The choice facing Arabs: integration or irrelevance

By Jamal Kanj
Pity the nation divided into fragments, each fragment deeming itself a nation – Gibran Khalil Gibran.
The United Nations Economic and Social Commission for Western Asia (ESCWA) recently published a study prepared by nearly two dozen writers and intellectuals from the Arab world.
The report, The Arab Integration: A 21st Century Development Imperative, addresses audaciously many of the social, economic and political ills of the Arab world. The more than 300-page report enumerates a litany of futile steps taken in the last 60 years to “integrate” countries in the region.
As an example, in 1957 member states of the Arab League signed a progressive and overarching Economic Unity Agreement (EUA) advocating “free movement of persons and capital; the free exchange of goods and products; freedom of residence, work-free use of modes of transport and civil ports and airports for all Arab citizens”.
In the same year, six European countries established what became known as the Common Market.
More than five decades later and the European nations, which were shaped for the most part by hundreds of years of the most devastating wars known to humanity, have turned their Common Market into a union to be reckoned with.

For the first time, the Arab people have stepped ahead of their leaders, demanding open governance and freedoms on a scale that no single Arab country will be able by itself to provide. (UN Economic and Social Commission for Western Asia)

On the other side, the secretly-crafted 1916 Sykes-Picot Arab states are fragmented further and their 1957 EUA is not even worth the paper it is written on.
In theory and unlike nations within today’s European Union, the Arab world has much firmer unifying attributes like shared language, history and religion. Apparently though, the legacy of war was more merciful than the relics of colonialism when it came to promoting democratic values and integration.
While death and destruction triggered the detoxing of corrupt political systems in Europe, colonialism left behind feeble “unrepresentative Arab regimes that took their legitimacy from international powers and not from the people”.
While the ESCWA study did not overtly call for removing restrictions on movement, it points out that the biggest hindrance to trade between Arab countries are governments’ protectionist measures, “non-tariff barriers and the high cost of transport”.
For instance, the report finds that a modest 5 per cent reduction in the transport cost combined with free movement of Arab labour and local resources “would double the rate of income rise” in the region.
Unsurprisingly, these small steps would bring significant benefits for all countries, not just to the poor at the expense of the rich. In fact, the study argues that rich countries such as the United Arab Emirates “would benefit most” by removing government-imposed restrictions.

Arab states must choose between democracy and integration, or further disintegration along sectorial and tribal allegiances and risk being relegated to the sidelines between major trade hubs to the East and West.

Keeping in mind recent political upheavals, ESCWA conducted public surveys in 15 Arab countries where it surmised that the impetus for political change in the Arab world has passed the point of no return. “For the first time, the Arab people have stepped ahead of their leaders, demanding open governance and freedoms on a scale that no single Arab country will be able by itself to provide.”
Unfortunately, stepping “ahead of their leaders” has not been without the pain of war. The struggle against the Syrian tyrant has turned into an outsider-managed civil war aiming to destroy Syria; the foreign “remote-control” change of dictatorship has fragmented Libya, and Egypt continues to struggle with its democracy.
The ESCWA report concludes with a warning that in the 21st century some of the Arab countries can’t continue to rely on non-sustainable natural resources to survive.
Arab states must choose between democracy and integration, or further disintegration along sectorial and tribal allegiances and risk being relegated to the sidelines between major trade hubs to the East and West.

UK Pensions Exposed Without Diversification To Gold As Pensions ‘Time Bomb’ Looms

by GoldCore

Today’s AM fix was USD 1,294.25, EUR 934.88 and GBP 769.38 per ounce.
Yesterday’s AM fix was USD 1,283.50, EUR 928.53 and GBP 764.26 per ounce.

Gold climbed $8.50 or 0.66% yesterday to $1,292.90/oz. Silver rose $0.24 or 1.24% yesterday to $19.67/oz.

Gold in U.S. Dollars – 5 Days – (Thomson Reuters)

Gold consolidated on yesterdays sharp recovery after a sudden sell off but remained near its weakest level in more than two months. Thursday saw the expiry of US Comex May options and weakness and concentrated selling is often seen on options expiration – indeed, short term bottoms often occur after such bouts of selling.

Increasing tensions between NATO and Russia are underpinning the metal’s safe-haven appeal and leading to safe haven demand.

Ukrainian forces killed up to five pro-Moscow rebels late yesterday and attacked the separatists military stronghold in the east. Russia launched army drills near the border in response, raising fears of a military conflict with NATO.

U.S. Secretary of State John Kerry warned on Thursday that the United States was drawing closer to imposing more sanctions on Russia. He warned that time was running out for Moscow to change its course in Ukraine.

Economic sanctions are likely to see retaliation by Russia and an intensification of currency wars.

European and Asian stocks struggled on Friday, as fears of an escalating Ukraine crisis eclipsed mixed  U.S. economic data and buoyant tech earnings.

Traders are now looking at next week’s U.S. Federal Reserve Open Market Committee’s meeting on interest rates for trading cues.

Premiums for gold bars in Hong Kong were quoted at 80 cents to $1 an ounce to spot London prices, while the premiums for gold bars in Singapore, the increasingly important centre for bullion trading in Southeast Asia, were at $1 to $1.20 to the spot London prices – both mostly unchanged from a week ago.

Gold in U.S. Dollars – 5 Years – (Thomson Reuters)

CME Group Inc plans to launch a physically deliverable gold futures contract in Asia, three sources familiar with the matter said according to Reuters. In the first three months of 2014, U.S. COMEX gold futures volume fell 10% from a year ago. This is partly due to an increased preference by some speculators and investors to own physical gold coins and bars rather than paper gold in the form of futures contracts. The new Asian contract could help boost volumes for CME.

