Tuesday, May 6, 2014

The History of the Modern World in Paper Money

Theodore Dalrymple 
Everyone loves a tyrant, provided he is far enough away or long enough ago. Tyrants are much more interesting than so-called democratic politicians, especially nowadays, when so many of the latter have done nothing with their lives except sit electoral office. What, for example, would Latin American literature be without tyrants?
The writer of that part of the world has so many to choose from: General Melgarejo of Bolivia, for example, who marched his troops over the balcony of his palace to demonstrate their loyalty to a visitor; or Maximiliano Hernández Martínez of El Salvador, who trained himself to stare at the sun for spiritual purposes. My favorite is Justo Rufino Barrios of Guatemala, who was once seen to take a copy of the Guatemalan constitution, fold it in four, and sit on it. “I’m going to rule in Guatemala as long as I like,” he said, “and I’ll hang anyone from the nearest tree who doesn’t like it.” Full marks for sincerity and truthfulness, if not for political philosophy.
This is not, however, a propitious age for the tyrant: we prefer our tyranny to be of the creeping, surreptitious, bureaucratic, and undermining kind, rather than galloping, open, obvious, and overbearing. Tyrants are the dinosaurs of small-brained and rigid ways destined for extinction, while democratic politicians are the swift little mammals with adaptable ways who take over from the dinosaurs as the climate changes. But who is so dull that he is not fascinated by dinosaurs, even if he wouldn’t want a Tyrannosaurus rex in his garden?
I was walking down London’s Cecil Court—the haunt of people of slightly Aspergerish disposition who collect rare, though not the very rarest, books— yesterday, when I stopped at the window of a seller of banknotes from around the world. I have always liked banknotes as physical artefacts, and have kept one or two from the foreign countries that I have visited (I am not so much a collector as an accumulator). There was displayed in the window what was called “The Tyrant Collection”: six colorful banknotes marked with the portraits of various tyrants. It was cheap and I decided to buy it, which is really against my principles. Normally, I keep only banknotes of the countries I have visited, from the time I have visited them. Among them, of course, are banknotes with portraits of tyrants: Baby Doc, Julius Nyerere, Mobutu Sese Seko.
I went in. A very pleasant lady asked me whether she could help me. I asked whether the Tyrant Collection were still available. She said that it was, and then turned to the other assistant in the shop.

Financial Doom, the World Taking the Mark of the Beast – To Buy or Sell

The Twin Arms of Financial Control Bringing in World Financial Doom and the MARK OF THE BEAST
1) Consumer Financial Protection Bureau (CFPB) Formed July 21, 2011

2) The Foreign Account Tax Compliance Act (FATCA)

1) The CFPB gives virtually complete tracking of All Financial Transactions except for CASH or Barter

2) The FATCA encourages all NON-USA Companies to Dump ALL US Partnerships and Investment in USA Companies or face Heavy USA Regulation, If an

institution does not comply, the U.S. will impose a 30% withholding tax on all its transactions concerning U.S. securities, including the proceeds of sale of securities.

Consumer Financial Protection Bureau (CFPB) Formed July 21, 2011

The jurisdiction of the bureau includes banks, credit unions, securities firms, payday lenders, mortgage-servicing operations, foreclosure relief

services, debt collectors and other financial companies, and its most pressing concerns are mortgages, credit cards and student loans, according

to Director Richard Cordray.[3][4] It was designed to consolidate employees and responsibilities from a number of other federal regulatory bodies,

including the Federal Reserve, the Federal Trade Commission, the Federal Deposit Insurance Corporation, the National Credit Union Administration

and even the Department of Housing and Urban Development.[5]The bureau is an independent unit located inside and funded by the United States

Federal Reserve, with interim affiliation with the U.S. Treasury Department. It writes and enforces rules for financial institutions, examines

both bank and non-bank financial institutions, monitors and reports on markets, as well as collects and tracks consumer complaints.


FATCA requires foreign financial institutions (FFI) of broad scope
- banks, stock brokers, hedge funds, pension funds, insurance companies, trusts – to report directly to the IRS all clients’ accounts owned by U.S. Citizens and U.S. persons (Green Card holders).

Starting July 1, 2014, FATCA will require FFIs to provide annual reports to the Internal Revenue Service (IRS) on the name and address of each U.S. client, as well as the largest account balance in the year and total debits and
credits of any account owned by a U.S. person.

If an institution does not comply, the U.S. will impose a 30% withholding tax on all its transactions concerning U.S. securities, including the proceeds of sale of securities.

In addition, FATCA requires any foreign company not listed on a stock exchange or any foreign partnership which has 10% U.S. ownership to report to the IRS the names and tax I.D. number (TIN) of any U.S. owner.

If you thought that Americas economy suffered under USA Companies and Individuals battling with the IRS, Just see how fast the World runs away

from the USA when they see the COST of Dealing with this New World Order contrived monster for themselves.

Virtual Currencies are now being allowed to exist when only a few years ago the FEDS shut down Liberty Dollar for Selling people real, Gold, Silver Coins that HAD REAL Value.
These Virtual Currencies Can be Tracked and Taxed.

Dollar Death Begins: Frankfurt Issues First Bond Backed by Chinese Currency!!!

Frankfurt is joining London, Singapore and Hong Kong in the fast-moving market for bonds denominated in the Chinese currency, the renminbi. Germany’s KfW development bank announced it was issuing a two-year bond with the volume of 1 billion renminbi at the Frankfurt Stock Exchange.

Germany signed agreements with Chinese financial authorities in March that permit the sale of Dim Sum bonds at the Frankfurt Stock Exchange. The deal also means Frankfurt will become the first offshore “clearing center” for exchanging euros for renminbi, which are needed for buying Dim Sum bonds.
KfW joins renminbi bond fray with first Frankfurt-listed deal
KfW may have sold the first Frankfurt-listed Chinese renminbi bond this week, but some market watchers say the Triple A rated issuer’s new sale is a long way off from providing the impetus for a larger shift in Dim Sum market dynamics.
Germany’s largest promotional bank is supporting the recent initiative to promote Frankfurt as a financial centre for renminbi, which is backed by several parties both in politics and the wider economy.
Frankfurt hub to help make RMB a global currency
Frankfurt becomes Europe’s first renminbi payment hub
Goes along with what Dr. Ben Carson is warning about

We have a national debt that is so high, and it’s being raised even higher,” he said. “Now, the only reason we can do that is because we are the reserve currency for the world. What if that changes?”
“What if other people come along?” Carson asked, saying China and the U.N have mentioned doing the same. “We would become a third-world nation overnight. Occupy Wall Street would be a walk in the park. And all of a sudden, the things that would be going on in this country which would necessitate marital law… all this could happen very rapidly. We should be really concerned.”

Max Bacon

They Own Your Reality & Control your Salary – “BANKSTERS” [Truth Music Video]

“They took control, the books are closed,
We can’t look, No – No one knows,

What they’re doing, What they’re making,
They just say, Hey we’re banking,

Banksters are Gangsters, That’s what I’m Yelling,
They Own your Reality & Control Your Salary.” 

