Wednesday, 30 May 2012

The National Attack Authorization Act? 

We all know that the National Defense Authorization Act (NDAA) signed by President Obama on New Year’s Eve contained a now-struck-down provision to authorise the indefinite detention of American citizens on US soil.

But did you know that the NDAA also paves the way for war with Iran?
 
                                            ............................. Aziz


Monday, 28 May 2012


The critical decision at the G-8 meeting and several of the bilateral meetings that took place on the sidelines of the Camp David gathering centered on the decision to plunge ahead with the bailout of the European banks in an effort to save the Euro system, with Greece still inside. President Obama is terrified that a financial meltdown of the Euro system will spill over into Wall Street and result in his losing the November elections. Behind the scenes around Camp David, Christine Legarde put the IMF squarely behind a bailout of the European banks, with the full backing of the Federal Reserve and Treasury in the United States to boost the leveraged lending of the European Central Bank (ECB) to prop up the European banks. ECB will take junk bonds and other vastly over-priced assets as collateral for loans to the Spanish, Greek and other European banks. This will offset an additional estimated $500 billion in new write-offs by bondholders of Greek debt....
                                                    ............Harry Schultz (courtesy of Jim Sinclair)

Sunday, 27 May 2012

         Message to Policy-Makers: Stop Pretending 

The world economy is a colossal Ponzi Scheme in which a fortunate few at the top reap the vast majority of the rewards while those further down the pyramid eat the bread crumbs falling off the table. This scheme has been fueled by unprecedented greed and gluttony, widespread ignorance and record levels of debt. We have now reached the point of inescapable economic collapse that will decimate the Western economies and cause unprecedented anarchy and geopolitical conflict.....

I have no faith that the policy-makers will ever balance another budget again or stop with their phony extend and pretend political games; however, reality is inevitable and time is running out on the debt-sponsored global Ponzi. Once we hit the inevitable Minsky Moment, the illusion-formerly-known-as-the-economy will collapse for good.....                                                        ...............KWN
On Niall Ferguson's newest book, Civilization: The West and the Rest
 The notion that civilizations do not decline but collapse inspired the anthropologist Jared Diamond's 2005 book, Collapse. But Diamond focused, fashionably, on man-made environmental disasters as the causes of collapse..... The Roman Empire did not decline and fall over a millennium... It collapsed within a few decades in the early fifth century... What all these collapsed powers have in common is that the complex social systems that underpinned them suddenly ceased to function....
 The U.S. ranks 86th in the world for the costs imposed on business by organized crime, 50th for public trust in the ethics of politicians, 42nd for various forms of bribery, and 40th for standards of auditing and financial reporting....the 1 percent that collects 20 percent of the income—has become dangerously divorced from the rest of society, especially from the underclass at the bottom of the income distribution....
...we need to... delete the viruses that have crept into our system: the anticompetitive quasi monopolies that blight everything from banking to public education; the politically correct pseudosciences and soft subjects that deflect good students away from hard science; the lobbyists who subvert the rule of law for the sake of the special interests they represent—to say nothing of our crazily dysfunctional system of health care, our overleveraged personal finances, and our newfound unemployment ethic....
                                                                        ............ John Mauldin.........
whatthe 1 percent that collects 20 percent of the income—has become dangerously divorced from the rest of society, especially from the underclass at the bottom of the income distribution.
What all these collapsed powers have in common is that the complex social systems that underpinned them suddenly ceased to function.
The U.S. ranks 86th in the world for the costs imposed on business by organized crime, 50th for public trust in the ethics of politicians, 42nd for various forms of bribery, and 40th for standards of auditing and financial reporting.
The notion that civilizations do not decline but collapse inspired the anthropologist Jared Diamond's 2005 book, Collapse. But Diamond focused, fashionably, on man-made environmental disasters as the causes of collapse.
The notion that civilizations do not decline but collapse inspired the anthropologist Jared Diamond's 2005 book, Collapse. But Diamond focused, fashionably, on man-made environmental disasters as the causes of collapse
Source: JohnMauldin.com (http://s.tt/16PpX)The notion that civilizations do not decline but collapse inspired the anthropologist Jared Diamond's 2005 book, Collapse. But Diamond focused, fashionably, on man-made environmental disasters as the causes of collapseThe notion that civilizations do not decline but collapse inspired the anthropologist Jared Diamond's 2005 book, Collapse. But Diamond focused, fashionably, on man-made environmental disasters as the causes of collapse
Source: JohnMauldin.com (http://s.tt/16PpX)The notion that civilizations do not decline but collapse inspired the anthropologist Jared Diamond's 2005 book, Collapse. But Diamond focused, fashionably, on man-made environmental disasters as the causes of collapse.The notion that civilizations do not decline but collapse inspired the anthropologist Jared Diamond's 2005 book, Collapse. But Diamond focused, fashionably, on man-made environmental disasters as the causes of collapse.The notion that civilizations do not decline but collapse inspired the anthropologist Jared Diamond's 2005 book, Collapse. But Diamond focused, fashionably, on man-made environmental disasters as the causes of collapse.
John Williams: The Real unemployment Rate 22% not 8.1%

