Monday, April 21, 2014

Barclays Latest To Exit Commodity Trading, Layoff Several Thousand Staff

With JPMorgan and Deutsche Bank having exited the commodities business (and numerous other banks discussing it ahead of the Fed and regulators' decisions over banking rules of ownership), it appears a few short months of regulatory scrutiny is enough to warrant more broad-based cuts across bulge-bracket banks historically most manipulated and profitable business units. As The FT reports, Barclays, one of the world’s biggest commodities traders, is planning to exit large parts of its metals, agricultural and energy business in a move expected to be announced this week. This comes on the heels of Barclays shuttering its power-trading operations (after refusing to pay $470mm in fines) with CEO Jenkins expected to announce several thousand layoffs.

As The FT reports, the regulatory uncertainty appears a major hurdle...
Regulators, including the US Federal Reserve, are reviewing whether to curb banks’ commodities trading operations after they were accused of manipulating markets for electricity, aluminium and other materials for their own profit.
And Barclays has already run afowl of regulators...
Barclays closed its US and European power trading operations in February after it was fined a record $470m for allegedly manipulating power prices by the US Federal Energy Regulatory Commission. Barclays has refused to pay the fine, shifting the dispute to a federal court.
So the decision to shut its commodity business should not be a total surprise...
Barclays, one of the world’s biggest commodities traders, is planning to exit large parts of its metals, agricultural and energy business in a move expected to be announced this week.

The shake-up comes as commodity trading suffers a sharp slide in revenues and attracts greater scrutiny from regulators, which has already led to the withdrawal of several big banks from the area.


Chief executive Antony Jenkins is preparing a strategic update for investors on May 8 and is expected to slash several thousand jobs by cutting Barclays’ exposure to areas that do not generate returns above their cost of capital. These are likely to be moved into an internal “bad bank” and either sold or closed down.


The retreat is being driven by tighter regulation, fresh capital constraints and lower profitability due to stable prices for oil and other commodities. Coalition, a consultancy, estimates the revenues of the top 10 banks in commodities fell last year to $4.5bn from a record $14.1bn in 2008.


Precious metals trading is likely to move into the bank’s foreign exchange trading business. There are expected to be heavy job cuts among the 160 staff in its global commodities trading, sales and research operations, many of them in London.
The base of manipulating banks is shrinking...
Barclays is one of the top five banks in commodities – which together controlled about 70 per cent of the commodities trading pot last year. But several are shrinking or disposing of these businesses, including Morgan Stanley, Deutsche Bank, UBS and Royal Bank of Scotland.
and becoming ever more concentrated with Goldman, Mercuria (ex-JPM), and Glencore to run the commodities world.

A mortuary of 7,000,000 foreclosures and counting: Nation still faces 9.1 million properties that are seriously underwater.

If a foreclosure happens in the wilderness, does it make a sound? It seems like people have conveniently forgotten that since the housing crisis hit we have witnessed more than 7,000,000+ foreclosures. Do you think these people believe the Fed is almighty and can stop a speeding train or turn water into wine? Apparently some people forget that the Fed failed to prevent the tech bust or the housing bust in the first place. Now, the Fed is somehow the cult leader and the leader will not let housing values fall. The nation still has 9.1 million seriously underwater homeowners on top of the more 7 million that have gone through foreclosure. It is abundantly clear that the mindless drivel of “buying is always a good decision” is just that. Investors are starting to pull back in expensive states because value is harder to find. I see the lemmings at open houses and you can see the drool at the side of their mouths hoping for a morsel of real estate. The Fed, for better or worse, has turned us all into speculators. Simply putting your money in a bank is a losing battle because inflation is eroding your buying power. Yet wages are not keeping up. What you have is people competing with investors, foreign money, and a market with low inventory and trying to guess the next move from the Fed. Yet the tech bust and housing crash (keep in mind these happened only since 2000) were major events not prevented by the Fed.

Does buying today make sense?
The big question for many is whether buying today makes sense. Hopefully the 7 million foreclosures within the last decade highlights that housing isn’t always a simple buying decision. Investors have been dominant in the market since 2009. Big money is clearly pulling back from inflated markets like those in California. This trend is fairly new but even with this minor twist, inventory is picking up and sales are still very low.
It helps to understand that many foreclosures are happening because people are spread thin. People are still maxed out. Unlike big banks with sophisticated deals and systems in place, most households are living paycheck to paycheck even those with higher incomes. First, take a look at some foreclosure history:
Print this chart out and just remember that housing is a big freaking purchase. Probably the biggest you will ever make. Just because someone is house horny doesn’t mean they should act on it. What fascinates me is that late in 2012, most of those in the housing industry failed to see the big run-up in prices for 2013. Most were predicting 2 to 5 percent price gains. Instead, we saw double-digit gains. At the end of 2013, the predictions were incredibly optimistic for 2014.
If the trend is so obvious and clear, why do we see low volume in housing sales?
existing home sales
Existing home sales are down more than 35 percent from their peak reached in 2006. Our population is growing and prices are going up. Yet the push for higher prices has come from Wall Street, low rates, and normal buyers competing with the investor group. A big question that many are wondering is what will happen when big money starts to flow out of real estate. We are starting to find out slowly. Rates are also likely to go up – so for those that believe the almighty Fed can do anything they should listen to their leader that is utterly telling the market rates will go in one direction.
What we don’t have to guess on is that this recent trend has made it tougher for first time buyers:
First-time home buyers are a small portion of the market today because of investors crowding them out. We also have a large number of young ones living in the basement of their parent’s granite countertop sarcophagus.
Still underwater
Despite the recent rise in home prices we still have 9.1 million home owners seriously underwater. What this tells us is that many people pushed their budgets to the financial limits merely to squeeze in. If this were truly a solid housing uptrend we would be seeing home builders doing what they do, building homes. We would also see existing home sales kicking butt. Yet we have a juiced up system with countless forms of accounting shenanigans. Some try to make it out as if economics and finance are somehow a new science. Unlike Newtonian physics on Earth, the Fed can act like a deus ex machina and literally change the rules for a brief period of time. And people are emotional and the reptilian part of our brain goes haywire when you talk about the “nest” – you need only go to an open house to see the house horny folks battle it out.
We’ve been adding many more rental households over the last few years, just in line with the big investor buying (those 7 million foreclosures have to move somewhere but foreclosures are also slowing down):
What is telling about this chart is that we have never had a sustained period of actually losing home owner households since, well this last crisis. Why? Take a look at the graveyard of 7,000,000 foreclosures. The Fed has turned the housing market into a speculative vehicle and with this volume of investor buying, you should proceed with the caution of buying a stock. This is another critical point here in regards to perceived risk. You have people staying miles away from stocks (which are up 170+ percent since 2009) yet are more than willing to stuff their entire $100,000 or $200,000 down payment into a highly priced piece of property that just went up by double-digits courtesy of investor fever. Yet they feel this is safer! California was a big chunk of the 7,000,000 foreclosures folks. You have people with pathetic 401ks and retirement funds yet 80 to 90 percent of their wealth tied up in one piece of real estate.
7 million foreclosures and currently 9.1 million seriously underwater home owners. It should be apparent that when it comes to buying a house, you really need to run the numbers. Investors have and they are pulling back from certain markets.

