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Archive for March 7th, 2011

“America Is Not Broke”: Michael Moore Speaks Out To Madison, WI

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March 7, 2011: “America Is NOT Broke”: Michael Moore Speaks In Madison, WI — March 5, 2011

The Tonka Report Editor’s Note: “Contrary to what those in power would like you to believe so that you’ll give up your pension, cut your wages, and settle for the life your great-grandparents had, America is not broke. Not by a long shot. The country is awash in wealth and cash. It’s just that it’s not in your hands. It has been transferred, in the greatest heist in history, from the workers and consumers to the banks and the portfolios of the uber-rich.” — Michael Moore

Thousands Of Farmers To Descend On Wisconsin Capitol With Their Tractors

Link to original video below…

BLS Continues To Overestimate Job Growth In Another Jobs Mirage

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March 7, 2011: Paul Craig Roberts / – March 7, 2011

There is no job recovery for the millions of unemployed. For those of us fortunate to have jobs, many of us have two jobs just to make ends meet in order to survive the mirage of an oasis– SJH

The announcement on March 4 that 192,000 new jobs were created in February was greeted with a sigh of relief.

But the number is just more smoke and mirrors, as I will show shortly. First, let’s pretend the jobs are real. What areas of the economy produced the jobs?

According to the Bureau of Labor Statistics, 152,000 of the jobs or 79% are in private services, consisting of: 11,700 jobs in wholesale trade, 22,000 in transportation and warehousing, 36,400 in administration and waste services (of which 15,500 are temporary help services), and 36,200 in ambulatory health care services and nursing and residential care facilities. Entertainment, [waiters], waitresses and bartenders accounted for 20,000. Repair and maintenance, laundry services, and membership associations accounted for 14,000.

As one who has often reported the monthly payroll jobs breakdown, I am struck by the fact that these categories are the ones that have accounted for job growth for year after year. How can this be? How can Americans, who have had no growth in their real incomes and who are foreclosed from their homes and maxed out on credit card debt, car payments, and student loans, spend more every month in bars and restaurants? How can a few service areas of the economy grow when nothing else is?

The answer is that there were not 192,000 new jobs. Statistician John Williams estimates the reported gain was overstated by about 230,000 jobs. In other words, about 38,000 jobs were lost in February.

There are various reasons that job gains are overstated and losses understated. One is the BLS’s “birth-death model.” This is a way of estimating the net of non-reported new jobs from business start-ups and job losses from business shut-downs. During recessions this model doesn’t work, because the model is based on good times when new jobs always exceed lost jobs. On the”death” side, if a company goes out of business because of recession and, therefore, doesn’t report its payroll, the BLS assumes the previously reported employees are still in place. On the”birth” side, the BLS adds 30,000 jobs to the monthly numbers as an estimate of new start-ups.

Williams estimates the “death” side is really reducing employment by about 200,000 per month, and the “birth” side is stillborn. Therefore, “the BLS continues regularly to overestimate monthly growth in payroll employment by roughly 230,000 jobs.” The benchmark revisions of payroll jobs bear out Williams. The last two benchmark revisions resulted in a reduction of previously reported employment gains of about 2 million jobs.

Another indication is that despite 10 years of population growth, there are 8 to 9 million fewer Americans employed today than a decade ago. Some “New Economy” we have. If only we could have the old one back.

US Faces “Terrible” Job Market

The Tonka Report Editor’s Note: As of two weeks ago, the real unemployment number was 22.6%– SJH

Link to original article below…

Economy Hit With The Ultimate Smokescreen Known As: “Biflation”

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March 7, 2011: Eric Blair / Activist Post – March 7, 2011

You can tell when a Ponzi scheme is approaching its collapse by the increased number of smoke and mirrors needed to cover up the counterfeit foundation of the scheme.

The U.S. government, who already grossly disfigures the real numbers for GDP, unemployment and inflation, is constantly having to twist reality to keep their scheme afloat.

The government recently reported that unemployment numbers reached the lowest point in nearly two years at 8.9%, “sparking optimism” in the establishment media.  