The world’s largest futures exchange is targeting rising hedging, investor and store of wealth demand in Hong Kong and Singapore – Asia’s increasingly important precious metals hubs.

Pensions Exposed Without Diversification To Gold As Pensions ‘Time Bomb’ Looms
The ‘pensions time bomb’ looms: pension funds lack of diversification, and over exposure to traditional assets may cost pension holders dearly according to research we have just released. Pensions allocations to gold are very low internationally and yet gold has an important role to play over the long term in preserving and growing pension wealth.

The Guide To Gold In UK Pensions shows the importance of owning gold as a diversification in a pension in the UK. Allocations to gold in pensions are very low internationally and therefore the research is relevant for pension owners internationally.

Professor of Finance in Trinity College Dublin, Dr Brian Lucey wrote the Foreword  and warned about the lack of diversification in pension funds. “Pensions need balance. UK pension funds have been slow to embrace gold and this imbalance may cost pension holders dearly” said Dr Lucey.

Dr. Brian Lucy

“Small allocations to gold balance and stabilise pensions in the long term and gold should be an essential part of UK pension funds. The Guide To Gold In UK Pensions should be read by pension owners and pension managers,” said Dr Lucey who is a respected independent authority on gold.

British citizens are slowly waking up to the growing pensions crisis. The pension ‘time bomb’  looms closer and millions of people are at risk of having insufficient resources to fund their retirement years.

It is estimated that some 11 million people in the UK face entering “pension poverty.” Average earners may need to save over six times more than they currently do if they’re to generate an adequate retirement income, according to some calculations.

Head of Research in GoldCore, Mark O’Byrne, said that “pension funds should include gold as part of a diversified portfolio. It has a very long track record, and possesses valuable investment attributes. Gold should form part of a diversified pension investment – it will protect from the pensions time bomb.”

Mark O’ Byrne

“Conservative wealth management and asset diversification naturally grow in importance as people get older. Prudent asset diversification will enable pension funds to preserve and grow their pension savings,” according to O’Byrne.

The UK’s financial and economic outlook remains uncertain. “While the UK is recovering, the overall debt to GDP position remains worrisome and there is a real risk of a property bubble in London,” said O’Byrne.

There is also a risk that the state may find it difficult to pay for the massive entitlements of an aging population.

“Today’s uncertain world makes the investment and pensions landscape a more challenging place for pension owners and again underlines the importance of being properly diversified and not having all your eggs in certain assets,” according to O’Byrne.

ConclusionGold is once more being considered as an important asset to have in a properly diversified pension portfolios. Gold plays an important role in stabilising and reducing volatility in the overall portfolio and as financial insurance to protect against worst case scenarios.

These include the risk of inflation and stock and property crashes. Bail-ins or deposit confiscation, as was seen in EU country Cyprus, is a new unappreciated risk to pension owners and another reason to have an allocation to gold.

Currency devaluations as was seen on Black Wednesday in September 1992 when George Soros “broke the Bank of England” is another risk that gold hedges against.

The UK’s influential research institute Chatham House , has said that gold can be used to hedge against currency devaluation and other risks as part of a diversified portfolio. “Gold can serve as a hedge against declining values of key fiat currencies, and can also be useful for central banks looking to diversify their foreign reserves,” Chatham House said.

“As we draw close and closer to the pensions ‘time bomb,’ diversification will become even more important and an allocation to gold in a pension portfolio will again preserve and grow wealth in the coming years,” concluded Dr Lucey.

The Guide To Gold In UK Pensions  can be downloaded here.

Central Banks Can’t Fix the System! Fed’s Plan To Use Stocks To Boost U.S. Economy Has Failed, Yellen Collapse ‘Will Be Unlike Any Other’.

Art Cashin – Fed’s Plan To Use Stocks To Boost U.S. Economy Has Failed

Today one of the legends in the business explains why the Fed’s plan to use the stock market to boost the U.S.economy has failed.  50-year veteran Art Cashin, who is Director of Floor Operations at UBS ($650 billion under management), also included a guest commentary discussing the Fed’s failure.

By Art Cashin Director of Floor Operations at UBS 

April 23 (King World News) – “On this day in 1985, one of the savviest marketing teams at one of the savviest marketing companies in history stunned the world with a product announcement.  They proclaimed that they were phasing out their main product and replacing it with a new improved version.  Pretty tame stuff for most products.

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2014/4/23_Feds_Plan_To_Use_Stocks_To_Boost_U.S._Economy_Has_Failed.html

Billionaire Warns: Yellen Collapse ‘Will Be Unlike Any Other’

Another horrific stock market crash is coming, and the next bust will be “unlike any other” we have seen.

That’s the message from Jeremy Grantham, co-founder and chief investment strategist of GMO, a Boston-based firm with $117 billion in assets under management.

Grantham pulls no punches when he discusses who he holds responsible for the coming financial carnage. In a recent interview with The New York Times, he calls Federal Reserve Chair Janet Yellen “ignorant” and said the Federal Reserve all but killed the economic recovery.

He also says that he isn’t putting his clients’ money into the market right now.

“We invest our clients’ money based on our seven-year prediction. And over the next seven years, we think the market will have negative returns. The next bust will be unlike any other, because the Fed and other central banks around the world have taken on all this leverage that was out there and put it on their balance sheets. We have never had this before.”

http://www.moneynews.com/MKTNews/economic-JanetYellen-stockbust/2014/03/26/id/561923/#ixzz2xkTF4LEuGLY

Turk – Western Central Banks To Run Out Of Gold This Year

Turk: “What’s going on in the gold market is just unbelievable, Eric. It’s really never happened before. We’ve had this prolonged backwardation starting in the middle of last year when the lows in gold and silver were reached….

