Outrage in inner cities: the source
$$ in the matrix
by Jon Rappoport
August 31, 2015
(To read about Jon’s mega-collection, The Matrix Revealed, click here.)
“The leader says to his people: ‘In order for me to help you, you have to remain in need of help. You can never rise above your need for me. Catch my drift? That’s our bargain.’” (The Underground, Jon Rappoport)
“Inner city gangs assist political leaders. First, gangs keep the local population under the gun, in a state of fear, so that nothing good can take root and grow in those communities. Second, gangs distribute drugs. Government is in the drug business.” (The Underground, Jon Rappoport)
Inner cities are about money, and any American president since Lyndon Johnson could have seen it in an hour, if he had bothered to look, if he cared, if he really intended to help solve the problem of inner cities.
But solving problems was never the objective, and that’s important to know because, now, with explosions of violence rippling in inner cities of America, the original crisis has become much worse—and therein lies a clue:
The goal was always destruction, decimation, and loss of hope in inner cities, leading to violence and more violence—which becomes part of the excuse for the spreading onrush of the militarized police state.
So let’s get to the money.
A 1993 Cato Institute Essay, “The Myth of America: Underfunded Cities,” by Stephen Moore and Dean Stansel, makes this stunning point:
“Since 1965 the federal government has spent an estimated $2.5 trillion on the War on Poverty and urban aid. (That figure includes all spending on welfare, Medicaid, housing, education, job training, and infrastructure and direct aid to cities.) Economist Walter Williams has calculated that that is enough money to purchase all the assets of the Fortune 500 companies plus all of the farmland in the United States. But it has not spurred urban revival.”
How is that possible?
How do you spend $2.5 trillion and achieve no revival?
Sheer administrative incompetence doesn’t explain it. Not even close. First of all—and any well-intentioned government would investigate this down to the core—you find out where exactly all the money went.
This has never been done.
It’s safe to assume there are people who’ve gotten very rich off this feast. Huge sums never ended up where they were supposed to go. Instead, they were diverted and stolen. On top of that, a relatively minor chunk of the $2.5 trillion was hijacked after it reached local administrators in the inner cities.
But what about the massive federal dollars that did arrive at proper destinations? What happened there? For that, we have to look at how government traditionally operates.
It gives money as a form of welfare. It creates some government jobs. It funds programs that are aimed at “improving conditions.” But it almost never does something that will invigorate or create a local economy.
I’m talking about the creation of small businesses, real ones. Because that’s how you initiate an actual local economy. That’s the only way.
You fund 20 small businesses in an area, and now you have people with jobs, with income, and you have the production of goods and services that people in the neighborhood will buy. With 200 small businesses, and then 2000, you’ll get people who can afford to buy what is produced locally. The money circulates. That’s how it works. That’s called a recovery.
On top of that, you use a bit of that federal money to create community projects that really count. For example, urban gardens and farms. People grow their own food. They share and trade food. They eat. The food is healthy.
By now, there could be and should be thousands of these flourishing urban gardens in inner cities across America. Many thousands. But there aren’t.
When a community, with help, lifts itself up beyond a certain point, economically, and sees the light at the end of the tunnel, their resistance to crime and drugs and shootings and the recruitment of their children into gangs intensifies. They change the culture.
I’m not saying this is walk in the park. It isn’t. There are other factors. Yes, large corporations have fled from inner cities, and so has the middle class, and banks have intentionally cheated homeowners on their mortgages, and there are certain police forces who are corrupt and brutal.
But if the federal government had ever wanted to help lift life up in inner cities, it would have gone after these banks long, long ago. It would have routed out corrupt cops long, long ago. It would have gone after emerging gangs long, long ago.
These days, government does little more than use the residents of inner cities as propaganda props to enforce tactics of political correctness, stir up racial conflict, foster permanent dependency, and label whole classes of people as permanent victims.
You see, if these inner cities ever came back, ever moved up the economic ladder, ever triumphed, the government would take a serious hit. A very serious hit. Its whole program would go down the drain, in just the same way the cancer treatment industry would take a major torpedo if truly workable cures were deployed.
