Tuesday, April 15, 2014

Germany shuts scheme for young unemployed because of overwhelming demand

Germany said on Monday it would no longer accept applications for a programme to attract young Europeans to its job market due to overwhelming demand from crisis-ravaged countries.
The labour ministry said it had been flooded with interest from job-seekers particularly from struggling Spain and Hungary for the scheme offering subsidized job training, apprenticeships and work in fields lacking manpower.
"Currently we cannot meet the demand" for the programme, called "The Job of My Life", a labour ministry spokeswoman told reporters.
Germany, Europe's top economy, faced criticism from its EU partners for an approach to the eurozone debt crisis that placed a strong emphasis on fiscal discipline, which has been blamed for exacerbating the economic impact among ts weakest members.
Source and full story: The Local (Germany), 14 April 2014

CBO Issues Dire Debt Warning of 'Fiscal Crisis'





New figures by the Congressional Budget Office released on Monday reveal that over the next 10 years the U.S. debt-to-GDP ratio will double to 78%.

Over the last four decades America's average debt-to-GDP ratio was 39%. At the end of 2007, federal debt was just 35% of GDP.
The CBO report says gross federal debt will soar from $17.7 trillion to $27 trillion over the next ten years.
CBO warned of the dire consequences the nation's debt will have if gone unchecked.
"Such high and rising debt would have serious negative consequences," says the report. "Federal spending on interest payments would increase considerably when interest rates rose to more typical levels. Moreover, because federal borrowing would eventually raise the cost of investment by businesses and other entities, the capital stock would be smaller, and productivity and wages lower, than if federal borrowing was more limited."
The report added: "Finally, high debt increases the risk of a fiscal crisis in which investors would lose so much confidence in the government's ability to manage its budge that the government would be unable to borrow at affordable rates."


This Chart Shows Us How Bad The Economy Really Is: “Flashing Red Warning”

fuse-lit
Recent weeks have led to a fairly significant drop in stock valuations, with many expert analysts struggling to figure out exactly why it’s happening. You’ll hear them cite the weather, or market overreaction, or any number of reasons for why stocks have seen their share prices reduced and why they’ll be rebounding in the near-term.
What they won’t show you on mainstream financial channels is what’s really happening behind the scenes.
Forget about all the minute-by-minute noise for a moment and take a look at the following chart. It gives a very simple overview of earnings growth trends for stocks listed on the S&P 500 on a quarterly basis.
Last year saw what analysts would call fairly robust growth, and they had no problem citing these numbers for evidence of economic recovery.
We’re curious what they’d call it now, considering this chart shows a massive collapse in earnings per share growth across the board.
Pay close attention to that yellow line, which indicates growth (or lack there of) for the first quarter of 2014. According to Zero Hedge this is a Flashing Red Warning as earnings growth plunges to its lowest levels since 2012:
While the so-called “experts” were adamant in repeating that one must ignore all Q1 economic data (because of harsh weather you know), one thing the same “experts” pounded the table on was the earnings growth in 2014 which confirmed that the Fed was correct in tapering and that the corporate sector was well on its way to achieving “escape velocity” and a stable recovery. And then this happened…
EPS Growth
(Chart via @Not_Jim_Cramer)
Most people, when you ask them how the economy is doing, will point to the Dow Jones, NASDAQ and S&P 500 as evidence of a healthy recovery.
What the majority of those people fail to look at is the underlying valuations for the stocks within those indexes.
If you are an investor and hold stocks, or are thinking about jumping in because this latest “correction” is about to take a turn for the better, we direct your attention to this absolutely critical piece of information regarding price-per-earnings from Karl Denninger of Market Ticker.
A bit of perspective is in order here.  The number of stocks that have been trading on nothing more than QE-addled leverage, with nosebleed territory P/Es including Facebook (96), Amazon (537!), Netflix (180), LinkedIn (762), Salesforce (Negative P/E) and Twitter (ditto; -$3.41 EPS.)
Yeah, but the market is “cheap”, right?  Sure it is with all these big-cap techs trading at prices like this…

There is only one reason to buy such a stock — you’re convinced that some other sucker will pay you an even greater multiple to sales (say much less earnings) than you paid.
That the air will eventually come out of such a market is inevitable.
The P/E ratio of a stock is basically the price of the stock compared to the earnings of said share. In the case of Amazon trading at 537 times earnings, this is an INCREDIBLE number considering most conservative financial advisers recommend dividend earning stocks in the 10 – 12 P/E range for investment purposes. In essence, the easiest way to interpret Amazon today is that an investor is willing to pay $537 for $1 in current earnings. So, investors who bought Amazon stock at its current price should see a return on that investment… in about 537 years (give or take)  at current earnings.
Yes, that’s how crazy the stock market is right now, and Amazon is certainly not alone insofar as over-valuation is concerned.
Couple that with the earning growth chart above and you can clearly see that we are in very dangerous territory here.
And this doesn’t even take into account the economic warfare playing out between East and West, where Russia has now announced it will be actively pursuing a strategy to decouple its resource trade from the US dollar, meaning it will now trade in local currencies as opposed to the world’s traditional reserve currency.
As this new form of warfare plays out by the worlds super powers, all monetary systems will be affected. So how is this going to affect you? These effects will cause a continued degradation of the U.S. dollar with the real possibility that China and Russia will stop funding our debt. If and when this happens, the-you-know-what will inevitably hit the fan. 
As Paul Craig Roberts noted recently, there is a reckoning coming and all evidence points to economic failure in 2014.
Or, we can all just go along with the prevailing narrative and pretend like happy days are here again.
The following song was released shortly after the 1929 stock market crash before anyone had realized its implications. It reassured Americans that “Your cares and troubles are gone… there’ll be no more from now on.”
We know how that ended up…

Gasoline Prices Soar!! 4.59 A Gallon and spreading across U.S.

They couldn’t wait…with more unrest ukraine and OTHER EXCUSES…
If California’s economy does begin to suffer from high gasoline prices, several other regions will not be far behind. In New York, Chicago, Miami and other large cities, the average price for a gallon of regular has passed above $3.75 and shows little evidence of moderating. The “California gas problem” has already started to spread aggressively. The price of an average gallon of regular is above $3.60 in Pennsylvania, Indiana, Ohio, Florida, Michigan, New York, Illinois and California. Among them, these states have well over a third of the U.S. population
Gonviral


Sen. Bernie Sanders: Americans are losing faith in the political system

REUTERS DO NOT REUSE
 
  • 3
     



By Daniel Lovering
MANCHESTER, New Hampshire (Reuters) – Vermont U.S. Senator Bernie Sanders warned that a growing number of Americans were losing faith in the political system at a New Hampshire site that often hosts presidential primary debates. But he said he is “many, many months” away from deciding on a White House run.
Liberal independent Sanders, 72, covered a raft of issues in an hour-long speech before taking questions from an audience of about 220 people at Saint Anselm College’s New Hampshire Institute of Politics in Manchester, New Hampshire.