The coming fiscal cliff: hyperinflation on track for 2014

If you feel the economy is not as strong as the government is saying or that inflation might be higher than what they’re reporting, you’re most likely right because you’re dealing with the real world... The government’s numbers don’t reflect what’s going on. It’s a matter of how they define it. They put in happy definitions that tend to give them a better economic result with lower inflation rates...
Quality adjustments are legitimate. Let’s say the surveyors for the Bureau of Labor Statistics, who go out each month and measure prices at all sorts of different locations, all sorts of different goods, let’s say the price of an 8 ounce candy bar; and the next month they go to price it and the package is the same but it’s a 6 ounce candy bar....
..... if you go back to 1933 when Roosevelt abandoned the gold standard, since then the purchasing power of the dollar has dropped about 98 percent....
                              ......................................... John Williams, ShadowStats

Friday, 25 May 2012


The bad news from last week's passage of the 2013 National Defense Authorization Act is that Americans can still be arrested on US soil and detained indefinitely without trial.... That the US government asserts the legal authority to pick up Americans within the United States and hold them indefinitely and secretly without a trial should be incredibly disturbing to all of us.


                                                                       ..................... Ron Paul 

The Olympics are coming home to the birth place of Crony Capitalism, and nothings more crony than 900 vested interests lining up to run a a few hundred yards to grab themselves as much as a £145,000 bounty by near immediately selling their 'precious' replica torches on ebay.

…… whilst I could rant on and on about the selling of Olympic torches, the truth is that this is but the mere tip of the cronyism iceberg. These 2012 Olympic games will have very little to do with sport but everything to do with the a feeding frenzy of cronyism as officialdom line up one by one for personal profit from a range of activities such as corporate sponsorship deals.


This is an example of where Britain stands today, society is literally rotting away, we saw it in last summers riots for goods in the shops and we are seeing it with the 2012 Olympics, this does not bode well for what could follow in the event of a Euro-zone sparked Financial Armageddon.
                        ....................... Nadeem Walayat

In both gross-margin and absolute terms, gold-mining profits continue to rise dramatically thanks to these sustained high gold prices. Late last August heading into the HUI’s all-time high, its components had a market-capitalization weighted-average price-to-earnings ratio of 23.3x earnings. By the end of April, it had plunged to just 13.2x!

 


So it’s not like gold miners aren’t earning money anymore with gold near $1500 instead of $1800. They are actually earning profits hand over fist, and are seriously cheap even by general-stock-market standards. 2011 was gold miners’ most profitable year ever by far, when gold averaged $1573 on close. So far this year, despite all the bearish gold hysteria, gold has averaged $1672! This is 6% higher.

