Jan 252017
 
 January 25, 2017  Posted by at 11:16 am Finance Tagged with: , , , , , , , , , ,
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Jack Delano Family of Dennis Decosta, Portuguese Farm Security Administration client 1940

US Demoted To ‘Flawed Democracy’ (CNBC)
David Stockman: Prepare for Fiscal Bloodbath, Not Fiscal Stimulus (DR)
Donald Trump Claims ‘Environmentalism Is Out Of Control’ (Ind.)
Trump Administration Seeks To Muzzle US Agency Employees (R.)
Trump Poised To Build Wall, Ban Many Middle East Immigrants (WSJ)
Trump Pins Keystone, Dakota Pipeline Fate on Renegotiation (BBG)
Pricier Oil Means China’s Foreign Reserves Will Shrink Even Faster (BBG)
A $90 Billion Wave of Debt Shows Cracks in US Real Estate Boom (BBG)
A New Deal to Save Europe (Varoufakis)
The European New Deal (Varoufakis)
Karl Rove’s Prophecy (Unz)
Bumblebee Added to US Endangered Species List (VoA)
Half Of Families In Greece Live On Pensions (Kath.)
Cold Weather Reignites Fears For Refugees Poorly Sheltered In Greece (G.)

 

 

“..Washington can’t point fingers at President Donald Trump for the nation’s downgrade. “The U.S. has been teetering on the brink of becoming a flawed democracy for several years..”

US Demoted To ‘Flawed Democracy’ (CNBC)

The U.S. has been demoted from a full democracy to a flawed democracy for the first time, according to the Economist Intelligence Unit (EIU). Every year, the firm’s Democracy Index provides a snapshot of global democracy by scoring countries on five categories: electoral process and pluralism; civil liberties; the functioning of government; political participation; and political culture. Nations are then classified under four types of governments: full democracy, flawed democracy, hybrid regime and authoritarian regime.America’s score fell to 7.98 last year from 8.05 in 2015, below the 8.00 threshold for a full democracy, the EIU announced in a report on Wednesday. That put the world’s largest economy on the same footing as Italy, a country known for its fractious politics.

A flawed democracy is a country with free elections but weighed down by weak governance, an underdeveloped political culture and low levels of political participation, according to the EIU. Other flawed democracies in 2016 included Japan, France, Singapore, South Korea and India, the report said. However, Washington can’t point fingers at President Donald Trump for the nation’s downgrade. “The U.S. has been teetering on the brink of becoming a flawed democracy for several years, and even if there had been no presidential election in 2016, its score would have slipped below 8.00,” the report explained. Instead, dwindling trust in government, elected representatives and political parties is to blame.

“Trust in political institutions is an essential component of well-functioning democracies. Yet surveys by Pew, Gallup and other polling agencies have confirmed that public confidence in government has slumped to historic lows in the U.S. This has had a corrosive effect on the quality of democracy,” the report found. As other developed countries experience a similar trust deficit, contemporary democracy is undergoing a crisis, the EIU said. The increasing role played by non-elected technocrats, increased voter abstention and curbs on civil liberties are among the main symptoms of this global malaise, the EIU said, noting that almost half of the 167 countries covered by its index registered a decline in overall scores between 2006 and 2016.

Read more …

“The Congressional Budget Office (CBO) baseline says there will be no recession through 2026. That is 206 months. The longest one we have ever had is about 100 months, under a much better circumstance.”

David Stockman: Prepare for Fiscal Bloodbath, Not Fiscal Stimulus (DR)

“I have lots of hope and zero faith.” “Somehow the idea that Donald Trump is the second coming of Ronald Reagan has gotten in the mix. Wall Street has priced it in. It is just completely wrong.” David Stockman served within the Ronald Reagan administration as the director of the Office of Management and Budget from 1981-1985 and is a two term Congressman. Stockman is also the recent bestselling author of Trumped! His book hits at the heart of exactly what the incoming administration must do in order to correct the dangerous direction toward financial turmoil. Cavuto then pressed on fiscal stimulus and the Reagan approach, where Stockman replied, “We are not going to get big tax cuts. We are in a diametrically different position. In 1980 the public debt was $930 billion, that was 30% of GDP.

