accounting system and fraudulently represented its business to investors, and its "independent" auditors were complicit in the fraud. It's just that simple.

Fraud isn't a new human behavior. It has been around as long as man and perhaps longer and it certainly won't be cured by deregulation. Two, not all regulation is the same. Enron operated a few utilities but it was much more than a utility company and the degree of regulation varied by business. Sarbanes-Oxley was a law created by congress to prevent another Enron. Having been personally involved in its implementation, it really caused companies to do some serious introspection and to tighten up corporate financial controls. But it will not prevent fraud, but it does make CEOs personally accountable for their financial statements. If either of you are really concerned about Enron and eliminating corruption, you would be advocating minimizing the influence of big money in our political processes and institutions. That is truly the only way to solve the problem. But I don't hear too many people making that case.

 

[Billy T]

... If either of you are really concerned about Enron and eliminating corruption, you would be advocating minimizing the influence of big money in out political processes and institutions. That is truly the only way to solve the problem. But I don't hear too many people making that case.

I agree with your post, but wonder about this last part. How can you say not many people are making that point? Trump can not say three sentence before noting he will not be tens of millions of dollars obligated to any "funding angels" or PACs.

Ever since the Supreme Court removed the limitations on PAC funding, the US has has a government - by the best candidates money from lobbyists can buy.

Spending by candidates, parties and outside groups and individuals may approach $10 billion. Both Hillary Clinton and Jeb Bush, if they receive their parties' nominations, each could spend more than $2 billion, about twice as much as Barack Obama and Mitt Romney each forked out in 2012.

With several Supreme Court decisions lifting restrictions -- on the misguided premise that money doesn't buy political influence -- the way is open for an orgy of spending by well-heeled interest groups and super rich individuals* on both political sides. Even beneficiaries, including Clinton and several top Republican aspirants, say the system is rotten.

* When combined with very poorly educated masses, US has ceased to be a democracy. It is now an oligarchy - and a small one with < 1000 very rich members.

 

[joepistole]

I agree with your post, but wonder about this last part. How can you say not many people are making that point? Trump can not say three sentence before noting he will not be tens of millions of dollars obligated to any "funding angels" or PACs.

Ever since the Supreme Court removed the limitations on PAC funding, the US has has a government - by the best candidates money from lobbyists can buy.* When combined with very poorly educated masses, US has ceased to be a democracy. It is now an oligarchy - and a small one with < 1000 very rich members.

What I said was I don't hear too many people making the case for the elimination of corruption. Trump has used corruption to distinguish himself from this competitors. He has made a case for his election by claiming he is wealthy and therefore incorruptible as opposed to other less wealthy politicians. But he has said precious little about what he would do to eliminate corruption in Washington if he were POTUS. Hillary Clinton has said she wants a constitutional amendment to change campaign finance. But she too has spent little time advancing the idea and her idea really isn't very comprehensive, but its a start. Campaign finance reform needs to be combined with ethics reform. Just as private enterprise employees are expected to not have interests which conflict with those of their employer, our elected representatives and appointed public officials should not have interests which conflict with the interests of the nation and those they represent (e.g. the K Street revolving door).

If we are lucky, corruption will be front and center this election cycle. But the odds are against it. Trump has been a beneficiary of the current system and continues to benefit from the current system. I find it odd and difficult to believe he would suddenly turn against it given how well it has worked for him over the years.

 

[iceaura]

Actually, both of you have it wrong. What happened with Enron is simply corruption. It has nothing to do with regulation or the lack of regulation.

The opportunity for the corruption, was created by the deregulation of the financial and energy markets in the US. Without that deregulation, Enron's abuses would have been impossible. And the abuses extended far beyond the fake books - they included, for example, coordinated shortages of electricity supply to major California utilities to boost the price and leverage contracts, all but bankrupting several California municipalities and utilities (and providing much political support for Republican and rightwing politicians). All this while flying W around in Enron jets, financing Republican causes and campaigns, etc.

If either of you are really concerned about Enron and eliminating corruption, you would be advocating minimizing the influence of big money in our political processes and institutions. That is truly the only way to solve the problem. But I don't hear too many people making that case

Read leftwing sources. They've been banging on about corruption since Reagan, with increasing urgency. And very little support from any Clinton.

Warren has advocated a Constitutional amendment to correct Citizens United, and some others have agreed it would be a good idea. (Sanders?). For example.

