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

[Michael]

It's the wages received being taxed, not the labor provided. If she labors, but receives no wages, she pays no tax. If she performs no labor, but receives wages, she pays tax.

If she labors and isn't paid, she didn't sell anything. This is called volunteering to help someone. While I'm sure the State would LOVE to tax this as well (it certainly 'Regulates' it) as of now, it hasn't figured out how to make money off volunteers. If she was 'Forced' to "Volunteer" - we'd stop calling that 'Voluntary' and call it "Slavery".

Words have meaning - try to remember that.

If she SELLS labor.
She pays a TAX on that sale.
You can call the sale a wage if you like (it doesn't change the meaning) at the end of the day it's money she made selling labor that HER body (she owns) performed and SHE is forced to PAY THE TAX.

What don't you get??

If you were to just give her money out of kindness, as in your example, without her performing Labor, then she did NOT SELL you anything and therefor YOU PAY THE TAX on that transfer. Of course, this also should be illegal, but thanks to the 16th Amendment the Mafia / Government passed - It takes as many cuts, in as many ways, as It can - including Taxing Gifts. So, one more time, as you seem to be confused: if YOU give her money and YOU receive nothing of value in exchange for the given money, then YOU are taxed. That money is not referred to as a 'Wage', it's instead called a 'Gift' and the Mafia / Government takes Its cut called a Gift Tax. If she does something for you, out of kindness, the Government will Regulate your behavior (because you're a sod that needs a Nanny) but has not figured out how to tax you (yet). Believe me, It would if It could. Which is why it 'Regulates' volunteers to ensure it isn't missing a cut of the action (which it will receive indirectly from corporate taxes if volunteers increase productivity - so, the State settles with that instead).


You know, we all have to be Regulated and Taxed - for the Good of You Use The Roads. Because if the Government didn't Regulate and Tax the f*ck out of every and any exchange that it's Tax Chattel attempted make, then the Gates of Hades would open up and the Sky Would Fall.

Not that any of this matters in terms of revenue: The State can make as much Fiat paper as it so wishes. It can also sell Bonds on future Labor-sales to the Chinese Government meaning THEY can take a cut as well. They're not called BONDS for the fun of it. It's in reference to Bonded Labor / Debt bondage, which is known as Debt Slavery. Our so-called "Modern" financial system is founded on Pledging the Labor of unborn children for the repayment of debt obligations so that we can bailout the richest most corrupt crony Statists in the history of humankind. Debt bondage in the form of T-Bonds and Municipals are passed on from generation to generation. The ONLY difference between outright Slavery and Bonded Labor was that it was possible in theory that the Debt Slave may one day be freed. Not so now. It's mathematically impossible.

Nice to know our so-called "Modern" financial system functions like a Slaver Market from 2500 years ago. Even the Athenians were civilized enough to outlaw the practice - over 2000 years ago! Yup, 'Modern' America where the Labor of the unborn can be auctioned off to the Chinese and it's all very 'Normal'.

Yes, thank the Gods we passed the 16th Amendment.

Massachusetts Rep. Samuel McCall argued in a speech before the U.S. House of Representatives as Congress debated the 16th Amendment, legalizing the income tax in 1909, “leads me to believe that the chief purpose of the tax is not financial, but social. It is not primarily to raise money for the state, but to regulate the citizen and to regenerate the moral nature of man. The individual citizen will be called on to lay bare the inner-most recesses of his soul in affidavits, and with the aid of the Federal inspector, who will supervise his books and papers and business secrets, he may be made to be good, according the notions of virtue at the moment prevailing in Washington.” McCall’s Massachusetts constituents rewarded the Republican congressman’s efforts by electing him governor several years later.

That's right. The morality flows from the Magical Government / Sky Daddy to the Peons who need to be told what to do and how to do it. Not that it now matters, the actual essence of the US Constitution was irrevocably changed then and with it this nation. America ended a LONG time ago. Now we live in our Tax Farm called the USA with our Farmers/ Regulators, sure, maybe not a King and His Lords, but better: A Cartel of Central Bankers and Central Banker caused Great Depression(s), Central Banker paid for WWII, Korean War, Vietnam War, Iraq War I (Mission Complete), Iraq War II (Mission Complete), Government Schools, the NSA spying on us, even Government agencies who can determine who you can legally marry, if you can sell arranged flowers, if you can legally fix a computer, and etc....

