Saturday, May 24, 2014

Be Your Own Central Bank – Hacking at the Root


“You’re that little guy at the root of that bad, ugly tree with the little hatchet and every time you take a dollar out of the system, by not using it. By using something else whether it’s a barter transaction, whether it’s a trade with your neighbor, whether it’s sending Dale silver and you take your visa card and you go and buy your gasoline with your silver. Every time you do that, you’re hacking at the root of that ugly beast!” ~Will Lehr

Will Lehr of Perpetual Assets discusses how you can take physical delivery of precious metals, 30 round magazines and even real estate to fund your IRA LLC. That’s right, your physical gold, silver and/or platinum, at home or stored in a place of your choosing without penalties, taxes or fear of having your assets MyRA’d. Perpetual Assets represents a key factor in breaking away from the system and taking a few of the debt based petrodollars out as well.
This is another step you can take to help break the system. Can we break effectively destroy the dollar by simply transferring our 401k or IRA to a retirement LLC account? Of course not. However, we are doing our part and every swing of the hatchet is another blow to the system. What also happens is the security of your family is greatly increased. With a major portion of your wealth, and your future, out of the way of the thieving, bankrupt federal government, control of your life begins to return. You may not see it right away, but over time, I believe your sense of well being will transform at every level of daily life.
Mr. Lehr does a great job of “keeping it simple” and explaining a lot of the details on how it works, what you have to do, the types of investments you allowed to make–and equally as important–the investments you are NOT allowed to make. “Check book control”, as you will learn, is a key element in taking control of your assets. If you have an old 401k or an IRA that is in harms way (with one of the too big to jail mafia organizations) you should consider taking control of these assets before the government doesn’t knock on the door, but is happy to tell you…”I’m from the government, I’m here to help.”
Delivered by The Daily Sheeple

Contributed by Rory Hall of The Daily Coin.
As a daily contributor at SGTReport.com. for the past two years I have written a several original articles and interviewed some of the top precious metals professionals in the industry, as well as top preparedness specialists in the world. YouTube Channel, The Daily Coin, was launched in February 2014 and website TheDailyCoin.org was launched April 25, 2014. As a student of monetary, financial and economic history for the past five years it has taught me to watch the markets with an open mind and a hand on my wallet.
Also, built and maintained Rory’s Glass (Eyes of the Heart Glassworks) – now closed to the public.


Fed Bailed Out CANADA! Prime Minister Harper Caught Lying!

The Fed’s Secret Liquidity Lifelines
Canada Bank Bailout: Yes, There Was One
$114 billion in emergency lending and cash injections at the bailout’s peak.
Federal Deposit Insurance Corp The fund has less than its required reserve ratio of 1.15 percent of the deposits it insures, and the FDIC expects to reach that goal by 2018. The reserve ratio was at 0.45 percent at the end of 2012, according to the agency.

A Productive Economy Is a Trading Circle

The destructive consequences of a parasitic Tyranny of the Wealthy and Majority have yet to play out, but they will, and sooner than most believe possible.
One of the core concepts of my work is that our state-cartel dominated economy is fundamentally a vast parasitic skimming machine that redistributes the nation’s earned wealth to two constituencies that support the skimming operation: those at the top of the financial pyramid (i.e. super-wealthy cronies who fund the careers of the political elite) who constitute a Tyranny of the Wealthy, and state dependents who constitute a Tyranny of the Majority, i.e. they will support the political elites that guarantee their share of the swag, regardless of the consequences to the nation or the economy.
In other words, these two self-serving groups see the productive economy as the host that the state feeds off to fund their swag: at the top of the pyramid, the swag is unlimited nearly-free credit issued by the Federal Reserve and various tax breaks; at the bottom of the pyramid, the swag is unlimited free services in the form of social programs such as Section 8 housing, easily gamed disability for life, food stamps, free medical care via Medicaid, etc.
The destructive consequences of a parasitic Tyranny of the Wealthy and Majority have yet to play out, but they will, and sooner than most believe possible. Those being sucked dry will never have the wealth or votes to reform the current system, so their only choice is to opt out and choose to live as independently of the state-cartel Status Quo as possible.
This parallel economy is the community economy, the resilient, decentralized, entrepreneurial sectors of the economy that not just survive without state subsidies but thrive outside centralized dependency on the state.
What is the foundation of a productive economy? Correspondent Jeff W. provides an intuitively insightful answer: trading circles.
Here is Jeff’s explanation of trading circles:

