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The Floodgates Begin to Open

by John Rubino
Dollar Collapse

It’s now clear that what governments did to counter the Great Recession may have delayed systemic collapse, but did not resurrect the old normal. Growth around the world is anemic – which is to say debt continues to increase faster than the productive capacity to service it – and inflation (the other way to shrink a debt burden) remains below target.

Now “anemic” is becoming “non-existent.” In the US, mini-credit-bubbles like auto loans, home mortgages and student loans are sputtering, leading economists to dial back their rosy scenarios for 2016. The Atlanta Fed’s GDPNow forecast for Q3 growth, for instance, was a robust 3.8% in August but is now less than 2% — and still falling.

Continue Reading at DollarCollapse.com…

Is the US on the Verge of Mass Race Riots?

by David Galland
Garret / Galland

Dear Reader,

Thanks to a philosophy course my daughter is currently taking, I have recently become more intimately acquainted with the British philosopher John Locke (1632-1704).

While Locke is famous for many other truly important ideas, our recent reacquaintance began after I reviewed an essay on Locke’s theory on the primary versus secondary qualities of things, a bit of a brain teaser.

Locke’s general line of thinking was that the only way to fundamentally understand anything is to first break it down to its most basic qualities.

Continue Reading at GarretGalland.com…

Tech Boom Downside: Not Enough Jobs?

by Mike ‘Mish’ Shedlock
Mish Talk

The Wall Street Journal says there is a “great unraveling” to America’s Dazzling Tech Boom: Not Enough Jobs. Let’s investigate.

technology-boom

The technology revolution has delivered Google searches, Facebook friends, iPhone apps, Twitter rants and shopping for almost anything on Amazon, all in the past decade and a half.

What it hasn’t delivered are many jobs. Google’s Alphabet Inc. and Facebook Inc. had at the end of last year a total of 74,505 employees, about one-third fewer than Microsoft Corp. even though their combined stock-market value is twice as big. Photo-sharing service Instagram had 13 employees when it was acquired for $1 billion by Facebook in 2012.

Hiring in the computer and chip sectors dove after companies shifted hardware production outside the U.S., and the newest tech giants needed relatively few workers. The number of technology startups fizzled. Growth in productivity and wages slowed, and income inequality rose as machines replaced routine, low- and middle-income, human-powered work.

This outcome is a far cry from what many political leaders, tech entrepreneurs and economists predicted about a generation ago. In 2000, President Bill Clinton said in his last State of the Union address: “America will lead the world toward shared peace and prosperity and the far frontiers of science and technology.” His economic team trumpeted “the ferment of rapid technological change” as one of the U.S. economy’s “principal engines” of growth.

The gap between what the tech boom promised and then delivered is another source of the rumbling national discontent that powered the rise this year of political outsiders Donald Trump and Bernie Sanders.

The tech-powered disappointment is subtler than the anger caused by the crushing impact of China’s import invasion and the perceived failures of government institutions like the Federal Reserve in guiding the economy. Instead, it stems from the idea that Americans expected larger economic gains from these amazing new machines and the companies that created them, not a widening between the haves and have-nots.

superstar-tech

By the time Mr. Jobs died in 2011, Apple made nearly every one of its products outside America, largely in Asia. Apple halted U.S. manufacturing in 2004 and didn’t resume until 2013, when it began producing Mac Pro personal computers in Austin, Texas.

Apple says it employs about 80,000 workers in the U.S., or two-thirds of the company’s overall workforce. About half the U.S. employees have retail jobs.

American tech workers are getting a smaller piece of the economic pie created from what they produce. As of 2014, employee compensation in computer and electronic-parts making was equal to 49% of the value of the industry’s output, down from 79% in 1999, according to the Commerce Department.

WhatsApp had more than 450 million users world-wide when Facebook bought the messaging service for $19 billion in 2014, turning founder Jan Koum into a billionaire several times over. At the time of the acquisition, WhatsApp had 55 employees.

Economists call the phenomenon “skill-biased technical change.” The spoils of growth go to those few people with skills and luck and who are best positioned to take advantage of new technology.

The five largest U.S.-based technology companies by stock-market value—Apple, Alphabet, Microsoft, Facebook and Oracle Corp. —are worth a combined $1.8 trillion today. That is 80% more than the five largest tech companies in 2000.

Today’s five giants have 22% fewer workers than their predecessors, or a total of 434,505 as of last year, compared with 556,523 at Cisco Systems Inc., Intel, IBM, Oracle and Microsoft in 2000.