 

[billvon]

The opportunity for the corruption, was created by the deregulation of the financial and energy markets in the US. Without that deregulation, Enron's abuses would have been impossible.

Well, to be more accurate, it was PARTIAL deregulation that caused all the problems. For example, producers could charge whatever they wanted on the spot market - but utilities were required to pay those prices, and were forbidden by law to pass those costs on. At one point Davis admitted "I could solve all these problems tomorrow by letting utilities increase their prices" - and he was right. That would have brought the market back into balance, albeit with a lot of short-time pain for consumers.

It is interesting to note that of all the California utilities, the one that had no problems during the Enron debacle was SDG+E. Because of their status with regard to loan repayment they COULD raise prices as power prices rose, and thus San Diego had no power problems.

Partial regulation of a market is very difficult to do well, and it was not done well in the California power market, leaving it open to abuses by companies like Enron.

 

[joepistole]

Joe,

Many investors are very un-characteristically and un-historically fleeing to GOLD and SILVER right now. That will become the "reserve currency", like it or not.

You mean many idiots, people who are clueless with respect to economics and are poorly informed. Gold has gone from 1.9k per ounce to 1.1k per ounce. Silver has gone from nearly 40 dollars per ounce to 15 dollars per ounce.

 

[joepistole]

The opportunity for the corruption, was created by the deregulation of the financial and energy markets in the US. Without that deregulation, Enron's abuses would have been impossible. And the abuses extended far beyond the fake books - they included, for example, coordinated shortages of electricity supply to major California utilities to boost the price and leverage contracts, all but bankrupting several California municipalities and utilities (and providing much political support for Republican and rightwing politicians). All this while flying W around in Enron jets, financing Republican causes and campaigns, etc.

Actually and as previously stated, the opportunity for corruption existed prior to deregulation. If it hadn’t, there would have been no deregulation. And you are talking about two different things here. Enron’s problem was fraud, it wasn’t deregulation. California’s consumers didn’t benefit from deregulation and deregulation allowed Enron to manipulate prices to its advantage. But that is a different story. That isn’t why Enron failed.
Here is the problem Iceaura, one of the reasons we have a problem with corruption are folks like you on both ends of the political spectrum, people who are easily manipulated and extraordinarily myopic. You and those like you are always chasing your tails, and as long as you are chasing your tail, you are no threat to those who perpetuate and profit from corrupt practices, because you never see it. That is one reason why corruption thrives. You and those like you are always chasing illusions rather than addressing the real issues.

Read leftwing sources. They've been banging on about corruption since Reagan, with increasing urgency. And very little support from any Clinton.

No they haven’t. There is a difference between lip service and doing something and liberals have done precious little to reform politics. They had an opportunity a few 6 years ago when they controlled all organs of government (Supreme Court exempted) and they did nothing. Why is this not central to Clinton’s campaign?

Warren has advocated a Constitutional amendment to correct Citizens United, and some others have agreed it would be a good idea. (Sanders?). For example.

Then why are they not doing something beyond agreeing it would be a good idea? I have yet to hear a good coherent plan, something beyond vague generalizations.

 

[Billy T]

You mean many idiots, people who are clueless with respect to economics and are poorly informed. Gold has gone from 1.9k per ounce to 1.1k per ounce. ...

Currently and for several years, economics (I.e. supply and demand finding a equilibrium price) has had nothing to do with the price of gold PoG. This because PoG is set by paper gold traders, (or should I say speculators?) Especially the COMEX exchange. There people with established credit can sell contracts that promise delivery at various future point in time. (and of course for every such contract sold there is an Owner of the "Long Side," OLS of the contract. The sellers on average have done well financially while PoG has been falling, and very rarely need to deliver the gold promised. They just by an off-setting contract as the OLS, usually at lower price then when they sold gold they did not have.

At present (well a couple of weeks ago when I looked) there were 120 OLS contracts open for every bar of deliverable gold at COMEX. I.e. less than 1% of the OLS asking for the promised by contract gold could potentially "Break the Vault" at Comex; however, there are two classes of Gold at Comex (Eligible & Registered").

Eligible called that as it could be registered, has a specified owner. Registered is the only type that can be delivered to a OLS contract if he is asking for the gold, instead of buying an off-setting Short side contract as most normally do. In addition to gold in COMEX vaults other firms have vaults holding gold, the largest / most important is GLD. Physical gold only there and the amount has been rapidly declining:

Likewise, so many OLS contracts have been asking for physical gold recently that the stock of "registered or deliverable gold" was falling too; but COMEX did not want to default on delivery demands by OLS contracts, so persuaded some specific owners of eligible gold at Comex to give up their ownership claims and allow their gold to transfer into the eligible class. (Presumably by paying the owner slightly more that the "spot price.")

