Monday, February 3, 2014

Top 20 countries; likely to face coup in 2014:

Source: News Tribe
Top 20 countries; likely to face coup in 2014:
WASHINGTON: Pakistan has been included in the list of 40 countries having risks of coup in 2014 and residing on the 14th position released by Jay Ulfelder, a famous political scientist who also blogs.
A famous political scientist, Jay Ulfelder’s mathematical model which forecasted about expected ‘coups’ across the World in 2014, while the Max Fisher has posted the list in Washington Posts on January 28.
Pakistan has been placed on the 14th position in the list while its neighbouring country Afghanistan is on 12th.
Jay Ulfelder’s have maintained the coups’ lists since last three years stated that 40 countries are on the list 10 were more prone to risk mostly belong to sub Saharan Africa except Thailand.
Ranking has been finalised on basis of country’s political history, present political, social and economic situation prevailing in the countries.
Top 20 countries; likely to face coup in 2014:
1. Guinea
2. Madagascar
3. Mali
4. Equatorial Guinea
5. Niger
6. Guinea-Bissau
7. Sudan
8. Central African Republic
9. South Sudan
10. Thailand
11. Somalia
12. Afghanistan
13. DRC
14. Pakistan
15. Haiti
16. Egypt
17. Chad
18. Ecuador
19. Mauritania
20. Cameroon
The 40 countries most at risk for a coup in 2014 (Jay Ulfelder): Courtesy Washington Posts
Rest of countries (21-40) in the list include:
21. Togo
22. Myanmar
23. Lesotho
24. Republic of Congo
25. Ethiopia
26. Ivory coast
27. Iraq
28. Nigeria
29. Algeria
30. Papua New Guinea
31. Swaziland
32. Rwanda
33. Nepal
34. Angola
35. Burkina Faso
36. Libya
37. Mozambique
38. Georgia
39. Gabbon
40. Yemen
There were two coups seen in last year including Mali and Guinea-Bissau, the two West African countries that Ulfelder had rated as particularly high-risk, whereas, his model for 2013 hadn’t even included Eritrea in the top 30 most endangered.

Hong Kong rings in Year of the Horse with fireworks

May The Farce Be With You – Janet Yellen Compares Bernanke to Obi-Wan Kenobi

Just in case you had any lingering doubt about how hopelessly screwed the world’s monetary and financial system really is, all you have to do is learn that in a series of ceremonies (because that is so appropriate with a record number Americans on food stamps) celebrating Ben Bernanke in recent days incoming Fed head Janet Yellen likened Bernanke to Obi-Wan Kenobi, the wise, experienced Jedi Knight mentor to his protégé Luke Skywalker in “Star Wars” movies.
There’s nothing that makes you feel more warm and fuzzy inside than the recognition that the soon to be most powerful person in the world thinks that printing trillions of dollars and giving it to criminals at zero interest qualifies as attributes of a intergalactic Jedi Master.
On the flip-side, this right here is what 95% of Americans think of Bernanke and his criminal cartel.
Not from The Onion, but from the Wall Street Journal we learn that:
Officials held a series of ceremonies honoring Mr. Bernanke in the past few days. At a dinner Tuesday evening among senior officials, Ms. Yellen likened Mr. Bernanke to Obi-Wan Kenobi, the wise, experienced Jedi Knight mentor to his protégé Luke Skywalker in “Star Wars” movies. She jokingly imagined Mr. Bernanke advising her to trust in the Fed’s statement of objectives, a document that lays out its goals for inflation and jobs, according to someone familiar with the event.
Mr. Bernanke received a standing ovation from Fed officials at the FOMC meeting in its boardroom earlier Tuesday. And he was toasted Thursday by hundreds of Fed staff packed into an atrium at the Fed’s Eccles Building, where they were served peanuts, popcorn and crackerjacks in honor of Mr. Bernanke’s love of baseball.
Kill. Me.
Full article here.
In Liberty,
Michael Krieger

Why is the Federal Reserve Tapering the Gold Market?

In former times, the rise in the gold price was held down by central banks selling gold or leasing gold to bullion dealers who sold the gold. The supply added in this way to the market absorbed some of the demand, thus holding down the rise in the gold price.
As the supply of physical gold on hand diminished, increasingly recourse was taken to selling gold short in the paper futures market. We illustrated a recent episode in our article. Below we illustrate the uncovered short-selling that took the gold price down today (January 30, 2014).
When the Comex trading floor opened January 30 at 8:20AM NY time, the price of gold inexplicably plunged $17 over the next 30 minutes. The price plunge was triggered when sell orders flooded the Comex trading floor. Over the course of the previous 23 hours of trading, an average of 202 gold contracts per minute had traded. But starting at the 8:20AM Comex, there were four 1-minute windows of trading here’s what happened:
8:21AM: 1766 contracts sold
8:22AM: 5172 contracts sold
8:31AM: 3242 contracts sold
8:47AM: 3515 contracts sold


