Category Archives: Economics/Statistics

What Does it Take to Be Middle Class in the US These Days?

by Gabrielle Olya Edited by Gary Dudak via gobankingrates

Over the last decade, the household income needed to be a part of the middle class has increased significantly. In 2012, a household income of $35,364 qualified you as a member of the middle class in the U.S.; in 2022, $50,099 was the lowest minimum household income threshold.

It also takes a lot more to reach the next level of wealth. In 2012, the highest household income considered to be middle class was $106,092, but as of 2022, that high end of the middle-class household income spectrum had reached $150,298. Overall, the household income required to be considered middle class in the U.S. has increased by 41.67% during that time frame.

However, the shifts in middle-class household income requirements have not been the same in every state. In some states, the household income range of the middle class hasn’t increased quite as much as the national average. On the other hand, it’s shot up by as much as 53.15% in one state.

To find the household income needed to be middle class in each state, GOBankingrates defined “middle class” as those with an annual household income that is two-thirds to double the median income.

Here’s a look at how much the definition of middle class has changed in every state from 2012 to 2022. States are ranked by largest to smallest percentage change.

Key Findings

  • Mississippi has the lowest household income needed to be middle class. As of 2022, a $35,323 salary is considered middle class in the state.
  • Maryland has the highest household income needed to be middle class. As of 2022, $65,641 is the lowest household income that qualifies you to be considered middle class in the state.
  • The definition of the middle class has changed the least in Alaska. The household income needed to be middle class in Alaska has increased by just 23.53% from 2012 to 2022.
  • In Oregon, the household income needed to be middle class has increased by 53.15% from 2012 to 2022 — the biggest increase of any state.

Read more here https://www.gobankingrates.com

Jeff Bezos’ Grandfather, A DARPA Co-Founder

Tyler Durden's Photo

BY TYLER DURDEN
What’s not widely known is that Amazon founder Jeff Bezos’ grandfather, Lawrence Preston Gise, helped form the Pentagon’s supersecret Advanced Research Projects Agency (ARPA—renamed DARPA) in 1958. Years later, DARPA developed the internet and spurred breakthroughs in high-speed networking, voice recognition, and internet search. 

One year before Gise died in 1995, Bezos founded Amazon in the garage of his Bellevue, Washington home.

Or so we’re told… 

John Greenewald Jr., who operates The Black Vault, a website dedicated to revealing declassified government documents through obtaining Freedom of Information Act requests, posted on X that he went after Gise’s “FBI file, but found out if there was one, it has been destroyed.” 

News website Leading Report’s Patrick Webb commented on Greenewald’s findings, saying, “There has long been speculation that DARPA has been involved in the creation of many popular big tech companies, using “frontmen” for the allusion of a startup led by outsiders.” 

With the contents of Gise’s FBI file unlikely to ever be unearthed and likely never destroyed, just inaccessible to FOIA requests or the public, other X users commented on Webb’s and Greenewald’s posts, pointing out how DARPA possibly created other big tech firms: 

Questions swirl about DARPA’s involvement in creating Amazon, given Bezos’ grandfather’s connection to the secret agency. 

Israel’s Economic Strains from Turkish Trade Ban

Via Middle East Eye

Sectors across the Israeli economy are warning of wide-reaching impacts of Turkey’s decision to halt all trade with Israel, and are scrambling to find alternative sources for lost imports.

The Turkish trade ministry announced earlier this week that Ankara is halting all import and export transactions related to Israel until it “allows an uninterrupted and sufficient flow of humanitarian aid to Gaza.” The ban on imports includes iron and steel products, construction materials, minerals, machinery, cars, energy products, rubber, plastics, health and agricultural products.

The construction industry is bracing for the loss of Turkish iron and steel products and building materials, as Turkey supplied 29 percent of Israel’s total cement imports last year.

Construction work on the settlement of Tzofim, east of the Palestinian West Bank village of Qalqilya, on 2 January 2024 (AFP)

Last month, Israeli businessmen warned that the restrictions could drive an increase in property and rent prices. Meanwhile, Israel’s largest oil refinery, Bezan, said the ban could impact crude oil imports.

Forty percent of Israel’s annual oil consumption is piped to the Turkish oil hub port of Ceyhan and then shipped to Israel.

