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Our Phantom Economy

Tyler Durden's picture




 

Submitted by Charles Hugh-Smith of OfTwoMinds blog,

Those who believe that phantom recoveries and phantom metrics can be substituted for reality are in for a shock in the next downturn. 

Stripped of artifice, there are only two kinds of media stories: those that support the status quo narrative, and those that are skeptical of that narrative.
What is the status quo narrative? Simply this: not only is this the best possible arrangement of labor, assets and money, it is the only possible arrangement of labor, assets and money.
 
It is impossible to challenge a system that is the only possible arrangement; the only option is to accept it.
 
In effect, the mainstream media is a vast Psychological Operation (PSYOPS) aimed at persuading the American public that the status quo Imperial system of predatory, debt-based crony-capitalism that benefits the few at the expense of the many is not just beneficial to all its debt-serfs and welfare recipients, but it is the only possible system--there is no alternative(TINA).
 
One of the greatest and most important PSYOPS of the Imperial State (U.S. Government) and its faithful lapdog the mainstream media is the unemployment rate. As I will show tomorrow, the real unemployment rate is between 20% and 40%, depending on whether you think someone earning $1,500 a year selling stuff on eBay and Etsy should be counted as "employed."
 
The federal government is delighted to count everyone earning $100 a year as employed, and equally delighted to label everyone without a job (even one paying $100/year) who doesn't qualify for unemployment insurance a job market zombie--a once living person who is no longer counted as among the living.
 
These zombies are non-participants in the labor market, i.e. not in the labor force. They might be able to work, and want to work, but they're considered zombies once they're no longer "actively seeking work." But is this the proper metric for measuring the unemployment rate? It is obvious that the unemployment rate should be calculated on the total work force (those of working age 18 - 65 who are not institutionalized or permanently disabled) and those with real jobs, i.e. ones that generate enough income to get close to the poverty line.
 
Here is our phantom economy on display: 93 million people are no longer counted as being in the work force. They are officially declared zombies, and that's how the federal government can claim an "official" employment rate of 5.6%.
 
And here's the work force with full-time jobs, i.e. jobs that might support a household (or half a household) and that might pay substantial payroll and income taxes (unlike the forms of marginal employment that earn a few hundred or few thousand bucks annually).
 
Just as we have a phantom work force--the 93 million not in labor force almost equals the 120 million with full-time jobs--Imperial Rome in its final days had phantom legions. There were no longer any active-duty soldiers in the legions, but the officers and paymasters filed their payroll chits and collected the legion's pay from the out-of-touch remnants of the Imperial Core in Rome.
 
Just as Rome in terminal decline had its phantom legions, we have a phantom "recovery," phantom democracy, phantom GDP and phantom unemployment rate.Those who believe that phantom recoveries and phantom metrics can be substituted for reality are in for a shock in the next downturn.
 

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Mon, 06/15/2015 - 08:20 | 6197306 JustObserving
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real unemployment rate is between 20% and 40%

Every statistic about the US economy is now a lie as David Stockman looks at 5.5% unemployment:

At the present time, there are 210 million adult Americans between the ages of 16 and 68—to take a plausible measure of the potential work force. That amounts to 420 billion potential labor hours, if we accept the convention that all adults are at least theoretically capable of holding a full-time job (2,000 hours/year) and pulling their share of society’s need for production and work effort.

By contrast, during 2014 only 240 billion hours were actually supplied to the US economy, according to the BLS estimates. Technically, therefore, there were 180 billion unemployed labor hours, meaning that the real unemployment rate was 42.9%, not 5.5%!

Yes, we have to allow for non-working wives, students, the disabled, early retirees and coupon clippers. We also have drifters, grifters, welfare cheats, bums and people between jobs, enrolled in training programs, on sabbaticals and much else.

http://davidstockmanscontracorner.com/the-warren-buffett-economy-why-its...