Regardless of which angle you choose to view gold stocks from, their steep selloff culminating in this week’s capitulation climax makes zero sense fundamentally. The hard truth is gold stocks have been sold wildly disproportionately to gold’s own weakness merely because investors and speculators succumbed to their own unjustified fears. Capitulations are always irrational, emotional events.

                                                            .....................Adam Hamilton

Thursday, 24 May 2012


What we have discovered recently is that not only is the quality of China’s economic numbers are even worse than the US, but real time numbers indicate to us that China is probably already in a recession.

Electricity consumption now is barely growing after years of double digit gains. Rail cargos volumes are also now barely ahead and new bank loans are actually dropping.

Chinese residential real estate sales were down 17% in Q1 and other real time indicators indicate that demand and now prices for Chinese home are actually dropping.

                          ...................... Charles Biderman

Sunday, 20 May 2012



For members of the Club, life is a continuous success story. It doesn’t matter whether your products are terrible (GM) or even imaginary (Goldman Sachs). All that matters is the continuing flow of freshly printed money into your business. It’s like being a medieval noble; you can do no wrong. The courts will always find in your favor, you are never subject to the humiliations of peasants (airport security, police raids, etc.) All that you need is a little modification of language: "counterfeiting" becomes "quantitative easing", "theft" becomes "stimulus", and so on. After enough repetition, the peasants will believe that your wealth causes the Sun to rise in the morning, and that they must thank you for allowing them to pay for your palaces  and the subsidies for your unprofitable businesses.
                                                         ................... Bill Walker

Saturday, 19 May 2012

......the scope of global policy interventions over the past two decades (and especially since 2008) makes 1920’s policy measures look rather microscopic in comparison...........There is overwhelming evidence supporting the view that European policymakers have lost control of their debt crisis .... the sovereign and banking system nexus has become only more toxic. And with the ECB today highly exposed to Greece and Portugal, there are myriad issues that will have the European Central Bank treading cautiously when it comes to accumulating Spanish and Italian debt. The Europeans will have to use the “firewall” they had hoped was fashioned only for show...
If the European debt fiasco wasn’t enough, it is increasingly clear that China is faltering. Recent economic data confirm the Chinese economy has commenced a meaningful downturn. Housing markets continue to weaken, and there has been increased focus on rising inventories of apartments, automobiles, steel, raw materials, commodities, etc. Shanghai News this week reported that China’s four largest banks essentially had zero net loan growth in the first two weeks of May, confirming that April’s sharp lending slowdown gained momentum. It is also apparent that, despite recent reductions in bank reserve requirements, finance has tightened throughout important markets for non-bank finance (including securitizations and corporate bonds). I don’t see China’s economic and financial systems responding well to an abrupt Credit slowdown......

                                     ..................... Doug Noland

Friday, 18 May 2012


….simply by accident of birth, you are born with a lifelong obligation that you never signed up for to finance the corrupt misdealings of the political class....
                                                       ................ Simon Black


We've had it backward for the last 30 years. Rich businesspeople like me don't create jobs. Rather they are a consequence of an eco-systemic  feedback loop animated by middle-class consumers, and when they thrive, businesses grow and hire, and owners profit. That's why taxing the rich to pay for investments that benefit all is a great deal for both the middle class and the rich...... 

By Jim Tankersley  


Curing Debt with Debt – Bad Things Will Happen

The main problem is that the country is excessively indebted. We have got too much debt – public and private – relative to GDP, and an increasing portion of this debt is unproductive or even counterproductive, which means that we are not going to be able to generate income in the future to service the debt.

…Charles Kindleberger, in his great book Manias, Panics, and Crashes, called it "overtrading." In other words, people do things beyond their fundamentals, and for a time it is very enjoyable. Incomes are rising, prices are rising, people are being employed, but the process can go too far; and then Kindleberger said that you eventually move into what is called "discredit." Discredit is when a certain discerning minority starts pulling their money out. And then discredit leads to revulsion, when the general population realizes that there are a lot of core problems and they try to pull out, and then you have your crash.
                                                   .................... Lacy Hunt

Thursday, 17 May 2012


Is anyone from the major banks in New York ever prosecuted? The answer is no! The rule of law has meant nothing in the MF Global case.What happened to Corzine?

