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Posts Tagged ‘politics’

Election Fraud: Accounts Of Voting Machines Turning Mitt Romney Votes Into Barack Obama Votes

November 17th, 2012

Michael Snyder: Why is the mainstream media saying nothing about election fraud even though there are eyewitness reports from all over the country of voting machines turning Romney Read more…

Economy, Government

22 Signs That Voter Fraud Is Wildly Out Of Control And The Election Was A Sham

November 13th, 2012

Michael Snyder: After what we have seen this November, how is any American ever supposed to trust the integrity of our elections ever again?  There were over 70,000 reports of voting Read more…

Economy, Government, Markets

8 Shocking Rumors That Could Change The Outcome Of The U.S. Election

October 23rd, 2012

This is proving to be one of the tightest presidential elections in U.S. history, and with less than two weeks to go even a minor scandal could completely change the outcome of the race.  Read more…

Economy, Government

Big Oil Funding U.S. Politics

October 2nd, 2012

U.S. Rep. John Boehner, speaker of the House of Representatives, received nearly twice as much financial support from donors tied to the energy sector than did the next-closest recipient, a report from the National Wildlife Federation finds. The 20-page report highlights Read more…

Uncategorized

40 Reasons That Show Barack Obama And Mitt Romney Are Essentially The Same Candidate

August 20th, 2012

Michael Snyder: What a depressing choice the American people are being presented with this year.  We are at a point in our history where we desperately need a change of direction Read more…

Economy, Government

Federal Government: More Than 100 Million Americans Are On Welfare

August 17th, 2012

Michael Snyder: There are more Americans dependent on the federal government than ever before in U.S. history.  According to the Survey of Income and Program Participation conducted by the U.S. Census, well over 100 million Americans are enrolled in at least one welfare Read more…

Government

Darkening Storm Clouds on the US Civility Horizon

June 10th, 2011

Today, a new post on our friend Barry Ritholtz’s blog looks at Jack Cafferty’s new CNN Question of the Hour: What are the chances the US economy could eventually trigger violence in our country?

A few choice quotations help explain the perspective:

  • “A new CNN poll suggests 48 percent of Americans think the country is headed for another Great Depression in the next 12 months.”
  • “If our economy doesn’t turn around, and people don’t start feeling optimistic about their futures again, we could be headed for some ugly scenarios.”
  • James Carville remarked, “The current economy is so bad, there’s a heightened risk of civil unrest unless things begin changing for the better.”
  • “In the most recent jobs report, last Friday, more than half of the private sector jobs added were at McDonald’s.”

Some viewer reactions point out challenges with wealth disparity in the nation, as well as with increasing prices of gas, groceries, and other basic items as the ingredients of “a crumbling nation.” You can view more details in the video below which came to our attention via a Big Picture blog post on how the handling of the economic crisis may lead to civil unrest.

Darkening Storm Clouds on the US Civility Horizon originally appeared in the Daily Reckoning. The Daily Reckoning provides over half a million subscribers with literary economic perspective, global market analysis, and contrarian investment ideas.

Read more here:
Darkening Storm Clouds on the US Civility Horizon




The Daily Reckoning is a contrarian e-letter, brought to you by New York Times best-selling authors Bill Bonner and Addison Wiggin since 1999. The DR looks at the economic world-at-large and offers its major players – investors, politicians, economists and the average consumer – some much-needed constructive criticism.

Commodities, Uncategorized

More Catalysts for the Impending Crisis

June 2nd, 2011

Somewhere in the sad tale of Raymond Zack lies a warning about the future – the new financial crisis the catalysts for which we were searching yesterday and the day before.

Zack, depressed and on disability, walked into San Francisco Bay on Monday…and allowed the tide to wash him away to his death. He was 52.

The windsurfers and joggers at Crown Memorial State Beach stood and watched. One called 911. Alameda police and firefighters showed up. They too stood and watched.

And that’s all they did.

Funding for the fire department’s water-rescue training program dried up in 2009. That meant firefighters had to use overtime hours to train… and OT has been cut back recently. So no one had the proper certification. “Without it, the city would be open to liability,” reports KGO-TV.

Two hours later, an off duty nurse swam out 50 yards to retrieve Zack’s body. Liability was no longer an issue.

“It’s like you are living in a different country,” a witness told the San Jose Mercury News.

Indeed it is. The country is broke. And the impact of its bankruptcy is beginning to show  from the bottom up. Libraries are closing in Charlotte, N.C. Garbage pickup is being cut back in Columbus, Ga. Camden, New Jersey’s police force has been cut in half.

As early as January 21, 2010 the Atlanta Journal Constitution was beginning to report on the seeds of the new crisis: “About 80 percent of stimulus money has gone directly to state governments,” the paper observed. “Instead of being used to create new jobs, the bulk of the money has been used to save existing state government jobs – teachers, law enforcement and others – and for shoring up sagging state budgets.”

In a new documentary, we’ve tentatively titled “Risk!”, we’ve been chronicling the challenge of entrepreneurs in the post-Panic environment to create and sustain new jobs. The policy mix that has come along with the effort to save government budgets has been anathema, in our opinion, to an environment that encourages entrepreneurship.

Unless the politics change, and people begin to realize that government, even at the local level, cannot be the guarantor of American prosperity, the economy will continue to be hollowed out from the inside. Capital, in large quantities, is being misallocated to saving unproductive government assets… and crowding out investment in job creating entrepreneurial efforts.

Worst of all, it’s not like the government is using its savings to fund their spending sprees. As you know, the US government has no savings. Instead policymakers have chosen to swipe Uncle Sam’s credit card and…poof, everything has been magically “paid” for.

