Authored by Jim Quinn via The Burning Platform blog,

“Whether in actual fact the policy of the boot-on-the-face can go on indefinitely seems doubtful. My own belief is that the ruling oligarchy will find less arduous and wasteful ways of governing and of satisfying its lust for power, and these ways will resemble those which I described in Brave New World. Within the next generation I believe that the world’s rulers will discover that infant conditioning and narco-hypnosis are more efficient, as instruments of government, than clubs and prisons, and that the lust for power can be just as completely satisfied by suggesting people into loving their servitude as by flogging and kicking them into obedience.” – Aldous Huxley – Letter to George Orwell about 1984 in 1949

“There will be, in the next generation or so, a pharmacological method of making people love their servitude, and producing dictatorship without tears, so to speak, producing a kind of painless concentration camp for entire societies, so that people will in fact have their liberties taken away from them, but will rather enjoy it, because they will be distracted from any desire to rebel by propaganda or brainwashing, or brainwashing enhanced by pharmacological methods. And this seems to be the final revolution” ― Aldous Huxley

When I step back from the day-to-day minutia and trivialities flooding my senses from all directions and media devices, it almost appears as if I’m living in a highly scripted reality TV program where the characters and plots are designed to create passions and reactions to support whatever narrative is being weaved by those directing the show. Huxley really did foresee the future as clearly and concisely as anyone could, decades before his dystopian vision came to fruition.

Orwell’s boot on the face vision is only now being initiated because a few too many critical thinkers have awoken from their pharmaceutically induced stupor and begun to question the plotline of this spectacle masquerading as our reality. The mass formation psychosis infecting the weak-minded masses; relentless mass propaganda designed to mislead, misinform, and brainwash a dumbed down and government indoctrinated populace; and complete control of the story line through media manipulation, regulation, and censorship of the truth; has run its course. As Charles Mackay stated 180 years ago, the masses go mad as a herd, but only regain their senses slowly, and one by one.

My recognition that the world seems to be scripted and directed by Machiavellian managers, working behind a dark shroud, representing an invisible governing authority, molding our minds, suggesting our ideas, dictating our tastes, and creating fear, triggered a recollection of the 1998 Jim Carrey movie – The Truman Show. The movie, directed by Peter Weir (Gallipoli, Witness, Dead Poet’s Society), had the surreal feel of Forest Gump, while beckoning the horrendous introduction of reality TV (Big Brother, Survivor), which poisons our shallow unserious society to this day. The plot of the movie focuses on individuality versus conformity, consumerism, voyeurism, reality versus manipulation, false narratives, the truth about the American Dream, and the dangers of surveillance in a technologically advanced society.

Truman Burbank is the unsuspecting star of The Truman Show, a reality television program filmed 24/7 through thousands of hidden cameras and broadcast to a worldwide audience. Christof, the show’s creator seeks to capture Truman’s authentic emotions and give audiences a relatable everyman. Truman has been the unsuspecting star of the show since he was born 30 years prior. Truman’s hometown of Seahaven Island is a complete set built within an enormous dome, populated by crew members and actors who highlight the product placements that generate revenue for the show. The elaborate set allows Christof to control almost every aspect of Truman’s life, including the weather. The picture-perfect home, with picket fence and plastic people, is an attempt to convince Truman he is living the American Dream rather than in an inescapable dystopian techno-prison.

To prevent Truman from discovering his false reality, Christof manufactures scenarios that dissuade Truman’s desire for exploration, such as the “death” of his father in a sea storm to instill aquaphobia, and by constantly broadcasting and printing messages of the dangers of traveling and the virtues of staying home. One cannot but acknowledge the plotline to keep Truman under control, obedient, and locked down in his controlled environment, with no escape hatch visible, as exactly the plotline used by our overlords during the Covid scam. Using fear to regulate your subjects is a familiar theme used by those controlling the narrative and pulling the strings behind the scenes of our glorious democracy of dystopia.

The first task was to instill fear into the masses through fake videos, fake medical experts spewing fake “facts”, denying the reality masks, social distancing, and locking down the world did not stop a microscopic virus, while suppressing treatments which were clearly safe and effective (ivermectin, hydroxychloroquine) and forcing Fauci’s remdesivir and ventilators on patients – insuring their deaths. Truman’s life was built upon lies, deception, and fake narratives, controlled by a tyrannical director putting on a show to please his bosses and maximize profits. We are experiencing the same reality today.

Since March 2020 we have been trapped in a dystopian reality show based on lies, deception, and fake narratives about a weaponized virus created in a lab funded by Anthony Fauci and utilized to further the totalitarian Great Reset agenda of Schwab, Gates and their ilk, while maximizing the profits of Pfizer, TV networks and filling the pockets of politicians, shills, and apparatchiks willing to sellout the people of our country for thirty pieces of silver.

As the Truman Show approached its 30th anniversary, Truman began discovering unusual elements, such as a spotlight falling out of the sky in front of his house and a radio channel that precisely described his movements. He began to awaken to the fact he was nothing but a peculiarity trapped in a cage and constantly deterred from escaping at every turn, for the good of the show. He lived in a scripted world of conformity, where questioning the plot was not allowed, and the masses just played their parts.

This is exactly how a dictatorship without tears uses technology, pharmaceuticals, and psychological manipulation to convince the masses to love their servitude. This is the reality show we have been living in during this 21st Century dictatorship dystopia of dunces. But this psychological phenomenon is not new to mankind, as Plato described an ancient Truman Show analog in the 6th Century with his Allegory of the Cave. The nature of human beings has not changed across the trials and tribulations of history.

In the allegory, Plato describes a group of people who have lived chained in a cave all their lives, facing a blank wall. The people watch shadows projected on the wall from objects passing in front of a fire behind them and give names to these shadows. The shadows are the prisoners’ reality but are not an accurate representation of the real world. An enlightened man is like a prisoner who is freed from the cave and comes to understand the shadows on the wall are not reality.

The ignorant inmates do not desire to leave their prison/cave, for it is the only life they know, and they fear reality. The fire and the puppets, used to create shadows, are controlled by artists. Plato indicates the fire is also the political doctrine taught by a nation state. The artists use light and shadows to indoctrinate the masses with the dominant doctrines of the times. Few humans ever escape the cave. Most humans will remain at the bottom of the cave, with a small few elevated as major artists, to project the shadows keeping the masses disoriented, confused and fearful.

“Whereas the truth is that the State in which the rulers are most reluctant to govern is always the best and most quietly governed, and the State in which they are most eager, the worst.” ― Plato, The Allegory of the Cave

“Most people are not just comfortable in their ignorance, but hostile to anyone who points it out.” ― Plato, The Allegory of the Cave

The State is run by an eager group of psychopaths who are hell bent on destroying our civil society and common culture on behalf of globalists attempting to implement their Great Reset agenda, and enforcing it through technological surveillance, mind control through propaganda messaging, and strict management of the daily plot via mainstream media and social media censorship of the truth. As Plato contemplated fifteen centuries ago, most men will remain in their cave, believing shadows presented by their overlords is reality, never questioning their servitude or seeking the truth.