There was huge running room and an open balance sheet for the accidental Keynesian stimulus. This resulted from the tax cuts and the defense increase, along with a massive deficit.” “Ronald Reagan actually increased the public debt by $1.8 trillion, or two times more than had been generated by the first 39 presidents.” “Today we have used that all up. We are at $20 trillion of debt.” “The base case forecast is so optimistic, such a rosy scenario, that they are going to need reflow of extra economic growth to get back to where they started. The Congressional Budget Office (CBO) baseline says there will be no recession through 2026. That is 206 months. The longest one we have ever had is about 100 months, under a much better circumstance.”

Read more …

Yeah, we need more cars…

Donald Trump Claims ‘Environmentalism Is Out Of Control’ (Ind.)

President Donald Trump has claimed that “environmentalism is out of control”. Mr Trump spent the morning meeting with auto executives as part of a push to bring jobs back to the US. Mr Trump told his guests at the White House that he was looking to ease regulations to help car companies and other businesses wishing to operate in the US. Among the attendees at the breakfast meeting were Ford chief executive Mark Fields, Fiat Chrysler chairman Sergio Marchionne and General Motors chief executive Mary Barra. Mr Trump called on car firms to increase production in the United States and boost American employment, adding that he hoped to see new auto plants built in the country. “We have a very big push on to have auto plants and other plants,” Mr Trump said.

Mr Trump has repeatedly criticised companies for building cars in Mexico and elsewhere and has threatened to impose 35 per cent tariffs on imported vehicles. The President often singled out Ford’s Mexico investments for criticism during his election campaign. The gathering was the first time the CEOs of the big three car makers have met jointly with a US president since a July 2011 session with former president Barack Obama to highlight a deal to raise fuel efficiency standards to 54.5 miles per gallon by 2025. White House spokesman Sean Spicer said on the eve of the meeting that Mr Trump was looking forward to meeting the CEOs and “hearing their ideas about how we can work together to bring more jobs back to this industry”.

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This will only lead to more publicity.

Trump Administration Seeks To Muzzle US Agency Employees (R.)

U.S. President Donald Trump’s administration has moved since he took office last week to curb the flow of information from several government agencies involved in environmental issues, in actions that may have been designed to discourage dissenting views. Employees at the Environmental Protection Agency, the Interior Department, the Department of Agriculture and the Department of Health and Human Services (HHS) have seen directives from the newly minted leadership seeking to limit how they communicate to the public, according to multiple sources. The moves have reinforced concerns that Trump, a climate change doubter, could seek to sideline scientific research showing that carbon dioxide emissions from burning fossil fuels contributes to global warming, as well as the career staffers at the agencies that conduct much of this research.

All of the agencies affected by the actions have some input on issues related to the environment and have been involved in various efforts related to climate change, including effects on natural resources and human health. On Tuesday, a source at the EPA said that staff had been told by members of the Trump administration not to speak to reporters or publish any press releases or blog posts on social media. EPA staff have also been asked not to publicize any talks, conferences, or webinars that had been planned for the next 60 days, the staffer said, asking not to be named. Asked if the EPA had been gagged, White House press secretary Sean Spicer said on Tuesday: “I don’t know … we’re looking into it. … I don’t think it’s a surprise we’re going to review the policies, but I don’t have any info at this time.”

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No surprise here. That may come when these things become real.

Trump Poised To Build Wall, Ban Many Middle East Immigrants (WSJ)

President Donald Trump was set to announce plans to expedite construction of his promised wall along the Mexican border, and was preparing orders banning entry to the U.S. of people from countries deemed risky and suspending the U.S. refugee program, people familiar with the planning said. Trump planned to travel Wednesday to the Department of Homeland Security, where he said he would be announcing his border security plans. Trump has given few details about his promise for a border wall, a project that is estimated to cost at least $10 billion and possibly much more.

Congressional Republicans have been mulling appropriating funds in spending legislation that must pass by April to keep the government funded, but Trump may be able to divert funds from other projects to begin work sooner. The other executive actions on immigration were possible for later in the week. That includes a ban on entry, which was expected to include Iraq, Iran, Syria, Yemen, Somalia, Sudan and Libya, one person familiar with the planning said. During his presidential campaign, Trump initially said he would ban entry by Muslims but later modified his proposal to call for suspending visas to people from any place “where adequate screening cannot occur.”