We can’t help but sit back and wonder what the world looks like when that credit card is eventually cut off. Or when it becomes much more expensive for the Federal government to borrow money.

As we pointed out in our first film, I.O.U.S.A., the States can’t print money. They have to cut spending. They have to cut services like policeman, firefighters and trash collection. For most Americans, those cuts won’t be popular. As we’ve seen all across the country, people get angry they things they’ve been “promised” are cut.

But unlike the States, when the Federal government’s credit card it cut off they don’t have to cut back. They can continue to spend. Continue to promise. And continue to run the printing presses day and night to pay for political whims. But for how long?

Addison Wiggin
for The Daily Reckoning

More Catalysts for the Impending Crisis originally appeared in the Daily Reckoning. The Daily Reckoning provides over half a million subscribers with literary economic perspective, global market analysis, and contrarian investment ideas.

Read more here:
More Catalysts for the Impending Crisis




The Daily Reckoning is a contrarian e-letter, brought to you by New York Times best-selling authors Bill Bonner and Addison Wiggin since 1999. The DR looks at the economic world-at-large and offers its major players – investors, politicians, economists and the average consumer – some much-needed constructive criticism.

Uncategorized

How Zombies Get Rich and Drive the US Economy

June 1st, 2011

First, let’s look at what Mr. Market is doing to see if he will give us a hint of what is going on. He’s supposed to know everything. And he’s supposed to look ahead and tell us what is coming.

So already, Mr. Smarty-Pants, what’s up? Alas, Mr. Market seems as confused as we are.

Stocks rose yesterday…for no apparent reason. Oil went up a little too. Gold stood still.

Interestingly, bond yields continue to fall. The 10-year note yields only 5 basis points over 3%. Since the government’s own calculation of inflation over the last three months puts it over 5%, this leaves the real yield negative by more than 200 basis points. What are bond buyers thinking? Beats us.

We only know what we’re thinking. And we’re thinking that anyone who buys bonds with a negative yield…while the Fed shows every intention of raising inflation rates further…is a moron.

Of course, he could turn out to be a very clever moron…or a lucky moron. Yields could continue to sink as the Great Correction does its work. The Fed could buy even more bonds – driving prices up (and yields down) further. But count us out. We’re not that clever. Nor that lucky.

Meanwhile, the housing slump has now wiped out 8 years of price increases.

Bloomberg is on the story:

Home prices in 20 US cities dropped in March to the lowest level since 2003, showing housing remains mired in a slump almost two years into the economic recovery.

The S&P/Case-Shiller index of property values in 20 cities fell 3.6 percent from March 2010, the biggest year-over-year decline since November 2009, the group said today in New York. At 138.16, the gauge was the weakest since March 2003.

Other reports today showed consumer confidence unexpectedly declined in May to a six-month low, and business activity in the US cooled more than forecast.

Nineteen of the 20 cities in the index showed a year-over-year decline, led by a 10 percent slump in Minneapolis. The exception was Washington, where values climbed 4.3 percent.

Prices in 12 markets dropped to fresh lows in March from their 2006, 2007 peaks: Atlanta, Charlotte, Chicago, Cleveland, Detroit, Las Vegas, Miami, Minneapolis, New York, Phoenix, Portland, Oregon, and Tampa.

Builders are gloomy and project demand will remain depressed into next year, Bill Wheat, chief financial officer of D.R. Horton Inc., told a housing conference in New York on May 11.

“We still see housing demand at very weak levels,” Wheat said. “It could still be a struggle in 2012.”

Did you notice? Only the zombies’ houses are rising in value. Alone among major metropolitan centers, Washington, DC posts real estate gains.

How is that possible? Oh don’t pretend to be so naïve. You know what the zombies are doing. Almost all GDP growth in the past 10 years has come from government spending. And the majority of household income growth since the beginning of the crisis in ‘07 has come from government transfer payments.

The zombies are flourishing, prospering…gorging themselves on the blood of the nation. Your editor sees it first hand. He lives among them. He watches them coming and going. He has learned their zombie language and studied their zombie ways. From a distance, they look like normal people. But up close, you see that they are imposters. Only their lowest-ranking members do any real work – picking up garbage or teaching kindergarten. As you move up the zombie hierarchy you find managers with no real responsibility and intellectuals with no real ideas.

Just read Jeffrey Sachs in yesterday’s Financial Times. Mr. Sachs is a member of the zombie intelligentsia: “The world economy is rife with lawlessness and recklessness,” he laments, “with tax havens and regulation-free zones catering to the avarice of globally mobile capital. [The new head of the IMF] should be given the task of systematically shutting these venues down…”

That’s right – hire more zombie regulators, tax collectors, and enforcers!

Why are zombies so rich? Here’s part of the answer, from The Washington Post:

It’s no secret that members of Congress qualify as political insiders, but a new report strongly suggests that they also may be insiders when it comes to trading stocks.

An extensive study released Wednesday in the journal Business and Politics found that the investments of members of the House of Representatives outperformed those of the average investor by 55 basis points per month, or 6 percent annually, suggesting that lawmakers are taking advantage of inside information to fatten their stock portfolios.

“We find strong evidence that members of the House have some type of non-public information which they use for personal gain,” according to four academics who authored the study, “Abnormal Returns From the Common Stock Investments of Members of the US House of Representatives.”

The professors reviewed more than 16,000 common stock transactions carried out by about 300 House members as revealed in the members’ financial-disclosure forms from 1985 to 2001.

In a 2004 study, the same professors found that US senators also enjoy a “substantial information advantage” over the average investor – and even corporate bigwigs – when it comes to picking stocks. The latest study shows that members of the Senate outperform their House colleagues by an average of 30 points per month.

