http://guymcpherson.com/2016/01/so-stupid-it-berns/
So Stupid It Berns
Had I not already offended everybody I know, and many people I don’t, I’d hesitate to post this essay. I’m an equal-opportunity offender, as I’ve written often in this space. My latest example, though likely not my last, is offered in this brief missive.
It seems Americans are falling for it again. Afflicted with hope and humanism, willfully turning a blind eye to the horrors of imperialism, they are trading reason for wishful thinking and genocide for a few dollars in the bank. Repeat after me, fellow Americans: We’re number one!
If our collective enthusiasm has waned, who could be surprised? We’ve traveled this pothole-littered path before, only to be bamboozled by the same shuck-and-jive nonsense as previous generations.
We generally admit that politicians are reasonably intelligent and knowledgeable about a broad array of topics. And yet we express surprise when the latest elected official changes course post-election. The masses, naively believing politicians will serve them instead of the moneyed interests that greased the election, constantly ignore the age-old patterns of broken promises, redistribution of wealth and power, and accelerating oligarchy as civilization decays.
Afraid to acknowledge imperialism, horrified to accept the truth about this set of living arrangements, we muddle along, pretending not to notice reality even as it intrudes into our personal lives. We can’t even accept our own individual death, much less the demise of empire or extinction of Homo sapiens.
So we vote, with plenty of evidence to suggest our vote doesn’t matter. We each hold our nose in checking the box beside the politician we believe is the lesser of evils. The lesser of evils is still evil, and the support of a fascist enterprise we incorrectly label “democracy” has led to the expected, fascist outcome.
Vladimir Lenin, who ought to know, said, “fascism is capitalism in decay.” Or, as I pointed out with far more words than Lenin in a book published more than a decade ago: “The administration of George W. Bush is characterized by powerful and continuing expressions of nationalism, identification of enemies as a unifying cause, obsession with militaristic national security and military supremacy, interlinking of religion and the ruling elite, obsession with crime and punishment, disdain for the importance of human rights and intellectuals who support them, cronyism, corruption, sexism, protection of corporate power, suppression of labor, control over mass media, and fraudulent elections. These are the defining elements of fascism.”
The situation in the United States has worsened considerably as one spineless, empty suit in the Oval Office has been replaced by another. I’ve no doubt we’ll rinse and repeat at every future opportunity. Serving corporate masters comes at a cost to the laborers, though the latter are adept at denying their slavery. And, although the United States is almost certainly the worst of the bunch, other industrialized countries are happy to follow the dirty road of lies, propaganda, and concentration of power within the hands of the few at the expense of the many.
Franz Kafka’s short stories and novels don’t even come close to the reality of our time. We’re firmly ensconced in Aldous Huxley’s brave (sic) new (sic) world. Most of the proles refuse to acknowledge the disaster of human affairs, much less the abject horrors beyond the human realm.
Consider a minor example, from among thousands: the complete isolation of the political system from the economic system. The latter is never debated in Congress, much less in town halls or universities. Economic issues, as emphasized by politicians, are limited to conversations about taxation and re-distribution. The taboo on discussions of, for example, ownership and control, is as severe as the taboo placed by the dominant culture on discussions of grief, death, sex, and urinating. Discussions about economics are limited to the economics of capitalism, the unquestioned only path worthy of conversation. Rather than deal with the foundation of capitalism — much less the deeper issue of civilization — we allow ourselves to address the color of the trim on the structure (e.g., wages and management).
Ask the typical American about any of the following topics, and you’ll likely receive the same response: atomic bombs, cluster bombs, depleted uranium, land mines, indefinite detention without due process, torture of untried detainees, and murder of children. The response to each of these crimes: We’re upholding security in the world. If not us, who?
I’m offended when the self-proclaimed patriots marinating in imperialism refer to the operation housed in the Pentagon as the Department of Defense. The language was a bit more honest before 1949, when the entity bore the War label. Even then, Department of Conquest would have been more accurate.
I doubt a Department of Peace emerges any time soon. Peace is boring. Conquest means bling. Not for you and me, but we don’t matter beyond our contributions as cannon fodder and cheap labor. And of course as consumers of cheap products we don’t need.
Your favorite candidate for political office isn’t going to repair the system. For starters, the system isn’t broken: It’s fixed, albeit not for you or me. Another politician isn’t going to douse the conflagration. He’s more likely to throw gasoline on the fire. Only then will it be clear what is meant by the expression, “Feel the Bern.”
Wednesday, January 27, 2016
Sunday, January 24, 2016
SC133-4
http://www.informationclearinghouse.info/article44030.htm
Emancipating the Military, Containing the Citizenry
Those who try to understand military policy often confuse themselves by focusing on minor matters such as strategy, tactics, logistics, and armament. Here they err. For years the central goal of the military, the brass ring, has been independence from control by civilians. It has been achieved.
In time of war, the first concern of the command is to limit the flow of information to their publics. The actions of the enemy are an important but secondary consideration. Thus militaries strive to prevent the dissemination of photos of mutilated soldiers or, as in Washington today, of governmentally tortured prisoners. In the United States, which characteristically fights wars unrelated to the safety of the country, the Pentagon must also keep soldiers from being told that they are being sacrifice for the benefit of arms manufacturers and imperialist ambitions. In wars before Vietnam, this was adroitly effected. You could go to jail for criticizing a war.
In Vietnam, something new happened. The press covered the war freely. Reporters went where they pleased, beyond the control of the military. Their publications ran the results. National magazines printed horrific photographs of what was really happening.
Truth tells. The coverage was one of the two factors that forced Washington to quit the war. The other was the passionate unwillingness of young men to be forced to fight a war in which they had no interest. The war, a source of meaning for Washington’s thunderous hawks and fern-bar Napoleons, was getting them killed.
The military of Vietnam wasn’t very good at fighting, and neither is the military of today. GIs in Asia would assault a hill, usually of no importance, and, after three days, with the aid of helicopters, helo gunships, napalm, artillery, and fighter-bombers, would capture it. This would be called a triumph. The astute observed that if the Americans had to fight on equal terms, without overwhelming material superiority, they would last perhaps ten minutes. This is now a recognized pattern. Note that numerically superior and hugely armed American forces have been outfought for years by lightly armed Afghan goat herds. Since neither the wars nor the soldiers in them are of much importance, this doesn’t matter.
The Pentagon learned a lot from Vietnam: It learned that its greatest enemies are the press and the American public. The burning question became how to keep the goddam public from interfering in wars which were none of its business and, particularly in the award of large contracts.
The problem was solved in two major ways. The first was to end the draft and go to the All Volunteer Army. The command realized that if they conscripted kids from Yale and the University of Virginia to come back in body bags, the prospective conscriptees, their girlfriends, and their families would take to the streets. This would threaten the smooth flow of funds. If volunteer kids from Tennessee died, no one would care.
The second step in keeping the public out of the loop was to control the press. This was done partly by “embedding” reporters in American military units in the victim country. The control was furthered, more by happenstance than plan, by the amalgamation of the major media in a few large corporations which then controlled content. It worked.
