More than half of Americans depend on government subsidies

Copied from RT

Government dependency is on the rise, with more than half of all Americans relying on the government for survival. While the Obama administration is broadening eligibility, US citizens increasingly also say they prefer it this way.
Americans’ self-reliability has been decreasing as eligibility for Medicaid, food stamps, earned income tax credit, work pay tax credit and unemployment benefits have broadened since 2009 to allow more US citizens to enjoy them.
More than half of the US population – 165 million of 308 million Americans – is now dependent on the state in some form. Of these, 107 million Americans rely on government welfare, 46 million seniors collect Medicare and there are 22 million government employees.
The number of Americans on welfare have increased from 97 million to 107 million since President Obama took office, according to research by Ranking Member of the Senate Budget Committee Jeff Sessions. The number of Americans on food stamps during the president’s term has risen by more than 14 million.
“Under Obama’s plan, you wouldn’t have to work and wouldn’t have to train for a job – they’d just send you a welfare check,” stated a recent anti-Obama television advertisement.
And it seems that Americans increasingly want it that way. In 2011, a report by Globescan showed that the number of US citizens who believe in the strength of a free market economy dropped to 59 percent from 74 percent in the previous year, falling below Brazil and China. When Globescan first conducted this survey ten years ago, 80 percent of Americans favored a free market economic system.
Those with the lowest annual incomes were more likely to oppose a free market economy.
This year’s annual Index on Dependence on Government, released in February, found that since 2008, the American people’s dependence on government has grown by 23 percent. The US government broke a record last year, spending the most on federal assistance in the nation’s history.
The Heritage Foundation found that on average, Americans who depend on federal assistant received $32,748 in annual benefits, which is more than an average American worker makes in a year. In 2011, the median annual paycheck was reported as $26,364.
“We expect the government to take care of us from the cradle to the grave,” said an analyses in the Economic Collapse blog.
In 2010, more than 70 percent of federal spending went to dependence programs – which is almost 2.5 times more what it used to be fifty years ago. In 1962, only 28.3 percent of federal spending was used for these purposes.
But the cost of these programs does not go to those who reap the benefits. Half of all American households pay no income taxes – the very half that is most likely to be granted welfare and food stamps.
As government dependency increases, the cost of federal assistance programs will decrease with less people paying for it.

[end article]

This just illustrates the massive hole that the USA is in financially. The more their growth slows, the more people go on unemployment benefits, which means more tax income goes to the poor. Then they kick those people off unemployment benefits after 16 weeks and if they cant find a job, then the only options left are drugs, crime, or prostitution. Believe me, I have met many people who were victims of 'Tough Love' by their parents who kicked them out of home at the tender age of 15, only to wind up addicted to heroin, stripping and whoring in the Red Light district of the nearest big city.

Drugs are the only business keeping many of these areas alive as far as I can tell. There is no other economic activity going on anywhere, there are no factories, no shops. To suggest that people in such areas should gainful employment is just stupid. Not only that, but if you are convicted of a crime, (which is really easy when you are American and Black, since they have more people in Jail than the next 4 countries combined) then your right to vote gets taken away, as well as your right to employment in many places who will not employ anyone who has been convicted of a crime.

It is my personal theory that the introduction of fluoride in the drinking water by 1960 combined with the massive amount of LSD being spread across the country have made Americans more susceptible to just sitting there and doing nothing about it.. But then again, I dont know.. When I was living in a country with fluoridated drinking water, I felt alot more powerless and so did everyone around me, I think it is a real effect, although many will disagree, (I still use fluoride toothpaste though) the problem with putting it in the water supply is that there is no way of controlling just how much fluoride each single person in the population gets, which is inherently dangerous, given that fluoride is toxic.

If you are at all interested in this kind of stuff, check the Wikipedia article on Flouride

The Vast Interlinked Modern Food Network

Below is a Picture of the 10 biggest food companies and all of their subsidiaries. It graphically points out how foods that we think come from different 'brands' came from the same company. In addition, many of these companies use GMO products, which are not required to be labelled in the USA.

Given the trend of individual farmers increasingly leaving their land, especially in America, more and more, it is these companies that are responsible for feeding us, which is arguably the most important function a company could have, because, as they say, every city is just 3 days away from a revolution if the food runs out.

