We Rain On Mr. Sunshine's Parade

August 27, 2008

Elaine Meinel Supkis

I have to go out and fix a roof today so this is a quick story: Mr. Sunshine is an economist who says some very dumb things at Seeking Alpha. I and other readers tear him apart. Fun times, go enjoy. Also, we notice that our anger about the ending of the M3 data was correct, the news about the global monetary system still shows the collapse continuing. Even as commodity inflation fades temporarily, the underlying trade mess still continues. The US saw its trade deficit fall but this was 100% due to the weakening dollar. The cost of this fall in imports was very, very high: we paid through the nose for oil. Everyone in America is significantly poorer thanks to this.

First, Mr. Sunshine Man attacks the heros who struggle to keep the M3 data going despite the criminals at the Federal Reserve hiding this information:

Mark Sunshine at Seeking Alpha: Prominent Economists Make Up Data That Doesn't Exist

Many so-called “prominent economists” in the United States and Great Britain were late to understand Federal Reserve monetary policy and are now covering up their past incompetence by making up data and presenting it at as both authoritative and accurate. The issues surrounding the destruction of money supply as result of the credit crisis were obvious but often ignored during the second half of 2007 and the first half of 2008.

Despite having the Great Depression’s monetary history as a guide, many economists that were critical of Federal Reserve policy in the international media didn’t bother to think before talking. These economists didn’t understand that the Federal Reserve’s emergency liquidity facilities were designed to prevent a wholesale destruction of the monetary base and that once the money supply was stabilized, the Federal Reserve could resume its current hawkish stance.

Here is my reply:

This is Elaine Supkis of Culture of Life News:

I was one of the many people who protested very loudly when the Fed capriciously suddenly said, no one needed to see M3 numbers anymore. A number of central banks still publish this data but not the privately-owned Federal Reserve!

When the Fed made that announcement back when we were at the very peak of the housing bubble, oil inflation was just beginning to really take off. I figured, this M3 data was being terminated because Bernanke and Greenspan, as one left office and the other entered, knew that we were on the eve of global hyper-inflation.

And I was right. Immediately, inflation took wing and shot upwards. This is very significant because it happened precisely when asset values of things like properties, etc. began to lose value, rapidly.

A classic situation that M3 helps track was this rapid wealth destruction in assets running during a raging rise in commodities. We saw this in the past like in the stagflation years of the seventies, for example.

We know from history, the only cure for this is to raise interest rates. Instead, now we are 'driving blind' and the first wave of hyper-inflation has hit shore and the next is definitely on the horizon. Until the Fed and the Bank of Japan cease making loans below the rate of real inflation of COMMODITIES, these future inflation waves will destroy the value of global trade monetary icons. Already, the world's #2 economy, Japan, has killed its currency to the point, even the Japanese don't want it anymore.

Now, the #1 economy has set out to do the same. The frightened Europeans are trying desperately to up the value of the dollar but they will fail. Not with both China and Japan, the #2 and #3 economies, flooding Europe with exports or blocking European exports to third parties like the OPEC nations, etc.

For ultimately, none of this is really about monetarist values. It is all about TRADE. With 'free trade' we have a system of 'beggar your neighbor' trade that is extremely hostile and dangerous. The only way the US can get out of this trap is to install tariffs and barriers. This is because we are the world's #1 trade deficit nation. This is utterly unsustainable.

And when we look at debt, trade and monetary policies all at once, we then understand, the 'money creation' business is just a symptom, not a cause.

Also, where does Seeking Alpha find these 'economists'? Mr. Sunshine is pretty close to the bottom of the pit where these poor guys live.

I didn't mention Mr. Sunshine's attacks on the good people who try their best to keep us informed about the M3 information. Other outraged readers tore into him about that. And they are right and Sunshine is a rain cloud. Or cloud coo coo land.

