Quantum Pranx

ECONOMICS AND ESOTERICA FOR A NEW PARADIGM

Posts Tagged ‘New Paradigm

Everything I learned about succeeding in business, I learned outside of the institutional academic system

with one comment

by JS Kim
Originally posted January 26th, 2011

Here is a related article to the previous one (posted earlier today) by JS Kim. I apologize if I appear to be plugging SmartKnowledgeU, Mr Kim’s independent research, education and consulting company, but I happen to completely agree with all that he says about education and related issues. Bold italics are my own. This is a must-read!! –Aurick

In a recent US study called “Academically Adrift: Limited Learning on College Campuses”, researchers studied more than 2,300 students that attended 29 different US universities. Here is what they concluded:

(1) 45% of the students showed no gains in learning the first two years of college, and
(2) 36% gained little learning even after four years of college level courses

even though the average GPA (Grade Point Average) was 3.2 among the sample of students.

Richard Arum, the author of the study, discovered that “students [were] able to navigate through [college] quite well with little effort”. Furthermore, he discovered that many faculty were focused on their own research with a disdain for teaching many of the introductory freshmen and sophomore level courses that colleges required of them.

The gains in learning were ascertained by tests that measured critical thinking, complex reasoning and writing skills in a standardized manner.

Of course, other factors outside of the enormous failures of the US educational system are also responsible for the failures of students to gain any critical thinking or complex reasoning skills during their years spent inside institutional academics.

There is a plethora of mass entertainment designed to prevent young adults from noticing that bankers are ruining their lives and ignoring all the topics that affect their quality of life while keeping them fixated on events that will eventually have no consequence on their quality of life. The Jersey Shore, American Idol, the Bachelor, an 18-game NFL season that will extend the nation’s fixation on football for several more weeks…shall I continue?

Arum’s study found that students spend less time studying today and more time socializing as compared to their peers from a decade ago and blamed students for deliberately seeking easy courses full of fluff for their lack of learning in addition to professors and universities that valued research and money more than teaching. Of course, the question still persists of why do universities even waste students’ time by offering students courses full of fluff? And if students really go to college to socialize more than they study, do they really need to waste $30,000 of their parent’s money every year for the privilege of playing Xbox in their dorm rooms with their friends?

Though the value derived from institutional academia seems to be little, this hasn’t prevented the owners of these institutions from raising tuition prices by 29% over the last four years from $84,940 to $109,172 for a four-year private university degree (Source: the National Inflation Association). In fact, if people were to view institutional academia as the money-making business it really is, one would likely conclude that in terms of value for money spent, this business would rank as one of the greatest all time-scams next to the fractional reserve banking system.

Read the rest of this entry »

2011 Financial Meltdown Fast Approaching

leave a comment »

by James West
Originally posted 17 January 2011

www.MidasLetter.com

DESPITE THE BEST EFFORTS BY THE AMERICAN MAINSTREAM FINANCIAL media, the eager PR division of the United States Dollar Ponzi Scheme, to paint the rosiest of rosy pictures for blindly optimistic readers, the stubborn image of a debt-swollen jobless behemoth economy slowly toppling persists. No matter how much U.S. departmental data is primped, polished, and primed, no amount of lipstick is going to transform this fat pig into a princess.


This week’s top harbinger headline points to the fact that the United States is once again bumping its fat head on the ceiling of its spectacularly stratospheric debt ceiling of $14.3 TRILLION dollars. That means an act of congress is once again necessary to lift that limit. The alternative is either a) a revaluation of the U.S. Dollar to reflect the depreciation inherent in Quantitative Sleazing as part of a debt restructuring, or b) default.

Default? Could it be? Never, according to bright-eyed Harvard educated economists and Forexperts.

“The likelihood of a restructuring of US sovereign debt is zero,” says MF global currency and fixed income analyst Jessica Hoversen. “As for a downgrade, while it’s theoretically possible, it is still extraordinarily unlikely.”

Well, that’s one opinion.

The U.S. is Smoking Crack

The rate at which U.S. debt is growing is well beyond what it could repay, even if the economy were to start growing at 10% per year. That’s because the rate of U.S. debt growth in the last 3 years is well over that figure, and since 2002, the debt has more than doubled.

This is the mathematical certainty that is assiduously kept out the press by accommodating editorial boards. Lets try to sift through the contradictory headlines and see if we can’t discern something a little more reminiscent of reality.