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“White House spokesman Sean Spicer cast that possible renegotiation of the Dakota Access project as a way to address concerns by stakeholders, including the Standing Rock Sioux Tribe..”

Trump Pins Keystone, Dakota Pipeline Fate on Renegotiation (BBG)

President Donald Trump took steps to advance construction of the Keystone XL and Dakota Access oil pipelines, while demanding a renegotiation to get a better deal for the U.S. government. Trump stopped short of green lighting construction on either pipeline but put a deadline on the government’s review of TransCanada’s proposed Keystone XL to transport Alberta oil sands crude to U.S. refineries. Trump also announced policies to encourage the use of American-made products in U.S. pipeline projects and to curtail federal environmental reviews for major infrastructure projects. “If we’re going to build pipelines in the United States, the pipes should be made in the United States,” Trump said.

The moves, taken on Trump’s fourth full day in office, are a major departure from the Obama administration, which rejected the Keystone proposal in 2015 and has kept Dakota Access blocked since September. Environmentalists, concerned about climate change and damage to water and land, now face an executive branch that’s less sympathetic to their efforts. For the oil industry, it heralds more freedom to expand infrastructure and ease transportation bottlenecks. White House spokesman Sean Spicer cast that possible renegotiation of the Dakota Access project as a way to address concerns by stakeholders, including the Standing Rock Sioux Tribe, which is concerned about Native-American cultural sites and the safety of its water supply.

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As I said a while ago: throw in a major devaluation and see what you get then.

Pricier Oil Means China’s Foreign Reserves Will Shrink Even Faster (BBG)

Much focus is on how China’s capital outflows will impact the world’s biggest pile of foreign-exchange reserves, but another issue in need of attention here is the rally in crude, argues Goldman Sachs. In a country where oil prices play “a disproportionate role” in the balance of payments – and China’s crude output is forecast to fall as much as 7% this year – the commodity’s bullish outlook poses a serious threat to reserves that have already shrunk more than 20% in the past two years. “The outlook for the balance of payments has deteriorated from a year ago, because oil prices are now on an upward trajectory, which could push the current-account surplus to around $200 billion this year, down from $331 billion as recently as 2015,” Goldman analysts Robin Brooks and Michael Cahill wrote in a Jan. 23 note.

That 40% slump is part of the picture for reserves, which contracted to $3.01 trillion at the end of 2016 from a record $3.99 trillion in mid-2014. A stronger dollar will also drive outflows. Goldman estimates the greenback will strengthen 15% by the end of 2019 against its major developed-market peers, so China is likely to keep weakening its currency fixing to maintain stability. The analysts reckon this could trigger a renewed pick-up in capital flight, which abated to $532 billion in 2016 from $736 billion in 2015. China even registered net inflows via its capital and financial accounts in December for the first time for 1 1/2 years.

Still, Goldman sees capital outflows slowing this year to $500 billion, and it expects reserve losses to accelerate to $394 billion from $369 billion in 2016 because the deterioration in the current account, led by surging oil prices, is “so sizable.”

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Like this: “Extremely low interest rates over the last four or five years have forgiven a lot of sins.”

A $90 Billion Wave of Debt Shows Cracks in US Real Estate Boom (BBG)

A $90 billion wave of maturing commercial mortgages, leftover debt from the 2007 lending boom, is laying bare the weak links in the U.S. real estate market. It’s getting harder for landlords who rely on borrowed cash to find new loans to pay off the old ones, leading to forecasts for higher delinquencies. Lenders have gotten choosier about which buildings they’ll fund, concerned about overheated prices for properties from hotels to shopping malls, and record values for office buildings in cities such as New York. Rising interest rates and regulatory constraints for banks also are increasing the odds that borrowers will come up short when it’s time to refinance. “There are a lot more problem loans out there than people think,” said Ray Potter, founder of R3 Funding, which arranges financing for landlords and investors. “We’re not going to see a huge crash, but there will be more losses than people are expecting.”