The State is a vampire, and it must have victims on which to feed. Yesterday, today, tomorrow.
We have reached a place in this psyop where the victims are being fed encouragement to establish themselves as forever-crippled with forever-rights and demands that must be met and will never be entirely met.
“Don’t achieve economic success. Never do that. That’ll ruin everything.”
This kind of propaganda is gasoline poured on a fire. Which is the precise objective.
When you peel away the veneer of “deep concern” the government has for “the less fortunate,” what you see is a stark demeaning attitude: “We know you’re hopeless, you can’t do anything for yourselves, you’ll never win, but we can fulfill our agenda on your backs, as long as you stay dependent.”
Let me reiterate the crucial point: the recovery of inner cities is all about creating local economies that work. There is no recovery without that. Everything else is destructive in the long run. Financially and psychologically destructive.
An allied fact: most people who are unemployed want to work. They prefer work to welfare. In the absence of jobs and local businesses, people will accept welfare rather than starve. That’s obvious. But when most of the incoming money is devoted to welfare, and work doesn’t show up, the negative vortex takes over.
What I’m explaining, in this article, stands in stark contrast to the millions of words that have been written and spoken by “the professionals” in academia and government. They build mountains of nonsense to account for “inner-city poverty.” They divert attention from the truth. They weave complex impenetrable webs.
Some of these professionals are lunatics who believe that a new form of society, without actual businesses, will come into being and save the poor. This society will of course be run by government employees, who will reveal their tolerance, their care, their love, their superior intelligence.
In the present climate, I expect that soon one of these crazies will make it on to a Sunday talk show and say: “Well, George, you know, a new study has concluded that if the underclass in this country kills every fifth person in America, and I mean randomly kills them, then statistically speaking, we will have made significant progress toward equality. That is the amount of blame we can attach to the unjust society in which we live today. Every fifth person.”
And the interview will be soberly reported on by the New York Times.
The author of three explosive collections, THE MATRIX REVEALED, EXIT FROM THE MATRIX, and POWER OUTSIDE THE MATRIX, Jon was a candidate for a US Congressional seat in the 29th District of California. He maintains a consulting practice for private clients, the purpose of which is the expansion of personal creative power. Nominated for a Pulitzer Prize, he has worked as an investigative reporter for 30 years, writing articles on politics, medicine, and health for CBS Healthwatch, LA Weekly, Spin Magazine, Stern, and other newspapers and magazines in the US and Europe. Jon has delivered lectures and seminars on global politics, health, logic, and creative power to audiences around the world. You can sign up for his free NoMoreFakeNews emails here or his free OutsideTheRealityMachine emails here.
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Japan’s Defense Ministry has asked for the country’s largest ever military budget as Tokyo seeks to boost its armed forces amid persisting territorial conflicts with China and Russia as well as concerns over Beijing’s expanding naval power.
The defense ministry…
Vía Global Research http://ift.tt/1X5Gfom
On Monday, August 31st, racist fascists (nazis) who hate Russians rioted in front of Ukraine’s parliament building to demand resumption of the unlimited bombing campaign against the breakaway former Ukrainian region, Donbass, which had voted 90%+ for the neutralist Ukrainian…
Vía Global Research http://ift.tt/1KXaLY7
Last week ended with the cackling hens on CNBC and the spokesmodels on Bloomberg bloviating about the temporary pothole on the road to riches. They assured their few thousand remaining viewers the 11% plunge in the stock market was caused by China and the communist government’s direct intervention in their stock market, arrest of a brokerage CEO, and threat to prosecute sellers surely cured what ails their market. The Fed and their Plunge Protection Team co-conspirators reversed the free fall, manipulating derivatives and creating a short seller covering rally back to previous week levels. The moneyed interests are desperate to retain the appearance of normality and stability, as their debt saturated system teeters on the verge of collapse.