Moreover, representatives of the electrical products industry are warning that the ban could lead to a 35 percent hike in prices, as the majority of domestic electrical goods in Israel are manufactured in Turkey.

The new restrictions could force importers to import across the Red Sea, where attacks by Yemen’s Houthi group have driven a spike in shipping costs.

‘Dire straits’

In April, the contractors’ association wrote a letter to Israeli Prime Minister Benjamin Netanyahu and Finance Minister Bezalel Smotrich, accusing them of driving the sector to the brink of collapse.

Amit Gottlieb, chairman of the Urban Renewal Committee in the Israel Builders’ Association (ACB), said the Israeli construction industry was already in “dire straits” since Israel’s war on Gaza began, due to labor shortages resulting from Israel’s ban on Palestinian workers.

He added that alternative imports of construction materials from Germany, Great Britain, the Czech Republic, Hungary and Greece needed to be arranged “as soon as possible”.

Turkey’s exports to Israel were worth $5.4bn in 2023, or 2.1 percent of its total exports, according to official data. From 2009 to 2023, trade between the two countries nearly tripled. By the end of that period, Turkey had become the fifth-largest supplier of goods imported by Israel, while Israel ranked as Turkey’s 10th-largest export market, based on data from the Central Bureau of Statistics.

On Thursday, Israel’s foreign minister, Israel Katz, accused Turkey’s President Recep Tayyip Erdogan of ignoring international trade agreements and acting like a “dictator”. He added that Israel would seek to replace the lost Turkish imports with locally produced goods or imports from other countries.

Why Does the US Gov. Borrow Money?

IMPORTANT QUESTION: “Why does the government borrow the money that it prints?”

Jared Bernstein, Chair of Council of Economic Advisers to Joe Biden: “I don’t get it”

➡️ Thought so, they don’t get it … LMAO

Fact. By law, the US Treasury cannot issue dollars, it can only mint coins. When the Federal Reserve (which is a consortium of private banks) wants to create money and put it into the system, it does so through banks lending money to the government. Treasury bonds are IOUs that the government issues in exchange for a loan. You, or the bank, buy a bond with cash today and the government promises to pay you back with interest in the future.

Banks like to hold treasury bonds because they’re viewed as low risk—it’s unlikely the US government will default on debt (any time soon at least). Treasury bonds also have the advantage that they’re relatively easy to sell to someone else to get cash. Economists call this ease of converting an asset into money liquidity.

When the Federal Reserve buys bonds, they have an advantage you and I don’t. They are allowed to print new money (in fact only FED is allowed to print dollars) to buy the bonds. It’s more likely that the money will be digitally created than literally printed, but the form of the money doesn’t make a difference.

Now, it is common to hear people say the Fed prints money.

That’s not technically correct. The Bureau of Engraving and Printing, an agency of the U.S. Treasury, does the printing. The Fed, for its part, purchases cash (dollars)  from the bureau at cost (which is pennies to the dollar) and then puts it in circulation.

A debt based monetary system is when money creation is issued as debt from commercial banks (primarily). The more money is created the more debt for the government.

Is the Confiscation of Russian Assets Imminent? Probably Not

by Sergey Markov

The law on the confiscation of Russian assets has been adopted by the US Congress. But this law does not make much difference for several reasons.
1. The law does not oblige the president to confiscate Russian assets. It only allows the president to confiscate them.
2. The general problem remains the same: if the United States actually confiscates Russian assets, then confidence in the dollar and American financial instruments will inevitably decrease in the world. And the United States would lose much more than the value of the confiscated assets.
3. Russian assets in the US amount to only 5 billion, whereas the EU has 210 billion. That is, only 2.5% of the blocked Russian assets are in the United States.
4. The main goal of the United States is not to confiscate Russian assets itself, but to force the EU to confiscate Russian assets in the EU. And the new law’s aim is to push the EU towards that.
5. But the EU is very much afraid of confiscating Russian assets. Afraid of Russian retaliatory confiscations. But the main thing is that it is afraid that after the theft of 200 billion dollars, confidence in financial instruments in the euro area will simply collapse. And the EU will lose trillions. And this will lead to a financial crisis. And the financial crisis will lead to an economic and political crisis.

Is Germany Heading for Dexit?

by German Gorraiz Lopez

After Brexit, Germany’s hypothetical exit from the EU would provoke the liquidation of the Eurozone and lead to the gestation of a new European economic map with a return to national economic compartments.