We Are Now In Year 6 Of ZIRP As Fixed Investments Yield No Income

T  —>  $1.6 T —> $5.9 T (cumulative “foreign” held US Treasury debt)
25% —>     40% —>    55%  (% of notes / bonds held by “foreigners”)
1%  —>      1%  —>     25%  (% Fed held notes / bonds…Fed primarily held Bills until ’08)
74% —>     59% —>    20%  (% domestically held notes / bonds)
6.6% —>    5%    —>   2.4% (net interest rate on debt)
$300B ->  $270B —> $223B (net interest paid on national debt)
$9.2 T –> $13.7 T –> $16.1 T (GDP = 75% increase);
$5.7 T –>  $9 T     –> $17.5 T (National debt = 305% increase )
We are now in year 6 of ZIRP and as the fixed income crowd laddering of investments of 2, 3, 5, and nearly all 7yr debt with actual yields must have rolled off replaced by ZIRP or much “riskier” assets to acheive yield.  This onboarding of ZIRP to Pensions, States, Insurers, intra-gov SS, etc. will leave the already underfunded completely unable to pay out w/out more bail-outs.  And Japan is really in the same scenario as fixed investments yield no income.
So we now come to a point that CB’s effectively are the market debt markets..and the roll off of yielding debt to ZIRP is a corrosive that is destroying all institutional holders of this debt…the laddered tipping point or bankruptcy of 7% planned growth rates of fixed income must be soon.

EU misdiagnosed the crisis, former Barroso advisor admits

General strike. Barcelona, March 2012. [Julien Lagarde/Flickr]

In his new book, Philippe Legrain, a former adviser to European Commission President José Manuel Barroso, says European leaders are responsible for the record-high unemployment and rock-bottom growth afflicting the EU.
At the height of the euro zone debt crisis, with Portugal's economy nearing collapse, the European Commission told the government in Lisbon that it had to slash wages if it was ever going to boost competitiveness and grow again.
Portugese shoemakers – one of the economy's main export sectors – steadfastly ignored the advice and found a way to bounce back while actually increasing workers' pay.
It is just one of many examples Philippe Legrain, a former adviser to Commission President José Manuel Barroso, cites in a new book that argues policymakers misdiagnosed the crisis and ended up prescribing the wrong medicine to resolve it.
He was an adviser from 2011 until resigning in March of this year, so was involved at some of the most critical moments.
"The Portuguese basically said, 'We're not going to do that', and they went upmarket instead," said Legrain, the author of "European Spring: Why our Economies and Politics are in a Mess", which is published on April 24.
"They are now selling more expensive designer shoes and their exports are soaring - wages and employment have risen," he said. "That shows in a nutshell how policy was misguided."
Wrong diagnosis
The worst of Europe's debt crisis may have passed after four years of turmoil. But Legrain's book makes for withering reading, suggesting that by misunderstanding the problem, EU leaders and policymakers are responsible for the record-high unemployment and rock-bottom growth afflicting the union.
Instead of recognising that the crisis was principally the fault of a banking sector run amok, leaders focused on the excessive debts of Greece, Ireland and Portugal, effectively seeing the problem as fiscal rather than financial.
That led policymakers to enforce a strict regimen of budget cuts, tax increases and lower wages in an effort to improve competitiveness and make exports comparatively cheaper.
"A crisis that could have been a unifying force – Europe acting together to tackle overmighty, dysfunctional cross-border banks – has instead become a divisive one, pitting creditors against debtors," Legrain writes.
"Across Europe, fifteen million people below the age of thirty are neither in employment nor education. A lost Generation is in the making."
Outlook remains dim
While Legrain acknowledges that Greece, with debts greater than its GDP and a budget deficit of 6.5% of output in 2008, was facing mainly a debt crisis rather than a banking one, he says the solution chosen by Europe was wrong.
Rather than renegotiating or writing down much of that debt, the Commission, the International Monetary Fund and the European Central Bank pushed through two hard-to-swallow bailout programmes totalling more than €200 billion that left Greece's economy shattered and just as indebted.
Unemployment now stands at 26% and debt is expected to peak at 170% of GDP. Social unrest is bubbling.
"Greece's debts should have been restructured in May 2010," said Legrain. "Instead, we have had a lurch towards self-defeating austerity and now have much more centralised fiscal controls, which are inflexible and undermine democracy."
EU officials point out that while the rescue programmes applied to Greece, Portugal, Ireland and Cyprus were strict and tightly administered, they have succeeded in stabilising the crisis and all four countries are starting to recover.
Ireland has successfully exited its programme and Portugal is scheduled to do so in the coming months. Cyprus is on track with its targets and Greece is running a much healthier than expected primary budget surplus.
Legrain, who has previously written books about the benefits of globalisation and the need for more open immigration, counters that Europe would have bounced back more quickly if the right diagnosis had been made in the first place.
It would also be further along in resolving deep-seated problems in its banking sector, while not having tied itself down with unbending fiscal rules and a single currency many now perceive as a "sadomasochistic straitjacket".
A pro-European and former chief economist of Britain in Europe, Legrain is nonetheless downbeat about the prospects for the EU unless it takes radical steps to raise productivity and make itself more democratically accountable. He is particularly concerned about the survival of the single currency.
"The EU will survive, but I think the euro zone might ultimately break up," he said. "My base line scenario is that the euro zone is headed for a Japanese-style period of stagnation and deflation."

Ready For The Price Of Food To More Than Double By The End Of This Decade?