The winners and losers of a lopsided real estate recovery will be cemented as the last vestiges of pre-crisis debt clear the system. While Manhattan skyscraper values have surged 50% above the 2008 peak, prices for suburban office buildings still languish 4.8% below, according to an index from Moody’s Investors Service and Real Capital Analytics Inc. Borrowers holding commercial real estate outside of major metropolitan areas are now feeling the pinch as they attempt to secure fresh financing, Potter said. The delinquency rate for commercial mortgages that have been packaged into bonds is forecast to climb by as much as 2.4 percentage points to 5.75% in 2017, reversing several years of declines, as property owners struggle with maturing loans, according to Fitch Ratings. That sets the stage for bondholder losses.

Banks sold a record $250 billion of commercial mortgage-backed securities to institutional investors in 2007, and lax lending standards enabled landlords across the U.S. to saddle buildings with large piles of debt. When credit markets froze the following year, Wall Street analysts warned of a cataclysm, with $700 billion of commercial mortgages set to mature over the next decade. “At the depths of the panic, it was just that: panic,” said Manus Clancy, a managing director at Trepp, a firm that tracks commercial-mortgage debt. “That made people’s future expectations extremely bearish. Extremely low interest rates over the last four or five years have forgiven a lot of sins.”

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Yanis ignores the role the decline of growth plays. That is a shame.

A New Deal to Save Europe (Varoufakis)

“I don’t care about what it will cost. We took our country back!” This is the proud message heard throughout England since the Brexit referendum last June. And it is a demand that is resonating across the continent. Until recently, any proposal to “save” Europe was regarded sympathetically, albeit with skepticism about its feasibility. Today, the skepticism is about whether Europe is worth saving. The European idea is being driven into retreat by the combined force of a denial, an insurgency, and a fallacy. The EU establishment’s denial that the Union’s economic architecture was never designed to sustain the banking crisis of 2008 has resulted in deflationary forces that delegitimize the European project. The predictable reaction to deflation has been the insurgency of anti-European parties across the continent.

And, most worrying of all, the establishment has responded with the fallacy that “federation-lite” can stem the nationalist tide. It can’t. In the wake of the euro crisis, Europeans shudder at the thought of giving the EU more power over their lives and communities. A eurozone political union, with a small federal budget and some mutualization of gains, losses, and debt, would have been useful in 1999, when the common currency was born. But now, under the weight of massive banking losses and legacy debts caused by the euro’s faulty architecture, federation-lite (as proposed by French presidential hopeful Emmanuel Macron) is too little too late. It would become the permanent Austerity Union that German Finance Minister Wolfgang Schäuble has sought for years. There could be no better gift to today’s “Nationalist International.”

Simply put, progressives need to ask a straightforward question: Why is the European idea dying? The answers are clear: involuntary unemployment and involuntary intra-EU migration. Involuntary unemployment is the price of inadequate investment across Europe, owing to austerity, and of the oligopolistic forces that have concentrated jobs in Europe’s surplus economies during the resulting deflationary era. Involuntary migration is the price of economic necessity in Europe’s periphery. The vast majority of Greeks, Bulgarians, and Spaniards do not move to Britain or Germany for the climate; they move because they must. Life for Britons and Germans will improve not by building electrified border fences and withdrawing into the bosom of the nation-state, but by creating decent conditions in every European country.

And that is precisely what is needed to revive the idea of a democratic, open Europe. No European nation can prosper sustainably if other Europeans are in the grip of depression. That is why Europe needs a New Deal well before it begins to think of federation. In February, the DiEM25 movement will unveil such a European New Deal, which it will launch the next month, on the anniversary of the Treaty of Rome. That New Deal will be based on a simple guiding principle: All Europeans should enjoy in their home country the right to a job paying a living wage, decent housing, high-quality health care and education, and a clean environment.

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The practical measures in Yanis’ ’manifesto’.

The European New Deal (Varoufakis)

The European New Deal should include five precise goals and the means to achieve them under existing EU treaties, without any centralization of power in Brussels or further loss of sovereignty:

· Large-scale green investment will be funded by a partnership between Europe’s public investment banks (the European Investment Bank, KfW, and others) and central banks (on the basis of directing quantitative easing to investment project bonds) to channel up to 5% of European total income into investments in green energy and sustainable technologies.