A third and crucial element was the quiet and de facto abolition of the restrictions imposed by the Constitution. As long as that document was held to be canonical, Congress would have to declare war before the military could attack anyone. A congressman voting for a war would have to explain to his constituents why he wanted to spend a trillion dollars on killing remote peasants when his jurisdiction had crumbling schools. People in Oklahoma might ask, “Can’t we grow our own goat herds more cheaply and kill them here?”
Congress was happy to shed this responsibility, or for that matter any responsibility. And so it did. The Commander-in-Chief was now able to send troops anywhere he pleased. It was his private army. He could , in effect, contract out the US military to Israel to crush its enemies or to the petro-interests to try to capture oil fields.
However, this happy canvas was not yet raised to Rafaelsesque perfection. There was still the awkward, though now minor, matter of body bags. The Presidency did what it could. It forbade the filming of flag-draped coffins coming into Dover Air Force Base on grounds of protecting the privacy of the occupants. Logicians might question just what intimate private details a photo of a box might reveal. But the public wasn’t William of Ockham. The point was to keep the rubes from knowing what the shrapnel cone of an RPG does the the head of Jimmy Jack Perkins of Memphis.
However, the damage was controllable. Not to Jimmy Jack’s head, but to the Army’s PR persona. That was what the Army cared about. Yet…things were not quite perfect. An awful lot of kids were coming back from obscure wars with TBI (Traumatic Brain Injury), which is what happens when seventy-five pounds of C4 in an IED blows. It turns said kid’s brain into the equivalent of a pudding stirred by an enthusiastic but poorly trained chef. For the next fifty years he stumbles, mumbles, drools, shuffles, and has the IQ of a duckbill platypus.
This was not a serious difficulty. The corporate media were in line, so there was no danger that CBS would do a hostile expose. Besides, with luck the creep would die early. But it was still a potential source of political blowback.
A solution appeared: Drones. They were wonderful, serving several purposes at once. They cost not as much as fighter planes, but enough to funnel lots of loot to contractors.. No body bags ever came back and so didn’t need to be hidden. Drones could be flown by wet-lipped sociopaths in air-conditioned comfort in Colorado. They couldn’t win a war, but neither could they lose one. This was ideal, since either winning or losing would slow the award of contracts.
The remaining bump in the road to full emancipation was the military budget. This matter was neutralized by the major media, which had become for practical purposes minor federal departments. In Mein Kampf, der Fuehrer pointed out that the masses would eventually believe any idea repeated often enough. A corollary was that the masses would ignore any idea mentioned only once or twice. Hiding financial grotesquery was not necessary. It sufficed to mention it briefly in paragraph seventeen or, on the tube, in passing in tones usually used in reporting uneventful weather. Done.
Close. Very close. There was no longer a single columnist in the major media who actually knew the technology, bureaucracy, and tactics of the military, or had been near a rifle. The networks could therefore hire retired colonels to explain that the military was dedicated to truth, justice, and the American way. The final condom in this chain of chastity was the president asserting that America was a city on a hill and a beam of light for darkened mankind, who to reach heaven needed only to give us their oil fields.
In sum, the foregoing measures constituted the greatest military victory since Waterloo. Neither Congress or the goddam public could any longer meddle where it had no business meddling. Fewer and fewer troops actually went to war, so the unpatriotic bastards couldn’t disrupt the war effort by coming home in body bags. The Pentagon had achieved its long-sought emancipation. It looked forward to killing any peasants who struck its fancy with the insouciant independence of a trust-fund baby in the fleshpots of the Orient.
Emancipating the Military, Containing the Citizenry
Those who try to understand military policy often confuse themselves by focusing on minor matters such as strategy, tactics, logistics, and armament. Here they err. For years the central goal of the military, the brass ring, has been independence from control by civilians. It has been achieved.
In time of war, the first concern of the command is to limit the flow of information to their publics. The actions of the enemy are an important but secondary consideration. Thus militaries strive to prevent the dissemination of photos of mutilated soldiers or, as in Washington today, of governmentally tortured prisoners. In the United States, which characteristically fights wars unrelated to the safety of the country, the Pentagon must also keep soldiers from being told that they are being sacrifice for the benefit of arms manufacturers and imperialist ambitions. In wars before Vietnam, this was adroitly effected. You could go to jail for criticizing a war.
In Vietnam, something new happened. The press covered the war freely. Reporters went where they pleased, beyond the control of the military. Their publications ran the results. National magazines printed horrific photographs of what was really happening.
Truth tells. The coverage was one of the two factors that forced Washington to quit the war. The other was the passionate unwillingness of young men to be forced to fight a war in which they had no interest. The war, a source of meaning for Washington’s thunderous hawks and fern-bar Napoleons, was getting them killed.
The military of Vietnam wasn’t very good at fighting, and neither is the military of today. GIs in Asia would assault a hill, usually of no importance, and, after three days, with the aid of helicopters, helo gunships, napalm, artillery, and fighter-bombers, would capture it. This would be called a triumph. The astute observed that if the Americans had to fight on equal terms, without overwhelming material superiority, they would last perhaps ten minutes. This is now a recognized pattern. Note that numerically superior and hugely armed American forces have been outfought for years by lightly armed Afghan goat herds. Since neither the wars nor the soldiers in them are of much importance, this doesn’t matter.
The Pentagon learned a lot from Vietnam: It learned that its greatest enemies are the press and the American public. The burning question became how to keep the goddam public from interfering in wars which were none of its business and, particularly in the award of large contracts.
The problem was solved in two major ways. The first was to end the draft and go to the All Volunteer Army. The command realized that if they conscripted kids from Yale and the University of Virginia to come back in body bags, the prospective conscriptees, their girlfriends, and their families would take to the streets. This would threaten the smooth flow of funds. If volunteer kids from Tennessee died, no one would care.
The second step in keeping the public out of the loop was to control the press. This was done partly by “embedding” reporters in American military units in the victim country. The control was furthered, more by happenstance than plan, by the amalgamation of the major media in a few large corporations which then controlled content. It worked.
A third and crucial element was the quiet and de facto abolition of the restrictions imposed by the Constitution. As long as that document was held to be canonical, Congress would have to declare war before the military could attack anyone. A congressman voting for a war would have to explain to his constituents why he wanted to spend a trillion dollars on killing remote peasants when his jurisdiction had crumbling schools. People in Oklahoma might ask, “Can’t we grow our own goat herds more cheaply and kill them here?”
Congress was happy to shed this responsibility, or for that matter any responsibility. And so it did. The Commander-in-Chief was now able to send troops anywhere he pleased. It was his private army. He could , in effect, contract out the US military to Israel to crush its enemies or to the petro-interests to try to capture oil fields.
However, this happy canvas was not yet raised to Rafaelsesque perfection. There was still the awkward, though now minor, matter of body bags. The Presidency did what it could. It forbade the filming of flag-draped coffins coming into Dover Air Force Base on grounds of protecting the privacy of the occupants. Logicians might question just what intimate private details a photo of a box might reveal. But the public wasn’t William of Ockham. The point was to keep the rubes from knowing what the shrapnel cone of an RPG does the the head of Jimmy Jack Perkins of Memphis.
However, the damage was controllable. Not to Jimmy Jack’s head, but to the Army’s PR persona. That was what the Army cared about. Yet…things were not quite perfect. An awful lot of kids were coming back from obscure wars with TBI (Traumatic Brain Injury), which is what happens when seventy-five pounds of C4 in an IED blows. It turns said kid’s brain into the equivalent of a pudding stirred by an enthusiastic but poorly trained chef. For the next fifty years he stumbles, mumbles, drools, shuffles, and has the IQ of a duckbill platypus.
