“You should never again talk about economics, you are an absolute moron and have no idea what you are saying.”
That’s what a commenter said the last time I put up a big post on economics, way back in April.
After that the anonymous person told me to “stop licking Trump’s balls,” mentioned that I was “more than happy to lick Essman’s dick,” and ended by calling me “the biggest tool in the box.”
I guess it must have been something I said.
While some resort to name-calling to make their point and win friends, I always felt citing facts was more effective.
So why don’t we do it again today?
As usual with the Montana blogs, though…you’ll get more information here than anywhere else. This article contains 19 different sources.
Let’s begin with the media, then get into stock buybacks, followed by China and the petrodollar before we end with a brief conclusion.
That’s what a commenter said the last time I put up a big post on economics, way back in April.
After that the anonymous person told me to “stop licking Trump’s balls,” mentioned that I was “more than happy to lick Essman’s dick,” and ended by calling me “the biggest tool in the box.”
I guess it must have been something I said.
While some resort to name-calling to make their point and win friends, I always felt citing facts was more effective.
So why don’t we do it again today?
- If you like hard numbers, you’ll like this post.
- If you feel that our media isn’t quite telling us the whole story, you’ll like this post.
- If you feel the American economy isn’t quite as strong as it’s made out to be, you’ll like this post.
- If you’re a partisan or a politician or someone that likes living in their little bubble, you won’t like this post.
As usual with the Montana blogs, though…you’ll get more information here than anywhere else. This article contains 19 different sources.
Let’s begin with the media, then get into stock buybacks, followed by China and the petrodollar before we end with a brief conclusion.
The State of Our Media
Let’s begin with the sad state of our media.
The US media never really mentions things like currency and oil much anymore, and for good reason – they don’t want you to know.
Remember, 90% of the American media is owned by just 6 companies: GE, NewsCorp, Disney, Viacom, Time Warner, and CBS.
Back in 1983, 90% of the American media was owned by 50 companies.
Despite Americans now watching 166 minutes of TV a day – compared with the 10 minutes a day they spend reading – they don’t know anything about what’s really going on in the world.
And that’s one of the main goals of the American media.
How’s that working for ‘em?
Not too good.
The three major cable news channels – CNN, Fox, and MSNBC – saw their audiences decline by 12% last year, or 1.2 million people.
Despite that loss in audience, those three networks saw a 10% increase in revenues, bringing them to $5 billion in total 2017 revenues.
Most of that money is coming from advertisers. Here are the largest advertisers on those networks:
We know that in 2017, around 2,900 worked in the cable TV news industry.
What about the network news?
ABC, CBS and NBC saw their nightly news audience drop by 7% last year, to 5.2 million people.
The networks’ morning news audience fell 10% in 2017, to around 3 million people.
Additionally, the networks’ Sunday news shows fell 1%, to 2 million people while their news magazine shows (think 60 Minutes) fell 12%.
The ad revenues for the three networks’ nightly news shows was $552 million last year, about the same as they were the year before.
The morning news shows brought in a staggering $1.1 billion in revenue last year, however.
And how’s our local TV news doing?
For the morning, local TV news have seen a 15% decrease in viewership while for the evening and late-night they’ve seen a 7% drop. Midday saw the smallest drop, with 4%.
Across America last year, local TV news brought in $17.4 billion in advertising revenue. Sounds like a lot, but it’s a 13% drop from 2016…an election year.
The local TV stations’ digital ad revenue was at $1 billion, or a 3% increase from the previous year.
We know that about 29,000 people work in local TV news.
Finally, the newspapers.
Last year there was a daily newspaper circulation in America of 31 million, with 34 million on Sunday. That’s an 11% and 10% drop from 2016, respectively.
When it comes to reading the newspaper online, the 50 largest daily newspapers reported an average of 11.5 million unique visitors a month…or about the same number as the year before.
Most people spend 2.5 minutes reading their local newspaper online.
In addition, alt-weekly papers have seen a 10% decline from the previous year, with an average circulation of 55,000.
