Peter Schiff Was Right - 'Taper' Edition

Italy undergoing a very real deindustrialisation

Italy is experiencing a real deindustrialisation, with an industrial production index that has fallen 20 percentage points since 2007, according to a report on the competitiveness of the EU that will be presented tomorrow in Brussels.
The competitiveness of Italy's labour costs has eroded significantly over the past 10 years, as well as its productivity has worsened from 2007 to 2012 along with that of France, Finland and Luxembourg. Improvements in Spain mean that it has passed to the 'more virtuous' group of EU countries. 
Source and full piece (in Italian): ANSA, 24 September 2013

Cyprus-Style Wealth Confiscation Is Now Starting To Happen All Over The Globe

Source: Economic Collapse

Now that “bail-ins” have become accepted practice all over the planet, no bank account and no pension fund will ever be 100% safe again.  In fact, Cyprus-style wealth confiscation is already starting to happen all around the world.  As you will read about below, private pension funds were just raided by the government in Poland, and a “bail-in” is being organized for one of the largest banks in Italy.  Unfortunately, this is just the beginning.  The precedent that was set in Cyprus is being used as a template for establishing bail-in procedures in New Zealand, Canada and all over Europe.  It is only a matter of time before we see this exact same type of thing happen in the United States as well.  From now on, anyone that keeps a large amount of money in any single bank account or retirement fund is being incredibly foolish.
Let’s take a look at a few of the examples of how Cyprus-style wealth confiscation is now moving forward all over the globe…
Poland
For years, there have been rumors that someday the U.S. government would raid private pension funds.
Well, in Poland it just happened.
According to Reuters, private pension funds were raided in order to reduce the size of the government debt…

Poland said on Wednesday it will transfer to the state many of the assets held by private pension funds, slashing public debt but putting in doubt the future of the multi-billion-euro funds, many of them foreign-owned.

The Polish government is doing the best that it can to make this sound like some sort of complicated legal maneuver, but the truth is that what they have done is stolen private assets without giving any compensation in return…

The Polish pension funds’ organisation said the changes may be unconstitutional because the government is taking private assets away from them without offering any compensation.
Announcing the long-awaited overhaul of state-guaranteed pensions, Prime Minister Donald Tusk said private funds within the state-guaranteed system would have their bond holdings transferred to a state pension vehicle, but keep their equity holdings.
He said that what remained in citizens’ pension pots in the private funds will be gradually transferred into the state vehicle over the last 10 years before savers hit retirement age.

Iceland
For years, Iceland has been applauded for how they handled the last financial crisis.  But now it is being proposed that the “blanket guarantee” that currently applies to all bank accounts should be reduced to 100,000 euros.  Will this open the door for “haircuts” to be applied to bank account balances above that amount?…

Following the crisis in October 2008, Iceland’s government declared all deposits in domestic financial institutions were ‘blanket’ guaranteed – an Emergency Act that was reafrmed twice since. However, according to RUV, the finance minister is proposing torestrict this guarantee to only deposits less-than-EUR100,000. While some might see the removal of an ‘emergency’ measure as a positive, it is of course sadly reminiscent of the European Union “template” to haircut large depositors. This is coincidental (threatening) timing given the current stagnation of talks between Iceland bank creditors and the government over haircuts and lifting capital controls – which have restricted the outflows of around $8 billion.

Europe
European finance ministers have agreed to a plan that would make “bail-ins” the standard procedure for rescuing “too big to fail” banks in the future.  The following is how CNN described this plan…

European Union finance ministers approved a plan Thursday for dealing with future bank bailouts, forcing bondholders and shareholders to take the hit for bank rescues ahead of taxpayers.
The new framework requires bondholders, shareholders and large depositors with over 100,000 euros to be first to suffer losses when banks fail. Depositors with less than 100,000 euros will be protected. Taxpayer funds would be used only as a last resort.