Over those four minutes of trading, an average of 3,424 contracts per minute traded, or 17 times the average per minute volume of the previous 23 hours, including yesterday’s Comex trading session.
The yellow arrow indicates when the Comex floor opened for gold futures trading. There was not any news events or related market events that would have triggered a sell-off like this in gold. If an entity holding many contracts wanted to sell down its position, it would accomplish this by slowly feeding its position to the market over the course of the entire trading day in order to avoid disturbing the price or “telegraphing” its intent to sell to the market.
Instead, today’s selling was designed to flood the Comex trading floor with a high volume of sell orders in rapid succession in order to drive the price of gold as low as possible before buyers stepped in.
The reason for this is two-fold: Driving down the price of gold assists the Fed in its efforts to support the dollar, and the Comex is running out of physical gold available to be delivered to those who decide to take delivery of gold instead of cash settlement.
The February gold contract is subject to delivery starting on January 31st. As of January 29th, 2 days before the delivery period starts, there were 2,223,000 ounces of gold futures open against 375,000 ounces of gold available to be to be delivered. The primary banks who trade Comex gold (JP Morgan, HSBC, Bank Nova Scotia) are the primary entities who are short those Comex contracts.
Typically toward the end of a delivery month, these banks drive the price of gold lower for the purpose of coercing holders of the contracts to sell. This avoids the problem of having a shortage of gold available to deliver to the entities who decide to take delivery. With an enormous amount of physical gold moving from the western bank vaults to the large Asian buyers of gold, the Comex ultimately does not have enough gold to honor delivery obligations should the day arrive when a fifth or a fourth of the contracts are presented for delivery. Prior to a delivery period or due date on the contracts, manipulation is used to drive the Comex price of gold as low as possible in order to induce enough selling to avoid a possible default on gold delivery.
Following the taper announcement on January 29, the gold price rose $14 to $1270, and the Dow Jones Index dropped 100 points, closing down 74 points from its trading level at the time the tapering was announced. These reactions might have surprised the Fed, leading to the stock market support and gold price suppression on January 30.
Manipulation of the gold price is a foregone conclusion. The question is: why is the Fed tapering?
The official reason is that the recovery is now strong enough not to need the stimulus. There are two problems with the official explanation. One is that the purpose of QE has always been to support the prices of the debt-related derivatives on the balance sheets of the banks too big to fail. The other is that the Fed has enough economists and statisticians to know that the recovery is a statistical artifact of deflating GDP with an understated measure of inflation. No other indicator–employment, labor force participation, real median family income, real retail sales, or new construction–indicates economic recovery. Moreover, if in fact the economy has been in recovery since June 2009, after 4.5 years of recovery it is time for a new recession.
One possible explanation for the tapering is that the Fed has created enough new dollars with which to purchase the worst part of the banks’ balance sheet problems and transfer them to the Fed’s balance sheet, while in other ways enhancing the banks’ profits. With the job done, the Fed can slowly back off.
The problem with this explanation is that the liquidity that the Fed has created found its way into the stock and bond markets and into emerging economies. Curtailing the flow of liquidity crashes the markets, bringing on a new financial crisis.
We offer two explanations for the tapering. One is technical, and one is strategic.
First the technical explanation. The Fed’s bond purchases and the banks’ interest rate swap derivatives have made a dent in the supply of Treasuries. With income tax payments starting to flow in, fewer Treasuries are being issued to put pressure on interest rates. This permits the Fed to make a show of doing the right thing and reduce bond purchases. As a weakening economy becomes apparent as the year progresses, calls for the Fed to support the economy will permit the Fed to broaden the array of instruments that it purchases.
A strategic explanation for tapering is that the growth of US debt and money creation is causing the world to turn a jaundiced eye toward the US dollar and toward its role as world reserve currency.
Currently the Russian Duma is discussing legislation that would eliminate the dollar’s use and presence in Russia. Other countries are moving away from the dollar. Recently the Nigerian central bank reduced its dollar reserves and increased its holdings of Chinese yuan. Zimbabwe, which was using the US dollar as its own currency, switched to Chinese yuan. The former chief economist of the World Bank recently called for terminating the use of the dollar as world reserve currency. He said that “the dominance of the greenback is the root cause of global financial and economic crises.” Moreover, the Federal Reserve is very much aware of the flight away from the dollar into gold, because it is this flight that causes the Fed to manipulate the gold price in order to hold it down and in order to be able to free up gold for delivery.
The Fed knows that the ability of the US to pay its bills in its own currency is the reason it can stand its large trade imbalance and is the basis for US power. If the dollar loses the reserve currency role, the US becomes just another country with balance of payments and currency problems and an inability to sell its bonds in order to finance its budget deficits.
In other words, perhaps the Fed understands that a dollar crisis is a bigger crisis than a bank crisis and that its bailout of the banks is undermining the dollar. The question is: will the Fed let the banks go in order to save the dollar?
Paul Craig Roberts is a former Assistant Secretary of the US Treasury for Economic Policy.
Dave Kranzler traded high yield bonds for Bankers Trust for a decade. As a co-founder and principal of Golden Returns Capital LLC, he manages the Precious Metals Opportunity Fund.