We know that just over 39,000 people work in the newspaper business, which is 15% lower than it was in 2014, and 45% lower than it was in 2004.
The American newspaper industry made $16.5 billion in advertising revenue in 2017, a 10% drop from the year before. Circulation revenue brought in an additional $11 billion, which is actually up 3% from the previous year.
The US media never really mentions things like currency and oil much anymore, and for good reason – they don’t want you to know.
Remember, 90% of the American media is owned by just 6 companies: GE, NewsCorp, Disney, Viacom, Time Warner, and CBS.
Back in 1983, 90% of the American media was owned by 50 companies.
Despite Americans now watching 166 minutes of TV a day – compared with the 10 minutes a day they spend reading – they don’t know anything about what’s really going on in the world.
And that’s one of the main goals of the American media.
How’s that working for ‘em?
Not too good.
The three major cable news channels – CNN, Fox, and MSNBC – saw their audiences decline by 12% last year, or 1.2 million people.
Despite that loss in audience, those three networks saw a 10% increase in revenues, bringing them to $5 billion in total 2017 revenues.
Most of that money is coming from advertisers. Here are the largest advertisers on those networks:
- Nutrisystem: $1.9 million
- Otezla: $1.07 million
- T-Mobile: $938,000
- GEICO: $917,000
- Jenny Craig: $806,000
- Progressive: $712,000
- Humira: $690,000
- Sleep Number: $655,000
We know that in 2017, around 2,900 worked in the cable TV news industry.
What about the network news?
ABC, CBS and NBC saw their nightly news audience drop by 7% last year, to 5.2 million people.
The networks’ morning news audience fell 10% in 2017, to around 3 million people.
Additionally, the networks’ Sunday news shows fell 1%, to 2 million people while their news magazine shows (think 60 Minutes) fell 12%.
The ad revenues for the three networks’ nightly news shows was $552 million last year, about the same as they were the year before.
The morning news shows brought in a staggering $1.1 billion in revenue last year, however.
And how’s our local TV news doing?
For the morning, local TV news have seen a 15% decrease in viewership while for the evening and late-night they’ve seen a 7% drop. Midday saw the smallest drop, with 4%.
Across America last year, local TV news brought in $17.4 billion in advertising revenue. Sounds like a lot, but it’s a 13% drop from 2016…an election year.
The local TV stations’ digital ad revenue was at $1 billion, or a 3% increase from the previous year.
We know that about 29,000 people work in local TV news.
Finally, the newspapers.
Last year there was a daily newspaper circulation in America of 31 million, with 34 million on Sunday. That’s an 11% and 10% drop from 2016, respectively.
When it comes to reading the newspaper online, the 50 largest daily newspapers reported an average of 11.5 million unique visitors a month…or about the same number as the year before.
Most people spend 2.5 minutes reading their local newspaper online.
In addition, alt-weekly papers have seen a 10% decline from the previous year, with an average circulation of 55,000.
We know that just over 39,000 people work in the newspaper business, which is 15% lower than it was in 2014, and 45% lower than it was in 2004.
The American newspaper industry made $16.5 billion in advertising revenue in 2017, a 10% drop from the year before. Circulation revenue brought in an additional $11 billion, which is actually up 3% from the previous year.
The Stock Buy Back Scheme
Let's get into something the corporate media won't: our house-of-cards stock market.
Currently we have a proposal by the Trump Administration to bypass Congress so that the rich 1% can pay less in capital gains taxes.
George H.W. Bush had the same idea in the 90s, but figured he couldn’t use the Treasury to bypass Congress so let the issue go.
Now it’s back, and it sounds like it’ll reduce federal revenues by $10 billion a year.
This is great for the 1%, as they can now save a lot of money on the sale of their stock.
It’s interesting when we get into the issue of stock sales and stock buybacks these days.
For instance, did you know that after the 1929 Crash, stock buybacks were made illegal?
Yep, happened in 1934 and lasted until 1982 when the SEC allowed them again.