What they’re doing, What they’re making, 
They just say, Hey we’re banking, 

Banksters are Gangsters, That’s what I’m Yelling, 
They Own your Reality & Control Your Salary.” 
Read more at http://investmentwatchblog.com/they-own-your-reality-control-your-salary-banksters-truth-music-video/#mhrrm6sQZEIpqf3h.99

Common Core Rebellion

Unemployment Really 59%!! Using Federal Figures

An email forwarded to me with screen shots from the Bureau of Labor Statistics, which will be shown below, proves conclusively that the government is manipulating job numbers in order to claim that unemployment is down to 6.3 percent.

Gold And Silver Bull Run Ducks Are Lining Up

Half of young Spaniards have no money coming in

Almost half of all Spaniards aged 16 to 29 receive neither a salary nor government benefits while only one in five can afford to fly the family coop, the startling results from a new study reveal.
A total of 47.5 percent of young Spaniards receive no formal income at all, the study by youth lobby group CJE shows.
Youth unemployment is currently 55 percent but the CJE study shows the situation is made even worse by the precarious nature of that employment.
With just 34 percent of people aged 16 to 29 in Spain actually working, more that half of people in this age group are on temporary contracts. Of those contracts, 46.4 percent are of less than 12 months duration.
Meanwhile, just over a quarter of working Spaniards aged 16 to 29 are doing so part-time, the CJE results based on the final quarter of 2014 reveal.
Source and full story: The Local (Spain), 5 May 2014

Nancy Pelosi Says The Way To Create 600.000 Jobs Is Unemployment, Food S...

REALIST NEWS – Ex-Goldman Sachs CEO To Head Largest Gold Mining Company

Debt Crisis, Inflation, & Dollar Collapse | Peter Schiff

Silver and Gold as Currency – “Don’t Sell It, Spend It.”

gold and silver
There’s a time when the operation of the machine becomes so odious, makes you so sick at heart, that you can’t take part! You can’t even passively take part! And you’ve got to put your bodies upon the gears and upon the wheels…upon the levers, upon all the apparatus, and you’ve got to make it stop! And you’ve got to indicate to the people who run it, to the people who own it, that unless you’re free, the machine will be prevented from working at all! ~Mario Savio
When I wrote “Breaking Away From the System” I had forgotten Perpetual Assets offered a silver backed debit card. David Morganthe silver guru, and I discussed this fact and David also explained how this all came about.
At the Silver Summit in Spokane a few years ago David was speaking about precious metals mining in Idaho and working with the local government to help them figure out how the legislation should work. After his lecture, a gentleman named Dale Olmstead ( you can contact Dale at pmb-v@hotmail.com ) approached David and ask if they talk. Dale explained to David that he had an idea for a precious metals backed debit card. After a short conversation, they parted ways and little thought, on David’s part carried forward.

A couple of months later Dale contacted David and proclaimed he had created the precious metals backed debit card!If you are serious about getting out the debt-based, fraud known as the US Dollar, this is a great way to take a giant step in that direction. Need a new generator, AR-15, solar panels to keep the lights on? Why not use gold and silver to make the purchase? Why do you possess real money if you are not going to use it? I understand the “insurance policy” aspect of these monies, but they are intended to be used. How do we, the gold and silver community, plan on making a difference if we are sitting on our assets and doing nothing? What is it going to take to truly wake people up to make the necessary changes and the hard decisions that are REQUIRED to break the system? 
Delivered by The Daily Sheeple
- See more at: http://www.thedailysheeple.com/silver-and-gold-as-currency-dont-sell-it-spend-it_052014#sthash.SsgNnv7H.dpuf

Banca d’Italia Comes Clean: Half of Italy’s Gold is Held in New York Fed Vault

Italy’s central bank, the Banca d’Italia, has recently published an important document detailing the storage locations and composition of the country’s gold reserves. The document confirms that Italy’s gold is held across four vault locations, three of which are outside Italy.
This is a significant announcement given that the Banca d’Italia is the world’s third largest official holder of gold after the U.S. and Germany. Italy officially holds 2,451.8 tonnes of gold, worth more than €72 billion (US$ 100 billion) at current market prices [1].
In the detailed three page report focusing exclusively on its gold reserves (and only published in Italian), the Banca d’Italia reveals that 1,199.4 tonnes, or nearly half the total, is held in the Bank’s own vaults under its Palazzo Koch headquarters on Via Nazionale in Rome, while most of the other half is stored in the Federal Reserve Bank gold vault in New York.

From Goldcore:
Today’s AM fix was USD 1,285.00, EUR 927.26 and GBP 761.03 per ounce.
Yesterday’s AM fix was USD 1,283.00, EUR 924.15 and GBP 759.04 per ounce.
Gold fell $5.50 or 0.43% yesterday to $1,284.90/oz. Silver slipped $0.13 or 0.68% yesterday to $19.06/oz.
Gold remained in range bound trading yesterday and into this morning, fluctuating between $1,280 and $1,285/oz. Likewise, silver traded in a narrow band between $18.90 and $19.10/oz. The precious metals appear to be treading water while awaiting the open of New York morning trading, and the release of the latest U.S. non-farm payroll figures today.
Consensus payroll data estimates from surveyed economists indicate improving expectations for April and a possible drop in the unemployment rate. Any surprises in the U.S. payroll data today could be the catalyst to move the gold price out of its very narrow trading pattern, although given that it’s the end of the trading week, the short term direction for gold may not become apparent until next week.

Gold in USD Simple Moving Averages, 9 Years – (Thomson Reuters)

Italy May Have Over 1,000 Tonnes Of Gold At The New York Fed
Written by Ronan Manly

Italy’s central bank, the Banca d’Italia, has recently published an important document detailing the storage locations and composition of the country’s gold reserves. The document confirms that Italy’s gold is held across four vault locations, three of which are outside Italy.
This is a significant announcement given that the Banca d’Italia is the world’s third largest official holder of gold after the U.S. and Germany. Italy officially holds 2,451.8 tonnes of gold, worth more than €72 billion (US$ 100 billion) at current market prices [1].
In the detailed three page report focusing exclusively on its gold reserves (and only published in Italian), the Banca d’Italia reveals that 1,199.4 tonnes, or nearly half the total, is held in the Bank’s own vaults under its Palazzo Koch headquarters on Via Nazionale in Rome, while most of the other half is stored in the Federal Reserve Bank gold vault in New York. The report also states that smaller amounts are stored at the Bank of England in London, and at the vaults of the Swiss National Bank in Bern, Switzerland.
The Gold in Rome
Of the 1,199.4 tonnes held in Rome, 1,195.3 tonnes are in the form of gold bars, with 4.1 tonnes held as gold coins (871,713 coins). There are 95,493 bars in the Rome vault, most of which are the standard trapezoidal shaped bars, however the holdings also include brick shaped U.S. Assay Office bars produced by the U.S. Assay Office, and another bar type which the Bank d’Italia refers to as ‘panetto’ (or loaf) shaped ‘English’ bars.
Like other major European central banks, the Banca d’Italia’s gold reserves were mainly accumulated during the late 1950s and early 1960s. Although Italy was already an important official gold holder during the first half of the 20th century, it still only held 402 tonnes of gold as of 1957. However, from 1958 until the late 1960s, the country’s gold reserves increased nearly 600% to exceed 2,560 tonnes by 1970[2].
Since 1970, Italy’s gold holdings have remained fairly constant, although at times some of the gold has been used in various financial transactions such as gold collateral against a German loan during the 1970s, and as contributions to the European Monetary Cooperation Fund (EMCF) and more recently to the European Central Bank (ECB).