John Hussman’s weekly letter provides sound advice for anyone looking to avoid a 50% loss in the next 18 months. The market has been overvalued for the last three years and now sits at overvaluation levels on par with 1929 and 2000. The difference is that fear has been overtaking greed in the psyches of traders. The average Joe isn’t in the market. Only the Ivy League MBA High frequency trading computer gurus are playing in this rigged market. The 1,100 point crash last Monday is what happens when arrogant young traders, fear and computer algorithms combine in a perfect storm of mindless selling. Suddenly the pompous risk takers became frightened risk averse lemmings.
The single most important thing for investors to understand here is how current market conditions differ from those that existed through the majority of the market advance of recent years. The difference isn’t valuations. On measures that are best correlated with actual subsequent 10-year S&P 500 total returns, the market has advanced from strenuous, to extreme, to obscene overvaluation, largely without consequence. The difference is that investor risk-preferences have shifted from risk-seeking to risk-aversion.
If there is a single lesson to be learned from the period since 2009, it is not a lesson about the irrelevance of valuations, nor about the omnipotence of the Federal Reserve. Rather, it is a lesson about the importance of investor attitudes toward risk, and the effectiveness of measuring those preferences directly through the broad uniformity or divergence of individual stocks, industries, sectors, and security types. In prior market cycles, the emergence of extremely overvalued, overbought, overbullish conditions was typically accompanied or closely followed by deterioration in market internals. In the face of Fed induced yield-seeking speculation, one needed to wait until market internals deteriorated explicitly. When rich valuations are coupled with deterioration in market internals, overvaluation that previously seemed irrelevant has often transformed into sudden and vertical market losses.
With corporate profits falling, margin debt at all-time highs, the Fed preparing to raise rates, China’s fake economic system imploding, currency wars breaking out across the globe, emerging markets in turmoil, oil dependent countries in the Middle East seeing budgets go deeply in the red, Greece and the other insolvent southern European countries nearing collapse and tensions rising between Russia, Europe and the U.S., there is plenty to fear in this central banker created debt bubble world. History teaches us this isn’t over. It’s only just begun. The bubblevision assertions that the worst is behind us is false. They will insist all is well until you’ve lost half your net worth. When fear overtakes greed, neither monetary easing, propaganda, nor acts of desperation by politicians, government bureaucrats, or central bankers will turn the tide.
It may not be obvious that investor risk-preferences have shifted toward risk aversion. It’s certainly not evident in the enthusiastic talk about a 10% correction being “out of the way,” or the confident assertions that a “V-bottom” is behind us. But a century of history demonstrates that market internals speak louder than anything else – even where the Federal Reserve is concerned. Why did stocks lose half their value in 2000-2002 and 2007-2009 despite aggressive and persistent monetary easing? The answer is that monetary easing doesn’t reliably support speculation when investors have turned toward risk aversion, as indicated by the state of market internals.
Why has the market become much more vulnerable to vertical losses since last summer? Because market internals have turned negative, indicating that investors have subtly become more risk averse, removing the primary support that has held back the consequences of obscene overvaluation. If the Fed is going to launch QE4 and QE5 and QE6, or if zero interest rate conditions are going to support speculation as far as the eye can see, those policies will only have their effect on stocks by shifting investors back toward risk-seeking, and the best measure of that shift will be through the observable behavior of market internals.
If the powers that be are this panicked with the market only off 6% from its all-time high, imagine how they’ll react when this turns into a route on par with the plunge in the Chinese markets. The average person on the street was worried early last week, but they mindlessly just regurgitated the mantra preached to them by MSM talking heads and Wall Street investment shills about long-term, blah, blah, blah. They acted the same way in 2007 through 2009, as their retirement funds were obliterated. The fact is that stocks are extremely overvalued and are going to fall, whether the moneyed interests like it or not.