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2014/4/23_Turk_-_Western_Central_Banks_To_Run_Out_Of_Gold_This_Year.html

The United States Debt Meltdown, And The Coming Dollar Collapse

The United States government and the Federal Reserve must keep interest rates near zero – because if they don’t, there will be great difficulty in paying the interest on the debt they’ve accumulated, which could bring it all (the economy and our way of life) crashing down.

There’s one problem though. The only way the United States can maintain their zero interest rate policies is for the world to continue accepting the dollar as the world’s reserve currency. The thing is – they’re not, and plans are nearly implemented to circumvent the United States dollar for major countries such as Russia and China (and others).

The carrot and the stick approach (by the United States) isn’t working so well anymore. The carrot (the strength of the dollar) is becoming increasingly rotten and the stick (the willingness to use the military) has weakened considerably as Americans have grown war weary.

http://modernsurvivalblog.com/current-events-economics-politics/the-united-states-debt-meltdown-and-the-coming-dollar-collapse/

Measured by Gold and the Dow, Wheat Is Cheap (But Maybe Not For Long)

by Charles Hugh Smith

Priced in gold and stocks, wheat is near multi-decade lows. That may not last.

Measuring the cost of anything in currency can be misleading. As we know, inflation can be gamed by authorities to appear low, and supposedly low inflation is actually high inflation if wages are declining while prices rise.

Longtime correspondent Harun I. has often recommended in these pages that we look to other yardsticks to get a more realistic assessment of price and value.

For example, what is the cost of wheat when priced in gold rather than dollars?Harun has graciously provided a chart of the wheat/gold ratio, which I marked up to identify when gold was expensive and wheat was cheap, and vice versa.

Priced in gold, wheat is at multi-decade lows; technically, this long downtrend appears to have reversed into an uptrend. If this is so, the only direction in the price of wheat (priced in gold) is up.

Here is wheat priced in the Dow Jones Industrial Average (DJIA). In essence, how many bushels of wheat can be purchased with one share of the Dow index?

In 1975, at the nadir of the stagflation-ridden stock market, wheat was expensive and the Dow cheap–once again, this is pricing wheat in the Dow, not the dollar.

At the top of the stock market bubble in 2000, the Dow was expensive and wheat was cheap.

When the Dow hit bottom in March 2009, wheat went up when priced in stock market shares.

Despite some impressive volatility since 2000, the trend in the price of wheat (when priced in stocks) is clearly up. Once again, it seems a long-term downtrend in the price of wheat has reversed and is now an uptrend.

The only way for wheat to regain its previous trading range is for gold and the Dow to both plummet or for wheat to rise in cost, i.e. it takes more gold or shares of the Dow to buy a bushel of wheat.

Priced in gold and stocks, wheat is near multi-decade lows. That may not last.Technically the trend has reversed, suggesting much higher prices–in dollars, gold or stocks–for wheat and indeed, by extension, for all food.

We may be tasting the first minimal increases in food prices that could soar to unimagined heights in the years ahead.Want to give an enduringly practical graduation gift? Then give my new book Get a Job, Build a Real Career and Defy a Bewildering Economy, a mere $9.95 for the Kindle ebook edition and $17.76 for the print edition.

Plan to trap feral hogs and feed them to Houston's hungry

HOUSTON (KTRK) -- A plan is being put into place that would both rid local areas of property-destroying feral hogs, and feed Houston's hungry at the same time.

County Commissioner Steve Radack says this is a "gift from God." He's behind the program which he says solves two problems -- feeding the hungry with feral hogs.
For years Harris County has been looking for a better way to get the hogs under control in and around George Bush and Congressman Bill Archer parks. They've caused thousands of dollars' worth of damage to property in neighborhoods nearby as they root for food.
 "There may be as many as 8,000 to 10,000 feral hogs in each of the reservoirs," said Mike McMahon with the Harris County Commissioner's Precinct 3 Office.
On Thursday Harris County commissioners signed off on the purchase of four large, mobile pens to capture the hogs. The wild pigs will then be taken to J and J Processing in Brookshire, where they will be inspected, slaughtered and packaged. The meat will all be sent to the Houston Food Bank.
Some are reportedly concerned about diseases which the hogs may carry. But at the processing facility, they point out that harvesting of the animal will occur just the same as any other meat, and it will be watched by an onsite USDA inspector.
At the Houston Food Bank, they're excited about all the food this will mean on their freezer shelves for distribution. Each hog they say can produce an average of 40 pounds of meat. The county estimates it will be able to trap 2,500 wild pigs in the first year.
"This is a huge win for everybody in all the communities that we serve," said Dr. Pamela Berger with the Houston Food Bank.
The new program begins in mid-May.

(Copyright ©2014 KTRK-TV/DT. All Rights Reserved.)

           

WARREN BUFFETT Laughs & Jokes About The 1% CLUB. Doesn’t Want To Join 99% CLUB

Fed’s Wealth Effect: Richest 200 Moguls Made $13.9 Billion Today

Wolf Richter www.testosteronepit.com  www.amazon.com/author/wolfrichter

Former Fed Chairman Ben Bernanke doesn’t regret much about the Fed’s actions during and after the financial crisis, he told the Economic Club of Canada on Tuesday, during a speech for which he was most likely paid a small fortune.

So he doesn’t regret that the Fed, under his reign, handed out trillions of dollars to the largest banks and corporations, US and foreign, to teach them once and for all a crucial lesson, that the Fed – and hence the public at large – would always be there for them when their horrid and reckless bets got them into very predictable trouble; that the Fed would always do whatever it would take to fan inflation in order to raise corporate revenues and profits, whittle down real wages, and inflict financial repression on savers.