“What exists all over America today is that millions and millions and millions of people – working people, low income people, young people – they look at the political process and they say, ‘Not for me,’” Sanders said in a speech that touched on the widening wealth and income gap in the United States, national security, health care and climate change.
“There are a lot of angry people out there.”
Earlier in the week, Sanders told his hometown Burlington Free Press newspaper that if he were to run for president in 2016, it would be important to perform well in the neighboring New Hampshire’s first-in-the-nation nominating primary.
On Saturday he said he still had “plenty of time” to make up his mind on whether to run.
“We’re giving thought about it, but we’ve got many, many months,” he said in an interview.
Sanders would face an uphill battle were he to seek the Democratic nomination or run as an independent. Polls show former Secretary of State Hillary Clinton, who has not yet said whether she will run in 2016, as the undisputed front-runner with about five times the support of Vice President Joe Biden, her closest potential challenger.
High school history teacher Branden Grant, 27, said he drove 100 miles from Pomfret, Connecticut, to hear Sanders speak.
“He’s very authentic and sticks to his word and fights the good fight,” Grant said. “I like what Bernie says.”
But Richard Polonsky, 68, of Bedford, New Hampshire, said he doubted Sanders would have a shot at the White House.
“I would be surprised if he would have a chance of winning, even though I think he should,” Polonsky said. “It’s a tough road at this point.”
Even Sanders had more immediate goals, urging voters to support Democratic candidates in the 2014 Congressional election, to help the party he is most closely allied with hold its 55-43 majority in the upper chamber.
“The first thing we have to do is make sure the Republicans do not gain control over the Senate,” said Sanders, who is not up for re-election this year. “I’ll be working very hard on it.”
(Editing by Scott Malone and Gunna Dickson)

America: Freedom to Fascism - Full.

Taxi Companies Sue For Protection From Ridesharing

Real-time ridesharing is a service that arranges one time shared rides on very short notice with non-commercial vehicles. It is a technologically driven alternative to hailing a taxi cab, by using GPS and smartphone apps to arrange rides, as well as using social media to establish trust and accountability between drivers. Many people like this idea due to its effectiveness and the fact that it can benefit the environment by limiting the volume of car traffic, and reducing congestion on the road. However, there are opponents to ridesharing, and they originate overwhelmingly from taxi companies and public transit operators. Ridesharing companies have already danced with the legality of this issue in Los Angeles, but now the city of Chicago is preparing engage in the same, as the taxi industry has gone to courts to protect their monopoly.

Romanian villagers take on Chevron over shale gas

US energy major Chevron, shielded by barbed wire, under police protection and under fire from egg throwers, is in trouble in Romania with villagers angry at its drive to drill for shale gas.
Opposition is fierce in the tiny remote village of Pungesti near the border with Moldova which has become a symbol of hostility to the environmentally controversial techniques of extracting shale gas.
"In other countries, I have not experienced this type of protest", said grim-faced drill site-manager for Chevron, Greg Murphy.
His words were almost drowned out by cries of "stop Chevron", "thieves", and "please leave" from dozens of demonstrators at the wire barriers as he showed journalists the site in the northeast of the country.
Various new techniques for extracting oil and gas, notably "fracking" involving the injection of water and chemicals deep into rock to release reserves, has lead to booming production in North America.
The flows of this cheap energy are causing upheaval on world markets in what the International Energy Agency describes as an energy revolution.
- Demonstrators disrupt project -
Chevron has broadened its attention to potential reserves in eastern Europe, especially in Poland and Romania.
But the company's attempts to establish its first exploration well in Romania were suspended twice at the end of 2013 owing to demonstrations by villagers.
Now the site is a "special security zone", and people in the area have to show identity papers.
Chevron has gone on a charm offensive with an "open day" bussing the media pack directly into the site in coaches to avoid contact with the local people.
But villagers outmanoeuvered the minders, made their way across fields and turned up uninvited to vent their anger as the Chevron executives showed journalists around.
One of the coaches came under fire from eggs. "We thought Chevron executives were inside," a demonstrator told AFP later.
Chevron's country manager in Romania, Tom Holst, held that the objectors did not represent feeling in Pungesti, which includes several hamlets nestling in hills.
"I would say that people of Pungesti are very anxious for this project. There are benefits to be had and those benefits are jobs. There are approximately 60 locals who are working here on the project. About 30 from Pungesti," he said.
"Given the recent events in the Ukraine, countries are very, very concerned that they have energy security and that they are not dependent on imports," he said referring to Russian intervention in Crimea and a big increase in the price of Russian gas for Ukraine.
Romania, unlike many countries in eastern and western Europe, is not heavily dependent on Russian gas since it produces gas itself, and last year imported from Russia only about 10 percent of its supplies, according to financial newspaper Ziarul Financiar.
But the main concern which drives opposition to the drilling is that fracking technology could seriously damage the environment below and above ground.
On this, too, Holst was reassuring.
"This is an exploration well," he said. "Hydraulic fracturing will not be used."
But many local people object that if the drilling finds gas, it will be only a matter of time until fracking techniques are used.
Their homes bear banners saying "I don't want fracking" or "Stop Chevron".
- Cows, goats, and water -
Mariana Morosanu, a 33-year-old local farmer who has cows, goats and chickens, referring to a common concern that underground water reserves could be contaminated, asks: "If it's not dangerous why did France ban fracking?"
She said: "My child passes through the garden and asks me: will I still be able to pick fruits, will the grass still grow? He looks at the hills and he asks me if they will remain this beautiful if Chevron starts drilling. I don't know what to answer ... People protest but Chevron goes on with its plans."
Catalin Scantei, a carpenter had the same concerns, and pointed to cracks in his house which he alleged had been caused by heavy traffic of lorries carrying drilling gear.
"Before people were calm, they lived their lives," he said. "Here in the village we work the fields and grow animals. But now if they poison our water and everything, what will we do?"
But the objecting villagers target the root of their wrath at Romanian officials, accusing them of "betrayal".
The Social Democrat Party of Prime Minister Victor Ponta, when in opposition, opposed exploration for shale gas but is now fervently in favour.
"Unfortunately, our politicians do not care about the population," Mariana asserted.
For Chevron, Holst was confident: "We expect that within the next two to three weeks, the drilling operation will commence here in Pungesti," he said.
cor-iw/hd/rl