This was not a serious difficulty. The corporate media were in line, so there was no danger that CBS would do a hostile expose. Besides, with luck the creep would die early. But it was still a potential source of political blowback.
A solution appeared: Drones. They were wonderful, serving several purposes at once. They cost not as much as fighter planes, but enough to funnel lots of loot to contractors.. No body bags ever came back and so didn’t need to be hidden. Drones could be flown by wet-lipped sociopaths in air-conditioned comfort in Colorado. They couldn’t win a war, but neither could they lose one. This was ideal, since either winning or losing would slow the award of contracts.
The remaining bump in the road to full emancipation was the military budget. This matter was neutralized by the major media, which had become for practical purposes minor federal departments. In Mein Kampf, der Fuehrer pointed out that the masses would eventually believe any idea repeated often enough. A corollary was that the masses would ignore any idea mentioned only once or twice. Hiding financial grotesquery was not necessary. It sufficed to mention it briefly in paragraph seventeen or, on the tube, in passing in tones usually used in reporting uneventful weather. Done.
Close. Very close. There was no longer a single columnist in the major media who actually knew the technology, bureaucracy, and tactics of the military, or had been near a rifle. The networks could therefore hire retired colonels to explain that the military was dedicated to truth, justice, and the American way. The final condom in this chain of chastity was the president asserting that America was a city on a hill and a beam of light for darkened mankind, who to reach heaven needed only to give us their oil fields.
In sum, the foregoing measures constituted the greatest military victory since Waterloo. Neither Congress or the goddam public could any longer meddle where it had no business meddling. Fewer and fewer troops actually went to war, so the unpatriotic bastards couldn’t disrupt the war effort by coming home in body bags. The Pentagon had achieved its long-sought emancipation. It looked forward to killing any peasants who struck its fancy with the insouciant independence of a trust-fund baby in the fleshpots of the Orient.
SC133-3
http://www.globalresearch.ca/global-financial-turmoil-a-severe-worldwide-economic-recession-in-2016-17/5502923
Global Financial Turmoil: A Severe Worldwide Economic Recession in 2016-17
....The onset of 2016 has been most chaotic for global financial markets with, so far, a severe stock market correction. As a matter of fact, the first month of 2016 has witnessed the most severe drop in financial stocks ever, with the MSCI All-Country World Stock Index, which measures major developed and emerging stock markets, dropping more than 20 percent, as compare to early 2015. For sure, there will be oversold rallies in the coming weeks and months, but one can expect more trouble ahead.
Many commentators are saying that the epicentre of this unfolding financial and economic crisis is in China, with the Shanghai Composite Index beginning to plummet at the beginning of the year. In my view, reality is more complex and even though China’s financial and economic problems are contributing to the collapse in commodity prices, the epicenter of the crisis is still in Washington D.C.
That is because the current unfolding crisis is essentially a continuation of the 2007-08 financial crisis which has been temporarily suspended and pushed into the future by the U.S. central bank, the Fed, with its aggressive and unorthodox monetary policy of multiple rounds of quantitative easing (QE), i.e. buying huge quantities of financial assets from commercial mega-banks and other institutions, including mortgage-backed securities, with newly created money. As a consequence, the Fed’s balance sheet went from a little more than one trillion dollars in 2008 to some four and a half trillion dollars when the quantity easing program was ended in October 2014. Other central banks have followed the Fed example, especially the central bank of Japan and the European central bank, which also adopted quantity easing policies in monetizing large amounts of financial assets.
Why did the Bernanke Fed adopt such an aggressive monetary policy in 2008? Essentially for three reasons: First, the lame-duck Bush administration in 2008 was clueless about what to do with the financial crisis that had started with the de facto failure of Bear Stearns in the spring of 2008 and of Merrill Lynch in early September 2008, culminating on September 15, 2008, with the failure of the large global investment bank of Lehman Brothers. So the U.S. central bank felt that it had to step in. In fact, it financed the merger of the two first failed mega-banks with the JPMorgan Chase bank and the Bank of America respectively. (For different reasons, it did not intervene in the same way when the Lehman Brothers bank failed.)
Secondly, bankers who have a huge influence in the way the Fed is managed did not want the U.S. government to nationalize the American mega-banks in financial difficulties, as it had been done in the 1989 when the George H. Bush administration established the government-owned Resolution Trust Corporation (RTC) to take over some 747 insolvent savings and loans thrift banks.
Thirdly, the Bernanke Fed was very worried that the 2007-08 banking crisis would lead to a Japanese-style deflation that would wreak havoc with an overleveraged economy. The hope was to avoid a devastating debt-deflation economic depressionlike the one suffered in the 1930s.
By injecting so much liquidity in the system, the Bernanke Fed created a gigantic financial bubble in stocks and bonds, even though the real economy has grown at a somewhat languishing 2 percent growth rate. Stock prices went into the stratosphere while interest rates fell as bond prices rose. Last December 16, the Fed announced officially that it will no longer blow into the financial balloons and that it was raising short-term interest rates for the first time since the financial crisis, setting the target range for the federal funds rate to between 1/4 to 1/2 percent. This was a signal that the financial party was over. And what’s more, this means that the stock market and the bond market will once again go in different directions, as a reflection of the state of the real economy, no matter what the Fed does.
Since 2008, the U.S. Fed has painted itself into a financial corner from which I personally felt it would be difficult to extricate itself. Indeed, it would be extremely difficult to correct the financial bubbles it has created —as an unintended consequence of salvaging the mega-banks in creating trillions of free money —without damaging the real economy of production and employment. If global stock markets collapse and if price deflation accelerates, making it more difficult to service the debt of consumers, corporations, and government alike, a repeat on a larger scale of what has happened in Japan over the last twenty-five years can be feared. This, at the very least, could lead to a global economic recession in 2016-17. If we go back in history, it could also be a repeat of the 1937-38 crash and recession, eight years after the crash and financial crisis of 1929-32.
One thing can be made clear: The creation of the Fed in 1913, as a semi-public American central bank, has not prevented the occurrence of financial crises. It has, however, been a boon to large banks because it has served as an instrument to socialize their losses....
Global Financial Turmoil: A Severe Worldwide Economic Recession in 2016-17
....The onset of 2016 has been most chaotic for global financial markets with, so far, a severe stock market correction. As a matter of fact, the first month of 2016 has witnessed the most severe drop in financial stocks ever, with the MSCI All-Country World Stock Index, which measures major developed and emerging stock markets, dropping more than 20 percent, as compare to early 2015. For sure, there will be oversold rallies in the coming weeks and months, but one can expect more trouble ahead.
Many commentators are saying that the epicentre of this unfolding financial and economic crisis is in China, with the Shanghai Composite Index beginning to plummet at the beginning of the year. In my view, reality is more complex and even though China’s financial and economic problems are contributing to the collapse in commodity prices, the epicenter of the crisis is still in Washington D.C.
