Aid money could go to defence - David Cameron

The government is to consider spending money from the UK's £10bn aid budget on peacekeeping and other defence-related projects, David Cameron has said.

Such a move could see funds diverted from the Department for International Development to the Ministry of Defence.
The PM, who has been urged to cut aid spending by some Tories, said security and stability were often needed before development could take place.
Critics argue that aid money should not be used to compensate for defence cuts.

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Mr Cameron has said he intends to protect all £10bn of Britain's aid budget, promising to spend 0.7% of national income on development.

But, speaking to reporters on his return journey from a trade visit to India, the prime minister said he was very open to the idea of the Department for International Development (DfID) sharing more of its money with the Ministry of Defence (MoD)

"DfID and the Foreign Office and the defence ministry work increasingly closely together," he said. "If you are asking me can they work even more closely together, can we make sure that the funds we have at our disposal are used to provide basic levels of stability and security in deeply broken and fragile states, then I think we should.
"That is an important part of development."
"We have our moral responsibilities for tackling poverty in the world. We also have national security responsibilities for mending conflict states and helping with development around the world and we should see DfID in that context," he added.
Officials said hundreds of millions of pounds could be diverted from aid to peacekeeping and stabilisation operations, particularly in fragile states.
A Downing Street source said one option under consideration was a significant increase in the size of the Conflict Pool - a fund jointly managed by the MoD, Foreign Office and DfID that supports conflict prevention, stabilisation and peacekeeping.
The money would not be used for combat missions or equipment and Downing Street insisted the plan would comply with international aid spending rules.

Conservative MP Colonel Bob Stewart said critics of the idea were "barking"

Defence Secretary Philip Hammond said it "made sense" to look at areas where defence supports international development "at a time when the defence budget is under pressure".
He said it was about using budgets "most effectively" and said proposals would be brought before the National Security Council before a decision was made.
BBC deputy political editor James Landale said this shift in priorities would go down well with Conservative MPs and voters who think it was wrong to increase aid while cutting defence.
The question now was what aid projects would be cut to pay for more security operations, he added.
Liberal Democrat chairman of the International Development Committee Sir Malcolm Bruce said switching funds from overseas aid to the defence budget would be "outrageous", adding: "You can't use the aid budget to make up for defence cuts."

Continue reading the main story

2011-12 departmental budgets

• MoD - £37.2bn (-4.5%)
• DFiD - £7.9bn (+1.8%)
• FCO - £2.2bn (-4.9%)

Source: Treasury

For Labour, shadow international development secretary Ivan Lewis said he supported a "coordinated approach to tackling conflict" but said the "major proportion" of UK aid money should continue to be used to "alleviate poverty, improve basic services and support job creation".

"Cameron's attempt to suggest aid money can be used to offset deep defence cuts is misleading and will not stand up to scrutiny," he added.
Oxfam's head of policy Max Lawson told BBC Radio 4's Today programme "millions" supported the protection of the aid budget and the money should be spent on "hospitals and not helicopter gunships".

Liberal Democrat MP Malcolm Bruce said a major shift in the budget was "simply not possible"

"We cannot see any penny diverted into the military," he argued.
Charity Christian Aid said it was "deeply concerned" that the "blurring of the lines between military action and aid delivery" could put aid workers at risk.
But Tory MP Patrick Mercer, a former Army officer, said security and overseas aid were "inextricably linked".
"So much of the aid we have attempted to spend in the past in places like Iraq and Afghanistan has not been delivered as effectively as it might because of the lack of a benign security environment.
"If that means more money has to be spent on defence in order to increase the efficacy of overseas aid spending, I'm all for it."

Wal-Mart: "Families Are Adjusting To A Reduced Paycheck And Increased Gas Prices"

Source: Zero Hedge

Moment ago Wal-Mart reported a top-line miss, a bottom line beat, a dividend hike and a rather subdued full year forecast ($5.20-$5.40 on Exp. of $5.39), and nobody cared. The only thing that algos and carbon-based lifeforms alike honed in on, was the recap of the most recent 13 week period, to see if WMT was only kidding when it said that February sales, which obviously were not part of Q4 results, were a "total disaster." The reason WMT's stock is not doing to well in the pre-market is that they did not like what they found.

