Sky Could Fall On North Dakota’s Oil If We’re Not Careful, Shale Boss Says

Submitted by Daniel Graeber via OilPrice.com,

All parties with a collective interest in seeing the North Dakota oil experiment succeed need to work together because, right now, the boss at the largest stakeholder in the Bakken shale says opponents are drawing a bead on the region. And it’s not just exploration and production that’s a concern.

Oil production from the Bakken shale oil play in North Dakota is increasing at an exponential rate. State government data show production for May, the last full month for which complete information is available, was 977,051 barrels per day, a new all-time high.

On April 28, Continental Resources, the largest stakeholder in the Bakken play, said the field produced its 1 billionth barrel of oil at some point during first quarter 2014. The company’s chairman, Harold Hamm, said that, at the rate things are going now, production could hit the 2 million bpd mark by the end of the decade if, and it’s a big if, nothing goes wrong.

“We can’t have any more issues,” Continental’s boss said.

In overall production terms, there’s not much going wrong in the Bakken play. Though this year’s rough winter slowed things down, Adam Sieminski, the top official at the U.S. Energy Information Administration (EIA), said the slump would be erased in the next few months.

But there are other problems needling away in the North Dakota oil patch.

Last week, the FBI said it has only two agents working in the area and needs the industry’s help because state law enforcement agencies can’t keep up with the growing crime rate. There’s even a non-profit group, 4her North Dakota, to combat sex trafficking now.

On the legal margins, meanwhile, it’s not just the male members of the oil industry in North Dakota striking it rich. Female strippers, on a good night, are bringing home the bacon to the tune of $2,500 per shift.

Domestic violence and bar brawls are commonplace in parts of the state that boast an unemployment rate of next to zero, but a population boom creating a chronic housing shortage.

The oil sector itself is no stranger to problems. In September, about 20,000 barrels of crude oil spilled in rural Tioga, N.D., and state officials think it will take about two years to clean up the mess.

Three months later, flames shot 100 feet in the air after an eastbound train carrying oil for BNSF Railway hit a westbound train carrying grain in Casselton, N.D. Though no injuries were reported, it was just one of a string of train accidents involving Bakken crude.

A July train accident involving Bakken crude in Lac-Megantic, Quebec, left more than 40 people dead.

That’s part of the dark underbelly of the North Dakota oil industry that’s not making much of a splash in the circle of energy wonks keeping steady count of wells drilled and barrels produced. But it’s part of the narrative that may throw North Dakota’s oil future off the rails, in more ways than one.

“We’re in the crosshairs,” Continental’s Hamm said. “If we have anything [go wrong,] they’re going to shut us down.”




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First Germany, Now Austria Demands An Audit Of Its Offshore Held Gold

First it was Germany, now another AAA-rated European country is starting to get concerned about its hard assets.

Overnight Bloomberg reported that following in Bundesbank’s footsteps, Austria will audit its gold reserves located in the UK, which represent 80% of its total gold holdings. This gold reserve reviews held at Bank of England in London will be first conducted by external auditors, Christian Gutleder, a spokesman for the Austrian central bank, says via telephone.

As a reminder, Austria held 80% of its roughly 280 tons of gold in U.K., according to last annual report.

Gutleder explained that the Central bank has checked its reserves regularly in the past, adding that gold reserves haven’t changed since 2007. Which begs the question: why check them now then? 

According to the official explanation that review comes after euro-skeptic Freedom Party demanded more transparency, repatriation of reserves. Perhaps it is time to rename the Euroskeptic party into the “we doubt our gold is where you say it is” skeptics. A better explanation was provided by the Austrian Trend magazine, which said that “the measure is seen as a consequence of growing public pressure. There is a rising disbelief among Austrians about the existence of the gold.”

Joking aside, with Euroskeptics across Europe ascendent, we wonder which central European nation will be the first to uncover that its gold is no longer where it is supposed to be (that most certainly includes the Banque de France).

Some more color from Goldreporter.de:

Austria is planning to send auditors to the Bank of England in order to verify the existence of Austrias gold reserves stored in british vaults.

 

The Austrian accountability office will sent a delegation to London in order to check on Austrias gold reserves stored in vaults at the Bank of England. This is reported by Austrian magazine Trend. The measure is seen as a consequence of growing public pressure. There is a rising disbelief among Austrians about the existence of the gold.