It's not just beef, pork, shrimp, eggs, and orange juice...
Submitted by Michael Snyder of The Economic Collapse blog,
Do you think that the price of food is high now?  Just wait.  If current trends continue, many of the most common food items that Americans buy will cost more than twice as much by the end of this decade.  Global demand for food continues to rise steadily as crippling droughts ravage key agricultural regions all over the planet.  You see, it isn't just the multi-year California drought that is affecting food prices.  Down in Brazil (one of the leading exporters of food in the world), the drought has gotten so bad that 142 cities were rationing water at one point earlier this year.  And outbreaks of disease are also having a significant impact on our food supply.  A devastating pig virus that has never been seen in the U.S. before has already killed up to 6 million pigsEven if nothing else bad happens (and that is a very questionable assumption to make), our food prices are going to be moving aggressively upward for the foreseeable future.  But what if something does happen?  In recent years, global food reserves have dipped to extremely low levels, and a single major global event (war, pandemic, terror attack, planetary natural disaster, etc.) could create an unprecedented global food crisis very rapidly.
A professor at the W. P. Carey School of Business at Arizona State University named Timothy Richards has calculated what the drought in California is going to do to produce prices at our supermarkets in the near future.  His projections are quite sobering...
  • Avocados likely to go up 17  to 35 cents to as much as $1.60 each.
  • Berries likely to rise 21 to 43 cents to as much as $3.46 per clamshell container.
  • Broccoli likely to go up 20 to 40 cents to a possible $2.18 per pound.
  • Grapes likely to rise 26 to 50 cents to a possible $2.93 per pound.
  • Lettuce likely to rise 31 to 62 cents to as much as $2.44 per head.
  • Packaged salad likely to go up 17 to 34 cents to a possible $3.03 per bag.
  • Peppers likely to go up 18 to 35 cents to a possible $2.48 per pound.
  • Tomatoes likely to rise 22 to 45 cents to a possible $2.84 per pound.
So what happens if the drought does not end any time soon?
Scientist Lynn Ingram, who has studied the climate history of the state of California extensively, told CBS News that we could potentially be facing "a century-long megadrought" in California.  If that does indeed turn out to be the case, we could be facing huge price increases for produce year after year.
And it isn't just crops that are grown in the United States that we need to be concerned about.  As NBC News recently reported, the price of cocoa is absolutely soaring and that is going to mean much higher prices for chocolate...
As cocoa prices surge to near-record highs on demand for emerging markets, chocoholics brace for a hike in price – and maybe even a different taste, as chocolate makers hunt out cheaper ingredients.

Cocoa futures are up 10 percent so far this year, hitting almost £1,900 on ($3,195) a ton in March. Last year prices rose 20 percent.
In fact, experts are now warning that chocolate may soon become a "high-end luxury item" because it is becoming so expensive.
Meat prices are also starting to spiral out of control.
A virus known as porcine epidemic diarrhea has pushed pork prices up to new all-time record highs.  It has already spread to 27 states, and as I mentioned above, it has already killed up to 6 million pigs.  It is being projected that U.S. pork production will decline by about 7 percent this year as a result, and Americans could end up paying up to 20 percent more for pork by the end of the year.
The price of beef has also soared to a brand new all-time record high.  Due to the drought that never seems to let up in the western half of the country, the total size of the U.S. cattle herd has been declining for seven years in a row, and it is now the smallest that is has been since 1951.
If the overall price of food in this country increases by just an average of a little more than 12 percent a year, it will double by the end of this decade.
What would you do if you suddenly walked into the grocery store and everything was twice as much?
That is a frightening thing to think about.
Meanwhile, all of our other bills just keep going up as well.  For example, we just learned that the price of electricity hit a brand new all-time record high for the month of March.
If our incomes were keeping up with all of these price increases, that would be one thing.  Unfortunately, that is not the case.  As I wrote about earlier this week, the quality of our jobs continues to go down and more Americans fall out of the middle class every single day.
According to CNBC, there are hundreds of thousands of Americans with college degrees that are working for minimum wage right now...
While a college degree might help get a job, it doesn't necessarily mean a good salary. According to a report released last month by the Bureau of Labor Statistics, some 260,000 workers with bachelor's degrees and 200,000 workers with associate's degrees are making the minimum wage.

The federal minimum wage is $7.25 an hour, and the minimum wage for tipped workers is $2.13 an hour. Some cities and states have recently raised their minimum wage, but the BLS report defines only those making $7.25 an hour or less as "minimum wage workers."
And according to the U.S. Census Bureau, median household income in the United States has dropped for five years in a row.
This is why so many families are financially stressed these days.  The cost of living is going up at a steady pace, but for the most part our paychecks are not keeping up.  Average Americans are having to stretch their money farther than ever, and many families have reached the breaking point.

Gas Prices Hit 13-Month Highs, Prompt Macro Concerns

At $3.67, US Regular gasoline prices are their highest since March 2013 having risen over 12% (40c) in the last 2 months. This must be great news, right? It must mean world demand is picking up and driving up prices of crude oil as global trade soars (amid a collapsing Baltic Dry and decelerating Chinese growth). This can't be related to "war premia" right? - as we noted here - because stocks (which always know best) have discounted all this tomfoolery. However, as the following chart shows, each time gas prices have surged up toards the Maginot Line of $3.80, US macro-economic fundamentals have collapsed... the only problem is, this time is different - because macro data is already weak going in (and expectations for the post-weather pop are high).

Gas prices heading towards the crucial $3.80 level - and US macro is already weak ahead of this turning point...