Here is the key section:

"We are confident that our low prices will continue to resonate, as families adjust to a reduced paycheck and increased gas prices," Simon said. "We see the underlying health of the Walmart U.S. business is sound, and sales trends are similar to what we've demonstrated in the last few quarters. However, February sales started slower than planned, due in large part, to the delay in income tax refunds. We began seeing increased tax refund check activity late last week in our stores, resulting in a more normalized weekly sales pattern for this time of the year. Due to the slower sales rate in the first few weeks of this year's first quarter, we are forecasting comp sales for the 13-week period from Jan. 26 to Apr. 26, 2013 to be around flat. We continue to monitor economic conditions that can impact our sales, such as rising fuel prices, changes in inflation and the payroll tax increase."

One can hope that all the other retailers in the US, which are just as dependant on the consumer's discretionary revenue stream which is now certifiably less, will adjust just as well.

'Greece becoming third world country - economically and democratically'

RT

Greece is hard pressed with debt and poverty. The country faces huge amounts of bailout loans. Aris Chatzistefanou, journalist and documentary maker, says Greece is facing an even bigger issue.

“When you have huge debt like the one that Greece and other countries in the European periphery are facing, you start losing levels of democracy and I’m afraid that has happened,” he told RT.

In response to RT’s question on way to help the economy Aris Chatzistefanou said: Many progressive economists have said for the last two or three years that these austerity measures will create not only social genocide in Greece, but they will destroy the infrastructure of the economy. And now we are talking about debt that is still increasing after three austerity packages. And if everything goes as planned, we will have a debt of 175 percent of GDP. Don’t forget that before the IMF and the troika intervention in Greece, we had a debt of 115 per cent. So it’s exactly these austerity measures that create the problem.

Aris Chatzistefanou said: There are many alternative plans for example, default, because everyone knows that right now it’s impossible to repay a huge debt like that – even if we accept that it’s legal. And many people say that it’s not legal. That it’s illegal. Many other economists have spoken about exiting the eurozone. Even Paul Krugman has characterized the eurozone as a straightjacket for Greece which created this huge debt to the economy.

RT asked about situation in Athens.
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Can Turkey Cause a Global Power Shift in Joining the SCO?

Source: MM
Is Turkey about to join the Shanghai Cooperation Organization (SCO)?
After years of delay on its application to join the European Union (EU) as a full member, Turkey has made overtures to the SCO as an alternative to the EU.
Turkish Prime Minister Recep Tayyip Erdogan said after a meeting with Russian Prime Minister Vladimir Putin that Turkey was seriously considering becoming a member of the SCO instead of continuing its efforts to join the EU.
‘The European Union needs to stop stalling us,’ Erdogan said. ‘We have a strong economy. I told [Putin], “You should include us in the Shanghai Five [the former name of the SCO] and we will say farewell to the European Union.” The Shanghai Five is much better off economic-wise. It is much more powerful. We told them, “If you say come, we will”.’
What’s the Shanghai Cooperation Organization?
The SCO’s full members are China, Russia, Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan. Mongolia, India, Iran and Pakistan have observer status in the SCO while Turkey is a dialogue partner along with Sri Lanka and Belarus.Originally formed in 1996 to demilitarize the border between China and the former Soviet Union, the SCO was expanded in 2001 to include Uzbekistan.
According to a background study by the Council on Foreign Relations, the SCO has the potential to be an important body for regional energy and security cooperation in Central Asia, but has so far not achieved anything substantial.
Both China and Russia have secured bilateral agreements with other SCO members to build pipelines from the energy-rich Caspian Sea region to their respective home markets but this has taken place outside of the SCO.
‘The competing efforts of Russia and China to secure influence in the region are a potential obstacle to extensive SCO energy cooperation,’ the Council on Foreign Relations concluded.
If genuine energy cooperation could be achieved by the SCO, particularly if it included Iran, that would be a boon for Turkey, which depends on imported energy to fuel its rapidly growing economy.
Would SCO Bid Affect Turkey’s NATO Status?  Turkey is a member of NATO, while the SCO is seen as acting as a counterweight to American interests in Central Asia – if not outright anti-American.The SCO has called for U.S. troops to leave the region but the U.S. has military bases in several Central Asian countries, including SCO members Kyrgyzstan and Uzbekistan, to support the war in Afghanistan.
Although those bases are subject to bilateral agreements with the countries involved and not with the SCO, the issue of what happens to those bases when the U.S. withdraws from Afghanistan at the end of 2014 will be a thorny one.
Of course, the U.S. has a major military presence in Turkey. If Turkey joins the SCO, what will happen to the U.S. bases there? Will Turkey want to withdraw from NATO?
As the U.S. State Department said, if Turkey joins the SCO, it will be ‘interesting’.
SCO a Cover for Big Power Diplomacy?  Many experts feel that the SCO can never be an effective security or energy cooperative organization because of its membership.Russia has a proprietary interest in the Central Asian countries Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan, which used to be part of the Soviet Union, and clearly wants to keep rival China out.
For its part, China wants to get access to the energy-rich area around the Caspian Sea which, according to the BP Energy Survey, holds about 21% of the world’s oil and 45% of the world’s natural gas.
Would Russia or China really welcome Turkey, a significant power with regional ambitions of its own, into the SCO?
That, too, would be ‘interesting’.
Jeff Uscher
Contributing Writer, Money Morning