Never has this fact been truer than during this covid pandemic reality show directed by our Christof – mass murderer Anthony Fauci. The willful ignorance of the masses was assumed by the covid controllers who cast shadows of fear and death on the cave walls of the locked down extras in this well-orchestrated reality show. Using a purposefully misleading PCR test to vastly overestimate “cases”, paying hospitals to classify all deaths as covid, and having the propaganda professionals at CNN, MSNBC and Fox showing Covid Death Counters on their screens 24/7 to terrify the masses into compliance was the Covid Show.

Once the fear level was ramped to eleven on the control dial, the producers of this show introduced the miraculous Big Pharma vaccine antidote to save the day. Their script was so believable they were able to convince over 5 billion members of their captive audience to inject themselves with an untested, unproven genetic therapy, that didn’t prevent you from catching, transmitting, getting sick, being hospitalized, or dying from the Fauci funded Wuhan lab produced virus. But, as a dramatic twist to the tale, it seems the “vaccine” causes myocarditis, blood clots, infertility, miscarriages, heart attacks, cancer, and sudden death.

Despite the obvious dangers and failures of these “vaccines”, those bullied into getting jabbed became so comfortable in their ignorance, they were easily persuaded to hate the unjabbed and wish for their deaths. Orwell’s “Two Minutes of Hate” was extended for over a year and continues to this day. Rather than think critically and question why annual flu cases averaged 35 million per year prior to 2020 but dropped to near ZERO during the covid “emergency”, the cave dwellers lashed out in anger at anyone questioning the plot, because to admit they were duped would destroy their self-esteem and decrease their virtue signal credits.

The annual flu didn’t disappear. Covid was the annual flu, with a multi-billion-dollar marketing campaign. This wasn’t a pandemic, but an IQ test, and most people failed miserably. But the critical thinking unvaxxed are still considered the enemy of the state, especially since they have been proven right.

Whether we are trapped in an artificial world produced in a dome, cave, or our current technologically advanced surveillance propaganda state, the goal of those controlling our false reality is to take away our freedoms, crush dissent, keep us ignorant of the truth, and treat us as plebs to be taxed and molded. Christof, whose name is supposed to invoke him being a god-like figure ruling over Truman’s world, declares Truman could discover the truth and leave at any time, while using every diabolical trick to keep that from ever happening, because his show generated revenues exceeding the GDP of a small country.

Truman and ourselves are essentially prisoners in a vast production, and our overlords believe it is their duty to convince us to love our servitude and prefer our cells, because it is financially beneficial to the overlords and their crew.

Our world is not fake, but it is tightly controlled by those running the show. Seemingly random events, plots, and subplots are manipulated to generate specific emotions and reactions by the public in order to achieve the objectives of those benefitting from the various storylines. They are molding our minds and forming our tastes through psychological and technological manipulation of our daily existence. Christof explained why most rarely discover the truth or question the world they live in – “We accept the reality of the world with which we’re presented. It’s as simple as that.”

We have allowed men we have never seen to dictate how we live our lives, the choices we make, and which politicians and “experts” to believe, without ever putting in the effort to understand why we are being prodded to do so. We are locked in a self-imposed prison of desires, emotions, and needs through mass media messaging and a constant barrage of advertisements. Conformity and obedience are the desired traits sought by the ruling class, while individuality and skepticism are frowned upon and punished through social ostracism.

We are conditioned from birth to believe what they tell us to believe. Government school indoctrination and mass media misinformation does the trick. Distracted by our techno-gadgets and ignorant of truth is how the globalist oligarchs methodically implement their Great Reset agenda. They are so convinced of the ignorance of the masses they openly proclaim their depopulation and techno-prison schemes with no fear of push back or retribution.

The ending of the Truman Show is a lesson in resistance, persistence, and the strength of the individual, even in the face of a technologically advanced Big Brother state. It offers a message of hope, no matter how powerful our overlords appear to be. Refusing to obey or conform by one individual can inspire others to do likewise. Once Truman ‘awoke’ to his plight as a lab rat in a scripted show, he began to plot his escape. Using a makeshift tunnel in his basement, out of view of Christof’s cameras, he disappeared and forced the suspension of the broadcast for the first time in thirty years.

Christof discovers Truman sailing away from Seahaven in a small boat, as he has overcome the fake conditioning of fear instilled in him by the man who supposedly loves him but traumatized him about the sea by faking his father’s death while at sea. Christof chooses to almost drown Truman by creating a violent storm to deter him from discovering the truth. Ultimately the storm ceases and his boat strikes the wall of the dome.

This is exactly how our controllers treat the ignorant masses. They feed us stories designed to make us fearful and compliant to the exhortations of their paid experts. Paid to lie. Paid to misinform. Paid to persuade people a dangerous concoction is “safe and effective”. The evilness of using Sesame Street characters to convince four-year-old children they need this Big Pharma gene altering toxic brew, even though essentially ZERO children on earth died from covid, is a testament to the greed and malevolent impulses of those in power. Vast amounts of ever-increasing advertising revenue are what kept The Truman Show on the air for thirty years.

The covid advertising campaign will never be topped, as Hollywood stars, top athletes, famous writers, rock legends, supposedly impartial journalists, and all the major networks said SHOW ME THE MONEY!!!! Everyone was for sale, and all they had to do was lie and say the jabs were “safe and effective”. Product placement was the money-making formula for the Truman Show, while hard selling a Big Pharma phony cure over the airwaves 24/7 using the tax dollars of the victims was the final solution of the Great Reset Cabal.

The grand finale is a clash of the philosophies of reality versus false reality, as Truman discovers a staircase leading to an exit door. Christof speaks to Truman, claiming there was no more truth in the real world than in his artificial world, and he would be safe, with nothing to fear, in a world controlled by men invisible to him assuring him they have his best interests at heart. Truman chooses individuality, truth, risk, living a real meaningful life, and seeking honest relationships over a safe existence in a bubble where all decisions were made by others. Truman bows to the audience and exits, leaving Chistof to mourn the loss of his star and the revenue he generated. The ignorant masses watching the show cheer his escape and then ask, “what’s on next?” Plato captured the uncertainty and bewilderment Truman must have felt as he walked into the light.