Chart: Bloomberg

New cold war means new record price for this precious metal

New cold war means new record price for this precious metal
By Jeff Berwick | The Dollar Vigilante
Palladium could be heading for a record. Here’s why:
Tensions in the Ukraine have turned investors’ attention towards precious metals.  In times of political conflict, especially military, precious metals generally do well. But some people might have been surprised just how the tensions have affected precious metals.
Palladium has risen to its highest level since 2011. Escalating tensions in Ukraine are the reason, in particular the supply of palladium from Russia, the world’s biggest producer, could be restricted. This is especially true if US politicians and “experts” continue mouthing off about how the US government should go after Russia’s banking and financial system. As if the US government is not in a precarious situation enough… In 1999-2000 palladium ran to $1,090. Could it be heading to its old high? There are lots of reason to believe so…and also to believe we are at the beginning of the next price run in the precious metals, including gold and silver. But for now palladium is the big story.
Palladium has already increased 13 percent this year. There is crisis in Ukraine, as well as in South Africa, the world’s second largest producer of palladium.
I have never seen such perfect conditions for the continued rise in the price of palladium. Demand has never been higher and the supply is volatile.
The situation in Ukraine has caused a mess geopolitically. In the country itself, capital controls have already been instituted, which we have covered at The Dollar Vigilante continuously.
7 percent of deposits were withdrawn from Ukrainian banks in the week after the fall of Kiev. The Ukraine Central Bank’s early capital controls:
  • Sets limits on foreign currency purchases.
  • Limits purchasees to 15,000 Hryvnia per person per day ($1,300).
  • Ukraine central bank limit purchases to 150,000 Hryvnia per person per month ($13,000).
The European Union and the US have been quick to aid Ukraine through the International Monetary Fund.  The US has also threatened sanctions, and some US banks have even moved in that direction, like JP Morgan.
But the Kremlin has taken a similar stance in response to (mainly) US antagonisms. A Kremlin economist, Sergei Glazyev, told RIA Novosti that this would lead to a crash of the US financial system.
“We would find a way not just to reduce our dependency on the United States to zero but to emerge from those sanctions with great benefits for ourselves,” said the Kremlin economic aide.
“We have wonderful economic and trade relations with our Southern and Eastern partners,” he said. “We will find a way not just to eliminate our dependence on the US but also profit from these sanctions.”
Obama has already ceased trade and energy talks with Russia. The State Department said: “At this point, we are not just considering sanctions. Given the actions Russia is taking, it is likely we will put those in place and we are preparing that.”
All this gives Russia reason to begin playing the game of geopolitical chess. Russia’s strength? It’s commodities and resources.
I don’t foresee tensions over Russia mellowing out. Of course there is room for a correction in the palladium price, but there is little reason why it should face any troubles overtaking the $1,090 mark should questions over supply remain.  Western companies reliant on palladium are now forced to stockpile. This puts them in a precarious situation as in 1999 Ford went long palladium at the top of the market, and lost a lot of money. You can see how palladium has responded in bitcoin terms:
Palladium is a volatile metal. But we feel that it belongs in a diversified and balanced precious metals portfolio. Especially considering its supply problems.
Our special report, Getting Your Gold Out Of Dodge, is 127 pages on how to internationalize your precious metals holdings, something which could prove to be more important than even owning precious metals in the first place. We analyze the hundreds of options investors have to store worldwide, with more actionable info of this kind than you’ll find anywhere else.
Our conference, The TDV Wealth Management Crisis Conference, can help sophisticated million dollar entrepreneurs and others make the changes to their savings plan to ensure they keep their wealth, something many people who don’t see the writing on the wall won’t have the luxury of.
(Photo: Wikimedia Commons)
Writer bio:
Anarcho-Capitalist.  Libertarian.  Freedom fighter against mankind’s two biggest enemies, the State and the Central Banks.  Jeff Berwick is the founder of The Dollar Vigilante, CEO of TDV Media & Services and host of the popular video podcast, Anarchast.  Jeff is a prominent speaker at many of the world’s freedom, investment and gold conferences as well as regularly in the media including CNBC, CNN and Fox Business.

It’s Time to Retire Gross Domestic Product (GDP) as a Measure of Prosperity

What if we used wellness (Gross Domestic Happiness) as a metric for prosperity rather than GDP?
Distilling an economy’s sucess in delivering “prosperity” to a single number has outlived its purpose. Zachary Karabell describes the birth of GDP in far less complex times in (Mis)leading Indicators: Why Our Economic Numbers Distort Reality (Foreign Affairs):
A GDP that is growing in sync with expectations can enhance a country’s reputation and thus its strength and power. A GDP that is contracting or failing to meet expectations, on the other hand, can lead to disaster. Yet a hundred years ago, the concept of GDP did not exist; history unfolded without it. The United States, for example, managed to win its independence, fight a civil war, and conquer a continent without any measure of national income.GDP’s origins lie in the 1930s, when economists and policymakers in the United States and the United Kingdom struggled to understand and respond to the Great Depression.
It is not terribly surprising that economists and policymakers came to favor a statistical technique that helped the United States survive a depression and win a war. But not even the economists who invented this metric imagined that GDP would become so central to every state in the world within a few short decades.
The problem is this radical reductionism at the heart of any single measure is irrevocably flawed: 
Leading indicators were invented to measure the economies of the industrial nation-states of the mid-twentieth century. In their time, they did so brilliantly. The twenty-first century, however, is proving more challenging to measure. Industrial nation-states have given way to developed economies rich in services and to emerging industrial economies exporting goods made by multinational companies. The statistics of the 20th century were not designed for such a reality, and despite the assiduous efforts of statisticians, they cannot keep up.These shifts have created a temptation to find new formulas, better indicators, and new statistics. But the belief that a few simple numbers or basic averages can capture today’s multifaceted national and global economic systems is a myth that should be abandoned. Rather than seeking new simple numbers to replace old simple numbers, economists need to tap into the power of the information age to figure out which questions need to be answered and to embrace new ways of answering them.
The limitations of GDP are so severe that the number is at best misleading. Karabell identifies three intrinsic flaws in any single-number scheme to measure GDP:
1. GDP does not include vast swaths of economic output and value
2. GDP is useless in measuring real-world trade
3. GDP counts digging a hole and filling it but not conservation of energy or resources.
If a steel mill produces pollution that then requires a cleanup, both the initial output (the steel) and the cost of addressing its byproduct (the cleanup) add to GDP. So, too, would the cost of health care for any workers or residents injured or sickened by the pollution. Conversely, if a company replaces its conventional light bulbs with long-lasting LED bulbs and, as a result, spends less on lighting and electricity, the efficiency gains would detract from GDP. Yet few would argue that the pollution example represents a positive development or that the lighting example constitutes a negative one.
The simplistic assignment of “import” and “export” completely misses the reality of modern manufacture and trade, where parts come from multiple nations. As Karabell explains: 
If trade numbers more accurately accounted for how products are made, it is possible that the United States would not have any trade deficit at all with China. The problem, in short, is that trade figures are currently calculated based on the assumption that each product has a single country of origin and that the declared value of that product goes to that country. Thus, every time an iPhone or an iPad rolls off the factory floors of Foxconn (Apple’s main contractor in China) and travels to the port of Long Beach, California, it is counted as an import from China.A more reasonable standard, of course, would recognize that iPhones and iPads do not have a single country of origin. More than a dozen companies from at least five countries supply parts for them. Infineon Technologies, in Germany, makes the wireless chip; Toshiba, in Japan, manufactures the touchscreen; and Broadcom, in the United States, makes the Bluetooth chips that let the devices connect to wireless headsets or keyboards.
Taking these facts into account would leave China, the supposed country of origin, with a paltry piece of the pie. Analysts estimate that as little as $10 of the value of every iPhone or iPad actually ends up in the Chinese economy, in the form of income paid directly to Foxconn or other contractors.
I have addressed this issue for years, for example: Trade War with China: Who Benefits? (April 11, 2007)
No single number, regardless of the inputs, can possibly reflect the real economy.Karabell concludes:
How entrepreneurs run effective businesses; how individuals buy homes, pay for college, or retire — none of those decisions should be based on the leading indicators of the last century. Old attachments to those indicators, and to the myth that there is something called “the economy” that affects all people equally, poses a major obstacle to progress.
Karabell also discusses what I call the propaganda value of GDP: 
These measurements were not invented to serve as absolute markers of national success or failure or to indicate whether some governments were visionary and others destructive. But the transformation of these numbers from statistics into markers of national success happened so quickly over the course of a few decades that no one quite noticed what was happening.
I tend to think political authorities knew exactly what was happening: they realized that their own credibility could be boosted by a rigged GDP number. Thus we have the central government of China issuing blatantly bogus claims of 7+% annual GDP, as anything less will severely erode their claim of managerial brilliance.
In our own propaganda-dependent state, GDP is almost always positive, much like corporate earnings always beat expectations by a penny.
But we should be paying attention to an even deeper critique of GDP: that prosperity no longer depends of the “growth” of consumption, financialization, etc. but on the Degrowth of narcissistic consumerism and more efficient use of resources and capital.
What if we used Bhutan’s guiding national policy of Gross Domestic Happiness, as a metric for prosperity?
A second-generation GNH concept, treating happiness as a socioeconomic development metric, was proposed in 2006 by Med Jones, the President of International Institute of Management. The metric measures socioeconomic development by tracking seven development areas including the nation’s mental and emotional health.GNH value is proposed to be an index function of the total average per capita of the following measures:1. Economic Wellness: Indicated via direct survey and statistical measurement of economic metrics such as consumer debt, average income to consumer price index ratio and income distribution
2. Environmental Wellness: Indicated via direct survey and statistical measurement of environmental metrics such as pollution, noise and traffic
3. Physical Wellness: Indicated via statistical measurement of physical health metrics such as severe illnesses
4. Mental Wellness: Indicated via direct survey and statistical measurement of mental health metrics such as usage of antidepressants and rise or decline of psychotherapy patients
5. Workplace Wellness: Indicated via direct survey and statistical measurement of labor metrics such as jobless claims, job change, workplace complaints and lawsuits
6. Social Wellness: Indicated via direct survey and statistical measurement of social metrics such as discrimination, safety, divorce rates, complaints of domestic conflicts and family lawsuits, public lawsuits, crime rates
7. Political Wellness: Indicated via direct survey and statistical measurement of political metrics such as the quality of local democracy, individual freedom, and foreign conflicts.
Here in the U.S., we give lip-service to all these values, but ask yourself: where do we spend most of our time? Serving our masters in the State/crony-cartel economy, creating GDP.
Yes, we all still need to earn a livelihood, but imagine a society constructed around generating Gross Domestic Happiness instead of GDP. The power structure would collapse because none of these activities generate enough profits or taxes to keep the Machine operational.
It is a sad statement that we often only awaken to real value and meaning when we’ve run out of time to change the way we “invest” our time.