He doesn’t regret either that the Fed has destroyed what was left of the financial markets as a means of price discovery. Nor does he regret that the wealthy were bailed out during the financial crisis and that they have then become much wealthier while the rest of the people were left to struggle the best they could with the conditions the Fed has created.

But there’s one thing he does regret: that he wasn’t able to explain the Fed’s actions well enough to the vast majority of Americans, namely those who’ve gotten shafted by the Fed’s very actions. “They think somehow or another that we favored Wall Street instead of favoring Main Street and that’s unfortunate,” he said. “I still think there are a lot of people out there who really don’t understand why we did what we did.”

For sure for sure. But there are a few people out there who do understand: the billionaires, or those who became billionaires during the worldwide money-printing and interest-rate repression binge. It’s been one heck of a bonanza for them.

Just today, the world’s 200 richest people made $13.9 billion. In one single day, according to Bloomberg’s Billionaires Index. That’s big bickies, as my friends from down-under might say.

We may quibble over the accuracy to the penny of these net-worth estimates, and their daily changes, but Bloomberg is pretty confident, even concerning assets that are not publicly traded. And in case of doubt, they’re left out, Bloomberg explains in itsMethodology. And so here is the crème de la crème:

Steven Cohen, founder of SAC Capital Advisors, the hedge fund that got embroiled in a mega-criminal insider trading scandal which it settled by agreeing to pay a $1.2 billion fine and stop managing funds for outsiders – well, he made it to the front of the lineup today with a gain of $2.3 billion for a day of blood, sweat, and tears.

Sheldeon Adelson, CEO of a gambling empire in Las Vegas and Macao, among other things, wasn’t that far behind with a gain of $1.9 billion for today.

Mark Zuckerberg, whose Facebook puts the NSA to shame with its all-encompassing worldwide personal-data dragnet and internet surveillance expertise, saw his net worth jump by $763 million today.

Amancio Ortega, Spanish fashion mogul, was in fourth place. The millions of unemployed Spaniards, and the lucky ones who have jobs but whose real wages have been decimated so that companies could become more “competitive,” would be proud of him. At least somepeople are doing well in Spain! He booked a gain of $734 million today.

Stefan Persson, Swedish business mogul, saw his wealth grow by $576 million. Elon Musk, hype-machine extraordinaire and CEO of, among others, Tesla which sells about 2,000 cars a month, pocketed $558 million [read.... Tesla’s Sales Stall, Don’t Even Amount To A Rounding Error].

Our favorite Uncle Warren Buffett, whose financial and insurance empire was bailed out by the Fed and who has become one of the largest beneficiaries of the “bold” policies of central banks worldwide, only made $417 million today, barely enough for 7th place. Tsk, tsk, tsk.

Bernard Arnault, richest mogul in France, CEO of luxury-goods empires LVMH and Groupe Arnault, who applied for Belgian citizenship in late 2012 to escape newly elected President François Hollande’s tax strangulation, but then abandoned his application in April 2013 under withering ridicule and political pressure – well, he scraped by with a gain of $408 million today. His beleaguered compatriots probably have no clue.

Etc. etc.

This is the Fed’s “wealth effect,” on a daily basis, as seen from the top. It’s a construct that the Greenspan Fed conjured up out of thin air and presented to the incredulous American people as a valid economic theory. Bernanke then promoted it to the Fed’s stated raison d’être. His theory: if we immensely enrich during years of bailouts, money-printing, and interest rate repression the richest few thousand people in the world, everyone would be happy somehow.

And so central bankers, with glowing support from the bondholder bailout organ, the IMF, inflated by hook or crook and for over five years the prices of assets that these chosen few were holding, and they gave them free money to acquire every asset insight and drive up values even further. It all worked out wonderfully and like clockwork for over five years, and the numbers of this “wealth effect” are truly impressive as we can see above. The only thing that Bernanke regretted not doing, based on his own admission, was to explain the whole noble construct to the American people.

There is nothing like a wealthy central bank chief admitting that he wants to, one, help governments default gradually on their debts; and two, cut the real wages of those less lucky than he –  an honesty the Fed never dared to exhibit when it inflicted waves of QE on American workers. Read…. Draghi’s Bold Push For Creeping Defaults And Real Wage Cuts (Illustrated With Hilarious Cartoon)

Furious Russia, Downgraded To Just Above Junk By S&P, Proposes “Scorched Earth” Retaliation Against NATO Countries

Source: Zero Hedge

Cyprus and Russia – what’s the difference (aside from the fact that the former was a money laundering offshore center of the latter until last year of course)?
If you said one is a lackey to statist, selfish banker interests, and after having its economy thoroughly destroyed by the great doomed European sociopolitical (and pathological) experiment, came crawling back to its Eurozone masters, while the other couldn’t care one bit about Pax Petrodollariana and the global central bank cabal, you are right. In which case it will also be clear why a few hours ago that joke of a rating agency, Standard & Poor’s, which also earlier announced it was “affirming” France at an AA rating making it very clear it will no longer accept being sued for telling the truth and downgrading sovereigns or otherwise have its offices abroad raided, not only upgraded Cyprus from B- to B (please deposits your funds in Cyprus banks now: they are safe, S&P promises), but – far more importantly – delivered a political message to the Kremlin, and downgraded Russia from BBB to BBB-, one short notch away from junk status. This was the first downgrade of Russia by S&P since December 2008.
WSJ reports:

“In our view, the tense geopolitical situation between Russia and Ukraine could see additional significant outflows of both foreign and domestic capital from the Russian economy and hence further undermine already weakening growth prospects,” S&P wrote in its report.