 The trading circle is a concept I came up with in order to try to think clearly about economic issues.
Key definitions/observations include:
A trading circle is any group of people who trade with each other on a regular basis.
I use the term “trading circle” instead of “local economy” because it helps me picture the actual traders involved.
Unless you are Robinson Crusoe, you participate in a trading circle.
Money, of course, is a medium of exchange. People trade their goods and services in the trading circle using money as a convenience.
People have to work AND trade in order to survive. Government counts time away from paid work as leisure time, but you have to go to the grocery store and trade your cash for food if you want to survive.
Activities needed for basic survival are not leisure. Trading for basic necessities is part of the work humans have to do (unless they are Robinson Crusoe).
Trading circles can be growing or shrinking, becoming richer or poorer.
To picture a simple trading circle, picture a few people on a remote island: one fishes, another makes clothing, another builds huts. They trade with each other. Specialization of labor benefits everyone.
People are entering and leaving the trading circle all the time. The trading circle is co-operative, but it is also harsh and unforgiving. Participants want their rivals kicked out. Adam Smith wrote, “The rivalship of competitors, who are all endeavoring to jostle one another out of employment, obliges every man to execute his work with a certain degree of exactness.”
Traders participate in the trading circle as equals, though some may do hundreds of times the business as others. Every participant is allowed to trade. Exceptions to this rule are a king, who does not get his money by trading but through taxation or money printing, and a moneylender, who trades valuable money for promises written on paper. Both the king and the moneylender claim legal rights over their subjects/debtors that ordinary traders do not claim.
People do not get rich outside a good trading circle. Put Warren Buffett in Bangladesh and he will struggle just like everyone else. Your fortune depends on belonging to a good trading circle.
The trading circle is self-correcting in terms of dealing with gluts and shortages. Participants move from one line of work to another according to the advantages they see.
The trading circle tends toward efficiency, improved quality, and reduced prices. It is a progressive institution in that sense. Its free operation tends to make everyone richer.
A trading circle must guard against thieves. Today, America’s trading circle, however, is basically owned and operated by thieves.
America used to be known for having good quality products at low prices. That was back when our trading circle was functioning properly.
Sick people, the very old, and the young do not directly participate in the trading circle. Society must make provisions for them (such as having strong families to take care of them). If the young are not cared for properly, society does not survive.
Robots tend to kick people out of the trading circle.
People who are dependent on the state are only partly in the trading circle. They are consumers but not producers. The same goes for government workers. They are thus not full members of the community like the full participants in the trading circle.
All businesses want to skew the rules of the trading circle in their favor. It is thus necessary to have someone in charge of the trading circle who is above it all and whose commitment is to its fair operation. (Editor’s note: this is the definition of good governance.)
A good community tries to find niches for the young people in the trading circle. The trading circle may be an unforgiving competitive environment, but the community in which the trading circle resides need not be such an environment.
The trading circle works best when everyone focuses on his own self interest. Altruistic and charitable work should take place outside the trading circle.
A corrupt government kicks everyone out of the trading circle who is not an insider or who does not pay bribes. This leads to higher prices and reduced quality, which is the usual condition of most trading circles historically.
When I think about an economic issue, I always ask, “How does this affect the trading circle?”
A person’s niche in the trading circle as a producer and seller is primary; his role as consumer is secondary. If you have a good niche as a producer, you automatically have the means to be a consumer. This is another way of expressing Say’s Law, which is that supply creates its own demand. If you lose your niche as a producer, your ability to be a consumer is impaired because you have lost your income.
A person often obtains his niche by degrees. In the old days, there used to be unpaid apprentices, paid apprentices, journeymen, and masters. The master craftsman was a guy who had earned a solid niche, and he usually employed journeymen and apprentices.
A person’s niche is dependent on profitability. Many people are hanging on to their niche by a thread, being very close to being driven out by financial losses. Government-imposed burdens on the trading circle have the effect of pushing people out of their niches and into failure and poverty. (Government tries to solve this problem through cartelization.)
Success of the trading circle hinges on business profitability. That is where all the factors come together to determine if a person can stay in his niche or whether a new niche can be created.
A niche in the trading circle must be continually earned. Even if you inherit a business, you still will have to work to ensure its survival. Earning a niche in the trading circle is like physical exercise: no one can do it for you. Government can give you a half-participation in the trading circle, where you are a consumer but you don’t produce anything.
Since taxes and inflation harm full participants, there is no free lunch in adding government-supported consumers. Government cannot give you a niche as a producer–or they can only do it through the corrupt act of giving you an unfair advantage. 


Ku Nan demands Umno Youth explain fracas at DAP headquarters

Ku Nan demands Umno Youth explain fracas at DAP headquarters 
 
Umno secretary-general Datuk Seri Tengku Adnan Tengku Mansor has demanded an explanation from the Federal Territory (FT) Umno following chaos involving Umno Youth members outside the DAP headquarters in Kuala Lumpur yesterday.
Saying the protesters had crossed the line, Tengku Adnan (pic) said action would be taken against them.
"We will question them. What they did was unethical. We want a peaceful country.
"To me, whoever holds a protest, let the police handle it, as this country has laws," Tengku Adnan said at the Gerakan by-election campaign operations centre in Teluk Intan today.
Yesterday afternoon, some 50 FT Umno Youth members protested in front of the DAP headquarters in Jalan Loke Yew, threatening to burn the building.
DAP leaders claimed the group had destroyed the party's signboard.
The protesters later handed over a memorandum to party strategist Dr Ong Kian Ming, denouncing Penang's Seri Delima assemblyman R.S.N. Rayer over his "Umno celaka" (Umno be damned) remark.
Tengku Adnan said Umno Youth members were not exempt from disciplinary action if they were found to have breached party constitution.
"If they breached party rules, we will take action. I was not aware as I was outstation (during the incident).
"We leave it to the police. If Umno Youth is wrong, let the police act against them.”
Tengku Adnan, however, took aim at the opposition, saying its elected representatives were exploiting house immunity by saying "whatever they like" during sittings. – May 23, 2014.

A Tale of Two Charts (and Two Economies)

These two charts depict the same index (DJIA) over the same time frame, but they reflect two stories and two economies.
Long-time correspondent Harun I. recently submitted two charts of the stock market that suggest two different stories–and these two stories suggest two different economies.
The first story is the one the Federal Reserve wants us to believe: the economy is expanding smartly without inflation or deflation–in effect, a Goldilocks economy that is enabling expanding profits and margins, which have pushed stocks ever higher.
In summary, this is the happy story.
The other story is the Fed’s nightmare scenario: the stock market’s expansion is exhausted and poised to decline. This story is one of an economy that never expanded in meaningful fashion, and a stock market rigged to rise by unprecedented intervention (i.e.manipulation) by the Fed.
This is the not-so-happy story.
These two charts depict the same index (Dow Jones Industrial Average (DJIA) over the same time frame, but they reflect two stories and two economies. These divergent stories are possible because the data supports two parallel universes: one in which the booming market is held up as evidence the overall economy is expanding to everyone’s benefit, and the other a manipulated market that has expanded not as a reflection of growth but of a staggering loss of purchasing power of the U.S. dollar and a central bank transfer of wealth from the many to the few who own the majority of financial assets.
Here is Harun’s commentary:

Below are two charts of the DJIA. The periodicity is yearly, i.e. each bar is one year. One is arithmetic and one is log. They present two dramatically different perspectives.
The log chart puts gains into a relative context and I use them extensively. However, the one drawback I find is that they are a poor indicator of psychology when using the bars to gauge sentiment.
The log chart indicates nothing unusual but the arithmetic chart indicates that we should be asking ourselves whether last year’s bar suggests a high probability of exhaustion. The log chart allows the Fed and others to claim, “see, no ‘flation”, i.e., no inflation or deflation of any sort.
Yet when we look at the relative strength charts and see that when measured against gold and equities, commodities are, in many instances, at all time lows.
The cheers go up–if you are of the small percentage of people who own these assets (gold and equities). But if you are one of the 99.90%, everything has gone up except your paycheck; 1 out of every 6 are on food stamps. In the case of the majority, inflation is everywhere. If you’re in the one-third of the working age population that is unemployed, there is no hope in sight.
The arithmetic chart, on the other hand, shouts, “Warning, something is really wrong here!” It says that either the wealthiest people (those who own equities) are really excited about the economy’s growth opportunities, or they are fearful and taking advantage of the transfer of wealth being orchestrated by the government via the Fed.
One can choose which narrative best fits. To paraphrase former president Clinton, it just depends what on your definition of is, is.