Much of our nation's dilemmas can be traced back to the 1980s, when we switched from an industrial capitalist model to the financialization of the American economy.
This was done with the export of US manufacturing to China at the same time we shifted the nation’s focus and talent to financial markets and institutions and the elites who run them.
We stopped making things so we could move numbers around on a spreadsheet…and we called this progress.
So what does this stock buy back thing mean, exactly?
Well, how it works is that a corporation’s CEO has their pay tied to stock share performance…so if the stock price goes up, so does their pay/bonus.
So what these CEOs do is direct their corporation to purchase their own stock, or what’s called a buyback.
This causes the share price to go up, simply because there are fewer available shares to buy. Supply and demand.
Sometimes the corporations even use debt to buyback their stock. Whether it’s profits or debt, though, either way those corporations aren’t really making anything!
No research & development…no plant expansions…no jobs created.
But boy…that CEO and his management team got their high pay and bonuses, didn’t they?
Sadly for most Americans, they get pulled into this pump-and-dump operation. Seeing the stock price go up – and figuring the company must be doing something right – they buy that stock.
There’s really no value behind that stock, however…just manipulation.
Trump’s latest idea to cut stock sale taxes for the rich will only make the problem worse.
Currently we have a proposal by the Trump Administration to bypass Congress so that the rich 1% can pay less in capital gains taxes.
George H.W. Bush had the same idea in the 90s, but figured he couldn’t use the Treasury to bypass Congress so let the issue go.
Now it’s back, and it sounds like it’ll reduce federal revenues by $10 billion a year.
This is great for the 1%, as they can now save a lot of money on the sale of their stock.
It’s interesting when we get into the issue of stock sales and stock buybacks these days.
For instance, did you know that after the 1929 Crash, stock buybacks were made illegal?
Yep, happened in 1934 and lasted until 1982 when the SEC allowed them again.
Much of our nation's dilemmas can be traced back to the 1980s, when we switched from an industrial capitalist model to the financialization of the American economy.
This was done with the export of US manufacturing to China at the same time we shifted the nation’s focus and talent to financial markets and institutions and the elites who run them.
We stopped making things so we could move numbers around on a spreadsheet…and we called this progress.
So what does this stock buy back thing mean, exactly?
Well, how it works is that a corporation’s CEO has their pay tied to stock share performance…so if the stock price goes up, so does their pay/bonus.
So what these CEOs do is direct their corporation to purchase their own stock, or what’s called a buyback.
This causes the share price to go up, simply because there are fewer available shares to buy. Supply and demand.
Sometimes the corporations even use debt to buyback their stock. Whether it’s profits or debt, though, either way those corporations aren’t really making anything!
No research & development…no plant expansions…no jobs created.
But boy…that CEO and his management team got their high pay and bonuses, didn’t they?
Sadly for most Americans, they get pulled into this pump-and-dump operation. Seeing the stock price go up – and figuring the company must be doing something right – they buy that stock.
There’s really no value behind that stock, however…just manipulation.
Trump’s latest idea to cut stock sale taxes for the rich will only make the problem worse.
The Trade War with China
In addition to those shady financial dealings, we know we’re in the midst of a trade war and have been for months.
The main enemy here is China…or at least that’s what the media wants you to think. We never hear much about the other twenty-or-so countries that have been hit by Trump tariffs, just China.
And this makes sense, because like I said…China needs to be the enemy.
The country actually had the audacity to start its own crude oil futures market, the Shanghai International Energy Exchange.
China is already importing more oil than any other nation.
This is a direct challenge to the global currency, the US petrodollar. Now it’s not just the dollar that’s backed-up by oil, but the Chinese yuan.
How’d it come to this?
Mostly because Muslims were pissed at Israelis, which sparked the Yom Kippur War in 1973.
This caused OPEC to raise crude oil prices by 400%.
