There is a growing angst in this country which manifests itself differently for everyone. The unease is palpable as very few can put into words the exact source of it, but they know its there. This is part and parcel of what the OWS (occupy wall street) demonstrations are all about - misdirected angst. In our last blog we discussed how rising prices are not possible in a capitalist society with sound money. Today we will discuss another little known fact about a capitalist society with sound money, Unemployment is not possible either. Did you know the word unemployment was not added to Webster's dictionary until the 1930's. For centuries, with the using of sound money there was no such thing as unemployment.
It took the creation of the FED in 1913 less than 20 years to generate a problem (unemployment) where there never was one before. Now, just like with rising prices - people think rising unemployment is the natural state of being; when in fact it is created intentionally by the "haves" to lower the real wages paid to the "have nots" here in America.
It wasn't too long ago where a college degree guaranteed a job for life. Nowadays, not only does that degree not even guarantee work - but it usually comes saddled with a student loan the size of a mortgage which is not erasable by bankruptcy. In other words, you have to pay it. As we all know - debt is the money of slaves. So in effect, those with student loans outstanding lucky enough to find jobs, are little more than indentured servants of the state. And you thought slavery was abolished - lolol
As the best & brightest this country has to offer graduate College (in debt to their eyeballs), they tend to gravitate towards one of the 3 power professions - Politicians, Lawyers, and Bankers. Problem is, none of those professions create anything tangible as they are all parasites feeding off those who produce. Meanwhile, the people who actually make things (and create jobs) have to kiss the rings & line the pockets of said parasites long before ever opening a business and/or producing anything. Until this fact is addressed, unemployment will continue to grow like a weed.
My apologies in advance if this comes as a shock, but wages paid in this country are much too high. If you are an employer, then you know what I mean. If you are an employee, chances are you lack the proper vantage point (and education) to understand why real wages paid in this country are headed significantly lower (including yours). Looking big picture, why would any employer hire an American worker (with an obscene list of Gman given rights) for 10 bucks an hour, when there are Billions of people worldwide willing to do the same job for 10 bucks a day. Oh, and without all the Gman granted employee rights......
Most of the world is willing to work today for the paper equivalent of a dollar an hour. Market forces will demand wages paid here in the US get more in line with wages paid around the world. If they don't, Unemployment will continue to grow. While it may seem unimaginable today, within a decade labor here in America will be working for the equivalent of a dollar an hour, just like the rest of the world does today. If you expect unemployment to fall there really is no alternative, as the Haves can either pay a 150 million Americans less - or pay billions worldwide more. You don't need a Doctorate in Economics to know how that will progress.
As if high real wages & obscene government regulations aren't driving jobs overseas fast enough, the intellectuals in Washington currently have the corporate tax rate set at the 2nd highest of any nation on the planet. Only Japan (another comatose economy) has a higher tax rate. I doubt seriously, our leaders will even acknowledge there is a connection between high tax rates & growing unemployment.
Perhaps the most sinister element of Gmans behavior is his marginalizing of the problem by changing the way the "unemployed" are counted. John Williams at shadowstats claims unemployment today stands at 26% if measured like it was in the Jimmy Carter era. Those are depression level numbers. So rigging the unemployment percentage down to, say 9% - like they claim it is today - has the effect of defending the "haves" from insurrection by convincing the "have nots" things are not as bad they seem. Goebbels would be proud.
For those who care to look at history, unemployment skyrocketed in the 1930's & 1970's. Immediately following the rise in unemployment came HUGE US Dollar devaluations and ultimately a sharp fall in real wages paid to employees. Historically, its a familiar script. Those playing the "great game" need a rise in unemployment today, to properly foment (ignorant) demand for the coming devaluation tomorrow of our beloved dollar. The devaluation is necessary to bring the US labor market back in balance with the rest of the planet. We can't just start paying people here a dollar an hour as they would not accept the pay cut. What they will do however, is allow themselves to be boiled slowly like the "proverbial frog" as the US $$ is devaued by 90 percent over the next decade.
The net effect a decade from now, will be to pay workers everywhere the equivalent of a dollar an hour. Sure, it will be called ten bucks an hour - but the purchasing power of that ten bucks a decade from now will be the same as one dollar today. Working man does not comprehend what is happening to his wages because he does not understand the distinction between real wages & nominal wages. This is the source of the national angst. Working man is focused on how many $$ he gets for his work (nominal) instead of what those $$ can buy (real). So he loses ... in spades. To properly comprehend what is happening to you, it is imperative you understand the distinction between nominal & real.
What is perhaps most interesting about the con is working man knows he is getting shafted, but cant figure out who or what or how - because he can't see it. His nominal paycheck is as high as its ever been, but that check does not go as far as it used to - because the purchasing power of the actual wages paid is falling. In my parents era, it was possible to work a menial job, like say a janitor and support a wife & kids on that salary. Today, there is no chance of that for a janitor - because real wages paid in this country are falling at a staggering rate. Even worse, the current rise in unemployment portends that the falling rate of real wages paid is about to accelerate to the downside. Fcking Brutal.
For 200 years in this country, It was part of the American dream that while the woking man toiled - he did so secure in the knowledge his children would have it better. Ours may well have been the last generation in America to be raised by parents who believed that. Despite the negative tone of today's blog, the news is not all bad. Now that you know about the coming dollar devaluation, there is nobody to blame but yourself if you do not start storing a signifigant portion of your wealth in something other than US dollars. Gold & Silver are ideal. Buy an ounce…take the ride.
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