The RAI Broadcast, the BIS and Bern
While the report from the Banca d’Italia appears to be the first official written confirmation that documents the exact storage sites of its gold reserves, the four storage locations were previously confirmed to Italian TV station RAI in 2010 when an RAI presenter and crew were allowed to film a report from inside the Bank’s gold vaults in Rome.
In the RAI broadcast for an episode of ‘Passaggio a Nord Ovest’, the presenter Alberto Angela states that in addition to Rome, the Italian gold is stored at the Federal Reserve Bank in New York, the Bank of England in London, and at the Bank for International Settlements (BIS) in Switzerland. The reporter uses the exact words “Banca dei Regolamenti Internazionali”.
The BIS connection was also confirmed in August 2009, when Italian newspaper “La Repubblica” published an article about Italy’s gold, stating that it was held in Rome, at the Federal Reserve in New York, in the vaults of the the Bank of England, and in the ‘vaults’ of the BIS in Basel.
This apparent contradiction between, on the one hand, the RAI and La Repubblica, who both state that some of the Italian gold is stored with the BIS in Switzerland, and on the other hand, the Banca d’Italia’s own document which states that its gold in Switzerland is stored at the Swiss National Bank (SNB) in Bern, is not really a contradiction since the BIS does not have its own gold storage facilities in Switzerland. The BIS simply uses the SNB’s gold vaults in Bern.
The BIS confirms this fact on its web site, under foreign exchange and gold services, where it states that it offers its clients “safekeeping and settlements facilities available loco London, Bern or New York”.[3] The term loco refers to settlement location for precious metals transactions.
By confirming that it stores gold at the Swiss National Bank in Bern, the Banca d’Italia has also inadvertently confirmed that the Swiss National Bank’s gold vaults are located in Bern. While this was generally known, the SNB currently will not confirm this fact publically and does not go beyond saying that it stores its own gold “domestically and internationally” in “decentralised” locations.[4]
However, Bern based Swiss newspaper “Der Bund” published an article in 2008 stating that the SNB’s gold vaults are in Bern, specifically underneath the Bundesplatz square which is adjacent to the SNB’s headquarters at No. 1 Bundsplatz. The SNB has two headquarters, one in Bern, the other in Zurich.
So it appears that the Italian gold in Switzerland is on deposit with the BIS (either earmarked or as a sight deposit) and is, at the same time, stored in Bern at the SNB vaults. Therefore the RAI and La Repubblica reports and the Banca d’Italia report are most likely both all in agreement, since they are merely saying the same thing, just in different ways. Another possibility is that the BIS sight deposit was converted back to earmarked gold in the SNB vault sometime since the 2010 RAI broadcast.
The reason for the confusion is because the Banca d’Italia will not confirm any of these details about how their gold in Bern is held, and they stated last week that they cannot comment beyond what is published in their April document.
Some of the details in the Bank’s gold reserve document were also confirmed a week prior to its publication when three Italian senators from Beppe Grillo’s political party Movimento 5 Stelle (Five Star Movement), namely, the party treasurer Giuseppe Vacciano, Andrea Cioffi and Francesco Molinari, visited the Rome vault on 31st March 2014.
The senators’ report states that as well as the 1,199.4 tonnes of gold held in Rome, “the remainder is mostly deposited at the Federal Reserve”, but also at the Bank of England and at “la Banca Centrale Svizzera” (which is the Swiss National Bank). The senators also reported that “For confidentiality reasons we were not notified of the exact extent of the deposits in different countries”.
Italian Gold in New York
As per the senators’ experience, the Banca d’Italia document does not specify how much of the Italian gold is held in New York, London and Bern, beyond stating that most of the gold that is not stored in Rome is stored in New York. However, the document does state that “the bulk” of foreign stored gold is in New York with “contingents of smaller size” located in London and Bern, so essentially it implies that the London and Bern holdings are not very large.
Of the 1,252.4 tonnes not in Rome, technically, a majority of this figure is anything greater than 626.2 tonnes. So with a simple calculation, there is at least 626.2 tonnes of Italian gold in New York.  But given that the “bulk” of 1,252.4 tonnes is in New York as the Bank’s document implies, and that “most of the remainder” not in Rome is in New York as the senator’s comments imply, then there could be anywhere up to between 1,000 tonnes and 1,200 tonnes of Italian gold in the FRB in New York.
In fact, 522 tonnes of this Italian gold that was earmarked at the Federal Reserve in New York in September 1974 was used as gold collateral for the Bundesbank loan to Italy during the first gold loan to Italy between 1974 and 1976. This collateral rose to 543 tonnes between 1976 and 1978.
London – The Bank of England
It is possible using historical data and records of Italian gold movements to estimate how much, or how little, Italian gold may be in London.
It would appear that the Banca d’Italia does not hold very large amounts of gold in London. During the late 1960s, mainly between 1966 and 1968, the Banca d’Italia moved most of their gold that was stored at the Bank of England back to Italy. Regular shipments were exported and delivered to the Bank’s vaults in both Rome and Milan. By the end of 1969, the Banca d’Italia held less than 1,000 gold bars in London, or just under 400,000 ounces (approx. 12 tons).
Therefore, since Italian gold reserves have not in total changed very much since 1969, it would be realistic to assume that the Banca d’Italia’s London gold holdings have not changed very much since 1969, unless gold was moved back to London (or swapped back to London) after 1969. This would only make sense if it had been moved back to London for a specific reason such as to allow Italian gold lending through the London market. Gold lending only really began in London in the mid-1980s, and there is no public record that the Italians have engaged in gold lending through London.
Bern, Switzerland
Historical records from the BIS show that there wasn’t any Italian gold left in Bern after WWII, so whatever Italian balance is in Bern has been built up since 1946. It’s interesting to note that Sweden and Finland both recently published the international locations of their gold reserves, and revealed that only very small percentages of their gold is kept in the SNB vaults in Switzerland. Of Sweden’s 125.7 tonnes of gold reserves, only 2.8 tonnes or 2.2% is stored with the SNB vaults[5]. For Finland, only 7%, or 3.4 tonnes of its 49 tonnes of gold reserves are stored with the SNB in Switzerland[6].
If this Swedish-Finnish 2-7% range of allocations at the SNB was applied to the Italian gold that is reported to be outside Italy, it would work out at between 25 tonnes and 87.6 tonnes of Italian gold held at the SNB vaults in Bern. Assuming that there is very little Italian gold in London (400,000ozs or about 12 tonnes), and only a small allocation in Bern, then there could be nearly 1,200 tonnes of Italian gold at the Federal Reserve in New York.
Gold Audits and Repatriation
The Banca d’Italia state in their gold document that external auditors verify the gold held in Rome each year in conjunction with the Bank’s own internal auditors. The external auditors also verify the gold held abroad using annual certificates issued by the central banks that act as the depositories i.e.
This sound very similar to the way the German gold reserves stored abroad was audited. i.e. the gold stored abroad is not physically audited at all (although the Bundesbank did describe recently in quite a vague way that their gold in New York was recently audited by some of their own appointed representatives).
Given the widespread recent media coverage of the German Bundesbank’s plans to repatriate 300 tonnes of its gold reserves from the Federal Reserve in New York to the Bundesbank’s headquarters in Frankfurt, it will be interesting to see whether, in time, a critical mass is reached in Italian public opinion or even in Italian political opinion that would lead to the Banca d’Italia raising a similar request to the Federal Reserve.
The fact that the initial gold repatriated from New York by the Bundesbank needed to be melted down and recast (suggesting that it was low grade coin bars), does not inspire confidence that the Banca d’Italia might not face a similar problem if it attempts any gold repatriation from New York.