Christopher Carrion

August Soft Commodities Update

US dryness fears shift south as wheat sowings near

21st August 2012
The southern Plains, the seat of drought in the US last year, revived as a centre for this year too, seeing its crops continue to deteriorate even as those in much of the Midwest improved – and ahead of the important wheat sowing period.

The US Department of Agriculture, for a third week, rated domestic corn as 23% in "good" or "excellent" health, showing no further deterioration towards the levels of 1988, the last year drought caused such devastation to US crops.

Soybeans were rated at 31% in good or excellent health as of Sunday, an increase of 1 point on the week, if still the worst figure since 1988, and an improvement at the bottom end of market expectations.

Reports of poor yields, below even USDA expectations, were revealed on Monday on the first day of the ProFarmer tour of major US row crop areas.

'Continued to deteriorate'

However, the overall USDA crop condition data concealed a difference in experience between states - crops in parts of the southern Plains continued to deteriorate, even as those in much of the Midwest improved.

While some of the Plains state of Oklahoma received rainfall last week, more than half did not and overall the rains "provided no significant improvements to conditions", USDA officials said.

"Concerns about aflatoxin in corn were reported," they added, a reference to a fungal residue commonly found in crops stressed by drought.

In Kansas, "row crop conditions continued to deteriorate last week as the state received only scattered rainfall", they said, cutting their good or excellent ratings of Kansas soybeans by two points to 3%, and of corn by three points to 5%,

"While average temperatures dropped last week, continued lack of precipitation still plagues farmers," the USDA staff said.

'Greened up considerably'

The comments contrasted with those from Midwest states such as Indiana, where rains allowed soybeans to recover by four points to 20% rated good or excellent.

"Rain showers helped to improve drought conditions with less than half the state still in extreme-to-exceptional drought conditions compared with nearly 70% on July 31," the USDA said.

"Pastures and hay fields have greened up considerably in the last two weeks.

"Later-planted soybeans are benefitting from the recent rainfall with additional growth and pod fill," besides lower spider mite activity and reduced aflatoxin risk in corn.

'Tight grip of drought'

Can an Algorithm Write a Better News Story Than a Human Reporter?

This article was copied from Wired. I chose to include this article to give people an idea of what kind of things computers can really do nowdays. Despite the fact that it is known that there are software packages out there that allow you to pretend to be 1000 different users twiter and facebook, most people just wouldn't think a message had been written by a machine unless it was very formal and designed to look like computer output (for instance, SMS's about Taxi's, Emails about Margin Calls, etc.) 

I actually think that much more media is being written by computers than people realise, the same way that the stock markets are being run by computers. I mean, lets face it, due to costs, for many years, various publications have been using 'press releases'. A Press Release is a piece of Corporate Propaganda that is usually slightly disguised to make it look like something else vaguely newsy.

A good example would be the following: A Public Relations Consultant has a number of clients who tell them what kind of image they wish to portray. The PR Company will then write a Press Release, which is basically just the propaganda message of their client disguised as something to do with news and send it off to a hundred local newspapers.

Now, the local newspapers, which have been drowning slowly for years to the point where they are now being given away free just to boost circulation, receive the Press Release along with an offer from the company involved, or one of it's subsidiaries to purchase advertising. This has a two pronged effect,  since the local papers are always looking for column inches, it's very easy for them to just copy the press release verbatim, plus, it is understood that if they do not, then the company involved will not advertise with them.

Given that your average press release could be written by a 12yr old, I think the development of this technology will breath fresh life into local newspapers, since they will simply be able to auto-generate content. Doubtless, some papers will fire their human staff for the savings, but some may keep their reporters on, freeing them up to do more actual reporting instead of churning out the piles and piles of crap, such as sport results. This could actually lead to a rise in the quality of some local newspapers. I mean, after all, I cant imagine a newspaper putting a computer generated story into print without proofreading it first, but proofreading it is a snap compared to actually writing such boring crap. I suspect this will make many journalists very happy.. The ones that get to keep their jobs, that is.

Christopher Carrion

2012 in Perspective.