Bankers Love War Because It Creates Massive Profits

War Makes Banks Rich

After all, the banking system is founded upon the counter-intuitive but indisputable fact that banks create loans first, and then create deposits later.
In other words, virtually all money is actually created as debt. For example, in a hearing held on September 30, 1941 in the House Committee on Banking and Currency, the Chairman of the Federal Reserve (Mariner S. Eccles) said:
That is what our money system is. If there were no debts in our money system, there wouldn’t be any money.
And Robert H. Hemphill, Credit Manager of the Federal Reserve Bank of Atlanta, said:
If all the bank loans were paid, no one could have a bank deposit, and there would not be a dollar of coin or currency in circulation. This is a staggering thought. We are completely dependent on the commercial Banks. Someone has to borrow every dollar we have in circulation, cash or credit. If the Banks create ample synthetic money we are prosperous; if not, we starve. We are absolutely without a permanent money system. When one gets a complete grasp of the picture, the tragic absurdity of our hopeless position is almost incredible, but there it is. It is the most important subject intelligent persons can investigate and reflect upon. It is so important that our present civilization may collapse unless it becomes widely understood and the defects remedied very soon.
Debt (from the borrower’s perspective) owed to banks is profit and income from the bank’s perspective.  In other words, banks are in the business of creating more debt … i.e. finding more people who want to borrow larger sums.
Debt is so central to our banking system. Indeed, Federal Reserve chairman Greenspan was so worriedthat the U.S. would pay off it’s debt, that he suggested tax cuts for the wealthy to increase the debt.
What does this have to do with war?
War is the most efficient debt-creation machine.   For starters, wars are very expensive.
For example, Nobel prize winning economist Joseph Stiglitz estimated in 2008 that the Iraq war could cost America up to $5 trillion dollars.  And a new study by Brown University’s Watson Institute for International Studies says the Iraq war costs could exceed $6 trillion, when interest payments to the banks are taken into account.
This is nothing new … but has been going on for thousands of years. As a Cambridge University Press treatise on ancient Athens notes:
Financing wars is expensive business, and the scope for initiative was regularly extended by borrowing.
So wars have been a huge – and regular – way for banks to create debt for kings and presidents who want to try to expand their empires.
General Smedley Butler – the most decorated military man in American history – was right when he said:
Let us not forget the bankers who financed the great war. If anyone had the cream of the profits it was the bankers.
War is also good for banks because a lot of material, equipment, buildings and infrastructure get destroyed in war.    So countries go into massive debt to finance war, and then borrow a ton more to rebuild.
The advent of central banks hasn’t changed this formula.   Specifically, the big banks (“primary dealers”) loan money to the Fed, and charge interest for the loan.
So when a nation like the U.S. gets into a war, the Fed pumps out money for the war effort based upon loans from the primary dealers, who make a killing in interest payments from the Fed.

Inflation Alert: Grocers Are Starting To Pass Along Their Higher Wholesale Costs To Consumers

After two months of sharp increases in food prices, grocers are starting to pass along their higher wholesale costs to consumers.
Beverly Cabellon, 61, of Pleasant Hill, Calif., was taken aback by the $38 price for two steaks at Costco recently, up from the $27 she paid last September. “I will be grilling more vegetables and shrimp this summer,” she says, adding that she and her husband will likely eat beef once a month instead of weekly. “And I may switch to pork and chicken.”
Food prices increased 0.4% after posting a similar jump in February, the Bureau of Labor Statistics said Tuesday. That’s the largest monthly increase since September 2011. Beef, pork, poultry, eggs and milk have had the most dramatic price hikes as drought, a virus outbreak and rising exports have thinned U.S. supplies.
Overall consumer prices rose 0.2% in March, a bit more rapidly than in recent months, and annual inflation was 1.5%, up from 1.1% in February. Still, that’s well below the Federal Reserve‘s 2% target as falling gasoline prices offset rising food costs.
US Food Prices Up 19% Since December!!!
h/t Bloomberg’s Chase van der Rhoer
IHS Economist: ‘Living Standards Will Suffer’ as Food Prices Surge
Food prices are registering sharp gains, climbing 0.4 percent in both February and March and threatening to put a damper on the economy.
The 0.4 percent increase compares with smaller gains for the overall consumer price index of 0.1 percent in February and 0.2 percent in March.
What’s happening is that wholesalers have raised the prices they charge grocers, and grocers in turn have passed along the increases to their customers, USA Today reports. That obviously creates a hardship for consumers, who account for about 70 percent of GDP.
Read more:
Everyone’s Talking About This Bullish Trend, But Art Cashin Warns It’s Hyperinflationary
We’re seeing increasing amounts of evidence to suggest that business spending activity is picking up.
The most compelling evidence that many analysts are pointing to is the recent acceleration of commercial and industrial loans (C&I) as reported by the Federal Reserve.
“Why is lending increasing so fast in the US?” asked The Financialist’s Jens Erik Gould. “There are two primary factors: a recovering economy and loose monetary policy meant to entice businesses to take on more debt.”