The Separation of Wealth & State - Jesse Ventura


How To Get a Job Despite the Economy

An entire new feedback loop of accreditation is necessary in the economy we have, and fortunately that feedback is within our individual control.
And what characterizes the economy we have?
It’s bewildering because nothing works like it’s supposed to. For example, getting a college degree was supposed to guarantee a good job and an 80% lifetime wage premium over people without college degrees.
But in the economy we have, getting a college degree no longer guarantees a good job, or indeed, a job of any kind: 53% of recent college graduates under the age of 25 are unemployed or doing work they could have done without going to college.
The payoff for getting a college degree is declining while the risks of becoming a debt-serf due to crushing student loans is rising. The big premium that once accrued to college graduates is eroding for reasons of basic supply and demand: there are far more people with college degrees than there are high-paying jobs for people with degrees–even law degrees, MBAs and PhDs.
The entire notion that a college degree “signals” something valuable to employers is breaking down. In the good old days, earning a college degree proved that a student was hard-working and conformist–just what hierarchical corporations and government agencies want in employees. (The “signaling” value of a diploma is based on work by economist Michael Spence in the 1970s. In general, the signal indicates an attribute whose value is correlated with the difficulty and cost of the signal: the harder it is to get a degree, the greater the value of the signal it sends.)
But in an economy in which education credentials are in over-supply, that signaling mechanism is running up against a basic reality: a degree accredits very little about the student’s knowledge, problem-solving skills or professionalism. A degree is simply a proxy of knowledge, not evidence of knowledge or useful skills.
Indeed, the study Academically Adrift: Limited Learning on College Campuses concluded that “American higher education is characterized by limited or no learning for a large proportion of students.”
Signaling an ability to grind though four or five years of institutional coursework is no longer enough; the signaling needed to indicate an ability to create value must be much richer in information density and more persuasive than a factory model diploma.
A resume is equally thin on information that accredits a worker’s knowledge, useful skills and professionalism. A resume is a public-relations summary that everyone knows has been tailored to present the candidate in the best possible light. And precisely how useful and trustworthy is PR in any setting?
Put yourself in the shoes of a hiring manager or potential collaborator: there is precious little useful information in either a diploma or a resume. As a result, human resources departments have been tuned to eliminate as many candidates as possible by signal-based winnowing rather than by the collection of useful information on the skills, knowledge and professionalism of the potential employee/collaborator.
Conforming to social behavioral norms and being able to grind through mind-numbing work used to be enough to create value in the economy–but this is no longer the case for high-value (i.e. well-paid) work. The “signaling” camp holds that a degree showing the student sat through four or five years of classes is sufficient to justify hiring the person. That the student learned essentially nothing useful doesn’t matter; the entire value of college is in the last class needed to get the diploma.
This was true in the long postwar boom when the number of well-paid jobs expanded at a faster rate than the number of college graduates. This is simply no longer true.
In contrast to the “signaling” theory of value, the “human capital” camp holds that working knowledge is what creates value. If the student learns little critical thinking, real skills or practical knowledge, then a college degree has little value.
What if conformity and being able to navigate formal systems/bureaucracies no longer creates value or helps people solve real-world problems? In the economy we have, the “signal” value of a college degree has sharply declined. This is why college graduates can send out hundreds of resumes and not even receive a single reply, much less an interview or job offer.
Systems analysis teaches us that changing the parameters of a system (for example, adding another line to your resume or getting another degree) does not change the system; only adding a new feedback loop can change the system.
Clearly, an entire new feedback loop of accreditation is necessary in the economy we have, and fortunately that feedback is within our individual control: it’s a process I call accredit yourself. The most powerful feature of accredit yourself is the process is open to anyone: recent college graduates, those without degrees, those re-entering the workforce, those seeking to launch their own enterprises–everyone who wants an income stream in the economy we have.
I outline the process of accrediting yourself in my new book Get a Job, Build a Real Career and Defy a Bewildering Economy which is on sale through Tuesday evening (Pacific Standard time) at a 20% discount for my regular readers ($7.95 for the Kindle edition, 20% off of the list price of $9.95. The print edition is $20).
I explain why the economy no longer responds as conventional commentators expect, and why it will remain in a state of rapid transformation for decades to come.
The book makes a useful gift for high school and college graduates; if you give a Kindle ebook as a gift, you can schedule delivery of the gift to coincide with a graduation date.
Delivered by The Daily Sheeple

Dumping the Dollar: Russian oil firm Gazprom Neft says Asian buyers willing to use euros

Russian state-controlled oil producer Gazprom Neft said it had received positive responses from Asian clients about the possibility of using euros as a settlement currency instead of the dollar.
Company head Alexander Dyukov said this week Gazprom Neft had broached the idea of dropping the dollar, traditionally the currency of choice for the global energy sector, in response to a possible new round of Western sanctions over Russia’s annexation of Crimea.
He said the company had discussed with buyers the possibility of switching contracts to euros and that 95 percent had said they were ready to do it. Gazprom Neft ships around 30,000 barrels per day of oil eastward.
“Gazprom Neft has held discussions with its eastern partners about the possibility of completing settlements in the European currency. They, in turn, expressed their potential readiness for this,” the oil arm of top Russian top natural gas producer Gazprom said in emailed comments on Thursday.
Three buyers in Japan and China said they had been approached by Gazprom to settle oil payments in currencies other than the dollar. Two of the buyers said they were still considering the proposal, while the third said his company had bought crude using euros before and did not see it as a problem.
“Switching to euros is not a big deal. The problem is who will bear the exchange cost,” a trader with a Japanese buyer of Russian Asia-bound ESPO crude oil blend said.
Read More @ Source

BLM Selling Out America-Fabian Calvo


Fabian CalvoBy Greg Hunter’s USAWatchdog.com   (Early Sunday Release)
Real estate expert Fabian Calvo thinks the recent standoff between the Bureau of Land Management (BLM) and Nevada cattle rancher Cliven Bundy is about much more than grazing rights.  Even though this standoff is over, we find out It’s really about sweetheart deals for federal land.  Calvo says, “The hair on the back of my neck stood up when I was doing research for this and speaking to some of my contacts on Wall Street.  The BLM is part of the Department of the Interior, and look at what they have been doing?  Through the BLM, the Department of the Interior has been confiscating land and going after land, for example, in the high desert in California and all over the place.  What I am hearing is they are categorizing this land for future collateralization or to sell off.  In the Weimar (Germany) hyperinflation, after the hyperinflation, what did they back their currency with?  They backed it with mortgages and they backed it with land.  This is a total possibility here in America, but here’s the part that is more sinister and crazy.  The Department of the Interior and BLM have been providing sweetheart deals for Chinese investors.  I have a laundry list of deals that have been approved just in the last year.  Whether it’s Smithfield, a giant hog producer in America, and all of the farm land, overnight, the Chinese became the number one employer in a ton of cities across the U.S., but it doesn’t stop there.  Chinese investors are getting approval for solar fields.  There are battery companies they have taken over, and the list goes on and on.  The USDA gave the Chinese approval to import their chickens.  Why is this happening?  It is an end of the road situation.  It is just like where America was with England when we were exercising leverage over them around WWII because we were the largest creditor nation.  Now, we are the largest debtor nation, and we owe all this money to the Chinese.  In order to not have them dump our debt, we’re basically allowing them, through the Department of the Interior who is stealing rancher land and killing their cattle, they are selling out America.” 
As far as the crisis between the federal government and the Bundy ranch in Nevada that is now over, Calvo says, “I think this Bundy ranch situation could be the Lexington and Concord of the Second American Revolution.  I know that sounds like hyperbole, but look, people are waking up to this insanity.  When this information comes out . . . we need a peaceful show of we are not going to take it.  We really need a Rambo in the financial sector to take these people on to expose their crimes and what’s going on.”  Calvo goes on to say, “People need to understand this is not some sort of theory about what is happening–it’s a fact.  All you need to do is Google ‘U.S. Department of Interior and China approved,’ or something like that, and you will see all these stories come up and the deals that have been approved. . . . In order to keep the world reserve currency and keep that Ponzi scheme up, the U.S. basically has, as long as possible, they need to be able to collateralize stuff and do all these sweetheart deals so that the country that has us over a barrel, namely China, doesn’t dump our debt.  Just last month, we had this BBC documentary where Treasury Secretary Hank Paulson says, in the 2008 crash, he was pleading with China, those are his words not mine, pleading with them to not dump U.S. mortgage-backed securities.  In all of this QE, make no mistake, a lot of those mortgage-backed securities that the Fed was buying were a lot of the garbage they sold to China. They are now buying it back, and they are literally worthless garbage pieces of paper.” 
As far as the continuing $55 billion a month the Fed is spending buying bonds, Calvo says, “Bottom line is I don’t believe anything they say.  It’s much more than that because the economy is not getting any better.” 
On the rash of banker deaths in the last few months, Calvo reports, “The people on Wall Street that I speak with think it is totally plausible that these people are being murdered to prevent an economic Edward Snowden from exposing the economic crime and fraud that is taking place.  The system is scared to death.  That’s why I am saying we need a financial Rambo to come out and expose what they are doing. . . . Hey look, if you have an economic Edward Snowden come out and expose the fraud of the derivatives, credit default swaps, manipulation of interest rates, it’s game over.  You need trust in the financial market for it to operate, and when the trust blows up, it is game over. . . . You can see the cracks already taking place with the market plunge . . . . In my opinion, people are really getting shaky as far as trust in this financial market.”  
As far as the big players in the real estate market, Calvo, whose company buys and sells $100 million in real estate annually, says, “They are not going to buy; they are going to start selling off.  This is what I have been talking about since we have been doing interviews.  It’s the pump and dump of the U.S. housing market.  All the lenders are saying we want to start doing subprime loans.  After 2014, you are going to see subprime loans roar back with style. . . . You are going to see real estate go absolutely buck wild, unless there is some sort of black swan event.  Real investors are scared to death of the imploding U.S. dollar. . . . Not everybody is a gold investor, and real estate is a tangible hard asset that can be rented out.  I think home prices could go up until we have another full blown collapse.  I think the collapse of the housing market will be coupled with the stock market collapse, the bond market collapse and the dollar collapse.  Everything will blow at once.” 
Join Greg Hunter as he goes One-on-One with Fabian Calvo from TheNoteHouse.us. 