Thank you, Harun, for explaining the two narratives the charts tell. I suspect the divergent stories will be compressed into one narrative in the next few years: either the overall economy matches the optimistic forecast of the stock market, or the market declines to the recessionary stagnation of the Main Street economy.

This Happened Twice Before, And Each Time Stocks Crashed

Stock market participants and the players around them cling to every word proffered by the Fed that might reveal its secret plans because everyone knows that the words from the Fed and the money it prints and the interest rates it sets have been the fuel for the stupendous rally that started over five years ago. Wall Street wrings the last drop of hype and hope out of these words and spins them and doctors them to rationalize ever higher stock prices.
But recently, there has been one word that has moved up on the central-bank public worry list. As so often, it did so in a coordinated manner, and within days, it cropped up at the Fed, the Bundesbank, the Bank of England, the ECB….
“Complacency.”
It’s a condition of super-low volatility where the markets have become a one-way ticket to heaven, when market participants think that asset prices can only go up, that stocks will always rise, that a 4% decline is a correction, that even the worst junk bonds won’t ever default, that inflation doesn’t exist – and no one demands being paid for the risks they’re taking on because there are no more risks. Just look at the VIX volatility index, or fear index as it’s called: it has descended into a state of somnolence.
Central bankers are now worried that this creature of their making – this happy state of complacency amidst gorgeous and plump asset bubbles – might cause the next crisis. They’re worried that no one will be prepared for when it all turns around.
Alas, beneath the surface, stocks have already turned around.
Volatility is already tearing into stocks, and those holding them outright, rather than safely out of view in some confidence-inspiring fund, have watched “wealth” and dreams go up in smoke. But they know their formerly red-hot darlings will soon reach new highs, and that’s when they’ll sell them to a greater fool, and so they’re hanging on by the skins of their teeth, and others are buying because complacency still rules the day.
LinkedIn skidded 40.6% from its 52-week high, Twitter 57.5% in five months. It’s not just a few fallen angels. The Russell 2000, which tracks the 2000 smallest stocks in the Russell 3000, is down 9.1% from its 52-week high. The FDN Internet Index 16.1% in three months, the NBI Nasdaq Biotech index 16.5%, the Social Media Index SOCL 24.4%. Stock after stock has taken a brutal licking, papered over by the Dow and the S&P 500 whose components, the largest companies in the US, have largely held up so far. But beneath them, the Fed’s illusory “wealth effect” has begun to reverse.
And just as these stocks were coming off their peaks in March, the one thing that wasn’t supposed to happen, happened: margin debt, after having spiked for months, declined.
Margin debt – newly created money that is plowed into stocks – is the great accelerator on the way up. It inflates values and increases leverage, and when it spikes, it performs miracles. But it has a terrifying habit: after going into a majestic spike, it reverses abruptly right around the time stocks crash.
Over the last 15 years, margin debt had three spikes and reversals:
The first spike peaked in March 2000 at a record of $278.5 billion, or 2.66% of GDP. By the time it reversed in April, the stale air was hissing out of stocks with epic speed.
The second spike peaked in July 2007 at $381.4 billion, or 2.60% of GDP. In November, stocks began to swoon. No one will ever forget what happened next.
The third spike – the most phenomenal yet – peaked in February 2014 at $465.7 billion, beating the prior record by 22%. It reached 2.73% of GDP, the highest ratio ever! In March, the spike reversed. And in April, it declined again.
And it’s forming an increasingly terrifying chart:
Margin debt is down 6.1% from its February peak. $28.6 billion was drained from the stock market in two months, rather than added, as it might have been the case during the spike – a difference of $57 billion. And the dough that was yanked out isn’t piled up on the sidelines either, waiting to be plowed back into stocks. It was used to pay off debt. It simply evaporated.
During those months, the former red-hot darlings have been eviscerated, and thousands of stocks have skidded in sympathy. It’s brutal out there. But hey, the VIX is asleep, volatility isn’t visible from the top, complacency rules, and to heck with the last two times this scenario played out and blew down the whole flimsy construct.
The equation might not have gone so horribly awry if each class of graduates had seen their incomes skyrocket in line with their student debt. But that’s a crummy joke in America these days. Read…. This Chart Is The Fate of Housing In America As Student Loans Bankrupt A Whole Generation

As Goes Walmart, So Goes America: “Major Holes Are Starting to Form In Its Business”

If there’s one indicator of the state of the global economy it’s consumer purchasing on the retail level. And if there’s one retail company to watch as a prelude to what comes next it’s always been Walmart. Known for low prices, low wages, and multi-billion dollar profits, the world’s largest retailer is struggling.
According to a recent report from Motley Fool, the behemoth’s same stores sales in the U.S. have dropped precipitously and internationally they have outright collapsed, signalling serious trouble ahead.
Wal-Mart has begun to lose its cache with consumers and major holes are starting to form in its business.
Interestingly, Wal-Mart has hidden its financial problems from the headlines because challenges are different around the world, masking themselves in the overall picture.
But when you dig between the headlines you can see a company in serious trouble and could be the latest in a long line of leading retailers to go from boom to bust in the blink of an eye.

The problem for Wal-Mart goes far further than just cyclical swings in retail or a weak economy. Wal-Mart has long been able to lure customers with one-stop shopping and low prices, but consumer trends are now working against that core strategy. For cost conscious shoppers, lower prices can often be found online and more affluent consumers are choosing style and quality products over one-stop shopping.