For anyone who is worried about all the 2012 end of the world crap flying around, I present the following bit of humour pinched from here:

Just remember, humanity has survived many crisises in the past and will survive many in the future. I just cant see the whole human race being wiped out, I mean, we are like cockroaches. I could see certain portions of the world being scorched, but at the same time, there will always be places for the people who make money from the wars to hang out, after all, they dont want to hang out in some smelly bar in Kabul, they want to hang at the Armed Services Club in London.
So if you live in a large city, just remember, there are alot of people who would be ruined if a disaster struck and given the increasing frequency of natural disasters, I imagine many of them are scrambling to make their buildings more weather proof. Or maybe they arn't because of the economy.. Who knows? =)
And below, something for all my friends into technical analysis, stolen from here:

LCH.Clearnet Raises Deposits On Wheat And Corn After Price Gains

LCH Clearnet SA, the French arm of Europe’s biggest clearing house, raised the deposits it demands from clients to trade milling wheat and corn futures on NYSE Liffe in Paris after prices jumped.
The margin for milling wheat futures will climb to 1,300 euros ($1,595) per contract from 1,200 euros, LCH.Clearnet wrote in a statement on its website yesterday. Margin requirements for corn will rise to 1,000 euros from 900 euros, the clearinghouse said.
Milling wheat futures have climbed 33 percent in the French capital this year to 259.25 euros a ton, while corn futures have advanced 28 percent to 252.25 euros a ton. The changes will come into effect with the margin call tomorrow morning for positions at today’s close, LCH.Clearnet wrote.
This should send a signal that the price of basic food commodities such as Corn and Wheat are set to rise further, after rising already over 30% this year.
Some people have estimated that the effect of speculation adds up to 20% to the price of basic food items, which may made trading in such commodities morally dubious, however, I would say that it is not the individual investors so much as the massive banks with the potential weight to move the market that are responsible for the majority of the increase in the price of food, but alas, such is the world we live in. In addition to speculation, I think the biggest driver of food prices is the making of food into fuel, such as corn based ethanol. Although there are experiments happening with thing such as switchgrass in order to extract food from plants that cannot be eaten, but this does not solve the problem. Instead of planting the ground with crops that bear food, the fields will be planted with crops that yield food. In fact, one could even say that moving to switchgrass or some other kind of ethanol made from crops that are inedible is even worse, because if there is a surplus, then it cannot be eaten.

For a table on World Corn consumption by country, look here:

The Entire European Crisis Explained By One Huge Chart About Beer

Originally posted here:
The world's best economics website FRED, which lets you chart all kinds of economic data, has just added thousands of datapoints on European inflation and pricing from Eurostat (the EU's main economic data warehouse). Eurostat's own website is famously hard to use, so this is a great addition for everyone in the economics community. Critical to understanding the European crisis is understanding the divergent price levels in the varying countries. What basically happened over the past several years is: Prices of everything surged in the periphery of Europe, while staying incredibly stable in Germany. This has been a boon to Corporate Deutschland, as it is far more competitive—on a price basis—than all of its peers. Now the peripheral countries are being asked to devalue and regain competitiveness, but it is a difficult if not impossible task. The problem is that when devaluing an economy the legacy debts remain, and so the sovereign debt of the country stays there, while all of the internal income goes down. And you get a crisis. So naturally the first thing we did when checking out the new European pricing data is check out the price of beer. And the chart is a doozy. What we've done here is charted the price of beer in Greece (blue), Italy (orange), Spain (red), Ireland (green), and Germany (black). Now this is an index chart; essentially the beer component of the CPI. We've set the index to start at 100 in 1996. The first thing you see is that Greek inflation is WAY above everyone else. The next thing you see is that Germany has had very little beer inflation since 1996. Spain and Italy have seen surging prices. And Ireland (in Green) did once have a huge price bubble, but has now seen significant beer deflation. And not surprisingly, Ireland is seen as having made far and away more progress in its efforts at regaining health. So really the beer chart says it all: Greece: a wreck. Germany: calm. Spain and Italy: in trouble, and Ireland making a comeback. The entire European crisis explained by the price of beer.

Where’s the gold? NY Fed undergoes first-ever audit

From RT's Website http://rt.com/usa/news/ny-fed-audit-gold-839/

A massive trove of gold kept under lock and key five stories below Manhattan at the New York Federal Reserve has been undergoing its first audit in history. It could put conspiracy theories - for example, that the gold is a sham - to sleep for good.