The news this morning clearly shows that the continuing mess is due to the US trying to weaken the dollar so we can increase exports and dampen US appetites for imports. This is a cruel way of balancing trade. Tariffs feed Federal revenues. Whereas a weak dollar kills the consumer and the savers at the same time. We get inflation in import prices while getting no relief with taxes! Our sensible ancestors understood this very clearly. The deflation cycle of the Great Depression spooked economists and politicians to the point, they misunderstood what happened back then and thought, the way to avoid depressions is to have no barriers to trade. This childish ideal is proving to be very bad for the workers in the US which as become the main destination of global exports.

Orders for Durable Goods in U.S. Unexpectedly Gain

(Bloomberg) -- Orders for U.S. durable goods unexpectedly increased in July, indicating growing demand from abroad is still helping companies weather a slump in consumer spending.

The 1.3 percent gain in bookings of goods meant to last several years matched the previous month's rise, which was larger than previously estimated, the Commerce Department said today in Washington. Excluding transportation equipment, orders climbed 0.7 percent after a 2.4 percent increase a month earlier.

Sales overseas have helped U.S. factories withstand the three-year housing slump and tighter lending rules that have caused Americans to cut back. Still, economies abroad are now also weakening, signaling companies will not be able to count on sustained gains in exports.

The ICE raids show that US manufacturing has coped with inflation by bringing in a hoard of illegal aliens and undercutting US working wages. This is why the US has seen no worker agitation for higher wages. The illegal aliens have to be silent or else they get deported. This is the cure for inflation. Like Japan, depressing wages. This depresses the local economy and it is spreading. As the dollar weakens, this hammers worker's buying power and causes all assets purchased by workers to decline in value even as the things needed for survival, food, fuel and medicine, shoot upwards.

This causes a 'hand to mouth' economy to develop and this is a third world economy. Taxes are cut but this worsens the credit rating and the need to pay interest to foreign powers makes the trade situation worse, not better. The cruel methods of dealing with trade imbalances rests ENTIRELY on beggaring the working class.

Lockhart Says Fed's Rate Is `Consistent' With Slower Inflation

(Bloomberg) -- Federal Reserve Bank of Atlanta President Dennis Lockhart said the central bank's interest-rate stance is ``consistent'' with slowing inflation, while signaling readiness to raise borrowing costs if needed.

``Current Fed policy is consistent with an easing in overall inflation given the dynamics of the economy,'' Lockhart said in the prepared text of a speech today in Atlanta. At the same time, ``I am mindful of today's elevated risks and am prepared at any point to change tactics to ensure inflation expectations do not become unanchored.''

Policy makers agreed on Aug. 5 that their next change in rates would be an increase, according to minutes of their meeting released yesterday. A number of officials concerned at rising risks of inflation favored an increase earlier than traders expected, the minutes also showed. Lockhart will vote on rates for the first time in 2009.

The first wave of inflation has passed. The second is on the horizon. We see it pretty clearly. The only tool left to stop this commodity wave is for the US workers to be totally destroyed like the Japanese workers. This takes us to the election this year:

Financial Crisis Is Absent From Agendas of Parties, Candidates

(Bloomberg) -- The U.S. is facing the worst financial crisis since the Depression. You would never know that from the Democrats' platform in Denver or its Republican counterpart, or from listening to Barack Obama or John McCain.

While both candidates have bemoaned the ravages of the subprime crisis, they have yet to spell out steps for tackling it, such as using taxpayer money to shore up banks and housing.

``They fail to come to grips with the biggest danger that is going to hit the next president in his first few months in office: the crisis in the capital markets,'' said David Smick, a Washington-based consultant to hedge funds and author of ``The World is Curved: Hidden Dangers to the Global Economy.''

The born again Christians want no abortions. This way, women will be forced to have children while having declining incomes! Japan's workforce has nearly totally ceased to reproduce itself and is now declining, rapidly. The US will do the same. Neither candidate talks about Japan's policies. This is peculiar but of course, I must be the only other human on earth who is tracking Japan's economy and analyzing its bad effects! I worry much more about Japan than China for obvious reasons: we are imitating the worst aspects of Japan's 'economic miracle'. China is very dynamic. The workforce, quite restive.