See tables at: http://www.silverdoctors.com/comex-august-gold-deliveries-heat-up/#more-56553, but they will not post. Here are some main points:
At end of July HSBC moved 72,022 ounces of its owned Eligible gold to Registered; and
JP MOrgan Chase moved 200, 753 ounces of its owned Eligible gold to Registered. Without this aid, COMEX would have been unable to meet the surging demand for physical gold - the claims of the OLS contracts.

http://www.silverdoctors.com/comex-august-gold-deliveries-heat-up/#more-56553[/URL],]After a whopping 2,828 deliveries yesterday (more on that below), the total amount of deliveries made so far in just four days is 3,171. If we plug that in versus the total number of contracts still open when the contract went off the board on July 30, we already have a delivery percentage of 34.4%. So, for August to “look like a normal month” of deliveries, gold deliveries would have to stop right about here.
However, they’re not going to stop right about here? Why? Because, as of yesterday, there were still 6,593 August gold contracts still open. THIS BRINGS UP ALL SORTS OF INTERESTING ISSUES.

If just half of the remaining 6,593 contracts get delivered, August gold will see something like 6,500 total deliveries versus a standing total of 9,215 for something like 70%.

1. But that’s not the most interesting part. Let’s do some math! As noted, there were 9,215 contracts still open at “expiration” and 8,295 still open at the close on First Notice Day last Friday. Today, the CME shows 3,171 total deliveries made and 6,593 contracts still open. If we add those together we get 9,764. Holy smokes! Have we already seen 550 contracts “jump the queue” for immediate August delivery?
2. And where is this deliverable “gold” coming from? When August deliveries began late last week, the CME Gold Stocks report showed only 351,519 ounces in the registered (available for delivery) category and now we’ve already seen 317,100 ounces delivered.

I don't think COMEX will default on OLS contracts maturing in September 2015, but withPoG rising. COMEX will need to pay a big premium to owners of Eligible gold to get them to transfer it to the deliverable (registered) class.

SUMMARY: What this (and China's new gold exchange market)* probably means is that soon supply and demand for physical gold, instead of the paper gold futures contracts, will set the price of gold (and at much higher level that reduces demand to equal the supply). Here is why, graphically:

* Note how the deliveries of gold to Chinese are growing rapidly (In part I thinks as real estate is no longer what rich Chinese invest in.)

According to trade data out of Hong Kong, about 64.2 tonnes of gold was imported to the mainland, an increase of 36% compared to last month and up 35% compared to May 2014. Gambarini noted that this was the highest level of imports from Hong Kong so far this year.

Also helping supporting the opinion of increased gold demand is Swiss trade data. Gambarini said that gold to China from Switzerland increased 24% compared to April and saw an incredible 800% increase compared to May 2014.

Gold Bullion Demand In ‘Chindia’ Heading Over 2,000 Metric Tonnes Again
August 7th, 2015 ETF Daily News

 

[Billy T]

The recent lower prices in gold have not deterred investors internationally from buying gold coins and bars in large volumes again. Indeed the Perth Mint and the US Mint are struggling to fulfill demand for gold coins and bars.
This is particularly the case in the eastern hemisphere – especially in India and China – where demand has again increased significantly on price weakness.3rd largest week of gold withdrawals ever on SGE

• Both China and India heading for over 1,000 metric tonnes in 2015 … again
• India imports 96.1 tonnes in May alone
• ‘Chindia’ imports 296.55 tonnes in May – 14% greater than global production
• South Korean gold demand surges in wake of Chinese crash
• Asian and global gold demand robust contrary to anti-gold narrative.

Central banks have been net buyers of gold for more than half a decade. Yet they and the big investments firms keep trying to talk the PoG down while buying more for their own accounts too!

Joe said in post 1166: "You mean many idiots, people who are clueless with respect to economics and are poorly informed."

Lets revisit the PoG in a year, to be sure who are the real "idiots" IE when the paper gold traders can no longer set the price of gold as supply and demand (rapidly growing) will.
Note the right end of the above chart (last 10 months) has demand from China and India ALONE greater than global production. How long do you think that can continue when they buy less than 60% of gold sold. Note in graphs of my prior post, how the physical gold is draining out of the COMEX and GLD vaults.
I expect the "profit train" many paper traders going short have been riding is about to crash. No one knows the extent of the "collateral damage" that will do to US economy. S&P going down 30% while PoG rises 30% is certainly possible.