Here’s where Wal-Mart’s story gets really interesting. Sales in the U.S. are beginning to struggle, but overseas the company’s profitability is in downright freefall.
In an earlier report we noted that economist John Williams says a deep recession will likely become official by Summer of this year, when the government releases it latest economic growth numbers.
According to Williams, consumers in America are strapped because of stagnant incomes and rising costs for food, energy and health care, leaving little money in consumers’ pockets for other purchases. “The consumer doesn’t have the liquidity to fuel the growth in consumption,” Williams says, a serious implication that is a key reason for why Walmart is seeing same store sales collapse and return on investment shrink across the board.
In June of 2009 trend forecaster Gerald Celente, in an interview on Infowars with Alex Jones, discussed the parallels between Walmart and the United States of America, suggesting that as goes Walmart, so goes America.
When you hear these advertisements where Walmart brags about everyday low prices, well sure, we’re turning into a Walmart economy.
With everyday low prices comes everyday low paying jobs. With everyday low paying jobs, comes everyday low quality. So every day America is sinking lower and lower.
Since then we’ve learned that a large percentage of Walmart employees make so little money that they have to depend on the government for nutritional assistance, joining nearly 48 million other Americans in the process. Morale at the company has always been low, as evidenced by the often sullen faces seen when being “greeted” upon entering a local store. This mirrors the general sentiment in many parts of America as the financial and economic destruction of the last five years takes it toll.
For many, Walmart has become the soup kitchen of the modern day bread line. One could even argue that the only reason Walmart hasn’t yet gone bankrupt is because of the surge of monthly customers who receive Electronic Benefits Transfers from the government and head straight to the low-cost retailer to spend their taxpayer subsidized income on food, clothing and other knick-knacks they offer.
Just as Walmart has been sinking over the last several years, so too has America.
Our national debt has skyrocketed, Americans dependent on monthly disbursements just to survive have hit historic highs, and there are more people out of the labor force today than there are working.
Taken in this context Walmart’s success or failure certainly seems to mirror that of the United States as a whole.
Like Walmert, iconic retailers Montgomery Ward, Sears, and K-Mart were once believed to be immune from the busts normally associated with economic downturns and new competition. The United States, another super power in its sphere of influence, also seems indestructible for these reasons.
Reality is catching up with both of them.

Will overpopulation drive us to eat our own DEAD? Controversial academic claims humanity is moving towards cannibalism at 'ridiculous speed'

  • Stanford professor Paul Ehrlich predicts population increases will lead to food crisis
  • Says we will have to address if it is 'okay to eat the bodies of your dead because we’re all so hungry'

A controversial Stanford professor has claimed overpopulation could lead to humanity having to eat the bodies of the dead.
Paul Ehrlich, best known for his prediction of human 'oblivion' 46 years ago, says that current population trends are on a course that could leave cannibalism as one of the only options.
Ehrlich claimed that scarcity of resources will get so bad that humans will need to drastically change our eating habits and agriculture.
Ehrlich claimed that scarcity of resources will get so bad that humans will need to drastically change our eating habits and agriculture - and even consider eating the dead.
Ehrlich claimed that scarcity of resources will get so bad that humans will need to drastically change our eating habits and agriculture - and even consider eating the dead.

IS LAB-GROWN MEAT THE ANSWER?

Researchers are developing new ways to grow meat in the lab.
Last year, Mark Post, a professor of tissue engineering at Maastricht University, the Netherlands, presented the first lab-grown hamburger.
To great the burger, stem cells are cultivated in a nutrient broth, allowing them to proliferate 30-fold.
Next they are combined with an elastic collagen and attached to Velcro 'anchor points' in a culture dish.
Between the anchor points, the cells self-organise into chunks of muscle.
Electrical stimulation is then used to make the muscle strips contract and 'bulk up' - the laboratory equivalent of working out in a gym.
Finally thousands of beef strips are minced up, together with 200 pieces of lab-grown animal fat, and moulded into a patty.
Ehrlich claimed that scarcity of resources will get so bad that humans will need to drastically change our eating habits and agriculture.
'We will soon be asking is it perfectly okay to eat the bodies of your dead because we’re all so hungry?,' he told HuffPost live host Josh Zepps.
He added that humanity is 'moving in that direction with a ridiculous speed.
 

'In other words between now and 45 years from now, 2.5 billion people will be added to the planet.
'We are moving towards resource wars.
Ehrlich is widely known for his 1968 publication of 'The Population Bomb' which called for 'population control' to prevent global crises from overpopulation.
'In the 1970’s the world will undergo famines - hundreds of millions of people are going to starve to death,' he predicted.
'our children will inherit a totally different world, a world in which the standards, politics, and economics of the 1960’s are dead.'
Population crisis: Between now and 45 years from now, 2.5 billion people will be added to the planet, Ehrlich  claims
Population crisis: Between now and 45 years from now, 2.5 billion people will be added to the planet, Ehrlich claims

Ehrlich claims that the dangers of overpopulation are once again growing, blaming Republicans and the media for failing to take action.
'We all have to eat, and it's very destructive.
The ethical issues around the way we raise cattle are important, but relatively trivial compared to the wrecking of our life support systems.
'I can much more about people, because I'm a person.'
In his new book, called 'Hope On Earth,' Ehrlich worked with Michael Tobias.
'There's a tremendous amount of optimism in the book,' said Tobais.
'I really think we have  a capacity to come to the aid of individuals.'
Tobias believes that young investors could hold the key to solving the problem, by investing in technologies to solve the problem.


US dollar as reserve currency becoming 'obsolete': Economist


The US dollar as the most widely held reserve currency is becoming “outmoded and obsolete” due to the government’s mismanagement of the financial system, an American economist says.
The use of the dollar as an international reserve currency, including for international trade, has become “outmoded, obsolete and unworkable,” said Webster Griffin Tarpley, a critic of US foreign and domestic policy.
“US Treasury Secretaries and US Federal Reserve officials have been much more interested in saving the Wall Street zombie banks from the consequences of their own speculation than they have been in doing the things that would really make the dollar a liable reserve currency,” Tarpley said.
“They’ve given up on functioning as a reserve currency and therefore the rest of the world is drawing the consequences,” he told Press TV on Wednesday.
In a symbolic blow to US global financial hegemony, Russia and China took a step toward undermining the dominance of the US dollar as the world reserve currency on Tuesday.
In the presence of Chinese President Xi Jinping and Russian President Vladimir Putin in Shanghai, Russia’s second biggest financial institution, VTB, signed a deal with the Bank of China to bypass the dollar and pay each other in domestic currencies.
The world’s five major emerging economies known as the BRICS countries — Brazil, Russia, India, China and South Africa — have long sought to diminish their dependence on the dollar as a means of reshaping the world financial and geopolitical order.
Demand for the dollar as a reserve currency in international transactions has allowed the US to borrow almost unlimited cash and spend well beyond its means, which some economists say has afforded the United States an outsize influence on world affairs.
Economists believe, however, that in the absence of a viable alternative, replacing the US dollar will be difficult.