                                           ............................  Martin Armstrong
Welcome to the American police state
The terrorist has never had it so good. The level of fear in this country has grown to a point where weak willed Americans just want to be safe no matter what the cost and that cost is your freedom......
    ...........Ken Hildebrand
                                     
Americans in particular are prone to reactionary dismissal when exposed to facts that disrupt their misconceptions. Our culture has experienced a particularly prosperous age, not necessarily free from all trouble, but generally spared from widespread mass tragedy for a generous length of time. This tends to breed within societies an overt and unreasonable expectation of ease. It generates apathy, and laziness. A crushing blubberous slothful cynicism subservient to the establishment and the status quo. Even the most striking of truths struggle to penetrate this smoky forcefield of duplicitous funk.
                                                               ......................... Brandon Smith

Daily Bell: You want to end the Fed don't you? What would you put in its place?
Mish Shedlock: One word: nothing. The free market can easily set interest rates.
Monkey See Monkey Do

Nobody wants to talk about it. And certainly the mob does not want change when it is painful and violently alters the illusion. This is why the fascist oligarchs and bureaucracy that control power in America (and abroad) are allowed to remain at the forefront, not accountable for their actions and accelerating the decay of our society. And this is why our civil liberties and freedom are systematically stolen by these same perpetrators, because the mob is too afraid and soft on the alternatives. This is our time of bread and circuses.
                                                       .................. Captain Hook     
                                                         



Thucydides ….. describes the breakdown of civil society and in doing so it perfectly describes every civil war and revolution that has taken place in the almost two and half thousands years since it was written including the English Civil War, French Revolution, American Civil War, Russian Revolution, and Spanish Civil War. Human nature, it seems is immutable. I bring it to attention in the vain hope that those who have blindly pursued the policies which have brought Greece to the brink and risks plunging the whole of Europe into the abyss, might consider more keenly the consequences of their actions and change course before it’s too late.

                                                               ........................... gojam
                      

Sunday, 13 May 2012

 
What exists today in India is a government, both at the Union (national) and State levels, that is increasingly run for lower castes and other disadvantaged groups. The private sector on the other hand has managements dominated by upper caste groups. This is not a healthy situation...
Somewhere in the next one to three years –maybe sooner --India will have another crisis. If the crisis of 1991 is any guide India will simply run out of foreign reserves, the rupee will collapse and financing for imports will dry up. Hopefully then genuine reforms will be introduced and some roll back of recently introduced welfare programs will occur.
Until then, stay away from Indian stocks.

............ Peter T Treadway (The Dismal Optimist)

 04.2012 India A Bric Hitting a Brick Wall PDF
A world terrified by impotent ghosts from the past
Bankers quote the past purely from sociopathic greed. They point to it as a track record…while noting, in half-point type at the bottom of every investment contract, ‘The past is no guide to the future’....

Large multinationals recite the theories of Ted Levitt ad nauseam. Levitt is the man who invented globalism, and then rationalised it with a stream of assertions, very few of which bear any interrogation at all.....

                   ..................... John Ward



....Up until the turn of the millennium, the job of all governments has been to make resources available at lowest cost to giant business cartels and to lightly manage the prosperity that resulted, making certain that those at the bottom of the economic food chain were not over-supplied. The expression of this idea can be found in every kind of government including the dictatorships, monarchies and republics, constitutional and otherwise: all of these are prosperity governments. The politics in all their variety functioned more or less because there were always more resources to exploit....