That is because the current unfolding crisis is essentially a continuation of the 2007-08 financial crisis which has been temporarily suspended and pushed into the future by the U.S. central bank, the Fed, with its aggressive and unorthodox monetary policy of multiple rounds of quantitative easing (QE), i.e. buying huge quantities of financial assets from commercial mega-banks and other institutions, including mortgage-backed securities, with newly created money. As a consequence, the Fed’s balance sheet went from a little more than one trillion dollars in 2008 to some four and a half trillion dollars when the quantity easing program was ended in October 2014. Other central banks have followed the Fed example, especially the central bank of Japan and the European central bank, which also adopted quantity easing policies in monetizing large amounts of financial assets.
Why did the Bernanke Fed adopt such an aggressive monetary policy in 2008? Essentially for three reasons: First, the lame-duck Bush administration in 2008 was clueless about what to do with the financial crisis that had started with the de facto failure of Bear Stearns in the spring of 2008 and of Merrill Lynch in early September 2008, culminating on September 15, 2008, with the failure of the large global investment bank of Lehman Brothers. So the U.S. central bank felt that it had to step in. In fact, it financed the merger of the two first failed mega-banks with the JPMorgan Chase bank and the Bank of America respectively. (For different reasons, it did not intervene in the same way when the Lehman Brothers bank failed.)
Secondly, bankers who have a huge influence in the way the Fed is managed did not want the U.S. government to nationalize the American mega-banks in financial difficulties, as it had been done in the 1989 when the George H. Bush administration established the government-owned Resolution Trust Corporation (RTC) to take over some 747 insolvent savings and loans thrift banks.
Thirdly, the Bernanke Fed was very worried that the 2007-08 banking crisis would lead to a Japanese-style deflation that would wreak havoc with an overleveraged economy. The hope was to avoid a devastating debt-deflation economic depressionlike the one suffered in the 1930s.
By injecting so much liquidity in the system, the Bernanke Fed created a gigantic financial bubble in stocks and bonds, even though the real economy has grown at a somewhat languishing 2 percent growth rate. Stock prices went into the stratosphere while interest rates fell as bond prices rose. Last December 16, the Fed announced officially that it will no longer blow into the financial balloons and that it was raising short-term interest rates for the first time since the financial crisis, setting the target range for the federal funds rate to between 1/4 to 1/2 percent. This was a signal that the financial party was over. And what’s more, this means that the stock market and the bond market will once again go in different directions, as a reflection of the state of the real economy, no matter what the Fed does.
Since 2008, the U.S. Fed has painted itself into a financial corner from which I personally felt it would be difficult to extricate itself. Indeed, it would be extremely difficult to correct the financial bubbles it has created —as an unintended consequence of salvaging the mega-banks in creating trillions of free money —without damaging the real economy of production and employment. If global stock markets collapse and if price deflation accelerates, making it more difficult to service the debt of consumers, corporations, and government alike, a repeat on a larger scale of what has happened in Japan over the last twenty-five years can be feared. This, at the very least, could lead to a global economic recession in 2016-17. If we go back in history, it could also be a repeat of the 1937-38 crash and recession, eight years after the crash and financial crisis of 1929-32.
One thing can be made clear: The creation of the Fed in 1913, as a semi-public American central bank, has not prevented the occurrence of financial crises. It has, however, been a boon to large banks because it has served as an instrument to socialize their losses....
Thursday, January 21, 2016
SC133-2
http://peakoil.com/enviroment/get-ready-for-water-wars
Get Ready for Water Wars
A great war looms, one that will rise from the most desperate circumstance: our battle over water.
Today, we war because of a chasm of values and ideologies, national and religious differences. But quietly, a new conflict is budding in the shadows, one that many of us have not taken much notice of because it isn’t given the attention it’s due, especially by the “shallow pool” of candidates running for president of the United States.
If trends persist and a growing body of scientific evidence holds true, we may be at war, or at least find ourselves hurled into new geo-political conflicts, for something that most of us, at least in first-world countries, take for granted — water. I say this not to be an alarmist, to spread fear for the sake of spreading it, because of an “agenda” or a desire to manufacture attention. I say this because conflicts to secure this precious resource are already brewing across the world. The water wars of today may not be pervasive and prevalent. But someday soon, they could be coming to a city near you, a situation that could lead to another kind of conflict, the slow death of progress and economic growth.
Unrelenting global population growth and the insatiable consumption of water by industry, agriculture, burgeoning cities, freewheeling suburban development, and just utter waste is placing severe strains on diminishing water supplies, setting the stage for water scarcity even in places where it is seemingly bountiful. We must also consider the relatively undefined “x factor” — climate change. What that phenomenon means to our planet’s hydrologic cycle is still being sorted out by scientists.
But the outlook, thus far, is dire. The issue is real: clear and present.
In the Middle East, ISIS has waged war over water, scurrying to control dams in the parched land of Syria and Iraq. In China and Laos, more dams are being erected to redirect water to drier regions, leaving downstream countries like Cambodia and Vietnam to wonder whether the great rivers of the continent will one day be reduced to a trickle by the time it reaches them. In Africa, countries like Egypt, Ethiopia, and Sudan are staking their water claims, signing treaties that will dictate the fate of the Nile and the farmland surrounding it.
And in the U.S., we have a history of waging war in the courtroom over water rights from coast to coast. But if current water shortage trends persist, we may be in for a far worse situation, beyond the courtroom, a bleak day of reckoning that will be utterly incompatible with the American promise of progress and prosperity for all. Analyzing U.S. Geological Survey data, a USA Today investigative series focusing on groundwater shortages found that once huge and flush acquirers, like the Ogallala Aquifer that lies beneath a wide swath of the Great Plains, are being dangerously drained to fuel the water needs of cities, industry, and new development.
The newspaper’s investigation discovered that water levels have dropped in 64 percent of groundwater wells in a national database of more than 32,000 wells, figures that were compiled by the U.S. Geological Survey over two decades. According to the data, the average declines nationally were larger from 2011 to 2014. Farmers in Kansas now hear a meager splash of water when they drop a rock in their wells because the groundwater beneath their properties is so low.
Elsewhere, California is contending with a historic drought and record water shortages, which scientists believe is partly due to climate change. The state’s crops (an important food supply for the nation) and economy has been decimated because of four consecutive years of severe drought. According to a University of California study, the state has been forced to swallow a $2.7 billion hit to its economy, including 21,000 lost jobs in the agricultural sector. In parts of the state with limited groundwater reserves, the impact has been much more severe while other parts of the state have had to increase their draws from underground reserves. In addition, one study found that climate change was a significant contributor to recent drought conditions and that “although natural variability dominates, anthropogenic warming has substantially increased the overall likelihood of extreme California droughts.”
In Colorado, the state “faces the possibility of a significant water supply shortfall within the next few decades, even with aggressive conservation and new water projects,” according to a recently released state water plan. The plan attempts to mitigate this potentially devastating trend that will, if projections hold true, cripple the growth of cities like Denver. Meanwhile, Colorado’s population of about 5 million today is expected to double by 2050 — with much of that growth occurring just east of the Rocky Mountains — adding pressure to diminishing supplies.