First off, the United States Federal Reserve, apparently a private corporation whose self-declared mandate is to be “the central bank of the United States, that provides the nation with a safe, flexible, and stable monetary and financial system”, has been “buying” Treasury bills, the source of U.S. monetary supply, at the rate of, on average, $75 Billion a month.

But that process has resulted in the Fed being exposed in no insignificant way to major losses from credit exposure. But Ben Bernanke, the Fed’s embattled leader, suggested last week that the risks were minimal, because “if the liabilities on the Fed’s balance sheet were to exceed its assets, it would only be so because of rising interest rates in the context of a thriving economy.”

Huh? What kind of pie-in-the-sky theoretical postulation is that? According to a Reuters article earlier today:

“..the Fed’s newfangled policy steps and the potential for credit losses raises, for some experts, the prospect that the Treasury may actually be forced to ‘recapitalize’ the Fed – economist-speak for what others might call a bail-out.”

Bottom line: The Fed, who capitalizes the treasury by buying treasury bills, now needs to be ‘recapitalized’ by the treasury, who will now write cheques to the Fed, so it can continue to write cheques to the Treasury.

This is no oversimplification – this is reality. The Fed is broke, and so is the Treasury. The ability of the Fed to ‘stimulate’ the economy in such a condition does not exist. If the only way to inject capital into the asset-stimulating portion of the economy is to encumber the current account of the same economy with an exponentially greater quantity of debt, the result can only be, at some point, default.

Read the rest of this entry »

Ten Trends for 2011

leave a comment »

by Gerald Celente
Originally posted December 18, 2010

After the tumultuous years of the Great Recession, a battered people may wish that 2011 will bring a return to kinder, gentler times. But that is not what we are predicting. Instead, the fruits of government and institutional action – and inaction – on many fronts will ripen in unplanned-for fashions.

Trends we have previously identified, and that have been brewing for some time, will reach maturity in 2011, impacting just about everyone in the world.

1. Wake-Up Call In 2011, the people of all nations will fully recognize how grave economic conditions have become, how ineffectual and self-serving the so-called solutions have been, and how dire the consequences will be. Having become convinced of the inability of leaders and know-it-all “arbiters of everything” to fulfill their promises, the people will do more than just question authority, they will defy authority. The seeds of revolution will be sown….

2. Crack-Up 2011 Among our Top Trends for last year was the “Crash of 2010.” What happened? The stock market didn’t crash. We know. We made it clear in our Autumn Trends Journal that we were not forecasting a stock market crash – the equity markets were no longer a legitimate indicator of recovery or the real state of the economy. Yet the reliable indicators (employment numbers, the real estate market, currency pressures, sovereign debt problems) all bordered between crisis and disaster. In 2011, with the arsenal of schemes to prop them up depleted, we predict “Crack-Up 2011”: teetering economies will collapse, currency wars will ensue, trade barriers will be erected, economic unions will splinter, and the onset of the “Greatest Depression” will be recognized by everyone….

3. Screw the People As times get even tougher and people get even poorer, the “authorities” will intensify their efforts to extract the funds needed to meet fiscal obligations. While there will be variations on the theme, the governments’ song will be the same: cut what you give, raise what you take.

4. Crime Waves No job + no money + compounding debt = high stress, strained relations, short fuses. In 2011, with the fuse lit, it will be prime time for Crime Time. When people lose everything and they have nothing left to lose, they lose it. Hardship-driven crimes will be committed across the socioeconomic spectrum by legions of the on-the-edge desperate who will do whatever they must to keep a roof over their heads and put food on the table….

5. Crackdown on Liberty As crime rates rise, so will the voices demanding a crackdown. A national crusade to “Get Tough on Crime” will be waged against the citizenry. And just as in the “War on Terror,” where “suspected terrorists” are killed before proven guilty or jailed without trial, in the “War on Crime” everyone is a suspect until proven innocent….