U.S. Dollar is Going to Die | Gregory Mannarino

- Don’t pay attention to the gold and silver markets, “this is all fake” ?1:00
- Will the stock market bubble continue? ?3:40
- What caused the bond market to sell-off? ?5:44
- The European Central Bank is going to have to start inflating the Euro; global economic collapse coming, “This isn’t really just a financial issue – its an issue about survival” ?9:37
- How to prepare for global financial crisis ?12:58 
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Picture: Bundy Family Uncovers New BLM Cattle Grave


A new photo released by the Bundy family posted to the official Bundy Ranch Facebook page Sunday shows more evidence that the Bureau of Land Management was illegally killing and burying cattle.

The image shows multiple dead cows being removed from what appears to be a mass grave discovered over the weekend.
“Digging up one of the HUGE holes where they threw the cows that they had ran to death or shot,” the facebook description reads. “I feel that this NEEDS to be put out for the public to see.”
The picture is emerging just days after Republican member of the Nevada General Assembly Michele Fiore tweeted out an image of a dead bull

Ex-Banker: “We Are In Great Danger”… On another financial collapse, best-selling author Prins predicts, “We absolutely can. There is much more reason that we will than that we won’t. The stability of the system is really fake. A lot of speculation has occurred with cheap money, and then it is bailout, and then nothing changes, and then something worse happens. That is the current pattern and the pattern of the last three decades.”Prins, who is a former top Goldman Sachs banker, exclaims, “It is very easy to see how the system could unravel because it isn’t stable. We are definitely in big trouble. There is no way we are not headed for a crisis. . . . It should have happened already, but the level of support is epic and reckless from the political and financial elite.”Join Greg Hunter as he goes One-on-One with Nomi Prins, best-selling author of the new book, “All the Presidents’ Bankers.”

Turd Ferguson: A Gold War Has Started

Jason Burack of Wall St for Main St interviewed returning guest, Turd Ferguson, of the TF Metals Report .
In the 40+ minute interview, Jason asks Turd about this book by Ferdinand Lipps he found called Gold Wars. Here is a book summary Turd wrote about the book:… 
Turd talks about how Gold price manipulation has occurred in the US for many decades.Jason asks Turd if he thinks gold manipulation actually increased in 2011 onward.Turd talks about gold supply and demand and how many gold miners are barely able to tread water.Then, Jason asks Turd if he thinks Koos Jansen’s Chinese demand figures or Alasdair Macleod’s figured of Chinese demand are more accurate?Finally Jason asks Turd if he thinks a collapse in China will mean an increase in the demand for gold?
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The Biggest Scam In The History Of Mankind The Federal Reserve

Education Backgrounds OF Those Who Have Been Devising The Education Policies Of Malaysia

Malaysia gained its independence in the year 1957 and since its early days laid stress on improving the quality of education at all levels. Throughout its five year plans, education has been an important development objective. Right in the first development plan itself the direct relationship between the rate of economic and social advancement on one hand and the education system was recognized. Establishing equality of opportunities amongst genders and diverse races, fostering national unity and supporting economic growth have always been the guiding factors for its education polices.
The education ministry of the country has always been considered as a storehouse of power and is seen as a stepping stone for the future Prime ministers with only Tunku Abdul Razak (1955-57) being an exception. The ministry has always been headed by highly educated people – doctors, lawyers, educationists to specify a few. Looking briefly at the education ministers and their educational backgrounds:

ECB Ready For QE Because It Works So Well | John Rubino

After years of such wonderful results in the US, the ECB is ready to go all in on QE for Europe. Seems that they just can’t take a strong Euro any longer. That and cutting interests rates to Zero and perhaps they can tank the Euro without really trying. And we thought that failure was an orphan.
This interview was recorded on April 14th, 2014, and posted with permission from http://FinancialSurvivalNetwork.comSUBSCRIBE (It’s FREE!) to “Finance and Liberty” for more interviews and financial insight ? 
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DISCLAIMER: The financial and political opinions expressed in this interview are those of the guest and not necessarily of “Finance and Liberty” or its staff.

Belgian Banker, Wife, Nephew (9) Murdered "Vermoorde bankdirecteur werd eerder al bedreigd"

UPDATE De schietpartij in Visé die vrijdagavond drie doden eiste, leek op een ware executie. De bankdirecteur en zijn vrouw werden in koelen bloede doodgeschoten en ook het petekindje van de vrouw werd door een of meerdere daders koudweg vermoord. Het koppel werkte allebei in de bankwereld en was graag gezien in de buurt. speurders van de federale gerechtelijke politie van Luik momenteel de piste van een financieel geschil.
Benoît Philippens, zijn echtgenote Carol Haid - beiden 37 - en de negenjarige Esteban C., het metekind van de vrouw, werden van dichtbij doodgeschoten met een automatisch 9mm-pistool. Philippens was bankdirecteur van een filiaal van BNP Paribas Fortis in Ans. Naar verluidt zou hij een tijd terug bedreigingen hebben gekregen van een klant die hij aan de deur had gezet. Philippens had ten gevolge van een herstructurering ook personeel moeten ontslaan.

De drie slachtoffers waren vrijdag gaan eten met de ouders van de kleine Esteban. De jongen had gevraagd om te mogen slapen bij zijn meter. Het zou de eerste keer geweest zijn dat hij dat deed. Philippens kreeg een kogel in het hoofd en één in de buik. Zijn vrouw werd getroffen door drie kogels in de rug. De jongen werd geraakt door één kogel.

Het onderzoek spitst zich momenteel toe op de bankwereld, waar zowel Benoît als Carol in tewerkgesteld waren. Ook een vriend van het koppel denkt dat de politie het daar moet zoeken. "Ik ken Benoît al 15 jaar. Hij werkte eerst in het agentschap in Ans, daarna werd hij directeur van twee andere kantoren en uiteindelijk keerde hij terug naar Ans. Maar het agentschap was ondertussen fel veranderd."

"Niet zozeer op vlak van personeel, maar vooral de klanten waren anders. Hij heeft echt orde op zaken moeten stellen. Zes maanden geleden vertelde hij me dat hij een zware aanvaring had gehad met een buitenlandse klant die dacht dat hij zich alles kon veroorloven. Hij heeft de klant in het bijzijn van iedereen aan de deur gezet en die heeft toen bedreigingen geuit. Ik zeg niet dat dit iets met zijn dood te maken heeft natuurlijk, maar het is om aan te tonen dat de bankwereld niet altijd even makkelijk is."