4 Things Politicians Will Never Understand About Poor People

Off the top of your head, how many of your friends can you think of make less than $11,000 a year? Maybe they work some mind-numbing part-time job, taking cover charges and stamping hands at a strip club. Or if you're a bit older, how many families do you know of who have one person working, bringing in less than $23,000 to support a spouse and a couple of kids? There's nothing wrong with either of those things ... but those numbers are the poverty threshold in the U.S., and in my area of the country, it encompasses a fudging poopload of people (sorry, I'm trying to cut down on my cursing).
Poverty is a hot topic for politicians, but it seems like every time they open their mouths about the subject, stupid falls out. There's a huge part of me that wants to grab them by their orphan skin lapels and scream reason into their preciously oblivious brains, but the logical side of me knows it won't matter. There are some things they will just never understand. Things like ...

#4. Poor Does Not Equal Unemployed

Not long ago, Newt Gingrich had his famous "janitor" idea, where he proposed that we pay impoverished students to clean up vomit and strewn feces part time at their schools. It sprung up a lot of debate, which I had little to no interest in beyond this key phrase: "Really poor children in really poor neighborhoods have no habits of working and have nobody around them who works. [...] They have no habit of 'I do this and you give me cash,' unless it's illegal." Not to be out-douched, Mitt Romney's now famous video hit the 'net, showing him calling 47 percent of the country "entitled" and saying that they believe they're victims and they want the government to hand them everything:

I realize these are both republicans, but that's actually not my point here. This isn't about philosophy, it's about pure numbers: A big ol' chunk of people living below the poverty line actually work. About 10.5 million of them, in fact, or a third of the people living in poverty. Of the households below the poverty line, 84 percent have somebody in the house who is working. So that whole bit about how these kids have no concept of what work is? That's a bunch of, uh, horse pucky. Two-thirds of poor children are in working households.
That's a far mother-frumpled cry from Gingrich's pretty broad statement. It's such a dramatic misunderstanding of what "poor" actually is, and it's dangerous because it paints a grossly inaccurate picture of people laying around their house, watching Family Guy and enjoying their "free money." Yes, those people do exist -- I've met them in person. I've drank their beer and dodged their roaches in their living rooms. At one point, my parents were those people.

This is how I remember my mom through most of my adolescence.