· An employment guarantee scheme to provide living-wage jobs in the public and non-profit sectors for every European in their home country, available on demand for all who want them. On condition that the scheme does not replace civil-service jobs, carry tenure, or replace existing benefits, it would establish an alternative to choosing between misery and emigration.

· An anti-poverty fund that provides for basic needs across Europe, which would also serve as the foundation of an eventual benefits union.

· A universal basic dividend to socialize a greater share of growing returns to capital.

· Immediate anti-eviction protection, in the form of a right-to-rent rule that permits homeowners facing foreclosure to remain in their homes at a fair rent set by local community boards. In the longer term, Europe must fund and guarantee decent housing for every European in their home country, restoring the model of social housing that has been dismantled across the continent. Both the employment scheme and the anti-poverty program should be based on a modern version of an old practice: public banking for public purpose, funded by a pragmatic but radical currency reform within the eurozone and the EU, as well as in non-EU European countries. Specifically, all seigniorage profits of central banks would be used for these purposes.

In addition, an electronic public clearing mechanism for deposits and payments (outside the banking system) would be established in each country. Tax accounts would serve to accept deposits, receive payments, and facilitate transfers through web banking, payment apps, and publicly issued debit cards. The working balances could then be lent to the fund supporting the employment and anti-poverty programs, and would be insured by a European deposit insurance scheme and deficits covered by central bank bonds, serviced at low rates by national governments. Only such a European New Deal can stem the EU’s disintegration.

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“We’re an empire now, and when we act, we create our own reality.”

Karl Rove’s Prophecy (Unz)

In a famous exchange between a high official at the court of George W. Bush and journalist Ron Suskind, the official – later acknowledged to have been Karl Rove – takes the journalist to task for working in “the reality-based community.” He defined that as believing “that solutions emerge from your judicious study of discernible reality.” Rove then asserted that this was no longer the way in which the world worked: “We’re an empire now, and when we act, we create our own reality. And while you’re studying that reality – judiciously, as you will – we’ll act again, creating other new realities, which you can study too, and that’s how things will sort out. We’re history’s actors . . . and you, all of you, will be left to just study what we do.” (Ron Suskind, NYTimes Magazine, Oct. 17, 2004).

This declaration became popular as an illustration of the hubris of the Bush-Cheney government. But we could also see it as fulfilled prophecy. Fulfilled in a manner that no journalist at that time would have deemed possible. Yes, the neoconservatives brought disrepute upon themselves because of the disaster in Iraq. Sure, opposition to the reality Rove had helped create in that devastated country became a first rung on the ladder that could lead to the presidency, as it did for Barack Obama. But the neocons stayed put in the State Department and other positions closely linked to the Obama White House, where they became allies with the liberal hawks in continuing ‘spreading democracy’ by overthrowing regimes. America’s mainstream news and opinion purveyors, without demurring, accommodated the architects of reality production overseen by Dick Cheney.

[..] publications that used to be rightly known as quality newspapers have turned into unreadable rags. The newspaper that was my employer for a couple of decades used to be edited on the premise that its correspondents rather than authorities were always correct in what they were saying. Today greater loyalty to the reality created in Washington and Langley cannot be imagined. For much of northern Europe the official story that originates in the United States is amplified by the BBC and other once reliable purveyors of news and opinion like the Guardian, the Financial Times and the (always less reliable) Economist.

[..] How could Rove’s predictions so totally materialize? There’s a simple answer: ‘they’ got away with momentous lies at an early stage. The more authorities lie successfully the more they are likely to lie again in a big way to serve the purposes of earlier lies. The ‘they’ stands for those individuals and groups in the power system who operate beyond legal limits as a hydra-headed entity, whose coordination depends on the project, campaign, mission, or operation at hand. Those with much power got away with excessive extralegal use of it since the beginning of this century because systems of holding the powerful to account have crumbled on both sides of the Atlantic. Hence, potential opposition to what the reality architects were doing dwindled to almost nothing. At the same time, people whose job or personal inclination leads them to ferret out truth were made to feel guilty for pursuing it.

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Your children’s children are going to love you for this.