What this means is that if you have over 100,000 euros in a bank account in Europe, you could lose every single bit of the unprotected amount if your bank collapses.
Italy
As Zero Hedge reported on Tuesday, a “bail-in” is now being organized for the oldest bank in Italy…

Recall that three weeks ago we warned that “Monti Paschi Faces Bail-In As Capital Needs Point To Nationalization” although we left open the question of “who will get the haircut including senior bondholders and depositors…. given the small size of sub-debt in the capital structures.” Today, as many expected on the day following the German elections, the dominos are finally starting to wobble, and as we predicted, Monte Paschi, Italy’s oldest and according to many, most insolvent bank, quietly commenced a bondholder “bail in” after it said that it suspended interest payments on three hybrid notes following demands by European authorities that bondholders contribute to the restructuring of the bailed out Italian lender. Remember what Diesel-BOOM said about Cyprus - that it is a template? He wasn’t joking.
As Bloomberg reports, Monte Paschi “said in a statement that it won’t pay interest on about 481 million euros ($650 million) of outstanding hybrid notes issued through MPS Capital Trust II and Antonveneta Capital Trusts I and II.” Why these notes? Because hybrid bondholders have zero protections and zero recourse. “Under the terms of the undated notes, the Siena, Italy-based lender is allowed to suspend interest without defaulting and doesn’t have to make up the missed coupons when payments resume.” Then again hybrids, to quote the Dutchman, are just the template for the balance of the bank’s balance sheet.
Why is this happening now? Simple: the Merkel reelection is in the bag, and the EURUSD is too high (recall Adidas’ laments from last week). Furthermore, if the ECB proceeds with another LTRO as many believe it will, it will force the EURUSD even higher, surging from even more unwanted liquidity. So what to do? Why stage a small, contained crisis of course. Such as a bail in by a major Italian bank. The good news for now is that depositors are untouched. Unfortunately, with depositor cash on the wrong end of the (un)secured liability continuum it is only a matter of time before those with uninsured deposits share some of the Cypriot pain. After all, in the brave New Normal insolvent world, “it is only fair.”

Fortunately, it does not appear that this particular bail-in will hit private bank accounts (at least for now), but it does show that European officials are very serious about applying bail-in procedures when a major bank fails.
New Zealand
The New Zealand government has been discussing implementing a “bail-in” system to deal with any future major bank failures.  The following comes from a New Zealand news source…

The National Government are pushing a Cyprus-style solution to bank failure in New Zealand which will seesmall depositors lose some of their savings to fund big bank bailouts, the Green Party said today.
Open Bank Resolution (OBR) is Finance Minister Bill English’s favoured option dealing with a major bank failure. If a bank fails under OBR, all depositors will have their savings reduced overnight to fund the bank’s bail out.
“Bill English is proposing a Cyprus-style solutionfor managing bank failure here in New Zealand – a solution that will see small depositors lose some of their savings to fund big bank bailouts,” said Green Party Co-leader Dr Russel Norman.
“The Reserve Bank is in the final stages of implementing a system of managing bank failure called Open Bank Resolution. The scheme will put all bank depositors on the hook for bailing out their bank.
“Depositors will overnight have their savings shaved by the amount needed to keep the bank afloat.”

Canada
Incredibly, even Canada is moving toward adopting these “bank bail-ins”.  In a previous article, I explained that “bail-ins” were even part of the new Canadian government budget…

Cyprus-style “bail-ins” are actually proposed in the new Canadian government budget.  When I first heard about this I was quite skeptical, so I went and looked it up for myself.  And guess what?  It is right there in black and white on pages 144 and 145 of “Economic Action Plan 2013″ which the Harper government has already submitted to the House of Commons.  This new budget actually proposes “to implement a ‘bail-in’ regime for systemically important banks” in Canada.  “Economic Action Plan 2013″ was submitted on March 21st, which means that this “bail-in regime” was likely being planned long before the crisis in Cyprus ever erupted.

So what does all of this mean for us?
It means that the governments of the world are eyeing our money as part of the solution to any future failures of major banks.
As a result, there is no longer any truly “safe” place to put your money.
One of the best ways to protect yourself is to spread your money around.  In other words, don’t put all of your eggs in one basket.
If you have your money a bunch of different places, it is going to be much harder for the government to grab it all.
But if you don’t listen to the warnings and you continue to keep all of your wealth in one giant pile somewhere, don’t be surprised when you get wiped out in a single moment someday.

US House vote coming on emergency spending bill

The U.S. Capitol building is seen on January 11, 2010 in Washington, D.C. (Mark Wilson, Getty Images)

WASHINGTON (AP) — The U.S. Senate is moving toward a test vote on an emergency spending bill to keep the government running past Oct. 1.
The vote on Wednesday followed a lengthy speech from Republican Sen. Ted Cruz, opposing President Barack Obama's health care law.
The House version of the stop-gap spending bill would de-fund implementation of the health care law, but Senate Democrats intend to remove that provision. While some conservative senators helped Cruz hold the floor, Republican leaders in the Senate did not support his effort.
Meanwhile, Treasury Secretary Jacob Lew said Wednesday the government will have exhausted its borrowing authority by Oct. 17, and that will leave just $30 billion cash on hand to pay bills.
That's a slightly worse financial position than Treasury predicted last month, and adds to the pressure on Congress to increase the government's borrowing cap soon to avert an unprecedented U.S. default on its obligations.
©2013 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

October 17th : The Day The U.S. May Run Out Of Cash

The Treasure Warns of ‘Catastrophic’ Results If The U.S. Defaults

Treasury Secretary Jacob Lew said Wednesday the government will have exhausted its borrowing authority by Oct. 17, leaving the United States just $30 billion cash on hand to pay its bills.