Read the rest of this entry »

Desperation sets in: More than 100,000 people apply for low paying flight attendant positions with Delta Air Lines

leave a comment »

From The End of the American Dream
(link here)
Posted originally Dec 16, 2010

ALL ACROSS AMERICA, JOB SEEKERS ARE BECOMING iINCREASINGLY DESPERATE. Today, unemployed Americans often find themselves competing against hundreds or even thousands of other job applicants for the same position. An absolutely stunning example of this happened recently when more than 100,000 people applied for just 1,000 open flight attendant positions with Delta Air Lines. The starting salary for these positions is only “in the upper $20,000s”, and serving peanuts and sodas to cranky passengers can get really old really fast. But this just shows how desperate people are becoming. For many unemployed Americans, any job is a good job at this point. Right now there are approximately 5 unemployed Americans for every single job opening, and 6 million Americans have been out of work for 6 months or longer. When you get that many unemployed people fighting over so few positions the desperation in the air becomes almost palpable.

For most Americans, all they have to offer in the marketplace is their labor. But today there is a tremendous shortage of jobs.  Even job openings that were once considered to be “undesirable” are now being flooded with applicants.

The following are some more examples of the desperation that is starting to set in around the nation:

• More than a thousand desperate job seekers recently lined up to apply for temporary positions paying between $8.25 to $9.75 per hour picking, packing and shipping orders for Zappos.com.

• One 54-year-old woman in California recently went to apply for one of four county clerk positions and discovered that she was competing against over 2000 other applicants for those four spots.

• Recently more than 500 desperate applicants submitted applications for just 120 positions at a new IHOP restaurant in the Washington, D.C. area.  The new positions pay just $3.32 an hour plus tips.

• Several months ago, thousands upon thousands of people lined up at the crack of dawn for a chance to get an application for one of the 400 openings at Ford’s plant in Chicago’s Hegewisch neighborhood.

The positions only pay 15 dollars an hour plus benefits, but that was enough to draw massive crowds of job applicants. In fact, the crowds were so immense that many applicants were turned away without receiving an application even after waiting for many hours.

Read the rest of this entry »

Preparing for the Big One, coming soon…

leave a comment »

by Deepcaster
Originally posted Nov 24, 2010

The pace and severity of financial crises has taken an ominous turn for the worse…. With one crisis seemingly begetting another, and the fuse between crises now getting shorter and shorter, the world economy is on a very treacherous course.” –Stephen Roach, Morgan Stanley, May, 2010

“Wherever we look at the world economy today, we see a wall of risk… and potential financial catastrophe. We see a large number of virtually bankrupt major sovereign states (US, UK, Spain, Italy, Greece, Japan and many more) teetering atop a financial system that is bankrupt, but is temporarily kept alive with phony valuations and unlimited money printing… The consequence of this rescue mission will be a hyperinflationary depression in many countries, due to many currencies becoming worthless.”
–“The Sovereign Debt Disaster”, Egon von Greyerz – Matterhorn Asset Management Zurich, February 23, 2010

“…full force of the economic crisis will hit us next year… The problem will get bigger before things can get better…”
–Angela Merkel, German Chancellor, November 11, 2009

“What this crisis reveals is a broken financial system like no other in my lifetime”
–Paul Volcker, Former Chairman, U.S. Federal Reserve, November 16, 2008

“This is going to be one of the worst economic downturns since the Great Depression.”
–Nobel Laureate Economist Joseph Stiglitz, April 25, 2008″

“Right now, the rest of the world owns $3 trillion more of us than we own of them. In my view, it will create political turmoil at some point. Pretty soon, I think there will be a big adjustment.”
–Warren Buffet, speaking at the University of Nevada, Reno, January, 2006

“We’re clearly on an imprudent and unsustainable fiscal path. Our current liabilities and unfunded commitments as of the end of the last fiscal year amounted to over $43 trillion, up to $13 trillion in one year alone.”
–David Walker, U.S. Comptroller General, April 11, 2005

“America has no better than a 10% chance of avoiding economic “Armageddon.”
–Stephen Roach, Chief Economist, Morgan Stanley, Boston Herald, November 23, 2004

Read the rest of this entry »

Ghost estates and broken lives: the human cost of the Irish crash

with one comment

by Michael Savage in Dublin and Donald Mahoney in Manorhamilton
Posted in The Independent on 17 November 2010

 

A man begs outside Anglo Irish Bank in Dublin’s city centre AFP/GETTY IMAGES

THEY STAND EMPTY ACROSS IRELAND: 300,000 UNOCCUPIED HOMES, A SILENT REPROACH to those who built them believing that the country’s economic boom would never end. As Europe’s finance ministers laboured in vain to reach an agreement on how to ease Ireland’s economic misery last night, the so-called ghost estates were an awful reminder that the “survival crisis” the politicians were warning was under way had already hit ordinary people.