Bumblebee Added to US Endangered Species List (VoA)

A small insect is getting a lot of attention in the United States. The rusty patched bumblebee is the first of its species to be declared endangered in the lower 48 states – meaning every state except Alaska and Hawaii. The rusty patched bumblebee is named for a rust-colored line on its back. The U.S Fish and Wildlife Service announced this month it was adding the bee to its endangered species list. The insects are “on the brink of extinction,” according to the service. It said the bees were once found in 28 states. But there now are only small populations remaining in 13 states. The government agency will make a plan to help the dying bees recover. The agency said that such a plan might help other insects, like butterflies.

U.S. officials think land owners can take small steps to help the rusty patched bumble bee. They say land owners can be friendlier towards bees by using native plants in their gardens. The insects directly fertilize many kinds of fruit and vegetable crops. And they fertilize grain crops used to feed cattle and milk cows. It costs billions of dollars to duplicate the job the bees do for free. Land owners are also being urged to cut back on their use of pesticide products. The officials also suggest that gardeners leave their plants alone at the end of the summer instead of cutting them. That way, the bees will have a place to live over the winter. The Fish and Wildlife Service says the rusty patched bumblebee was added to the endangered species list partly because of habitat loss. Other reasons were disease, pesticides and climate change.

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It gets worse by the day.

Half Of Families In Greece Live On Pensions (Kath.)

Greek society is evolving into a sum of households surviving on pensions while its most dynamic section, young people aged between 18 and 35, are abandoning it or considering abandoning it to seek a better life abroad, a survey by the Small Enterprises Institute of the Hellenic Confederation of Professionals, Craftsmen and Merchants (IME GSEVEE) has concluded. The report published on Tuesday suggests that the long-term financial crisis, whose main victims are the middle class, is not only leading to a further decline in incomes and the broadening of inequalities, but also openly threatening social cohesion. The so-called therapy, with its constantly increasing direct and indirect taxes, may lead to primary budget surpluses but this is not returned to taxpayers in the form of public services, as at the same time public spending on health and education is also being reduced.

The survey, conducted between November 14 and 26, used a sample of 1,000 households across Greece. It found that more than three-quarters of households (75.3%) had endured significant declines in their income in 2016. Crucially, 37.1% of households said that they live on less than €10,000 per year, while 49.2% said that their main source of income is pensions. This was actually higher in December 2014 (at 52%), and the small decline is attributed to the cuts in pensions. Salaries are the main source of revenues for 37.9% of households, up from 37.3% in the 2015 survey, while 9% said that they mainly rely on incomes from businesses.

Almost one in every three households has an unemployed member, which amounts to 1.1 million households, while the long-term unemployed amount to 73.3% of all jobless. Financial problems are not limited to the unemployed though, as 22.4% of households also include an employee who earns less than the minimum monthly salary of €586 gross. No wonder 9.7% of respondents said at least one member of their family has left the country.

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The entire aid industry must be overhauled, from EU to NGOs and ‘charities’, or this will continue. Brussels likes the agony because it thinks it’s a deterrent, the NGOs are profit seekers. The model is completely broken.

Cold Weather Reignites Fears For Refugees Poorly Sheltered In Greece (G.)

A new bout of cold weather across southern Europe has reignited fears for thousands of refugees and migrants sheltered in deplorable conditions in Greece. Forecasts of freezing temperatures have also been met with trepidation by international agencies, aid groups and local mayors on islands. “Thousands of people are poised to suffer needlessly in conditions that are becoming increasingly desperate,” said Eva Cossé at Human Rights Watch. “Europe’s failed policies have contributed to immense suffering for people warehoused on the Greek islands.” Greece was the focus of public outcry this month after shocking footage emerged of refugees on Lesbos living in flimsy, snow-swamped tents as an arctic blast sent temperatures plummeting to -14C.

The outcry prompted the government to dispatch a naval ship to temporarily house up to 500 people detained at the island’s vastly overcrowded Moria reception centre. Others were moved into heated containers, hotel rooms and apartments. But the measures have proved inadequate and with more severe weather on the way officials, volunteers and human rights defenders fear the worst. Sub-zero temperatures are expected by Thursday. Since the closure of the Balkan route into Europe, more than 62,000 men women and children have been trapped in Greece, according to government figures. Every day a steady trickle continues to arrive on rickety boats from Turkey, placing increasing pressure on Lesbos and other eastern Aegean islands close to the Asia Minor coast. “It is not much talked about, but this month alone 900 people have reached Greece,” said Gianmaria Pinto, country director of the Norwegian Refugee Council.