Harvard University economist David Deming estimates that the hollowing-out of work spread to programmers, librarians and engineers between 2000 and 2012. As much as $2 trillion worth of human economic activity could be automated away using existing technologies, such as Amazon’s robots, in coming years, consulting firm McKinsey & Co. estimates.

Knightscope Inc., based in Mountain View, Calif., makes robots that serve as night watchmen. About three dozen are on patrol, including at shopping malls, corporate campuses such as Microsoft’s in Mountain View and the new home arena of the Sacramento Kings. Knightscope clients pay $7 an hour per robot.

“Robots don’t complain,” says Stacy Stephens, a Knightscope co-founder and vice president of marketing and sales. “There’s no pension. And there’s no worker’s comp,” he adds.

Downside or Upside?

So is this a downside or an upside?

Continue Reading at MishTalk.com…

Hillary Groped Me

from Gregory Mannarino

Hillary Groped Me.

Elites Link Populism to Emerging ‘Bullyboys’ Like Trump

by Daily Bell Staff
The Daily Bell

Donald Trump Is One More Bullyboy in a World of Strongmen … Watching Donald Trump skulking behind Hillary Clinton on the debate stage Sunday night, muttering about locking her up if he wins, was a reminder that we are drifting toward a kind of bullyboy-world, where power is everything. – RealClearPolitics/Washington Post

Populism has now been linked directly to tyranny as we can see from this above article. We have been reporting on the elite-generated “populism versus globalism” meme here and here.

We suspected there would be a further move and now it is taking place. If you are a political populist, you are also legislator to whom “power is everything.”

More:

Continue Reading at TheDailyBell.com…

Gold Manipulators Not Only Will Be Punished, They Have Been Punished

by Gary Tanashian
Gold Seek

I have not gone off the deep end and joined the “community” of boosters, promoters, pompom waving cheering squads and general cult figures who you can just tell not only want you to adore gold, but in some cases need you to act on your adoration and buy gold or gold stocks. Read into that what you will, but the history of investors burned by the pitch, which tugs at peoples’ morals, sense of right and wrong and plain old common sense, is a long and storied one.

As in any market, you are the mark, the target, the food… unless you do the educational work to the degree required in order to have your own – not some expert’s – view on things. That includes we would-be geniuses who think we can write for you and provide worthwhile information along the way in your decision making process. The day I stop learning and working to be better is the day I stop doing this, and that’ll be the day they fit me for a pine box.

Continue Reading at GoldSeek.com…

New Obama Executive Order Hints At Devastating Space Event: “Could Disable Large Portions Of The Electrical Power Grid… Cause Cascading Failures”

by Mac Slavo
SHTF Plan

Once considered a fringe conspiracy theory, it appears that the Obama administration is now actively preparing for a massive solar event that could wipe out life as we have come to know it. Space weather events such as solar flares, solar energetic particles, and geomagnetic disturbances have long been believed to pose a significant threat to our technologically advanced society with the ability to not only affect global positioning satellites, but on-earth electronics that include the entire domestic (and global) power grid.

In the latest Executive Order signed by Barack Obama, the President calls for coordination between various government agencies including the Department of Defense and Department of Homeland security should a major “space weather event” come to pass.

Continue Reading at SHTFPlan.com…

El-Erian: This is How Toxic Politics Can Lead to an Economic Crisis

Populist movements, like Donald Trump’s, are founded upon incoherent strategies

by Mohamed A. El-Erian
Market Watch

NEW YORK (Project Syndicate) — The relationship between politics and economics is changing.

Advanced-country politicians are locked in bizarre, often toxic, conflicts, instead of acting on a growing economic consensus about how to escape a protracted period of low and unequal growth. This trend must be reversed, before it structurally cripples the advanced world and sweeps up the emerging economies, too.

Obviously, political infighting is nothing new. But, until recently, the expectation was that if professional economists achieved a technocratic consensus on a given policy approach, political leaders would listen. Even when more radical political parties attempted to push a different agenda, powerful forces — whether moral suasion from G7 governments, private capital markets, or the conditionality attached to International Monetary Fund and World Bank lending — would almost always ensure that the consensus approach eventually won the day.

Continue Reading at MarketWatch.com…

A Few Questions for Sharps Pixley CEO Ross Norman and Other Bullion Bankers

by Chris Powell
GATA.org

Dear Friend of GATA and Gold:

Ross Norman, CEO of London bullion dealer Sharps Pixley, yesterday disputed the 2013 study by a professor at the University of Western Australia that concluded that prices in the twice-daily London gold fixings were manipulated, a study publicized this week by the Sydney-based newspaper The Australian:

http://www.gata.org/node/16835

Norman wrote that the study had not discovered market manipulation at all but only that gold trading volume in London increases around the fixings because of the greater liquidity at those times:

http://news.sharpspixley.com/article/london-fixings-the-case-is-laid-bar…

Norman concluded: “It is no surprise that U.S. courts have seized upon the academic report, prompting a flurry of lawsuits to be filed in what is clearly looking like a pre-ordained desire for a guilty verdict in search of evidence to support it.”