BLM Selling Out America-Fabian Calvo

Fabian CalvoBy Greg Hunter’s USAWatchdog.com   (Early Sunday Release)
Real estate expert Fabian Calvo thinks the recent standoff between the Bureau of Land Management (BLM) and Nevada cattle rancher Cliven Bundy is about much more than grazing rights.  Even though this standoff is over, we find out It’s really about sweetheart deals for federal land.  Calvo says, “The hair on the back of my neck stood up when I was doing research for this and speaking to some of my contacts on Wall Street.  The BLM is part of the Department of the Interior, and look at what they have been doing?  Through the BLM, the Department of the Interior has been confiscating land and going after land, for example, in the high desert in California and all over the place.  What I am hearing is they are categorizing this land for future collateralization or to sell off.  In the Weimar (Germany) hyperinflation, after the hyperinflation, what did they back their currency with?  They backed it with mortgages and they backed it with land.  This is a total possibility here in America, but here’s the part that is more sinister and crazy.  The Department of the Interior and BLM have been providing sweetheart deals for Chinese investors.  I have a laundry list of deals that have been approved just in the last year.  Whether it’s Smithfield, a giant hog producer in America, and all of the farm land, overnight, the Chinese became the number one employer in a ton of cities across the U.S., but it doesn’t stop there.  Chinese investors are getting approval for solar fields.  There are battery companies they have taken over, and the list goes on and on.  The USDA gave the Chinese approval to import their chickens.  Why is this happening?  It is an end of the road situation.  It is just like where America was with England when we were exercising leverage over them around WWII because we were the largest creditor nation.  Now, we are the largest debtor nation, and we owe all this money to the Chinese.  In order to not have them dump our debt, we’re basically allowing them, through the Department of the Interior who is stealing rancher land and killing their cattle, they are selling out America.” 
As far as the crisis between the federal government and the Bundy ranch in Nevada that is now over, Calvo says, “I think this Bundy ranch situation could be the Lexington and Concord of the Second American Revolution.  I know that sounds like hyperbole, but look, people are waking up to this insanity.  When this information comes out . . . we need a peaceful show of we are not going to take it.  We really need a Rambo in the financial sector to take these people on to expose their crimes and what’s going on.”  Calvo goes on to say, “People need to understand this is not some sort of theory about what is happening–it’s a fact.  All you need to do is Google ‘U.S. Department of Interior and China approved,’ or something like that, and you will see all these stories come up and the deals that have been approved. . . . In order to keep the world reserve currency and keep that Ponzi scheme up, the U.S. basically has, as long as possible, they need to be able to collateralize stuff and do all these sweetheart deals so that the country that has us over a barrel, namely China, doesn’t dump our debt.  Just last month, we had this BBC documentary where Treasury Secretary Hank Paulson says, in the 2008 crash, he was pleading with China, those are his words not mine, pleading with them to not dump U.S. mortgage-backed securities.  In all of this QE, make no mistake, a lot of those mortgage-backed securities that the Fed was buying were a lot of the garbage they sold to China. They are now buying it back, and they are literally worthless garbage pieces of paper.” 
As far as the continuing $55 billion a month the Fed is spending buying bonds, Calvo says, “Bottom line is I don’t believe anything they say.  It’s much more than that because the economy is not getting any better.” 
On the rash of banker deaths in the last few months, Calvo reports, “The people on Wall Street that I speak with think it is totally plausible that these people are being murdered to prevent an economic Edward Snowden from exposing the economic crime and fraud that is taking place.  The system is scared to death.  That’s why I am saying we need a financial Rambo to come out and expose what they are doing. . . . Hey look, if you have an economic Edward Snowden come out and expose the fraud of the derivatives, credit default swaps, manipulation of interest rates, it’s game over.  You need trust in the financial market for it to operate, and when the trust blows up, it is game over. . . . You can see the cracks already taking place with the market plunge . . . . In my opinion, people are really getting shaky as far as trust in this financial market.”  
As far as the big players in the real estate market, Calvo, whose company buys and sells $100 million in real estate annually, says, “They are not going to buy; they are going to start selling off.  This is what I have been talking about since we have been doing interviews.  It’s the pump and dump of the U.S. housing market.  All the lenders are saying we want to start doing subprime loans.  After 2014, you are going to see subprime loans roar back with style. . . . You are going to see real estate go absolutely buck wild, unless there is some sort of black swan event.  Real investors are scared to death of the imploding U.S. dollar. . . . Not everybody is a gold investor, and real estate is a tangible hard asset that can be rented out.  I think home prices could go up until we have another full blown collapse.  I think the collapse of the housing market will be coupled with the stock market collapse, the bond market collapse and the dollar collapse.  Everything will blow at once.” 
Join Greg Hunter as he goes One-on-One with Fabian Calvo from TheNoteHouse.us. 
After the interview:
Calvo told me he’s working on a new book about the coming global economic reset.  He says it will be out at the end of April.  You can keep track of Fabian Calvo on his personal website called Fabian4Liberty.com. 