According to the official record, the US government keeps billions of dollars in gold stored beneath the New York Fed's Italian Renaissance fortress around the block from Wall Street.

But conspiracy theorists claim that the gold stock may have been stolen years back in a dramatic caper, that it's been used for backdoor deals with foreign governments, or even that it's been removed and replaced with gold-painted metal bars. 

And as many know, the stash has caught the attention of some politicians, most notably Texas Representative Ron Paul.

For years, Paul has called for an independent audit of not only the New York Fed, but of the Federal Reserve Bank as a whole.

But the government hasn't been eager to grant his wish.

In 1981, when Paul served on the Gold Commission – a panel formed by Congress to look into expanding gold's role in the US financial system – he argued for full gold audits to be carried out on an annual basis. 

He has proposed legislation for an exhaustive review of all the gold kept on US soil, which includes bullion owned by various foreign governments in addition to America's.

"If the gold is there and everything is in order, they should welcome an audit," Paul said, as quoted by The Los Angeles Times.

HFT Algo Goes Crazy, Costing Knight Frank 70% Share Price

The Algo Trading Software of Property Development company Knight Frank Ltd went berserk on the 1st of August, losing it a total of $440million USD in 45 mins. The activity was so severe, it affected the NYSE. This outlines the dangers of connecting computers to accounts with large amounts of money. The smallest change in code can turn a money maker into the perfect money burner.

Copied from ZeroHedge

We all know something went horribly wrong in various NYSE-traded stocks today between 9:30 am and 10:15 am. So wrong in fact that the NYSE had to step in and cancel numerous trades in 6 symbols. However it did not DK millions of other trades in 134 other symbols, the vast majority of which we assume traded errantly due to the market making of Knight Capital (as admitted by the company), which today saw its biggest drop ever since going public on volume about 60 times greater than its average. We also all know that one should buy low and sell high. At least that is what human traders are taught, and that is what they attempt. Because if one consistently does the opposite, one will simply run out of money. Well, the opposite is precisely what the berserk algo in Knight's Market Making group may have done if Nanex, which has done a forensic analysis of one of the trades in question, is correct. In other words, instead of at least attempting to provide liquidity via limit trades, Knight's algorithm acted as a market order... gone horribly wrong. As the third chart below shows what the algo did with furious repetition and steadfast consistency was to buy at the offer, and sell at the bid, in other words buy high and sell low. Over and over and over and over. As Nanex laconically notes, "In the case of EXC, that means losing about 15 cents on every pair of trades. Do that 40 times a second, 2400 times a minute, and you now have a system that's very efficient at burning money." Which also means that by not DK'ing several hundred million prints, the NYSE may have just thrown Knight under the bus, because the market maker is suddenly on the hook for tens if not hundreds of millions in inverse market making profits.

Financial Media Tries to Convince People that Libor Fraud actually benefited the poor.

I love to read the mainstream financial media, they never seem to know what is actually happening, they attribute events to vague mythical causes and say that no one can predict them. They are constantly making bad predictions, but people follow their advice anyway, usually because they don't understand enough about finance to know that the real news is not on the TV.
So when I saw this piece on Bloomberg, I nearly split a rib in laughter. It tries to make the argument that Libor fraud isn't really that bad, it only happens during extreme times like the crash and finally, the cherry on the cake, argues that Libor fraud actually helped the poor by bringing down their mortgage rates during and after the crash. But enough of me, I will let the article speak for itself.

The War on Silver

This is one of the best articles I have found that accurately and succinctly explains the massive ongoing manipulation of the silver market by JPMorgan and CME. It's so good, I copied it to my blog for posterity. You can find the original at http://www.silverseek.com/commentary/war-silver


[begin article]
The War on Silver
Theodore Butler | July 23, 2012 - 10:32am       
It has taken more than 25 years for me to fully comprehend a conclusion that I never wanted to reach, namely, that there is an organized war against the price of silver that has come to include the US Government. I think the US Government involvement came into being almost accidently, but even if it was an accident of sorts, that does not diminish the serious nature of what must be described as illegal activity at the highest levels. I am conflicted between feelings of sadness and outrage.