“Anyone who has common sense will remember that the bewilderments of the eyes are of two kinds, and arise from two causes, either from coming out of the light or from going into the light” ― Plato, The Allegory of the Cave

This world of manufactured dystopian pleasure harkens more towards Huxley’s Brave New World, where pharmaceuticals and conditioning would keep the public seeking pleasure, pre-occupied with trivialities, distracted by materialism, unable to think critically, and reduced to passivity and egoism through the control of messaging by their controllers. Our efficient totalitarian state has gained complete control by convincing the masses to love their servitude and beg for more rules, restrictions, and reduction of liberties in the name of safety and security.

Smart phones, smart cities, and smart streets are nothing more than code for spying on you and controlling you. Truman finally understood his liberty was his to choose and not Christof’s to give. There is a small minority of Americans who are realizing the same thing after two years of totalitarian measures designed to take away our freedoms and liberty. The question is whether enough will exit this tyrannical government produced show to make a difference. The future of mankind literally depends on the answer to this question.

“Liberties aren’t given, they are taken.” ― Aldous Huxley

“A really efficient totalitarian state would be one in which the all-powerful executive of political bosses and their army of managers control a population of slaves who do not have to be coerced, because they love their servitude.” ― Aldous Huxley, Brave New World

Just as those controlling the Truman Show were not doing it for Truman’s benefit, but for their enrichment, those controlling the puppet strings of our society today had no interest in our health over the last two years, our financial well-being, our psychological well-being, or the peaceful rational functioning of our civilization. They have no interest in securing our border, reducing crime, holding fair elections, promoting peaceful solutions to global conflict, or allowing the truth to reach the masses. Their agenda has been and continues to be, the destruction of our civilized society, obliteration of our core standards and norms, depopulation of the planet, confiscation of our wealth, and ultimately our enslavement through technological shackles and chains.

As Huxley noted decades ago, technology has just provided our civilization with a more efficient means of going backwards. Technology is being used by our controllers to monitor our movements, communications, and to surveil, distract, and amuse us to death. It is no longer a force for good, but a means to control us. They plan to use technology to disarm their citizens through increasingly authoritarian regulations, sold as keeping us safe from mass shooters.

Their climate agenda isn’t about the climate, but about complete control of the masses. When government and their social media attack dogs monitor the citizens for “hate speech and misinformation”, and dole out retribution at their whim, our system is profoundly broken and extremely warped. They are supposed to answer to us. But these megalomaniacs have much bigger agenda.

We’ve lost all sense of reality, reason, and truth in a profoundly abnormal world, created by those we allowed to ascend to power through the control and influence of shadowy globalist billionaires operating as an invisible government, with Deep State apparatchiks doing the dirty work. Schwab, Gates, Soros, the World Economic Forum, and whoever hides in the shadows behind these psychopaths, intend to control the entire world and steal all the wealth because they believe they are smarter, more ruthless, and know what’s best for the lowly peasants polluting their satanic playground planet.

They know facts can be ignored when they’ve conditioned the masses to be willfully ignorant. They know they can lie without implications, but even more powerful, they can stay silent about the truth through censorship, suppression, and cancellation of truth tellers. The adaptation of the masses to this abnormal society, created by evil power-seeking men, is a form of mental illness – or as documented by Mattias Desmet in his book The Psychology of Totalitarianism – Mass Formation Psychosis.

 “The real hopeless victims of mental illness are to be found among those who appear to be most normal. Many of them are normal because they are so well adjusted to our mode of existence, because their human voice has been silenced so early in their lives that they do not even struggle or suffer or develop symptoms as the neurotic does. They are normal not in what may be called the absolute sense of the word; they are normal only in relation to a profoundly abnormal society. Their perfect adjustment to that abnormal society is a measure of their mental sickness. These millions of abnormally normal people, living without fuss in a society to which, if they were fully human beings, they ought not to be adjusted.” ― Aldous Huxley, Brave New World Revisited

I know I will never adapt or adjust to this abnormal society. We certainly can’t change a system, so thoroughly rigged and controlled (e.g., 2022 Arizona election and the 2020 presidential election), through traditional means. Those in control can easily buy-off our politicians, scientists, doctors, academics, TV personalities, and journalists to spin whatever web they choose, enabling their despicable anti-human agenda of deviancy. The only viable solution is the individual solution of walking away from this phony world like Truman.

Armed revolution is a non-starter, as the oligarchs have far more firepower, and the dissenters are unorganized and scattered. A form of ‘Irish Democracy’ where a silent dogged resistance, marked by the withdrawal from society, belligerence to authority and non-compliance with government dictates by millions of ordinary people would accomplish far more than rioting and armed revolution. Millions have already practiced a form of Irish Democracy by not masking, not social distancing, not getting jabbed, and taking control of their own health decisions.

They have almost sealed the escape hatch in this dystopian paradise of pleasure and pain. They know their techniques of control through fear work like a charm. Their final task to achieve total control is central bank digital currencies (CBDC), where everything we buy and sell is tracked digitally, so taxes can be levied, your life tracked, and if you choose to dissent from government directives, your ability to utilize CBDCs will be turned off. Micro-chipping us is next on the agenda.

We need to reduce our tax and digital footprint now. It might seem hopeless in going to battle against these vile, vindictive vermin, but the solution is to not play. Many have already walked away from the modern world, taking to the country – farming, homesteading, bartering, and only giving to Caesar the bare minimum. They’ve chosen a hard, but a far more fulfilling life.

The more people who disassociate from their fake world, the weaker they get. As their hold on our lives weakens, they will lash out. This is why it is important to be armed. Direct armed confrontation with the establishment’s forces is foolish, but guerrilla tactics on land you know would start to eat away at the morale of the paid police thugs sent to enforce their dictates. The beast isn’t as strong as it portrays. It’s broke and its empire of debt is crumbling.

If millions walk out the exit door, the beast will begin to starve and eventually die. Maybe a new, less complex, smaller, more community-oriented society could be born from the ashes. Tribe up with like-minded individuals with different skills, if possible. There is hope if enough patriots decide to regain their senses and walk away from this abnormal society, leaving our totalitarian Christofs to wallow in their failure to control the truly awoken.

“Do not let the hero in your soul parish, in lonely frustration, for the life you deserved but never have been able to reach. Check your road and the nature of your battle. The world you desired can be won. It exists, it is real, it is possible, it is yours.” ― Ayn Rand, Atlas Shrugged

*  *  *
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Authored by Jack Phillips via The Epoch Times (emphasis ours),

Rep. Marjorie Taylor Greene (R-Ga.) said that former President Donald Trump’s team is making significant changes to his Mar-a-Lago’s vetting process following his meeting with rapper Kanye West and Nick Fuentes.

Greene told reporters Tuesday that “Trump had no idea [Fuentes] was even coming” and described the incident as “unfortunate.” Over the weekend, Trump confirmed on Truth Social that West, also known as Ye, and Fuentes met with him at his Florida resort.