Japan is quiet. Dying. Like the older US industrial workforce, the workers there accept all the hammer blows that make Toyota and Sony stronger and themselves, poorer. I am very alarmed about this and seeing unions give up the ghost here is scary. The unions support Obama but he is not a union supporter, himself. He is part of the New World Order. The New World Order is nervous about McCain because his literally insane.

Reagan was a happy, friendly senile old man. McCain is a bitter, angry, ill tempered senile old man. And this is the only major difference between the two AIPAC candidates. But then, analyzing things so they make sense is very difficult. Since tariffs have been removed from the table, it is nearly hopeless, trying to fix things. We can't fix things unless we first understand what is going on. And to do this, we must look into history. And to understand history, we have to stop accepting old chestnuts of wisdom and look for walnuts of intellectual understanding from a new perspective.

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Comments

[Buffalo Ken]

its 11:11 or very close, does everyone know where their children are?

Peace Elaine - I love the picture. Irish Meade is so fine.

oh now i think its 11:12

[DrKrbyLuv]

The Democratic convention is a joke and rest assured the Republican convention will be as bad or worse. Last night, one of the talking heads put Ted Kennedy's speech in prospective when he happily proclaimed "this is a great moment, the torch has been passed from the Kennedy dynasty to the new, Obama dynasty."

This is at once the most bizarre and accurate statement so far. We are celebrating the fact that to be a viable presidential candidate one must be from a privileged background?

Estimates are that the two campaigns will each spend close to a billion dollars on this election. This is why we have two terrible candidates, 99.99999999999% of the population is excluded. We allow, by design, to have the plutocrats give us a multiple choice of two hand picked candidates.

That's why I'm attending Ron Paul's "Rally for the Republic" in Minnesota. We cannot rely on the benevolence of the plutocrats or the "wisdom" of Washington.

Successful political change starts with a few that inspire the many. I want to help push the move to the tipping point, whereby the many will take the power from the few.

[DrKrbyLuv]

[Buffalo Ken]

you know i just posted about the deck above on another article - oh well. Elaine you site doesn't seem to "move around" as fast as it used to....at least not for me.

Peace,
Ken

[Buffalo Ken]

dang, i always seem to miss the "r" in you...

correction: "your"

[PLovering]

Ho DrLuv,

Love the picture(s).

[Buffalo Ken]

not to belabor this, but if two of us were drinking the meade, i wonder who would get which glass. One of em is more than half empty --- the other one seems to have more.

I'd let the other person choose because there is plenty in the bottle and I suspect plenty more bottles to go around.

Take one down pass it around....

My girls sang that song all the way from 100 on down. I was impressed.

Peace,
Ken

[Elaine Meinel Supkis]

My glass was the one that was more than half empty. But my husband cheated. He poured a new glass while I was fiddling with the camera.

[GK]

http://www.marketoracle.co.uk/Article5990.html

The United States of America is the Next Argentina

[Darius]

ahh Mead, the drink of the kings - try to get your hands on the Jadwiga Mead, you will not regret it :)

http://www.realbeer.com/edu/mead/polish.php

The story goes that this recipe was created to celebrate Queen Jadwiga and King Jagiello's wedding. That was about 635 years ago in Krakow. A beautiful city as well...

[Bear of Little Brain]

GK: thanks for the link. I then clicked on another item:
http://www.marketoracle.co.uk/Article5992.html
which talks about an American Monetary Act and mentions this site:
http://www.monetary.org/

There it features a Dennis Kucinich video and has the interesting lead-in to various articles, "Here's why the AMI considers the Austrian School as monetarily illiterate and not having done their homework". Since Jim Puplava is always banging on about Austrian economics, I think I'll spend some time checking this out.

Might be of interest to you, Elaine, since Kucinich was one of the candidates you had some time for, as I recall.

[Elaine Meinel Supkis]

The Austrian school is right about half the time. Like a clock. Heh.

And this is much superior to being continuously wrong. Like Yale economists. Or many mainstream pundits.