Enjoy the Great Recovery, it's going to be with us for a LONG time.

 

[Billy T]

I liked Michael's post 1401 even though over-stated to the extreme* as it is basically true and seldom stated.

* We "tax cattle" must be taxed as there are so many of us, collecting all sorts of benefits (unfortunately not very efficiently delivered) from the government. Even 100% taxation of the top 0.1% of incomes would not fund the distributed benefits.

 

[pjdude1219]

I liked Michael's post 1401 even though over-stated to the extreme* as it is basically true and seldom stated.

* We "tax cattle" must be taxed as there are so many of us, collecting all sorts of benefits (unfortunately not very efficiently delivered) from the government. Even 100% taxation of the top 0.1% of incomes would not fund the distributed benefits.

thats a sure sign of mental defect given micheal's general level of ignorance and dishonesty. but than given your one issues with those its no surprise you'd agree with his garbage.

 

[pjdude1219]

If she labors and isn't paid, she didn't sell anything. This is called volunteering to help someone. While I'm sure the State would LOVE to tax this as well (it certainly 'Regulates' it) as of now, it hasn't figured out how to make money off volunteers. If she was 'Forced' to "Volunteer" - we'd stop calling that 'Voluntary' and call it "Slavery".

Words have meaning - try to remember that.

yes they do. your lying ass should be last person to lecture anyone on that given your lies about meaning of labor and taxation and progressive and socialism and liberalism and facism and conservatism and a whole host of other words.

so despite your once again lies and dishonesty that the moderation refuses to punish your wrong. whether or not one earns a wage doesn't change the meaning of the word labor in economics which is anything a person produces whether or not they are paid for it. so the fact you don't like it payroll and income taxes are not labor taxes no matter how fucking times you lie about.

 

[Michael]

The Magic Thinking is strong in this one...

 

[Michael]

The USA has not added a single manufacturing job this year:

So, thank the Gawds AND Central Bankers for bailing out the richest 0.1% by selling BONDS that will be repaid with lost income from The Worker and his children (if she can afford to even have any). Yes, if we hadn't bailed out the rich a decade ago, the economy would have restructured and a great many of our current Oligarchs would be poor - and we couldn't have THAT now could we? Apparently The Worker likes paying for the folly of his Regulators. Either in Tax or Blood. Maybe it's what The Work is? Built from DNA up to be ruled by emotion, cognitive biases and tradition. Spanked into compliance and Schooled in obedience. Ripe for a Demagogue.

I don't know about you, but I'd say the fruit is ripening up nicely. Not yet ripe, but getting there. Who knows, maybe soon, we'll get WWIII and the Great Redistribution? I'd guess, sometime within the next 30 - 40 years. But, before then we still have QE4-eva Pro Air addition to unleash prosperity upon the people (and Magic Thinking) and then there's The Great Rebuild to come first.... so much to do, so little time to do it all in....

 

[Billy T]

The signs of deflation are now flashing all over the globe. In our estimation, the possibility of an associated financial crisis is now dangerously high over the next few months.
As we've been saying for a while, our preferred model for how things are going to unfold follows the Ka-Poom! Theory as put out by Erik Janszen of iTulip.com. That theory states that this epic debt bubble will ultimately burst first by deflation (the "Ka!") before then exploding (the "Poom!") in hyperinflation due to additional massive money printing efforts by frightened global central bankers acting in unison.

First an inwards collapse, then an outwards explosion. Ka-Poom! We've been tracking the deflationary impulse for a while, and declared deflation the winner back in July of this year.
A Failed Strategy
What exactly do we mean by deflation? Back in 2008 the central banks of the developed world, as well as China, had a choice.
(1) admit that prior policies geared towards encouraging borrowing at a faster rate than income growth were a horrible idea, or
(2) double down and push those failed policies even harder.