Following last week’s dinner, Trump is now making “big changes over who can come in and the vetting process, which I think is smart,” Greene said, according to The Hill. “Any former president should have that in place.”

Greene told reporters that she spoke with the former president and talked to his staff about the incident and changes to the vetting process. Alleged anonymous sources within Trump’s campaign also told The Associated Press that his team is putting new protocols in place to ensure that those who meet with him are fully vetted and approved.

A Trump spokesperson has not returned an Epoch Times request comment. Neither Trump nor his campaign have publicly commented on Greene’s statement to reporters Tuesday.

While news outlets and the Department of Justice have described (pdf) Fuentes as a “white nationalist,” he’s denied that label. In a statement, Fuentes said Sunday that “I reject all labels other than Christian American.”

Earlier this year, Greene appeared at a Fuentes event and spoke, although she later distanced herself from Fuentes. When speaking to reporters, the Georgia Republican said that she doesn’t regret her message to those in the audience.

“I don’t regret talking to the kids that were there because I don’t understand why they follow him. But would I have gone to his event? No,” Greene said Tuesday, adding, “I don’t want to have anything to do with him.” Greene then wondered who is funding Fuentes and whether West is paying him.

Trump Post

Over the weekend, Trump explained that he wanted to “help” West, whom he described as “a seriously troubled man,” coming more than a week after he announced he’s embarking on a third bid for the White House in 2024.

Amid a surge of reports and critical statements made by Republicans, Trump added Saturday that “Fake News went CRAZY!” over the meeting. On Tuesday, House Republican Leader Kevin McCarthy (R-Calif.) and Senate Minority Leader Mitch McConnell (R-Ky.) both denounced Fuentes and West during an event with reporters.

“So I help a seriously troubled man, who just happens to be black, Ye (Kanye West), who has been decimated in his business and virtually everything else, and who has always been good to me, by allowing his request for a meeting at Mar-a-Lago, alone, so that I can give him very much needed ‘advice,’” Trump wrote on Saturday.

West showed up at his resort “with 3 people, two of which I didn’t know, the other a political person who I haven’t seen in years. I told him don’t run for office, a total waste of time, can’t win,” Trump’s post said. He added that “our dinner meeting was intended to be Kanye and me only, but he arrived with a guest whom I had never met and knew nothing about.”

During an interview with Fox News on Tuesday, Trump stated again that he had “never heard of” Fuentes. “I had no idea what his views were and they weren’t expressed at the table in our very quick dinner, or it wouldn’t have been accepted,” he added.

Since then, the former president has not commented on subsequent reports about the meeting, including anonymously sourced articles alleging that former Breitbart editor Milo Yiannopoulos was seeking revenge against Trump.

Read more here…

While FTX founder Sam Bankman-Fried continues to make lawyers cringe every time he opens his mouth, US authorities are seeking information from investors and trading firms that worked closely with the company.

According to Bloomberg, the US Attorney’s Office for the Southern District of New York (SDNY) has recently sent out a flood of requests seeking information on a list of FTX employees and associates.

Recipients include firms that frequently traded on FTX and may have had conversations with platform executives or hold other information that might help the criminal investigation, the people said. Such requests are often used to start tapping into potential sources of information held by witnesses, investors or customers without seeking grand jury subpoenas. –Bloomberg

In a parallel investigation, attorneys from the US Securities and Exchange Commission’s enforcement division have sent similar requests for information to companies which traded or invested in the crypto platform in an attempt to learn more about the relationships they had with the imploded cryptocurrency exchange – as well as communications with top officials from FTX and Alameda Research, SBF’s investment arm headed by Caroline Ellison – who Sam was banging.

The SEC also wants to know what FTX representatives told investors, and whether they misrepresented anything that would violate securities laws, according to the report, which suggests that “The moves show authorities are casting a wide net as they embark on their investigations into FTX’s collapse.”

In a Thursday interview with Bloomberg Television, Galaxy Digital Chief Executive Officer Mike Novogratz – whose firm had a $76.8 million exposure to FTX, said that authorities have been contacting firms which had relationships.

“Broadly, yes,” he said when asked if the SEC, CFTC or DOJ had been reaching out to FTX clients.

“Regulators have some egg on their face,” he said. “Sam was very far along at pitching to be the cash Bitcoin market here in the US, both with the SEC and CFTC.”

FTX, Alameda or any of its former top executives haven’t been accused of any wrongdoing by US authorities. The opening of criminal or civil investigations doesn’t necessarily mean that they will press charges or take other actions.  

The probe would start wide, focusing on customers and trading partners that had a lot of contact with FTX before narrowing down onto the crypto platform’s key figures. -Bloomberg

According to former prosecutors who spoke with Bloomberg anonymously, investigators will look for material false statements by SBF and his allies.

Slow Burn?

And in what should be a surprise to nobody, the investigation will likely take a very long time.

“While the crypto industry is evolving, the statutory enforcement tools really aren’t,” said former acting US Attorney in Brookly, Seth DuCharme, who added that investigators will use “blunt, well-established powers to determine the extent of any criminal wrongdoing,” such as laws that govern wire fraud, money laundering and conspiracy.

“You can lose a lot of money and no one may have done anything intentionally wrong,” he continued, adding “Mistake is a defense to a crime.

The fact FTX was run out of the Bahamas and its founder still lives there adds a layer of complexity to the investigation.

If they need to act fast, prosecutors can seek a provisional warrant and request that Bahamian authorities arrest Bankman-Fried. The US then has 60 days, according to an agreement between the two countries, to file a formal extradition request through diplomatic channels.

Raise your hand if you think nobody of import will see the inside of a prison cell.

There it is pic.twitter.com/BRhQD9XMWz

— Merissa Hansen🇺🇸 (@MerissaHansen17) December 1, 2022

Authored by George Ford Smith via The Mises Institute,

There’s an idea rooted among some libertarians that the Federal Reserve was originally a sound institution but has grown corrupt. As a bankers’ bank, it was fine, they believe, but not as the monster it has grown to be. If we could only go back to the Fed’s founding charter, all would be well.

I’m thinking of two well-known financial analysts who are unsurpassed in their analytical brilliance and knowledge of markets and who rightly regard the bureaucratic Federal Open Market Committee (FOMC) as the father of bubbles, busts, stagnation, and market privilege. In their articles, Peter Schiff and David Stockman hammer the Fed relentlessly and rightfully for its cluelessness, corruption, and threat to our material and spiritual well-being. They have authored engaging bestsellers on the state of the economy and place blame where it belongs, on the monetary policies of the Federal Reserve.

Yet, strangely, their recommendations stop short of eradicating the cancer altogether. They want the Fed reformed, not abolished. In each case they believe the Fed in its infancy was an institution compatible with free markets. Peter Schiff writes:

The role of a central bank is limited: to control the currency so as to keep prices and interest rates fairly stable. . . . This sort of central bank is one I could have supported. But the Federal Reserve Bank of the United States never functioned this way, and it probably was never meant to. . . . We never should have trusted the Fed to respect its boundaries.