 

[joepistole]

Currently and for several years, economics (I.e. supply and demand finding a equilibrium price) has had nothing to do with the price of gold PoG. This because PoG is set by paper gold traders, (or should I say speculators?) Especially the COMEX exchange. There people with established credit can sell contracts that promise delivery at various future point in time. (and of course for every such contract sold there is an Owner of the "Long Side," OLS of the contract. The sellers on average have done well financially while PoG has been falling, and very rarely need to deliver the gold promised. They just by an off-setting contract as the OLS, usually at lower price then when they sold gold they did not have.

At present (well a couple of weeks ago when I looked) there were 120 OLS contracts open for every bar of deliverable gold at COMEX. I.e. less than 1% of the OLS asking for the promised by contract gold could potentially "Break the Vault" at Comex; however, there are two classes of Gold at Comex (Eligible & Registered").

Eligible called that as it could be registered, has a specified owner. Registered is the only type that can be delivered to a OLS contract if he is asking for the gold, instead of buying an off-setting Short side contract as most normally do. In addition to gold in COMEX vaults other firms have vaults holding gold, the largest / most important is GLD. Physical gold only there and the amount has been rapidly declining:

Likewise, so many OLS contracts have been asking for physical gold recently that the stock of "registered or deliverable gold" was falling too; but COMEX did not want to default on delivery demands by OLS contracts, so persuaded some specific owners of eligible gold at Comex to give up their ownership claims and allow their gold to transfer into the eligible class. (Presumably by paying the owner slightly more that the "spot price.")

See tables at: http://www.silverdoctors.com/comex-august-gold-deliveries-heat-up/#more-56553, but they will not post. Here are some main points:
At end of July HSBC moved 72,022 ounces of its owned Eligible gold to Registered; and
JP MOrgan Chase moved 200, 753 ounces of its owned Eligible gold to Registered. Without this aid, COMEX would have been unable to meet the surging demand for physical gold - the claims of the OLS contracts.

I don't think COMEX will default on OLS contracts maturing in September 2015, but withPoG rising. COMEX will need to pay a big premium to owners of Eligible gold to get them to transfer it to the deliverable (registered) class.

SUMMARY: What this (and China's new gold exchange market)* probably means is that soon supply and demand for physical gold, instead of the paper gold futures contracts, will set the price of gold (and at much higher level that reduces demand to equal the supply). Here is why, graphically:

* Note how the deliveries of gold to Chinese are growing rapidly (In part I thinks as real estate is no longer what rich Chinese invest in.)


Gold Bullion Demand In ‘Chindia’ Heading Over 2,000 Metric Tonnes Again
August 7th, 2015 ETF Daily News

The fact that you think your post makes any kind of sense speaks to your ignorance BillyT. Your post is utter nonsense. You have no formal training in economics or business. You repeatedly cite specious sources, taking material from sellers of gold and silver as gospel. Gee, when was the last time you found a salesman who said his product was bad? Just because a salesman told you something BillyT it doesn't make it so.

The fact is you have been consistently wrong. Your prognostications have been consistently wrong and for good reason. You have no subject matter knowledge. We have had this discussion now for many years. The unfortunate fact for you is your "paper gold" machinations don't change the fact that gold spot prices, the prices paid for gold delivered today, have plummeted as previously stated, nor does it explain away the severe decline in gold prices. The bottom line is your predictions have been wrong and continue to be wrong.

Your predictions the dollar would collapse in October of last year failed, because you have no subject matter knowledge. Contrary to you predictions, the dollar is stronger than it has been in decades and it will likely get stronger in the coming months. As a result, commodity prices will likely fall further. That means, ceteris paribus, gold will likely fall further because gold is a commodity. That has nothing to do with "paper gold". You cannot rationally explain away your failures with "paper gold". You keep trying to apply microeconomic concepts to macroeconomic events or you totally ignore macroeconomic events. The subject is a little more complicated than you seem to be able to understand or appreciate.

As we have repeatedly discussed over the years, there is a market for immediate delivery and a futures market. You keep conflating the two when in fact they are very different. Futures contracts are just that, a futures contract, a contract for delivery of gold at a future date. And the existence of a futures market doesn't change the economics of the gold market. Futures markets do not trump the laws of economics.