Moscow’s MICEX stock index fell by 1.5% after the move. The ruble weakened 0.6% against the dollar to 35.977.
A further cut to junk status would be a big move, given Russia’s relatively modest level of debt, according to Tim Ash, an economist at Standard Bank.
“But if the crisis in Ukraine deteriorates further, and we see sustained capital flight and pressure on the ruble and Russian markets further, then it is possible,” he said.

Russia’s response was prompt.
First, in retaliation to the downgrade, Russian economy minister Alexei Ulyukaev said S&P’s downgrade of Russia’s rating was expected by investors, won’t significantly change their behavior, adding the obvious that the decision to cut Russia’s rating was partly political, partly based on economic situation. In other words, entirely symbolic – it is not as if Russia has access to bond markets anyway, plus as we wrote earlier this week in “Why Putin Is Smiling At The Bond Market’s Blockade Of Russia“, it is not as if it needs them.
But far more importantly, and ahead of yet another round of western sanctions which appears imminent unless Obama is to look even more powerless than he currently is (granted, a difficult achievement), Russian presidential adviser Sergei Glazyev proposed plan of 15 measures to protect country’s economy if sanctions applied, Vedomosti newspaper reports, citing Glazyev’s letter to Finance Ministry. According to Vedomosti as Bloomberg reported, Glazyev proposed:

• Russia should withdraw all assets, accounts in dollars, euros from NATO countries to neutral ones

• Russia should start selling NATO member sovereign bonds before Russia’s foreign-currency accounts are frozen

• Central bank should reduce dollar assets, sell sovereign bonds of countries that support sanctions

• Russia should limit commercial banks’ FX assets to prevent speculation on ruble, capital outflows

• Central bank should increase money supply so that state cos., banks may refinance foreign loans

• Russia should use national currencies in trade with customs Union members, other non-dollar, non-euro partners

In other words, a full-blown scorched earth campaign by Russia.
Granted, Russian holdings of US Treasurys are not that substantial (and could be monetized entirely in three months of POMO by the Fed), and western financial linkages to Russia, aside from trade routes, are not life-threatening, but if Russia were to take the baton, and other BRIC countries, already furious by the recent US decision to not boost their IMF status, follow suit, then Obama’s life is about to become a living nightmare. Especially, if that most important BRIC member – China – does any of the many things it can do to indicate if, in this brand new Cold War, it is with or against the US…
Finally, those curious what are the linkages between the west and Russia are, review our recent post on the matter: All You Need To Know About Russia, In Charts.

Visa admits Russia sanctions hitting business

RIA Novosti/Iliya Pitalev

Visa, the world’s largest card services company, says its revenue growth slowed to a four-year low, as cross-border operations with Russia were hit by the political tension over Ukraine.
"We are caught between the politics of the United States and the politics of Russia,"Reuters quotes Byron Pollitt, Visa’s Chief Financial Officer."We're clearly seeing a drop-off in cross-border volume, and sanctions are expected to have some impact on volume."
For the first time in more than four years Visa’s quarterly revenue growth declined to single digit percentages amid a strengthening dollar. In the second quarter ended March 31 it was 7 percent, down from 11 percent in the first quarter. The company projects revenue growth to slow further this quarter.
In March Visa and another US-based payment system MasterCard suspended services to two Russian banks after President Barack Obama imposed sanctions on Russia.
President Vladimir Putin said Russia would develop its own payment system, which should start operating in about 6 months.
Visa in turn said it has assessed the situation and hopes it would still have a “meaningful opportunity” to continue business with Russia, as it would benefit both sides.
"We have 100 million cards there and it is not in anyone's best interest, inclusive of the Russians, to make those cards not available to their own citizens," Pollitt said.
Visa and MasterCard control 90 percent of the Russian market.

Federalist Papers in 21st Century

Federal Property

“To exercise exclusive Legislation in all Cases whatsoever, over such District (not exceeding ten Miles square) as may, by Cession of particular States and the Acceptance of Congress, become the Seat of the Government of the United States, and to exercise like Authority over all Places purchased by the Consent of the Legislature of the State in which the Same shall be, for the Erection of Forts, Magazines, Arsenals, dockyards, and other needful Buildings;” Article One, Section 8, United States Constitution ​ Once again, the Constitution is written so clearly that it takes a liar to say that it authorizes the federal government to take and/or manage property within the United States for reasons other than “Forts, Magazines, Arsenals, dockyards, and other needful Buildings”.  Of course, “other needful Buildings” is not specific.  However, any sane person will understand that the Constitution is talking about either military uses, e.g., bases, or the buildings necessary to fulfill the other federal duties, e.g., post offices. Neither the United State Constitution nor The Federalist Papers mention national parks, national monuments, Bureau of Land Management, national forests, "protected land" or national land regulations.  However, we can infer from the Papers and the ratification debate that the States would not have ratified the Constitution if it gave the federal government the power to come into a State and take control of land. “The size of this federal district is limited.  The State ceding the land for this use must consent.  The State will make a compact with the federal government, assuring the rights of the citizens of the district.  The inhabitants will have enough inducements to become willing parties to the cession.  An elected municipal legislature will exercise authority over them.  The legislature of the State and the people who live in the ceded part will agree to the cession and ratify the Constitution.  Therefore, this seems to cover every objection. “The federal government must have authority over forts, military depots, arsenals, dockyards, etc.  Public money will be spent on such places.  The property and equipment stored there should not be under State authority.  These are important to the security of the entire Union and shouldn’t depend on one State.  However, each State where they are located must agree.”  Federalist Paper # 43 [paragraphs 5-6] Except for the small amount of land listed in the Constitution, it is clear that the federal government is not supposed to own property within the United States.  The Constitution cannot be faulted for the federal land grab that has been detrimental to the economy and well-being of the States.  The States have allowed this invasion of unconstitutional federal power. To further highlight how out of kilter the federal government’s role has become, it is doing a better job keeping United States citizens off federally owned land than protecting our borders from illegal entry.  I live in Oregon.  The federal government bribed Oregon with “federal timber funds” to not cut down trees on federally owned land that, of course, pays no property taxes.  The consequences of this policy has had many negative ramifications.  Since the federally owned forests are not managed, forest fires have been devastating.  Now, the federal timber funds are running out.  Sheriff offices and jails are closing because they were funded with federal timber money.  And paved highways are reverting back to gravel roads because there are no funds to fix them. The only solution is for the States to use their Constitutional power to reclaim their land.  Oregon could cut timber, which would mean more jobs and more money for county budgets.  Alaska could drill for oil, with the same results.  The economic benefit of States reclaiming their land is enormous, not just for the States but for the citizens within each State.