Jim Rickards: Money Printing Will Destroy Confidence At Some Point

Gold Silver Worlds: In a recent online presentation organized by bullion service provider GoldCore, Jim Rickards explained the current economic environment and what it means to gold investors. His main premise is that central bank intervention is very destructive in the long term and that there is no economic recovery. Gold investors should keep part of their wealth in physical form, not as an investment, but rather as wealth protection.
Jim Rickards on deflation and the risk of collapse:
The system is now larger than 2008 — make the system bigger and you’re going to have a bigger collapse. We are further down the timeline.

The ultimate thesis is that deflation is the biggest problem in the world. The world wants to deflate but central banks and governments cannot have deflation – it increases the debt-to-GDP ratio, destroys tax collection, creates bad debts and hurts the banks. So central banks will do anything to avoid deflation. The way they do this is to print money. But if you print too much money then you’ll collapse confidence in the U.S. dollar.
The U.S. dollar is ultimately backed by confidence, as also said by Paul Volcker. The Fed is insolvent on a mark to market basis. I came to this conclusion himself, but insiders have also told me this privately; they won’t say it publicly.
Money is a perpetual non-interest-bearing note issued by an insolvent central bank. How long can that go on before people walk away from it?
On the fact that the economy is in a depression:
Rickards questions the consensus mantra of recovery and asserts that “we are in a depression and we have been in one since 2007.”
If the Fed had not done everything they’ve done, then things would have been much worse than they were in 2010. No question about that — unemployment would have been higher and growth would have been lower.
But we should have been much stronger today. We should be having 7% growth now. We can’t have 7% for a long time, but we can for a short time while people come back into the workforce. Instead we’re Japan — we’ve got 1.9% growth as far as the eye can see. So I would much rather have a little pain up front and then have robust growth.
Everyone wants a ‘V’ shape recovery, but you can’t have a ‘V’ unless you get to the bottom. We didn’t get to the bottom because the Fed truncated the ‘V’.
On the myth that the economy is recovering:
The Fed said we had “green shoots” in 2009. Timothy Geithner declared a recovery in 2010. Nobody has a worse forecasting record than the Fed. They do a one-year forward forecast each year…they have been wrong and off by orders of magnitude every year.
Listen to yourself …who cares about unlimited printing of money, who cares about bad forecasting, who cares about destroying confidence? I care. I think we all should all care.
 On the myth that it is not important how much is printed:
The Fed’s safety net of printing has holes in it. If the money printing could go on indefinitely then you would be right and I would agree with you but it cannot go on indefinitely. The Fed could legally print more than the $4 trillion they’ve already created — $8 trillion, $12 trillion, $16 trillion. Some people say that they can do that — legally they can but my view is that that will destroy confidence at some point.
People say why doesn’t the Fed just forgive the Treasury debt and make $4 trillion go away? They could do it legally but what would that do to the confidence?

On the 2 second attention span:
People are investing based on what they think is going on right now, because they have the curse of the 2 second attention span. So when the stock market is down 30% a couple of years from now, you can kiss those investments goodbye.

Even Warren Buffett is buying hard assets:
Look at Warren Buffett, he is getting out of cash and into hard assets as fast as he can — railroads and oil…Warren Buffett is buying hard assets as fast as he can.
I talk about this in Chapter 3 of The Death of Money’ the Fed is manipulating every market in the world with zero interest rates. I don’t like to be in manipulated markets, I’d rather be in things that retain their value.
On gold manipulation:
The IMF sold 400 tonnes of gold in 2010. We know 200 tonnes went to India and Sri Lanka. Where did the other 200 tonnes go that they dumped on the market? They are funded by U.S. taxpayers but they are not being transparent.
On making money with gold vs preserving wealth:
I have always recommended about 10% gold, not all in, not 50%. Do you want to make money or do you want to preserve wealth?
This article is brought to you courtesy of Gold Silver Worlds, who advocates to own physical gold and silver outside the banking system.