 

[Billy T]

The fact that you think your post makes any kind of sense speaks to your ignorance Billy T. Your post is utter nonsense. You have no formal training in economics or business. You repeatedly cite specious sources, taking material from sellers of gold and silver as gospel. ...

More of your standard "Attack the Poster" and or his source, when you don't like the facts quoted and can not refute them.

My first graph/ chart said the physical gold in GLD's vault has decreased 51% and asked: Where is all that gold going? Is that not true?
BTW GLD publishes its holdings every day!

My second graph/chart shows that more than 9,000 tonnes of gold have been delivered between 2009 and 24July2015, with the weekly removal of physical gold increasing every week. Is that not true?

My third graph/chart, from a different source, redisplays that same data and add that, which India has {legally} imported, but as Indian government did not like so much drain of foreign exchange (needed for other imports) they placed a heavy duty on these legal imports, (10% by memory) with the very predictable result that smuggled in of gold soared. Then when the Indian government realized they were not in fact slowing the out flow of funds by the high tax on gold imports, they lowered the duty and strengthen their efforts to interdict the smuggled gold - confiscated any they caught. Is all that not true?

Personal attacks as you often make do not cancel facts.

 

[joepistole]

More of your standard "Attack the Poster" and or his source, when you don't like the facts quoted and can not refute them.

My first graph/ chart said the physical gold in GLD's vault has decreased 51% and asked: Where is all that gold going? Is that not true?
BTW GLD publishes its holdings every day!

My second graph/chart shows that more than 9,000 tonnes of gold have been delivered between 2009 and 24July2015, with the weekly removal of physical gold increasing every week. Is that not true?

My third graph/chart, from a different source, redisplays that same data and add that, which India has {legally} imported, but as Indian government did not like so much drain of foreign exchange (needed for other imports) they placed a heavy duty on these legal imports, (10% by memory) with the very predictable result that smuggled in of gold soared. Then when the Indian government realized they were not in fact slowing the out flow of funds by the high tax on gold imports, they lowered the duty and strengthen their efforts to interdict the smuggled gold - confiscated any they caught. Is all that not true?

Personal attacks as you often make do not cancel facts.

Yes personal attacks do not cancel facts. And the facts are you have been demonstrably wrong in your prognostications over the years for reasons explained to you many times over the years.

It's one thing to be ignorant, it's another to be willfully so. How much money have you lost over the years BillyT? All this stuff has been repeatedly explained to you over the years.

 

[Billy T]

SHANGHAI, June 25 (Reuters) - China plans to launch a yuan-denominated gold fix by the end of 2015 via the Shanghai Gold Exchange (SGE), in a move aimed at giving the world's biggest bullion producer and consumer more influence over pricing. The first public confirmation made by an exchange official comes after Reuters cited sources in February on the proposal for the fix to be set through trading on the SGE, the world's biggest physical bullion exchange.

"We will be introducing a renminbi-denominated fix at the right moment, we are hoping to introduce by the end of the year," Shen Gang, SGE's vice president, said at the LBMA Bullion Market Forum in Shanghai on Thursday. ...Pan Gongsheng, a deputy governor of the People's Bank of China (PBOC), said the bank would continue to support "speedy and healthy growth of the China gold market" and its internationalisation.

Given its leading role* in gold, China feels it is entitled to be a price-setter for bullion and is asserting itself at a time when the global benchmark, the century-old London fix, is under scrutiny for alleged price-manipulation. If the yuan fix takes off, China could compel local buyers and foreign suppliers to pay the domestic yuan price, making the London fix less relevant in the world's biggest bullion market.

* "leading role" is reference to fact China is world's largest producer AND usually the world's largest buy of open market gold. (Once or twice a year, India imports more in same month).

But hey, there I go again quoting "specious sources" like Reuters & kitco gold.

 

[Billy T]

Yes personal attacks do not cancel facts. And the facts are you have been demonstrably wrong ....

Please pick ANY of my facts (Your choice as to which) and demonstrate it is wrong.

Yes, I have predicted serious trouble would come to US seven years after I made that prediction, and it did not, even though it is now a little more than eight years from date of the predictions. I have admitted I got the timing wrong, but not that US economy will not soon decline.