It’s important to recognize that the S&P 500 is down only about 6% from its record high, while the most historically reliable valuation measures are double their historical norms; a level that we still associate with expected 10-year S&P 500 nominal total returns of approximately zero. We fully expect a 40-55% market loss over the completion of the present market cycle. Such a loss would only bring valuations to levels that have been historically run-of-the-mill. Investors need not expect, but should absolutely allow for, a market loss of that magnitude. If your investment portfolio is well-aligned with your actual risk tolerance and the horizon over which you expect to spend the funds, do nothing. Otherwise, use this moment as an opportunity to set it right. Whatever you’re going to do, do it. You may not get another opportunity, and if you’re taking more equity risk than you wish to carry over the completion of this cycle, you still have the opportunity to adjust at stock prices that are close to the highest levels in history.
How many Boomers or Gen Xers are prepared for 0% returns on their 401ks over the next ten years, with a 50% plunge thrown in for good measure? This market pullback is a drop in the proverbial bucket. Everyone should be using this dead cat bounce as an opportunity to get out of the market. But most will not heed Hussman’s advice. Their cognitive dissonance is too overwhelming.
The chart below offers a good idea of how little conditions have changed in response to the recent market pullback. The blue line shows the ratio of nonfinancial market capitalization to corporate gross value added, on an inverted log scale (so that equal movements represent the same percentage change). The slight uptick at the very right hand edge of the chart is barely discernable. That’s the recent market selloff. Current valuations remain consistent with expectations of zero nominal total returns for the S&P 500 over the coming decade.
The Fed is now nothing more than a helpless bunch of academic theorist bystanders as they already have interest rates at zero and have poured $3 trillion down the drain in their fruitless Keynesian effort to revive this zombie economy. Low interest rates didn’t work and they will not avert the coming stock market collapse.
Yes, low interest rates may encourage investors to drive stocks to extremely high valuations that are associated with low prospective equity returns. We certainly believe that as long as investor preferences are risk-seeking (as we infer from market internals), monetary easing and QE can encourage yield-seeking speculation that drives equities to recklessly extreme valuations. The point is that once valuations are driven to those obscene levels, low interest rates do nothing to prevent actual subsequent market returns from being dismal in the longer term. The low subsequent returns are baked in the cake.
Now for the money quote. Market crashes happen in stages. After an initial plunge, a recovery bounce occurs but fails to reach the pre-plunge levels. And then the bottom falls out.
As I noted early this year (see A Better Lesson than “This Time Is Different”), market crashes “have tended to unfold after the market has already lost 10-14% and the recovery from that low fails.” Prior pre-crash bounces have generally been in the 6-7% range, which is what we observed last week, so I certainly don’t see that bounce as having removed any of our concerns. We remain extremely alert to the prospect for much more extended market losses.
Despite the brave talk from the buy and hold crowd, no one is prepared for a 50% loss over an 18 month horizon. These are the people who will hold until the market has already fallen by 30% and then panic. It has paid to be reckless and foolish over the last three years. It’s this same reckless attitude that brought down the dot.com day traders in 2001, house flippers in 2006, and subprime derivative gurus in 2008. Rational, risk averse, clear minded people need to bail out of the stock market now. It may be your last chance.
Again, if your portfolio is well aligned with your risk-tolerance and investment horizon, given a realistic understanding of the extent of the market losses that have emerged over past market cycles, and may emerge over the completion of this cycle, then it’s fine to do nothing. Otherwise, use this opportunity to set things right. If you’re taking more equity risk than you can actually tolerate if the market goes south, setting your portfolio right isn’t a market call – it’s just sound financial planning. It’s only fun to be reckless if you also turn out to be lucky. Market conditions are now more hostile than at any time since the 2007 peak. If you want to be speculating, and you can tolerate the outcome, then you’re not taking too much equity risk in the first place. But it’s one or the other. Can you tolerate a 40-55% market loss over the next 18 months or so? If not, take this opportunity to set things right. That’s not the worst-case scenario under present conditions; it’s actually the run-of-the-mill historical expectation.
via Zero Hedge Read More Here..
The current VIX level of 26 is equal to the median VIX level over the last three recessions. As Goldman warns, while extreme VIX levels periodically occur, our analysis shows that VIX levels in the high-twenties to low-thirties for extended periods of time are rare outside of recessions. Furthermore, this was foreseeable as equities were ignoring potential warning signs from other asset classes prior to the recent sell-off.