Insiders Tell All: Both the Stock Market and the SEC Are Rigged

By Pam Martens: April 14, 2014
President Obama Nominates Mary Jo White for Chair of the Securities and Exchange Commission
Since bestselling author Michael Lewis appeared on 60 Minutes on March 30 to promote his new book, “Flash Boys,” and explained how the U.S. stock market is rigged; and Brad Katsuyama, the head of IEX, an electronic trading platform who plays a central role in the Lewis book, did the same on CNBC a few days later, the debate has gone viral.
But Lewis and Katsuyama were not the first to blow the whistle on rigged U.S. stock markets. Sal Arnuk and Joseph Saluzzi, Wall Street insiders and co-founders of Themis Trading LLC literally wrote the book on “Broken Markets” in 2012 and have been exposing details of the rigging  on their blog ever since.
Wall Street Journal reporter, Scott Patterson, mapped out the exotic and corrupt order types permitted by the stock exchanges to fleece the little guy in his 2012 book, “Dark Pools,” which follows the trading career of Haim Bodek, who has set up his own web site to blow the whistle on just how badly the stock market is rigged.
Following all the media hoopla, the FBI has recently announced that it has opened an investigation into the allegations. But under the Securities Exchange Act of 1934, the FBI is not in charge of rigged stock exchanges — the Securities and Exchange Commission is. But according to insiders, the SEC has stood down in much the same fashion that it ignored warnings about Bernard Madoff from whistleblower Harry Markopolos for years. The explanation for the SEC’s inaction, many traders feel, is that the SEC itself is rigged against Main Street in favor of big Wall Street firms. That view has found support among the SEC’s own insiders.
Since 2006, four attorneys at the Securities and Exchange Commission have put their reputations and family interests on the line by blowing the whistle on corrupt cronyism that is now so ingrained at the Nation’s regulator of stock exchanges and securities markets that it’s become part of the SEC’s business model.
Last week, James Kidney, an SEC trial attorney who retired at the end of March, set off pandemonium inside the SEC by giving an interview with Bloomberg News and releasing the full text of his March 27 retirement speech in which he castigated the SEC’s upper management for policing “the broken windows on the street level” while ignoring the “penthouse floors.” Kidney said in his speech that “On the rare occasions when Enforcement does go to the penthouse, good manners are paramount. Tough enforcement – risky enforcement – is subject to extensive negotiation and weakening.”
News of the speech was quickly amplified by the New York Times and multiple business press outlets.
Kidney blamed the demoralization at the agency on its revolving door to Wall Street as the best and brightest “see no place to go in the agency and eventually decide they are just going to get their own ticket to a law firm or corporate job punched.” (Retirement Remarks of SEC Attorney, James Kidney (Full Text).)
Kidney’s interview with Bloomberg came one day after American Lawyer published excerpts from 2,000 pages of documents it had obtained from the SEC under a Freedom of Information Act (FOIA) request, which showed that Kidney had pushed the SEC to investigate up the chain of command in the Goldman Sachs Abacus 2007-AC1 investment scam. Goldman Sachs knew that Abacus was designed to fail and allowed a hedge fund, John Paulson & Co., to bet against it while recommending it as a good investment to its own clients. The SEC only pursued a mid-level employee, Fabrice Tourre, while settling with Goldman Sachs for $550 million.
John Paulson was never charged officially by the government but he was named in the Securities and Exchange Commission’s outline of the crime. New York University, which has followed closely in the footsteps of the SEC’s brand of crony capitalism, allows Paulson to serve as a Trustee and has named the first floor lobby of Tisch Hall and the Stern School of Business auditorium in Paulson’s honor.
In the documents obtained by American Lawyer, Kidney is quoted as stating that “This was not a case where there was only one low-level vice president involved.”
At the end of last week, Kidney expanded further with NPR on the demoralization of public servants who are genuinely interested in doing an honest job, stating: “Washington has become — and I think everybody knows it — a bathtub full of cash. As long as you just go in the bathtub you’re going to come out with cash stuck on you – if you’re at least a certain, have certain jobs and have certain roles. And that’s why the revolving door is such a problem. It’s cultural, it’s the culture of Washington, it’s the culture of Wall Street and it hollows out the civil service…”
On June 28, 2006, Gary Aguirre, a former SEC attorney, testified before the U.S. Senate on the Judiciary. During his final days at the SEC, Aguirre had pushed to serve a subpoena on John Mack, the powerful former official of Morgan Stanley, to take testimony about his potential involvement in insider trading. Mack was protected; Aguirre was fired via a phone call while on vacation — just three days after contacting the Office of Special Counsel to discuss the filing of a complaint about the SEC’s protection of Mack.
Aguirre told the Senate hearing that the SEC had thrown a “roadblock” in his investigation because the suspected insider trader had “powerful political connections.” Aguirre returned on December 5, 2006 to testify further before the Senate Judiciary Committee, providing the following additional insights:
“My testimony today will focus on a favor. Senior SEC officials gave it. Morgan Stanley and its CEO, John Mack (Mack), accepted it.
“The favor had positive effects for some. It cleared the way for Mack’s return on June 30, 2005, as Morgan Stanley’s CEO. Without the favor, Mack would have faced the risk of an SEC lawsuit for insider trading over the next year…
“Few principles are more deeply engrained in Title 17 of the Code of Federal Regulations, which regulates the SEC’s operation, than the mandates obligating the SEC to handle all of its affairs, including the enforcement of the securities laws, with impartiality. No conduct would stray farther from those mandates than a double set of laws: one for the politically well connected and another for everyone else.”
Next in line was Darcy Flynn, also an attorney at the SEC. In 2011, Flynn told Congressional investigators and the SEC Inspector General that for at least 18 years, the SEC had been shredding documents and emails related to its investigations — documents that it was required under law to keep. Flynn explained to investigators that by purging these files, it impaired the SEC’s ability to see the connections between related frauds – a big benefit for the mega banks on Wall Street known for serial and elaborate frauds.
Up next was an anonymous whistleblower from inside the bowels of the SEC. On September 27, 2011, the SEC Inspector General released a heavily redacted report suggesting that SEC attorneys have come to understand that whistleblowing can be hazardous to their career so they now operate incognito.
The case involved an employee at the SEC who had sent an anonymous letter to the Inspector General, blowing the whistle on the SEC Director of Enforcement, Robert Khuzami, (now handsomely compensated as a partner at the law firm, Kirkland & Ellis). The anonymous whistleblower was complaining about Khuzami’s handling of charges that Citigroup executives had intentionally misled public investors about its exposure to subprime mortgages, understating the amount by $37 billion in the fall of 2007. According to the Inspector General’s report, the whistleblower alleged that:
 “…just before the staff’s recommendation was presented to the Commission, Enforcement Director Robert Khuzami had a ‘secret conversation’ with his ‘good friend’ and former colleague, a prominent defense counsel representing Citigroup, during which Khuzami agreed to drop the contested fraud charges against the second individual. The complaint further alleged that the Enforcement staff were ‘forced to drop the fraud charges that were part of the settlement with the other individual,’ and that both individuals were also represented by Khuzami’s friends and former colleagues, creating the appearance that Khuzami’s decision was ‘made as a special favor to them and perhaps to protect a Wall Street firm for political reasons.’
“The complaint also alleged that Khuzami’s decision had the effect of protecting Citigroup from private litigation, and that by not telling the staff about his secret conversation, Khuzami ‘directly violated recommendations by Inspector General Kotz in previous reports about how such special access and preferential treatment can cause serious appearance problems concerning fairness and integrity of decisions that are made by the Enforcement Division.’ ”
The Inspector General’s report effectively whitewashed the claims against Khuzami, throwing more demoralization at the veteran attorneys in the SEC.
Any hope that President Obama would demonstrate a breath of fresh air by making independent appointments to the SEC and in cleaning up Wall Street were dashed to shreds with the appointment of Mary Jo White as SEC Chair early last year. White has now spun through the revolving door four times in 36 years, always returning to her corporate law firm, Debevoise & Plimpton. Between herself and her husband, John W. White, of corporate law firm Cravath, Swaine & Moore LLP, they or their law firms have represented every major Wall Street mega bank. Under Federal law, the conflicts of the SEC Chair’s spouse become her own conflicts.
Adding further outrage to the situation, Mary Jo White quickly named her close associate at Debevoise & Plimpton, Andrew Ceresney, to be the Co-Director of the SEC’s Division of Enforcement – the unit that decides who gets prosecuted and who gets an unfettered license to steal.
Ceresney is now the sole Director of Enforcement as his co-director, George Canellos, has left to rejoin the (wait for it) big Wall Street law firm, Milbank, Tweed, Hadley & McCloy, as a partner and head of litigation.
Just one year prior to moving into the top cop slot at the SEC, Ceresney had pulled off a major coup for Wall Street firms JPMorgan Chase, Citigroup, Wells Fargo, Bank of America and Ally. Ceresney was directly employed as counsel to JPMorgan Chase, but he also played a key role in the negotiations between the U.S. Justice Department, 49 state attorneys general and an army of Federal regulators to settle charges of mortgage, foreclosure and servicing fraud – all melded into the National Mortgage Settlement – a deeply flawed deal for defrauded homeowners.
A nonpartisan Congressional watchdog has also weighed in on the abysmal personnel practices at the SEC. On July 18 of last year, the Government Accountability Office (GAO) issued a stunning report on the declining morale among SEC employees. The report found that the SEC ranked 19 out of 22 similarly sized Federal agencies in overall satisfaction and commitment.
The GAO said its findings were consistent with the Partnership for Public Service’s analysis of the Office of Personnel Management’s 2012 Employee Viewpoint Survey. That analysis found that “SEC’s overall index score—which measures staff’s general satisfaction and commitment—declined from 73.1 in 2007 to 56 in 2012.”
The danger for the U.S. economy and our financial markets is that a system this tainted cannot stand – as we learned so well in 2008. It is inevitably destined to collapse under the weight of its own corruption.
The writings of economist Joseph Schumpeter explain creative destruction: failed systems and business models are meant to collapse in order to be replaced with more efficient, innovative ones. Studies indicate that impediments to the process of creative destruction have severe economic consequences.
The SEC is both an impediment to change on Wall Street and an impediment to regulatory reform. It is a dark pool of redactions and shredded documents; it has fired the truth-tellers and retained the timid; it is Wall Street’s top legal defense team in temporary quarters.