 

“I acknowledge the request. Any grocery store is obliged to do inventory once a year. It is the only way of getting rid of these unreasonable allegations”, Ewald Nowotny, Governor of the National Bank of Austria tells Trend.

 

Austria officially owns 280 tonnes of gold of which 17 percent are kept in vaults inside the country. Around 150 tonnes are estimated to be stored in London.

 

In recent years doubts about the existence and the quality of Germanys monetary gold stored at the New York Fed and the Bank of England were raised by a rising number of skeptics. In January the Bundesbank eventually announced plans to repatriate most of Gemanys gold reserves until 2020.

So first Germany (which at this rate may repatriate its gold held in New York, London and Paris some time in the year 3000, now Austria… Who’s next to confirm that all those doubts about infinite rehypothecation of physical gold with countless beneficiaries of paper receivables will be the next conspiracy theory to become conspiracy fact, after last week’s surprising announcement that Barclays (the first of many) had manipulated paper gold prices on at least one occasions in the past decade.




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America’s “To Do” List

Submitted by James H. Kunstler via Kunstler.com,

History is moving the furniture around in the house of mankind just about everywhere but the USA. Things have changed, except here, where people come and go through the rooms of state, and everything looks shabbier by the day, and lethargy eats away at the upholstery like an acid fog, and the walls reverberate with meaningless oratory. The USA is going nowhere because it doesn’t like the new place where history wants to take it.

That is, first of all, a place of far less influence on everybody else, in a new era of desperate struggle to remain modern. That fading modern world is the house that America built, the great post World War Two McMansion stuffed with dubious luxuries in a Las Vegas of the collective mind. History’s bank has foreclosed on it and all the nations and people of the world have been told to make new arrangements for daily life. The USA wants everybody to stay put and act as if nothing has changed.

Therefore, change will be forced on the USA. It will take the form of things breaking and not getting fixed. Unfortunately, America furnished its part of the house with stapled-together crap designed to look better than it really was. We like to keep the blinds drawn now so as not to see it all coming apart. Barack Obama comes and goes like a pliable butler, doing little more than carrying trays of policy that will be consumed like stale tea cakes — while the wallpaper curls, and the boilers fail down in the basement, and veneers delaminate, and little animals scuttle ominously around in the attic.

Everybody I know is distressed by this toxic languor, this sense of being stuck waiting in a place they want desperately to move on from — like the prison of elder-care where so many find themselves hostage to the futility of staving off a certain ending, while all the family resources drain into various bureaucratic black holes. Do we care that the generations to come will have nothing left, nothing at all?

This Memorial Day the usual pieties are noticeably muted. Few politicians dare to utter sanctimonies about our brave soldiers maimed on far-flung battlefields, when so many of them are stuck waiting alone in dark rooms with only their wounds and phantom limbs for company. If regular civilian medicine is a cruel, hopeless, quasi-criminal racket, imagine what medicine for army veterans must be like — all that plus an overlay of profound government ineptitude and institutionalized ass-covering

Even the idle chatter about American Dreaming has faded out lately, because too much has happened to families and individuals to demonstrate that people need more than dreams and wishes to make things happen. It’s kind of a relief to not have to listen to those inane exhortations anymore, especially the idiotic shrieking that “We’re number one!”

Others have got our number now. They are going their own way whether we like it or not. The Russians and the Chinese. The voters in Europe. The moiling masses of Arabia and its outlands. The generals in Thailand. Too bad the people of Main Street USA don’t want to do anything but sit on their hands waiting for the rafters to tumble down. My guess is that nothing will bestir us until we wake up one morning surrounded by rubble and dust. By then, America will be a salvage operation.

There’s a long and comprehensive To-Do list that has been waiting for us since at least 2008, when the nation received one forceful blow upside its thick head. We refuse to pay attention.

First item on the list: restructure the banks.

 

Other items: reinstate the Glass-Steagall Act; disassemble the ridiculous “security” edifice under the NSA; upgrade the US electric grid; close down most of our military bases overseas (and some of our bases in the USA); draw up a constitutional amendment re-defining the alleged “personhood” of corporations; fix the passenger railroad system to prepare for the end of Happy Motoring; rebuild Main Street commerce to prepare for the death of WalMart and things like it; outlaw GMO foods and promote local food production; shut down casino gambling.