The Doctrine of the “Debt Brake”

As Joel Kotkin points out in Forbes magazine, for decades “the countries of the North (Germany, Norway, Sweden, Denmark, Holland, Finland and the United Kingdom) have compensated for very low fertility rates and declining domestic demand by accepting immigrants and by creating highly productive export-oriented economies”. In line with this, Germany introduced in its Constitution in 2009 the doctrine of the ‘Schuldenbremse’ (debt brake) with the principal objective that “every generation should pay its expenses and not consume (in the form of debt) the taxes that their children will pay “.

Germany achieved successive economic surpluses in the last five years because the ECB’s zero or negative interest rates required less money to pay public debt and allowed Germany to accumulate reserves, which enabled them to address the social crisis of COVID-19 with a massive investment boost estimated at €20 billion to kick-start the economy. 

A traffic jam for the German locomotive

However, according to an analysis by the German Institute for Economic Research (DIW), at present Germany is burdened by the war in Ukraine and by the total cut off of the Russian gas supply, which has have already caused a contraction of about €100 billion (2.5% of GDP). This contraction cause collateral damage, pushing the economy into recession and raising the unemployment rate, combined with runaway inflation and the loss of trade surpluses.

Thus, according to euronews.com <http://euronews.com/> , the German locomotive lost steam in the fourth quarter of 2023 (negative growth of 0.3% of GDP) due to higher energy prices, reduced industrial production due to weak European demand, stagnating domestic consumption and the loss of competitiveness vis-à-vis the rest of the world — which has resulted in a severe decline of 1.2% in exports in 2023.

At the same time, ECB interest rates rose to 4.5%. That, combined with the rampant inflation of 5.9% in 2023, caused real wages to stagnate in Germany. Fiscal adjustments and cuts in agricultural subsidies have put the German countryside and the other trade unions on the warpath.

Charles Dumas (Lombard Street Research London) argues that “Returning to a cherished German mark would squeeze profits, increase productivity and raise consumers’ real incomes, because instead of lending savings surpluses to peripheral countries, Germans could enjoy better living standards in their country”.

Increase in social fracture

According to a recent EU report, 7.5 million Germans work in the low-income sector (mini-jobs), and according to the NGO Paritätischer Gesamtverband, 14% of the people in Germany (16.6% of the population) are at risk of poverty.

This, together with the high proportion of immigrants in Germany (almost 20%), will exacerbate xenophobic feelings in German society (especially among East Germans), due to the reduction in the labour supply, fierce competition for jobs, and the conversion of many outlying neighbourhoods into genuine ghettos of immigrants. Thus, a spectacular rise of ultra-right groups is foreseeable in the 2025 elections.

On the way to Dexit?

According to a survey conducted by TNS-Emnid for the weekly magazine Focus, 26% of Germans would consider supporting a party that wants to take Germany out of the euro. The rising star in the German political firmament, “Alternative for Germany” (AfD ), was initially formed by academics and businessmen but it has been radicalized. It has adopted clearly xenophobic postulates, such as the possible expulsion of millions of foreign citizens, and they are considering proposing a referendum on Germany’s exit from the Euro (Dexit).

This hypothetical exit of Germany from the Euro would mean the beginning of the end for the Eurozone and the formation of a new European economic map that will mean the return to the fixed economic compartments — and the triumph of the US in achieving the Balkanization of Europe.

The Pushback & Cryptos to Keep the Gold Price Low

Watch the full interview:

Catherine Austin Fitts (CAF), Publisher of The Solari Report, financial expert and former Assistant Secretary of Housing (Bush 41 Admin.), says the top story (out of 20 top stories) of 2023 was massive, documented pushback to tyranny and control by the evil Deep State globalists. 

Join Greg Hunter of USAWatchdog.com as he goes One-on-One with the Publisher of The Solari Report, Catherine Austin Fitts for 12.30.23.

How To Keep the Gold Price Down ? They Invented Crypto!

”They want to keep the gold prices low and when the price goes up, what do they do? They promote crypto!… “ and that sucks up the excess dollars and removes them from the gold market. Voila! 

Watch the story from minute 42:

Huawei Breaks the 5G Blockade, Russia’s First Homemade SuperJet

via Moon of Alabama

Just a few month back I argued that the new economic protectionism the U.S. is pushing for will fire back:

Last week Secretary of the Treasury Janet L. Yellen gave a speech on the U.S.-China economic relationship. I called it a declaration of war.