                        ................... Steve from Virginia, (www.economic-undertow.com)
  Crisis of the Old Order

....Wall Street has captured the government’s levers of financial decision making. Public-employee unions utilize their power to capture greater and greater shares of the public fisc. Corporations foster tax-code provisions that allow them to game the system. “Crony capitalism” is endemic. Members of Congress tilt the political system to favor incumbency. A national-debt burden threatens the country’s financial health. And American citizens have become increasingly frustrated and angry...                     
                   ...... The Editors,  National Interest

                                                  


"The choice facing all societies going back to the Greeks, Romans, the British Empire and now America seems to lie between using inflation and debt to stimulate economic growth when real production proves inadequate and turning to war to create growth at the expense of others. Finding a way to avoid these two extremes is now the chief concern."
                                                              ....Christopher Whalen



The new Japan is China...The new Greece is Spain... The new America is Brazil... But what happened to the old America? It’s the new Argentina...
.......
The Pentagon has gone rogue. It no longer protects the US from war; it causes wars. It no longer seeks to win wars; it wants them to go on forever. It no longer avoids wasting US resources; it sucks up all it can get.
                                               
                                                        ....Bill Bonner (Daily Reckoning)

Friday, 11 May 2012


"The solution to the looming federal funding crisis could hardly be simpler. America has a credit card. What it sorely needs is a debit card. Imagine a super-premium platinum credit card with no preset spending limits; no membership fee; low, low interest rates; and no requirement ever to repay the outstanding balance. You spend to your heart’s content, the only limit being a statutory debt ceiling that Congress dutifully raises whenever you bump up against it."....            
                                                       ........ James Grant




So – after Spain's banks have gorged themselves for months on bonds issued by their sovereign, they are now turning back and asking for some of that money to be shifted back their way, in the usual 'I bail you out if you bail me out' Three Card Monte that's being played between the ECB, the commercial banks and governments in the euro area....
                                        .......... Peter Tenebrarum (Acting Man)



Today’s economy is based on theft under the euphemism of “free enterprise.” It’s sometimes called “socialism for the rich” because they receive most government subsidy. But it’s not the kind of socialism that people talked about a hundred years ago. It is a travesty of social democracy and socialism. In a word, it’s oligarchy. But we’re living in an Orwellian world. No party calls themselves fascist today, or even anti-labor. They call themselves social democracy. But it’s the opposite of what social democracy meant in the 19th and early 20th century.



Social Security has not yet been privatized, but education has – not only privatized, but financialized. Students no longer get free or low-priced education. In order to qualify for professional jobs in America, they have to take out loans that put them deeply in debt. Then, when it comes time to start a family, they have to take on a lifetime 30-year mortgage debt. They need to take out an auto loan to buy an automobile to drive to work, especially where public transportation has been dismantled as in Los Angeles. And when their paychecks are squeezed more, they can maintain their living standards and social status only by taking on credit card debt."

...............

An object lesson of the shift from classical democracy to post-classical oligarchy is a country that is held out to you as a success story: Latvia, where neoliberals had a completely free hand, as they did in Russia. What they call a neoliberal paradise turned out to be debt-ridden kleptocracy. The country has a set of flat taxes on employment of 59 percent – and only a 1 percent real estate tax. "

                                                          ...... Michael Hudson



Thursday, 10 May 2012

Plutonomy, Precariat and a new Dark Age?


"The Occupy movement has been an extremely exciting development... sit-down strikes, are frightening to the business world ... - because a sit-down strike is just a step before taking over the factory and running it yourself.... The idea of worker takeovers is something which is, incidentally, very much on the agenda today...

Plutonomy refers to the rich who buy luxury goods whilst the Pracariat are people who live a precarious existence at the periphery of society. Only it’s not the periphery anymore. It’s becoming a very substantial part of society.... If working people are insecure, if they’re part of the precariat, living precarious existences, they’re not going to make demands, they’re not going to try to get better wages, they won’t get improved benefits....

By Noam Chomsky

To read more, click here
Tom Dispatch

The Japanese are Dumping their Gold


In Japan, people who are old enough to have lived it as adults still reminisce about the bubble that blew up in 1989 when the Nikkei almost hit 40,000 (now at 9,045) and when the sky-high prices of real estate could only go up further.....