All quotes from The Federalist Papers: Modern English Edition Two.

The Federalist Papers: Modern English Edition Two The United States Constitution: Annotated with the Federalist Papers in Modern English Both books are available on my website, Amazon and Kindle.

REALIST NEWS – 41 Tons of Silver Removed From Shanghai Exchange In April 2014

Photo of a very thin Lee Kuan Yew sparks concern

Yahoo Newsroom/MCI - Picture provided by Ministry of Communications and Information. Sultan of Brunei Haji Hassanal Bolkiah and his wife the Raja Isteri Pengiran Anak Hajah Saleha met with Mr Lee Kuan Yew at the Istana on 21st April 2014.

Reactions to photo showing a very thin Lee Kuan Yew

A new picture of Singapore's first prime minister, Lee Kuan Yew, who is now 90 years old, has drawn concern from people on Singapore's internet space.

Recently, state broadcaster Channel NewsAsia tweeted this photo of former Singapore prime minister Lee Kuan Yew, courtesy of the Ministry of Communication and Information:
It shows Sultan of Brunei Haji Hassanal Bolkiah and his wife the Raja Isteri Pengiran Anak Hajah Saleha flanking Lee at the Istana on 21st April 2014 during the Brunei leader's state visit to Singapore.

People on social media quickly started expressing their concern over how emaciated the former prime minister looked:

Putting the ‘Sharing’ Back in to the Sharing Economy

A vibrant debate is beginning to question the meaning of sharing in relation to the big questions of our time.

by Adam Parsons
RINF Alternative News

In recent years, a new kind of economy based on the age-old practice of sharing is flourishing across North America and Europe, and is now rapidly spreading in popularity throughout the Middle East and other world regions. Human beings may have shared since time immemorial, but information technology and peer-to-peer networks have given rise to an innovative trend in modern societies – the sharing economy, which enables people to ‘share’ various goods and services with their peers in everything from cars and bikes to food, office space, spare rooms, even time and expertise. Countless articles and reports have now evaluated the many social and economic benefits of accessing rather than owning resources, while many proponents of the sharing economy uphold the potential of sharing as a social change strategy and ‘a call to action for environmentalists’. Indeed a growing chorus of pioneers within this self-professed social movement hail it as an approaching transformation of society on a par with the industrial revolution, and ‘the defining economic story of the 21st century’.

The business community may be enthusing about the immense market size and profitabilityof the big corporate players that espouse sharing as part of their brand identity, but not everyone is convinced that the sharing economy is living up to its visionary rhetoric and aspirations. Far from promoting communitarian values, providing an answer to overconsumption or increasing social equity, for example, a growing number of critics attest that sharing-oriented business models are taking us in the opposite direction – such as byundercutting unionised labour, benefitting from unfair competition, encouraging de-regulated and precarious employment, and even by robbing cities of vital public money. Many people are also questioning whether these new business ventures have co-opted or subverted the original conception of community-based sharing, considering that they charge money for a service and are effectively renting skills or assets. So is the sharing economy really a ‘dumb term that deserves to die’, or does this moment of hyperbole give us reason to pause and consider what sharing actually means in relation to the big questions of our time?

Rolling back the commercialisation of everything

A key critique of the sharing economy concerns the question of whether sharing should or can be commercialised. The essential dynamic of for-profit enterprise is to marketise formerly non-economic spheres of life, which is no different in the Internet-enabled sharing economy than in the dominant corporate sector. Hence many progressives are questioning whether the kind of ‘disruption’ that these new tech start-ups represent is really providing a solution to social and economic problems, or rather deepening a pernicious trend of ‘the commercialisation of everything’. For example, is renting one’s apartment (on Airbnb), swapping designer clothes (on ReFashioner), or loaning out your garden (on campinmygarden) a way of extracting value from unused assets and enhancing social relations, or is it a more efficient way for businesses to turn us into self-interested consumers and commercially exploit us? By monetising our skills, personal belongings and community activities, the line between the market and non-market worlds is increasingly blurred and intermeshed, in which case collaborative consumption and for-profit sharing is arguablyreinforcing the values of consumer capitalist society. At the very least, commercial sharing platforms cannot be fully inclusive if they cater only to the more affluent consumers who can afford to participate.

This debate is not black and white, of course, as meaningful relationships can clearly still be formed in the worlds of business and commerce, and there are obvious social benefits to collaborative consumption and valuable economic gains to be made by leveraging our unwanted or underused goods or so-called ‘non-product assets’. But common experience demonstrates how the truly ‘sharing’ economy is often free and not commercial, and has always included the unpaid care, support and nurturing that bonds us as human beings – what Edgar Cahn, the founding father of the TimeBanking movement, terms the core economythat enables people to contribute to the welfare and well-being of each other through acts of reciprocity. From this perspective, the transformative social power of interpersonal sharing lies in scaling up its non-economic dimensions through more formalised institutions, new technologies or informal networks that can be accessed by anyone. Such examples would include community gardens, open-source projects, clothing and book swaps, the Really Really Free Markets, and countless other social networks based on gift exchange or collective efforts to pool skills and support. As writers such as Charles Eisenstein or‘Moneyless Man’ Mark Boyle attest, living according to the spirit of the gift and sharing has benefits that go beyond the quantifiable: it means to reclaim human relationships from the market, to take a stand against a commodity world in which everything exists for the primary goal of profit, and to reaffirm our collective identities as interdependent, creative and joyful human beings as opposed to mere consumers.