Schoolchildren among 14 killed by Indonesia volcano eruption

Residents run to escape from hot volcanic ash clouds engulfing villages in Karo district during the eruption of Mount Sinabung in Indonesia's Sumatra island on February 1, 2014 

Indonesian rescuers recover the body of a victim at a village in Karo district following eruptions of Mount Sinabung, on Sumatra island, on February 1, 2014

A giant cloud of hot volcanic ash clouds engulfs villages in Karo district during the eruption of Mount Sinabung volcano, on Indonesia's Sumatra island, on February 1, 2014

Fourteen people, including four schoolchildren, were killed Saturday after they were engulfed in scorching ash clouds spat out by Indonesia's Mount Sinabung in its biggest eruption in recent days, officials said.
Dark, searing clouds rolling down the mountain left apocalyptic scenes of ash-covered bodies scattered by a roadside in Sukameriah village, just 2.7 kilometres (1.7 miles) from the volcano's crater, an AFP witness who helped with the evacuation said.
Officials fear there could be more fatalities from Saturday's eruptions, but due to the high potential of lethal heat clouds spewing from the mountain, a search and rescue mission has been grounded, officials said.
"We suspect there are more victims but we cannot recover them because the victims are in the path of the hot (ash) clouds," said Sutopo Purwo Nugroho, the spokesman for the National Disaster Management Agency.
All 14 bodies have been identified. Four of them were high school students on a sightseeing trip to the volcano on the western island of Sumatra, he added.
"The bodies were in a state where, even though their skin did not peel, their faces were swollen and the tongues were sticking out," an AFP reporter on the ground said.
Three other people -- a father and his son who wanted to pay respects at the graves of their relatives, and a man who came to the village to check his long-abandoned house -- were also trapped and injured by the deadly clouds, Karo district official Johnson Tarigan told AFP.
He said the three were in the intensive care unit of a local hospital.
Thirty thousand people have been evacuated from the area since the volcano started erupting in September.
But some residents had returned home on Friday following advice from the Center for Volcanology and Geological Hazard Mitigation that houses outside the five-kilometre radius from the mountain were safe.
The volcano erupted again on Saturday morning, sending hot rocks and ash up 2,000 metres (16,00 feet) into the air, blanketing the surrounding countryside with grey dust, said volcanologist Kristianto, who like many Indonesians goes by one name.
Sukameriah village is located in the red zone, where human activities are strictly banned, but locals often trespassed the restricted area to check on their houses and belongings as well as their crops, officials said.
Nugroho said the evacuation will resume on Sunday.
Mount Sinabung is one of 129 active volcanoes in Indonesia that straddle major tectonic fault lines, known as the Pacific Ring of Fire.
It had been quiet for around 400 years until it rumbled back to life in 2010, and again in September last year.
In August 2013, five people were killed and hundreds evacuated when a volcano on a small island in East Nusa Tenggara province erupted.
The country's most active volcano, Mount Merapi in central Java, killed more than 350 people in a series of eruptions in 2010.

Anwar’s Kajang campaign faces first roadblock from Selangor Islamic authorities

PKR top leader Datuk Seri Anwar Ibrahim’s attempt at meeting Kajang voters before the start of official campaigning hit a snag last Friday when he was barred from giving talks at mosques in the state.
It is learnt that Anwar was barred from giving the tazkirah (a short speech before the Friday sermon) at the Impian Saujana mosque in Kajang on orders from the Selangor Islamic Affairs Council (Mais), the body which regulates mosques in the state and which comes under the purview of the Selangor Sultan.
Anwar was supposed to give the tazkirah before a Friday sermon delivered by PKR information chief Dr Muhd Nur Manuty.
“But after subuh prayers on Januari 30, the mosque’s caretaker told us that they were pressured by MAIS to stop the event. So the mosque committee did not dare go ahead with the plan.
“So we had to quickly look for another mosque,” said the source, who is part of Anwar's team, explaining how the programme was later moved from the Impian Saujana mosque to the Kariah mosque in Batu 10 Cheras, which is part of the Kajang state constituency. This, too, was blocked by Mais at the last minute.
The source said Mais and the Selangor Islamic Religious Department (Jais) threatened to arrest Anwar if he delivered the tazkirah, pointing out that he did not have tauliah (certificates of approval) to give talks or sermons in Selangor mosques.
Due to the ban, Anwar, Muhd Nur, Selangor Menteri Besar Tan Sri Abdul Khalid Ibrahim and other Pakatan Rakyat leaders who were present, performed their prayers at the Kariah Mosque. They later spoke to the congregation after the prayers.
The latest development reflects the bumpy road ahead for the "Kajang move", which is said to pave the way for Anwar to replace Khalid as the Menteri Besar.
On January 28, PKR announced that it was fielding Anwar as candidate in the upcoming Kajang by-election, after incumbent Lee Chin Cheh of PKR resigned.
There are 38,965 voters in the constituency, with Malays making up 49% of the voters, while the Chinese make up 41%, and Indians, 10%.
In the 2013 general election, PKR’s Lee got 19,571 votes against Barisan Nasional's Lee Ban Seng (12,747 votes) and Mohamad Ismail of Berjasa (1,014 votes). – February 2, 2014.