Source Links (all in Italian):
Banca d’Italia gold document, April 2014
RAI gold vault video http://www.youtube.com/watch?v=4u4iSEQOxyk&sns=em
La Repubblica gold article:http://www.repubblica.it/2009/07/sezioni/economia/scudo-fiscale-1/lingotti-italiani/lingotti-italiani.html
Movimento 5 Stelle article:http://www.latina5stelle.it/vacciano_riserveauree_bankitalia/
Movimento 5 Stelle video of visit to Bank: https://www.youtube.com/watch?v=RNbGc2P677s
[1] Excluding the IMF, Italy is the world’s third largest official gold holder; including the IMF, Italy is the world’s fourth largest gold holder.
[2] Central Bank Gold Reserves, An Historical perspective since 1845, Timothy Green, Research Study No. 23, November 1999, WGC
[3] http://www.bis.org/banking/finserv.htm
[4] http://www.goldcore.com/goldcore_blog/swiss-gold-stored-“decentralised-locations”-–-snb-does-not-disclose-where
[5] http://www.thelocal.se/20131029/51064

France Approves Largest Austerity Package In Years

Luis R. Miranda 
RINF Alternative News
Citing the legitimacy of the French government and that of the European Union as well as the credibility of France abroad, the French Prime Minister, Manuel Valls, defended Tuesday the biggest cuts in public spending in modern French history.
Mr. Valls made his appeal after the vote that approved the cuts was led by a broken alliance between the National Assembly and the Socialist Party (PS ) of France. Valls pushed through a vote of 265 yeas against 232 nays and 41 abstentions in the ranks of PS.
Although his administration was heavily influenced by Brussels, Valls presented his Stability Triennial Program as an example of “France’s sovereignty” and as an effort to reduce the country’s deficit that was born in Paris.
Valls said that the new package would help to improve business competitiveness, growth, reduce the deficit and ensure “social justice and the purchasing power of the poor.”
“We cannot live longer beyond our means,” proclaimed Valls, who asked vehemently for the symbolic support of the representatives of the Socialist government, who were overwhelmed by internal dissent. Valls asked government and assembly members to be “consistent, to show courage and take their share of responsibility.”
Regarding the recent losses in municipal elections, the prime minister said “It’s not just a vote, but a decisive vote that will profoundly mark the evolution of this country. The result determines both the legitimacy of the government, its ability to govern and, above all, the credibility of France.”
Valls was cheered by the bench at the end of most of his speech. He denied that the snip of 50,000 million in the period between 2014-2017 will be an “austerity plan” and stated that the priority remains investing in education and creating youth employment.
Valls added that the drop in 30,000 million of tax and labor burdens on companies “should serve” to create jobs, but he did not specify how much, when and how. He said that it would not “increase dividends and salaries of managers” – and encouraged unions and the “people’s representatives” to monitor the employers meet their commitments.
The prime minister sought to give a coat of positivism to the neoliberal policies embraced by François Hollande in January when he announced massive spending cuts while offering employers unions a covenant of responsibility.
“The wealth is created by businesses and jobs, too,” Valls said, recalling that France has lost tens of thousands of jobs in recent years. Today 3.6 billion people do not engage in any activity – and it is necessary to “reduce the competitive disadvantage between France and Germany.”
“The drop in labor costs will intensify. Zero charges for workers earning the minimum wage from January 1, 2015 is an important incentive for entrepreneurs ,”said Valls , who acknowledged that the pact has generated “doubts” among political groups, including the socialist, but he said that the fiscal adjustment “is just, well distributed , and it is not hard nor soft, but calibrated to ensure economic recovery.”
Valls then promised that Hollande will require that Brussels provides new monetary and investment policies to stimulate employment and “reduce the high price of the euro” and justified the measures with some real issues: “40 years ago we spent over what we produced. Debt costs us 45,000 million per year. We have changed to take the measures that were needed.”
“France is a great country,” said Valls, resorting to the infallible words of grandeur. “But it must ensure its financial independence and sovereignty, ie, not neing dependent on financial markets and not put the burden of the debt on future generations.” France now pays about 2 % for financing its sovereign debt, the lowest number in decades, but drags public debt equivalent to 96 % of GDP.
“In these years we are collectively depleted, and the French can no take more tax increases, “also said the former Minister of the Interior, who avoided reminding the audience that the measures adopted require a tax increase worth 10,000 million euros for taxpayers who pay income tax.
The stability program undertaken by the Government will reduce France’s spending by 18.000 million and by 11.000 million in other expenses. In addition, it will cut 10,000 million and 11,000 million in health and other benefits.
The cuts will play their role in the next two and a half years for 6.6 million public employees and nearly 15 million pensioners. Salaries aid by the State will be frozen for a year. Salaries of officials – frozen since 2010 -, pensions and family allowances and housing will only be raised on October 1, 2015, which will save 2,000 million euros, or 4.000 million if the social dialogue can also freeze supplementary pensions.
Valls said that the government will create 30,000 additional jobs in education, as planned, and others whose figure is not clear in the police and justice, while the number of employees in all other ministries will continue to decline.

Luis R. Miranda is the Founder and Editor of The Real Agenda. His 16 years of experience in Journalism include television, radio, print and Internet news. Luis obtained his Journalism degree from Universidad Latina de Costa Rica, where he graduated in Mass Media Communication in 1998. He also holds a Bachelor’s Degree in Broadcasting from Montclair State University in New Jersey. Among his most distinguished interviews are: Costa Rican President Jose Maria Figueres and James Hansen from NASA Space Goddard Institute. Read more about Luis.