He adds,

The ultimate destroyer of the U.S. dollar was the Federal Reserve System, which was supposed to be the guardian of the currency. As I discussed in chapter 2, the original idea of the Fed was a good one: providing a uniform currency backed by gold.

In The Great Deformation, David Stockman tells us that “the Federal Reserve System, therefore, was intended to be a ‘banker’s bank,’ not an agent of national economic management. This founding charter has been literally blotted out of modern day discussions.”

In his closing chapter, Stockman lists various steps he believes will avoid the worst possible catastrophes. He begins with the restoration of the Fed as a banker’s bank and the adoption of sound money, by which he means a gold-backed dollar.

Why Was the Fed Created?

Before the Fed, the number of nonnational banks was growing steadily, as was their percentage of total bank deposits. By 1896 the number of nonnational banks had grown to 61 percent and their share of deposits to 54 percent; by 1913 those numbers had increased to 71 percent and 57 percent, respectively. Thus, Wall Street power was waning. It was also being diminished by a new trend in which businesses financed growth from profits rather than borrowed funds. Bank interest rates were too high for many ventures.

Then there was the long-standing problem with depositors. They would leave their money with a bank, believing it was available on demand, and the banks would turn around and loan it out. If enough customers lined up to withdraw their money, the bank could only close its doors (or get an exemption from government).

So, from Wall Street’s perspective, there were the problems of competition from nonnational banks, industry’s preference for thrift over debt, and the public’s irritating tendency to panic and run on banks.

To address this situation, four representatives of J.P. Morgan, John D. Rockefeller, and Kuhn, Loeb, along with Senator Nelson Aldrich and assistant secretary of the Treasury A. Piatt Andrew, met secretly at Morgan’s retreat on Jekyll Island, Georgia, in November 1910. The bankers accounted for an estimated one-fourth of the world’s wealth. 

Led by Paul Warburg of Kuhn, Loeb, they devised a banking cartel that was written into law in late 1913. The money powers—Wall Street—sold the plan to the public as a means of controlling the vast power of Wall Street.

How was Wall Street shackled? It wasn’t. By appointing Wall Street bankers to the Federal Reserve Board and to the most important post in the new system, governor of the New York Fed, they increased Wall Street’s influence.

The original manifestation of the Fed included these developments:

1. The Fed monopolized the issue of all banknotes; national and state banks could only issue deposits, and the deposits had to be redeemable in Fed notes and gold.

2. All national banks were drafted into the Fed, and their reserves had to be kept as demand deposits at the Fed.

3. As banks around the country sent their depositors’ gold to the Fed, they received Fed notes in return. Thereafter, when the public made withdrawals, they were handed Fed notes instead of gold coins. The disuse of gold coins not only encouraged inflation, but it also made confiscation easier later on.

4. With the centralizing of gold and bank reserves, the Fed doubled the inflationary power of the banks by reducing the reserve requirement from 5:1 to 10:1. With more credit available, the banks could lower their interest rates. 

Banks Violate Their Depositors’ Property Rights

As I note in chapter 5 of The Jolly Roger Dollar, the key to the success of free markets is the establishment and defense of property rights. Government law has never recognized the right of depositors to their property, meaning their deposits. Alan Greenspan in his famous 1966 essay writes:

Since it is rarely the case that all depositors want to withdraw all their gold at the same time, the banker need keep only a fraction of his total deposits in gold as reserves. This enables the banker to loan out more than the amount of his gold deposits.

Observe the language: “the banker need keep only a fraction of his total deposits.” How different the impact of that sentence would be if Greenspan had said: “The banker need keep only a portion of his customers’ property, which they entrusted to him for safekeeping”:

As Rothbard observed, a bank that fails to meet its deposit obligations is just another insolvent, not an embezzler. Following the British ruling in Foley v. Hill . . . in 1848, U.S. courts consider that money left with a banker is, “to all intents and purposes, the money of the banker, to do with as he pleases.” This holds even if the banker engages in “hazardous speculation.” Thus, according to the state there can be no embezzlement because the money belongs to the bank, not the depositor. (The Jolly Roger Dollar, chap. 4)

A “Banker’s Bank” without Government

The desire for a banker’s bank is not misguided as long as it’s disconnected from the government:

In the interval between the War of 1812 and the Civil War, banking was de-centralized into state-chartered banks issuing banknotes redeemable in gold or silver coins. One of the highlights of this period was the development of a clearinghouse in Boston called the Suffolk Bank.

Formed by prominent merchants, the Suffolk System allowed New England banks to accept the notes of other banks, including country banks, at par with specie. Members of the system had to keep a sufficient reserve of specie at Suffolk to redeem all the notes it received. Suffolk could not keep banks from inflating but it could remove them from the list of approved banks and cause their notes to trade at discount.

Conclusion

The Federal Reserve was not a sound institution that became corrupt. It was always a corrupt institution and has only grown more corrupt.

Ron Paul has the right approach—End the Fed. Get it out of our lives and restore monetary freedom—the right to choose a medium of exchange.

The European Union reached a deal on Friday to cap Russian oil at $60 a barrel, paving the way for G7 nations to launch an ‘unprecedented mechanism,’ as the Wall Street Journal reports.

The move came after overcoming a last-minute push by Poland to lower the cap, for which the European Commission had originally proposed between $65 and $70 per barrel. In short, the EU came down to Poland’s price, which had become a point of contention for more than a week..

The cap – designed to punish Russia financially for invading Ukraine, while still allowing enough oil into the market, is significantly below benchmark Brent prices, which traded around $86 a barrel Friday morning, but bear in mind that Urals crude trades basically around these levels…

It will also mean that any country which agrees to the policy will only be allowed to purchase ship-borne Russian oil products at, or below the cap – and any maritime firm that violates the price cap would face harsh sanctions.

Russia Says Nyet

One day before the $60 decision, a Thursday press conference, Moscow threatened to ignore the price cap set by the West – saying they will continue to charge buyers regular prices. Those unwilling to pay will be cut off, according to Russian Foreign Minister Sergey Lavrov at a Dec. 1 press conference reported by state news agency, Tass.

“We have no interest in what the price cap will be. We will reach direct agreements with our partners. The partners working with us will disregard these caps and will give no guarantees to those who impose such caps illegally,” said Lavrov.

Russia, meanwhile, is looking for new buyers for its energy exports. According to Lavrov, they are courting nations such as Brazil, India, China, and South Africa (which together with Russia are the BRICS nations), along with allies such as Turkey.