Many analysts point to two months in a row of “job growth” as evidence that the U.S. is well on its way to recovery and it should be good news for job seekers. Try telling that to a random unemployed commenter who responded to the news with the following:

“All lies. Why not just up the ante and say the unemployment rate is 5%? The last job I applied for had 440 applicants, many of whom had Phd’s, for the whopping non-living wage figure of 35K.”

Even if jobs are added, the question begs–what kind, and how much per hour? $8?

We all know the inherent problems with the official unemployment number, as it never tells the full story. But assuming hiring has gotten better, these lower wage jobs will surely affect consumer spending in the near and long term. Additionally, John Challenger, an executive with an outplacement firm, claimed his optimism is tempered because, “Certainly the specter of rising gas prices could impact employers’ staffing decisions over the next six months.”

Which brings us to the phony number in the theater to hide the Ponzi scheme that I want to focus on: inflation. The 12-month inflation rate as of January 2011, was 1.6% according to the official Consumer Price Index, or only 1% when you remove food and energy. The report stated:

“Over the last 12 months, the food index has risen 1.8 percent with the food at home index up 2.1 percent; both 12-month changes are the highest since 2009. The energy index has increased 7.3 percent over the last 12 months, with the gasoline index up 13.4 percent.”

The gasoline index is indeed an eye-popping number. Too bad it’s not accurate. According to a recently released report by the American Petroleum Institute (PDF) gas prices are up about 25% on average over the last 12 months, and a whopping 105.7% in just over two years (since December 29, 2008 lows). And these numbers scarcely reflect recent jumps in oil prices due to turmoil in Libya and the Middle East, which has already caused the Obama Administration to consider tapping the nation’s strategic oil reserves.

For all the news lately about looming food inflation with commodities skyrocketing, the Consumer Price Index for the past twelve months seems somewhat accurate. In other words, the commodity speculation is only now starting to impact food prices in a major way. The CPI release pointed out that “The index for food at home posted its largest increase in over two years with all six major grocery store food group indexes rising,” and January’s food at home index has already increased 0.7 percent.

All of these real increases to the cost of living for average people are balanced out with used housing, cars, and washing machines that are declining in price to create a palatable inflation official number. This phenomenon is called biflation. First introduced by Dr. F. Osborne Brown, biflation is where inflation and deflation occur simultaneously in the economy. It is an effective tool to confuse the public and give pundits the intellectual case for spinning the numbers in either direction.

During biflation, there’s a rise in prices of commodity-based assets like food and energy (inflation) and a simultaneous fall (deflation) in the price of debt-based assets like homes, cars, and appliances. The free-market concept is that the price of all assets are based on the demand for them versus the amount of money in circulation to buy them. In other words, their sales are utterly dependent on banks for credit, which is in turn dependent on the job market.

Wikipedia clearly describes the process of biflation as follows:

“With biflation on the one hand, the economy is fueled by an over-abundance of money injected into the economy by central banks. Since most essential commodity-based assets (food, energy, clothing) remain in high demand, the price for them rises due to the increased volume of money chasing them. The increasing costs to purchase these essential assets is the price-inflationary arm of biflation… 

“With biflation on the other hand, the economy is tempered by increasing unemployment and decreasing purchasing power. As a result, a greater amount of money is directed toward buying essential items and directed away from buying non-essential items. Debt-based assets (mega-houses, high-end automobiles and other typically debt based assets) become less essential and increasingly fall into lower demand. As a result, the prices for them fall due to the decreased volume of money chasing them. The decreasing costs to purchase these non-essential assets is the price-deflationary arm of biflation.”

This biflationary period will likely continue, as money will continue to be printed to cover bank losses and government debt, while hardships will likely continue to mount for the average consumer. Although the deflationary debt-based products seem like necessities in our modern world, their demand elasticity is far greater than that of food and energy, meaning they should not be equally weighed to determine the struggle of middle-and-lower class households.

So don’t be fooled; biflation is being used as a smokescreen to keep the public from becoming alarmed about rapidly rising food and energy prices. Those who recognize the severity of the problem would be wise to prepare for massive inflation of human necessities today before the problem gets even worse.

The Day The Dollar Died

The Tonka Report Editor’s Note: The above fictional depiction could very well become stark reality! – SJH

Link to original article below…