Knowing this could spell doom for America, the financial elites met at the 1973 Bilderberg meeting and made a deal with the Saudi Arabian Monetary Authority to put all the Saudi oil profits back into the US stock and bond markets, with the express promise that the US military would come to the aid of the Saudi Royal family should they ever face trouble.
One of the most recent examples of the kind of trouble the Saudis needed the US government for was when Saddam Hussein began to sell his oil for euros, and wasn’t recycling them back into the US markets…as everyone in the world was doing.
This brought about the 2003 Iraq War, and since then we’ve seen Iraq continue to exchange its oil in the petrodollar exchange system.
The key here is the currency and what’s backing it up.
Now, China has wanted to start a crude oil futures market since 1993…and they did so before volatility closed it down in 1994.
They got serious about it again in 2001, but it took them seventeen long years before they were able to get the next iteration of the exchange open.
Now it’s doing an incredible amount of business. In just the first hour of operation, the exchange traded 23,000 oil contracts worth $10 billion.
What’s so wonderful for investors is that they can turn around and convert that petro-yuan into gold at the Shanghai Gold Exchange, something that’s all the easier since China bought the London Metals Exchange in 2012.
This allowed China to issue yuan-backed gold futures. Together with the oil-backing it up, the Chinese yuan has become quite the strong currency.
With no gold backing it up, the US dollar is in a much weaker position. The only thing backing up the US currency is the US military...and we know they can't win wars anymore (mostly because it's not as profitable as continual fighting).
The London Metals Exchange accounted for 80% of the world’s base-metal options, and in the $1.4 billion pound deal, we know financial elites like Goldman Sachs and JP Morgan made out like bandits.
And China backs up its currency with gold. The country currently takes in 42% of all the metals traded in the world.
Since 2009, when the country allowed citizens in other nations to buy its currency, the yuan has become much more popular.
But…but…but…what about this massive level of economic growth in the US right now?
Um…what growth?
Have you seen a hike in wages at all? I haven’t.
Sure, GDP growth might have gone to 4.1% in the second quarter, and the S&P is up 14% since last year…but how is that helping 99% of the American population?
Don’t be fooled by the 4.1% unemployment number, either. We both know that record-levels of senior citizens are rejoining the workforce because they just don’t have enough money.
We know that 225,000 Americans aged 85 or older are currently working, which is 4.4% of the workforce…up from the 2.6% it was in 2006. Those in their 30s are hardly working at all.
Some also point to the Shanghai Composite index being down nearly 13% this year, or the fact that Chinese GDP has slowed to 6.7% in the second quarter, or even that the yuan has fallen 8% in value in the past few months.
The thing is…China can weather those fluctuations. Currency drops will actually stem-off inflation for the country, which will help them in the trade war. Their imports might become more expensive, but their exports will become more competitive.
Could America weather the same?
I don’t think so.
The main enemy here is China…or at least that’s what the media wants you to think. We never hear much about the other twenty-or-so countries that have been hit by Trump tariffs, just China.
And this makes sense, because like I said…China needs to be the enemy.
The country actually had the audacity to start its own crude oil futures market, the Shanghai International Energy Exchange.
China is already importing more oil than any other nation.
This is a direct challenge to the global currency, the US petrodollar. Now it’s not just the dollar that’s backed-up by oil, but the Chinese yuan.
How’d it come to this?
Mostly because Muslims were pissed at Israelis, which sparked the Yom Kippur War in 1973.
This caused OPEC to raise crude oil prices by 400%.
Knowing this could spell doom for America, the financial elites met at the 1973 Bilderberg meeting and made a deal with the Saudi Arabian Monetary Authority to put all the Saudi oil profits back into the US stock and bond markets, with the express promise that the US military would come to the aid of the Saudi Royal family should they ever face trouble.
One of the most recent examples of the kind of trouble the Saudis needed the US government for was when Saddam Hussein began to sell his oil for euros, and wasn’t recycling them back into the US markets…as everyone in the world was doing.
This brought about the 2003 Iraq War, and since then we’ve seen Iraq continue to exchange its oil in the petrodollar exchange system.