The Intergovernmental Panel on Climate Change noted a litany of adverse water impacts because of climate change, evidence that was gathered from a recent and comprehensive review of scientific literature. That includes freshwater-related risks, a reduction in surface and groundwater resources in some regions, and intensified “competition for water among agriculture, ecosystems, settlements, industry, and energy production, affecting regional water, energy, and food security.” Because of increased greenhouse gas concentrations, another study revealed a “likely increase in the global severity of drought by the end of 21st century.” That study predicts South America and Central and Western Europe will be particularly hard hit, “in which the frequency of drought increases by more than 20%.”
Then, there’s a recent NASA study that showed through satellite data how more than half of the planet’s 37 largest aquifers are being depleted, taxed beyond their ability to effectively replenish. Other studies reveal that we will not have enough water to meet demand by 2040 — “to quench the thirst of the world population and keep the current energy and power solutions going if we continue doing what we are doing today” — and that 33 countries will face “extremely high water stress” in less than 25 years!
A bleak future looms, one that threatens our crops, our food supply and food security, our economic progress and prosperity, and perhaps even our survival. A growing body of scientific evidence reveals that a storm is brewing, one that could tip us into wars that make conflicts over values and ideologies utterly meaningless as we scavenge and stake claims on diminishing, nearly depleted resources to ensure our survival. We see the potential for this future today from historic droughts to sucking dry aquifers, strained and nearly depleted by our unrestrained march of progress.
As we quibble over nonsense in our national politics or get distracted by the latest box office hit, we ignore the larger issues, some of which are necessary for us to flourish. Perhaps we should begin quibbling over things that matter, rather than the inane. Water conservation is a global conversation we must have — today. We must radically rethink our use of water and its role in our economies. We may also need to rehash the mishmash of complex laws, regulations, and court decisions governing water use in the U.S. so that we protect our resources, as well as use them judiciously. In light of climate change and extreme population growth, the one element all life on Earth needs to live — clean freshwater — may one day no longer be bountiful and ubiquitous. If we refuse to accept that stark truth, we will be in for a bleak reckoning that will be far worse than anything we have seen in human history.
Get Ready for Water Wars
A great war looms, one that will rise from the most desperate circumstance: our battle over water.
Today, we war because of a chasm of values and ideologies, national and religious differences. But quietly, a new conflict is budding in the shadows, one that many of us have not taken much notice of because it isn’t given the attention it’s due, especially by the “shallow pool” of candidates running for president of the United States.
If trends persist and a growing body of scientific evidence holds true, we may be at war, or at least find ourselves hurled into new geo-political conflicts, for something that most of us, at least in first-world countries, take for granted — water. I say this not to be an alarmist, to spread fear for the sake of spreading it, because of an “agenda” or a desire to manufacture attention. I say this because conflicts to secure this precious resource are already brewing across the world. The water wars of today may not be pervasive and prevalent. But someday soon, they could be coming to a city near you, a situation that could lead to another kind of conflict, the slow death of progress and economic growth.
Unrelenting global population growth and the insatiable consumption of water by industry, agriculture, burgeoning cities, freewheeling suburban development, and just utter waste is placing severe strains on diminishing water supplies, setting the stage for water scarcity even in places where it is seemingly bountiful. We must also consider the relatively undefined “x factor” — climate change. What that phenomenon means to our planet’s hydrologic cycle is still being sorted out by scientists.
But the outlook, thus far, is dire. The issue is real: clear and present.
In the Middle East, ISIS has waged war over water, scurrying to control dams in the parched land of Syria and Iraq. In China and Laos, more dams are being erected to redirect water to drier regions, leaving downstream countries like Cambodia and Vietnam to wonder whether the great rivers of the continent will one day be reduced to a trickle by the time it reaches them. In Africa, countries like Egypt, Ethiopia, and Sudan are staking their water claims, signing treaties that will dictate the fate of the Nile and the farmland surrounding it.
And in the U.S., we have a history of waging war in the courtroom over water rights from coast to coast. But if current water shortage trends persist, we may be in for a far worse situation, beyond the courtroom, a bleak day of reckoning that will be utterly incompatible with the American promise of progress and prosperity for all. Analyzing U.S. Geological Survey data, a USA Today investigative series focusing on groundwater shortages found that once huge and flush acquirers, like the Ogallala Aquifer that lies beneath a wide swath of the Great Plains, are being dangerously drained to fuel the water needs of cities, industry, and new development.
The newspaper’s investigation discovered that water levels have dropped in 64 percent of groundwater wells in a national database of more than 32,000 wells, figures that were compiled by the U.S. Geological Survey over two decades. According to the data, the average declines nationally were larger from 2011 to 2014. Farmers in Kansas now hear a meager splash of water when they drop a rock in their wells because the groundwater beneath their properties is so low.
Elsewhere, California is contending with a historic drought and record water shortages, which scientists believe is partly due to climate change. The state’s crops (an important food supply for the nation) and economy has been decimated because of four consecutive years of severe drought. According to a University of California study, the state has been forced to swallow a $2.7 billion hit to its economy, including 21,000 lost jobs in the agricultural sector. In parts of the state with limited groundwater reserves, the impact has been much more severe while other parts of the state have had to increase their draws from underground reserves. In addition, one study found that climate change was a significant contributor to recent drought conditions and that “although natural variability dominates, anthropogenic warming has substantially increased the overall likelihood of extreme California droughts.”
In Colorado, the state “faces the possibility of a significant water supply shortfall within the next few decades, even with aggressive conservation and new water projects,” according to a recently released state water plan. The plan attempts to mitigate this potentially devastating trend that will, if projections hold true, cripple the growth of cities like Denver. Meanwhile, Colorado’s population of about 5 million today is expected to double by 2050 — with much of that growth occurring just east of the Rocky Mountains — adding pressure to diminishing supplies.
The Intergovernmental Panel on Climate Change noted a litany of adverse water impacts because of climate change, evidence that was gathered from a recent and comprehensive review of scientific literature. That includes freshwater-related risks, a reduction in surface and groundwater resources in some regions, and intensified “competition for water among agriculture, ecosystems, settlements, industry, and energy production, affecting regional water, energy, and food security.” Because of increased greenhouse gas concentrations, another study revealed a “likely increase in the global severity of drought by the end of 21st century.” That study predicts South America and Central and Western Europe will be particularly hard hit, “in which the frequency of drought increases by more than 20%.”
Then, there’s a recent NASA study that showed through satellite data how more than half of the planet’s 37 largest aquifers are being depleted, taxed beyond their ability to effectively replenish. Other studies reveal that we will not have enough water to meet demand by 2040 — “to quench the thirst of the world population and keep the current energy and power solutions going if we continue doing what we are doing today” — and that 33 countries will face “extremely high water stress” in less than 25 years!
A bleak future looms, one that threatens our crops, our food supply and food security, our economic progress and prosperity, and perhaps even our survival. A growing body of scientific evidence reveals that a storm is brewing, one that could tip us into wars that make conflicts over values and ideologies utterly meaningless as we scavenge and stake claims on diminishing, nearly depleted resources to ensure our survival. We see the potential for this future today from historic droughts to sucking dry aquifers, strained and nearly depleted by our unrestrained march of progress.