The World Has Nothing to Fear From the US Losing Power

As China looks set to overtake the US as the world’s largest economy, a multipolar world can only be good for democracy
Mark Weisbrot
The news that China will displace the US as the world’s largest economy this year is big news. For economists who follow these measurements, the tectonic shift likely occurred a few years ago. But now the World Bank is making it official, so journalists and others who opine on world affairs will have to take this into account. And if they do so, they will find that this is a very big deal indeed.
What does it mean? First, the technicalities: the comparison is made on a purchasing power parity (PPP) basis, which means that it takes into account the differing prices in the two countries. So, if a dollar is worth 6.3 renminbi today on the foreign exchange market, it may be that 6.3 renminbi can buy a lot more in China than one dollar can buy in the US. The PPP comparison adjusts for that; that is why China’s economy is much bigger than the measure that you have most commonly seen in the media, which simply converts China’s GDP to dollars at the official exchange rate.
The PPP measure is a better comparison for many purposes. For example, take military spending: the money that China needs to build a fighter jet or pay military personnel is a lot less than the equivalent in dollars that the US has to pay for the same goods and services. This means that China has a bigger economy than that of the US, for purposes of military spending. And in a decade, the Chinese economy will most likely be about 60 percent bigger than the US economy.
President Obama has just returned from a trip to Asia where he was criticised for not being tougher with China. However, Americans may want to consider whether “containing” China with a “pivot” to Asia is an affordable proposition.
When the US had an arms race with the Soviet Union, the Soviet economy was maybe one-quarter the size of ours. We have not experienced an arms race with a country whose economy is bigger than ours, and whose economic size advantage is growing rapidly. Are Americans prepared to give up social security or Medicare in order to maintain US military supremacy in Asia? To ask this question is to answer it.
Read more

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U.S. Corruption: A Summary of Recent Reports

By (about the author)
corruption threat to liberty
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On 24 April 2014, Jake Bernstein at ProPublica headlined, "Judge Tosses Retaliation Lawsuit by Fired N.Y. Fed Examiner," and reported that when Carmen Segarra, "a lawyer, was hired [on 31 October 2011] along with other examiners for her expertise in compliance," as part of the N.Y. Fed's new initiative to "ramp up its supervision of nine so-called 'Too-Big-To-Fail' financial institutions" and she found that "Goldman Sachs lacked a firm-wide conflict-of-interest policy," her three bosses ordered her to eliminate her finding, she refused to do so, and she was fired on 23 May 2012. She then filed charges against them and the N.Y. Fed; she "argued that numerous laws and regulations underpinned" her findings in the case; and the judge, whose husband was an attorney "representing Goldman Sachs in an advisory capacity" in the case, wrote in her ruling, that "Plaintiff [Segarra] has failed to state a cause of action." This judge "had also previously worked at a law firm with the Fed's lead counsel in the case." In other words: Don't whistle-blow if you're hired as a regulator and you find that a firm you're regulating isn't doing what the laws and regulations say they should. The judge ordered "to terminate the motions ... and to close the case." This was "regulation," in today's United States: Don't do your job -- or else! (Or else you'll be fired for doing it.)
Also on 24 April 2014, the Center for Public Integrity headlined "Meet the Banking Caucus, Wall Street's secret weapon in Washington: Lawmakers help industry donors beat back tougher rules," and a team reported that: "Members of this Banking Caucus receive massive financial support from the industry and collaborate with industry lobbyists to block or roll back efforts to tighten oversight of financial firms. Lobbyists help draft legislation and write questions for lawmakers to ask at hearings. Lawmakers help drum up support for lobbyists' pet issues."
The next day, yet another team at the Center for Public Integrity bannered, "What Happens When a Dark Money Group Blows Off IRS Rules? Nothing. The Government Integrity Fund spent most of its money on election ads, despite IRS rules prohibiting a social welfare nonprofit from doing so." The Government Integrity Fund was an Ohio nonprofit set up by aristocrats to oust the most progressive U.S. Senator, Ohio's Senator Sherrod Brown, and to install in his place a very conservative Republican, Josh Mandel. You can see the top 20 known contributors to each of these two contenders at opensecrets.org where the biggest two for Brown were Ohio State University ($113,980), and JStreet PAC ($110,990), and the biggest two for Mandel were Senate Conservatives Fund (former Republican U.S. Senator Jim DeMint's bundling operation) ($360,319), and Club For Growth (a Wall Street front) ($301,553). However, the Government Integrity Fund reported too late to make that list, and when they finally did report at opensecrets.org, they reported spending $1.3 million for Mandel, who nonetheless ended up with only 45% of the vote. Somehow, the most progressive U.S. Senator, Sherrod Brown, just kept on winning, even in his middle-of-the-road state of Ohio, despite everything that conservative aristocrats have been able to throw at him. Barack Obama's IRS refused to enforce the law against the clear legal violation by Mandel's largest donor-group: Government Integrity Fund.
On 26 April 2014, William K. Black at New Economic Perspectives bannered "Corporate CEOs Demand that They Be Tipped Off When a Whistleblower Reports Their Crimes," and he noted that, "The degree of hostility against regulators and whistleblowers, and intense sympathy for the CEOs leading the control frauds [i.e., heading the frauds against investors and consumers], is palpable among large numbers of Reagan and Bush judicial appointees," as a consequence of which there was now a raging war against whistleblowers. A reader-comment observed: "Enlisting the government to help whack rats is brazen even for the money industry." President Obama stood aside silently, while the "rats" who wanted clean and honest corporate governance, got "whacked" by judges, with his Administration's quiet complicity.
On 28 April 2014, yet a different team at the Center for Public Integrity bannered "Law-Breaking Judges Took Cases That Could Make Them Even Richer: Federal judges aren't supposed to hear cases in which they have a financial stake" but some "do it anyway," because "Judges face no formal punishment for breaking these rules." Consequently, for example: "When Linda Wolicki-Gables and her husband appealed a lawsuit all the way to the second-highest court in the nation against Johnson & Johnson over a malfunctioning medication pump that had been implanted in her body, the couple had no idea that one of the judges who decided their case had a financial stake in the giant multinational company. Eleventh U.S. Circuit Court of Appeals Judge James Hill owned as much as $100,000 in Johnson & Johnson stock when he and two other judges ruled against the Gables' appeal in the precedent-setting case."
Also on April 28th, the American Constitution Society headlined, "Federal Judge Says Big Donors' Money Drowning Out 'We the People'," and Jeremy Leaming reported an April 24th decision by U.S. District Court Judge Paul A. Crotty: "'In effect' Crotty wrote, 'it is only direct bribery -- not influence -- that the [U.S. Supreme] Court views as crossing the line into quid pro quo corruption'"; and, so, Crotty was compelled to rule in a case that there was no corruption, even though he thought that there actually was.
These are 6 news reports during 24-28 April 2014, about federal corruption, that did not appear at the New York Times, Washington Post, CNN, Fox "News," NBC, etc., but that seem to indicate the U.S. is a very corrupt country, perhaps including in its corruption major news-media themselves (if, that is, you and others find this to be a type of news-reporting that's more interesting than much of what those major news-media actually are reporting on -- because they virtually ignore it). If you would want to see more coverage of this type of news, you may indicate that in a reader-comment here, and I shall be happy to pass it along to major news-media, as a suggestion to them, that they should be covering this.