“Every time we negotiate with China, India, Turkey and other big buyers of ours, there is an element of balancing interests in terms of time, volume, and prices,” Lavrov added, before warning other states about the need to gravitate away from Western-dominated financial institutions.

“This is certainly an interesting development of events, which, among other things, sends a very powerful long-term signal to all states without exception … to consider abandoning the mechanisms imposed by the West within its globalization systems,” he said, adding “However, decisions need to be mutual, between the producer and the buyer, rather than made by a guy wishing to punish someone.”

“This is not about earning a bit more from selling our oil. It’s just that we need to start building a system independent from these neo-colonial methods. This is what we are doing together with BRICS colleagues and about a dozen other countries that wish to coordinate their efforts with BRICS,” Lavrov continued (via the Epoch Times).

“We are doing so in the SCO and, clearly, in the EAEU, alongside bilateral relations with China, Iran, India, and other countries.”

There was absolutely no reaction in crude prices to this ‘deal’ which probably tells you everything you need to know about the market’s perception of the efficacy of it…

More via the Epoch Times;

Western sanctions on Russia have generally had little serious effect on Moscow’s revenues, which was able to benefit from higher prices, despite falling oil export volumes.

Russia became India’s top oil supplier in October, with Russian imports rising to 22 percent from just 0.2 percent in March of this year.

China’s Russian energy purchases more than doubled compared with a year ago, to $10.2 billion in October, as Moscow offered Chinese importers generous discounts on its exports.

The purpose of the G-7 price cap is designed to rectify the West’s failure to hit Russian energy revenues, without punishing poorer countries which are heavily dependent on Russian energy sources.

Moscow Threatens to Penalize Any Country Supporting Price Caps

The foreign minister restated the Kremlin’s position that Russian energy companies would not supply oil to any country that favored such a price cap.

Russia “will not be supplying oil to the countries who would follow the lead of dictators,” Lavrov declared.

Russian Deputy Prime Minister Alexander Novak also stated that Russia will not supply oil to countries under the price cap rules, even if the limits made it more profitable for the Kremlin.

“We have repeatedly said that such measures—the so-called cap on Russian oil price—are not just a non-market mechanism—this is an anti-market measure that destroys supply chains and can significantly complicate the situation on global energy markets,” said Maria Zakharova, a spokeswoman for Russian foreign ministry.

She claimed that any mechanism to limit prices for Russian oil exports would actually worsen the energy shortage situation in the global markets, with devastating consequences for everyone.

The White House Promotes Price Cap as Alternative to an EU Ban on Russian Oil

A far harsher, separate EU embargo on Russian crude traveling by sea or via pipeline is set to take effect on Dec. 5, in an attempt to financially curtail Moscow’s war effort.

American negotiators worry that the EU embargo, combined with the threat of cutting off insurance and other services for vessels shipping Russian oil, will send crude prices upward, unintentionally boosting the Kremlin’s revenue.

The White House hopes that the price cap will encourage the EU to relax its draconian plan to completely ban the importation, financing, and insuring of Russian oil shipments.

Last week, the European Commission (EC) recommended capping Russian oil prices at $65–70 per barrel, but Poland and the Baltic countries opposed those levels.

Greece, Cyprus, and Malta, which were are reliant on tanker traffic, wanted a higher cap or some form of subsidy to compensate for the loss.

The EC came back this week with a $60 a barrel cap, according to officials and diplomats involved in discussions, reported The Wall Street Journal.

Almost all EU members have agreed to the new cap level, save Poland, which has asked for more time to consider and that a decision would not come before Friday. Poland has pressed for the price cap to be set far below the level at which Russian oil exports are currently being sold.

Meanwhile, the Biden administration, oil traders, and investors have pressed for a higher cap that would still allow Russia to sell its oil at the capped price.

The EC issued a compromise on Dec. 1 that would promise to review the price cap every two months, starting in January 2023, and would keep the price cap at least 5 percent below the normal export price of Russian crude, reported The Wall Street Journal.

U.S. Deputy Treasury Secretary Wally Adeyemo told Reuters that the Biden administration supported reviewing the price every two months.

“The key thing to remember is we’re starting at $60, but we have the ability to move the price cap, to further use the price cap to constrain Russia’s revenues over time,” Adeyemo said.

As of Dec. 1, Russian Ural crude stood $58.38 a barrel, well below the Brent crude international benchmark, which is at $86.88 a barrel.

Any price cap would set Russian crude prices well below the international benchmark.

Authored by Bill Pan via The Epoch Times (emphasis ours),

It was a mistake for Twitter to censor the story about Hunter Biden’s laptop in the weeks leading to the 2020 presidential election, the company’s former Trust and Safety Department head said on Tuesday.

Yoel Roth, who resigned earlier this month in the wake of Elon Musk’s takeover as Twitter’s new chief executive, has been blamed for censoring a New York Post article about emails retrieved from a laptop once owned by Hunter Biden.

Those emails, according to the Post, showed a direct link then-presidential candidate Joe Biden had with his son’s dubious business dealings in China and Ukraine. Shortly after the story’s publication, Twitter not only prohibited users from sharing it, but also suspended the Post’s account for two weeks.

Users who tried to share the link to the article were greeted with a message saying, “We can’t complete this request because this link has been identified by Twitter or our partners as being potentially harmful.” Those who tried to open the link in existing posts were also warned that it was “potentially spammy and unsafe.”

In his first public appearance since parting with Twitter, Roth tried to shift the blame, claiming that the story was too difficult for Twitter to verify its authenticity.

“We didn’t know what to believe. We didn’t know what was true. There was smoke,” Roth said during an interview at the Knight Foundation conference. “And ultimately for me, it didn’t reach a place where I was comfortable removing this content from Twitter.”

“It set off every single one of my finely tuned APT28 ‘hack and leak campaign’ alarm bells,” he said, referring to a notorious team of cyberspies affiliated with Russian military intelligence. “Everything about it looked like a hack and leak.”

When asked whether if it was a mistake to censor the story, Roth replied, “In my opinion, yes.”

The same reasoning has been used by former Twitter CEO Jack Dorsey, who told the U.S. Congress in October 2020 that the company wasn’t sure whether the materials featured in the Post story were from a hack. The story “showed the direct materials and screenshots of the materials and it’s unclear how they were obtained,” Dorsey said at that time.

Roth’s confession come as Twitter’s new leadership prepares to publicize records related to the decision.

“The Twitter Files on free speech suppression soon to be published on Twitter itself. The public deserves to know what really happened,” Elon Musk wrote on Monday. “This is a battle for the future of civilization. If free speech is lost even in America, tyranny is all that lies ahead.”

Ever since his takeover of Twitter, Musk has been repeatedly called on to disclosure on Twitter’s censorship of the Post’s story. In October, Rep. James Comer (R-Ky.), the top Republican on the House Oversight Committee, asked that Musk provide relevant information to help the investigation into “the Biden family’s pattern of influence peddling to enrich themselves and President Biden’s involvement in these schemes.”