As we quibble over nonsense in our national politics or get distracted by the latest box office hit, we ignore the larger issues, some of which are necessary for us to flourish. Perhaps we should begin quibbling over things that matter, rather than the inane. Water conservation is a global conversation we must have — today. We must radically rethink our use of water and its role in our economies. We may also need to rehash the mishmash of complex laws, regulations, and court decisions governing water use in the U.S. so that we protect our resources, as well as use them judiciously. In light of climate change and extreme population growth, the one element all life on Earth needs to live — clean freshwater — may one day no longer be bountiful and ubiquitous. If we refuse to accept that stark truth, we will be in for a bleak reckoning that will be far worse than anything we have seen in human history.
SC133-1
http://peakoil.com/business/the-u-s-is-at-the-center-of-the-global-economic-meltdown
The U.S. Is At The Center Of The Global Economic Meltdown
While the economic implosion progresses this year, there will be considerable misdirection and disinformation as to the true nature of what is taking place. As I have outlined in the past, the masses were so ill informed by the mainstream media during the Great Depression that most people had no idea they were actually in the midst of an “official” depression until years after it began. The chorus of economic journalists of the day made sure to argue consistently that recovery was “right around the corner.” Our current depression has been no different, but something is about to change.
Unlike the Great Depression, social crisis will eventually eclipse economic crisis in the U.S. That is to say, our society today is so unequipped to deal with a financial collapse that the event will inevitably trigger cultural upheaval and violent internal conflict. In the 1930s, nearly 50% of the American population was rural. Farmers made up 21% of the labor force. Today, only 20% of the population is rural. Less than 2% work in farming and agriculture. That’s a rather dramatic shift from a more independent and knowledgeable land-utilizing society to a far more helpless and hapless consumer-based system.
What’s the bottom line? About 80% of the current population in the U.S. is more than likely inexperienced in any meaningful form of food production and self-reliance.
The rationale for lying to the public is certainly there. Economic and political officials could argue that to reveal the truth of our fiscal situation would result in utter panic and immediate social breakdown. When 80% of the citizenry is completely unprepared for a decline in the mainstream grid, a loss of savings through falling equities and a loss of buying power through currency destruction, their first response to such dangers would be predictably uncivilized.
Of course, the powers-that-be are not really interested in protecting the American people from themselves. They are interested only in positioning their own finances and resources in the most advantageous investments while using our loss and fear to extract more centralization, more control and more consent. Thus, the hiding of economic decline is enacted because the decline itself is useful to the elites.
And just to be clear for those who buy into the propaganda, the U.S. is indeed in a speedy decline.
In ‘Lies You Will Hear As The Economic Collapse Progresses’, published in summer of last year, I predicted that “Chinese contagion” would be used as the scapegoat for the downturn in order to hide the true source: American wealth destruction. Today, as the Dow and other markets plummet and oil markets tank due to falling demand and glut inventories, all we seem to hear from the mainstream talking heads and the people who parrot them in various forums is that the U.S. is the “only stable economy by comparison” and the rest of the world (mainly China) is a poison to our otherwise exemplary financial health. This is delusional fiction.
The U.S. is the No. 1 consumer market in the world with a 29% overall share and a 21% share in energy usage, despite having only 5 percent of the world’s total population. If there is a global slowdown in consumption, manufacturing, exports and imports, then the first place to look should be America.
Trucking freight in the U.S. is in steep decline, with freight companies pointing to a “glut in inventories” and a fall in demand as the culprit.
Morgan Stanley’s freight transportation update indicates a collapse in freight demand worse than that seen during 2009.
The Baltic Dry Index, a measure of global freight rates and thus a measure of global demand for shipping of raw materials, has collapsed to even more dismal historic lows. Hucksters in the mainstream continue to push the lie that the fall in the BDI is due to an “overabundance of new ships.” However, the CEO of A.P. Moeller-Maersk, the world’s largest shipping line, put that nonsense to rest when he admitted in November that “global growth is slowing down” and “[t]rade is currently significantly weaker than it normally would be under the growth forecasts we see.”
Maersk ties the decline in global shipping to a FALL IN DEMAND, not an increase in shipping fleets.
This point is driven home when one examines the real-time MarineTraffic map, which tracks all cargo ships around the world. For the past few weeks, the map has remained almost completely inactive with the vast majority of the world’s cargo ships sitting idle in port, not traveling across oceans to deliver goods. The reality is, global demand has fallen down a black hole, and the U.S. is at the top of the list in terms of crashing consumer markets.
To drive the point home even further, the U.S. is by far the world’s largest petroleum consumer. Therefore, any sizable collapse in global oil demand would have to be predicated in large part on a fall in American consumption. Oil inventories are now overflowing, indicating an unheard-of crash in energy use and purchasing.
U.S. petroleum consumption was actually lower in 2014 than it was in 1997 and 25% lower than earlier projections predicted. A large part of this reduction in gas use has been attributed to fewer vehicle miles traveled. Though oil markets have seen massive price cuts, the lack of demand continued through 2015.
This collapse in consumption is reflected partially in newly adjusted 4th quarter GDP forecasts by the Federal Reserve, which are now slashed down to 0.7%. And remember, Fed and government calculate GDP stats by counting government spending of taxpayer money as “production” or “commerce”. They also count parasitic programs like Obamacare towards GDP as well. If one were to remove government spending of taxpayer funds from the equation, real GDP would be far in the negative. That is to say, if the fake numbers are this bad, then the real numbers must be horrendous.
And finally, let’s talk about Wal-Mart. There is a good reason why mainstream pundits are attempting to marginalize Wal-Mart’s sudden announcement of 269 store closures, 154 of them within the U.S. with at least 10,000 employees being laid off. Admitting weakness in Wal-Mart means admitting weakness in the U.S. economy, and they don’t want to do that.
Wal-Mart is America’s largest retailer and largest employer. In 2014, Wal-Mart announced a sweeping plan to essentially crush neighborhood grocery markets with its Wal-Mart Express stores, building hundreds within months. Today, those Wal-Mart Express stores are being shut down in droves, along with some supercenters. Their top business model lasted around a year before it was abandoned.
Some in the mainstream argue that this is not necessarily a sign of economic decline because Wal-Mart claims it will be building 200 to 240 new stores worldwide by 2017. This is interesting to me because Wal-Mart just suffered its steepest stock drop in 27 years on reports that projected sales will fall by 6% to 12% for the next two years.
It would seem to me highly unlikely that Wal-Mart would close 154 stores in the U.S. (269 stores worldwide) and then open 240 other stores during a projected steep crash in sales that caused the worst stock trend in the company’s history. I think it far more likely that Wal-Mart executives are attempting to appease shareholders with expansion promises they do not plan to keep.
I am going to call it here and now and predict that most of these store sites will never see construction and that Wal-Mart will continue to make cuts, either with store closings, employee layoffs or both.
As the above data indicates, global demand is disintegrating; and the U.S. is a core driver.
The best way to sweep all these negative indicators under the rug is to fabricate some grand idea of outside threats and fiscal dominoes. It is much easier for Americans to believe our country is being battered from without rather than destroyed from within.
Does China have considerable fiscal issues including debt bubble issues? Absolutely. Is this a catalyst for global collapse? No. China’s problems are many but if there is a first “domino” in the chain, then the U.S. economy claims that distinction.