That’s just my list. What’s yours? And when will you step out of this rotting house into the sunshine?




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Saxo Bank: 2014 Is The Year Of The Low

When 2014 started, expectations were sky high and as Saxo Bank’s Chief Economist Steen Jakobsen notes, policymakers and their support organisations like the OECD, the International Monetary Fund and the World Bank were all quick to call the crisis over and project a true recovery. Now just five month into the year we have seen nothing but disappointing data both relatively speaking but certainly also in absolute terms. As the following presentation outlines, Jakobsen believes we will see new low yields in this cycle this year and that 2014 will also be the year of the low in terms of: inflation expectations, wage/salary, velocity of money, loan demand, lack of reform, and innovation reforms.

As Jakobsen notes,

our projections are starting to pan out: Germany is slowing down as a consequence of Asian rebalancing, which is a derivative of the fact that the US is no longer running a USD 800 billion current account deficit.

 

Full presentation:

2014 May Update Macro Presentation




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Ron Paul Fears The VA Scandal Is Just The Tip Of The Military Abuse Iceberg

Submitted by Ron Paul via The Ron Paul Institute,

President Obama held a press conference last week to express his outrage over reports that the Veterans Administration was routinely delaying treatment to veterans, with some veterans even dying while on alleged secret waiting lists. The president said that, “if these allegations prove to be true, it is dishonorable, it is disgraceful, and I will not tolerate it, period.” He vowed that, together with Congress, he would “make sure we’re doing right by our veterans across the board.”

The president is right to be upset over the mistreatment of US military veterans, especially those who return home with so many physical and mental injuries.  Veterans should not be abused when they seek the treatment promised them when they enlisted. But his outrage over military abuse is selective. He ignores the most egregious abuse of the US armed forces: sending them off to fight, become maimed, and die in endless conflicts overseas that have no connection to US national security.

It is ironic that the same week the president condemned the alleged mistreatment of veterans by the VA, he announced that he was sending 80 armed troops to Chad to help look for a group of girls kidnapped by the Nigerian Islamist organization Boko Haram. Is there any mistreatment worse than sending the US military into a violent and unstable part of the world to conduct a search operation that is in no way connected to the defense of the United States?

As Judge Andrew Napolitano said last week, “Feeling sorry for somebody is not a sufficient basis for sending American men and women into harm’s way.”

We are naturally upset over reports that Nigerian girls have been kidnapped by this armed Islamist organization. Unfortunately, cruel and unjust acts are committed worldwide on a regular basis. What the media is not reporting about this terrible situation, however, is that it was US interventionism itself that strengthened Boko Haram, and inadvertently may have even helped the kidnappers commit their crime.

Back in early 2012, just months after the US-led attack on Libya overthrew Gaddafi and plunged the country into chaos, the UN issued a report warning about the proliferation of weapons from that bombed out country. UN investigators found — eight months before the attack that killed the US ambassador in Benghazi — that, “Some of the weapons … could be sold to terrorist groups like al Qaeda in the Islamic Maghreb, Boko Haram or other criminal organizations.”

The US, NATO, and the UN are guilty of creating the unrest currently engulfing much of northern Africa, as they all pushed lies to promote an attack on Libya that destabilized the region. Now the president is launching an intervention in Chad and Nigeria to solve the problems created by his own intervention in Libya. This pattern is the same in places like Ukraine, where the US-backed coup in February has led to chaos and unrest that leads to even more intervention, including NATO’s saber-rattling on the Russian border. Has anyone in the Administration or Congress ever considered that interventionism itself might be the real problem?

As Americans celebrate the Memorial Day holiday, we should remember that though the VA’s alleged abuse and neglect of US veterans is scandalous, the worse abuse comes from a president and a compliant Congress that send the US military to cause harm and be harmed overseas in undeclared, unnecessary, and illegal interventions. The best way to honor the US military is to honor the Constitution, and to keep in mind the wise advice of our Founding Fathers to avoid all foreign interventionism.




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Fun Fact: Shale Strippers Make Up To $2,500 Per Night

We have discussed the 'downside' of America's "black gold" rush and the town of Williston, North Dakota is the poster child for the costs and benefits of this exuberance. But, as The BBC reports, there is some silver lining for those willing to deal…"Strippers can earn $2,500 per shift here," says a bouncer, "but the men here are 100% worse. It's horrible. They're animals."