As we all know, they chose option #2. And so here we are, just 8 years later, with nearly $60 trillion in new debt piled on top of the prior mountain - while GDP grew by only $12 trillion over the same time period

This is much like what I predicted ~8 years ago, but I guessed it would occur during October 2014. That timing guess was wrong. Now I think by Halloween 2015 has a chance of being the correct SHTF date. IMF's Lagarde, in speech yesterday said she thinks the bad global economy is growing weaker now.
See details of Lagarde's speech here: http://www.theguardian.com/business...stine-lagarde-global-economic-growth-slowdown

 

[Billy T]

Now 259 claims on each ounce of deliverable gold (registered) at Comex.

The highest ratio ever.
Note 161,643 x 259 = 41,865,537 oz but ALL the gold at Comex is only 6,850,581 and most of it is "eligible" - has an owner already who does not need to sell it.
Four weeks more (from 2/10/15) is Halloween - I bet this one, (2015) is going to be real SCARY.

 

[Michael]

Forbes: Disappointing Jobs Report: 142,000 Jobs Added In September, Unemployment Rate Stays 5.1%

“Every aspect of the September jobs report was disappointing,” wrote Michelle Girard, chief U.S. economist at RBS, echoing a sentiment widespread among economists sending out response notes, as well as among investors. Equities were deep in the red Friday morning, with the S&P 500 Index, Dow Jones Industrial Average and Nasdaq Composite each down about 1.5% after the first half hour of trading. The yield on the 10-year Treasury note was at around 1.92% after closing Thursday at 2.04%.

The sea of red in markets marks a bit of a shift in sentiment. In recent years weaker than anticipated jobs figures had often been followed by market gains, or just very modest declines, because soft data was taken as a sign the Federal Reserve could keep access to money easy for longer. As the policy makers becomes increasingly anxious to act, it seems markets may be fed up with the uncertainty and concerned about what the report says about the U.S. economy.

As the USA continues to permanently lose skilled labor (such as manufacturing) combined with rent-seekers using State regulatory-capture via licencing scams in order to lock competition out of the few good markets left in the USA (oh, I mean protect the public) there's really only McJobs left. Hell, even the McJobs are behind a Pay Wall (see: How cities are locking Uber out of the low end market to the benefit of Taxi Cab Oligarchs)

Which is okay, McJobs pay just enough money for mom, dad and their kids (if they have any) working full-time to make rent to the their SlumLord - whom, since retiring early, likes to enjoy eating out!
It's a Win-Win in "Free-Market" USA.

I think the new motto at the US Federal Research Bank of New York is: Fake It Till You Make It.

 

[Michael]

WSJ: Yield of 0% a First at 3-Month Treasury-Bill Sale

The U.S. Treasury sold a new government security with a three-month maturity and a yield of zero for the first time on record, reflecting the highest demand since June.

Hmmm.... must be a sign of the Great Recovery from the Great Recession our Great Central Planners, centrally planned for them.

 

[iceaura]

If she SELLS labor.
She pays a TAX on that sale.

No - pay attention now: if she receives money in wages, she pays tax on it; if she receives no money in wages, she pays no tax. Whether or not she sold any labor for the money is not known, not recorded, and not part of the tax calculation. The amount she pays in taxes has nothing to do with the amount or kind of labor she may or may not have in fact provided.

Likewise if she receives money such as bonuses or profit sharing based on her wages - she pays tax based on the money received, without regard for whatever she did or did not sell to obtain it.

This is different from the tax levied on the sale of something. In that case whether or not something was sold, and exactly what it was, is critical in determining the tax owed. The sales tax on a purchased car, for example, is much different than the tax owed on money received by a car salesman without a car provided in return.

So, one more time, as you seem to be confused: if YOU give her money and YOU receive nothing of value in exchange for the given money, then YOU are taxed.

Not if I paid it as wages.
And not really, anyway. http://blog.taxact.com/gift-tax-do-i-have-to-pay-gift-tax-when-someone-gives-me-money/

Currently, a taxpayer does not pay gift tax until they have given away over $5.43 million in their lifetime (2015).

I don't think people who have given away that many millions of dollars in their lifetime are accurately described as "tax cattle".