Yesterday National Security Advisor Jake Sullivan held a speech on ‘Renewing American Economic Leadership’ which touched on some of the same themes as Yellen’s speech.

Sullivan argues that the U.S. must change course from opening markets and liberalization to targeted protectionism and subsidies for specific sectors. The main argument for it is ‘national security’ but the real aim seems to be the suppression of competition from others.

Sullivan’s whole speech is an argument against free markets and for protectionism and sector subsidies. It does away with the economic framework the U.S. had build after the end of the second world war. This is supposed to be replaced it with bilateral and block wise agreements that are to the advantage of the U.S., to the disadvantage of its agreement ‘partners’ and which exclude China and other ‘hostile’ economies.

The so called ‘decoupling’ or ‘de-risking’ from China is actually an attempt to isolate it. It creates a dynamic that will lead to import replacements in China.

This will lower exports to China from the U.S. and its allies. The whole scheme will thereby eventually work to China’s advantage.

Three years ago the U.S. prohibited domestic and foreign companies to stop the provision of 5G chips to Huawei. Thus a milestone of import replacement was revealed yesterday when Huawei announced a brand new 5G phone with Chinese made chips:

Huawei Mate 60 Pro has been silently launched in China. The successor to last year’s Huawei Mate 50 Pro, brings several major upgrades including satellite calling support and an LTPO AMOLED display. The handset sports a 6.82-inch AMOLED display with an adaptive refresh rate that ranges between 1Hz and 120Hz and a 300Hz touch sampling rate.

The U.S. pushed to stop supplies of 5G chips to Huawei. That led to a campaign to develop Chinese replacements. Huawei has also developed a graphic processor that is as fast as Nvidia’s A100 GPU which is used for high performance computing and AI development. The new 5G chip the phone is using has been confirmed as being genuine.

The $300 billion import of chips to China has shrunken as the country is fast in developing domestic replacements.

On the same day Russia increased its autonomy with the first flight of the new SJ-100 SuperJet which is based on the replacement of systems that previously came from foreign suppliers but are now produced domestically:

United Aircraft Corporation CEO Yury Slyusar also highlighted the broader implications of the project, declaring it a “testament to Russia’s technological self-sufficiency.” Slyusar added, “Our primary aim now is to obtain full Russian certification for the plane and initiate regular shipments to airlines.”

The launch of the plane and of Huawei’s new phone came on the same day U.S. Secretary of Commerce Gina Raimondo ended her visit to China. It was certainly meant as a point.

Today’s Global Times Editorial is rubbing it in:

Chinese companies will inevitably break through the blockade and move forward. This is the result of China’s overall development and close integration with global interests. In this era of globalization, the idea of kicking Chinese companies out of the industrial chain will only encounter increasing resistance because it goes against the law of development. The resurgence of Huawei smartphones after three years of forced silence is enough to prove that the US’ extreme suppression has failed. This also serves as a microcosm of the US-China tech war, reflecting the entire process and foreshadowing the final outcome. Recently, some American media outlets have been enthusiastic about hyping up things like Huawei is building a “secret” chip factory. Ultimately, these are all due to a failure to see or a refusal to believe in the general trend, and they hold on to outdated thinking that Chinese companies’ technology is all “stolen.” Essentially, it is Washington’s technological arrogance, and the US will definitely pay the price for this arrogance.

As China is training more engineers and researchers than the U.S. and Europe combined, it will eventually take the technological lead in many fields. Other countries will have to either become more specialized or close their markets to imports from China.

The later will in the longer run cause a less competitive environment that will come with higher costs and can only be sustained for a relatively short time.

Sanctions? Russia Joins World’s Top 5 Economies by PPP

via Sputnik International

The Russian economy exceeded $5 trillion in terms of purchasing power parity for the first time in late 2022, and stayed in fifth place in the world in this indicator, according to the World Bank

China became the world’s largest economy by PPP with $30 trillion, followed by the United States with $25.5 trillion. India closes the top three with $11.9 trillion, and Japan is in fourth place with $5.7 trillion.

In general, the world economy in terms of purchasing power parity grew by 11% – to $164.2 trillion, while 20 years ago it was a third as big: $54.1 trillion.