The key here is the currency and what’s backing it up.
Now, China has wanted to start a crude oil futures market since 1993…and they did so before volatility closed it down in 1994.
They got serious about it again in 2001, but it took them seventeen long years before they were able to get the next iteration of the exchange open.
Now it’s doing an incredible amount of business. In just the first hour of operation, the exchange traded 23,000 oil contracts worth $10 billion.
What’s so wonderful for investors is that they can turn around and convert that petro-yuan into gold at the Shanghai Gold Exchange, something that’s all the easier since China bought the London Metals Exchange in 2012.
This allowed China to issue yuan-backed gold futures. Together with the oil-backing it up, the Chinese yuan has become quite the strong currency.
With no gold backing it up, the US dollar is in a much weaker position. The only thing backing up the US currency is the US military...and we know they can't win wars anymore (mostly because it's not as profitable as continual fighting).
The London Metals Exchange accounted for 80% of the world’s base-metal options, and in the $1.4 billion pound deal, we know financial elites like Goldman Sachs and JP Morgan made out like bandits.
And China backs up its currency with gold. The country currently takes in 42% of all the metals traded in the world.
Since 2009, when the country allowed citizens in other nations to buy its currency, the yuan has become much more popular.
But…but…but…what about this massive level of economic growth in the US right now?
Um…what growth?
Have you seen a hike in wages at all? I haven’t.
Sure, GDP growth might have gone to 4.1% in the second quarter, and the S&P is up 14% since last year…but how is that helping 99% of the American population?
Don’t be fooled by the 4.1% unemployment number, either. We both know that record-levels of senior citizens are rejoining the workforce because they just don’t have enough money.
We know that 225,000 Americans aged 85 or older are currently working, which is 4.4% of the workforce…up from the 2.6% it was in 2006. Those in their 30s are hardly working at all.
Some also point to the Shanghai Composite index being down nearly 13% this year, or the fact that Chinese GDP has slowed to 6.7% in the second quarter, or even that the yuan has fallen 8% in value in the past few months.
The thing is…China can weather those fluctuations. Currency drops will actually stem-off inflation for the country, which will help them in the trade war. Their imports might become more expensive, but their exports will become more competitive.
Could America weather the same?
I don’t think so.
Conclusion
There is no sun on the horizon for America.
We were $20 trillion in debt when Trump took office, and budget deficits were already 16% higher than they had been the year before.
Now for 2019, the projection for the annual budget deficit has already soared from $530 billion to $1.1 trillion.
With America, the country is doing everything backwards:
With China, we have a country that’s doing everything right:
Both countries stifle the free flow of information with firm controls on the media.
But unlike China, America’s stock market is nothing more than a sham, with many major companies focusing on driving up the price of their shares.
They’re not so interested in making products or building this country or helping you or your family.
Another financial crash is a certainty, as financial markets move in cycles.
While it could be this year, I think the house of cards might stay upright for a while longer.
Either way, the crash will come in autumn…as they always do.
We were $20 trillion in debt when Trump took office, and budget deficits were already 16% higher than they had been the year before.
Now for 2019, the projection for the annual budget deficit has already soared from $530 billion to $1.1 trillion.
With America, the country is doing everything backwards:
- No interest in gold whatsoever
- Using crude oil to force the world to use our currency
- Whoring our military out to the Saudis
- Record levels of debt each year
With China, we have a country that’s doing everything right:
- Saving up a ton of gold
- Using a crude oil exchange to get away from the dollar
- Keeping debt low
Both countries stifle the free flow of information with firm controls on the media.
- In China the government cracks down on what can be said and who can say it.
- In America, 6 corporations control our information and they’re driven by the profit-motive more than any civic sense of duty to you or this country.
But unlike China, America’s stock market is nothing more than a sham, with many major companies focusing on driving up the price of their shares.
They’re not so interested in making products or building this country or helping you or your family.
Another financial crash is a certainty, as financial markets move in cycles.