 

[joepistole]

WSJ: Yield of 0% a First at 3-Month Treasury-Bill Sale

Hmmm.... must be a sign of the Great Recovery from the Great Recession our Great Central Planners, centrally planned for them.

What do you think that chart means Michael?

 

[Billy T]

The U.S. trade deficit expanded at the fastest rate in five months during the month of August, increasing 15.6% to $48.3 billion, according to data released by the U.S. Department of Commerce on Tuesday morning. The trade deficit is the amount by which net imports of goods and services exceeded net exports. One of the causes was a surge in iPhone imports, which helped raise the trade deficit with China by 11% to $35 billion.
As the dollar strengthens, U.S. imports become cheaper in dollar terms, while exports become more expensive for buyers paying in a weakened local currency. (The U.S.' largest trading partner is the European Union, followed by Canada and China.)

{There is graph of dollar's value and trade deficits for recent four years at link, but it will not copy here.)

As the dollar strengthens, U.S. imports become cheaper in dollar terms, while exports become more expensive for buyers paying in a weakened local currency. (The U.S.' largest trading partner is the European Union, followed by Canada and China.)

Part of why Fed wants more inflation (in addition to standard reason: makes people more inclined to buy now instead of later) is that all else unchanged, there would be less demand for the dollar - a weaker dollar is better for US exporters and jobs (In two ways. 2nd is more Americans buy locally instead of import.)

 

[Billy T]

Here is a quasi-draft of Lagarde's presentation to the annul joint meeting of the IMF & World Bank, planned for Nov. 9-11 in Lima, Peru with my bold added to quote below of part of her introduction.

While this refugee crisis captures media attention in the advanced economies, it is by no means an isolated event. Conflicts are raging in many other parts of the world, too, and there are close to 60 million displaced people worldwide.1 Let us also not forget that the year 2015 is on course to be the hottest year on record, with an extremely strong El Niño that has spawned weather-related calamities in the Pacific.

On the economic front, there is also reason to be concerned. The prospect of rising interest rates in the United States and China’s slowdown are contributing to uncertainty and higher market volatility. There has been a sharp deceleration in the growth of global trade. And the rapid drop in commodity prices is posing problems for resource-based economies.

Besides the heartbreaking suffering from conflict and forced migration, there is a human toll from economic dislocation and low activity: more than 200 million people are unemployed worldwide;2 income and wealth inequality keep on rising; and women continue to be disadvantaged both in pay and labor market opportunities.

 

[Billy T]

Central banks around the world are selling U.S. government bonds at the fastest pace on record, the most dramatic shift in the $12.8 trillion Treasury market since the financial crisis.
Sales by China, Russia, Brazil and Taiwan are the latest sign of an emerging-markets slowdown that is threatening to spill over into the U.S. economy. Previously, all four were large purchasers of U.S. debt.

If you go to the link given you can see this graphically. WSJ reproduced a bar chart made by Deutsche's Banks from 2005 to present.

 

[joepistole]

WSJ: Yield of 0% a First at 3-Month Treasury-Bill Sale



Hmmm.... must be a sign of the Great Recovery from the Great Recession our Great Central Planners, centrally planned for them.

Here is a quasi-draft of Lagarde's presentation to the annul joint meeting of the IMF & World Bank, planned for Nov. 9-11 in Lima, Peru with my bold added to quote below of part of her introduction.

What Lagarde means is there has been a sharp slowdown in the developing world and as previously noted, that slowdown will become exacerbated whenever the Federal Reserve decides to raise interest rates. Lagarde warned the Fed about this several months ago and that is one of the stated reasons, the main reason, why the Fed chose not to increase interest rates last month.

As I have written many times before, China's got some big problems. Now China has the ability to manage its way through those problems. But does it have the political will? The answer is uncertain at this point. Because in order to successfully negotiate the mind field in front of it, China will need to make some very serious changes. I'm not sure it's up to the job.

 

[Billy T]

... China's got some big problems. Now China has the ability to manage its way through those problems. But does it have the political will? The answer is uncertain at this point. ...

Theses problems were mainly caused by fact CCP does have the will to make drastic changes to the old "export based" economy.