Nought to gain and all to lose in Kajang, Khir Toyo tells BN

KUALA LUMPUR, Feb 1 — Barisan Nasional (BN) should forego the Kajang by-election as its victory there was “impossible”, former Selangor mentri besar Dr Mohd Khir Toyo said today.
The Umno veteran said contesting the seat would only lead to the coalition being made a punching bag to distract from the leadership crisis currently in PKR.
“Don’t contest. It is quite impossible to win the seat and a victory will be pointless as it changes nothing,” Mohamad told The Malay Mail Online when contacted today.
Pakatan Rakyat currently holds 44 of the 56 seats in the Selangor state assembly and is in no danger of losing hold of the administration regardless of who wins the poll.
Saying the by-election was outcome of a rumoured power struggle in PKR, the man who last helmed a BN administration in the state said the coalition’s entry was precisely what its rival was hoping for in order to divert attention away from its internal problems.
“It’s a trap. Instead of getting involved in the by-election and wasting money, we should just focus on real problems like rising living costs,” Khir said.
“So never mind if they call us cowards for not contesting. Let them. We should think about the bigger picture,” he added.
Although considered an MCA seat, Umno has sent out feelers about the party possibly contesting in place of its Chinese partners, citing the 49-per cent Malay majority in the constituency.
Today, Khir echoed the view of former prime minister Tun Dr Mahathir Mohamad for MCA to contest the seat, if the coalition remains adamant on fielding a challenger to Opposition Leader Datuk Seri Anwar Ibrahim.
Saying that Umno must honour its promises to its partners, the former Sungai Panjang state assemblyman also pointed out that the Malay nationalist party did not fare well in some of the seats it took over from MCA in Election 2013 and even lost some to PR.
In a surprise move on Monday, PKR’s Lee Chin Cheh resigned as Kajang assemblyman without giving a reason, paving the way for PKR de facto leader Anwar to contest the by-election.
Rumours persist that Lee vacated his seat to allow Anwar to gain entry into the Selangor state assembly and head off a full-blown power struggle involving party deputy president Azmin Ali and Mentri Besar Tan Sri Khalid Ibrahim.
While popular with the general public, Khalid’s penchant for unilateral decision-making in administering the country’s wealthiest state is understood to be a source of dissatisfaction among PR leaders in the state.
Lee won the Kajang seat in the May 5 general election with a 6,824-vote majority.