While it could be this year, I think the house of cards might stay upright for a while longer.
Either way, the crash will come in autumn…as they always do.
Notes
“American Time Use Survey Summary.” Bureau of Labor Statistics. 28 June 2018. https://www.bls.gov/news.release/atus.nr0.htm
Ariens, Chris. “Here Are the Biggest Advertisers on Fox News, CNN and MSNBC.” TVNewser. 9 March 2018. https://www.adweek.com/tvnewser/here-are-the-biggest-advertisers-on-fox-news-cnn-and-msnbc/359057
“Cable News Fact Sheet.” Pew Research Center. 25 July 2018. http://www.journalism.org/fact-sheet/cable-news/
“Chinese buy London Metal Exchange in £1.4bn takeover.” Independent. 16 June 2012. https://www.independent.co.uk/news/business/news/chinese-buy-london-metal-exchange-in-14bn-takeover-7855200.html
Coppes, Chuck. “Economic Deceptions, Petrodollar Dynamics & Metals Charts.” Chuck Coppes. 29 July 2018. http://chuckcoppes.com/current-newsletter/4592066389
Daye, Chu. “China becomes world’s largest oil importer.” Global Times. 6 February 2018. http://www.globaltimes.cn/content/1088490.shtml
Islam, Faisal. “Iraq nets handsome profit by dumping dollar for euro.” The Guardian. 15 February 2003. https://www.theguardian.com/business/2003/feb/16/iraq.theeuro
Jiang, Yuxuan. “Will China’s renminbi oil futures end the petrodollar monopoly?” South China Morning Post. 1 April 2018. https://www.scmp.com/comment/letters/article/2139676/will-chinas-renminbi-oil-futures-end-petrodollar-monopoly
“Local TV News Fact Sheet.” Pew Research Center. 12 July 2018. http://www.journalism.org/fact-sheet/local-tv-news/
Lutz, Ashley. “These 6 Corporations Control 90% Of The Media In America.” Business Insider. 14 June 2012. https://www.businessinsider.com/these-6-corporations-control-90-of-the-media-in-america-2012-6
Marshall, Andrew Gavin. “Controlling the Global Economy: Bilderberg, the Trilateral Commission and the Federal Reserve.” Global Research. 3 August 2009. https://www.globalresearch.ca/controlling-the-global-economy-bilderberg-the-trilateral-commission-and-the-federal-reserve/14614
“Newspapers Fact Sheet.” Pew Research Center. 13 June 2018. http://www.journalism.org/fact-sheet/newspapers/
“Network News Fact Sheet.” Pew Research Center. 25 July 2018. http://www.journalism.org/fact-sheet/network-news/
Park, Sungwoo. “How China Is About to Shake Up the Oil Futures Market.” Bloomberg. 9 February 2018. https://www.bloomberg.com/news/articles/2018-02-09/how-china-will-shake-up-the-oil-futures-market-quicktake-q-a
“Petrodollar.” Wikispooks. 6 February 2018. https://wikispooks.com/wiki/Petrodollar
Taylor, Andrew. “The US government’s budget deficit is about to explode – and the Trump tax law and spending surge is to blame.” Business Insider. 9 April 2018. https://www.businessinsider.com/us-budget-deficit-1-trillion-2019-cbo-report-2018-4
Van Dam, Andrew. “Record number of folks age 85 and older are working.” The Durango Herald. 6 July 2018. https://durangoherald.com/articles/230620
Wallace, Charles. “Trade War Hurts China While U.S. Economy Booms.” Forbes. 31 July 2018. https://www.forbes.com/sites/charleswallace1/2018/07/31/trade-war-hurts-china-while-u-s-economy-booms/#14dbb0ba5b64
Yiu, Enoch. “London Metal Exchange to launch yuan-denominated futures in sign of Chinese currency’s growing cachet.” South China Morning Post. 21 May 2018. https://www.scmp.com/business/banking-finance/article/2146956/london-metal-exchange-launch-yuan-denominated-futures-sign