[G.]

There used to be a brewery up the street called Kelly Creek that
made Mead. We went to a blues concert there one hot Saturday
night and I drank nothing but Mead.Probably about 4 pints of the stuff. It goes down so easy and smooth that it took me by surprise (understatement) Ooooh La La ! Luckily my wife didnt drink too much and I got a ride home with her instead of the police.

[Teddy]

Cheney should be immediately dispatched to China to tell Mr Yongding to chill out. This is no time for nationalism. He must be made to understand that whether you are a creditor or debtor, debt doesn't matter nor does sovereignty. These Fannie and Freddie loans are basically symbolic, non-recourse, make believe fairy tales. Yu knew damn well what his country was buying. We can repackage the paper if that will make him feel better, but there's a lot more debt to be accumulated as we make our way up the Milky Way to debt infinity and a one world government and standard of living. Does Yongding think that all that US technology and all those jobs were transferred to his country for free? Surely, he doesn't still believe in Santa Claus.

[OC]

Teddy,

He is China Claus; he fattens u up and serve u as main course for dinner on X'mas eve.

Always, always read the fine print before accepting gifts from Satan Claus.

[Elaine Meinel Supkis]

Sovereignty is all about debt: when you are in debt, you are a servant, a beggar and a weakling. If you are a creditor, you have great powers and you own the debtor.

[Teddy]

Evidently, Mr Yongding didn't read the fine print of Fannie and Freddies mortgage instruments that his government purchased. They are not implicitly guaranteed by the US government. As usual, China, which likes to steal technology if they can't get it any other way, thought they were getting something for nothing. Bill Gates sent Microsoft technology and jobs there, IBM also, the same with Intel, ditto Boeing, and the list goes on and on ad infinitum. Surely, China doesn't believe that the CEO's of these companies are traitors. Do they really believe that capitalists will sell them the rope to hang them with? Does China really believe that with capitalism, there are no losses and only gains in investment? Surely, there can't be the ying w/o the yang. It was all over the internet three years ago about the mortgage Ponzi scheme including Elaine's site, and Elaine says the Chinese read her site regularly. Actually w/o China participating and going hog wild, there would have been no housing bubble. Greenspan, Bush, Cheney, Bernanke, Rubin, Summers and many others identified China as a reliable source of manufactured goods such that the US would not need to manufacture in this country and China represented likewise, and thus was admitted to the WTO and a complete fairy tale was fabricated by both sides. If China is not happy buying the bonds, which they are still buying, they should stop buying them and buy US value added products, not run around the planet buying up and hoarding all the sources of energy, farmland, and other natural resources. This is a major factor in rising food and energy prices and the commodities boom.

[Buffalo Ken]

If I was China I would be investing in the quality of life for the country's laborors (I suspect they are doing this, but I am not an expert...). I'd also be very interested in Africa. An African - Chinese relationship could very well be a true "win-win". Mutually beneficial if you know what I mean.

[Elaine Meinel Supkis]

Teddy, hate to tell you this, but the US has REFUSED to sell China higher value goods in the past. This is why China is buying it elsewhere. The US didn't want China to have any high technology.

Talk about a stupid thing. The Chinese have something we seem short of: brains! They are the technological future, not the US. I once taught at a technical school.

99% of one of our computer design technology classes was all foreign and half of them were Chinese or Indian.

[Teddy]

Elaine, you should get a job as a lobbyist for China! I mean it! China is all dressed up with no place to go. They polluted their environment and can't feed nor energize themselves. They will cause trouble for the rest of the world in the future because of this. The five beanballs they threw at the US Olympic baseball team with one of them hitting our star player in the head is a sign of what's to come from them. They don't play fair.

[Buffalo Ken]

Hey Teddy maybe Elaine already is. Who knows and what difference does it make. Actions speak louder than words and just now it seems as if China is KICKING the USofA's ass - appropriately so in my humble opinion.