I failed to realize how big a problem a couple of trillion dollars of thin-air printed money could "paper over" for a while. You know, little things, like stagnate or shrinking middle class, most new jobs are low pay (Big Mac or part time jobs), the per capital debt continues to grow, Social Security is already tapping the trust fund, and if no changes, it will be empty by 2033, few college graduates expect to live as well as their college graduate parents did, etc.

 

[Michael]

I failed to realize how big a problem a couple of trillion dollars of thin-air printed money could "paper over" for a while. You know, little things, like stagnate or shrinking middle class, most new jobs are low pay (Big Mac or part time jobs), the per capital debt continues to grow, Social Security is already tapping the trust fund, and if no changes, it will be empty by 2033, few college graduates expect to live as well as their college graduate parents did, etc.

That's because you probably never lived in a white-trash welfare farm/trailer-park or grew up in one of the Government's ghettos. If you had, or if you were a slumlord, then you'd have easily seen the depths to which society can easily reside for generations. All of society is just continuing to normalize to living at a lower standard of living. Where once a single father could afford a house, a car and all the white good amenities of the middle class - while raising a family of 5, now both partners are working around the clock just to make ends meet and appear to be part of the middle class (minus the family). Soon children will be working to help make rent to the slumlord (or a banker) and taxes to the State. Many places in the USA, are indistinguishable from a third world nation.

Who could have imagined in the 1960s poverty rates would be worse now, compared with then?

Who could have imagined in the 1950s that giving the AMA a monopoly on Rx would lead to the War on Drugs, the largest non-violent prison population in human history, crack-ghettos, the Police State, and ironically, the leading use of heroin-like drug dependency being ... legal Rx!! About 1 in 4 heroin uses start out as patient receiving a prescription drug from her AMA certified MD.

Who could imagined in the 1930s, the State would STILL be taxing raisin farmers 80 years later - and making a profit selling these raisins on the open market. I mean, WTF, that's really no different than living under a Lord who comes and takes your produce!

Who could have imagined in the 1920s that the Central Bank was about to bring on the greatest Depression in human history?

Who could have imagined in the 1910s that one day, 100 years AFTER the general introduction of government schooling, literacy rates for Black Americans would be LOWER? Or that 1 in 5 "high" school graduates would be unable to competently read and write English! Or that the average reading grade level in the USA would be grade 6. Or that the average incoming University student would read at grade 7/8.

Who could have imagined in the 1900s that one day 115 years in the future, MD's would be LESS competent?! Let's see:
- 12 years government school? Check
- 4 years government university? Check
- 4 years government certified medical degree? Check
- In ability to identify a liver on a basic X-ray? Check

Medical Error is the 3rd largest killer of Americans, taking about 480,000 Americans each year. Oh, and in case anyone was wondering, the rate is similar in the other English speaking countries - for the exact same reasons (I actually read the rate was double in AU, but, these numbers are next to impossible to verify).

Who could have imagined in the late 1800s, the Progressive dream of creating a Progressive Central Bank and finally sticking it to the 'rich' would result in the creation of the IRS and Progressive Income Tax that this same Progressive Central Bank would use to sell T-Bonds on their grandchild to bail out the very same incompetent, corrupt, crony rich (who would be by then, much much MUCH more wealthier, relatively speaking).


We have decades and decades and decades worth of 'normalization' in front of us still to come. A slow downward decent into normal.

 

[iceaura]

At one point Davis admitted "I could solve all these problems tomorrow by letting utilities increase their prices" - and he was right. That would have brought the market back into balance, albeit with a lot of short-time pain for consumers.

How does passing the ripoff on to the consumers and general economy "solve" anything? Pain for electricity buyers was the problem.

Partial regulation of a market is very difficult to do well, and it was not done well in the California power market, leaving it open to abuses by companies like Enron.

Regulation was the status quo, as is completely normal and standard for "natural monopolies" like a sewer and water and electricity. What was "done" was deregulation, privatization, without attention to oversight of the new private entities. And it wasn't the California power market at center - the regulations, and the deregulations, were national ones.

Enron’s problem was fraud, it wasn’t deregulation. California’s consumers didn’t benefit from deregulation and deregulation allowed Enron to manipulate prices to its advantage. But that is a different story. That isn’t why Enron failed.

Enron's failure was not a problem. Enron's executives's abuses and robberies of their employees, creditors, clients, and customers were problems. Enron's corruption of national politics via Republican Party influence was a problem. Enron's manipulation and damage of the US energy markets was a problem. Enron's failure was a good thing - it should have happened much sooner.

There is a difference between lip service and doing something and liberals have done precious little to reform politics.