AHT/AGB

 

USDA warns of sticker shock on U.S. beef as grilling season starts

By Ros Krasny

WASHINGTON (Reuters) - The Department of Agriculture has warned of sticker shock facing home chefs on the eve of the Memorial Day holiday weekend, the unofficial start of the U.S. summer grilling season.
The agency said conditions in California could have "large and lasting effects on U.S. fruit, vegetable, dairy and egg prices," as the most populous U.S. state struggles through what officials are calling a catastrophic drought.
The consumer price index (CPI) for U.S. beef and veal is up almost 10 percent so far in 2014, reflecting the fastest increase in retail beef prices since the end of 2003. Prices, even after adjusting for inflation, are at record highs.
"The drought in Texas and Oklahoma has worsened somewhat in the last month, providing further complications to the beef production industry," USDA said.
Beef and veal prices for the whole of 2014 are now forecast to increase by 5.5 percent to 6.5 percent, a sharp advance from last month's forecast for a 3 to 4 percent rise. Pork prices are set to rise by 3 percent to 4 percent, up from a 2 to 3 percent advance expected a month ago.
The USDA said overall U.S. food price inflation for 2014, including food bought at grocery stores and food bought at restaurants, would rise by 2.5 percent to 3.5 percent in 2014.
That is up from 2013, when retail food prices were almost flat, but in line with historical norms and unchanged from April's forecast.
"The food-at-home CPI has already increased more in the first four months of 2014 then it did in all of 2013," USDA noted. At-home spending accounts for about 60 percent of the U.S. food CPI.
A major factor for rising pork prices is the Porcine Epidemic Diarrhea Virus (PEDv), responsible for more than 7 million U.S. piglet deaths in the past year.
Egg prices are also climbing - up 15 percent in April alone - and are expected to rise by 5 to 6 percent on the year, and higher milk prices are feeding through to other products in the dairy case, particularly cheese.
Sweet lovers and caffeine addicts will see some relief, however, since global prices for sugar and coffee remain low, USDA said.
The agency forecast prices of sugar and sweets to rise by 1 percent to 2 percent in 2014 and prices for non-alcoholic beverages to rise by 1.5 percent to 2.5 percent. Both forecasts were lowered this month.
"It appears supermarkets are maintaining minimal price inflation on packaged food products, possibly in an effort to keep prices competitive in light of rising cost pressures for most perishable items," USDA said.
So far the severe California drought has not had a discernible impact on national fruits or vegetable prices, USDA said, while warning that the effects are still to come.
(Reporting by Ros Krasny; Editing by Eric Beech, Doina Chiacu and Bernadette Baum)

Marc Faber – I Buy Gold Every Month – I Will Never Sell My Gold

May 22 (Bloomberg) –- Marc Faber, managing director and founder of Marc Faber Ltd., and Ian Bremmer, president of Eurasia Group, discuss Gold,Assets, Bitcoin, the state of the Chinese economy and the outlook for the U.S. stock market with Trish Regan on Bloomberg Television’s “Street Smart.” (Source: Bloomberg)

FEDS WARN OF FOOD PRICE JUMP…

USDA warns of sticker shock on U.S. beef as grilling season starts

food-price-jump
The Department of Agriculture has warned of sticker shock facing home chefs on the eve of the Memorial Day holiday weekend, the unofficial start of the U.S. summer grilling season.

The agency said conditions in California could have “large and lasting effects on U.S. fruit, vegetable, dairy and egg prices,” as the most populous U.S. state struggles through what officials are calling a catastrophic drought.

The consumer price index (CPI) for U.S. beef and veal is up almost 10 percent so far in 2014, reflecting the fastest increase in retail beef prices since the end of 2003. Prices, even after adjusting for inflation, are at record highs.

“The drought in Texas and Oklahoma has worsened somewhat in the last month, providing further complications to the beef production industry,” USDA said.

Beef and veal prices for the whole of 2014 are now forecast to increase by 5.5 percent to 6.5 percent, a sharp advance from last month’s forecast for a 3 to 4 percent rise. Pork prices are set to rise by 3 percent to 4 percent, up from a 2 to 3 percent advance expected a month ago.

The USDA said overall U.S. food price inflation for 2014, including food bought at grocery stores and food bought at restaurants, would rise by 2.5 percent to 3.5 percent in 2014.

That is up from 2013, when retail food prices were almost flat, but in line with historical norms and unchanged from April’s forecast.

“The food-at-home CPI has already increased more in the first four months of 2014 then it did in all of 2013,” USDA noted. At-home spending accounts for about 60 percent of the U.S. food CPI.

A major factor for rising pork prices is the Porcine Epidemic Diarrhea Virus (PEDv), responsible for more than 7 million U.S. piglet deaths in the past year.

Egg prices are also climbing – up 15 percent in April alone – and are expected to rise by 5 to 6 percent on the year, and higher milk prices are feeding through to other products in the dairy case, particularly cheese.

Sweet lovers and caffeine addicts will see some relief, however, since global prices for sugar and coffee remain low, USDA said.

The agency forecast prices of sugar and sweets to rise by 1 percent to 2 percent in 2014 and prices for non-alcoholic beverages to rise by 1.5 percent to 2.5 percent. Both forecasts were lowered this month.

“It appears supermarkets are maintaining minimal price inflation on packaged food products, possibly in an effort to keep prices competitive in light of rising cost pressures for most perishable items,” USDA said.

So far the severe California drought has not had a discernible impact on national fruits or vegetable prices, USDA said, while warning that the effects are still to come.

Italy includes cocaine, prostitution and black market alcohol in GDP figures

Change in methodology could boost the country's finances by 2%


If you can't stop it, at least make it count. The Italian government has announced it will include revenues from prostitution and illegal drug sales to its gross domestic product (GDP) figures.
The change in methodology complies with new EU rules requiring member states to record the value of all activities that produce income, including the "production and consumption of drugs", prostitution and black market alcohol and cigarette sales.
The move could boost the country's finances by as much as 2 per cent, according to the European statistics office, Eurostat, and help Prime Minister Matteo Renzi tackle the country's deficit.
Last week, official figures showed the Italian economy unexpectedly contracted in the first quarter. Italy's GDP fell by 0.1 per cent in the first three months of the year from the previous quarter and by 0.5 per cent from the same period a year earlier.
Analysts polled by Reuters expected a 0.2 per cent quarterly rise and a 0.1 per cent annual fall.
The Bank of Italy estimates that the value of the criminal economy accounts for approximately 10 per cent of the country's GDP. Italy also has a significant shadow economy, which by some estimates accounts for as much as 17 per cent of GDP.


Feds quietly bankroll cell phone spying devices for local police

http://wnyw.images.worldnow.com/images/3801606_G.jpgThe Erie County sheriff says he's done making public comments about a cellphone surveillance device used by his police agency to gather information on persons of interest.