Aligning business models with the principle of sharing

This is not to argue that entrepreneurship and commerce has no place in a sharing economy, as money-free sharing activities are mainly suited to a local level where physical interaction and proximity is necessary. The growing success of many sophisticated commercial sharing platforms (most of which boast a strong social dimension) also suggests that millions of people are choosing to participate in collaborative sharing activities, and new business start-ups that are oriented towards sharing are set to make up an ever greater proportion of economic activity. The question is what kind of business models these enterprises adopt if they want to remain genuinely aligned with the ethic and practice of sharing. Already,criticisms abound that venture capital is pouring in to promising sharing economy start-ups and turning them into large corporations whose raison d’être is revenue growth, shareholder value maximisation and the monopolization of markets – which makes them incapable of bringing us closer to a more equitable, fair or truly sharing society. Who can deny that those who run the sharing economy along these lines are not sharing the wealth it creates for them?

In this era of multiple and converging crises caused in large part by monolithic and mercilessly profit-seeking corporations, progressives are increasingly calling for new business ownership models that are aligned with the principle of sharing. This is most often discussed in terms of cooperatives, in which no single individual or group drives the company for their own profit and financial redistribution is built into the business structure. The ‘sharing lawyer’ Janelle Orsi in California is a prominent advocate of converting sharing economy companies into cooperatives, and even argues that these two concepts should be regarded as synonymous. But there are many other business models that reflect an ‘emerging ownership revolution’ (in the words of Marjorie Kelly) and adhere to principles that promote inherently fair and ecologically sustainable outcomes – such as community land trusts, community-supported agriculture, credit unions and locally-owned community banks, as well as not-for-profit enterprises in their different guises.

The institutionalisation of sharing by governments

If this real sharing economy is going to resist co-optation and embody the common good in place of growth and profit imperatives, it is going to need such widespread public backing that eventually governments will commit to scaling it up through national policies and regulations. And on the surface, there are promising signs that this process is underway: 15 mayors from across the United States have now officially declared their municipalities as Shareable Cities, and committed to reviewing and addressing regulations that may hinder participation in the sharing economy. Seoul in South Korea has also adopted a project called Sharing City that aims to promote existing sharing enterprises and incubate sharing economy start-ups, whileEcuador and Amsterdam are also embracing a new tech-driven sharing culture.

But the concept of economic sharing per se is not beholden to consumer-oriented, peer-to-peer or Internet-mediated forms of collaboration, and must also be reflected in government policies – especially if inequality and other long-term, systemic issues like climate changeand unsustainable food systems are ever to be tackled. Government can be understood as the most fundamental expression of economic sharing in which we practice “collaborative consumption through societal organisation of public services”, to quote Jonathan Schifferes of The RSA. A truly sharing society, in this sense, is underpinned by systems of universal social protection and requires a strong interventionist role for governments and strictly regulated markets, which would then necessitate, for example, the removal of profit-maximising companies out of certain sectors like healthcare, education and utilities. The concept of sharing also applies to democratic forms of governance in terms of how equally power is distributed throughout society, which has potentially dramatic implications for participatory politics. In fact, there is a long list of the kind of economic and social policies that align with the principle of sharing on a national level, from land value taxation and other tax reforms that can encourage a fairer distribution of wealth and income, to the laws and regulations that can support the extension of common property rather than its enclosure and privatisation.

In the end, however, the true possibilities of economic sharing will only be seen when governments, acting cooperatively in the interests of all nations, commit to the policies that can institutionalise sharing on a global basis. In a world of interlinked and interdependent economies, nothing less than a more equitable distribution of wealth and income between as well as within countries can ensure the sustainability, peace and security of present and future generations – which more and more people within the local sharing movement are coming to realise. When collaborative ideals and social solidarity is finally translated into a global call to share the world’s resources, we may finally bear witness to the ultimate Sharing Spring.

Adam Parsons is the editor at Share The World’s Resources, (STWR), a London-based civil society organisation campaigning for a fairer sharing of wealth, power and resources within and between nations. He can be contacted at adam@sharing.org

Peter Schiff: Reckless Fed may push gold to $5,000

Euro Pacific Capital CEO talks about Fed actions that would prompt a price surge

 

Euro Pacific Capital

Peter Schiff, CEO of Euro Pacific Capital

SAN FRANCISCO (MarketWatch) — Peter Schiff, chief executive officer of Euro Pacific Capital, has been known to make forecasts outside the mainstream, and his long-running belief that gold has the potential to hit $5,000 an ounce is no exception. Prices, after all, are struggling to get a grip on $1,300.

We caught up with Schiff to ask him how gold, a big disappointment for commodities investors last year, gets back its groove. Last year, gold futures GCM4 +1.02%   and heavyweight ETF SPDR Gold Trust GLD +0.19% lost 28%, breaking at least eight years of annual gains. 

First off, Schiff’s gold forecast isn’t brand new. The author of “The Real Crash — America’s Coming Bankruptcy” has talked about the possibility of gold hitting $5,000 or higher since at least 2011, when prices for the metal topped $1,900 in intraday trading.

Schiff reiterated his call on the potential for $5,000 gold and beyond during a heated debate with Paul Krake of View from the Peak on CNBC’s “Futures Now” episode posted on April 15.