Via Goldman Sachs,
While extreme VIX levels periodically occur, our analysis shows that VIX levels in the high- twenties to low-thirties for extended periods of time are rare outside of recessions. The second quarter revised US GDP print was 3.7% and our tracking estimate for Q3 currently stands at 2.3%, which biases us toward a mean reversion to lower VIX levels.
High-twenties to low-thirties VIX equates to recession volatility
On the economic front: Many investors have argued that VIX levels in the high-twenties to low-thirties are justified. We argue that while periodic spikes should be expected, it is hard to sustain high VIX levels outside of recessions. A few simple statistics:
- Recession volatility: The median level of S&P 500 realized volatility in a recession month has been 17.5 back to 1929.
- Non-recession volatility: The median level of realized vol in a non-recession month has been 11.4.
- VIX over the last three recessions: VIX levels go back to January 1990. Since that time there have been three recessions. Average VIX levels in the first two recessions (1990-1991, 2001) were 25 and 26 respectively. The worst of the worst was of course the Great Financial Crisis. Average VIX levels in the 2008-2009 recession were 34.
Volatility perspective: A simple VIX exercise. Suppose that we are not in a recession. Then, applying a hefty 5 point risk premium to the non-recession S&P 500 realized volatility number of 11.4, would suggest that median VIX levels might be somewhere in the neighborhood of 16.5. Even if we were in a recession, applying the same 5 point risk premium to the median level of S&P 500 realized volatility in a recession month would suggest a VIX level of 22.5 (17.5 + 5 = 22.5). Using averages instead of medians pushes the VIX higher due to the skewness in the underlying distribution of volatility (22.5+ 5=27.5).
While the VIX may have overshot its typical response to the S&P, the bigger question is whether equities were ignoring warning signs from EM FX, HY, oil and rates moves that have been building over the last year. Was the VIX too low to begin with?
Our results do suggest that relative to cross asset risk metrics the VIX was low in mid-August.
But that same analysis also shows that the VIX not only caught up but actually overshot cross asset risk moves by 12-14 points when it peaked above 40. Using cross asset risk metrics in order to generate a VIX range points to current VIX levels between 22 and 24 versus a closing VIX level of 26.05 on August 28th. While the VIX may struggle to find its new home, we think it’s headed lower if our economic projections are correct.
Were equities ignoring potential warning signs from other assets prior to the recent sell-off?
In our view, equity volatility is part cyclical, part positioning and liquidity, and partly reflective of financial distress or systemic risk. So the VIX can be high even when the economics are not poor. We tend to look at cross asset relationships during periods of stress. Cross asset risk metrics often provide higher frequency clues as to whether the VIX may be over- or under-shooting the stress in another asset classes. Earlier in 2015, non-equity asset volatility levels had been pushing higher while the VIX was still below 13 in mid-August. What if equity volatility was lagging and the VIX should have been much higher coming into the recent bout of equity volatility? That would imply that the VIX was too low and that equities were merely “catching-down”.
Which assets have historically been the most correlated to the VIX?
Emerging market weakness, the decline in oil prices, rise in high yield spreads and increase in rates volatility have all been areas of concern in 2015. Exhibit 8 shows the correlation between the VIX vs. other asset classes based upon daily changes each calendar year back to 2008. US HY spreads and EM FX have consistently been the most positively correlated to the VIX, while correlations back to S&P 500 returns have been strong and negative ranging from -0.76 to -0.89. Oil and rates have tended to have the weakest correlations back to the VIX.
Howver, Goldman concludes that in their view, the large VIX overshoot relative to recent S&P moves points to a vol spike driven more by positioning and liquidity more than fundamentals… though that merely ensures they are not antagonzing their economic 'forecasters' guess for growth this year. rather than fundamentals.
via Zero Hedge Read More Here..
The illiquid algo-induced idiocy that are the ‘markets’ is nowhere more evident than in WTI crude futures this morning…
It appears the positive USD-Oil correlation has broken.
via Zero Hedge Read More Here..