Sheriff Tim Howard told WGRZ Thursday that he won't publicly discuss the matter any longer because doing so could adversely impact investigations.

A stingray is a device that mimics a cell tower and thereby tricks all wireless devices on the same network into communicating with it.

Howard told Erie County legislators last week that the stingray surveillance device his office has owned since 2008 is used only for tracking a person's movements, not for gathering content of cellphone communications. The surveillance equipment can capture data from targeted cellphones even when they're not in use.
http://www.myfoxny.com/story/25597191/police-use-cellphone-spying-d...

HP Plan 16,000 More Layoff

SAN JOSE, Calif. — Hewlett-Packard will lay off another 16,000 workers on top of 34,000 layoffs it already announced. The move could save up to an additional billion dollars a year by 2016 on top of the maximum $4 billion savings previously anticipated.
The layoffs will come across all HP's product divisions and geographical locations. About 7,000 of the new layoffs will come before the end of HP's 2014 fiscal year and the rest before the end of 2015.
On a quarterly earnings call, HP chief executive Meg Whitman took a hammering from Wall Street analysts, clearly surprised by the magnitude of the numbers. Whitman announced her turnaround plan in May 2012 estimating layoffs of 27,000. The numbers were later boosted to 29,000, then 34,000 and now are estimated at a total 50,000
Analysts asked if Whitman had lost confidence in HP's ability to grow revenues.
"This has nothing to do with our confidence in business, it's about opportunities to make this company better," Whitman said. "I've done a number of turnarounds -- not at this scale -- but you see more opportunities the deeper you get in," she said.
Executives have been studying additional opportunities to streamline the company since last year, signaling along the way more layoffs could come, added HP's CFO.
Whitman noted HP has had three quarters of flat revenues after several quarters of revenue declines of 6& to 9%. "That's encouraging to me because you have to stabilize before you grow," she said.
Although HP's divisions might have their own layoff plans to deal with specific business issues in the future, "I do not anticipate another [corporate restructuring] program after this," Whitman said.

“Central banks, not gold, are the barbaric relics” | Mike Maloney & James Turk


High Frequency Trading Could Cause MAJOR MARKET CRASH!

Exchange head downplays high-frequency trading danger
program trading platform that uses powerful computers to transact a large number of orders at very fast speeds.
High-frequency traders are subpoenaed and sued
Barclays, Credit Suisse Questioned In High-Frequency Trading Investigation
Goldman Sachs Is Being Investigated For Its Hiring Practices, High Frequency Trading

The Battle For Africa: Chinese Investments Vs US Military

Source: Zero Hedge

We have been vociferously following the 'battle for Africa' - the last untapped Keynesian credit growth economic region of the world - for a few years. One common theme has emerged China and the US are aggressively chasing down 'assets' - especially in the equatorial region. However, as the following two charts indicate, the two nations are engaged in very difference tactics for that 'takeover' - China's investment versus US brute force and military intimidation (and fake vaccination programs).
Africa is huge...


Why is everyone so interested in Africa (aside from the vast resources there of course)...
 
 
While those in the power and money echelons of the "developed" world scramble day after day to hold the pieces of the collapsing tower of cards in place (and manipulating public perception that all is well), knowing full well what the final outcome eventually will be, those who still have the capacity to look, and invest, in the future, are looking neither toward the US, nor Asia, and certainly not Europe, for one simple reason: there is no more incremental debt capacity at any level: sovereign, household, financial or corporate. Because without the ability to create debt out of thin air, be it on a secured or unsecured basis, the ability to "create" growth, at least in the current Keynesian paradigm, goes away with it.
Yet there is one place where there is untapped credit creation potential, if not on an unsecured (i.e., future cash flow discounting), then certainly on a secured (hard asset collateral) basis. The place is Africa, and according to some estimates the continent, Africa can create between $5 and $10 trillion in secured debt, using its extensive untapped resources as first-lien collateral.
But the two major combatants for power over Africa - China and the US - appear to have very different approaches...
China - via Investment...
 
As Stratfor explains:
 
 
In late July, Beijing hosted the 5th Forum on China-Africa Cooperation, during which China pledged up to $20 billion to African countries over the next three years.China has proposed or committed about $101 billion to commercial projects in Africa since 2010, some of which are under negotiation while others are currently under way. Together, construction and natural resource deals total approximately $90 billion, or about 90 percent of Chinese commercial activity in Africa since 2010. These figures could be even higher because of an additional $7.5 billion in unspecified commitments to South Africa and Zambia, likely intended for mining projects. Of the remaining $3 billion in Chinese commercial commitments to Africa, about $2.1 billion will be used on local manufacturing projects.
While China has proposed $750 million for agriculture and general development aid and about $50 million to support small- and medium-sized business development in addition to the aforementioned projects, it has been criticized for the extractive nature of its relationship with many African countries, as well as the poor quality of some of its construction work. However, since many African countries lack the indigenous engineering capability to construct these large-scale projects or the capital to undertake them, African governments with limited resources welcome Chinese investments enthusiastically. These foreign investment projects are also a boon for Beijing, since China needs African resources to sustain its domestic economy, and the projects in Africa provide a destination for excess Chinese labor.
and The USA - by brute force and intimidation
President Obama's announcement that United States has deployed 80 troops to Chad came as a surprise to many. But as my colleague The Washington Post points out, the United States already has boots on the ground in a surprising number of African countries.
This map shows what sub-Saharan nations currently have a U.S. military presence engaged in actual military operations.

It should be noted that in most of these countries, there is a pretty small number of troops. But it is a clear sign of the U.S. Africa Command's increasingly broad position on the continent in what could be described as a growing shadow war against al-Qaeda affiliates and other militant groups.
It also shows an increasingly blurred line between U.S. military operations and the CIA in Africa.