Despite the GOP’s reputation as the party of the rich, House Republicans fared worse than their Democratic colleagues when it comes to investing, according to the study. The Democratic subsample of lawmakers beat the market by 73 basis points per month, or 9 percent annually, versus 18 basis points per month, or 2 percent annually, for the Republican sample.

Surely, the SEC is on the case! Demanding to see trading records of Members of Congress…probing into when…how…and why…the politicos made their trades, right? Nah… You really were born yesterday, weren’t you, dear reader? Zombies rarely pose a threat to each other. Congress exempted itself from the SEC.

Our old friend Doug Casey adds a comment:

…the SEC, which should really be called the Swindlers Encouragement Commission, [is] telling people it’s making sure everything’s fair, thus luring the lambs to the slaughter. The investment world is full of sharks, and it always will be – all the SEC does is lower the average guy’s defenses, which really does encourage swindlers. Just look at Bernie Madoff, a perfect example. The SEC has never prevented a fraud, to my knowledge. Rather, by making everyone think they’re protected, it makes a fraud much easier to perpetrate. Lambs to the slaughter.

It gets worse: adding insult to injury, the SEC costs business billions of dollars annually – probably scores of billions, if you take all the secondary and trickle-down costs into account: direct fees, legal fees, printing, mailing, and other costs of compliance. They have a direct budget cost of something over a billion dollars per year, but that’s trivial relative to the indirect costs they impose on the economy. They ought to be ashamed, diverting a significant fraction of GDP from productive use into the pockets of parasites, in the name of protecting business and investors, when they do the opposite. The SEC is like a Pied Piper who attracts ravening hordes of rats with his flute instead of getting rid of them – and then charges people tenfold for the “service.”

This is one agency I would abolish, immediately and completely. Not a single one of its functions should even be handed off to other agencies. The SEC serves absolutely no useful purpose whatsoever – just the opposite. It’s not a question of getting it under control, or paring it back. It should be eliminated in toto.

Regards,

Bill Bonner
for The Daily Reckoning

How Zombies Get Rich and Drive the US Economy originally appeared in the Daily Reckoning. The Daily Reckoning provides over half a million subscribers with literary economic perspective, global market analysis, and contrarian investment ideas.

Read more here:
How Zombies Get Rich and Drive the US Economy




The Daily Reckoning is a contrarian e-letter, brought to you by New York Times best-selling authors Bill Bonner and Addison Wiggin since 1999. The DR looks at the economic world-at-large and offers its major players – investors, politicians, economists and the average consumer – some much-needed constructive criticism.

Real Estate, Uncategorized

CIA Now Thinks Greece Military Coup Possible

June 1st, 2011

Despite last year’s 110 billion euro Greece bailout — from the European Union, the International Monetary Fund, and the European Central Bank — there remains serious concern that the periphery EU nation will be unable to continue its debt repayments. Due to the increasing severity of the problem, and the ongoing resistance to additional support, the Central Intelligence Agency has now issued a report warning on how worsening Greek unrest could bring rise to even a military coup.

According to Turkey’s Daily News & Economic Review:

“According to he CIA report, ongoing street protests in crisis-hit Greece could turn into escalated violence and a rebellion and the Greek government could lose control, said Bild. The newspaper said the CIA report talks of a possible military coup if the situation becomes more serious and uncontrolled.

“Greece is under immense pressure owing to public debt that has swollen to 340 billion euros. The EU, IMF and European Central Bank are pressing Greece to step up a privatization program and get all political parties to approve more austerity and reform measures that have sparked violent protests, but emergency talks called by the president on Friday failed to make any headway, AFP reported.

“Opposition parties have mostly refused to support the government in its quest to cut spending by trimming an overblown civil service and the sweeping privatization drive announced this week has attracted even stronger protests.”

A number of European Union countries including Germany, Finland, and the Netherlands have lost already lost interest in and support for extending any further bailout funds to Greece as its austerity measures continue to flounder. You can read more details in the Daily News & Economic Review’s coverage of the recent CIA report on how a military coup is possible in Greece.

Best,

Rocky Vega,
The Daily Reckoning

CIA Now Thinks Greece Military Coup Possible originally appeared in the Daily Reckoning. The Daily Reckoning provides over half a million subscribers with literary economic perspective, global market analysis, and contrarian investment ideas.

Read more here:
CIA Now Thinks Greece Military Coup Possible




The Daily Reckoning is a contrarian e-letter, brought to you by New York Times best-selling authors Bill Bonner and Addison Wiggin since 1999. The DR looks at the economic world-at-large and offers its major players – investors, politicians, economists and the average consumer – some much-needed constructive criticism.

Uncategorized

Storm Warning!

May 19th, 2011

An Interview with Addison Wiggin by Chris Martenson

Welcome to Crash Concepts where the economy, energy, and the environment are explored. Up next, fresh ideas and insights into the factors that are driving the world and shaping your future. Presenting information you can’t afford to live without, here’s Chris Martenson.

Chris Martenson: Welcome to another chrismartenson.com podcast. I am your host, Chris Martenson, and today we have the pleasure of speaking with Addison Wiggin, executive publisher of Agora Financial, LLC, the independent economic forecasting and financial research firm he runs with Bill Bonner. Agora’s wide-ranging operations include the influential econo-blog, The Daily Reckoning, bestselling publications such as Financial Reckoning Day Fallout, and The New Empire of Debt, both of which Addison coauthored with Bill.

Addison, you’re a man of many talents. I’m delighted to have you here today.

Addison Wiggin: Well thanks for having me, Chris. I’m happy to be here.