How Fracking Is Exposing People to Radioactive Waste

Radiation can accumulate in the water we drink, the fish we eat, and the soil in which our food grows.
There isn’t a lot of good news about fracking lately. Another train with volatile fracked crude oil from North Dakota’s Bakken Shale exploded in Lynchburg, Virginia igniting a ball of fire on the surface of the James River. Accidents involving these “bomb trains” are becoming commonplace. So are recent studies indicating serious health risks  from fracking and reports linking fracking to earthquakes.
With all that press you may have missed another cause for alarm: radiation risks. The oil and gas-drilling boom, aided by the practice of fracking, has unleashed some potentially scary radioactive stuff into our environment. 
Fracking involves injecting large quantities (sometimes millions of gallons) of water, sand, and chemicals at high pressure deep underground to break apart shale and release trapped hydrocarbons like oil and gas. But the process can also bring to the surface water that is laced with naturally-occurring radioactive materials that were underground. In small, dispersed quantities low-level radiation is not life threatening, but what happens when those quantities start increasing in the environment, and getting into the water we drink, the fish we eat, and the soil in which our food grows?
Scientists are trying to figure that out. But it’s a difficult process to track since fracking isn’t regulated under most federal environmental laws like the Safe Drinking Water Act and the Clean Water Act. That means industry is charge of policing itself a lot of the time.
Another problem is that it’s really hard to keep track of all the stuff that may become tainted by radioactive materials in the drilling process. Millions of gallons of soupy wastewater that flow back from wells after drilling and fracking can end up in a number of places. Sometimes the wastewater is simply left in lined or unlined pits to either evaporate or sink back into the ground. Other times it is sent to water treatment plants and eventually released back into rivers and streams. At times it is simply spilled or illegally dumped. It also ends up contaminating drilling mud (a more solid waste from the process), storage tanks, and equipment.
“Radionuclides in these wastes are primarily radium-226, radium-228, and radon gas,” reports the Environmental Protection Agency. “The radon is released to the atmosphere, while the produced water and mud containing radium are placed in ponds or pits for evaporation, reuse, or recovery.”
The fact that drilling for oil or gas increases radiation is not news. Avner Vengosh, a professor of geochemistry at Duke University told Bloomberg News that we’ve know that since the 1970s, but the pace and intensity of drilling now, combined with the huge amount of wastewater, is taking the issue to a new level of concern. “We are actually building up a legacy of radioactivity in hundreds of points where people have had leaks or spills around the country,” he said.
Vengosh was part of team of researchers that turned up some troubling findings in Pennsylvania, ground zero for hydraulic fracturing in the Marcellus Shale. Their study, published in the peer-reviewed journal Environmental Science & Technology, took samples over a two-year period from Blacklick Creek just below the discharge from the Josephine Brine Treatment Facility, which accepted water from drilling operations. They found that radium levels of wastewater from fracking operations had been reduced in treatment by about 90 percent, but what was coming out of the plant still exceeded upstream levels by 200 times.
“Such elevated levels of radioactivity are above regulated levels and would normally be seen at licensed radioactive disposal facilities, according to the scientists at Duke University's Nicholas school of the environment in North Carolina,” reported Felicity Carus for the Guardian.
The biggest threat is the bioaccumulation of radium. Small quantities can build up in the environment, eventually posing a health hazard (especially if it ends up in food we eat).
It also means that even if you don’t have a drilling rig in your backyard or even your neighborhood, you may still face some risks. As Carus wrote:
From January to June 2013, the 4,197 unconventional gas wells in Pennsylvania reported 3.5m barrels of fluid waste and 10.7m barrels of "produced" fluid. Most of that waste is disposed of within Pennsylvania, but some of it is also went to other states, such as Ohio and New York despite its moratorium on shale gas exploration. In July, a treatment company in New York state pleaded guilty to falsifying more than 3,000 water tests.
The Duke study came just two years after the New York Times did an exhaustive search of thousands of government and industry documents to try and assess how risky radioactive wastewater from fracking may be.
“The documents reveal that the wastewater, which is sometimes hauled to sewage plants not designed to treat it and then discharged into rivers that supply drinking water, contains radioactivity at levels higher than previously known, and far higher than the level that federal regulators say is safe for these treatment plants to handle,” Ian Urbina wrote for the Times.
“The Times also found never-reported studies by the EPA and a confidential study by the drilling industry that all concluded that radioactivity in drilling waste cannot be fully diluted in rivers and other waterways.” They found that 116 wells produced wastewater with levels more than 100 times higher than safe drinking water standards, and 15 wells were more than 1,000 times above the limit.
“The radioactivity in the wastewater is not necessarily dangerous to people who are near it. It can be blocked by thin barriers, including skin, so exposure is generally harmless,” wrote Urbina. “Rather, E.P.A. and industry researchers say, the bigger danger of radioactive wastewater is its potential to contaminate drinking water or enter the food chain through fish or farming. Once radium enters a person’s body, by eating, drinking or breathing, it can cause cancer and other health problems, many federal studies show.”
The Duke study and the Times’ research both focused on Pennsylvania, but the Marcellus region is not the only experiencing problems with radioactive waste. In February, an abandoned building in Noonan, North Dakota was found to contain bags of illegally dumped “filter socks” which are used by the industry to filter liquids during oil production. The radiation level from the material wasn’t high enough to be a health hazard unless people ventured into the building but it signals a growing problem for boomtowns, the likes of which have emerged across North Dakota’s Bakken shale. It’s not the first time this kind of waste has been dumped -- and the booming Bakken is producing around 27 tons of filter socks a day, by one estimate.
And the problem persists across the country.
“While it’s unclear how much drilling waste is produced nationally, state totals are rising. West Virginia landfills accepted 721,000 tons of drilling debris in 2013, a figure that doesn’t include loads rejected because they topped radiation limits,” wrote Alex Nussbaum for Bloomberg. “The per-month tonnage more than tripled from July 2012, when records were first kept, through last December. In Pennsylvania, epicenter of the Marcellus boom, the oil and gas industry sent 1.3 million tons to landfills last year.” Are those facilities equipped to monitor and handle radioactive waste?
North Dakota is attempting to cope with the problem by creating new regulations requiring industry to store these contaminated filter socks on site in special containers until they can be moved to a “certified dump.” But, Rebecca Leber writes for Think Progress, “North Dakota has no facilities to process this level of radioactive waste. According to the Wall Street Journal, the closest facilities are hundreds of miles away in states like Idaho, Colorado, Utah, and Montana.”
So the problem is not solved, it’s simply passed from one state to the next -- increasing the area that may be affected and the number of people. Meanwhile the grand experiment of fracking’s effects on human health continues.
Tara Lohan is a freelance writer and former senior editor at AlterNet. She is the editor of two books on the global water crisis, including Water Matters: Why We Need to Act Now to Save Our Most Critical Resource. Follow her on Twitter @TaraLohan or visit her website, taralohan.com.

Revealed: How parts of Britain are now poorer than POLAND with families in Wales and Cornwall among Europe's worst off

  • Seven areas of Britain poorer than ANYWHERE in France or Germany
  • Welsh Valleys is one of the Continent's poverty blackspots
  • Poles, Lithuanians and Hungarians wealthier than the Cornish
  • Outside London, only Home Counties and Aberdeen keep up with Germany

Parts of Britain are now poorer than Poland, Lithuania and Hungary, official figures reveal.
People in the Welsh Valleys and Cornwall - Britain’s two poorest areas - scrape by on less than £14,300 a year on average.
Because Britain is so expensive, this leaves families in these areas worse off than those vast swathes of Eastern Europe, according to an EU study.
In much of the UK, people's incomes are well below the EU average - in some areas by as much as a third. In the map (above) Britain's poorest regions are highlighted, showing how far below the European average incomes have fallen. The Cornish, for example, are 36 per cent less well-off than the EU norm. Families in Slovenia meanwhile are just 16 per cent poorer - and in Portugal 23 per cent.
In much of the UK, people's incomes are well below the EU average - in some areas by as much as a third. In the map (above) Britain's poorest regions are highlighted, showing how far below the European average incomes have fallen. The Cornish, for example, are 36 per cent less well-off than the EU norm. Families in Slovenia meanwhile are just 16 per cent poorer - and in Portugal 23 per cent.