Perkasa yakin sultan akan lantik Anwar jika menang dan dapat sokongan majoriti

Kumpulan pendesak Melayu, Perkasa yakin Sultan Selangor Sharafuddin Idris Shah tetap akan melantik Datuk Seri Anwar Ibrahim sebagai Menteri Besar Selangor sekiranya beliau menang dan mendapat sokongan majoriti Adun Selangor.
Setiausaha Agung Perkasa Syed Hassan Syed Ali (gambar) berkata tiada siapa pun boleh menafikan kuasa Sultan sebagai pemerintah berperlembagaan negeri itu.
"Sultan punya kuasa. Tapi biasanya raja-raja dalam Malaysia ini tidak mahu secara langsung mencampuri politik," katanya kepada The Malaysian Insider.
Kenyataannya itu berdasarkan ura-ura yang menyatakan biarpun pentadbiran negeri Selangor menyokong sepenuhnya Anwar, hasrat itu mungkin dihalang oleh sultan yang mempunyai mutlak mengiktiraf menteri besar secara rasmi.
Peguam dan aktivis, Edmund Bon mendakwa akan berlakunya krisis perlembagaan di Selangor jika  Anwar mahu menjadi menteri besar,
Syed Hassan berkata, Perkasa juga tidak melihat undang-undang yang boleh mengagalkan hasrat PR untuk menjadikan Anwar sebagai Menteri Besar Selangor.
Namun tegasnya, Perkasa mempersoalkan mengapa nama Anwar yang dicadangkan untuk bertanding dan bukannya pemimpin PR yang lain.
"Untuk gunakan alasan Anwar pernah dipenjarakan kerana salah guna kuasa dahulu, atau kerana beliau merupakan bekas banduan juga kes tuduhan liwat serta bukan anak Selangor, bukan alasan kuat untuk sultan menolak beliau.
"Apa pun Perkasa berasa sungguh menjelekkan bila tiada seorang Melayu pun dalam negeri itu layak menjadi menteri besar sehingga terpaksa "diimport" dari Pulau Pinang," katanya.
Perkasa turut mempersoalkan kredibiliti pemimpin itu untuk melaksanakan tugasnya sebagai wakil rakyat di Kajang.
Ini melihat daripada prestasi Anwar sebagai Ahli Parlimen di Permatang Pauh, Pulau Pinang apabila beliau juga tidak mampu untuk membela nasib Melayu di negeri tersebut.
"Apakah seorang pemimpin Melayu yang dikatakan hebat dari Pulau Pinang namun menyaksikan kaum sendiri terpaksa meninggalkan Pulau Mutiara akibat tiada pembelaan yang adil daripada kerajaan negeri dalam satu parti Pakatan.
"Kuasa di tangan rakyat Kajang menentukan kemenangan Anwar dan kuasa juga di tangan Sultan Selangor bagi menentukan Anwar boleh menjadi menteri besar atau tidak," katanya.
Semalam peguam veteran Tommy Thomas berkata, sebagai pemerintah berpelembagaan, Sultan Selangor “tiada tangan bebas” dalam memilih menteri besar, memetik Artikel 51 dan 53 perlembagaan negeri.
Artikel 51 (2) menyatakan bahawa calon “mesti berbangsa Melayu dan beragama Islam” sementara Artikel 53 (4) memperuntukkan bahawa Sultan Selangor boleh menggunakan budi bicaranya dengan peruntukan dalam perlembagaan seperti Artikel 51 (2) yang menyekat pilihannya.
Thomas berkata, sejak negara mencapai kemerdekaan pada 1957, parti politik (atau gabungan) yang mendapat kebanyakan kerusi dalam pilihan raya umum biasanya memilih pemimpin mereka sendiri.
“Jadi, dalam setiap kes di mana ada kekosongan dalam pejabat perdana menteri, sama ada disebabkan oleh peletakan jawatan atau kematian, pemangku pemimpin Umno atau Barisan Nasional (BN) dilantik oleh perdana menteri.
“Sama juga, selepas setiap 13 pilihan raya umum lalu, sultan tidak mempunyai budi bicara dalam pelantikan itu. Sama juga seperti keadaan di semua negeri. Jika ada pengecualian di negeri tertentu, menteri besar dilantik tanpa mengambil kira adab tertib perlembagaan,” katanya.
Beliau berkata, di Selangor, Pakatan mempunyai 44 kerusi berbanding 12 kerusi BN, iaitu majoriti lebih tiga perempat.
“Maka, jika Pakatan mencalonkan Anwar untuk menjadi menteri besar selepas kemenangan di Kajang, sultan tidak ada budi bicara mengikut perlembagaan untuk menolaknya.
“Boleh anda bayangkan jika Yang di-Pertuan Agong tidak menerima angkat sumpah Datuk Seri Najib Razak sebagai perdana menteri pada Mei 2013 selepas beliau memperolehi 44 kerusi majoriti di Dewan Rakyat? Dalam kedua-dua senario itu, pemerintah berperlembagaan tidak ada budi bicara dalam pelantikan itu,” katanya.
Bagaimanapun, jika sultan menolak pelantikan Anwar sebagai menteri besar ketika pencalonan oleh kerajaan negeri Pakatant atau jika Khalid enggan meletak jawatan sebagai menteri besar, speaker boleh memanggil persidangan Dewan Undangan Negeri khas untuk mengemukakan usul tidak percaya terhadap Khalid dan usul percaya kepada Anwar. – 2 Februari, 2014.