A taste of Williston and "Whispers" Strip Club – "if you come to Williston, you'll have a job within 20 minutes"

As The BBC reports,

It's a busy Monday night at Whispers strip bar in the oil boomtown of Williston, North Dakota.

 

A man in overalls drains his glass before showering money on a pole dancer.

 

By the side of the stage, a half-nude woman is building a miniature house out of folded dollar bills.

 

Strippers can earn $2,500 (£1,500) per shift here, says a bouncer.

 

But one employee, who goes by the name of Alexis, isn't feeling especially motivated tonight.

 

She's wearing a woolly sweater because whenever the front door opens an Arctic draught slashes at the pleather booths. It's -31C (-24F) outside.

 

"I do this work back in Illinois," says the mother of two, sipping a Sprite.

 

"But the men here are 100% worse. It's horrible. They're animals.

 

"I've only been here a week, but I'm done with Williston. I'm going home next weekend."

 

Fortunately for Whispers, there's no lack of applicants eager to take her place.

 

Exotic dancers are flocking here from as far away as Russia for the same reason as everyone else – to make their fortune in a place known as Kuwait on the Prairie.

 

Williston was once a humble ranching community tucked away near the Canadian border in one of the remotest US states.

 

But a sea of oil and gas beneath the region's farmland, and the hydraulic fracking technology that began to unlock it in 2006, has turned this small city into the wellhead of the North American energy boom.

However, as we noted previously, it's not all glitz and glamor and making it rain…

Lured by the promise of jobs created by the oil and gas boom, unemployed people are flocking to North Dakota en masse. This is heralded by many in the mainstream media as great news – labor mobility at its best – however, there is a darker side: rents are surging and finding a place to live at any price is difficult. As Reuters reports, amid all the boomtime plenty, however, is a housing affordability crisis. North Dakota saw a 200% jump in homelessness last year, the biggest increase of any state – "people are coming because it's widely publicized that we have jobs, but it's not widely publicized that we don't have housing."




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The Retail Death Rattle Grows Louder

Submitted by Jim Quinn of The Burning Platform blog,

The definition of death rattle is a sound often produced by someone who is near death when fluids such as saliva and bronchial secretions accumulate in the throat and upper chest. The person can’t swallow and emits a deepening wheezing sound as they gasp for breath. This can go on for two or three days before death relieves them of their misery. The American retail industry is emitting an unmistakable wheezing sound as a long slow painful death approaches.

It was exactly four months ago when I wrote THE RETAIL DEATH RATTLE. Here are a few terse anecdotes from that article:

The absolute collapse in retail visitor counts is the warning siren that this country is about to collide with the reality Americans have run out of time, money, jobs, and illusions. The exponential growth model, built upon a never ending flow of consumer credit and an endless supply of cheap fuel, has reached its limit of growth. The titans of Wall Street and their puppets in Washington D.C. have wrung every drop of faux wealth from the dying middle class. There are nothing left but withering carcasses and bleached bones.

Once the Wall Street created fraud collapsed and the waves of delusion subsided, retailers have been revealed to be swimming naked. Their relentless expansion, based on exponential growth, cannibalized itself, new store construction ground to a halt, sales and profits have declined, and the inevitable closing of thousands of stores has begun.

The implications of this long and winding road to ruin are far reaching. Store closings so far have only been a ripple compared to the tsunami coming to right size the industry for a future of declining spending. Over the next five to ten years, tens of thousands of stores will be shuttered. Companies like JC Penney, Sears and Radio Shack will go bankrupt and become historical footnotes. Considering retail employment is lower today than it was in 2002 before the massive retail expansion, the future will see in excess of 1 million retail workers lose their jobs. Bernanke and the Feds have allowed real estate mall owners to roll over non-performing loans and pretend they are generating enough rental income to cover their loan obligations. As more stores go dark, this little game of extend and pretend will come to an end.