Inflation in the land of the free is not so phantom though - Chapwood Index shows real inflation in US. In 2014, it was 9.7% - 1212% of official US inflation (0.8%)

http://www.chapwoodindex.com/

Mon, 06/15/2015 - 11:05 | 6197840 Scoobywan
Scoobywan's picture

Cool! A doom in September website.

I'll take that bet!

Mon, 06/15/2015 - 11:38 | 6197956 messymerry
messymerry's picture

*** BREAKING NEWS ***

I got my replacement bank card in the mail today.  Not news you say,,,  Well, it doesn't expire until Nov. 2016...and the replacement has a chip in it.  chip chip  hooray!!! The release schedule is being accelerated. 

Make of this what you will...

;-D

Mon, 06/15/2015 - 18:08 | 6199809 Abbie Normal
Abbie Normal's picture

The purpose of the chip is that if your card is lost or stolen, the finder can still use it by faking your signature or using it for online shopping.

Isn't the newfangled chip technology so wonderful as implemented in the USA?

Mon, 06/15/2015 - 08:39 | 6197370 Xibalba
Xibalba's picture

Be grateful they surpress the fiat price of GOLD.  Smile, say THANK YOU, and quietly leave the country for Montevideo or something...

Mon, 06/15/2015 - 12:49 | 6198206 fremannx
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As Stockman warned us about last year... "All Hell is going to break loose." 

 

http://www.globaldeflationnews.com/stockmans-warning-on-the-global-econo...

Mon, 06/15/2015 - 08:12 | 6197317 WTFUD
WTFUD's picture

Everything went wrong when banksters decided they could be businessmen. That's the crux.

Mon, 06/15/2015 - 09:21 | 6197490 RaceToTheBottom
RaceToTheBottom's picture

Agreed, financialization is not reality.

Mon, 06/15/2015 - 12:00 | 6198020 KnuckleDragger-X
KnuckleDragger-X's picture

Yep, but they aren't real bankers either, merely the newest mafia.......

Mon, 06/15/2015 - 08:13 | 6197318 onewayticket2
onewayticket2's picture

extend and pretend.....like musical chairs (but the chairs are being sold and the money is being used in the juke box)....when the music finally stops, people will be shocked at how few chairs (safe havens) are left.....Game Over will be brutal and widespread.

Mon, 06/15/2015 - 08:15 | 6197320 cowdiddly
cowdiddly's picture

Well, when in Rome.............................................................................

Mon, 06/15/2015 - 08:18 | 6197326 BandGap
BandGap's picture

Keep it going!

Use the time to create your "phantom" nest egg.  Prepare for the all-too-real impact after going off the cliff years ago.

Mon, 06/15/2015 - 08:21 | 6197333 Fun Facts
Fun Facts's picture

"In effect, the mainstream media is a vast Psychological Operation (PSYOPS) aimed at persuading the American public that the status quo Imperial system of predatory, debt-based crony-capitalism that benefits the few at the expense of the many is not just beneficial to all its debt-serfs and welfare recipients, but it is the only possible system--there is no alternative(TINA)."

Truth.

Mon, 06/15/2015 - 08:23 | 6197339 WTFUD
WTFUD's picture

The 'Phantom' raspberry blower of old London Town.

Mon, 06/15/2015 - 08:23 | 6197340 madbraz
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"phantom ships with phantom sails, set to sea on phantom tides" - Garcia/Hunter

Mon, 06/15/2015 - 09:34 | 6197527 Low Tech Future
Low Tech Future's picture

ship of fools, sail away from me....

Mon, 06/15/2015 - 13:52 | 6198569 Imminent Collapse
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+1 for Dead reference.  How about this one:  When the music's over, turn out the lights

Mon, 06/15/2015 - 08:25 | 6197345 SheepDog-One
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A real problem is today hardly anyone can actually DO anything, everyone is an administrator, advisor, personal trainer, or just the people of WalMart.

Mon, 06/15/2015 - 08:27 | 6197351 Brazen Heist
Brazen Heist's picture

New phrase: The phantom wealth effect.

When central banks think they can trickle down wealth to the bottom, it ends up being "stuck" at the top, and gambled on financial assets with no real value other than speculation, giving an illusion of wealth.