Continue Reading at GATA.org…

Jack Chan: This Past Week in Gold and Silver

by Jack Chan
The Gold Report

Technical analyst Jack Chan charts the latest moves in gold and silver markets, noting COT data is showing signs of a bottom.

[…] Our proprietary cycle indicator is down.

[…] Our proprietary cycle indicator is down.

[…] The gold sector is on a short-term sell signal as the buy signal has failed. Short-term signals can last for days and weeks, and are more suitable for traders.

Continue Reading at TheAuReport.com…

The Quarterly Wall St. Lie

by Adam English
Outsider Club

We’re neck deep in an already rocky October, and that can only mean one thing for the stock market: It is time to hype and spin everything, once again.

With less than three months left in the year, the clock is running out to meet targets and make companies look as healthy as possible.

Earnings season is ramping up, ladies and gentlemen, and that means companies are about to self-congratulate themselves once again.

And, as always, the time has come to do everything possible to sculpt easy sound bites for the talking heads and market cheerleaders to play along, glossing over reality and explaining why everyone should buy everything, forever.

Continue Reading at OutsiderClub.com…

China’s Stunning Move to Dominate the World and the Real Reason Why China is Buying So Much Gold

from King World News

With many investors worried about the economic turmoil that has engulfed the globe, here is a look at China’s stunning move to dominate the world and the real reason why China is buying so much gold.

China Quietly Increasing Its Global Dominance

Stephen Leeb: “In a fairly lackluster week for the markets, the only news that seemed to arouse any response was China trade data. The headline numbers reported that, contrary to expectations, both Chinese exports and imports had declined in September compared to year-earlier levels, with exports dropping by more than 10 percent in dollar terms. Stock and commodity markets in the West fell in response, believing the numbers signified Chinese weakness that would hurt global growth…

Continue Reading at KingWorldNews.com…

Deeper and Deeper in the Hole: Treasury Receipts Up 1%, Spending Up 5%

by Mike ‘Mish’ Shedlock
Mish Talk

For the first time since 2009, US Deficit Spending On the Rise.

Importantly, receipts are up only 1%, but government spending is up 5%.

The deficit does not count “off budget” items like Social Security and student debt, but let’s take a look at what they do count.

deeper-and-deeper

The U.S. budget deficit as a share of the economy widened for the first time in seven years, marking a turning point in the nation’s fiscal outlook as an aging population boosts government spending and debt.

Spending exceeded revenue by $587.4 billion in the 12 months to Sept. 30, compared with a $439.1 billion deficit in fiscal 2015, the Treasury Department said Friday in a report released in Washington. That was in line with a Congressional Budget Office estimate on Oct. 7 for a shortfall of $588 billion. As a share of gross domestic product, the shortfall rose to 3.2 percent from 2.5 percent a year earlier, the first such increase since 2009, government figures show.

“The slowdown in tax collections suggests some cooling in labor market activity,” said Gennadiy Goldberg, a strategist at TD Securities LLC in New York. He sees the higher budget deficits implying more borrowing needs by Treasury.

The Treasury said receipts in fiscal 2016 totaled $3.27 trillion, or 17.8 percent of GDP, while spending totaled $3.85 trillion, or 20.9 percent of GDP. Receipts rose $18 billion from fiscal 2015, while outlays jumped $166 billion, the figures showed. The department cited higher spending on Social Security, Medicare, Medicaid and interest on government debt.

For September, which is the final month in the fiscal calendar, the government reported a $33.4 billion surplus. That was lower than the $90.9 billion surplus a year earlier, in part due to calendar adjustments, according to the Treasury.

Receipts Up 1 Percent

Slowing receipts in the face of all this alleged hiring suggests the alleged hiring is way overstated. This is yet another sign that failure to weed out duplicate social security numbers results in double-counting employment.

Continue Reading at MishTalk.com…

Taxpayers, Pull out Your Wallet, Cost Estimates for Biggest Nuclear Energy Boondoggle Exploded Again

by Wolf Richter
Wolf Street

How the Nuclear Energy Lobby Eats up Global Taxpayer Billions

The well-funded lobbyists of the powerful nuclear energy industry are tirelessly working over governments around the world. Occasionally, there are minor setbacks, such as Fukushima or the current multi-billion-dollar scandal around the decommissioning costs of California’s San Onofre nuclear power plant, that threaten to expose just how horridly expensive nuclear power really is for taxpayers, ratepayers, and other stakeholders, from conception of the plant to final decommissioning and proper disposal of nuclear waste and contaminated materials – none of which has yet been accomplished and paid for.