Umno MP admits to Facebook photos of Karpal in death

Umno won’t punish MP for careless remarks on Karpal’s death, says sec-gen

KUALA LUMPUR, April 19 — Under-fire Umno lawmaker Datuk Nawawi Ahmad admitted today to uploading photos of slain DAP leader, Karpal Singh on the Internet using his smartphone.
The Langkawi MP said he only realised how inappropriate it was to spread the bloody images of the veteran opposition lawmaker and lawyer who was killed in a car crash Thursday much later, after looking them over on a desktop computer.
“After some harrowing days and nights of thinking, I have reached a conclusion that I have done something unethical or unacceptable by the public at large, and I truly regret doing so,” Nawawi told a press conference here today.
The Langkawi MP said he only realised later how inappropriate it was to spread the bloody images of the veteran opposition lawmaker and lawyer who was killed in a car crash Thursday, after looking them over on a desktop computer.
“After some harrowing days and nights of thinking, I have reached a conclusion that I have done something unethical or unacceptable by the public at large, and I truly regret doing so,” Nawawi told a press conference here today.
“Today, I would like to extend my sincerest apologies, especially to the family members of the late YB Karpal Singh, as well as to all Malaysians that were affected by my posting, and I withdraw all my words,” he added.
Nawawi called Karpal “one of the best lawyers in the country” and a “well respected” parliamentarian.
“I will always respect him as a highly capable Member of a Parliament and he had also projected himself as a man of principle, integrity and courage with a noble constitutional spirit. His demise is a tremendous loss to all Malaysians,” he said.
Hours after Karpal died in a road accident on April 17 that also claimed the life of his aide and nurse, Michael Cornelius, Nawawi’s Facebook page featured a collage of the former DAP chairman’s bloodied body, coupled with an old news report quoting him as saying that an Islamic state would only be possible “over my dead body”.
“Would anyone like to take on Karpal Singh’s challenge? Please give your names. Hehe,” the post on Nawawi’s Facebook account read, right next to the collage.
Earlier today, Nawawi suggested on Facebook that he did not personally pen the provocative remark as he had several people who administered his social media account, but that he accepted “full responsibility”.
Nawawi, who is also the Keretapi Tanah Melayu Bhd (KTMB) chairman, clarified to the press today that his social media account was private.
The federal lawmaker also said he was in his car when he made the Facebook post “without thinking of the consequences”.
Nawawi added that he deleted the post an hour later when he was strongly condemned on the social networking site.
Nawawi acknowledged that it was “unbecoming” and unacceptable for him, as an MP, to call for people to respond to Karpal's remark that an Islamic state would only be possible over his dead body.
He said he could not apologise yesterday as he was in Sarawak for a function and only returned to Kuala Lumpur today.
“I deeply regret for what has happened. I am so sorry. I know I hurt the feelings of many and I feel terrible about it. I promise to myself to be more cautious and careful on my future postings on my Facebook,” said Nawawi.