Ain't this obvious - you sound real pissed off and I think that has been a big problem with why things have gone so poorly of late for the once "sort-of" proud us of a. It good be so much better but we better stop tying to be a fucking bully. Our military is in shambles and has been getting its ass handed to it. Our congress is full of misfits with little inwit. And I won't even say anything about the "white" place.

What a joke.

[DrKrbyLuv]

Bear of Little Brain - thanks for posting the AMI Kucinich info. I applaud Kucinich's leadership in bringing articles of impeachment against Bush but I reject his ideas on economics. He is correct in his assertion that privatization has often been counter to the prosperity of the people. However, this should lead one to reform - not state ownership.

The state should own and control as little as possible, and then even a bit less. The Austrian school offers a sound alternative to the flawed system Kucinich would prescribe.

http://mises.org/

[Buffalo Ken]

I betcha China already is trying to make deals in Africa. It could go something like this:

1. We will create a "state-of-the-art" facility.
2. Worker safety will be an utmost consideration and will be given top priority.
3. Jobs will be well so that all employees can earn a good living.
4. Hours will be reasonable and mutually agree upon.
5. Etc, etc, etc.

Win-win.

[Buffalo Ken]

Hey - did I type it that way? No matter -- I hope it is understandable.

Peace,
Ken

[Teddy]

Buffalo Ken, worker safety? Reasonable hours? Good living? You are a funny guy.

[Teddy]

Buffalo Ken, worker safety? Good living?Reasonable hours? You are a funny guy.

[Buffalo Ken]

I know I'm funny. Thanks. I think you are a bit out there too! Teddy.

[Buffalo Ken]

But I don't think there is anything funny(?) about (1) Worker Safety; (2) Good living; and (3) Reasonable hours.

Whats the joke here?

[Buffalo Ken]

Thats the question. It is deadly serious to me when I think about my children and for that matter everyone elses.

What was it Elaine was saying about spirals the other day. I've been thinking about spirals for awhile. Anyhow, this ain't no joke.

[Teddy]

Buffalo Ken, since when did China give a damn about workers' rights in their own country?

[Buffalo Ken]

See something about "Cheney" the ultimate "bully-asshole".

http://www.informationclearinghouse.info/article20630.htm

[Buffalo Ken]

Teddy - lets not talk for awhile - you and I. OK - can we agree on that?

[Bear of Little Brain]

Teddy (Bear?):
"They don't play fair."

You've made my day!! I can't stop chuckling. (You have to think back over the modern history of the Olympics to appreciate the joke.)

All the best.

[Teddy]

Bear, seriously, when you intentionally hit a player in the head with a projectile going over 90 mph, and they have to carry him off the field, that ain't funny. When you go on and hit four more players, it's a complete disregard for human life. And how about those underaged gymnasts? All in the name of sportsmanship? What a joke!

[Buffalo Ken]

Elaine - I have a Greatful Dead album and the beautiful women on the cover looks just like you!

Is this a coincidence?

Ah the sun it always comes back (or at least it always has up till now....)

[Buffalo Ken]

well it always has....hasn't it?

[Bear of Little Brain]

Teddy:
Sorry, didn't mean to offend you. I was just amused that you should be so outraged which, probably, reflects badly on me and my expectations. I didn't see the match(es) you refer to but the idea of sportsmanship went out of the Olympic window a long time ago in too many events. In my lifetime both the USSR and the USA have put their ideologies above sportsmanship. If China does the same, they're only following established practice. National 'pride' and personal ambition lead to winning at all costs.

We don't have baseball over here, so I have no idea how commonly intimidation is used, but going for the man is a common tactic in many sports.
If it's truly unacceptable, they'll change the rules.

[DeVaul]

Teddy,

If our government cannot tell the likes of JP Morgan, Goldman Sachs, and other financial pirate organizations to "chill out" without first "bailing them out", how are we going to tell a nuclear armed superpower that hates us to "chill out"?

I don't think you have thought this out very carefully.

If we let American companies off the hook for their bad mortgage debt, but try to stick it to the Chinese, they are not going to view this as "playing fair" -- something you seem to be very concerned about.