Retail store results for the 1st quarter of 2014 have been rolling in over the last week. It seems the hideous government reported retail sales results over the last six months are being confirmed by the dying bricks and mortar mega-chains. In case you missed the corporate mainstream media not reporting the facts and doing their usual positive spin, here are the absolutely dreadful headlines:

Wal-Mart Profit Plunges By $220 Million as US Store Traffic Declines by 1.4%

Target Profit Plunges by $80 Million, 16% Lower Than 2013, as Store Traffic Declines by 2.3%

Sears Loses $358 Million in First Quarter as Comparable Store Sales at Sears Plunge by 7.8% and Sales at Kmart Plunge by 5.1%

JC Penney Thrilled With Loss of Only $358 Million For the Quarter

Kohl’s Operating Income Plunges by 17% as Comparable Sales Decline by 3.4%

Costco Profit Declines by $84 Million as Comp Store Sales Only Increase by 2%

Staples Profit Plunges by 44% as Sales Collapse and Closing Hundreds of Stores

Gap Income Drops 22% as Same Store Sales Fall

American Eagle Profits Tumble 86%, Will Close 150 Stores

Aeropostale Losses $77 Million as Sales Collapse by 12%

Best Buy Sales Decline by $300 Million as Margins Decline and Comparable Store Sales Decline by 1.3%

Macy’s Profit Flat as Comparable Store Sales decline by 1.4%

Dollar General Profit Plummets by 40% as Comp Store Sales Decline by 3.8%

Urban Outfitters Earnings Collapse by 20% as Sales Stagnate

McDonalds Earnings Fall by $66 Million as US Comp Sales Fall by 1.7%

Darden Profit Collapses by 30% as Same Restaurant Sales Plunge by 5.6% and Company Selling Red Lobster

TJX Misses Earnings Expectations as Sales & Earnings Flat

Dick’s Misses Earnings Expectations as Golf Store Sales Plummet

Home Depot Misses Earnings Expectations as Customer Traffic Only Rises by 2.2%

Lowes Misses Earnings Expectations as Customer Traffic was Flat

Of course, those headlines were never reported. I went to each earnings report and gathered the info that should have been reported by the CNBC bimbos and hacks. Anything you heard surely had a Wall Street spin attached, like the standard BETTER THAN EXPECTED. I love that one. At the start of the quarter the Wall Street shysters post earnings expectations. As the quarter progresses, the company whispers the bad news to Wall Street and the earnings expectations are lowered. Then the company beats the lowered earnings expectation by a penny and the Wall Street scum hail it as a great achievement.  The muppets must be sacrificed to sustain the Wall Street bonus pool. Wall Street investment bank geniuses rated JC Penney a buy from $85 per share in 2007 all the way down to $5 a share in 2013. No more needs to be said about Wall Street “analysis”.

It seems even the lowered expectation scam hasn’t worked this time. U.S. retailer profits have missed lowered expectations by the most in 13 years. They generally “beat” expectations by 3% when the game is being played properly. They’ve missed expectations in the 1st quarter by 3.2%, the worst miss since the fourth quarter of 2000. If my memory serves me right, I believe the economy entered recession shortly thereafter. The brilliant Ivy League trained Wall Street MBAs, earning high six digit salaries on Wall Street, predicted a 13% increase in retailer profits for the first quarter. A monkey with a magic 8 ball could do a better job than these Wall Street big swinging dicks.

The highly compensated flunkies who sit in the corner CEO office of the mega-retail chains trotted out the usual drivel about cold and snowy winter weather and looking forward to tremendous success over the remainder of the year. How do these excuse machine CEO’s explain the success of many high end retailers during the first quarter? Doesn’t weather impact stores that cater to the .01%? The continued unrelenting decline in profits of retailers, dependent upon the working class, couldn’t have anything to do with this chart? It seems only the oligarchs have made much progress over the last four decades.

Screen-Shot-2014-03-29-at-9.23.25-PM.png

Retail CEO gurus all think they have a master plan to revive sales. I’ll let you in on a secret. They don’t really have a plan. They have no idea why they experienced tremendous success from 2000 through 2007, and why their businesses have not revived since the 2008 financial collapse. Retail CEOs are not the sharpest tools in the shed. They were born on third base and thought they hit a triple. Now they are stranded there, with no hope of getting home. They should be figuring out how to position themselves for the multi-year contraction in sales, but their egos and hubris will keep them from taking the actions necessary to keep their companies afloat in the next decade. Bankruptcy awaits. The front line workers will be shit canned and the CEO will get a golden parachute. It’s the American way.

