Monday, August 29, 2011

Morning Update/ Market Thread 8/29 - Alien Wars. Private Banker vs. Politician Edition…

Good Morning,

Equity futures have been fluffed all weekend long on the back of a dollar that is threatening to break down out of its range, bonds are significantly lower, oil – of course – is therefore higher, gold and silver are back slightly, and food commodities are skyrocketing with nearly every one breaking higher out of its range, many are close to new highs (very dry gulp).

Obviously what’s happening is not sustainable. Every time equities try to mount a comeback it’s on the back of our money. You can see energy, precious metals, and food ratchet higher every time. On pullbacks they just sit and wait for the next wave higher. That’s the end game, if you run that trend out over time… its game over. The game being that private bankers are profiting from, and controlling the production of, your money.

One need only watch the news to see the pressure of the impossible math laying the foundation for those many “other events.” Those events are going to continue to gather pace as the pressures on the population mount.

The economic data continues to diverge further from reality, the most distortive being the way that our inflation figures have been manipulated. That affects almost all the other calculations. This morning it’s Personal Income and Outlays which understate the amount of inflation and tend to overstate the rate of income growth. Even with these miscalculations and divergence from reality, it is still obvious that incomes are failing to keep pace with the inflation:
In July, the consumer made a nice comeback in terms of income growth and spending. PCE inflation, however, was on the warm side. Personal income in July rose a moderately healthy 0.3 percent after rising 0.2 percent in June. The July advance matched the consensus for a 0.3 percent increase. Wages & salaries grew a little more robust 0.4 percent, following a bump up of 0.1 percent the month before.

Consumer spending rebounded a sharp 0.8 percent after slipping 0.1 percent in June. The latest number came in significantly higher than expectations for a 0.4 percent boost. By components, durables jumped 1.9 percent after declining 1.1 percent in June. Clearly, motor vehicle sales are up as the supply constraint related parts shortages from Japan is easing. Nondurables increased 0.7 percent, following a 0.5 percent decrease in June. Services rose 0.7 percent after nudging up 0.1 percent in June.

On the inflation front, the headline PCE price index jumped 0.4 percent, following a 0.1 percent decrease in June. The primary reason was energy costs with food also contributing. The core rate posted a 0.2 percent gain, matching the June pace and equaling expectations.

Year-on-year, headline prices are up 2.8 percent, compared to 2.6 percent in June. The core is up 1.6 percent on a year-ago basis, firming from the 1.4 percent pace in June.

Inflation and taxes did outpace income with real disposable income edging down 0.1 percent after a 0.3 percent boost in June. However, spending clearly beat inflation as real PCEs advance a sharp 0.5 percent in July, following no change the prior month.

On the news, equity futures rose, focusing on healthy spending. The bottom line is that the consumer sector is not down and out but actually adding to economic growth. Of course, the strength is coming from those with jobs and job growth would add to momentum.

Again, the data is disconnected from reality, but the Econoday commentary is even more so.

Pending Home Sales are released at 10:00 Eastern. It’s a pretty busy week for economic data that culminates in the August Employment Report this Friday.

Notice how Bernanke is laying the blame of the problem on the politicians? Friday he basically threw up his hands and said it’s up to them to straighten out the mess, of course implying that they’re the problem. And they are, primarily in the fact that they failed when they turned over their money powers to a few individuals. This was the ultimate corruption, that one corrupt act changed everything on the planet. And modern politicians who fail to correct it are equally complicit. So in that regard I agree, but I see them as special interests in crime together, both are culpable, but nothing will change until the power to create money is returned to its rightful owners, the people.

“Other events,” therefore, will continue to run. Between now and the coming climax, you will continue to be distracted and spun. Playing the blame game is just one way that they will both attempt to manipulate your thinking and emotions. But in the battle between these two alien forces, it is the politicians who can win at any point they find the will. It’s up to the other events to force them to find that will.

Bad things can happen when special interests are allowed to take control with no checks or balances in place. Producing money from nothing is the ultimate corruptor because that money can be used to buy away those checks and balances. That’s what happened with our money, and that’s why we have macroeconomic debt saturation, i.e. impossible math.

Some of the energy companies have become so influential that they, too, have permeated the regulatory agencies and warped rules so far in their favor that they have pushed the limits of physical reality. Our own NRC is an agency that has completely lost touch with reality – that is clearly seen in the way they are ignoring and twisting the reality that is Fukushima, and in the way they are failing to take any meaningful action here in the United States. Clearly it is run by “champions” of the nuclear industry, they are focused solely on the growth of the industry, and that focus is at the exclusion of safety. Here’s Arnie Gunderson simply telling the painful reality of the spent fuel pool condition, which the NRC claims are in great shape:

Newly Released TEPCO Data Proves Fairewinds Assertions of Significant Fuel Pool Failures at Fukushima Daiichi