In Lincolnshire and Durham, the next two poorest areas in Britain, people live on less than £16,500 a year.
This puts them in the same bracket as Estonians and rural Poles, once prices are taken into account.
Britain as a whole fares a little better, with average earnings of £23,300 - just over the EU average of £20,750. But this still leaves us out of the top 10 wealthiest countries in the EU.

And this figure is propped up by Europe’s runaway richest region – inner London. In the heart of the capital the average GDP per person is £71,000 a year.
This is 321 per cent of the average across the EU, according to Brussels’s official statistics arm Eurostat.
While Britain is home to Europe's richest city, most of the country is poorer than the Continent
While Britain is home to Europe's richest city, most of the country is poorer than the Continent


London is far and away Europe's capital of cash - with incomes 300% the EU average
Here are the top 10 richest cities:
  1. Central London (321% of EU average)
  2. Luxembourg (266%)
  3. Brussels, Belgium (222%)
  4. Hamburg, Germany (202%)
  5. Oslo, Norway (189%)
  6. Bratislava, Slovakia (186%)
  7. Île de France, France (182%)
  8. Groningen, Holland (182%)
  9. Stockholm, Sweden (173%)
  10. Prague, Czech Republic (171%)
But central London’s soaring wealth has failed to trickle down to much of the rest of the country, the figures suggest.
Britain’s seven most hard-up areas - including Lancashire, Leicestershire, South Yorkshire and Staffordshire - are poorer than ANY region in Belgium, Denmark, Germany, Ireland, Finland, France, Luxembourg, the Netherlands, Sweden and Austria.
The region of “West Wales and the Valleys” is now in the top five poorest areas in Western Europe - with families HALF as wealthy as their German counterparts on average.
The only parts of Britain matching Germany for wealth – outside central London – are “Berkshire, Buckinghamshire & Oxfordshire” and oil-rich “North East Scotland” around Aberdeen.
But even England’s second wealthiest area – with average incomes of £32,000 – fails to make it into Europe’s top 20 rich league.
Only North East Scotland, with an average GDP per person of £33,000, sneaks into Europe’s Premier League of wealth.
Eurostat, which is Brussels’ equivalent of the Office for National Statistics, measures wealth across the EU using a measure known as 'purchasing power standards'.
This aims to measure GDP per person but also 'takes into account differences in national price levels', to give a more realistic idea of how much the cash in people’s pockets is actually worth.
On this basis, four of the UK’s 37 regions struggle by on less than 75 per cent of the average EU earnings, alongside 15 in Poland, nine in Greece, seven in the Czech Republic and Romania, six in Hungary and five in Bulgaria and Italy.
Areas of Britain are being left behind by London - and much of Europe
Families in Krakow, Poland, enjoy the sunshine - and a better standard of living than many in Britain
Towns in Britain are not only being left behind by wealthy parts of the South East - but also by much of the Continent, including former Communist countries in Eastern Europe like Krakow (above, right)
Former mining villages in Britain, like Easington Colliery in County Durham, are now poorer than much of Eastern Europe
Booming Vilnius in Lithuania
Former mining villages, like Easington Colliery in County Durham (pictured left) are now poorer than booming cities in Eastern Europe like Vilnius (right) in Lithuania

Alongside Britain Portugal also has four poverty regions. Slovakia has three, Spain two and Croatia and Slovenia one each.
Families in Estonia, Latvia and Lithuania – which are so small that they each only count as a single region – also live on less than 75 per cent of the EU average, according to the figures.
Overall, there are just eight regions of the UK wealthier than the EU average. The remaining 29 areas are poorer.

'No other European country would tolerate such a gap between its rich and poor regions'
Chris Leslie,
Shadow Treasury Minister

The Valleys and Cornwall are in the top 50 poorest regions of the whole of Europe – and in the top 10 deprived areas of Western Europe, according to the purchasing power league table.
Eleven regions have incomes at least 20 per cent below the European average.
Shadow Treasury minister Chris Leslie told MailOnline the figures were a wake up call for Britain.
He said: 'No other European country would tolerate such a gap between its rich and poor regions.
'To allow so many parts of the country to fall behind not only London, but most of Europe, is shocking. We've got to take more action to have balanced prosperity.
'The challenge of the next few years is to help these parts of the country that have been left neglected.'
The Labour MP added: 'It is shocking to think parts of Britain are now poorer than Poland and other areas of Eastern Europe.
'When you start to take into account the prices people are having to pay in these areas - especially after seeing their incomes squeezed for years now - the contrast with Europe is even more stark.'
Whole streets in some of Britain's great towns and cities, like this one in Salford, have been abandoned.
Whole streets in some of Britain's great towns and cities, like this one in Salford, have been abandoned.

Tory MP Douglas Carswell said successive British governments had ran the economy for the benefit of the City - neglecting the rest of the country.
He said: 'Many of the poorest places in Britain are places that have europe-style big government. In Wales and the North East of England, the public sector is a huge chunk of the economy.
'If you are going to manage the economy like Europe, don't be surprised if you get European levels of wealth.'
Mr Carswell claimed there was a 'liberal metropolitan bias' in Westminster against areas outside London.

He said: 'For about 40 years we have been running our currency and our economy for the benefit of finance. This causes a huge distortion. We are basically subsidising Porsches and property in West London.'

Department of Defense to study bitcoin as possible terrorist threat

FILE - This April 3, 2013 file photo shows bitcoin tokens in Sandy, Utah. The Mt. Gox bitcoin exchange in Tokyo is headed for liquidation after a court rejected its bankruptcy protection application. Mt. Gox said Wednesday, April 16, 2014, the Tokyo District Court decided the company, which was a trading platform and storehouse for the bitcoin virtual currency, would not be able to resurrect itself under a business rehabilitation process filed for in February. (AP Photo/Rick Bowmer, File)

A division within the Department of Defense is investigating whether the digital currency bitcoin is a possible terrorist threat.
The Combatting Terrorism Technical Support Office is spearheading a program that will help the military understand how modern technologies could pose threats to national security, including bitcoin and other virtual currencies, the International Business Times reported.
A memo detailing some of the CTTSO projects states, “The introduction of virtual currency will likely shape threat finance by increasing the opaqueness, transactional velocity, and overall efficiencies of terrorist attacks,” as reported by Bitcoin Magazine, according to IBTimes.
One of the greatest concerns reportedly rests with the anonymity afforded bitcoin transactions. The transactions are public, but the people involved in the operations are unnamed.
Bitcoins, according to the business site, can allow illegal operations with the speed of the Internet, but with the secrecy of a cash deal.
Some high-profile cases have highlighted bitcoin’s vulnerability, including Silk Road, the digital black market shut down in October by the FBI. Silk Road accepted only bitcoin for payments. The site’s founder was charged with drug trafficking and money laundering.
A Treasury Department probe found no evidence of bitcoin being used to finance terrorism, but the anonymous nature of the transactions still has many law enforcement officials worried.
CTTSO is concerned that anonymous networks are a way to successfully traffic drugs, weapons, people and nuclear tech under the radar.
Android, Motorola, social media and virtual reality were also included on the CTTSO’s list of topics worth researching regarding terrorism.
Click for the story from the International Business Times.