Russia Declares War on U.S. Dollar


‘HOUSE OF CARDS’

Russia Declares War on U.S. Dollar

Russia Declares War on U.S. Dollar

FTMDaily.com – As the West continues to unleash its anger against Russia’s recent military moves, Vladimir Putin has intensified his diplomatic efforts with a rising China. After a decade of talks, Mr. Putin is expected to announce a broad plan to export vast amounts of natural gas to China during an official state visit to China next month. If Mr. Putin can seal the deal it will be another major victory for the BRICS nations and will provide yet another nail into the coffin of the failing U.S. dollar.
Of course, both sides are facing intense pressure from the West to abandon the deal. China, however, seems intent on pushing closer to Russia. Russia, in particular, is under the threat of more Western sanctions for its recent role in Ukraine. So too, Western sanctions are targeting Russia’s state-run energy company, Gazprom. Gazprom’s response to these sanctions shows just how close we are to the end of the petrodollar system
From the Financial Times, a story entitled: Gazprom Looks to Drop the Dollar to Avoid Sanctions’ Bite:

The oil arm of Russia’s state-owned Gazprom is preparing customers to settle contracts in euros rather than dollars as it braces for the possible escalation of US sanctions against Moscow. Alexander Dyukov, chief executive of Gazprom Neft, told reporters in St Petersburg that the company had discussed shifting contracts to euros with its customers. “Practically all – 95 per cent of our customers – confirmed their willingness to move to settlement in euros,” he said.

Through Gazprom, Russia is openly declaring war on the U.S. dollar and its long-standing role as the settlement currency in global oil transactions. Ukraine is yet another proxy war for the U.S. and Russia. Now, however, the long knives are coming out.
The Financial Times report continues:
One senior banker said that many commodity groups, including Gazprom Neft, had held talks with bankers about financing in euros rather than dollars. “Every commodity sector business is talking about what is possible if you couldn’t do deals in dollars – if you couldn’t get dollar clearing through New York,” he said.
Such a switch could result in higher costs for companies because of the need to convert currencies and the lower liquidity for those other than the US dollar.
As I have consistently told you, a global switch from the U.S. dollar is going to be costly, laborious, and painful. Those who suggest that one morning you will wake up to find the U.S. dollar completely worthless have no historical precedent. The entire global economic infrastructure is designed to run on U.S. dollars. Changing that system will be expensive and difficult. Nevertheless, the discussions on how to make the switch from the U.S. dollar are currently taking place, and plans are no doubt being hatched to eventually make the switch.
As this report suggests, Gazprom may just be ‘testing the waters.’ Regardless, this is just the calm before the storm. Our generation is going to witness the eclipse of the U.S. dollar as the world’s reserve currency. Global dollar demand creates a permission slip for excessive dollar supply. Excessive dollar supply creates unsustainably high prices. Reverse that cycle and you have a dramatic fall in prices.
America’s ‘house of cards’ is nearing the end of its lifespan. Its collapse is certain and historically identifiable. But don’t expect it overnight. History is never that kind to empires. Instead, the collapse will be a slow and humiliating descent.
Until tomorrow,
Jerry Robinson

Australian shares are being manipulated, say researchers

Market manipulation appears to be rife on the Australian sharemarket when compared to other major markets around the world, according to the country's leading market researchers.
The dramatic price spikes which occur just before the markets close at 4pm – the strongest proxy of market manipulation – are being used to boost bonuses for rogue fund managers, the researchers claim.
The dramatic price movements occur in the last 15 minutes of trading each month, quarter and end of financial year and most likely relate to fund managers ­lifting their trading results which are measured on the key dates.
"They are getting money in all the time but instead of buying it every day they save it and buy it at the last minute to drive more demand," chief executive of the federal ­government-backed Capital Markets Co-operative Research Centre, Michael Aitken, told The Australian Financial Review.
For example, on December 20 last year, $23 million was traded in the last 15 minutes for just three stocks, Village Roadshow, Ocean Gold and REA, most likely delivering a healthy Christmas bonus to the rogue fund managers.
On Friday, $23 million in trading occurred for the same three stocks over the entire day.

Engines at the pentagon and light poles explained

Secret anti-BDS meeting held in UK capital



The British capital has hosted a secret meeting attended by 25 countries to counter international calls to boycott Israeli regime’s products.
The meeting, which was held in London this week, lasted for three days and was attended by UK's former Parliamentary Undersecretary of State for Foreign and Commonwealth Affairs Alistair Burt and the Israeli Intelligence Minister Yuval Steinitz, UPI reported on Friday.
The report said the participants included the United States, Australia, and Canada, in addition to a number of European states.
The secret meeting was part of Tel Aviv’s attempts to avert the Boycott, Divestment, and Sanctions (BDS) campaign against the regime.
The BDS campaign is part of international efforts to pressure Tel Aviv to stop illegal constructions in the occupied Palestinian territory.
The presence and continued expansion of Israeli settlements in occupied Palestine has created a major obstacle for the efforts to establish peace in the Middle East.
More than half a million Israelis live in over 120 illegal settlements built since Israel’s occupation of the Palestinian territories of the West Bank and East al-Quds in 1967.
The UN and most countries regard the Israeli settlements as illegal because the territories were captured by Israel in a war in 1967 and are hence subject to the Geneva Conventions, which forbid construction on occupied lands.
However, the Tel Aviv regime defies calls to abandon its illegal settlement activities.
NT/NN/AS

Another Phony Budget Debate

By: Ron Paul

Anyone watching last week's debate over the Republican budget resolution would have experienced déjà vu, as the debate bore a depressing similarity to those of previous years. Once again, the Republicans claimed their budget would cut spending in a responsible manner, while Democratic opponents claimed the plan's spending cuts would shred the safety net and leave vital programs unfunded. Of course, neither claim is true.
The budget does not cut spending at all, and in fact actually increases spending by $1.5 trillion over ten years. The Republicans are using the old DC trick of spending less than originally planned and calling that reduced spending increase a $5.1 trillion cut in spending. Only in DC could a budget that increases spending by 3.5 percent per year instead of by 5.2 percent per year be attacked as a "slash-and-burn" plan.
The budget also relies on "dynamic scoring." This trick is where the budget numbers account for increased government revenue generated by economic growth the budget will supposedly unleash. The claims are dubious at best. Of course, reducing government spending will lead to economic growth. But real growth requires real cuts, not this budget's phony cuts.
As important as reducing spending and balancing the budget is, focusing solely on budget numbers ignores the root of the problem. The real problem is that too many in Washington -- and the nation as a whole -- refuse to consider any serious reductions in the welfare-warfare state.
I have always maintained that the logical place to start reducing spending is the trillions wasted on our interventionist foreign policy. Unfortunately, there are still too many in Congress who claim to be fiscal hawks when it comes to welfare spending, but turn into Keynesian "doves" when it comes to spending on the military-industrial complex.
These members cling to the mistaken belief that the government can balance it budget, keep taxes low, and even have a growing economy, while spending trillions of dollars policing the world, and propping up some governments and changing others overtly or covertly. Thus, President Obama is attacked as soft on defense because he only wants to spend $5.9 trillion over ten years on the military. In contrast, the Republican budget spends $6.2 trillion over the next decade. That is almost a trillion more than the budget's total so-called spending cuts.
If there are too many fiscal conservatives who refuse to abandon the warfare state, there are too many liberals who act as if any reduction in welfare or entitlement spending leaves children starving. I agree it is unrealistic to simply end programs that people are currently dependent on. However, isn't it inhumane to not take steps to unwind the welfare system before government overspending causes a bigger financial crisis and drags millions more into poverty?
Far from abandoning those in need of help, returning the responsibility for caring for the needy to private charities, churches, and local communities will improve the welfare system. At the very least, young people should have the freedom to choose to pay a lower tax rate in exchange for promising to never participate in a government welfare or entitlement program.
Last week's budget debate showed how little difference there lies between the parties when it comes to preserving the warfare-welfare state. One side may prefer more warfare while the other prefers more welfare, but neither side actually wants to significantly reduce the size and scope of government. Until Congress stops trying to run the world, run the economy, and run our lives, there will never be a real debate about cutting spending and limiting government.