What is it, more than anything, that you have been wanting to do, be, create, experience, or have?
Once you have gotten crystal clear on this, remember that by your very nature, you are a powerful co-creator. It is vital you never forget that your very well-being is hinged on your ability to freely express yourself and create your life.
You instinctively bring your seeds of unique genius forward so that individuals with the same or parallel agendas can help them take root and flourish in the world!
“Playing small” is a behaviour I encounter often in my clients, but even more interestingly, in my colleagues as well. Inadvertent shrinking back from your real magnitude, capability, and Self can occur for a variety of reasons, but perhaps most often when you feel that others will be able to more easily understand, access, or approve of you as a result.
You see, as human beings, we are wired and heavily conditioned to conform to familial, social, and cultural modes and norms. From a very early age we learn to unquestioningly censor our communication and behaviour in order to survive, to fit in, and to garner love and approval – rather than cause any upset or ‘let others down.’ We learn not to rock the boat. As adults, it is a commonly held belief that this pattern of conformity comes about in response to the other person or the particular situation/s they presently find themselves in, but in reality, it is usually a very strongly embedded characteristic having been born many years previously out of a primal instinct to feel safe and survive.
And what I know from many years of working very closely and personally with clients and colleagues is this:
In as much as shrinking back or stepping out of your true power keeps you safe, at the same time it holds you back from knowing and manifesting your fullest potential and most complete and capable Self.
Playing small gives you the feeling of being able to rest at a place of comfort and overall stability that, oftentimes, you feel you have worked extremely hard to achieve. Having arrived at a place in your life where things just seem to work, it becomes easy to get too comfortable – almost to the point where complacency sets in. This place is often brimming with the precise opportunities that will enable you to step into your next level of possibility, visibility, community/outreach, and on so many levels – if you can allow yourself – much more that you can enjoy.
This is the exact place at which, if you are to achieve your goals, you cannot afford to get complacent and still expect your experiences to evolve and grow.
It is part of the universal mandate of creation and fulfilment of your sacred purpose that you must keep learning, taking intuitive action, creating, staying open, and being in communication with your people or tribe – not isolate, feel sorry for, over busy yourself, and/or retreat from life.
Shrinking back from your true potential to create what you desire most can be frustrating to say the least. It is like making a declaration to the world about what you want but then crawling into your burrow to anchor into the safety and anonymity that lie within the walls of your hard-earned comfort zone. When you take yourself out of the game in this way, not only do you harness an outlook of scarcity and lack, but what you are seeking then cannot find you. You wind up sabotaging your creative impulses and intent.
Playing small therefore, gives you the illusion of being somewhat in control of whatever it is you are doing or want to create because it prevents you from having to experience the uncertainty and magnitude of self-trust that is required when you are in the river of change.
Isn’t it funny, however, that if you are to create the life you want most, smack dab in the middle of the river of change is exactly where you need to be?
If you are beginning to see exactly how playing small has been affecting your ability to really step into the next level of happiness, self-expression, and peace for yourself, here are 4 key points to remember as you draw on your courage and take your important next steps;
1. Consider from an outsider’s perspective your current level of visibility to others. Really feel into how you can show up more fully and authentically in your life and what it means to allow yourself to be truly SEEN.
2. What might become possible for you if you stopped hiding out in your comfort zone or ‘burrow’ and where appropriate, unapologetically and fearlessly articulated your desires and needs so that they could be truly HEARD (even if only by you!)?
3. Become acutely aware that you are working your way towards an unwavering belief in yourself so you can OWN the value of your time, companionship, unique history, perspective, and skills. In this way, others can behold, appreciate, and truly experience the REAL you.
4. In every possible way, intend that the decisions you make moving forward will honour your most heartfelt desires and needs. Become aware that there is no ‘right’ way. It is YOUR life and there is only your way. You get to intuitively make it up as you go and autocorrect along the way!
Vía Collective-Evolution http://ift.tt/1JwFVHS