Bitcoin for Activists – What You Need to Know

Among activists one often finds an aversion to even thinking about money. Associating it with the opponent — who has lots of it — they try to do without money themselves. Often, for as long as they can, they try to organize and resist without it, until burning out, quitting and getting into a different line of work just to keep up on rent. But, as the 19th-century U.S. populist movement recognized, money is also a battleground. Today, as a new wave of sophisticated digital currencies are beginning to arise, this is perhaps more true than ever before.
Bitcoin (the open-source software and peer-to-peer network) and bitcoin (the currency) first appeared in early 2009 — just after the housing bubble burst. It was heavily promoted by a tech-savvy, anti-establishment, libertarian community concerned with the power of big banks and government regulation. Critics have dismissed Bitcoin as being “by the privileged, for the privileged,” while defenders have claimed with an equal lack of subtlety that it is somehow “post-privilege” altogether. Regardless of the label, however, Bitcoin and other cryptocurrency platforms like it aren’t going away, and they are poised to become increasingly disruptive.
To understand why, I turned to Devin Balkind, founder and director of Sarapis, which promotes the use of free/libre/open-source software among non-profits and popular movements. He has recently written (and is continuing to write) a public working paper on cryptocurrency, “Finance Without Force.” Last year, we spoke about the role of open-source tools in the Occupy Sandy relief effort, in which he played a leading role. Before that, he had the distinction of being the first person to tell me about cryptocurrency in the first place, insisting that this was something I should be paying attention to. It has taken a while, but I am finally coming back to him for more.
What do social justice activists need to know about crypocurrency?
Cryptocurrency is open-source money. It lowers the cost of producing a means of exchange — a money system — down to almost zero. That means it’s easier than ever to organize alternative monetary systems. Some activists know about time-banking and mutual credit systems. Cryptocurrency makes it possible for people to turn the hours or credits from systems like that into money that can easily be sent around the world or spent at a local store. It completely changes what’s possible from the perspective of solidarity economics.
Where does the “crypto” come in? What role does cryptography play, and why is it so important?
The primary challenge with creating cash is that you have to produce a medium of exchange that can’t be spent more than once. If you could simply photocopy a dollar bill to make more cash, the U.S. monetary system wouldn’t work. The government uses security features such as special paper, ink, designs and holograms to prevent people from “double spending” cash. A unit of cryptocurrency, on the other hand, is just a string of characters — letters, numbers, symbols. This actually represents a “private key,” and when you share it with someone, you give them the ability to upload it to the network for authentication. Through a process of cryptography, every transaction is checked against a public ledger on a peer-to-peer network. If it’s illegitimate the transaction doesn’t execute.
What will it take to make cryptocurrency work in ways that are more democratic and just than the economy we already have?
The existence of strong cryptocurrencies is already making the economy more democratic simply by giving people a choice when it comes to the type of money they want to use. Many people take for granted that there is only one type of money used in the United States, but this wasn’t always the case. Scrip, bank notes, precious metals, whiskey and livestock have all been popular currencies in the United States over the past 200 years. While these might not seem like good currencies from a modern perspective, they all made it possible for people without access to official currency to trade and make deals with each other. From my perspective, that’s precisely what we need today: more ways to exchange with and reward people. Cryptocurrency makes that possible today, just as barter or using silver made it possible 100 years ago. Cryptocurrency can be money by the people and for the people.
A more open market doesn’t necessarily mean democracy. It has been observed, for instance, that many of those benefitting most from cryptocurrencies are those who already have high-level technical knowledge and lots of conventional capital to invest. Won’t this just deepen the inequality we already have, while perhaps also weakening the conventional social safety net? How can those most left behind in the current system use cryptocurrencies to build power?
Yes, it’s true that most cryptocurrencies are being deployed by privileged technologists, but so were websites in the 1990s, and I think we can all agree that the Internet has been a positive development for humanity. Over time these technologies democratize. Cryptocurrencies, for instance, could fuel an underground economy in which vendors can accept substantially lower prices for their goods and services because they don’t report their transactions as commercial activity and thus deny people consumers protections people often expect from conventional transactions. For example, if you buy a cookie from me with U.S. dollars and it gets you sick, you can sue me, but if you buy it with bitcoin, I can deny the transaction ever took place and make it very difficult for you to establish who is liable and for what.
Does that type of scenario create more or less inequality? On one hand prices are being reduced, enabling people with less to get more, but on the other hand it creates a lot of potential for abuse because of a lack of consumer protections. Indeed, it’s not hard to image a dystopian future in which two separate economies co-exist: one for the rich who use official currencies, and have consumer protections, and one for everyone else who use alternative methods of exchange and have fewer protections. In general, I think more choices are better and that unregulated commerce, grassroots businesses and alternative exchange practices are a great way for people left behind in the current system to build their personal and communal power.
I hear a lot of talk about using cryptocurrency to bring access to financing to under-banked communities. Is it hard to get a cryptocurrency adopted? To what extent is this a community organizing challenge?
It’s definitely hard to get a cryptocurrency adopted. Bitcoin didn’t become popular just magically. People deliberately organized an online community with the intention of making it popular; there were forums, listservs, in-person meetups and apps built for the sole purpose of spreading Bitcoin. One such app was the Bitcoin “faucet,” which gave people tiny amounts of bitcoin so they could experience it. The person who created that ultimately became one of the first leaders of the Bitcoin Foundation — which shows how important community engagement is for a project like this. But this is nothing new. Ask Paul Glover — the inventor of Ithaca Hours time-banking credits — what his secret to success was, and he’ll tell you the key is relentless organizing. He’ll tell you that he spent a decade calling businesses every day to discuss with them how they could meet their needs without using U.S. dollars. For me, organizing alternative money systems feels like a very natural and practical way for social justice activists to help the communities in which they live in material ways.
What particular examples of cyptocurrencies in action are you most interested in?
First of all, we need to give Bitcoin its due credit. It went from being worth pennies to hundreds of dollars in five years. Without Bitcoin we wouldn’t be talking about cryptocurrency — so I’m still very interested in it’s proliferation and success. People are beginning to create all types of interesting “altcoins,” which are modified Bitcoin software deployments that run on independent networks, and have their own configurations and market values. I really like Devcoin, which could theoretically fund lots of open source software production, and Permacredits, which propose a way for people to invest in permaculture projects. Maza Coin is now the official currency of the Traditional Lakota Nation, which has the potential to be really historic. The idea of giving these “altcoins” national identies is really catching on, with dozens of “national altcoins” now in existence.
The other really interesting development that’s slowly maturing is that people are beginning to use cryptocurrency’s components to do things other than mere “currency.” The most promising of those projects is Ethereum, a platform for coding cryptographically secured contracts. The implications are immense when you consider how much of our society depends on contracts — corporations, constitutions, financial securities, laws, even games. Ethereum is being designed to give us the ability to create machine-readable and executable contracts that we can generate quickly, easily and at near zero cost, and administered not by bureaucracies but by computers. People who are interested should check out the project website. But first, they should read your article about it on Al Jareeza.
It’s striking to me that enthusiasts describe cryptocurrency as a “space” and an “ecosystem,” when it seems so clearly divorced from physical space and ecology. But there has also been discussion about usingcryptocurrencies to change how we govern natural resources. Do you think they could help fight climate change, for instance?
Yes — though in ways we haven’t thought of yet. Right now groups could get funding through cryptocurrency communities. Dogecoin, for instance, leveraged a meme to create a popular cryptocurrency, and then used that popularity to fund do-good projects that got their community excited, which then resulted in even higher values for dogecoins. I also think we’ll see institutions that exist to maintain common assets like art museums and land trusts figure out how to generate valuable currencies that they’ll be able to use to fund projects that align with their interests and support local economies. While having art museums become cryptocurrency banks might not sound revolutionary, it’s an example of how we can create money systems around the resources we value most, rather than around government fiat. In the future, systems like Ethereum will create opportunities to rewrite how society operates. That process will present a historic opportunity for laws to be changed. Will the social justice activists be driving that change or will they be hiding from it?
So this is really about power.
Whenever we talk about money we’re also talking about power. If we want to focus solely on cryptocurrency, we’re talking about the ability of normal people to take control over money, to make it their own, to use it as a tool to better organize their communities and meet their needs. If we expand the conversation to focus on crypto-contracts, we’re also talking about the “refactoring” of our society into something that can be read and processed by machines. Cryptocurrency and crypto-contracts go hand in hand — so yes, we’re talking about a lot more than money. We’re talking about a machine-readable society and potentially the biggest shift in law since the advent of lawyers. Society is poised to remake itself.
What’s the best way for people to start learning more about this scene and become involved?
There are lot of news sites out there for cryptocurrency. CoinDesk is a good one. So is the Bitcoin subreddit. If you’re in New York City, you can go to an event at the Bitcoin Center, but if hanging with libertarian men isn’t your idea of fun you might not want to try that out. I highly recommend reading Hayek’s Denationalization of Money for some economic, philosophical and historical context. It was written in the 1970s and is a good reminder that people have been thinking seriously about alternative monetary systems for a long time, and that there is a lot of knowledge already out there about how these systems could work. Read part 8, “Putting Private Token Money Into Circulation,” for a pretty simple plan for how to operate your own currency. Remarkable stuff.
Remarkable, perhaps, but also profoundly destabilizing. It sounds to me like we’re talking about not guaranteed liberation but a new battleground, and the outcome will depend on who fights and how.
I urge activists to think about cryptocurrency as a set of new organizing tools — tools that the social justice community hasn’t really begun to use. But when it does, it will find them quite powerful on the battlegrounds on which it fights. Crypto-contracts are also a tool, and with even wider implications because their adoption will create new types of interactions, entities and institutions. We’re still in the early days with these technologies, but I urge people to start learning about them now so they’re prepared to take advantage of the opportunities these tools will surely create.
Nathan Schneider is an editor of Waging Nonviolence. His first two books, both published in 2013 by University of California Press, are Thank You, Anarchy: Notes from the Occupy Apocalypse and God in Proof: The Story of a Search from the Ancients to the Internet. He has written about religion, reason and violence for publications including The Nation, The New York Times, Harper’s, Commonweal,Religion Dispatches, AlterNet and others. He is also an editor at Killing the Buddha. Visit his website at
**This article originally appeared at, an outspoken voice for peaceful change in our violent world. Click here to support their noble efforts.**
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