Stupid, Stupid, Stupid: IMF Undermines Ukraine with Austerity

Greece: Can It Get Even Worse?

Ronald Janssen
Ronald Janssen
While the German public opinion, courtesy of the debate in the run up to the next political elections, is discovering the fact that Greece will be needing a third bail out, a team of economists from the US – based Levy Institute describes how things look like from the side of Greece.
The Levy Institute economists start by observing that the changes in government revenue and expenditure which are projected for the next years in the latest troika reports are far too optimistic. The key problem is that the internal devaluation of wages is not working and will not produce export growth any time soon. This implies that the scenario the troika is counting on will not materialise: Employment and unemployment trends will not turn the corner shortly and the public deficit will not be reduced down to near zero by 2016.
In a next step, the Levy economists use an econometric analysis to see where the Greek economy is actually heading when following the existing program of austerity and internal devaluation. The results are that GDP will grow more slowly, employment will decline further than the corresponding troika projections and public deficit targets will not be met. This is called the baseline scenario (the black line) in the graph below.
p1
In this ‘baseline’ scenario, the government deficit does not fall sharply but remains hovering above and around 6% of GDP. The authors therefore calculate a scenario where additional austerity is imposed on Greece to achieve the initial deficit targets (the red line in the graph above). In this ‘deficit target’ scenario, Greece continues to remain stuck in a deep recession up until 2016, losing an additional 300.000 jobs (on top of the 600.000 jobs already lost between 2010 and 2012).
What the latter scenario would imply for unemployment, one can imagine. The Levy report itself tables on a further increase in the rate of unemployment, from 27% now to almost 35% by 2016, and this in their baseline scenario (see graph below, again the black line). In the ‘deficit target’ scenario, one would probably need to add at least another 100.000 of unemployed.
p2
Finally, note the blue line in the first graph above called the Marshall Plan scenario. This scenario estimates the effects of injecting 2 billion euros each quarter into an increase in public investment using European funds and this for a grand total of 30 billion.  GDP starts growing again, 200.000 jobs are created and the public deficit falls to reach a bit over 4% of GDP.
Of course, the ‘Austerians’ over here in Europe will argue that this Marshall plan is not realistic, that there is no willingness from the other part of Europe to pay for such solidarity, that after Greece, many other countries will claim similar help. This however does not take away the fact that their policy of austerity and deregulation is resulting in an economic and social catastrophe. Time for politicians around Europe (whether they are ‘austerians’ or not) to face this and come up with solutions reflecting the ideas of the economists of the Levy Institute.

Palladium, Gas And Wheat Surge On Russian Supply Fears

Today’s AM fix was USD 1,324.50, EUR 958.05 & GBP 792.21 per ounce.
Friday’s AM fix was USD 1,317.25, EUR 948.62 & GBP 785.71 per ounce.
Gold dropped $0.20, or 0.015%, by close of trading on Friday to $1,317.80/oz, but showed a gain of 1.10% on the week. Silver lost $0.10 on Friday, closing at $19.95/oz with a 0.5% loss on the day but a small gain of 0.05% on the week.
Palladium in U.S. Dollars – 20 Years (Thomson Reuters)
Palladium surged 1.7% for a fifth straight session on Monday to its highest since August 2011 on growing fears that supply would be hurt by more U.S. sanctions on top producer Russia and prolonged labour strikes in world number two producer, South Africa.
Gold jumped to a three-week high as mounting geopolitical tensions in Ukraine curbed risk appetite, sending equities lower and boosting bullion’s safe-haven appeal.
Gold, silver, palladium, platinum and oil rose while European stocks fell for a third day after Russia called an emergency session of the United Nations Security Council amid worsening violence in Ukraine and a drift towards civil war. Clashes between Ukrainian forces and pro-Russian gunmen turned deadly this morning.
Platinum gained about 1% to its highest in nearly a month as labour strikes continued in South Africa.
Commodities in general climbed to a five-week high with the Standard & Poor’s GSCI gauge of 24 raw materials rising 0.6% in London, after earlier climbing to the highest level since March 3.
Palladium Mine Production By Country 2004 to April 2014 (Thomson Reuters)
U.K. natural gas, the European Union’s benchmark contract, climbed for a fourth day to the highest since march 27. Europe gets about a third of its natural gas from Russia, half of it through Ukraine.
Wheat surged 3.3%, nickel jumped to the highest since February 2013 and U.K. natural gas surged 2.4%.
The Stoxx Europe 600 Index dropped 0.8% and S&P 500 Index (SPX) futures slipped 0.3%.
Palladium Supply and Demand – 2004 to April 2014 (Thomson Reuters)
Relations between Russia and the West are at their worst since the Cold War. Some Western governments believe Russia is preparing to take control of eastern Ukraine.
The United States is prepared to step up sanctions against Moscow if pro-Russian military actions in eastern Ukraine continue, a senior U.S. envoy said, with the sanctions set to target mining, banking and energy, among other sectors.
There is the real risk of a civil war where the old Cold War powers support rival factions by proxy. Another significant risk is of economic and trade war morphing into financial and currency war.
Palladium has outperformed other precious metals this year, gaining about 14% supported by fears over Russian supplies, and growing demand in the auto sector.
Gold and the precious metals are likely to see more gains as tensions over Ukraine are set to continue and look like they could deteriorate further.
Officials from the U.S. and Russia blamed each other at yesterday’s UN Security Council meeting for violence that left at least one Ukrainian serviceman dead
Five shares declined for every one that advanced in the Stoxx 600, with trading volumes 8.2% higher than the 30-day average, according to data compiled by Bloomberg. The MSCI Emerging Markets Index slid 0.6 percent, declining for a second day.
S&P 500 futures were little changed after the index slumped 2.7% last week, with the Nasdaq Composite Index losing 3.1%, the most since June 2012.
Protect And Grow Your Wealth > The Essential Guide To Storing Gold In Singapore


US On the Brink! (of Hyperinflation, Shortages, & Riots!)


For the last 30 years we’ve been exporting price inflation. Now we’re going to import 200% price inflation. This is going to be a nightmare of price inflation and product shortages, you will have violence at the supermarkets, at the gas stations, and at the ATM machines- Martial law is a guarantee!