But here’s the mega project that was first conceived in 1985, is still far from completion, and has now thrown back the date of first power generation to 2035, if it can ever be accomplished, and there are grave doubts it can.

Continue Reading at WolfStreet.com…

Statistician Warn Of “Systemic Mainstream Misinformation” In Poll Data

from Zero Hedge

Submitted by Salil Mehta via Statistical Ideas blog,

Antagonism isn’t perpetual

If you recently glanced at the polls and the election markets, then you would be forgiven to believe that a landslide election is looming. It’s likely not, and the spreads have the potential to revert in surprising ways between now and Election Day. The drumbeat of negative news against Donald Trump may not cause further damage. We’ve discussed numerously, starting on October 11 and October 12, that Hillary Clinton’s runaway spread would revert (here, here, here, here).

Of course that’s a stand taken against a popular headwind, but also an opportunity to make money on an election bet that is mispriced. For example, when we wrote the reversion article, the betfair ask that Mr. Trump’s popular vote could remain in the 40’s% was only priced at 1:6 odds. Nate Silver’s 538 site also reflected this, as shown below. But we -and other academic statisticians- knew that this was faux election probability, and advised thousands to remain vigilant against planned mainstream misinformation.

Continue Reading at ZeroHedge.com…

Experts Said Arctic Sea Ice Would Melt Entirely by September 2016 – They Were Wrong

by Sarah Knapton, Science Editor
Telegraph.co.uk

Dire predictions that the Arctic would be devoid of sea ice by September this year have proven to be unfounded after latest satellite images showed there is far more now than in 2012.

Scientists such as Prof Peter Wadhams, of Cambridge University, and Prof Wieslaw Maslowski, of the Naval Postgraduate School in Monterey, California, have regularly forecast the loss of ice by 2016, which has been widely reported by the BBC and other media outlets.

Prof Wadhams, a leading expert on Arctic sea ice loss, has recently published a book entitled A Farewell To Ice in which he repeats the assertion that the polar region would free of ice in the middle of this decade.

Continue Reading at Telegraph.co.uk…

Ending a Taking Economy and Creating a Giving Economy (Part 2)

by Charles Hugh Smith
Of Two Minds

Here is Part 2 of the guest essay by Zeus Y.

There no longer seems to be a rational alignment between economic cost and value. This means questioning so-called conventional wisdom and critically considering whether or not to own property or even to go to college.

Here are some examples:

• In my own life, I owned a Florida vacant lot that would normally (and did actually significantly appreciate) in value, but the property was taxed so much in just a few years to pay for a municipal road that the taxes ate up the entire value of the property and I had to unload it just to stop the bleeding.

Lesson: Get rid of property that cost more in maintenance and taxes than they are worth. Don’t let sentimental attachment prevent you from liberating yourself of economic burdens, whether it is real estate property or old furniture in a paid storage facility.

College tuition is twelve times more expensive over the last generation and college debt has skyrocketed, yet the wages of college grads have actually gone down over the last fifteen years.

Continue Reading at OfTwoMinds.com…

The CERTAIN Destruction Of Our Nation

by Karl Denninger
Market-Ticker.org

Go back and read this Ticker, and the link in it on the actual budget deficit we ran last year (no, it’s not the nice number you see at the top of the MTS.)

The budget deficit was in fact $1.4 trillion — not the claimed $587 billion (which is bad enough, incidentally.)

Last year the Federal Government spent $1,417 billion dollars out of $3,854 billion, or 37% of every dollar it spent, on Medicare and Medicaid. This was a 9.3% increase over last year’s expenditure of $1,296,731 (million), all-in.

But inside this figure are even-more damning numbers.

Payments to the health care trust funds were up 13.4% (!)

Continue Reading at Market-Ticker.org…

GDPNow Forecast Dips to 1.9%, Nowcast Rises Slightly to 2.3%

by Mike ‘Mish’ Shedlock
Mish Talk

It was not at all obvious how today’s allegedly “solid” retail sales report would affect third quarter GDP estimates. As I have pointed out before, good reports do not necessarily translate that way. It all depends on what the models expected.

The FRBNY Nowcast expected a weaker retail sales report boosting its GDP estimate slightly.

However, the Atlanta Fed GDPNow Model expected a better retail report and its GDP forecast ticked lower.

GDPNow Latest Forecast: 1.9 Percent — October 14, 2016

Continue Reading at MishTalk.com…