In an email interview with MarketWatch this week, he offered his thoughts on exactly why he expects gold prices to continue to climb and under what circumstances, what it would take to change his bullish outlook on gold and whether prices for the metal have already hit bottom this year.

Here’s MarketWatch’s full email interview with Schiff that concluded Wednesday:

Q: Before this year began, what were your expectations for gold prices and how does that compare with the metal’s performance year to date?

Schiff: I thought that the selloff in 2013 was completely out of touch with reality, so I expected the price to rise this year. In this, I was virtually alone in the financial community. Just about every major investment house had predicted even more losses for gold in 2014.

So far this year, gold is the best-performing asset class, but I think the pullback we have seen over the last few weeks is just another indication of how much negative sentiment remains. Ultimately however, the fundamentals will prevail. The Fed will keep printing [dollars] and gold will keep rising.

Q: In a recent interview with CNBC, you said the Federal Reserve’s quantitative-easing program will push gold to $5,000 an ounce. Could you explain that a bit further? What’s your time frame for that forecast? [Watch: Gold bear takes on bug: ‘You’re miles off base’]

I believe the consensus expectation that the U.S. recovery is real and that the Fed will end its [quantitative-easing] program and normalize interest rates is wrong.

Over the past few years the Fed had become [a] serial mover of goal posts, delaying the decision to end stimulus more than anyone would have predicted. When the Fed has to admit that its forecast of a sustained recovery is wrong, it will come to the aid of a faltering economy with even more QE. When that happens, gold will rally.

Last year’s selloff was based [on] the expectation that a strong recovery will lead to tighter monetary policy, which would then undercut the reason for buying and holding gold. That is a false assumption.

Q: Could you offer your thoughts on other factors you see as most influential to the gold market this year, including China?

A renewed weakness in the dollar and strength in oil and other commodities will add to gold’s appeal during 2014. Also, any major geopolitical concerns, particularly if there is a deterioration of the situation in Ukraine, will add to gold’s appeal. I also expect renewed physical demand from emerging markets like India and China.

The World Gold Council recently forecast that Chinese gold demand will rise 20% by 2017 from the current level of 1,132 metric tons a year.

Q: What might alter your bullish outlook on gold?

Gold would certainly be hurt if the Fed surprised the markets by actually ending QE and tightening policy. But that is very unlikely to actually occur.

Q: What would you say to investors who are discouraged by gold’s performance so far this year? (Futures are prices up around 7% year to date, but only partially making up for last year’s plunge.)

FactSet Enlarge Image

Be patient. Many investors in the 90’s believed that gold was a dead asset class. But in the 10 years from 2001 to 2011, gold increased almost 900%. The moves come in waves.

Q: With prices currently under $1,300 an ounce, have prices hit bottom for this year? Is gold a bargain at these levels — is it a good time to buy now? Please explain.

Most likely prices have bottomed, as too many speculators are looking for lower prices. The fundamental case for gold has also never been stronger. From a gold short seller’s perspective, this will prove to be the equivalent of a perfect storm. Their losses will be severe. [Read about gold contrarians saying it’s time to start buying.]

Verona’s mayor Flavio Tosi threatens fines for those who feed homeless

Right-wing leader claims rising numbers of vagrants pose 'risk to health'

Homeless people living in the centre of Verona are to be cleared out like pigeons after the city’s right-wing mayor announced plans to introduce fines of €500 (£411) for those found feeding the vagrants.

Flavio Tosi, the first citizen of the pretty northern city forever associated with Shakespeare’s Romeo and Juliet, said the rising numbers of homeless in a central piazza was posing a “risk to public health”.
And he blamed a local homeless charity for attracting them there with food handouts.
“Near to Piazza Dante there’s a garden where for some time the Ronda della Carita [charity] has been sending food parcels,” said Mr Tosi, a member of the rabble-rousing Northern League.
“Now there are 20 or more [homeless] sleeping there and they use it like their own toilet. The situation has become unmanageable; for this reason I’ve had to introduce this ban,” the mayor said.
He added that in Verona there were already “loads of” refuge centres, while those who chose to live rough were provoking an “environmental health disaster”.
Marco Tezza, the president of Ronda della Carità, said the ban and news of the fines had come “like a bolt out of the blue”.
“We didn’t encourage the tramps,” he said. “We go where we’re needed. If there are problems with hygiene and public order you boost safeguards and increase controls. Fining those who bring them food is not the answer.”
The provincial president Giovanni Miozzi criticised the new policy. “I understand the need for decorum and public order but during a period like this the priority must be to help people in difficulty,” he said.
Francesca Businarolo, an MP for the anti-establishment Five Star Movement, decried the move as an election ploy. “This law has one function during an election campaign – to remind the electorate who Flavio Tosi is – the mayor sheriff,” she told the Verona edition of Corriere della Sera.
Mr Tosi denied the law was cynical electioneering. “My decree is not out of keeping with the Christian spirit and besides, during the winter when there’s an emergency cold snap, we welcome illegal immigrants, too,” he said.
But the mayor’s reference to immigrants is likely to remind critics of the Northern League’s attitude to minorities in general.
A senior party member, Roberto Calderoli, last year compared the black minister Cecile Kyenge to an orangutan.
Despite the uproar he refused to resign his post as Deputy Speaker of the Senate.
Other prominent Northern League officials, particularly in the party’s north-east heartland around Verona, have at times appeared to be in competition with each other to see who can make the most offensive comments about gays or ethnic minorities.
The party’s reputation as a refuge for bigoted goons was reinforced in January this year when the Northern League MP Gianluca Buonanno blacked up in parliament to accuse minister Kyenge of using her then position as integration minister to “favour negritude”.