Powerlessness has its penalties. They've done everything that has been done.

They had an opportunity a few 6 years ago when they controlled all organs of government (Supreme Court exempted) and they did nothing.

That is wingnut propaganda. At no time in the last forty years, the time of deregulation, did leftwingers - or even "the liberals" - control a single branch of the US government.

Why is this not central to Clinton’s campaign?

Clinton's doesn't want much attention paid to her record on corruption issues.

 

[billvon]

How does passing the ripoff on to the consumers and general economy "solve" anything? Pain for electricity buyers was the problem.

No, it wasn't. In many parts of California the problem was that there was no power, period. There were blackouts as utilities simply could not afford to keep power flowing. Those utilities went bankrupt.

In the areas where power was free to go up in price, people stopped using so much of it. They turned off A/C, turned off lights in offices during the day and shut down things like wind tunnels and amusement park rides. Had this happened everywhere, demand for power would have plummeted. The market, as dysfunctional as it was, would have seen prices plummet as well, and the system would have returned to balance. People would have then started using more power until demand approached the magic number that allowed uncontrolled increases in price, and then hovered there. Solar installations would have skyrocketed, and demand would have then trended down, avoiding the condition that allowed this to happen in the first place.

Gray Davis admitted this in a speech; he said he could solve the crisis tomorrow by deregulating _all_ the utilities as well.

Unfortunately the only two places where this was allowed to happen was in LA and San Diego. In both places power companies were free to set prices, and thus they avoided blackouts, bankruptcies and loss of service.

Regulation was the status quo, as is completely normal and standard for "natural monopolies" like a sewer and water and electricity. What was "done" was deregulation, privatization, without attention to oversight of the new private entities.

Any time you partially deregulate anything there are lots of potentials for abuse. With complete deregulation this doesn't happen, since market forces prevent abuses. With regulation this doesn't happen, since you can legislate prevention of abuse. Partial deregulation allows some entities in a system to use market forces to obtain more money for their goods, while preventing their customers or suppliers from doing the same.

 

[joepistole]

Please pick ANY of my facts (Your choice as to which) and demonstrate it is wrong.

Sure, it's not like I haven't done it before. As pointed out in my last post, your claim the dollar would collapse in October of last year was wrong. Your claim the price of gold is fixed by "paper gold" is false. And then there is the whole issue of relevance, you have a penchant for posting irrelevant data and citing it as relevant.

Unfortunately, I wasted some time this morning watching a film which was falsely represented to be a documentary. The writers/producers took a few facts (e.g. the paramagnetic properties of Aluminum) and used that fact to construct a notion that space aliens had deposited an isotope of aluminum at key spots around the globe as a navigational aid and those deposits are causing the planet to slow its rotation and will ultimately lead to the destruction of the Earth's magnetosphere and all life on Earth. That's pseudo science and that's analogous to what you do in the B&E Forum. You post pseudo economics.

Your posting on China's Gold deliveries isn't relevant to where the price of gold will go in the future. Many of your citations are just not relevant to the cause you are attempting to advance. The current price of gold is at all times determined my present supply and demand, not historical supply and demand, and not future supply and demand, but current supply and demand.

Investing in gold is popular in China. So if China prospers, it is reasonable to expect they would invest some portion of it in gold. But that is just one factor of many factors that factor into the global supply and demand picture for gold. Probably the most important factor affecting global gold supply and demand equation is supply. Depressed gold prices are putting pressure on gold producers especially high cost producers. Production in no longer profitable for some producers. Based on averages, gold producers are just breaking even. And then there is the matter of slowing economic growth in China. China is struggling. It has devalued its currency by 4% in 2 days in an effort to prop up its failing economy. That's desperation!

There are a number of factors affecting gold prices. You cannot just look at one or two and make any meaningful conclusions. As previously pointed out a strong dollar is a significant downer for all commodities, including gold, because commodities are traded in dollars.

Yes, I have predicted serious trouble would come to US seven years after I made that prediction, and it did not, even though it is now a little more than eight years from date of the predictions. I have admitted I got the timing wrong, but not that US economy will not soon decline.

I failed to realize how big a problem a couple of trillion dollars of thin-air printed money could "paper over" for a while. You know, little things, like stagnate or shrinking middle class, most new jobs are low pay (Big Mac or part time jobs), the per capital debt continues to grow, Social Security is already tapping the trust fund, and if no changes, it will be empty by 2033, few college graduates expect to live as well as their college graduate parents did, etc.