New Model Of Governance in Bailout Europe: Silence, Lies, and Evasion

Source: Testosterone Pit

By Don Quijones, a freelance writer and translator based in Barcelona, Spain. His blog, Raging Bull-Shit, is a modest attempt to challenge some of the wishful thinking and scrub away the lathers of soft soap peddled by our political and business leaders and their loyal mainstream media. 
Recent events in Spain have left me in even more a fog of confusion than usual. Here’s why: a little over a month ago, just before Christmas, it was announced to the loudest possible fanfare that Spain had finally fulfilled all its bailout obligations.
Its work done, the Troika was withdrawing its troops. After 18 long, arduous months of economic belt-tightening, Spain had finally regained its independence, its government and people liberated from the shackles of neo-colonial economic rule.
Personally speaking, I had my reservations. But even I, a seasoned skeptic, never imagined that the Troika’s shock troops would be back quite so soon. On Thursday morning, while scrolling the home page of El Diario, the following headline caught my eye:
IMF Technocrats Do Not Deign To Explain Their Reforms in Spain
The technocrats in question were two chief economists from the IMF’s European Department, Martin Schindler and Jasmin Rahmen, and two assistants from the same department, Helge Berger and Antonio Spilimbergo.
They were in Madrid for the express purpose of present their latest study, “Employment and Growth: Supporting European Recovery” — a title that proves, if nothing else, that the “Fund of Funds” hasn’t lost its sense of humour. The study contained the standard, all-familiar IMF recommendations: greater labour mobility (i.e. make it easier for companies to fire and hire workers, the former of which is definitely no longer a problem in Spain), lower salaries (always nice coming from unelected officials earning fat, tax-free, all expenses-included salaries) and, of course, less union involvement in collective bargaining agreements.
Things got interesting, however, at the end of the presentation when the small gathering of journalists began launching questions at the four IMF employees, to which Antonio Spilimbergo had one solitary response:
"We will not be taking any questions on the specifics of the Spanish situation."
And there you have it: the perfect summation of how our new technocratic system of governance functions in Europe today. A small clique of four empty suits rides into town, announces “recommendations” for economic reforms — reforms that will continue to suck the life-blood out of the Spanish economy – refuses to answer even the most innocent question on said reforms, and then rides back to wherever it came from.
In this new model of governance, difficult questions must never be asked. If they are asked, they must never be answered — for the simple reason that the IMF, the ECB, and the European Commission do not have plausible answers to such questions. In this video Klaus Masuch, a European Central Bank official, mumbles, stumbles, and squirms his way through a steady onslaught of probing questions from a seasoned Irish journalist. At the end of his merciless interrogation, the Irish journalist says:
This isn’t good enough. You people are intervening in this society causing huge damage while requiring us to make payments not for the benefit of anyone in Ireland but for the benefit of European financial institutions. Now could you explain why the Irish people are inflicted with its burden?
A damn good question, and one that merits an answer, but instead was met with a wall of silence, followed by all manner of evasive tactics.
Biting Austerity
Like Spain, Ireland was recently proclaimed cured. It had exited from the bailout program and, as The Guardian put it, recently made a “storming return” to the international bond market. Yet while the country may be returning to a semblance (for that is all it is) of normality in macro financial terms, the cold, hard frost of austerity continues to bite on the ground.
In October last year, Irish premier Enda Kenny announced another round of austerity cuts in the government’s (read: Troika’s) budget for 2014. Among many other things, health costs will soar, medical cards will be withdrawn from 35,000 people over 70, welfare rates will be cut for job seekers, and maternity benefits will be reduced.
The results are plainly visible for all to see. In Ireland, as in Spain, the poverty rate keeps rising, opportunity becomes a thing of the past for more and more young workers, the brain drain continues its onward march, the suicide rate is going up and public services are gradually deteriorating to the point where they no longer serve the public — cue: privatisation.
Ditto for Portugal, ditto for Italy, and the less said about the tragic fate of Greece, the better. Soon, even Europe’s core countries will be invited to join the eternal race to the bottom.
To paraphrase the Roman historian Tacitus, “They make an economic desert and call it progress.”
The markets raucously cheer and applaud from the sidelines, rewarding the respective national governments’ noble efforts to impoverish their own citizens with slightly higher bond prices, healthier-looking risk premiums and more debt — always more debt! In October, the continent’s Banking Union will be consummated, granting exclusive supervision of the continent’s banking system to unelected, unaccountable apparatchiks of the European Central Bank. And with it, another hefty chunk of our national sovereignty will disappear.
Yet if someone dares to ask any of the Troika’s three horsemen of Europe’s economic apocalypse just why such drastic steps and their brutal social, economic and political fallout are necessary — something that most representatives of the fourth estate seem strangely loath to do — you are greeted with silence, more lies, and evasion. By Don Quijones, Raging Bull-Shit.
Governments are seeking to reduce cash transactions. The reasons are obvious: as most countries struggle to rein in public spending, governments are frantically surveying their surroundings for anything of value to steal or pawn. Read.... We Are Sleepwalking Towards A Cashless Society

World risks deflationary shock as BRICS puncture credit bubbles

As matters stand, the next recession will push the Western economic system over the edge into deflation

An exchange store staff shows a Chinese RMB$100 banknote) and a US$100 banknote in Hong Kong
Image 1 of 4
It is a remarkable state of affairs that the G2 monetary superpowers - the US and China - should both be tightening  Photo: Reuters
Half the world economy is one accident away from a deflation trap. The International Monetary Fund says the probability may now be as high as 20pc.
It is a remarkable state of affairs that the G2 monetary superpowers - the US and China - should both be tightening into such a 20pc risk, though no doubt they have concluded that asset bubbles are becoming an even bigger danger.
"We need to be extremely vigilant," said the IMF's Christine Lagarde in Davos. "The deflation risk is what would occur if there was a shock to those economies now at low inflation rates, way below target. I don't think anyone can dispute that in the eurozone, inflation is way below target."
It is not hard to imagine what that shock might be. It is already before us as Turkey, India and South Africa all slam on the brakes, forced to defend their currencies as global liquidity drains away.
The World Bank warns in its latest report - Capital Flows and Risks in Developing Countries - that the withdrawal of stimulus by the US Federal Reserve could throw a "curve ball" at the international system.