“Right now I am on Chios and in one camp there are people living on the beach, in small tents, exposed to the wind and rain. They should be moved to better and more humane conditions and the structures and opportunity for that are only on the mainland.” Under a controversial deal agreed by the EU and Turkey to curb an influx that surpassed a million people in 2015, Greek authorities last year accepted the introduction of a policy of containment in order to process asylum seekers at accelerated rates. By restricting refugees to islands it was hoped “secondary movement” into Europe could be reduced and those undeserving of asylum easily repatriated to Turkey. Instead, the policy has backfired with thousands of refugees being forced to endure dire conditions in overcrowded camps while their asylum requests are processed slowly. Many have been in the facilities since March when the EU-Turkey accord was signed.

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Home Forums Debt Rattle January 25 2017

This topic contains 13 replies, has 6 voices, and was last updated by  Stephen Maturin 10 months, 3 weeks ago.

Viewing 14 posts - 1 through 14 (of 14 total)
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  • #32371

    Jack Delano Family of Dennis Decosta, Portuguese Farm Security Administration client 1940 • US Demoted To ‘Flawed Democracy’ (CNBC) • David Stockman:
    [See the full post at: Debt Rattle January 25 2017]

    #32372

    Ken Barrows
    Participant

    Ilargi,
    As an American, I can tell you that American politics, Democrat or Republican, is all about more cars. Even the enviros want a nation of a couple of hundred million electric vehicles. Battery production apparently has no environmental impact.

    #32373

    pjmeli
    Participant

    “We are at $20 trillion of debt.” – Stockman

    Translation…”private savings are at $20 trillion”. The opposite side of the double-entry accounting.

    #32374

    Nassim
    Participant
    #32375

    Nassim
    Participant

    The Neocon Lament

    So sad. The latest manifestations of the Trotskyists – what Stalin called Cosmopolitans – are out of power. Such a shame. Could not happen to a nicer bunch of people. To be displaced by an elderly white male is such a disgrace.

    #32376

    Chris M
    Participant

    $20 trillion in savings?

    By whom? How was it derived?

    There couldn’t be any of that fiat currency involved, could there? You know–that stuff found all over the world.

    Just asking.

    #32377

    Chris M
    Participant

    Nassim,

    Thanks for the link. I hadn’t seen that article about the neo-cons.

    So tell me something. What is the over-arching goal of the neo-cons?

    Have any insights?

    #32378

    Nassim
    Participant

    Chris M,

    Check out what the Trotskyists were all about and that should help.

    Trotskyism (Wikipedia)

    Permanent Global Socialist Revolution – under their leadership of course. Essentially, the destruction of Nationalism so that we all become hybrids – except for the Chosen People of course.

    You can already see how we are half way there in both the USA and now Europe. Russia has been inoculated against this infection by their tragic history. People like Dmitry Orlov (American / Russian / Jewish) think that the USA will have a somewhat similar experience. Dmitry is obviously not one of them.

    Reinventing Collapse: The Soviet Experience and American Prospects

    It would be nice if Trump could put an end to this. Far too difficult IMHO..

    Times Of Israel Removes Elad Nehorai’s Article “Jews DO Control The Media”

    #32379

    Nassim
    Participant

    Chris M,

    I just saw another article which demonstrates what is clearly going on:

    Eliminating Currency = Communism – Martin Armstrong

    This sort of nonsense is obviously being promoted with a view of enslaving the people of the world. There can be no other explanation. Do you think the currency of North Korea has any real value in that country?

    Note how those who control the media are saying almost nothing about the catastrophe being enacted in India at present. Banknotes representing 85% of all transactions have been arbitrarily cancelled. This is not something that Modi suddenly dreamed of. He was pushed in that direction by outsiders.

    WHY MODI’S INDIAN BANKNOTE BOMBSHELL HAS SHADES OF NORTH KOREA’S CURRENCY DISASTER

    #32386

    pjmeli
    Participant

    Chris M.

    “By Whom. How was it derived?”