The secret to retail success before 2007 was: create or copy a successful concept; get Wall Street financing and go public ASAP; source all your inventory from Far East slave labor factories; hire thousands of minimum wage level workers to process transactions; build hundreds of new stores every year to cover up the fact the existing stores had deteriorating performance; convince millions of gullible dupes to buy cheap Chinese shit they didn’t need with money they didn’t have; and pretend this didn’t solely rely upon cheap easy debt pumped into the veins of American consumers by the Federal Reserve and their Wall Street bank owners. The financial crisis in 2008 revealed everyone was swimming naked, when the tide of easy credit subsided.

The pundits, politicians and delusional retail CEOs continue to await the revival of retail sales as if reality doesn’t exist. The 1 million retail stores, 109,000 shopping centers, and nearly 15 billion square feet of retail space for an aging, increasingly impoverished, and savings poor populace might be a tad too much and will require a slight downsizing – say 3 or 4 billion square feet. Considering the debt fueled frenzy from 2000 through 2008 added 2.7 billion square feet to our suburban sprawl concrete landscape, a divestiture of that foolish investment will be the floor. If you think there are a lot of SPACE AVAILABLE signs dotting the countryside, you ain’t seen nothing yet. The mega-chains have already halted all expansion. That was the first step. The weaker players like Radio Shack, Sears, Family Dollar, Coldwater Creek, Staples, Barnes & Noble, Blockbuster and dozens of others are already closing stores by the hundreds. Thousands more will follow.

This isn’t some doom and gloom prediction based on nothing but my opinion. This is the inevitable result of demographic certainties, unequivocal data, and the consequences of a retailer herd mentality and lemming like behavior of consumers. The open and shut case for further shuttering of 3 to 4 billion square feet of retail is as follows:

  • There is 47 square feet of retail space per person in America. This is 8 times as much as any other country on earth. This is up from 38 square feet in 2005; 30 square feet in 2000; 19 square feet in 1990; and 4 square feet in 1960. If we just revert to 2005 levels, 3 billion square feet would need to go dark. Does that sound outrageous?

  • Annual consumer expenditures by those over 65 years old drop by 40% from their highest spending years from 45 to 54 years old. The number of Americans turning 65 will increase by 10,000 per day for the next 16 years. There were 35 million Americans over 65 in 2000, accounting for 12% of the total population. By 2030 there will be 70 million Americans over 65, accounting for 20% of the total population. Do you think that bodes well for retailers?

  • Half of Americans between the ages of 50 and 64 have no retirement savings. The other half has accumulated $52,000 or less. It seems the debt financed consumer product orgy of the last two decades has left most people nearly penniless. More than 50% of workers aged 25 to 44 report they have less than $10,000 of total savings.

  • The lack of retirement and general savings is reflected in the historically low personal savings rate of a miniscule 3.8%. Before the materialistic frenzy of the last couple decades, rational Americans used to save 10% or more of their personal income. With virtually no savings as they approach their retirement years and an already extremely low savings rate, do retail CEOs really see a spending revival on the horizon?

  • If you thought the savings rate was so low because consumers are flush with cash and so optimistic about their job prospects they are unconcerned about the need to save for a rainy day, you would be wrong. It has been raining for the last 14 years. Real median household income is 7.5% lower today than it was in 2001. Retailers added 2.7 billion square feet of retail space as real household income fell. Sounds rational.

  • This decline in household income may have something to do with the labor participation rate plummeting to the lowest level since 1978. There are 247.4 million working age Americans and only 145.7 million of them employed (19 million part-time; 9 million self-employed; 20 million employed by the government). There are 92 million Americans, who according to the government have willingly left the workforce, up by 13.3 million since 2007 when over 146 million Americans were employed. You’d have to be a brainless twit to believe the unemployment rate is really 6.3% today. Retail sales would be booming if the unemployment rate was really that low.