China is the largest exporter in the world, not the largest consumer. If anything, a crash in China’s economy is only a REFLECTION of an underlying collapse in U.S. demand for Chinese goods (among others). That is to say, the mainstream dullards have it backward; a crash in China is a herald of a larger collapse in U.S. markets. A crash in China is a symptom of the greater fiscal disease in America. The U.S. is the primary cause; it is not the victim of Chinese contagion. And the crisis in the U.S. will ultimately be far worse by comparison.
I wrote in ‘What Fresh Horror Awaits The Economy After Fed Rate Hike?’, published before Christmas:
“Market turmoil is a guarantee given the fact that banks and corporations have been utterly reliant on near-zero interest rates and free overnight lending from the Fed. They have been using these no-cost and low-cost loans primarily for stock buybacks, purchasing back their own stocks and reducing the number of shares on the market, thereby artificially elevating the value of the remaining shares and driving up the market as a whole. Now that near-zero lending is over, these banks and corporations will not be able to afford constant overnight borrowing, and the buybacks will cease. Thus, stock markets will crash in the near term.
This process has already begun with increased volatility leading up to and after the Fed rate hike. Watch for far more erratic stock movements (300 to 500 points or more) up and down taking place more frequently, with the overall trend leading down into the 15,000-point range for the Dow in the first two quarters of 2016. Extraordinary but short lived positive increases in the markets will occur at times (Christmas and New Year’s tend to result in positive rallies), but shock rallies are just as much a sign of volatility and instability as shock crashes.”
Markets moved immediately into crash territory after the new year began. This was an easy prediction to make and one that I have been reiterating for months — just as the timing of the Fed rate hike was an easy prediction to make, based on the Fed’s history of deliberately increasing instability through bad policy as the economy moves into deflationary spirals. The Fed did it during the Great Depression and is doing it again today.
It is no coincidence that global markets began to tank after the first Fed rate hike; no-cost overnight lending to banks and corporations was the key to maintaining equities in a relatively static position. As the U.S. loses momentum, the world loses momentum. As the Fed ends outright stimulation and manipulation, the house of cards falls.
I have said it many times and I’ll say it yet again: If you think the Fed’s motivation is to prolong or protect the U.S. economy and currency, then you will never understand why it takes the policy actions it does. If you understand and accept the fact that the Fed is a saboteur working carefully and incrementally toward the destruction of the U.S. to make way for a new globally centralized system, everything falls into place.
To summarize, the U.S. economy as we know it is not slated to survive the next few years. Read my article ‘The Economic Endgame Explained’ for more in-depth information on why a collapse is being engineered and what the openly admitted goal is, including the referenced 1988 article from The Economist titled “Get Ready A World Currency In 2018,” which outlines the plan for a reduction of the dollar and the U.S. system in order to make way for a global basket reserve currency (Special Drawing Rights).
It is astonishingly foolish to assume that even though the U.S. has held the title of king of global consumption share for decades, that our economy is somehow not a primary faulty part in the sputtering global economic engine. Economies are falling because demand is falling. Demand is falling because Americans are not buying. Americans are not buying because Americans are broke. Americans are broke because central bank policy has created an environment of wealth destruction. This wealth destruction in the U.S. has been ongoing, but only now is it becoming truly visible. The volatility we see in developing nations is paltry compared to the financial chaos we now face. Anyone who attempts to dismiss the dangers of a U.S. breakdown or the threat to the unprepared public is either an idiot, or they are trying to divert and distract you from reality. The coming months will undoubtedly verify this.
The U.S. Is At The Center Of The Global Economic Meltdown
While the economic implosion progresses this year, there will be considerable misdirection and disinformation as to the true nature of what is taking place. As I have outlined in the past, the masses were so ill informed by the mainstream media during the Great Depression that most people had no idea they were actually in the midst of an “official” depression until years after it began. The chorus of economic journalists of the day made sure to argue consistently that recovery was “right around the corner.” Our current depression has been no different, but something is about to change.
Unlike the Great Depression, social crisis will eventually eclipse economic crisis in the U.S. That is to say, our society today is so unequipped to deal with a financial collapse that the event will inevitably trigger cultural upheaval and violent internal conflict. In the 1930s, nearly 50% of the American population was rural. Farmers made up 21% of the labor force. Today, only 20% of the population is rural. Less than 2% work in farming and agriculture. That’s a rather dramatic shift from a more independent and knowledgeable land-utilizing society to a far more helpless and hapless consumer-based system.
What’s the bottom line? About 80% of the current population in the U.S. is more than likely inexperienced in any meaningful form of food production and self-reliance.
The rationale for lying to the public is certainly there. Economic and political officials could argue that to reveal the truth of our fiscal situation would result in utter panic and immediate social breakdown. When 80% of the citizenry is completely unprepared for a decline in the mainstream grid, a loss of savings through falling equities and a loss of buying power through currency destruction, their first response to such dangers would be predictably uncivilized.
Of course, the powers-that-be are not really interested in protecting the American people from themselves. They are interested only in positioning their own finances and resources in the most advantageous investments while using our loss and fear to extract more centralization, more control and more consent. Thus, the hiding of economic decline is enacted because the decline itself is useful to the elites.
And just to be clear for those who buy into the propaganda, the U.S. is indeed in a speedy decline.
In ‘Lies You Will Hear As The Economic Collapse Progresses’, published in summer of last year, I predicted that “Chinese contagion” would be used as the scapegoat for the downturn in order to hide the true source: American wealth destruction. Today, as the Dow and other markets plummet and oil markets tank due to falling demand and glut inventories, all we seem to hear from the mainstream talking heads and the people who parrot them in various forums is that the U.S. is the “only stable economy by comparison” and the rest of the world (mainly China) is a poison to our otherwise exemplary financial health. This is delusional fiction.
The U.S. is the No. 1 consumer market in the world with a 29% overall share and a 21% share in energy usage, despite having only 5 percent of the world’s total population. If there is a global slowdown in consumption, manufacturing, exports and imports, then the first place to look should be America.
Trucking freight in the U.S. is in steep decline, with freight companies pointing to a “glut in inventories” and a fall in demand as the culprit.
Morgan Stanley’s freight transportation update indicates a collapse in freight demand worse than that seen during 2009.
The Baltic Dry Index, a measure of global freight rates and thus a measure of global demand for shipping of raw materials, has collapsed to even more dismal historic lows. Hucksters in the mainstream continue to push the lie that the fall in the BDI is due to an “overabundance of new ships.” However, the CEO of A.P. Moeller-Maersk, the world’s largest shipping line, put that nonsense to rest when he admitted in November that “global growth is slowing down” and “[t]rade is currently significantly weaker than it normally would be under the growth forecasts we see.”
Maersk ties the decline in global shipping to a FALL IN DEMAND, not an increase in shipping fleets.
This point is driven home when one examines the real-time MarineTraffic map, which tracks all cargo ships around the world. For the past few weeks, the map has remained almost completely inactive with the vast majority of the world’s cargo ships sitting idle in port, not traveling across oceans to deliver goods. The reality is, global demand has fallen down a black hole, and the U.S. is at the top of the list in terms of crashing consumer markets.
To drive the point home even further, the U.S. is by far the world’s largest petroleum consumer. Therefore, any sizable collapse in global oil demand would have to be predicated in large part on a fall in American consumption. Oil inventories are now overflowing, indicating an unheard-of crash in energy use and purchasing.