I can not be sure, but think the CCP foresaw the falling purchasing power of average Americans, the Englishman and Europeans. IE knew they had to build more of a domestic based economy as they main customer could not expand their purchase - hell not even buy last year's volume.

They took nearly revolutionary steps. First one against their long held communistic doctrine - let farmers with use rights (not ownership which still remains with the state) lease out "their" land to large agro-industrial firms. This launched the greatest and most rapid urbanization in human history. Former small farmers moved to the cities and got jobs there. (China had a sever labor shortage and this helped with it too) In less than four years a population equal to that of the US became salaried in cities and many also had their farm lease rent income.

But this surge in buying power was not enough - would not make the transition from export to domestic consumption economy fast enough for the CCP. So they have for at least four years increased the real (purchasing power) salaries by double digits!

It is clear, the CCP has huge "political will" - they are even letting more FDI in and the Yuan be more fixed by the market place (have at least doubled the width of the band it "floats" in without any interference.) Will the transition be complexly smooth and problem free, of course not, but it is going very well. As an example of one small step (among dozens) last week they opened a Yuan currency exchange in Budapest - the first in all of Eastern Europe. The Yuan is every year more used for trade.

 

[joepistole]

If she labors and isn't paid, she didn't sell anything. This is called volunteering to help someone. While I'm sure the State would LOVE to tax this as well (it certainly 'Regulates' it) as of now, it hasn't figured out how to make money off volunteers. If she was 'Forced' to "Volunteer" - we'd stop calling that 'Voluntary' and call it "Slavery".

Actually, no. It's only volunteering if the labor was freely given. People can work with the expectation of getting paid and not get paid. That doesn't make their labor "volunteer" labor. Similarly, an entrepreneur can labor with the expectation of receiving a profit or some compensation and receive nothing and maybe even lose money.

There is a reason why the word labor is not synonymous with the word wage.

Words have meaning - try to remember that.

You would do well to take your advice.

If she SELLS labor.
She pays a TAX on that sale.

No, she may or may not pay a tax on income received for that labor depending on the amount received and where it was earned. Words have meaning Michael...remember?

You can call the sale a wage if you like (it doesn't change the meaning) at the end of the day it's money she made selling labor that HER body (she owns) performed and SHE is forced to PAY THE TAX.

OK, she is selling her labor for a wage...so?

What don't you get??

What don't you get Michael?

If you were to just give her money out of kindness, as in your example, without her performing Labor, then she did NOT SELL you anything and therefor YOU PAY THE TAX on that transfer. Of course, this also should be illegal, but thanks to the 16th Amendment the Mafia / Government passed - It takes as many cuts, in as many ways, as It can - including Taxing Gifts. So, one more time, as you seem to be confused: if YOU give her money and YOU receive nothing of value in exchange for the given money, then YOU are taxed. That money is not referred to as a 'Wage', it's instead called a 'Gift' and the Mafia / Government takes Its cut called a Gift Tax. If she does something for you, out of kindness, the Government will Regulate your behavior (because you're a sod that needs a Nanny) but has not figured out how to tax you (yet). Believe me, It would if It could. Which is why it 'Regulates' volunteers to ensure it isn't missing a cut of the action (which it will receive indirectly from corporate taxes if volunteers increase productivity - so, the State settles with that instead).

Government regulates volunteers....? You are making stuff up Michael. Gift taxes are only applicable in certain circumstances. Not all gifts are taxed, some are, some are not and there are legal means to avoid them. Yeah, you don't like the income tax, but that doesn't make the government a "Mafia".

You know, we all have to be Regulated and Taxed - for the Good of You Use The Roads. Because if the Government didn't Regulate and Tax the f*ck out of every and any exchange that it's Tax Chattel attempted make, then the Gates of Hades would open up and the Sky Would Fall.

Well, Michael people like the benefits they receive from government. They like the extensive roadways, the security provided by a military and police forces and judicial system. They don't like your buddies the Koch's stealing oil and polluting the land and air. And all those many benefits have a cost associated with it and that cost is funded with taxation.