Mon, 06/15/2015 - 08:55 | 6197410 Kickaha
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When central banks think they can trickle up wealth from the middle class to the ultra-rich, policies are put in place to do just that, because the central banks know how to take care of their fellow oligarchs. While there is no creation of new wealth, there is a massive transfer of wealth from those on the margin of poverty to those possessed of more wealth than they could spend in one hundred lifetimes.  Make no mistake here.  This is real wealth being transferred right now, money that comes in very handy for the purchase of politicians, news outlets, and private armies.  Don't confuse the erosion of fiat with the eventual demise of fiat.

The Tylers predicted many years ago that the oligarchs were coming after the last remnants of middle-class wealth in America - pension funds.  These funds have been and are being pushed into the stock market to achieve the rates of return necessary to meet actuarial assumptions for annual rates of return on investments.  As pre-ZIRP bonds mature, they are being replaced with shares of of Apple and other "can't miss" blue chips.  When the stock bubble finally pops, the oligarchs will be given prior warning, and the pension funds and retail investors will be the bagholders.  Like most folks, oligarchs love it when a plan comes together.

Mon, 06/15/2015 - 09:51 | 6197581 Low Tech Future
Low Tech Future's picture

It isn't worth the paper it's printed on..

Mon, 06/15/2015 - 08:36 | 6197362 mcbond
mcbond's picture

#MERS the final kill

 

Five new cases of Middle East Respiratory Syndrome have been confirmed in South Korea and another person has died from the virus, while Saudi Arabia has recorded five cases of MERS in the past week.

http://tersee.com/#!q=mers&t=text

Mon, 06/15/2015 - 09:33 | 6197524 Pullmyfinger
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Should we panic now or later? I'm still recovering from anthrax, ebola and bird flu.

Mon, 06/15/2015 - 18:17 | 6199845 SirBarksAlot
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You haven't heard the latest.  There is no such thing as a virus.

The alopathic medical system we use now was originated by the Rockefellars.

 

Mon, 06/15/2015 - 08:37 | 6197367 Panic Mode
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The Phantom Freedom.

Mon, 06/15/2015 - 08:44 | 6197379 WTFUD
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When you have Eurocrats earning 400 Whoreuros + expenses for turning up in Brussels for an hour per day with a personal assistant and a secretary earning a further 150 Whoreuros per day they'll fight to the last Ukrainian Life to keep that Gravy train Running.

Mon, 06/15/2015 - 08:45 | 6197386 B2u
B2u's picture

The water is beginning to boil and the frog is cooking....

Mon, 06/15/2015 - 08:49 | 6197395 arby63
arby63's picture

Soon, when no one cares and no one votes and no one participates, we will absolutely realize the value of true rugged individualism. This country is entering the beginning stages of massive change. Most won't even pay attention. 

Mon, 06/15/2015 - 08:53 | 6197400 BoPeople
BoPeople's picture

Yes, and even with all of that, in my neighborhood and the business I am in, everything is good.

People still want to buy things and companies still want to make things, so there are good basic fundamentals.

If there has been a failure, it has been in financing and in not aligning the cost of parasitic overhead with that of value added production.

But is it really a failure when the parasites intentionally increase the cost of themselves and thereby undermine the system? I think not.

Mon, 06/15/2015 - 09:15 | 6197460 IRC162
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"If there has been a failure, it has been in financing ______" 

Insert your choice:

The world  police

Insiders and pet projects 

The war on drugs

The war on poverty

Societal collapse

Pursuit of unicorn milk and magic fairy dust. 

Racism, class envy, and division

Antagonization of the taxpayer 

Your Death



So many choices.... 



Mon, 06/15/2015 - 11:08 | 6197846 Armed Resistance
Armed Resistance's picture

Actually there's only one choice: The Federal Reserve and private western central, fiat-based fractional reserve banking. Because without the ability to print money and run deficits, none of the other things could/would exist.

With a fiat printing press you can support any candidate or program, destroy any adversary and promote as much propaganda as you'd like. It truly is the root of all that plagues humanity and I cannot wait for its downfall!

Tue, 06/16/2015 - 08:06 | 6201133 IRC162
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+1 for not taking your eye off the fastball.... You wrapped it up very succinctly sir

Tue, 06/16/2015 - 08:11 | 6201137 IRC162
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+1 for not taking your eye off the fastball.... You wrapped it up succinctly 

Mon, 06/15/2015 - 08:51 | 6197404 northern vigor
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I am sure the real numbers will come out in the media as soon as a Republican president is elected.

Mon, 06/15/2015 - 11:43 | 6197968 A_latvian
A_latvian's picture

You aren't wrong. When an R gains the white house, a lot of this public assistance is going to dry up. It will no longer be profitable to not work. A lot of those 21 Million people will then re-enter the workforce, which will cause a spike in the official unemployment rate. This will get a LOT worse before they get better. Then the scripted revolt against "draconian cuts to fool stamps!" will crop up.

And the cycle will begin again...

Mon, 06/15/2015 - 12:02 | 6198028 sharonsj
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A_latvian:  What public assistance?  Welfare is already limited.  Unemployment insurance runs out.  You can't get disability without a bunch of medical records (and Rand Paul lies about 50% of people on disability having nothing but bad backs), and Social Security is NOT an entitlement.  States actually pay very little in public assistance and food stamps (if you did any research you'd find the red states pay as little $5000 annually for an entire family and food stamps are as little as $10 a month).  In addition, there are no jobs for the 21`million.  There isn't going to be a scripted revolt but a real one no matter who is in the White House.

Mon, 06/15/2015 - 15:23 | 6199058 A_latvian
A_latvian's picture

There's a lot of people not working. But they're still eating!

You can choose to believe government lies. As for me, I will keep my eyes open.

Mon, 06/15/2015 - 18:01 | 6199782 SirBarksAlot
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Yes, then we can thankfully return to the prosperity we enjoyed under "W."

We'll have endless wars everywhere and there will be lots of jobs at arms manufacturers, the military and the whore houses.  And lets not forget those prison jobs, paid and slave labor alike!!!

Vote for Jeb!!

 

Mon, 06/15/2015 - 09:30 | 6197516 Renfield
Renfield's picture

Whole article hits the nail on the head.

<<In effect, the mainstream media is a vast Psychological Operation (PSYOPS) aimed at persuading the American public that the status quo Imperial system of predatory, debt-based crony-capitalism that benefits the few at the expense of the many is not just beneficial to all its debt-serfs and welfare recipients, but it is the only possible system--there is no alternative(TINA).>>

That the MSM propaganda, as transparent and clumsy as it is, works so well is the best reason I can think of to protect children from the government indoctrination system known as "school". No-one with an attention span of more than a week, or basic logic skills, can be taken in by their coverage of economic or geo-political events -- full of opinion, anecdotes, ad hominem, and thought-stoppers -- often with few or no facts. They really do target stupidity. It breaks my heart to see parents STILL letting TV 'babysit' (and brainwash) their kids.

Mon, 06/15/2015 - 11:09 | 6197850 larz
larz's picture

I am a phantom US tax payer

Mon, 06/15/2015 - 11:21 | 6197903 August
August's picture

>>>I am a phantom US tax payer.

Ditto, and it feels good, too.

Sure I'm supporting another set of tax-collecting rancheros, but they destroy fewer lives than those blood-suckers who reside in the center of the web....

Leave the USA.   Now is good.

 

Mon, 06/15/2015 - 17:56 | 6199763 SirBarksAlot
SirBarksAlot's picture

I am an alcoholic.

Mon, 06/15/2015 - 11:18 | 6197884 Non Merger
Non Merger's picture

CHS has really put his balls out on the table lately. 

 

Another accessible article on how things are not as they seem.  Share this one with family and friends who don't "get it" yet. 