Shocking US jobs data impugns recovery, Fed tapering

Friday's figures are a warning that the US recovery may be losing momentum

A Job seeker has his resume reviewed during the San Francisco Hirevent job fair at the Hotel Whitmore on July 12, 2011 in San Francisco, California
The headline unemployment rate fell to 6.3pc but that was only because the labour 'participation rate' plummeted back to a modern-era low of 62.8pc Photo: Getty Images
The US economy has delivered two minor shocks in a week, prompting concerns that bond tapering by the Federal Reserve may be doing more damage than expected.
Non-Farm Payrolls data released on Friday shows that the workforce shed 806,000 jobs in April, a stunning drop that cannot plausibly be blamed on the weather. Wage growth and hours worked were both flat and the manufacturing hours per week fell.
This follows news earlier in the week that the economy to a halt in the first quarter. Growth plummeted to 0.1pc and is now well below the Fed’s “stall speed” indicator. Analysts blamed this on the freezing polar vortex over the winter.
Yet the jobs data confirm a disturbingly weak picture. The headline unemployment rate fell to 6.3pc but that was only because the labour “participation rate” plummeted back to a modern-era low of 62.8pc, last seen in 1978 when there were far fewer women in the workforce. The rate for males is the lowest ever recorded at 69.1pc.
The jobs market is highly volatile – and is often revised later – but the data are a warning that the US recovery may be losing momentum. Lakshman Achuthan, from the Economic Cycle Research Institute, said the trend was already weakening long before the cold weather. “We see a failure to launch. We’re decelerating, not accelerating, and that is a big concern,” he said.
The Fed has gradually been turning down the spigot of dollar liquidity, reducing its bond purchases by $10bn a month at each meeting, even though the bank’s measure of core PCE inflation has dropped to 1.1pc. The net stimulus has dropped from $85bn a month to $45bn.
This is a form of monetary tightening. Interest rates have not risen – though they are rising in real terms – but the quantity of money mechanism may nevertheless be having a powerful effect. The broadest measure of the money supply – Divisia M4 – has dropped from a growth rate above 6pc a year ago to just 2.6pc in March.
The Fed is unlikely to blink yet. Even the once dovish San Francisco Fed has warned that quantitative easing no longer serves a useful purpose and may be doing more harm that good at this stage, fuelling asset bubbles without much benefit for the real economy. Analysts say it would take several months of bad data to force the Fed to halt tapering and change course again.
US policy-makers no longer pay much attention to the monetary data. Robert Hetzel, from the Richmond Fed, said this led to a grave error in mid-2008 when the Fed’s voting board began to talk up rate rises even though the money supply was already buckling. He argues that this played a key part in the Lehman crash several months later.
Erica Groschen, from the Bureau of Labour Statistics, said the sudden drop in jobs last month was caused by fewer people joining the workforce, rather than people leaving. That is hardly reassuring, and conflicts with theories that the participation rate is falling because people are choosing to retire early.
The weakness may be nothing worse than a pause for breath – or a mid-cycle correction – as the US gears up for a second leg of the post-Lehman expansion. The risk is that this instead proves to be the end of growth cycle that is already long in the teeth by historic standards.
The possibility of a fresh downturn with the interest rates already at zero, the Fed’s balance sheet already at $4 trillion, and gross public debt above 100pc of GDP for the first time since the end of the Second World War is what keeps US economists awake night. There is little margin for policy error.

Fed won't consider rate raise until October: Fisher

The Federal Reserve will likely bring its massive bond-buying program to an end in October, and only after that will it consider when to raise U.S. interest rates, a top Fed official said on Sunday.
"I personally expect us to end that program in October," Dallas Federal Reserve Bank President Richard Fisher said in an interview on Fox News. "Then we have to see how the economy is doing, including these broader measures of unemployment and where we stand before we can talk about how we might move the short-term rate."
U.S. unemployment registered 6.3 percent in April, a government report showed on Friday. But broader measures of the strength of the labor market, including the labor participation rate and hourly wages, indicated the jobs market is still far from strong.
More workers are dropping out of the labor force, data showed, suggesting that many saw job prospects too poor to merit a job hunt. Average hourly wages last month did not grow at all.
"It's too early to tell," Fisher said of when the economy will be ready for higher rates. "I'll make this prediction: some time in the next 100 years, interest rates will go up."
The Fed has kept short-term U.S. interest rates near zero since December 2008 and has bought trillions of dollars in long-term securities to help boost the economy and bring down unemployment.
Five months ago, with unemployment down sharply from its recession-era high around 10 percent, the Fed began cutting back on its monthly bond-buying stimulus.
Last week it continued that process, trimming its monthly purchases to $45 billion.
At the same time, the Fed has said it will keep rates near zero for a "considerable time" after it ends its bond-buying program so that it can assess the strength of the economy.
Fisher, who votes on Fed policy this year, has long wanted to end the bond-buying program and has warned that keeping rates too low for too long could feed unseen financial market bubbles.

Target chairman and CEO ousted

Target's chairman and CEO Gregg Steinhafel abruptly departed from both roles on Monday, effective immediately, after 35 years with the retailer.
Following the move, Target shares fell in premarket trading on Monday. (Click here to track its shares.)

The company has appointed its chief financial officer, John Mulligan, as interim president and chief executive. Board member Roxanne S. Austin has been appointed as interim non-executive chair of the board.
Retail sector is a moving target: Buffett
Charlie Munger, Berkshire Hathaway vice chairman, and Warren Buffett, Berkshire Hathaway chairman & CEO, share their thoughts on the announcement Target CEO Gregg Steinhafel is stepping down, and the difficulty in working in the retail space.
During the transition, Steinhafel will serve as an advisor.
The decision comes in the wake of a massive data breach that impacted millions of Target customers late last year. The discount retailer has also faced challenges related to its expansion into Canada.
Brian Sozzi, Belus Capital Advisors' CEO & Chief Equities Strategist, said he expected Steinhafel's departure to have occurred a few months ago ahead of the spring selling season.
Watch: Target's new chip credit cards

"The fact that they're doing this now indicates that the first quarter may not have improved from the holiday quarter," he said, adding that he views Steinhafel's exit as a "long-term positive for the stock" and that the company should look for an outsider.
Janney Montgomery analysts echoed this need.
"There is a lot that has gone wrong at TGT over the past few years, and it is critical that the company looks for an outsider to come in, and revisit several strategic mistakes. This is a company that continues to have a great, if tarnished brand, tremendous supply chain, albeit an e-commerce business that is far behind where it needs to be at this point in its online growth strategy," they wrote in a note to clients.

This is the second C-suite departure at Target in as many months. In early March, Target CIO also resigned.

"Clearly, there is no longer the same level of bench strength that historically characterized the organization," Credit Suisse analyst Michael Exstein wrote in a research note. "In time we expect other members of the management team will retire as the management transition unfolds."

To hear Steinhafel's account of the Target breach, click here.