Starting around 1985, I became convinced that the price of silver was being manipulated by collusive and concentrated short selling by certain commercial entities on the world’s leading precious metals commodity exchange, the COMEX. Having a background in futures trading going back to 1972, it dawned on me that the concentrated and orchestrated short selling was dominating and, therefore, manipulating the price of silver. The very first thing I did after this discovery was to petition the regulators at the CFTC and the COMEX to alert them to the existence of the most serious market crime possible. My petitions fell on deaf ears but I continued to petition them through the present. Since this was in the pre-Internet era, I was limited in convincing others of the silver manipulation due to distribution restrictions. Communication was very different 25 years ago.

The Dangers of Paper Gold

This is an article written back in 2006 as part of bullionvault's documentation. However, it also provides a very good explaination of what paper gold is and why it a very unsafe investment.

The original article can be found here.

[begin article]

Take care when buying from a bank

Unallocated gold

As you set out to buy gold the first thing you need to know is that 95% of the world's gold traders will automatically sell you the wrong type.

Unallocated gold is the most widely traded form of gold in the world. It hides a way of advantaging the provider - usually a bank - by subjecting buyers to a risk they will frequently remain unaware of until it is too late. The widely quoted 'spot price' refers to this unallocated gold, and this is how it works:-

1. When a bank sells you unallocated gold on the spot market you become a creditor - i.e. the bank owes you gold which you do not own. The bank is taking advantage of the fact that you are not quite sure what to do with any gold you buy, and it feels logical - to most gold buyers - to put the gold safely in the bank. When you do this you become, in law, a depositor of gold. Most people now relax in the belief that they own gold completely securely, and they do not pay the little extra - above the spot - to have their trade formally 'allocated'.
2. A bank is required by its regulator to hold a proportion of its liabilities as certain types of assets capable of being turned into cash quickly during times of crisis. It is a liquid reserve and it's there to protect the bank from a common type of problem - a liquidity crisis - which occurs when a bank has short term deposits, long term loans, and insufficient cash to meet the immediate demand for withdrawals. Physical gold bars are accepted as a very good form of liquidity reserve because they can be turned quickly into cash. 
3. If a bank has physical possession of some gold which it owes you as its creditor the bank itself is the current owner of the gold. While this gold remains unallocated to you the regulator considers it part of a bank's liquid reserve. This makes unallocated gold an attractive way for the bank to maintain its regulated liquidity, because you have paid for your gold, and the bank is free to use your money, while it is also able to add your unallocated gold holding to its own reserve. 
4. So your unallocated gold would be ditched if the bank were in need of cash. It has no choice in the matter because liquid reserves are there to be sold at short notice to protect the bank's general creditors - all of whom, including you, must receive a proportionate share of whatever is raised from the sale of assets should the crisis deepen and the bank become insolvent. 
5. If that did happen you would be in a bad position. The bank's small gold reserve would be diluted by non-performing bond portfolios and other assets which don't sell well in a crisis. The last line of defence for bank depositors is deposit protection, which is a state underwritten mainstay of banking confidence in the West. But it does not apply on bullion debts like yours. Deposit protection is there as a confidence-builder for the national currency only, which means unallocated gold actually offers less protection from bank failure than a cash deposit. So having been the provider of the bank's liquidity reserve you will then be in the minority of those offered no protection by the state's guarantee.
6. So it is important not to be impressed by unallocated gold, or by it being physically stored in a bank's vault, or by it being checked daily by bank regulators. Regulators are checking it to make sure the bank maintains a liquid reserve, and they are not interested in your entitlement as a bullion creditor.

Allocated gold is different because you become the outright owner of gold and you are no longer a creditor. Your allocated gold is your property and it cannot be used as the bank's reserve, so with allocated gold you get proper protection from systemic failure.

Unfortunately with allocated gold your money does the bank no good. And since modern banks reckon to earn 20% each year on capital employed, their loss of use of your allocated gold is disappointing for them. This is why banks usually charge nothing for unallocated storage and at least 1.5% per annum for allocated storage, with the result that professionals in the bullion market reckon that less than 1% of gold traded within financial markets is allocated.

[ end article ]