But of all the poor people I've known over the years -- and I have known a lot -- I have come across very few able-bodied, able-minded people who didn't do something to bring in some money. Even the ones who didn't have so much as a part-time job still managed to at least find temporary seasonal work mowing lawns, shoveling snow, or standing on street corners and playing the guitar with their penis.
So if the issue is that these people are watching reruns and collecting government checks, guess what: 91 percent of government benefits go to the disabled, elderly, or working households. Not a typo -- 91 percent. You're free to speculate that some of those people could try harder or are faking their disability or whatever, but there's no way the reality lines up with this politician fantasy of the lazy masses who just greedily rub their hands together while leeching their unfathomable riches from the always generous American populace.

"Here's all the crap I hate. Now don't bother me for another year."

Oh, while we're on that subject ...

#3. Poor People Are Not Mindless Leeches

Let me give you a quote from then-Lieutenant Governor Andre Bauer of South Carolina that will make you step away from your computer so you can have adequate room to perform a full-on Hadoken at your monitor:
"My grandmother was not a highly educated woman, but she told me as a small child to quit feeding stray animals. You know why? Because they breed. You're facilitating the problem if you give an animal or a person ample food supply. They will reproduce, especially ones that don't think too much further than that. And so what you've got to do is you've got to curtail that type of behavior. They don't know any better."

"Look at it. All it does is eat, sleep, and crap. Same with that dog."

Oh, Andre. You crazy piece of sh- ... work. Honestly, I was going to give you some major crap about that, but why bother? You're just one guy spouting off some insane piece of extremist drivel. It's not like you compared poor people to raccoons eating beetles out of the carcasses of dead rats. Wait, Nebraska Attorney General Jon Bruning actually did that?
Yep. He was telling a story about a road project being disrupted by biologists who placed buckets of dead rats on the side of the highway to collect an endangered species of beetle, because sometimes science is weird. But at night, raccoons would come up and eat the beetles out of the rats. Then he went on to say, "They're not stupid. They're going to do the easy way, if we make it easy for them, just like welfare recipients all across America. If we don't incent them to work, they're going to take the easy route."
Right, the "easy route." Like spending money you don't have in order to attend college for four years, and then flail around, grasping for any job whatsoever in order to enjoy the frills and luxury of basic survival. Or does he mean taking "the easy route" by accepting government assistance and living the next year straddling the line between homelessness and malnutrition? The major problem I have with this isn't so much the ignorance as it is the insinuation that the poor are blithering genital heads (seriously, how does Prince do it?), who are constantly on the search for loopholes, allowing them to do as little as possible in life.

"I have a master's in 'Bring me a beer.'"

In reality, 47 percent of the impoverished 18 to 26 age group have actually been to college. Now, that doesn't mean they all graduated, but that's not the point. I don't know many people who had the motivation and presence of mind to enter into college and didn't also have a desire to do something special with their lives. Most people don't go to college because they were bored, though I will concede that it's why many people teach at colleges. OHHHHH, eat it, teachers!
See, it's not about intelligence, it's about trying. Politicians can't get past the idea that the only possible way to fail in America is if you sit back and do nothing. The idea that someone can put out the effort, yet not gain ground is inconceivable to them. Again, that doesn't mean that human leeches don't exist. I grew up doggone poor, myself. I've seen, firsthand, people who were content to cash their government check and then go back to sleep. But I know overwhelmingly more people who didn't want to be on assistance and busted their lovely lady lumps to escape. Some succeeded and some did not, but it sure as pickles wasn't for lack of trying.

"I am exhausted. But I'm exhausted with awesome shoes."

But, hey, if we don't let up on the poor, how are we going to flush all of the moochers and drug addicts from the system? Wait, did I just say "drug addicts"? That reminds me ...