Chris Martenson: For many years now you’ve been prolific in your efforts to wake up the investing public to the risks that lie ahead. Your books, The Demise of the Dollar, Empire of Debt, Financial Reckoning Day, your movie, I.O.U.S.A., all predicted a future that is increasingly now unfolding before our eyes. I’m wondering if you’re experiencing some emotional conflict here.

Your predictions have become soundly validated, yet that means sort of the dire outcome you feared is arriving. What’s it like for you to be at this time in history?

Addison Wiggin: Well it is kind of an interesting time because we had gotten used to, for well over a decade, being mocked by people in the mainstream press and even people in my own family… There’s a whole generation of Americans today that don’t understand the very nature of capitalism – the savings and investment that led to the United States being one of the more prosperous countries the world has ever known…

Chris Martenson: Yeah, so what’s a big surprise for you in this story so far? What’s unfolded maybe a little differently than you thought?

Addison Wiggin: Actually the thing that has been most surprising to me has been the willingness with which politicians in Washington have abandoned the very causes and ideas that led us to be a prosperous society in the first place. I suspected they would do it all along, but just to give you an anecdote in August of 2008 right before the last presidential election, we premiered I.O.U.S.A. This was before stimulus and bailouts, before trillion-dollar deficits. We had spent two-and-a-half years making a movie about the disastrous state of the financial balance sheet in Washington. We were running history deficits of what now seemed like a quaint $450 billion, and we had a mounting pile of unfunded liabilities.

We made the movie and released in August of 2008 for a reason, we wanted it to be part of the national conversations during the presidential campaign season. In August of 2008 we got Warren Buffet together with Pete Peterson, David Walker, the former Comptroller General, we premiered the movie, and we held a national town hall meeting with the intention of making deficit spending and unfunded liabilities a part of the conversation that was going on in Washington prior to electing the new president. We broadcasted on CNBC, we thought we made a big splash. Less than six weeks later, Lehman Brothers declared bankruptcy.

And we were already on sort of the wrong course to fiscal mayhem, and after September 17th, 2008 we jumped course and we got on a faster track and I guess my biggest surprise is how quickly people were willing to engage in the amount of stimulus bailouts and deficit-spending. They just kind of abandoned any kind of fiscal defense to a much greater degree than I thought was even possible.

Chris Martenson:
I found that surprising as well… And it was just surprising that money was just thrown everywhere at this problem…

Addison Wiggin: Right, even, even the voices that we followed for a couple of years while filming I.O.U.S.A., David Walker principally amount them. He fully supported the stimulus spending, even though we were documenting his efforts to wake people up to what was happening with the fiscal condition of the United States… It was just surprising to me that for all these people that we’ve elected to office and for the amount of study and intelligence that they presumably have, they rolled over and threw out all common sense and just went for it.

Chris Martenson: Given what you just saw, and the anecdotes you just shared with us, how do we reverse this, what do we do from this point forward?

Addison Wiggin: Well the prescription for what to do would probably come with a lot of political baggage. It depends on what form you think the government should take. Should the government play the role of providing a safety net for all citizens? Should the government be involved in providing security around the world for national interest companies to do business in places that are otherwise hostile to us? I happen to believe we shouldn’t be doing either of those things because we can’t afford them, not because politically, I think that they’re bad ideas, just that we’ve never done the hard work of figuring out how to balance those interests with the tax code that we currently run.

Everything is out of whack. We can’t be the policeman to the world and provide a safety net for all citizens if we don’t have the tax rates or the income to the government that supports all that. It seems like common sense, and it should be common sense, but something happens when you take it from a discussion that you and I might have to the political level, which is often just driven by emotion and public speech. Somehow the desire to continue promising that the government can solve all problems meets with jubilation and most people want to just keep going and they never want to actually accept that at some point unsustainable activities have to end, I mean it’s the nature of the word…

I struggle to think that we’re even capable of putting together a set of solutions that will work. It might be too late.

Chris Martenson: Well I share that view, and this is not just a US issue. World history, and also current events, recent current events shows that governments will reform, and they will undertake austerity and they will live within their means when the bond mark has forced them too.

Addison Wiggin:
Right, absolutely.

Chris Martenson: Greece is in the middle of it, Portugal’s in the middle of it, Ireland’s right in the middle of it, Spain’s gonna get there… So this has been my view for a long time, that the United States will reform when the bond market forces it to. And that day will come. Nobody knows when or how long we can kick the can down the road… But sooner or later, the bond market will revolt… Would you share this view, that there is a day of reckoning here?

Addison Wiggin: Well I would definitely share that view, and I think that it does come when the government has to raise interest rates beyond what it can already afford just to get the money that it needs to continue… It’s not unheard of, even in our own history, but when you mention that, when you talk about that, the fact that we might lose control of our ability to fund these massive deficits in this current environment, people think that you’re a kook, that you don’t understand something that they do understand.

But, in fact, there will be a point where investors will look at their return from the US government, and they’ll say, I want more to put my money at risk…

Chris Martenson: Well sure. And think about what would happen to the housing market right now. It’s nothing good in terms of upward price mobility. So one of my views is that we’re all speculators now… What’s your view on QE and is more QE a good idea here, or is Bernanke trapped either way?

Addison Wiggin: Well you mentioned Bill Gross, if you take his point of view, when QE2 dries up, who’s going to buy Treasuries then? That was the position that he took when he started unloading Treasuries from Pimco’s bond fund. I think the Fed is between a rock and a hard place because they have to continue to be the buyer of last resort in order to keep Treasury [yields] where they are. But the Fed is…at the end-game from what they’ve been trying to do. They’ve been trying to play both sides of the trade, keep Treasuries where they are, keep the government funded but at the same time avoid any kind of a fiscal restraint that would make Treasuries viable, or even attractive to the investment crowd.