Dave O’Hara was one of those who bought into the “Celtic Tiger” at the beginning of the decade, eschewing a seven-generation family tradition of carving headstones in favour of a piece of the country’s building boom. He founded a firm that constructed bespoke windows and doors for the thousands of upscale homes being built. The firm grew into a multimillion-euro enterprise, until the recession – and the collapse of the building industry – hit in September 2008.

Now his company is in liquidation, and Mr O’Hara, 41, who has one child, is on the dole. He owes the Bank of Scotland more than £850,000.

Like many others, Mr O’Hara’s anger is aimed at the banks, which have already been bailed out and seem destined to force the government to seek further help of some kind from Ireland’s European partners. “Everyone is responsible for their own actions, but the burden is being brought to bear on the people on the end of the line. In Ireland right now, it’s better to owe £40m than £40,000. The people who have sinned the most are suffering the least,” he said, sitting in his cottage along the borderlands between Leitrim and Sligo, in the boggy north-west of the country. “I don’t know what’s coming, but I know what we’ve got isn’t going to stay. I’ve lost all faith and confidence in our system.”

Read the rest of this entry »

The US$200-Trillion Debt which cannot be named

leave a comment »

from The Daily Bell
Posted originally October 28, 2010

The scary real U.S. government debt … Boston University economist Laurence Kotlikoff says U.S. government debt is not $13.5-trillion (U.S.), which is 60 percent of current gross domestic product, as global investors and American taxpayers think, but rather 14-fold higher: $200-trillion – 840 per cent of current GDP. “Let’s get real,” Prof. Kotlikoff says. “The U.S. is bankrupt.” Writing in the September issue of Finance and Development, a journal of the International Monetary Fund, Prof. Kotlikoff says the IMF itself has quietly confirmed that the U.S. is in terrible fiscal trouble – far worse than the Washington-based lender of last resort has previously acknowledged. “The U.S. fiscal gap is huge,” the IMF asserted in a June report. “Closing the fiscal gap requires a permanent annual fiscal adjustment equal to about 14 percent of U.S. GDP.” This sum is equal to all current U.S. federal taxes combined. The consequences of the IMF’s fiscal fix, a doubling of federal taxes in perpetuity, would be appalling – and possibly worse than appalling. – Globe and Mail (Canada)

Dominant Social Theme:
What? That can’t be. Let’s not talk about it.

Free-Market Analysis:
These numbers cited by Laurence Kotlikoff have been all over the Internet for a while now but have not been much reported by the mainstream press. No surprise there, but we are a bit shocked that the Globe and Mail chose to pick them up. Was it a slow news day? The story itself has been around since August.

Because the Globe and Mail has covered it, so shall we. Here is our question: Given these numbers, how can banks and institutions purchase US fixed income securities, let alone the dollar? What sense does it make? These large institutions, with fiduciary responsibility, are basically buying a bankrupt product. And it is not just the US. The entire Western world (maybe with the exception of Germany) is pretty much either flat broke or worse than broke.

For us, this shows as much as anything else how controlled the system really is. It’s just a fiction and has little resemblance to reality. Institutions are said to flee to the “safe-haven” of the US dollar when they are nervous. But as Kotlikoff shows, the safe-haven is nothing of the sort. When one adds up all of the various commitments that the US has made abroad and at home (to its own citizens) the debt begins to add up to the monstrous, impossible number Kotlikoff arrives at.

So we ask: Can’t bond buyers at large institutions add? How are they comfortable buying the bonds of a bankrupt entity? And why has it taken until 2010 for a mainstream economics professor to measure the “real debt” of the US and speak out about it? Heck we’ve known this for years now – and so have you! If the Western monetary system were a person, it would long ago have been declared clinically insane and shipped off to an asylum. What is worse is the conspiracy of silence about the “real” US debt, which we have to assume parallels at least partially the debt of other Western nations. The whole of the West is busted, pretty much – and the “austerity” plans being put in place are just more window-dressing, albeit of a very nasty sort.

Of course there are several ways out of this dilemma. Probably the easiest one is inflation verging on hyperinflation. If the US prints enough dollars-from-nothing (as Bernanke seems intent on doing) perhaps the dollar will lose so much value that the growing debt will be partially erased. Of course this basically debases the goods and services that people currently count on. The services will remain as a kind of legal fiction – funded but not worth anything.

Read the rest of this entry »