"If market reactions to tapering are precipitous, developing countries could see flows decline by as much as 80pc for several months," it said. A quarter of these economies risk a sudden stop. "While this adjustment might be short-lived, it is likely to inflict serious stresses, potentially heightening crisis risks."
The report said they may need capital controls to navigate the storm - or technically to overcome the "Impossible Trinity" of monetary autonomy, a stable exchange rate and free flows of funds. William Browder from Hermitage says that is exactly where the crisis is leading, and it will be sobering for investors to learn that their money is locked up - already the case in Cyprus, and starting in Egypt. The chain-reaction becomes self-fulfilling. "People will start asking themselves which country is next," he said.
Emerging markets are now half the global economy, so we are in uncharted waters. Roughly $4 trillion of foreign funds swept into emerging markets after the Lehman crisis, much of it by then "momentum money" late to the party. The IMF says $470bn is directly linked to money printing by the Fed . "We don't know how much of this is going to come out again, or how quickly," said an official from the Fund.
One country after another is now having to tighten into weakness. The longer this goes on, and the wider it spreads, the greater the risk that it will metamorphose into a global deflationary shock.
Turkey's central bank took drastic steps on Tuesday night to halt capital flight, doubling its repurchase rate from 4.5pc to 10pc. This will bring the economy to a standstill in short order, and may ultimately prove as futile as Britain's ideological defence of the ERM in September 1992.
South Africa raised rates on Wednesday by half a point to 5.5pc to defend the rand, and India raised a quarter-point to 8pc on Tuesday, all forced to grit their teeth as growth fizzles. Brazil and Indonesia have already been through this for months to stem a currency slide that risks turning malign at any moment.

Others are in better shape - mostly because their current accounts are in surplus - but even they are losing room for manoeuvre. Chile and Peru need to cut rates to counter the metals slump, but dare not risk it in this unforgiving climate.
Russia has a foot in recession but cannot take action to kickstart growth as the ruble falls to a record low against the euro. The central bank is burning reserves at a rate of $400m a day to defend the currency, de facto tightening. As for Ukraine, Argentina and Thailand, they are already spinning out of control.
China is marching to its own tune with a closed capital account and reserves of $3.8 trillion, but it too is sending a powerful deflationary impulse worldwide. Last year it added $5 trillion in new plant and fixed investment - as much as the US and Europe combined - flooding the global economy with yet more excess capacity.
Markets have a touching faith that the same Politburo responsible for a spectacular credit bubble worth $24 trillion - one and a half times larger than the US banking system - will now manage to deflate it gently with a skill that eluded the Fed in 1928, the Bank of Japan in 1990 and the Bank of England in 2007.
Manoj Pradhan, from Morgan Stanley, says that China's central bank is trying to deleverage and raise rates at the same time, which "amplifies risks to growth". This is a heroic undertaking, like surgery without anaesthetic. It is the exact opposite of what the Fed did after 2008 when QE helped cushion the shock. Morgan Stanley says that 45pc of all private credit in China must be refinanced over the next 12 months, so fasten your seatbelts.
Moreover, China is struggling to keep its industries humming at the current exchange rate. Patrick Artus, from Natixis, says surging wages - and falling productivity - mean that it now costs 10pc more to produce the Airbus A320 in Tianjing than it does in Toulouse.
The implications are obvious. China may at some stage try to steer down the yuan to hold on to market share, whatever they say in the US Congress, partly to stop Japan stealing a march with its 30pc devaluation under Abenomics. Albert Edwards from Societe Generale say this may prove the ultimate deflationary shock, dwarfing the 1998 Asia crisis.
Europe has let its defences collapse behind a Maginot Line of orthodox monetary policy. Eurostat data show that Italy, Spain, Holland, Portugal, Greece, Estonia, Slovenia, Slovakia, Latvia, as well as euro-pegged Denmark, Hungary, Bulgaria and Lithuania have all been in outright deflation since May, once tax rises are stripped out. Underlying prices have been dropping in Poland and the Czech Republic since July, and France since August.

Eurozone M3 money growth has been negative for eight months, contracting at a rate of 1.1pc over the past quarter. Bank credit to the private sector has fallen by €155bn in three months, according to the latest data from the European Central Bank.
The ECB's Mario Draghi talked up the need for a "safety margin" against deflation before Christmas but now seems strangely passive, as if beaten into submission by the Bundesbank. I heard him twice in Davos repeating - woodenly, without conviction - that core inflation is merely back to where it was in 1999 after the Asian crisis and in 2009 after the Lehman crisis, and therefore benign.
We are not in remotely comparable circumstances. Those two events were at the outset of a new credit cycle. Right now we are nearly five years into an old cycle - already long in the tooth - and 80pc of the global economy is tightening or cutting stimulus. As matters stand, the next recession will push the Western economic system over the edge into deflation.
The US has a slightly bigger buffer, but not much. Growth of M2 money has been slowing even faster than it did in the nine months before the Lehman crash in 2008, but then the Fed no longer pays any attention to such data so it may all too easily repeat the mistake. The Fed is surely courting fate with $10bn of bond tapering each meeting into the teeth of incipient deflation, as Minneapolis Fed chief Narayana Kocherlakota keeps warning.
Those who think deflation is harmless should listen to the Bank of Japan's Haruhiko Kuroda, who has lived through 15 years of falling prices. Corporate profits dried up. Investment in technology atrophied. Innovation fizzled out. "It created a very negative mindset in Japan," he said.
Japan had the highest real interest rates in the rich world, leading to a compound interest spiral as the debt burden rose on a base of shrinking nominal GDP.
Any such outcome in Europe would send Club Med debt trajectories through the roof. It would doom all hope of halting Europe's economic decline or reducing mass unemployment before the democracies of the afflicted countries go into seizure. So why are they letting it happen?