Chris Martenson: Yeah, well the 10-year at what, 3.5%, 3.4%, somewhere in that zone depending on which day we’re talking about. That’s a pretty low rate of interest over the next ten years, given everything that I see on the radar screen. And without the Fed stepping in there buying, influencing the prices, manipulating, whatever you want to call it…

It’s just a self-referential piece of ridiculousness, so there we are, and we’re all speculating now in terms of what the Fed’s going to do next. But what does this future mean to investors and what sorts of recommendations are you making to those that are looking to preserve wealth in this interesting period we’re in?

Addison Wiggin:
Well…we just recommend that people recognize that this is actually happening. Most people tend to think that the government is made up of a bunch of smart people who really know what’s going on. Even the readers that write back to us, they say things like, well the Fed wouldn’t be doing this kind of thing if there wasn’t a very good reason for it.

There’s a high degree of trust left in Bernanke’s hands, in Timothy Geithner’s hands. So even now, part of our goal is just to get people to recognize that there is a possibility that Treasuries might not get funded the way they have in the past. And if you take that piece out of the financial puzzle, then everything else begins to unravel very quickly. And that’s why I believe we have gold going to the prices it has that we’ve seen in recent weeks. Silver, precious metals, many of the commodities, because people are looking for tangible good outside of the financial system, things that seem to make more sense.

So we’ve been recommending commodities and precious metals, and energy markets.

To be continued…

Regards,

Addison Wiggin,
for The Daily Reckoning

Storm Warning! originally appeared in the Daily Reckoning. The Daily Reckoning provides over half a million subscribers with literary economic perspective, global market analysis, and contrarian investment ideas.

Read more here:
Storm Warning!




The Daily Reckoning is a contrarian e-letter, brought to you by New York Times best-selling authors Bill Bonner and Addison Wiggin since 1999. The DR looks at the economic world-at-large and offers its major players – investors, politicians, economists and the average consumer – some much-needed constructive criticism.

Commodities, Uncategorized

The Falling Bottom Line

May 12th, 2011

Children are taught it and adults repeat it. In the Western world, “religion” is the knee-jerk response as to why wars in the distant past were fought. It’s any easy way to explain away complex issues. By drawing God into conflicts that are entirely man made, initiators of the violence absolve themselves of all responsibility.

Though the uprisings in the Middle East were initially, and correctly, attributed to high unemployment, widespread poverty, lack of opportunity, rising prices and rampant corruption, it would not take long for the script to change from implicating politics and economics to implicating God.

Shortly following the downfall of Hosni Mubarak, western politicians, the media and analysts sounded the alarm: “Beware, here comes the Muslim Brotherhood.” Yet, two months later, polls showed only 10 percent of Egyptians would vote for the leader of the Brotherhood as president.

And if the Brotherhood wasn’t a frightening enough group to use as a pretext to blame religion for the troubles, there was always an endless supply of faceless, nameless, Islamic extremists lurking in the shadows, waiting for the opportunity to set up Sharia Law and threaten governments around the world.

But it was not religion that sparked the conflagrations. As “the good book” has it, “money is the root of all evil.” (1 Timothy 6:10)

It was neither God nor Allah that would take the world into “The 1st Great War of the 21st Century.”  It was the falling bottom line.

In 2011, all across Europe, the bottom continued to fall out of the bottom line. Like Greece and Ireland before it, the Portuguese government, after religiously vowing never to ask for a bailout, asked for a $118 billion bailout from the European Union.

Bailouts were not gifts, but debt traps – loans at interest rates lower than the private sector but still unmanageably high. Endlessly piling new un-repayable debt on top of old un-repayable debt would not solve the underlying problem, If fact, it would worsen it. By imposing forced austerity measures and draconian spending cuts in order to service the debt, the bailed-out nation would reduce its productive capacity and its ability to compete in the global market.

Moreover, the indebted nations would be required to privatize valuable resources and industries to service the debt, with the profits going to creditors, often in foreign countries.

In layman’s terms, “bailout” is a euphemism for state sponsored loan-sharking. Precious national assets are sold at bargain basement prices to political insiders, robbing the nation of its wealth.

How did the bailouts of Portugal, Ireland and Greece figure into the Great War? It was the same bottom line issue that brought on the “Arab Spring.” Apart from nationalities and languages, the provocations were the same: high unemployment, restless youth, rising prices, etc. – and, of course, corruption.

But it wasn’t the stereotypical Middle Eastern-style corruption of vulgar Arab sheiks doing dirty deals behind closed doors with shifty business moguls. In Europe, corruption was refined, honorable, prudent and openly practiced. It was called “banking.”

Legal, state-sanctioned European financial corruption that made more billions for billionaires and mega-millions for multi-millionaires had crashed or crippled many EU member countries.

Regards,

Gerald Celente
for The Daily Reckoning

[Editor's Note: The above essay is excerpted from The Trends Journal, which is published by Gerald Celente. The Trends Journal distills the ongoing research of The Trends Research Institute into a concise, readily accessible form. Click here to get the full story in, learn more about, and subscribe to The Trends Journal.]

The Falling Bottom Line originally appeared in the Daily Reckoning. The Daily Reckoning provides over half a million subscribers with literary economic perspective, global market analysis, and contrarian investment ideas. Bill Bonner, the founder of the the Daily Reckoning released his latest book Dice Have No Memory: Big Bets & Bad Economics From Paris to the Pampas in April 2011.

Read more here:
The Falling Bottom Line




The Daily Reckoning is a contrarian e-letter, brought to you by New York Times best-selling authors Bill Bonner and Addison Wiggin since 1999. The DR looks at the economic world-at-large and offers its major players – investors, politicians, economists and the average consumer – some much-needed constructive criticism.