Not that any of this matters in terms of revenue: The State can make as much Fiat paper as it so wishes. It can also sell Bonds on future Labor-sales to the Chinese Government meaning THEY can take a cut as well. They're not called BONDS for the fun of it. It's in reference to Bonded Labor / Debt bondage, which is known as Debt Slavery. Our so-called "Modern" financial system is founded on Pledging the Labor of unborn children for the repayment of debt obligations so that we can bailout the richest most corrupt crony Statists in the history of humankind. Debt bondage in the form of T-Bonds and Municipals are passed on from generation to generation. The ONLY difference between outright Slavery and Bonded Labor was that it was possible in theory that the Debt Slave may one day be freed. Not so now. It's mathematically impossible.

That's just more of your demagogic rhetoric which has been repeatedly debunked over the years. It's nonsensical.

Nice to know our so-called "Modern" financial system functions like a Slaver Market from 2500 years ago. Even the Athenians were civilized enough to outlaw the practice - over 2000 years ago! Yup, 'Modern' America where the Labor of the unborn can be auctioned off to the Chinese and it's all very 'Normal'.

Except, that is sheer nonsense.

Yes, thank the Gods we passed the 16th Amendment.

Massachusetts Rep. Samuel McCall argued in a speech before the U.S. House of Representatives as Congress debated the 16th Amendment, legalizing the income tax in 1909, “leads me to believe that the chief purpose of the tax is not financial, but social. It is not primarily to raise money for the state, but to regulate the citizen and to regenerate the moral nature of man. The individual citizen will be called on to lay bare the inner-most recesses of his soul in affidavits, and with the aid of the Federal inspector, who will supervise his books and papers and business secrets, he may be made to be good, according the notions of virtue at the moment prevailing in Washington.” McCall’s Massachusetts constituents rewarded the Republican congressman’s efforts by electing him governor several years later.

That's right. The morality flows from the Magical Government / Sky Daddy to the Peons who need to be told what to do and how to do it. Not that it now matters, the actual essence of the US Constitution was irrevocably changed then and with it this nation. America ended a LONG time ago. Now we live in our Tax Farm called the USA with our Farmers/ Regulators, sure, maybe not a King and His Lords, but better: A Cartel of Central Bankers and Central Banker caused Great Depression(s), Central Banker paid for WWII, Korean War, Vietnam War, Iraq War I (Mission Complete), Iraq War II (Mission Complete), Government Schools, the NSA spying on us, even Government agencies who can determine who you can legally marry, if you can sell arranged flowers, if you can legally fix a computer, and etc....

Enjoy the Great Recovery, it's going to be with us for a LONG time.

More nonsense.

 

[joepistole]

Theses problems were mainly caused by fact CCP does have the will to make drastic changes to the old "export based" economy.

I can not be sure, but think the CCP foresaw the falling purchasing power of average Americans, the Englishman and Europeans. IE knew they had to build more of a domestic based economy as they main customer could not expand their purchase - hell not even buy last year's volume.

They took nearly revolutionary steps. First one against their long held communistic doctrine - let farmers with use rights (not ownership which still remains with the state) lease out "their" land to large agro-industrial farms. This launched the greatest and most rapid urbanization in human history. Former small farmers moved to the cities and got jobs their (China had a sever labor shortage and this helped with it too) In a couple of years a population equal to that of the US became salaried in cities and many also had their farm lease rent income.

But this surge in buying power was not enough - would not make the transition from export to domestic consumption economy fast enough for the CCP. So they have for at least four years increased the real (purchasing power) salaries by double digits!

It is clear, the CCP has huge "political will" - they are even letting more FDI in and the Yuan be more fixed by the market place (have at least double the width of the band it "floats" in without any interference. Will the transition be complexly smooth and problem free, of course not, but it is going very well. As an example of one small step (among dozens) last week they opened a Yuan currency exchange in Budapest - the first in all of Eastern Europe. The Yuan is every year more used for trade.

No it isn't clear BillyT. China has done absolutely nothing radical or painful or courageous. It has done all the easy stuff. It has not let its currency freely float. It continues to try to micromanage its economy. The moves it made to control its stock market were draconian and autocratic. All the financiers who have been in China for decades jumped ship last year.

 

[Michael]

In the words of Helicoptor Ben: Mission Complete