“As part of this investigation, Committee Republicans are reviewing the role Big Tech—including Twitter—played in supporting the Biden campaign in 2020 by suppressing certain stories implicating the Bidens,” Comer wrote in an Oct. 28 letter (pdf) to Musk.

“We believe open communication and access to information is a fundamental principle for any free people, and the American people deserve to know the reason Twitter suppressed or censored the Biden laptop story shortly before the 2020 election.”

Yesterday we highlighted the fact that Credit Suisse stock was suffering its longest losing streak in history falling to just a few percent above the price of 2.52 francs for the 4 billion Swiss Franc subscription rights that the bank offered existing investors.

The big Swiss bank also announced further layoffs which follows years of scandals, mismanagement, mammoth asset outflows, and the current dilution from a vital capital raise that is under way.

BUT today that record 13-day losing streak is over…

And here’s why…

Chairman Axel Lehmann told Bloomberg TV that the bank’s liquidity was improving and the huge outflows of client assets that had spooked markets were coming to an end.

Withdrawals at the Swiss lender, which surged to about 84 billion francs ($90 billion) earlier this quarter after rumors about the bank’s stability, have “basically stopped.”

As a reminder, in October, outflows of assets and the subsequent use of liquidity buffers had caused the bank to fall below certain regulatory levels at some of its entities.

“When I speak to clients, I already know that there are going to be inflows,” Lehmann said.

“We already see it partially happening. So we have plans to continue to reach out to clients. It might take a bit of time but it will come back and we will go back to normal.”

Bloomberg reports that investors also took comfort from comments by Lehmann that the main indicators of the bank’s financial stability were strong and that its level of liquidity was improving after declines in recent weeks.

“I think core shareholders believe us and they will exercise their rights,” Lehmann said, adding he’s in regular discussions with investors.

“Of course, when you’re an investor in Credit Suisse for 20 years and you see where the share price is, these are challenging discussions.”

In other words, BTFD because “trust me”…

Authored by Andrew Moran via The Epoch Times (emphasis ours),

U.S. oil and gas sector activity advanced at a strong pace, although the rate of expansion decelerated in the third quarter, according to the Federal Reserve Bank of Dallas Energy Survey for the third quarter.

The business activity index, a measurement of conditions facing energy companies in the region, fell to 46.0 in the July-to-September period from the second quarter’s record of 57.7.

Executives at exploration and production (E&P) firms noted that crude oil and natural gas production increased at a solid rate of 31.7 and 35.6, respectively.

Costs continue to remain elevated for the seventh consecutive quarter as the index for input costs clocked in at 83.9. None of the 58 oilfield services firms that participated in the regional central bank’s quarterly survey recorded a drop in input costs. In addition, the indexes for finding and development costs and lease operating expenses for E&P entities eased slightly to 64.7 and 70.2, respectively.

“Oilfield service inflation has increased, uncertainty has increased and oil prices have decreased. This is a recipe for lower to flat industry spending in 2023,” one E&P executive stated.

Supply chain disruptions and labor shortages continue to be enormous challenges for the oil and gas industry. Supplier delivery times still lagged and remained above the industry average. While there was robust growth in employment, wages, and hours executives noted that it’s difficult to attract talent.

Businesses are struggling to obtain critical parts for hydraulic fracturing, drilling rigs, and other crucial tools. But executives revealed that they also find it hard to hire oilfield service workers and truckers amid limited worker availability.

“The labor issue will provide a restraint on any major increase in oil and gas production for the domestic market―this, as well as the regulations from the present administration as they chase green energy policy,” an E&P executive remarked in the report.

“The biggest challenge for us is adding employees. We are trying to add qualified staff, with little success, and that will negatively impact growth. Second is the rising cost of services,” another executive noted.

Overall, optimism diminished last quarter, with the outlook uncertainty index soaring to 35.7 from 12.4. At the same time, there was a divergence of uncertainty among oilfield services firms and E&P organizations: 17.8 compared to 45.2.

“The uncertainty over future inflation and/or a recession weighs heavily upon us,” one E&P executive commented in the survey.

But one oil and gas support services firm executive suggested that President Joe Biden and his administration are against the energy industry.

“The administration is holding us back, with no love of oil,” the person said.

When it comes to crude oil and natural gas prices, opinions were mixed. Some suggest that White House policies and a paucity of capital for E&P firms could be “wonderful news for long-term prices.” Others contend that global economic uncertainty and recession fears could send prices lower.

According to data from the Energy Information Administration (EIA), crude oil production remains approximately 1 million barrels below the pre-pandemic level of 13.1 million barrels. Overall, domestic crude output is expected to average roughly 11.9 million barrels in 2022.

‘Phasing Out the Use of Oil’

This week, the Biden administration proposed new rules on the national oil and gas sector.

The Interior Department’s Bureau of Land Management (BLM) released a proposal on Monday that imposes monthly limitations on gas flaring on federal lands. If companies are caught exceeding those limits, they will be charged fees. The measure, which regulators say would prevent waste and boost efficiency, also mandates energy firms to improve the detection of methane leaks.

“This proposed rule will bring our regulations in line with technological advances that industry has made in the decades since the BLM’s rules were first put in place, while providing a fair return to taxpayers,” said Interior Secretary Deb Haaland in a statement.

Critics assert that this is another example of the administration’s war on the oil and gas industry. But John Kirby, the National Security Council Coordinator for Strategic Communications, pushed back against some of these criticisms.

“The president has issued 9,000 permits for drilling on U.S. federal lands … 9,000 of them being unused. There are plenty of opportunities for oil and gas companies to drill here in the United States,” he told reporters during a White House press briefing on Monday.

However, Amos Hochstein, the Special Envoy and Coordinator for International Energy Affairs and top Biden energy advisor, told CNBC on Wednesday that “we’re going to be phasing out the use of oil.”

On Nov. 26, the Treasury Department announced that it would permit Chevron to resume pumping crude from Venezuela’s oil fields. One of the world’s largest energy companies will be allowed to extract oil in a joint partnership with the national oil firm, Petróleos de Venezuela.

Since the 2020 presidential election, Biden has vowed to end the fossil fuel industry, announcing in November 2020 that his administration would be “banning new oil and gas permitting on public lands and waters” to stop climate change.

Speaking at a campaign event in New York for Gov. Kathy Hochul, President Biden told a climate protester that “there is no more drilling. I haven’t formed any new drilling.”

A superficial take of today’s jobs report would note that both jobs and earnings “blew past expectations, flying in the face of Fed rate hikes”, and while that is accurate at the headline level, it couldn’t be further from the truth if one actually digs a little deeper in today’s jobs numbers.