That’s a slightly worse financial position than Treasury predicted last month and adds to the pressure on Congress to increase the government’s borrowing cap soon to avert a first-ever U.S. default on its obligations.

In a letter to top congressional leaders, Lew warned that a repeat of the debt brinksmanship of 2011 could inflict great harm on the economy and that “if the government should ultimately become unable to pay all of its bills, the results could be catastrophic.”

The government reached its $16.7 trillion debt limit in May. Since then, it has been using “extraordinary measures” such as suspending U.S. investments in federal employee trust funds to create about $300 billion in additional borrowing room.

But on the 17th the government will be left with only its cash cushion and daily receipts to pay its bills. Lew warned that before long it would not be able to meet all of its obligations. Economists and financial market experts warn that the stock market could plummet and that investors would demand higher returns on Treasury notes, which could raise interest rates and harm the economy.

It’s generally assumed that Treasury would make sure that the government wouldn’t default on Treasury notes held by investors, including foreign countries like China, If it did default on such debt obligations it could be a catastrophe for the economy.

A House-passed stopgap spending measure pending before the Senate contains a GOP-backed provision that would give Social Security recipients and bondholders priority in receiving payments from the government.

Lew again rejected the idea.

“The United States should never have to choose, for example, whether to pay Social Security to seniors, pay benefits to our veterans, or make payments to state and local jurisdictions and health care providers under Medicare and Medicaid,” Mr. Lew said. “There is no way of knowing the damage any prioritization plan would have on our economy and financial markets. It would represent an irresponsible retreat from a core American value: We are a nation that honors all of its commitments.”

Lew again warned that President Barack Obama would not negotiate with Republicans over the debt limit.

“The president remains willing to negotiate over the future direction of fiscal policy, but he will not negotiate over whether the United States will pay its bills for past commitments,” Lew wrote. Extending borrowing authority does not increase government spending; it simply allows the Treasury to pay for expenditures Congress has already approved.”

Republicans want to add budget cuts and other legislation like a one-year delay of “Obamacare.” House leaders hope to bring a debt limit increase to the floor by the end of this week but they haven’t released any details yet.

“Covering Up The [Gulf] Oil Spill With Corexit Was a Deadly Action … What Happened In the Gulf Was a Political Act, an Act of Cowardice and Greed”

A Tragedy Our Society Should Never Repeat

Preface: Additional interviews of leading government-affiliated experts concerning the Gulf oil spillhere and here.
As we reported at the time, the EPA allowed BP to dump mass quantities of a highly-toxic chemical into the Gulf of Mexico in order to help BP hide the amount of oil in the Gulf … and to help to cover up what was really going on.
Last month, 60 Minutes made a fantastic exposé on the whole shenanigan.
We contacted Gulf toxicologist Dr. Susan Shaw – Founder and Director of the Marine Environmental Research Institute – for comment. Background on Dr. Shaw’s involvement with the BP oil spill here and here.
Dr. Shaw told Washington’s Blog:

It was refreshing to see such a strong public statement about what really happened in the Gulf of Mexico.
I was the first scientist to dive in the oil slick after the Deepwater Horizon explosion in 2010. As a member of DOI’s [the U.S. Department of the Interior's] Strategic Sciences Working Group (SSWG) and a TEDx speaker, I alerted federal agency heads and the public about the combined toxicity of Corexit and oil, and predicted much of the terrible human suffering and environmental damage we are seeing in the Gulf today. The Australian 60 Minutes report takes the viewer up close to the victims, Gulf residents and cleanup workers whose health problems are overwhelming and who will not recover, ever. As a public health professional, I interviewed residents of Grand Isle LA (“ground zero”) and experienced first hand what we now call the “Gulf syndrome” – they had blinding headaches, memory loss, heart palpitations, internal bleeding, swollen livers, and skin lesions. Some had been sprayed directly with Corexit, often by planes flying at night. One was a 14 year old school girl who had periodic bleeding from her ears. As a scientist, I was stunned at the depth of suffering, the bewilderment, the loss.
Covering up the oil spill with Corexit was a deadly action that resulted in a tragedy our society should never repeat. For the federal government to make Corexit’s application the standard operating procedure for offshore oil spills is unacceptable. It is outrageous.
Below are links to my previous public statements about the danger and the duplicity of using Corexit to contain oil spills. Scientists know very well how toxic the mixture is.What happened in the Gulf was a political act, an act of cowardice and greed. It is time for Americans to know the truth.