House passes bill cutting $8 billion from ‘food stamps’ program

Source: AFP

The US House approved a five-year, nearly $1 trillion farm bill Wednesday reforming the federal government’s crop subsidy system but cutting food stamps to pare the deficit.
The mammoth bill, which has been some three years in the making and endured more than one collapse in negotiations in 2013, enjoyed bipartisan support in passing 251-166.
It now heads to the Senate where it could be voted on as early as Friday. It is expected to pass.

The Big Money Are Taking Profits And Leaving The Market

Creditors are now looking at Cyprus for the 3rd bailout. Cyprus is following the same path as Greece, they are getting deeper into debt. The FED tapered and the market fell, Marc Faber reports that the big money are taking profits and leaving the market. President Obama gave the SOTU and is going to use Executive Orders to bypass congress on issues like gun control. The test Czar has reported that the interceptor missiles have failed the test and the US is not protected. More warning of a terrorist false flag in Sochi and now there are reports of Assad developing biological weapons which might be used as a false flag event.

Bankers Commit Suicide in London! HSBC Denied Withdrawals! China High-Yield Trust Nearly Defaults!

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Congress to cut food stamps by $9 billion… 
Two top American bankers commit suicide in London as one jumps 500ft to his death… 
HSBC Apologizes After Cash Withdrawal Issue in Britain… 
Why China isn’t ready to let trust investments fail 
After Dropping Accounts, HSBC Adds $1 Billion to International Loan Program… 
China Default-Swap Bets at 14-Month High on Trust Flops… 
Experts address Fukushima-related radiation concerns… 
Fukushima cleanup could drag on for decades… 
UK drone offered for Fukushima clean-up… 
Can Ginger Help With Asthma? Studies Find It Can Ease Symptoms by Opening Airways… 
Genetic Engineering Actually INCREASES Pesticide Use, DECREASES Crop Yield, And May Be Dangerous to Your Health… 
‘Superweeds’ linked to rising herbicide use in GM crops, study finds… 
Report: FDA Documents Show Decade of Unsuccessful Attempts to Control Farm Antibiotics…

Faber: “Physical Gold” In Switzerland and Singapore Is 20% Of “Net Worth”

Today’s AM fix was USD 1,254.00, EUR 922.20 and GBP 761.89 per ounce.
Yesterday’s AM fix was USD 1,254.75, EUR 917.89 and GBP 756.42 per ounce.
Gold climbed $15.70 or 1.25% yesterday to $1,269.80/oz. Silver rose $0.20 or 1.02% to $19.78/oz.
Gold is marginally lower in most currencies today paring the first monthly advance since August. The gains yesterday came despite the U.S. Federal Reserve further reducing their massive bond buying programme to $65 billion a month.
Bullion for immediate delivery lost as much as 0.6% to $1,260.10/oz and was at $1,261.46 at 1500 in Singapore. Prices rose 0.8% yesterday on concern a rout in emerging-market assets may deepen and lead to contagion, leading to safe haven demand.
Increased physical demand in Asia has helped gold to rebound from a six-month low on December 31.
Marc Faber is back with a wide-ranging must read  interview with Barron’s. The astute investor who has a clear track record in protecting and growing wealth urged investors to own physical gold.
Own physical gold because the old system will implode. Those who own paper assets are doomed.”
Faber added,
I have no faith in paper money, period. Next, insider buying is also high in gold shares. Gold has massively underperformed relative to the S&P 500 and the Russell 2000. Maybe the price will go down some from here, but individual investors and my fellow panelists and Barron’s editors ought to own some gold.”
With regards to his allocation to physical gold, Faber was as transparent and candid as ever and said that he holds about 20% of his net worth in physical gold.
Marc Faber
About 20% of my net worth is in gold. I don’t even value it in my portfolio.”
Faber told the Wall Street Journal in December 2012 that:
Individuals are making a mistake if they’re holding all their assets in one country.…I still have the majority of my gold in Switzerland, but I am already moving gold to Asia,” he said.
Mr. Faber said his Asian storage center of choice is the Singapore FreePort, located in its own duty-free zone near the city’s airport.
Find out why Singapore is now one of the safest places in the world to store gold in our latest gold guide - The Essential Guide To Storing Gold In Singapore

Bank To Depositor: It’s Not Your Money!

This week:
-Bernanke to Yellen:”Good night and good luck”
-Emerging market chaos
-Currency crises: Replay 2008?
First High Quality Gold Hoard In Over A Decade: Interview with Drew Crowell… 
? Getting Away with Spending 4 times what You Make!… 
? 3 Canaries in a Coal Mine:… 
? Does Money Grow on Trees?… 
?2014: Year of Unintended Consequences…