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Spain Just Issued a Warning: the System is Blowing Up Again

At this point it is clear that Europe is totally finished. The house is burning. It’s just a matter of time before it collapses.
Indeed, we get a clear signal of this from Spanish Prime Minister Mariano Rajoy, who just announced the following: “It is not enough, there are no green shoots, there is no spring.”
To understand the significance of this statement, you need to know a bit more about Rajoy and European politics in general.
Rajoy is the same political leader who, throughout 2012, stated time and again that the Spanish banking system was in great shape. Indeed, he was still claiming, “there will be no rescue of the Spanish banking sector,” a mere week before Spain’s entire banking system collapsed.
Rajoy then demanded a €100 billion bailout from the EU (Spain’s entire banking market cap is just a little over this). It was only then that he admitted that 2012 would be a “bad year.” Of course, he also claimed that the bailout was a “triumph” and celebrated by hopping a plane to watch Spain’s soccer team play Poland, but that’s a story for another time.
Given that Rajoy has only admitted Spain is screwed at times when the entire system is going under, we have to ask ourselves… How BAD are things that he just admitted, “there are no green shoots, there is no spring”?
The short answer: HORRIFIC.
Spain only just squeaked through 2012 by using 90% of its social security fund to buy Spanish debt. The country now has over €200 billion in new debt to issue in 2013.
Where on earth Spain will get this money from remains to be seen, given that even Spanish banks became net sellers of Spanish debt last year as they sold assets to return money to fleeing depositors.
Indeed, the country now is attempting to find idiots, I mean investors, in the US, by offering a Dollar-denominated bond. After all, who wouldn’t want to invest in a country where the formal bailout fund is tapped dry, social security is tapped dry, and banks still have negative value?
At the end of the day, we all know how this mess will end: Spain will default which will suck several hundred billion Euros worth of collateral out of the system at which point we’ll experience a Lehman-type event times ten.
What happens between then and now is anyone’s guess. But the fact that Rajoy is admitting “there are no green shoots, there is no spring” indicates that things are likely about to get very ugly once again.
You can choose to ignore this and believe that Europe’s Crisis is fixed just as EU political leaders claim. But Europe in general is out of options in terms of solving its debt crisis. The only thing that held things together in 2012 was the promise of unlimited bond buying by ECB President Mario Draghi… but then again this “buying” would only come with a formal request for a bailout, rampant austerity measures, and a look at the books for any country requesting it.
Trust me, Spain doesn’t want ANYONE taking a closer look at its books.
source

Professor: Federal Reserve System isn’t working

That was the assessment Monday night of Steve Horwitz, the Charles A. Dana Professor of Economics and department chairman at St. Lawrence University in Canton, N.Y. Horwitz spoke at Grise Hall Auditorium at Western Kentucky University as part of the BB&T Center for the Study of Capitalism lecture series.

“Debt isn’t the problem,” Horwitz said. “The problem is you have a monopoly-based system. Banks can’t lend what people don’t give them. The attempt to provide money through a monopoly doesn’t work.”

The Fed’s track record since its creation in 1913 isn’t good, he said. Recessions and depressions in the U.S. economy have been more frequent after its creation than before, when state-chartered banks controlled the money supply. But that format had issues, too. State-chartered banks couldn’t create branch banks and also couldn’t cross state lines.

The Fed is actually a system of 12 banks across America that has seen more centralized power in Washington, D.C., in recent years.

“Free banking – true competition in the creation of money would work better,” the professor said. Banks would want to perform more efficiently to maximum their profits – interest made on the money – and not see either inflation or deflation occur in the economy.

In the history of America, there has never been a free banking market – there have always been regulations, whether they came from the states or the federal government, Horwitz said. Currency produced by local banks actually financed the Civil War, then when Congress passed a 10 percent tax on state banks’ money, efforts shifted to a federal banking system and that helped pay off Civil War debt.

“There is a long history of central banks being created to raise money for government to pay for wars,” he said.

Like an old warship, though, the central bank moves slowly and takes a while to come into the wind.

“It takes time for central banks to recognize a problem, collect data, make a decision, implement that decision and see the effects of that decision,” he said. “By the time the policy becomes effective, it can be the exact wrong thing to do.”

If someone had said to him a decade ago that reform of the Fed would become a serious discussion in 2013, Horwitz wouldn’t have believed it. However, with recessions in 2007 and 2008 and other regulatory problems with the nation’s banking system, the discussion is on the front burner.

“We were talking about the Fed in macroeconomics class,” said Raymond Shears, 21, a WKU junior business major from London. “It was good to hear an opposite viewpoint on the Fed. I think we need to keep the Fed because of the economy.”