Uncategorized

‘Angst’ Shouldn’t Even Begin to Describe the US’ Current Economic Sentiment (Part 2 of 2)

May 4th, 2011

This past week, an article written for The Economist, entitled Angst in the United States: What’s wrong with America’s economy?, suggested that Americans are being far too pessimistic, and that there’s reason to believe in a “rosier outlook for America’s economy.” On most of the points addressed in the article, I’d beg to differ. The following is part two of two-part explanation as to why.

Continued from part one

The Actual Entrepreneur’s Dilemma

Either way, let’s decide to ignore that matter and move on. The writer aptly points out that “corporate taxation is a mess and deters domestic investment,” but then offers no solution related to competitiveness on where to instead focus improvement efforts.

Instead, the writer launches into a discussion of public finances, which does make sense as the US’ central economic concern, but in no way debunks the relevance of competitiveness. To say that “when China innovates Americans benefit,” is to oversimplify the way both economies work.

For example, a common refrain in China is “C2C,” meaning “Copy to China.” Many Chinese entrepreneurs have made great careers in finding ideas elsewhere, usually a tech-oriented, US-based idea – preferentially those blocked by the Great Firewall such as Facebook or Twitter – code it up to be displayed in Chinese and appreciated by a Chinese audience, and reap the benefits of having a billion-plus potential first-time users.

Right now, competitiveness in China, especially entrepreneurship, is a game that is rigged – at least domestically – in its favor, and often at the expense of US innovation.

If the US is able to renew its fading preeminence in entrepreneurship the country will benefit specifically in terms of competitiveness. In addition to the brain drain of academics and entrepreneurs discussed earlier, too much of the nation’s wealth has been transferred from intrepid small business owners to other, less productive sectors, over the past quarter century.

Entrepreneurs try new things and either fail quickly, or end up providing goods demanded by the economy, create “more than half of all new jobs”, and contribute real growth through actual production. This is as opposed to less entrepreneurial sectors, including certain global corporations, primarily in financial services, and the public sector.

The Wall Street and government power centers have collected their share of the nation’s wealth through what are normal and legal mechanisms, such as lobbying and legislation, that, beneficial or not, are part of the US business environment. However, the same process that has added to their less-productive increases in wealth has also eroded the level playing field which entrepreneurs require in order to take risks.

Tax, legal, regulatory, and healthcare burdens have diminished the entrepreneurial will to start new businesses in the US, especially as opposed to starting businesses in emerging economies. As wrong-headed as some laws can be in emerging economies, many are not. Add to that fact that a stunning array are rarely enforced, and it stands to reason that countries like China have become breeding grounds for new ventures in what is still virtually untapped and verdant economic soil.

The Labor Market Quagmire

The other “underlying problem” the writer directly addresses is the labor market, which is undoubtedly one of the nation’s most serious ills. While the reasons for unemployment the writer brings up are accurate, they do not provide a complete picture.

In fact, the least promising solution to joblessness is exactly the writer’s route of choice, that “America needs to get its macro-medicine right, in particular by committing itself to medium-term fiscal and monetary stability without excessive short-term tightening.”

Essentially, that perspective is a vote in favor of the same kind of quantitative easing programs that have rocketed the equity markets higher at the expense of a consistently weakening US dollar.

Unfortunately, it’s exactly that same “macro-medicine” that is causing food price increases, and demanding an increasing share of the family budget from both the government-supported unemployed and the stagnant-salaried working poor.

This decrementing standard of living is hitting low-income workers and fixed-income retirees especially hard. To continue present monetary “macro-medicine” in light of its deleterious side effects is hardly a quick-fix solution for the US that credibly lends itself to being summed up in a sentence.

Finally Addressing the Real Issue: US Debt and Deficit

From the outset, the article has a confusing structure. The writer indicates that “three failings stand out,” and then appears to only describe two, at least in terms of subtitles: competitiveness and jobless growth. We’ll take a leap of faith, and guess that the third is intended to be US public finances. The writer describes the matter as “high” on the “the country’s real to-do list” and worth “sorting out,” and so deems it at least somewhat in need of discussion.

To squeeze the US’ crushing debt in as a side topic seems to undermine the needed confrontation of what is the single most important challenge facing the US. Why is that so? To begin, the writer doesn’t mention that according to the International Monetary Fund, US government debt is on pace to overtake GDP by 2012, which is next year.

Nor does the writer mention the fact that Standard & Poor’s recently downgraded the credit rating outlook for US government debt to negative for the first time ever since it began rating US debt about 70 years ago.

Of course, the outlook downgrade came after China-based Dagong Global Credit Rating Co. already downgraded the US’ actual sovereign credit rating to AA, also with a negative outlook. Certainly, Dagong Global does not provide a Nationally Recognized Statistical Rating Organization (NRSRO)-accepted opinion, but it’s already a very public one, and it was likely the catalyst that lit a fire under S&P to finally admit something is amiss with regard to US fiscal health.

Lastly, unlike many other nations, the US ratio of debt to GDP is calculated to exclude state and local government debt, a discrepancy some analysts estimate would tack another $1 trillion onto the national debt. If that figure is in the right ballpark, it would mean that the US is already in Greece-like territory when it comes to nearing default. Put simply, the scale of the debt and deficit problem is far beyond what the writer chooses to seriously consider.

The US economy is not in the midst of just one more quirky moment in the story of a comeback kid. The US economy is in a life and death struggle – it’s a nation that in the medium term is teetering on the brink of default – and it could potentially drag the world’s reserve currency, the US dollar, down alongside with it.