Fire Sale: Greece sells 110 of its best beaches in the name of “development”

Source: Keep Talking Greece

One hundred and ten of Greece’s best beaches are on sale by Greece’s privatization agency,  the Hellenic Republic Asset Development Fund (TAIPED) in the name of supposed “development” and “utilization of public assets”. In fact a sale off of Greece best beaches for cash so that the debt-ridden country can pay back its lenders.
The beaches plots are to be on sale with “50 years of utilization by the new owners.”In the list of TAIPED are featured among others Myrto Beach in Kato Achaia, Vasiliki Beach in Lefkada, Kalmitsi beach in Chalkidiki  and – what a shame – two beaches in Elafonisos, the small island between Peloponnese and Kythira, famous for its blue-green waters and light colored sandy beaches.From the list of 110 beachesMyrtoula beach, Kato Achaia area, West Achaia Municipality, AchaiaKorfoxylia, Magouliana area, Municipality of Gortynia, ArcadiaAgioi Anargyroi area, Municipality of Ermioni, Argolida, PeloponneseKoronissia area, ArtaKalamitsi, Municipality of Sithonia, ChalkidikiNea Propontida, Nea Irakleia, ChalkidikiNea Fokea area, Kassandra Municipality, ChalkidikiPorto Koufo area, Toroni, Sithonia Municipality, ChalkidikiFilizi area, near Naousa, Paros island, CycladesApokofto or Agia Kyriaki, Agios Ioannis area, Tinos island, CycladesIxia,
Rhodes island, Dodecanese (via postin.gr)Elafonisos


Breathtaking Sarakino beach and Simos beach in Elafonisos are furthermore under the protection of European Program “Natura 2000″.elafonissos

For sale is a 175,000 sq m plot of Sarakino beach. While TAIPED warns the future buyers of Forestry, Enviromental and Legal restrictions, it notes that the investor could build Hotel and/or vacation homes.
The Guardian on Elafonisos“Elafonisos has the best beach in Greece. So said more than one local during our stay nearby. It’s quite a claim given the reputation of the country’s islands, and you might imagine it would be hard for the beach to live up to expectations. But catching sight of it for the first time I found myself saying, “Wow!” Here was the fine sand and clear aquamarine water you rarely see outside of adverts for the Caribbean. The banner flapping gently over the entrance to Simos beach said it all: “Welcome to Paradise.”
However after the outcry in Greece and the fierce opposition by residents and local officials in Elafonisos, TAIPED announced the island beaches will not be for sale “now” but on a later point.As the new draft bill for the ‘regulation of seashores’ foresees that the sold beaches must allow a small space for the public to use for free, it is really hilarious to see the plot of Sarakino beach for sale: it is marked with red ink. A tiny strip of beach is foreseen for free access for the public. The free beach is so small that it will allow swimmers to enjoy sun bathing most probably standing on their feet.As I could not copy paste the picture of Sarakino beach, please, click in TAIPED list here in pdfand go to page 31/.

Peter Schiff Educates Day Trader On Gold As Money


Disappearing Tax Base Among States

(Reuters - Fri May 23, 2014 7:04am EDT) - New Jersey, which revealed a massive budget shortfall this week, is far from alone in feeling the pinch of lower income tax revenues in the key month of April, a Reuters analysis shows.
Personal income tax collections plunged last month from a year earlier in 27 of 32 states for which Reuters was able to collect data. That's most of the 43 states that levy income taxes, and drops were as high as 50 percent.
While many states predicted tough times this year, a handful including New Jersey and Pennsylvania is set to face hard decisions on either cutting spending or raising taxes.
New Jersey, for example, is cutting state contributions to the pensions system by 60 percent for the next two years. By the end of last year, 26 states had still not seen overall tax revenue return to pre-recession levels, according to recent data from Pew Charitable Trusts.
"There are states that are more cautious, but there is also New Jersey. There is also Kansas, Pennsylvania," said Lucy Dadayan, a senior policy analyst at the Rockefeller Institute of Government.
"Their projections are more optimistic than the reality," she said. "They either have to cut services - have to cut on the spending side - or raise taxes."
Even overall, states' prospects for growth in the first half of calendar 2014 are "very, very weak," she added. "And then we'll see a very slow rebounding."
New Jersey this week emerged as the poster child for the issue. Governor Chris Christie unveiled a shortfall of more than $1 billion for the budget year ending in just six weeks. A massive drop in April income tax collections was the main culprit, although the state has not detailed just how far below target they were.
April is the most important month for income tax revenues because of state and federal filing deadlines, and taxpayers writing the biggest checks tend to file at the last moment.
Part of the drop in revenues reflects a rush to pay last year, before tax hikes took effect. Many sold stocks, for example, to take the tax hit while rates were relatively low. But the drop still signals that a key revenue source for many states will be weak this year.
Income tax revenues declined by an average of 13 percent from the previous April in the 32 states for which Reuters has data. Only five states took in more year over year: Delaware, Mississippi, Oklahoma, Oregon and Virginia.
Personal income taxes make up a little more than a third of states' total general fund revenue, and sales taxes comprise roughly another third. Just seven states - Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming - collect no income tax, and two others - New Hampshire and Tennessee - only tax dividend and interest income, not wages.
ANTICIPATED BY MOST, BUT NOT ALL
When states drafted their budgets for this fiscal year, which started for most on July 1, 2013, many predicted overall revenue would remain relatively flat.
The average revenue forecast called for an increase of just 1.3 percent, according to Arturo Perez, fiscal affairs director at the National Conference of State Legislatures.
On balance, most states' overall revenue pictures are not suffering as much as the income tax declines might suggest, and some income taxes are collected outside of April, giving states time to still catch up, Perez said.
So, for cash-strapped Illinois, a 19.3 percent drop in income tax collections last month was actually good news because state officials had anticipated the plunge, and then some. As a result, officials boosted estimated general fund revenue for the 2014 budget up by $588 million.
But that windfall may be fleeting. Illinois legislators are engaged in fierce debate about whether to extend a 2011 tax increase due to partially expire on January 1, 2015, halfway through the next fiscal year. Letting it lapse will drop the tax rate to 3.75 percent from 5 percent and could cost the state more than $1.2 billion in just the second half of the 2015 budget year.
The biggest drop came in California, where April income tax collections were down $1.5 billion from a year earlier. But they were still $83 million more than the state had targeted.
Not every state was as sage as Illinois or California in its forecasting.
Take Michigan, with an economy still smaller than before the recession, a 7.4 percent unemployment rate that is well above the national rate of 6.3 percent, and its largest city, Detroit, struggling through the country's biggest municipal bankruptcy.
There, a 32.8 percent drop in April income taxes led officials in Michigan's capital, Lansing, last week to cut revenue forecasts for the current fiscal year by $317 million.
In Pennsylvania, April revenue fell just 4.4 percent from a year earlier, but still came in well below target, contributing to a shortfall of close to $1.4 billion through next year, according to independent state analysts.
TAX CUT IMPACTS
Tax cuts are also a factor. Eighteen states cut personal income taxes in 2013, while six increased them.
In Ohio, which enacted a $2.6 billion, three-year tax cut last year, April income tax collections fell by 45 percent. The state, however, partially offset the revenue loss by increasing the state sales tax. Ohio's jobless rate, meanwhile, has dropped steeply this year to 5.7 percent last month from 7.3 percent in April 2013.
The only state to see a bigger percentage drop in income tax receipts was Kansas, which in 2012 passed a big cut in tax rates. Collections fell 50 percent to $226 million from $453 million. That's nearly $90 million less than projected by Kansas.
Moody's Investors Service in April cut Kansas' credit rating a notch to Aa2, citing, among other factors, tax cuts that were not fully offset with recurring spending cuts.
reuters.com/article/2014/05/23/us-usa-state-taxes-exclusive-idUSBREA4M08N20140523