U.S. petroleum consumption was actually lower in 2014 than it was in 1997 and 25% lower than earlier projections predicted. A large part of this reduction in gas use has been attributed to fewer vehicle miles traveled. Though oil markets have seen massive price cuts, the lack of demand continued through 2015.
This collapse in consumption is reflected partially in newly adjusted 4th quarter GDP forecasts by the Federal Reserve, which are now slashed down to 0.7%. And remember, Fed and government calculate GDP stats by counting government spending of taxpayer money as “production” or “commerce”. They also count parasitic programs like Obamacare towards GDP as well. If one were to remove government spending of taxpayer funds from the equation, real GDP would be far in the negative. That is to say, if the fake numbers are this bad, then the real numbers must be horrendous.
And finally, let’s talk about Wal-Mart. There is a good reason why mainstream pundits are attempting to marginalize Wal-Mart’s sudden announcement of 269 store closures, 154 of them within the U.S. with at least 10,000 employees being laid off. Admitting weakness in Wal-Mart means admitting weakness in the U.S. economy, and they don’t want to do that.
Wal-Mart is America’s largest retailer and largest employer. In 2014, Wal-Mart announced a sweeping plan to essentially crush neighborhood grocery markets with its Wal-Mart Express stores, building hundreds within months. Today, those Wal-Mart Express stores are being shut down in droves, along with some supercenters. Their top business model lasted around a year before it was abandoned.
Some in the mainstream argue that this is not necessarily a sign of economic decline because Wal-Mart claims it will be building 200 to 240 new stores worldwide by 2017. This is interesting to me because Wal-Mart just suffered its steepest stock drop in 27 years on reports that projected sales will fall by 6% to 12% for the next two years.
It would seem to me highly unlikely that Wal-Mart would close 154 stores in the U.S. (269 stores worldwide) and then open 240 other stores during a projected steep crash in sales that caused the worst stock trend in the company’s history. I think it far more likely that Wal-Mart executives are attempting to appease shareholders with expansion promises they do not plan to keep.
I am going to call it here and now and predict that most of these store sites will never see construction and that Wal-Mart will continue to make cuts, either with store closings, employee layoffs or both.
As the above data indicates, global demand is disintegrating; and the U.S. is a core driver.
The best way to sweep all these negative indicators under the rug is to fabricate some grand idea of outside threats and fiscal dominoes. It is much easier for Americans to believe our country is being battered from without rather than destroyed from within.
Does China have considerable fiscal issues including debt bubble issues? Absolutely. Is this a catalyst for global collapse? No. China’s problems are many but if there is a first “domino” in the chain, then the U.S. economy claims that distinction.
China is the largest exporter in the world, not the largest consumer. If anything, a crash in China’s economy is only a REFLECTION of an underlying collapse in U.S. demand for Chinese goods (among others). That is to say, the mainstream dullards have it backward; a crash in China is a herald of a larger collapse in U.S. markets. A crash in China is a symptom of the greater fiscal disease in America. The U.S. is the primary cause; it is not the victim of Chinese contagion. And the crisis in the U.S. will ultimately be far worse by comparison.
I wrote in ‘What Fresh Horror Awaits The Economy After Fed Rate Hike?’, published before Christmas:
“Market turmoil is a guarantee given the fact that banks and corporations have been utterly reliant on near-zero interest rates and free overnight lending from the Fed. They have been using these no-cost and low-cost loans primarily for stock buybacks, purchasing back their own stocks and reducing the number of shares on the market, thereby artificially elevating the value of the remaining shares and driving up the market as a whole. Now that near-zero lending is over, these banks and corporations will not be able to afford constant overnight borrowing, and the buybacks will cease. Thus, stock markets will crash in the near term.
This process has already begun with increased volatility leading up to and after the Fed rate hike. Watch for far more erratic stock movements (300 to 500 points or more) up and down taking place more frequently, with the overall trend leading down into the 15,000-point range for the Dow in the first two quarters of 2016. Extraordinary but short lived positive increases in the markets will occur at times (Christmas and New Year’s tend to result in positive rallies), but shock rallies are just as much a sign of volatility and instability as shock crashes.”
Markets moved immediately into crash territory after the new year began. This was an easy prediction to make and one that I have been reiterating for months — just as the timing of the Fed rate hike was an easy prediction to make, based on the Fed’s history of deliberately increasing instability through bad policy as the economy moves into deflationary spirals. The Fed did it during the Great Depression and is doing it again today.
It is no coincidence that global markets began to tank after the first Fed rate hike; no-cost overnight lending to banks and corporations was the key to maintaining equities in a relatively static position. As the U.S. loses momentum, the world loses momentum. As the Fed ends outright stimulation and manipulation, the house of cards falls.
I have said it many times and I’ll say it yet again: If you think the Fed’s motivation is to prolong or protect the U.S. economy and currency, then you will never understand why it takes the policy actions it does. If you understand and accept the fact that the Fed is a saboteur working carefully and incrementally toward the destruction of the U.S. to make way for a new globally centralized system, everything falls into place.
To summarize, the U.S. economy as we know it is not slated to survive the next few years. Read my article ‘The Economic Endgame Explained’ for more in-depth information on why a collapse is being engineered and what the openly admitted goal is, including the referenced 1988 article from The Economist titled “Get Ready A World Currency In 2018,” which outlines the plan for a reduction of the dollar and the U.S. system in order to make way for a global basket reserve currency (Special Drawing Rights).
It is astonishingly foolish to assume that even though the U.S. has held the title of king of global consumption share for decades, that our economy is somehow not a primary faulty part in the sputtering global economic engine. Economies are falling because demand is falling. Demand is falling because Americans are not buying. Americans are not buying because Americans are broke. Americans are broke because central bank policy has created an environment of wealth destruction. This wealth destruction in the U.S. has been ongoing, but only now is it becoming truly visible. The volatility we see in developing nations is paltry compared to the financial chaos we now face. Anyone who attempts to dismiss the dangers of a U.S. breakdown or the threat to the unprepared public is either an idiot, or they are trying to divert and distract you from reality. The coming months will undoubtedly verify this.
Monday, January 18, 2016
SC132-15
http://www.truthdig.com/report/item/the_mirage_of_justice_20160117
The Mirage of Justice
If you are poor, you will almost never go to trial—instead you will be forced to accept a plea deal offered by government prosecutors. If you are poor, the word of the police, who are not averse to fabricating or tampering with evidence, manipulating witnesses and planting guns or drugs, will be accepted in a courtroom as if it was the word of God. If you are poor, and especially if you are of color, almost anyone who can verify your innocence will have a police record of some kind and thereby will be invalidated as a witness. If you are poor, you will be railroaded in an assembly-line production, from a town or city where there are no jobs, through the police stations, county jails and courts directly into prison. And if you are poor, because you don’t have money for adequate legal defense, you will serve sentences that are decades longer than those for equivalent crimes anywhere else in the industrialized world.
If you are a poor person of color in America you understand this with a visceral fear. You have no chance. Being poor has become a crime. And this makes mass incarceration the most pressing civil rights issue of our era.
The 10-part online documentary “Making a Murderer,” by writer-directors Moira Demos and Laura Ricciardi, chronicles the endemic corruption of the judicial system. The film focuses on the case of Steven Avery and his nephew, