U.S. Economic/Financial News
What is the Federal Reserve Trying to Hide?
Sept. 25 (EIRNS)Hearings in the House Financial Services Committee today underlined that the Federal Reserve, backed by the White House, unconstitutionally rejects any and all disclosure of its activities to anyone. What are they hiding?
The criminality and outright treason of the Federal Reserve is threatening to cause a 1923 Germany-style hyperinflationary wipeout of the United States, with its out-of-control printing of money. The Fed has lent, spent, and guaranteed $11.8 trillion in securities bailouts this year, and according to its Richmond branch bank, now guarantees about half of all the liabilities in the entire U.S. financial system. While the Fed has the monetary aggregate of the United States growing at a 20-21% annual rate, bank credit to the economy has been sharply contracting, particularly in August and September, perhaps at a negative 15-20% rate. This intensifying credit crunch simultaneously with skyrocketing money-printing, is a recipe for an early hyperinflationary explosion of the U.S. economy, as illustrated in Lyndon LaRouche's "Triple Curve" diagram.
Most members of Rep. "Bailout Barney" Frank's (D-Mass.) House Financial Services Committee avoided the crucial issue, led by Frank himself. The hearing was held on the subject of Rep. Ron Paul's (R-Tex.) bill to require the Federal Reserve to be audited every year by the Government Accountability Office (GAO). The bill is sponsored by 296 Members of the House; it is dreaded by Ben Bernanke and the Fed. Bailout Barney is trying to contain its impact by a deal to incorporate the Paul bill in some form into "financial regulation reform" legislation which Frank and the White House are working on.
Foreclosures on 7 Million Properties Are Looming
Sept. 24 (EIRNS)The crash in U.S. home prices will resume in the near term, because about 7 million properties that are likely to be seized by lenders have yet to hit the market, reported Bloomberg news today, citing Amherst Securities Group LP analysts. They call this a "huge shadow inventory" that reflects mortgages already being foreclosed upon, or now delinquent and likely to be foreclosed. This figure compares with 1.27 million foreclosures and delinquencies in 2005. The report says that the foreclosure "overhang"i.e., pending seizureshas been boosted by more borrowers going into default, and fewer able to catch up. In addition, changes in state laws, and loan-modification relief efforts have slowed down the time frame for seizing homes.
Home prices further tanked in August, when the median sales price was $177,700, down 12.5% from $203,200 in the same month last year. Also last month, sales of existing homes fell 2.7%, breaking the four-month string of "rosy" statistics constantly cited by the Obama administration.
U.S. Households Getting Much Poorer
Sept. 23 (EIRNS)Economists in Washington have projected that the average American household's real income is in the process of falling by a huge 9.3% (-$4,813/year) from 2007-2010, taking households back to early- to mid-1990s level income. The Economic Policy Institute (EPI) projects that the average household has already had its income cut by 8.1% (-$4,212/year) from July 2007 to now. This is the largest income drop since the Great Depression, and has occurred simultaneously with a loss of wealth by households, of $6 trillion, or $50,000 per household in the United States.
The Institute's projection comes from Census Bureau reports already released, which cover only the milder period of this economic collapse, mid-2007 to mid-2008. As far as poverty of households is concerned, the EPI projects that the national poverty rate will increase to 15.1% by early 2010, even against the extremely low income measure of the official "poverty line"; that child poverty is increasing by 8.6%, to 26.6% of all American children in poverty in early 2010; and that the poverty rate among Black Americans is increasing by 7.3%, to 31.8%.
The heads of these households are not finding work, despite constant claims of an "economic turn-around" by the Obama White House. The Bureau of Labor Statistics (BLS) reported today that long-term unemployment (joblessness for more than 27 weeks while actively seeking work) in August reached 3.2% of the entire U.S. civilian workforce, the highest level in BLS-data history, and well above the 1981 recession peak of 2.6% of labor force.
Of course this is only that fraction of long-term unemployed officially recorded as such and receiving state or fed benefits (5.1 million workers). The real number includes 6 million others who've given up and dropped out of the labor force, and others who don't receive benefits; it is near 8% of the whole workforce, who've wanted a job and been unable to find one for more than six months.
The BLS reported that in August, the number of job seekers per available job reached 6.2.