    By Congress. From simple accounting.

    Dollars are created by Congress when it passes spending bills and the President signs off on them. By accounting this is recorded as a liability (debit or debt) on the government side of the transaction when Treasury writes a check (marks up bank accounts) and an asset (credit or deposit) on the non-government side.

    It is by this simple rule of accounting that all money is debt…debt by definition. What is debt for one is (must be by accounting) an asset for another.

    All currencies in the World is fiat – from nothing. Money has no intrinsic value…it is a measure of claims on goods and services one has acquired.

    Where do you think the $ in your bank account came from?

    #32388

    Chris M
    Participant

    pjmeli,

    I understand how fiat money is created and fractional reserve banking.

    My point is that I don’t think all the government debt was purchased with earnings.

    And… I have my doubts Stockman really understands how a functional national economy is supposed to work. The supply siders always talked about supply creating its own demand. That’s true, but what they never talk about is the supply, particularly the raw material supply, being PRICED at parity to generate enough national income to consume the supply. If you don’t generate enough income, you tend to resort to debt to make up the difference.

    That’s the lesson Stockman, Reaganites, and supply siders need to learn.

    #32393

    pjmeli
    Participant

    Chris M

    “…fractional reserve banking”

    At the risk of being argumentative this particular zombie must be slayed.
    Fractional Reserve Banking™ doesn’t exist and never has. Every central bank in the World has gone on record that loans create deposits. Banks create money out of thin air when they make loans. Fractional reserve banking is a Rube Goldberg mathematical exercise untethered from the way things work in the real world. Like economics.

    “I don’t think all the government debt was purchased with earnings.”

    Not sure how ‘earnings’ got into this. Some government debt is held by the Fed though, maybe about $5T. The government owes $ to itself, while unconstrained in it’s ability to create $. I say unconstrained but the one constraint is that $ can’t buy something that doesn’t exist.

    Use of the term National Debt™ to describe our savings is Orwellian. Unfortunately, almost all of the $ in existence (not including bonds) are owed to the banking system. So what do we have in our pension funds?

    “…supply siders always talked about supply creating its own demand. That’s true…”

    Not true. What a business pays $1 to produce costs about $3 to buy, meaning business creates a fraction of the demand necessary to consume its own production. The additional income required comes from other sources, either as a result of federal spending or through private borrowing.

    For example in 2015 businesses invested approx. $3T, yet Consumption was some $10T. The Federal Government spent about $4T. Private debt increased by about $1.5T.

    Supply-siders will not learn what is in their best interests not to learn (paraphrasing Upton Sinclair). Starving the system keeps workers down, leaving business with the power, which is more important to them than money.

    #32396

    Chris M
    Participant

    pjmeli,

    If fractional reserve banking doesn’t or never existed, I’m not sure why it has a trademark. Anyways, I don’t mind arguments, but I didn’t really want to get in a discussion about how fiat money is created, or the Federal Reserve.

    To use your data, if it costs business $1 to produce, and it costs $3 to consume, then the selling price is much too above parity price, and business is getting more than its fair share. That’s why there isn’t enough income to consume. The economy is quite out of balance. However, I’m not sure where you are deriving your data. Data collectors have a knack for massaging the numbers for their particular benefit. You can’t analyze where things out of balance in the economy using massaged data. It can’t work.

    I think we can agree on one thing. If we need debt to consume, something certainly is out of balance in the economy. I know farmers in the US haven’t gotten parity prices for their commodities since the 1950’s. Knowing that parity prices for raw materials is vital to provide enough income to consume, that’s a place that certainly needs fixing in order to make the economy solvent. Earn our way, not borrow our way!

    #32398

    Stephen Maturin
    Participant

    I have heard Varoufakis say “investments in green technology not 4-wheel drive cars,” indicating that he means a different kind of growth substituting for the kind of growth we have had. If there is any kind of growth coming up, it must be by means of substitutions in the end products created, to be not petroleum-dependent in either their material make-up or in their necessary processes. Of course this means huge disruptions in how people are employed, or not. The structures planned in Yanis’ New Deal will be essential to smooth a sane social path to really new ways of living, both materially and socially. Fossil fuel-based growth is over, but there may yet emerge a different kind of growth.

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