[Teddy]

DeVaul, surely you jest. I was merely playing the role of devil's advocate. From my post above: "A complete fairy tale was fabricated by both sides". The viability of this global economy or New World Order concept is in direct contradiction to my Orwellian view of human nature. And since when did I say that people act morally? Better read or reread ANIMAL FARM. Both sides have created a monster, and we will be lucky if World War III is not a consequence of this fairy tale.

[OC]

Teddy,

We are the grass which elephants are feeding or trampling on.

When the elephants make or or love; we get to be stepped on.

The world is their oyster; we are just the ones that get shitted on. Their rules apply to us and only to us.

Get used to it.

[Elaine Meinel Supkis]

China was a delightful host for the Olympics! About bean balls: I played baseball for many years. The batter has the ability to STEP BACK from a bad throw!

I was catcher for much of my misspent youth. I know intimately how the ball looks from behind the plate. If batters are too aggressive and crowd the plate, they get hammered. Even if a pitcher aims for the head, the batter can simply step aside! They have brains, you know.

And so it goes: we love to think we are right even when we are being very stupid. The US has crowded both China and Russia at the plate. Both are now pitching one bean ball after another. Instead of stepping the FUCK BACK, the US continues to crowd the plate while whining about unfair throwing???

HAHAHA. Isn't that stupid?

[whine and cheese]

China just got a huge oil deal in Iraq in exchange for not backing Russia.

China stands to win from Cold War 2.0.

[Elaine Meinel Supkis]

PS. The catcher knows better than anyone when aggressive batters lean into the plate to intimidate the pitcher and interfere with the catcher. I sometimes would even warn them to lighten up so I can see what is going on. No unpleasant surprises.

The US SPONSORED the attack on Russian peace keepers. This is now escalating into WWIII. Is there some Austrian prince we can send to Kosovo to be shot? Then we can go full force into WWIII....

[tim]

Elaine, who are you? What are your credentials? Can I assume you have but few since I could not find any in your profile? Why should anyone listen to you?

[Elaine Meinel Supkis]

My kids often say that, too. "Mom, why should we listen to you?' Except they grew up and now listen to me!

My credentials: I was born at Yerkes Observatory at the cusp of the Great Trigon of Jupiter. I have been hit by lightning bolts several times. My father was an OSS officer who is one of the founders of the CIA. I grew up cheek and jowl with the US and global ruling elites.

I know everyone and they all hate my guts because I talk about the Outer Darkness, magic and lightning bolts. They hate this and want this badly. Nothing would please them more than to harness the powers of the Darkness and lightning bolts. Instead, they settle for the power of nuclear bombs and fake funny money.

Both things which menace us. If you disagree with me, that is OK: you are NORMAL, tim, alas. Also known as 'easily fooled.'

[Teddy]

Elaine, tell your story to Matt LaPorta and the US Olympic baseball team. You don't know what you're talking about.

[Elaine Meinel Supkis]

Teddy, I would LOVE to do that. Geeze.

You know, the US always whines when we lose. When we win, we go nuts and claim, this was all due to us being loved by god and being the good guys. We then go crazy, pumping our arms and screaming, 'We are NUMBER ONE!'

We have to grow up some day.

[Teddy]

Elaine, the US baseball team beat China 9 to 1, but that's not the issue. Do you think that Matt LaPorta, who will probably be a future major league baseball star, or for that matter anybody would purposely put their head in the path of a baseball traveling over 90 mph or has the ability to get out of the way each and every time when he's not expecting it? Get serious!

[Buffalo Ken]

In baseball individual get beaned all the time. It is part of the game.

Teddy - its a new day.

Today is the first day of the rest of your life.

Peace,
Ken

[Buffalo Ken]

Sometimes don't you think we have to be mature enough to "agree to disagree" without any military or other mayhem? Adults should be able to do this - it is in their own interest.

I have got to go out and get some Irish Meade.

By the way Elaine, the one tree in the background of your picture is looking a bit sickly.