Well that is a huge minimization of your error. Your error wasn't in your beliefs about "trillion dollars of thin-air money". It was in your basic failure to understand the monetary system and economics. You remind me of the many religious prophets over the years who have through divine revelation and interpretation of the Bible have repeatedly predicted the end of the world and have been repeatedly proven wrong by history. They issued similar excuses to explain away their errors.

 

[joepistole]

The opportunity for the corruption, was created by the deregulation of the financial and energy markets in the US. Without that deregulation, Enron's abuses would have been impossible. And the abuses extended far beyond the fake books - they included, for example, coordinated shortages of electricity supply to major California utilities to boost the price and leverage contracts, all but bankrupting several California municipalities and utilities (and providing much political support for Republican and rightwing politicians). All this while flying W around in Enron jets, financing Republican causes and campaigns, etc.

Actually, no. The opportunity for corruption existed before deregulation. You have a really difficult time understanding that very basic truth. If corruption were not possible before deregulation, then deregulation would have never occurred. Deregulation was the result of corruption, not the genesis. And I know you only want to selectively look at Enron's victims, but in the real world, the objective world, we look at all of Enron's victims. We don't' cherry pick as you are so fond of doing. And the fact is Enron's management victimized more than just the rate payers in California. They victimized their employees and their investors. Yeah, I know in your world investors don't count and apart of the evil class. But unfortunately for you this is objective reality here.

Read leftwing sources. They've been banging on about corruption since Reagan, with increasing urgency. And very little support from any Clinton.

Warren has advocated a Constitutional amendment to correct Citizens United, and some others have agreed it would be a good idea. (Sanders?). For example.

Well you need to read objective sources, sources which are not pitching an ideology based on belief but reality based on evidence and reason.

 

[joepistole]

That's because you probably never lived in a white-trash welfare farm/trailer-park or grew up in one of the Government's ghettos. If you had, or if you were a slumlord, then you'd have easily seen the depths to which society can easily reside for generations. All of society is just continuing to normalize to living at a lower standard of living. Where once a single father could afford a house, a car and all the white good amenities of the middle class - while raising a family of 5, now both partners are working around the clock just to make ends meet and appear to be part of the middle class (minus the family). Soon children will be working to help make rent to the slumlord (or a banker) and taxes to the State. Many places in the USA, are indistinguishable from a third world nation.

Who could have imagined in the 1960s poverty rates would be worse now, compared with then?

Who could have imagined in the 1950s that giving the AMA a monopoly on Rx would lead to the War on Drugs, the largest non-violent prison population in human history, crack-ghettos, the Police State, and ironically, the leading use of heroin-like drug dependency being ... legal Rx!! About 1 in 4 heroin uses start out as patient receiving a prescription drug from her AMA certified MD.

Who could imagined in the 1930s, the State would STILL be taxing raisin farmers 80 years later - and making a profit selling these raisins on the open market. I mean, WTF, that's really no different than living under a Lord who comes and takes your produce!

Who could have imagined in the 1920s that the Central Bank was about to bring on the greatest Depression in human history?

Who could have imagined in the 1910s that one day, 100 years AFTER the general introduction of government schooling, literacy rates for Black Americans would be LOWER? Or that 1 in 5 "high" school graduates would be unable to competently read and write English! Or that the average reading grade level in the USA would be grade 6. Or that the average incoming University student would read at grade 7/8.

Who could have imagined in the 1900s that one day 115 years in the future, MD's would be LESS competent?! Let's see:
- 12 years government school? Check
- 4 years government university? Check
- 4 years government certified medical degree? Check
- In ability to identify a liver on a basic X-ray? Check

Medical Error is the 3rd largest killer of Americans, taking about 480,000 Americans each year. Oh, and in case anyone was wondering, the rate is similar in the other English speaking countries - for the exact same reasons (I actually read the rate was double in AU, but, these numbers are next to impossible to verify).

Who could have imagined in the late 1800s, the Progressive dream of creating a Progressive Central Bank and finally sticking it to the 'rich' would result in the creation of the IRS and Progressive Income Tax that this same Progressive Central Bank would use to sell T-Bonds on their grandchild to bail out the very same incompetent, corrupt, crony rich (who would be by then, much much MUCH more wealthier, relatively speaking).


We have decades and decades and decades worth of 'normalization' in front of us still to come. A slow downward decent into normal.

That's just unmitigated nonsense.