Barclays Fined For Manipulating Price Of Gold For A Decade; Sending "Bursts" Of Sell Orders

http://cdn.images.express.co.uk/img/dynamic/1/590x/CITY-Gold-091679-477697.jpg
It was almost inevitable: a week after we wrote "From Rothschild To Koch Industries: Meet The People Who "Fix" The Price Of Gold" and days after "Barclays' Head Of Gold Trading, And Gold "Fixer", Is Leaving The Bank", earlier today the UK Financial Conduct Authority finally formalized what most in the "tin-foil" hat community had known for years, when it announced that it fined Barclays £26 million for manipulating "the setting of the price of gold in order to avoid paying out on a client order." Furthermore, the FCA confirmed that those inexplicable gold raids which come as if out of nowhere, and slam gold with a vicious force so strong sometime they halt the entire market, had a very specific source: Barclays, whose trader Daniel James Plunkett, born 1976, "sent out a burst of orders aimed at moving the price of the yellow metal."
This took place for a decade. As the FT reports:
The FCA said Barclays had failed to “adequately manage conflicts of interest between itself and its customers as well as systems and controls failings, in relation to the gold fixing” between 2004 and 2013.
Some further details on Plunkett's preferred means of manipulating the gold price.
The FCA said Mr Plunkett had manipulated the market by placing, withdrawing and re-placing a large sell order for between 40,000 oz and 60,000 oz of gold bars.

He did this in an attempt to pull off a “mini puke”, which the FCA took to mean a sharp fall in the price of gold. As a result, the bank was not obliged to make a $3.9m payment to the customer under an option contract.
Which is precisely what we have shown many times here for example in "Vicious Gold Slamdown Breaks Gold Market For 20 Seconds", when a sell order so aggressive comes in it not only takes out the entire bid stack with an intent not for "best execution" but solely to reprice the market lower. Recall from September:
more @ http://www.zerohedge.com/news/2014-05-23/barclays-fined-manipulating-price-gold-decade-sending-bursts-sell-orders

‘Wouldn’t Want To Be Short Gold This Weekend’ – Jim Wyckoff | Kitco News


Following gold’s volatility Thursday morning after the release of key economic data, Jim Wyckoff is on Kitco News to explain the metal’s moves and how he sees it set up for the long weekend. “I think the next big development is probably going to be the Ukrainian presidential elections [on Sunday],” Wyckoff says. “Going into a long U.S. holiday weekend, I sure would not want to be short gold,” he adds. Wyckoff also says there may be some short covering, bargain hunting and even safe-haven demand for gold on Thursday and Friday ahead of the ‘uncertain’ weekend. Tune in now to hear his market ratings and key levels for both gold and silver. Kitco News, May 22, 2014.

Russia/China Energy Deal, Russia Builds Nuke Plants in Iran and Vets Die Waiting for Medical Care

China and Russia and the oil and natural gas deal that excludes the dollar, in a deal worth $400 billion over the next 30 years. Please take note, this deal excludes the U.S. dollar.Russia is working on a deal in Iran to build eight nuclear power plants. I thought there were negotiations going on with the West trying to curtail Iran’s nuclear power program. Apparently, there is not going to be curtailment by Iran when it comes to nuclear energy.Back here in the U.S., another scandal for the Obama Administration, and this time it’s veterans who have died while waiting for medical treatment. It has been revealed the Veterans Administration falsified waiting times to make it look like veterans were receiving lifesaving care. In reality, dozens and dozens of vets died waiting for care.
Join Greg Hunter of USAWatchdog.com as he analyzes these stories and more in the Weekly News Wrap-Up.

Expect More Cities to Face Bankruptcy

Expect more U.S. cities to face bankruptcy like Detroit, former New York Lieutenant Gov. Richard Ravitch said Thursday.

“There are many more [cities] that are facing enormous fiscal squeezes… who are cutting education, cutting infrastructure investments and borrowing as long as the bond market permits,” he said.

Ravitch, who is advising Detroit’s bankruptcy judge, wrote about his prediction in an op-ed in the Wall Street Journal last week.

“We can expect to see more Detroits,” he wrote.

Detroit became the nation’s largest city to file for bankruptcy protection last July after being crushed by $18 billion in debt.

Ravitch said retirement obligations and health-care costs that are rising faster than inflation are putting enormous pressure on state budgets. That in turn puts pressure on city budgets. Additionally, there has been a reduction in federal aid to states and cities.
Detroit on the eve of the city's bankruptcy decision on Dec. 02, 2013.
Detroit on the eve of the city’s bankruptcy decision on Dec. 02, 2013.

Since local politicians like to avoid raising taxes and cutting services, they wind up borrowing to balance their budgets.

“If they can borrow and kick the can down the road, they do so. The problem is they’ve been kicking the can down the road for too long,” Ravitch said.

Real estate mogul Don Peebles, a native of Detroit, agreed there are huge financial problems facing the nation’s cities.

Pensions for public workers are a “ticking bomb,” he said. Plus, more than half the residents in some cities are living in poverty, which is putting more pressure on those at the top end of the tax bracket.

“The top bracket of the tax base in urban cities … they tend to now leave for places where there are lower and more friendly taxes,” he said.

However, Peebles doesn’t’ believe there will be “another big Detroit,” which was a one-industry town that saw its population shrink by about half.

The solution is simple, Ravitch said.

“Cities and states have to stop borrowing to balance their expense budgets,” he said. “It’s not sustainable. It is coming to a crashing halt in more and more places.”

If every local jurisdiction would match recurring expenses with recurring revenue, “you wouldn’t have a growth in the number of cities that ultimately are going to face the default on their obligations.”