"Historically, gold flowed to wealthy countries," said Itsuo Toshima, former Japanese representative at the World Gold Council. And a massive gold outflow, he said, is a sign of Japan's "declining economic power."?
.......................   Wolf Richter (Testosterone Pit)

Perhaps, selling gold may very well be the only way that many Japanese can raise the money they so desperately need.

To read more, click here

Dan Kervick: The Political Economy of Citadella

Imagine a world and a society in which 500 people own everything – absolutely everything.... The labors of the 100,000 workers yield more delights than can possibly be enjoyed by the 500 owners as the latter live out their luxurious but all-too-finite lives...

Despite their sumptuous and sybaritic lifestyle, the owners are frugal savers of their unused property. They are determined to preserve and maintain possession of everything they own, including all of those assets that are not in use for their own present consumption or for the present payment of their workers. They are determined to keep all of their superabundant property in their own possession, in perpetuity... Also, the owners are wary of permitting production lest the rude millions improve their material conditions and powers enough to become threats to the power of the owners and rulers of the Citadel.....Could we be living in Citadelia?

To read more, click here

Tuesday, 8 May 2012

Global Economic Outlook: Case Study - China


A DIFFERENT WAY OF LOOKING AT CHINA

Hard landing, soft landing, civil unrest, dominant economic superpower – the forecasts flow freely regarding China. The fact that good data is hard to come by regarding China does not seem to inhibit many outside observers. In this piece I will look at China through the lens of economic structure, Chinese history and culture—concepts which a number of observers often overlook. My general conclusion is that Chinese GDP growth rates are about to undergo a gradual but nevertheless perceptible decline. But I now believe a hard landing crash is unlikely, assuming that Europe does not totally disintegrate and the US does not roll over into a full scale recession.....                
                    By Peter T Treadway (The Dismal Optimist)

Sunday, 6 May 2012

Gold is a political metal

Up until August 15, 1971, there has never in history been an era when no paper currency was linked to Gold. The history of money is replete with instances of coin clipping, printing, debt defaults, and the other attendant ills of currency debasement. In all other eras of history, people could always escape to other currencies, whose Gold backing remained intact. But since 1971, there is no escape because no paper currency has any link to Gold. All of the economic, monetary, and  financial upheaval of the past 30 years is a direct result of this fact.

 Gold This Week

..... By The-Privateer To read more, click here

There’s Always Free Cheese in a Mousetrap

Recently, a wealthy customer of mine came into my office chortling about how he was able to sign up for VA disability:

“Are you disabled?” I asked. “You seem healthy, aren't you a tennis player?”
“Yes,” he replied, “but back when I was in the military I had a very hard landing (wink, wink), and now I’m starting to feel some of those aches and pains.”
To this I replied, “You’re a wealthy man. You’re worth millions. Why would you need to sign up for VA disability benefits and collect $1,400 a month from the government when you don’t need the money?”
“You are right. I don’t need the money, but why not?” was his reply. “Everyone is doing it. The government is giving it out. It’s easy and it’s free.”

........ By Ross Hansen (Financial Sense)

To read more, click here

Wealth, Income, and Power in America

From 1990 to 2005, CEOs' pay increased almost 300% (adjusted for inflation), while production workers gained a scant 4.3%. The purchasing power of the federal minimum wage actually declined by 9.3%, when inflation is taken into account.

.......... By G.William Domhoff

To read more, click here

How a Cashless Society Promotes Tyranny...


How Will Money Be Defined in a Cashless Society?

Is money a real thing, a commodity? Or is it an abstraction and a social construct? Normally you wouldn’t have to ask a question like this. You reach in your pocket and trade the paper there for the thing you want. It works without thinking. But it only works if everyone agrees on what money is.

If money is an abstraction it certainly makes it a lot easier to do business. But it also makes it a lot easier for the government to watch your every move. If every transaction is digital, it’s traceable, and can be produced when you’ve been audited by the tax authorities.
                                                                ........ Dan Denning ( Daily Reckoning)


To read more, click here