  • With a 16.5% increase in working age Americans since 2000 and only a 6.5% increase in employed Americans, along with declining real household income, an inquisitive person might wonder how retail sales were able to grow from $3.3 trillion in 2000 to $5.1 trillion in 2013 – a 55% increase. You need to look no further than your friendly Too Big To Trust Wall Street banks for the answer. In the olden days of the 1970s and early 1980s Americans put 10% to 20% down to buy a house and then systematically built up equity by making their monthly payments. The Ivy League financial engineers created “exotic” (toxic) mortgage products requiring no money down, no principal payments, and no proof you could make a payment, in their control fraud scheme to fleece the American sheeple. Their propaganda machine convinced millions more to use their homes as an ATM, because home prices never drop. Just ask Ben Bernanke. Even after the Bernanke/Blackrock fake housing recovery (actual mortgage originations now at 1978 levels) household real estate percent equity is barely above 50%, well below the 70% levels before the Wall Street induced debt debacle. With the housing market about to head south again, the home equity ATM will have an Out of Order sign on it.

  • We hear the endless drivel from disingenuous Keynesian nitwits about government and consumer austerity being the cause of our stagnating economy. My definition of austerity would be an actual reduction in spending and debt accumulation. It seems during this time of austerity total credit market debt has RISEN from $53.5 trillion in 2009 to $59 trillion today. Not exactly austere, as the Federal government adds $2.2 billion PER DAY to the national debt, saddling future generations with the bill for our inability to confront reality. The American consumer has not retrenched, as the CNBC bimbos and bozos would have you believe. Consumer credit reached an all-time high of $3.14 trillion in March, up from $2.52 trillion in 2010. That doesn’t sound too austere to me. Of course, this increase is solely due to Obamanomics and Bernanke’s $3 trillion gift to his Wall Street owners. The doling out of $645 billion to subprime college “students” and subprime auto “buyers” since 2010 accounts for more than 100% of the increase. The losses on these asinine loans will be epic. Credit card debt has actually fallen as people realize it is their last lifeline. They are using credit cards to pay income taxes, real estate taxes, higher energy costs, higher food costs, and the other necessities of life.

The entire engineered “recovery” since 2009 has been nothing but a Federal Reserve/U.S. Treasury conceived, debt manufactured scam. These highly educated lackeys for the establishment have been tasked with keeping the U.S. Titanic afloat until the oligarchs can safely depart on the lifeboats with all the ship’s jewels safely stowed in their pockets. There has been no housing recovery. There has been no jobs recovery. There has been no auto sales recovery. Giving a vehicle to someone with a 580 credit score with a 0% seven year loan is not a sale. It’s a repossession in waiting. The government supplied student loans are going to functional illiterates who are majoring in texting, facebooking and twittering. Do you think these indebted University of Phoenix dropouts living in their parents’ basements are going to spur a housing and retail sales recovery? This Keynesian “solution” was designed to produce the appearance of recovery, convince the masses to resume their debt based consumption, and add more treasure into the vaults of the Wall Street banks.

The master plan has failed miserably in reviving the economy. Savings, capital investment, and debt reduction are the necessary ingredients for a sustained healthy economic system. Debt based personal consumption of cheap foreign produced baubles & gadgets, $1 trillion government deficits to sustain the warfare/welfare state, along with a corrupt political and rigged financial system are the explosive concoction which will blow our economic system sky high. Facts can be ignored. Media propaganda can convince the willfully ignorant to remain so. The Federal Reserve can buy every Treasury bond issued to fund an out of control government. But eventually reality will shatter the delusions of millions as the debt based Ponzi scheme will run out of dupes and collapse in a flaming heap.

The inevitable shuttering of at least 3 billion square feet of retail space is a certainty. The aging demographics of the U.S. population, dire economic situation of both young and old, and sheer lunacy of the retail expansion since 2000, guarantee a future of ghost malls, decaying weed infested empty parking lots, retailer bankruptcies, real estate developer bankruptcies, massive loan losses for the banking industry, and the loss of millions of retail jobs. Since I always look for a silver lining in a black cloud, I predict a bright future for the SPACE AVAILABLE and GOING OUT OF BUSINESS sign making companies.




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WTF Chart Of The Day: Spot Gold Spikes Over $20 As Futures Close

Gold futures stopped trading at 1300ET for the Memorial Day holiday… seconds after that Spot Gold prices exploded higher from $1291 to $1312… of course liquidity is extremely light but it seems someone was anxious to get their hands on the real thing… Gold has breached its 200DMA, 100DMA, 50DMA, as well as the crucial $1300 (that Morgan Stanley said would never be seen again).

 

 

Nothing to see here , move along…

Moments later…

 

Un-rigged markets?




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