Mon, 06/15/2015 - 11:55 | 6198007 Pemaquid
Pemaquid's picture

Let's not forget the millions that collect social security disability while working under the table. Or the thousands with inherited wealth who have never worked a day in their life.

Mon, 06/15/2015 - 12:03 | 6198035 CHC
CHC's picture

How do you count people who no longer are looking for work?  How do you do that?

Mon, 06/15/2015 - 12:06 | 6198040 CHC
CHC's picture

Our entire state had an EBT computer shut down yesterday.  Happened to be in a large supermarket when they made the announcement that EBT wasn't available.  Not a pretty sight. 

Mon, 06/15/2015 - 13:01 | 6198275 lordylord
lordylord's picture

Stock boy must have had a hard time restocking all the doritos, pepsi, and hot-pockets left in people's carts.

Mon, 06/15/2015 - 12:10 | 6198060 yogibear
yogibear's picture

Keep repeating the lies over and over until everyone believes.

Don't observe what's really occurring.

Mon, 06/15/2015 - 12:45 | 6198190 fremannx
fremannx's picture

The largest debt bubble in the history of the world has burst and there is nothing anyone can do about it. Deflationary depression is right around the corner and everything is being sucked into the vortex...

http://www.globaldeflationnews.com/anatomy-of-a-bubble-how-the-federal-r...

Mon, 06/15/2015 - 12:52 | 6198221 I Write Code
I Write Code's picture

One of the best CHS ever.

in for a shock in the next downturn.

How about right now?  Take the red pill.

Mon, 06/15/2015 - 12:59 | 6198267 damicol
damicol's picture

I'm learning from ISIS.

Some of those guys are smart. Look, it makes not the slightest bit of difference if I agree or not with their fucking delusions and phantoms and fucking sky gods.

Fucking superstitious sand pigs do fuck all for me, I just hope they stay where they belong, in a fucking sand dune.

But, they did take over half the ME with nothing more than captured US shit, and scared the fuck out of every other bastard living there.

And it is no secret that fucking arabs, by and large have the IQ of a smarter goat. If Arabs lived in the sea they would be dolphin slaves.

 

But some smart fuckers at ISIS have their tactics just right. Every wanker and shit for brains in Washington is clueless how to stop them.

Every fucking action they take makes them stronger.

Sun Tzu would approve, the conditions are far different now and its not fucking axes swords and pans of boiling oil, Its fucking bombs bullets and fear and terror now..

Its the beheading, yes, I know almost certainly faked up, probably made by the CIA under contract, shitty quality gives it away, but the sheep buy that shit, and so do the soldiers.

They didn't hang around to see if it is true.

Well the fuck wits have scattered so much fucking heavy artillery around the US I can't wait for the uprising to do an ISIS and a ducking US pig op.

Civil forfeiture, and say a fucking word, I dare you, I double dare you, and your fucking head comes off.

hmmm smell the air, the good ole days are coming back.


 

Mon, 06/15/2015 - 13:39 | 6198496 Gambit
Gambit's picture

I am dying! "dolphine slaves"!!!! Hahahahaha... Fucking epic.  Thanks for the laugh!

Mon, 06/15/2015 - 13:11 | 6198327 Jack Burton
Jack Burton's picture

"In effect, the mainstream media is a vast Psychological Operation (PSYOPS) aimed at persuading the American public that the status quo Imperial system of predatory, debt-based crony-capitalism"

Agreed! And the wrost possible offender is this regard is National Public Radio. Their economic reporting has been a total fabrication in favor of the lie. Their international reporting has been pro war, pro imperial and all based on lies. In both cases, NRP lies knowingly, and willfully to aid the Washington concensus of neoliberal crony finance capitalism, and worse yet, total Zionism & neoconservative war mongering. I could go into detail over their morning news, but take my word, it has been all a fucking lie. NRP is like a Soviet or Nazi news outlet, always aiding the liars, always trying to brainwash the people.

Mon, 06/15/2015 - 23:49 | 6200641 hedgiex
hedgiex's picture

The Phantoms are not just in US/EC.

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