Recall that back in August, September, and October we showed that a stark divergence had opened between the Household and Establishment surveys that comprise the monthly jobs report, and since March the former has been stagnant while the latter has been rising every single month. In addition to that, full-time jobs were plunging while part-time jobs were surging and the number of multiple-jobholders soared.

Fast forward to today when the inconsistencies not only continue to grow, but have become  downright grotesque.

Consider the following: the closely followed Establishment survey came in above expectations at 263K, above the 200K expected – a record 7th consecutive beat vs expectations –  and down modestly from last month’s upward revised 284K…

… numbers which confirm that at a time when virtually every major tech company is announcing mass layoffs…

… the BLS has a single, laser-focused political agenda – not to spoil the political climate at a time when Democrats just lost control of the House as somehow both construction (+20K) and manufacturing (+14K) added jobs according to the BLS, when even ADP now reports that these two sectors combined shed more than 100,000 workers in November.

Alas, there is only so much the Department of Labor can hide under the rug because when looking at the abovementioned gap between the Household and Establishment surveys which we have been pounding the table on since the summer, it just blew out by a whopping 401K as a result of the 263K increase in the number of nonfarm payrolls (tracked by the Household survey) offset by a perplexing plunge in the number of people actually employed which tumbled by 138K (tracked by Household survey). Furthermore, as shown in the next chart, since March the number of employed workers has declined on 4 of the past 8 months, while the much more gamed nonfarm payrolls (goalseeked by the Establishment survey) have been up every single month.

What is even more perplexing, is that despite the continued rise in nonfarm payrolls, the Household survey continues to telegraph growing weakness, and as of Nov 30, the gap that opened in March has since grown to a whopping 2.7 million “workers” which may or may not exist anywhere besides the spreadsheet model of some BLS (or is that BLM) political activist. In fact, one look at the chart below confirms all one needs to know about BLS “data integrity.”

Showing this another way, there were 158.458 million employed workers in March 2022… and 158.470 million in November 2022 an increase of just 12,000 over 8 months, a period in which the number of payrolls (which as a reminder is the number the market follows) reportedly increased by 2.7 million!

As an aside, it appears this is not the first time the “apolitical” Bureau of Labor Statistics has pulled such a bizarre divergence off: it happened right before Obama’s reelection:

And then again: right before Hillary’s “100% guaranteed election (because one wouldn’t want a soft economy to adversely impact her re-election odds).

It gets better: digging in even deeper into the far more accurate and nuanced Household Survey, we find that the November drop in Employment was the result of a plunge in part-time workers, more than offsetting the modest increase in part-time workers which had declined in 3 of the past 4 months heading into November.

Further to this point, as shown below, since March, the US has lost 398K full-time employees offset by amodest gain of 190K part-time employees, while a whopping 291k workers were forced to get more than one job over the same period.

And while none of the above is really new – we have documented the record divergence between payrolls and employment for half a year now – there were two new developments: first, to facilitate its rigging of the data, the BLS has resorted to the oldest trick in the book, boosting the core goal-seek factor, the business “birth death” adjustments, which in October hit a record high 455K, and although it has since dipped to 14K in November, the trend in speculative BLS assumptions about the viability of the US economy (more businesses are created than are shut down only when there is economic solid growth) is clearly visible in the chart below.

One final point: a former Fed staffer Julia Coronado points out, we have reached the absurd part of the business cycle when average hours are declining in certain sectors even as hourly earnings are rising, prompting her to wonder if we are not in fact seeing a spike in hourly income courtesy of lump-sump severance payments.

Looks like we are getting a possible boost to average hourly earnings from severance pay–jobs and hours are declining in transportation and warehousing yet AHE jumped 2.5% m/m pic.twitter.com/ac8aHdEuXV

— Julia Coronado (@jc_econ) December 2, 2022

So what’s going on here?

The simple answer: as shocking as this may sound, there has been no change in the number of people actually employed in the past 8 months, but due to deterioration in the economy, more people are losing their higher-paying, full-time jobs, and switching into much lower- paying, benefits-free part-time jobs, which also forces many to work more than one job, a rotation which picked up in earnest some time in March and which has only been captured by the Household survey. Meanwhile the Establishment survey plows on ahead with its politically-motivated approximations, seasonal adjustments, and other labor market goalseeking meant to make the Biden admin look good and provide the Fed with ammo to keep rates high (thus forcing even more real layoffs, which unfortunately the BLS is incapable of capturing due to political reasons).

And since the Establishment survey is far slower to pick up on the nuances in employment composition, while the Household Survey has gone nowhere since March, the BLS data engineers have been busy goalseeking the Establishment Survey (with the occasional nudge from the White House especially now that the Biden admin needs something to hang its hat on after the GOP recaptured the House) to make it appear as if the economy is growing strongly, when in reality all they are doing is applying the same erroneous seasonal adjustment factor that gave such a wrong perspective of the labor market in the aftermath of the covid pandemic (until it was all adjusted away a year ago). In other words, while the labor market is already cracking, it will take the BLS several months of veering away from reality before the government bureaucrats accept and admit what is truly taking place.

As an aside, here we admit we were wrong: back in August we said that “we expect that “realization” to take place just after the midterms, because the last thing the Biden administration can afford is admit the labor market is crashing in addition to the continued surge in inflation.” Little did we know just how stubborn and intent the White House is to stick to the broken narrative that all is well in the US.

Or, putting it otherwise as BofA’s Michael Hartnett did earlier today (and as we will discuss in a subsequent post) – “unemployment in ’23 will be as shocking to Main St consumer sentiment as inflation in ’22.”

We’re gonna need another ‘dovish’ Powell speech to calm this market down.

This morning’s hotter than expected payrolls print (and reaccelerating wage growth) is not what the market or The Fed wanted to see to keep the ‘pause/pivot’ dream alive and rate-hike expectations are spiking and rate-cut hopes are tumbling…

This sent TSY yields soaring, led by the short-end…

And slammed stocks lower…

And spiked the dollar…

As Peter Tchir notes, the big news is earnings! Last month was up 0.5% instead of original 0.4% and this month was up a whopping 0.6% (versus 0.3% expected). Fed will not like that.

Establishment showing 263k jobs, with an upward revision of 23k to last month, but negative 46k the prior month (almost like we overstate jobs and claw back a bit over time). Household survey showed 138k job losses (with 328k lost last month). Why do we bother with two surveys?

Unemployment rate held steady at 3.7% but only because the labor force participation rate dropped – again!

We should give up some of this week’s gains (on rates, spreads and equities) and jobs, once again seems to be the strongest part of the economy (though Establishment survey seems to see more jobs than ADP or Household, but c’est la vie).

The pre-FOMC blackout period closes and leaves the market on its own to create a narrative that the pause is still alive…