Unfortunately, the government has a habit of covering up disasters – including not only oil spills, but everything from nuclear accidents to financial problems – instead of actually fixing the problems so that they won’t happen again.
Copyright: Global Research

The Bark of Greed

They call us consumers as they consume us. Our time, money, attention, work, all belong to them as they see it. We are born indentured in mind, body and spirit and there most of us remain. Theirs is not to assist us to clear our debts, alleviate our fears, theirs is to pile on more of it, to extract from us our lives, to put a toll on every breath, to tap our beating hearts.
We pay the premiums through the prime-time of our lifetimes and the best we get are doled out installments when we can no longer run jump or sprint. And then they have the gall to call them the “golden years” all that and they may reduce or even stall the installments (due to an issue of their own making!), calculating correctly that every month gained for them brings us closer to our deaths. Money saved is money earned in their book and every book they bother to print.
Sad but true this society is but a series of gill-nets placed in waters we are made to swim. It begins in the crib, staring up at a square ceiling, chipped leaden paint, bluish boys and pinkish girls, brow beaten adults passing it on, sunday schools, superstitions, public schools that value standing quietly in line over creative thinking and expression. Nearly everywhere the honest truth gets the kibosh.
If we are unlucky in our parents, health, smarts, etc, a gill-net may catch us by the throat, and before we can get our bearings straight, they will have drug us aboard for processing; to feed some penciled-in institution that demands a harvest.
When it’s time to fight crime they do it in poor neighborhoods where capitalism at the street level doesn’t look so good. They appear to fight against it, but it is entirely an act of separation, they do it to obscure the view, the poor practice capitalism in its purest form of supply and demand. This is where deregulation and free enterprise exist in all their ravages. The war on the poor has produced a lopsided prison population and perpetuated craters of violence and degradation. To cover their ongoing crimes a PR industry springs forth and runs day and night inflating all manner of bogymen to justify their injustices.

Capitalism only exists for us on the ground. The expense of competing, for us, is bourn by us. Where we compete, they collude. Where we labor, they merger. When we get together it is an evil union. When they get together it is a benign association.
We have become their polluted water sinking to its lowest level. We are where these unnatural chemicals have come to dissolve. On and under the skin, through the lungs, eyes and ears, into our hearts and minds. Our bodies are merely vessels for social contamination that is why misery abounds and unsound advice rattles through tinfoil speakers.
The message is clear. If you become a meal, a purse, a pillow, a rug, it is entirely your own doing, the current distribution of things is by natural order in need of only a few minor tweaks now and then, laws elaborated and elucidated by courts supreme merely guide the ship safely through troubled waters, your reward will come later, don’t forget those golden years, just keep kicking the can down the road. And pay no attention to what they do but what might happen if they don’t do what they do. You’ve seen the commercial, advertised bogyman’s bloodlust and penchant for rape and baby massacres knows no bounds.
If we don’t hop-to and kill on demand we are jeered as cowards and traitors, the very thing that they are guilty of, for what is more cowardly than to steal from the people their time, bread, shelter, thoughts. What is more traitorous than digging a trench shoving the people in and saying “You all start here.”
If they think of us at all it is usually as their chattel, cattle, troublesome cows. A herd that must be pushed and prodded. They prefer us locked in the cargo hold while they run the ship. Anyone looking out a porthole can see the ship is hell-bent for the rocks. A seagull’s view of the deck would reveal that their helicopters are packed and ready for lift off. If disaster is averted probability will stand in awe.
They call us consumers as they consume us. They insist that we are the problem. Too many, they say, not enough to go around. This is greed barking through gaping holes.
We give our best years, do our best to avoid the worst of the gill-nets, turn our sorrows into something less sorrowful, with extended arms, opposable thumbs, love, practice the miracle that is life on this good earth that is being trampled by this thing that exhales devastation and calls it living.
Be a loose rivet. Let this thing rattle apart.
Michael McDaeth is a writer and musician living in Seattle. He is the author of the novel Roads and Parking Lots. He can be reached atmmcdaeth@msn.com
Copyright: Counterpunch