The situation is not necessarily hopeless, and there’s much that could still be done to restore the US economy. However, to blithely suggest that as of now a “rosier outlook” for the US is possible, or that the nation may already be on “the brink of a revival,” is simply counterproductive.

Today, there is cause for far more than angst in the United States.

Best,

Rocky Vega,
The Daily Reckoning

‘Angst’ Shouldn’t Even Begin to Describe the US’ Current Economic Sentiment (Part 2 of 2) originally appeared in the Daily Reckoning. The Daily Reckoning provides over half a million subscribers with literary economic perspective, global market analysis, and contrarian investment ideas. Bill Bonner, the founder of the the Daily Reckoning released his latest book Dice Have No Memory: Big Bets & Bad Economics From Paris to the Pampas in April 2011.

Read more here:
‘Angst’ Shouldn’t Even Begin to Describe the US’ Current Economic Sentiment (Part 2 of 2)




The Daily Reckoning is a contrarian e-letter, brought to you by New York Times best-selling authors Bill Bonner and Addison Wiggin since 1999. The DR looks at the economic world-at-large and offers its major players – investors, politicians, economists and the average consumer – some much-needed constructive criticism.

Uncategorized

‘Angst’ Shouldn’t Even Begin to Describe the US’ Current Economic Sentiment (Part 2 of 2)

May 4th, 2011

This past week, an article written for The Economist, entitled Angst in the United States: What’s wrong with America’s economy?, suggested that Americans are being far too pessimistic, and that there’s reason to believe in a “rosier outlook for America’s economy.” On most of the points addressed in the article, I’d beg to differ. The following is part two of two-part explanation as to why.

Continued from part one

The Actual Entrepreneur’s Dilemma

Either way, let’s decide to ignore that matter and move on. The writer aptly points out that “corporate taxation is a mess and deters domestic investment,” but then offers no solution related to competitiveness on where to instead focus improvement efforts.

Instead, the writer launches into a discussion of public finances, which does make sense as the US’ central economic concern, but in no way debunks the relevance of competitiveness. To say that “when China innovates Americans benefit,” is to oversimplify the way both economies work.

For example, a common refrain in China is “C2C,” meaning “Copy to China.” Many Chinese entrepreneurs have made great careers in finding ideas elsewhere, usually a tech-oriented, US-based idea – preferentially those blocked by the Great Firewall such as Facebook or Twitter – code it up to be displayed in Chinese and appreciated by a Chinese audience, and reap the benefits of having a billion-plus potential first-time users.

Right now, competitiveness in China, especially entrepreneurship, is a game that is rigged – at least domestically – in its favor, and often at the expense of US innovation.

If the US is able to renew its fading preeminence in entrepreneurship the country will benefit specifically in terms of competitiveness. In addition to the brain drain of academics and entrepreneurs discussed earlier, too much of the nation’s wealth has been transferred from intrepid small business owners to other, less productive sectors, over the past quarter century.

Entrepreneurs try new things and either fail quickly, or end up providing goods demanded by the economy, create “more than half of all new jobs”, and contribute real growth through actual production. This is as opposed to less entrepreneurial sectors, including certain global corporations, primarily in financial services, and the public sector.

The Wall Street and government power centers have collected their share of the nation’s wealth through what are normal and legal mechanisms, such as lobbying and legislation, that, beneficial or not, are part of the US business environment. However, the same process that has added to their less-productive increases in wealth has also eroded the level playing field which entrepreneurs require in order to take risks.

Tax, legal, regulatory, and healthcare burdens have diminished the entrepreneurial will to start new businesses in the US, especially as opposed to starting businesses in emerging economies. As wrong-headed as some laws can be in emerging economies, many are not. Add to that fact that a stunning array are rarely enforced, and it stands to reason that countries like China have become breeding grounds for new ventures in what is still virtually untapped and verdant economic soil.

The Labor Market Quagmire

The other “underlying problem” the writer directly addresses is the labor market, which is undoubtedly one of the nation’s most serious ills. While the reasons for unemployment the writer brings up are accurate, they do not provide a complete picture.

In fact, the least promising solution to joblessness is exactly the writer’s route of choice, that “America needs to get its macro-medicine right, in particular by committing itself to medium-term fiscal and monetary stability without excessive short-term tightening.”

Essentially, that perspective is a vote in favor of the same kind of quantitative easing programs that have rocketed the equity markets higher at the expense of a consistently weakening US dollar.

Unfortunately, it’s exactly that same “macro-medicine” that is causing food price increases, and demanding an increasing share of the family budget from both the government-supported unemployed and the stagnant-salaried working poor.

This decrementing standard of living is hitting low-income workers and fixed-income retirees especially hard. To continue present monetary “macro-medicine” in light of its deleterious side effects is hardly a quick-fix solution for the US that credibly lends itself to being summed up in a sentence.

Finally Addressing the Real Issue: US Debt and Deficit

From the outset, the article has a confusing structure. The writer indicates that “three failings stand out,” and then appears to only describe two, at least in terms of subtitles: competitiveness and jobless growth. We’ll take a leap of faith, and guess that the third is intended to be US public finances. The writer describes the matter as “high” on the “the country’s real to-do list” and worth “sorting out,” and so deems it at least somewhat in need of discussion.

To squeeze the US’ crushing debt in as a side topic seems to undermine the needed confrontation of what is the single most important challenge facing the US. Why is that so? To begin, the writer doesn’t mention that according to the International Monetary Fund, US government debt is on pace to overtake GDP by 2012, which is next year.

Nor does the writer mention the fact that Standard & Poor’s recently downgraded the credit rating outlook for US government debt to negative for the first time ever since it began rating US debt about 70 years ago.

Of course, the outlook downgrade came after China-based Dagong Global Credit Rating Co. already downgraded the US’ actual sovereign credit rating to AA, also with a negative outlook. Certainly, Dagong Global does not provide a Nationally Recognized Statistical Rating Organization (NRSRO)-accepted opinion, but it’s already a very public one, and it was likely the catalyst that lit a fire under S&P to finally admit something is amiss with regard to US fiscal health.

Lastly, unlike many other nations, the US ratio of debt to GDP is calculated to exclude state and local government debt, a discrepancy some analysts estimate would tack another $1 trillion onto the national debt. If that figure is in the right ballpark, it would mean that the US is already in Greece-like territory when it comes to nearing default. Put simply, the scale of the debt and deficit problem is far beyond what the writer chooses to seriously consider.

The US economy is not in the midst of just one more quirky moment in the story of a comeback kid. The US economy is in a life and death struggle – it’s a nation that in the medium term is teetering on the brink of default – and it could potentially drag the world’s reserve currency, the US dollar, down alongside with it.

The situation is not necessarily hopeless, and there’s much that could still be done to restore the US economy. However, to blithely suggest that as of now a “rosier outlook” for the US is possible, or that the nation may already be on “the brink of a revival,” is simply counterproductive.

Today, there is cause for far more than angst in the United States.

Best,

Rocky Vega,
The Daily Reckoning

‘Angst’ Shouldn’t Even Begin to Describe the US’ Current Economic Sentiment (Part 2 of 2) originally appeared in the Daily Reckoning. The Daily Reckoning provides over half a million subscribers with literary economic perspective, global market analysis, and contrarian investment ideas. Bill Bonner, the founder of the the Daily Reckoning released his latest book Dice Have No Memory: Big Bets & Bad Economics From Paris to the Pampas in April 2011.

Read more here:
‘Angst’ Shouldn’t Even Begin to Describe the US’ Current Economic Sentiment (Part 2 of 2)




The Daily Reckoning is a contrarian e-letter, brought to you by New York Times best-selling authors Bill Bonner and Addison Wiggin since 1999. The DR looks at the economic world-at-large and offers its major players – investors, politicians, economists and the average consumer – some much-needed constructive criticism.

Uncategorized

Regime Change, Hillary’s Head Fake

April 28th, 2011

It was just another day of duplicity in DC. If there was a Washington newspaper that honestly reported on American politics, it would have to be called The Daily Double Standard.

When the Tunisian and Egyptian rebellions began, President Obama and Secretary of State Hillary “The Determinator” Clinton vacillated for weeks while hundreds of protesters were being slaughtered. It was only after it became clear that the autocratic leaders (that the US had supported for decades) would be overthrown that the US would champion the need for a transition to “democracy.”

Yet similar uprisings, destabilizing other Middle East and North Africa nations, were met only with earnest diplomatic calls for restraint and dialogue, never with demands for regime change… except when it came to Muammar Qaddafi.

On February 26th, just days after the first uprisings in Libya, President Obama boldly declared, “When a leader’s only means of staying in power is to use mass violence against his own people, he has lost the legitimacy to rule and needs to do what is right for his country by leaving now.”

Two days later Hillary Clinton threw her Secretarial weight into the fray, proclaiming, “It is time for Qaddafi to go, now, without further violence or delay. We want him to leave, we want him to end his regime.”

That these ludicrous ultimatums should have been uttered by people in responsible positions and then seriously reported by the world’s media (without editorial comment) was further proof of their arrogance and hubris. In the history of the world, what autocratic leader had ever packed up his bags, bowed down, bent over and gone into exile because a bunch of blowhards seven thousand miles away gave the order: “We want him to leave.”

On the other hand, perhaps the position wasn’t as foolish as it looked, but a calculated exercise in political cunning. Knowing full well that Qaddafi would never leave willingly and that plans were already in place to attack, when they attacked, their nonsensical ultimatum would serve as an effective excuse. Qaddafi had been given fair warning.

Three weeks before President Obama launched “Operation Odyssey Dawn” (a grotesque name to apply to a military exercise that would consist of launching missiles and dropping bombs without any fear of reprisal!), Hillary Clinton told reporters that the movement of US military forces off the coast of Libya was meant to position them to help with humanitarian efforts. And although there was discussion of a no-fly zone, “There is not any pending military action involving US naval vessels,” she said.

“We’ve been reaching out to many different Libyans who are attempting to organize in the east and, as the revolution moves westward, there as well,” she said, “… but we’re going to be ready and prepared to offer any kind of assistance that anyone wishes to have from the United States.”

[Editor's Note: As discussed in the next portion of The Trends Journal, exactly who these "anyones" were, that Secretary of State Hillary Clinton was keen to “offer any kind of assistance,” was a matter left to be sorted out later...]

Regards,

Gerald Celente
for The Daily Reckoning

[Editor's Note: The above essay is excerpted from The Trends Journal, which is published by Gerald Celente. The Trends Journal distills the ongoing research of The Trends Research Institute into a concise, readily accessible form. Click here to get the full story in, learn more about, and subscribe to The Trends Journal.]

Regime Change, Hillary’s Head Fake originally appeared in the Daily Reckoning. The Daily Reckoning recently featured articles on stagflation, best libertarian books, and QE2

.

Read more here:
Regime Change, Hillary’s Head Fake




The Daily Reckoning is a contrarian e-letter, brought to you by New York Times best-selling authors Bill Bonner and Addison Wiggin since 1999. The DR looks at the economic world-at-large and offers its major players – investors, politicians, economists and the average consumer – some much-needed constructive criticism.

Uncategorized

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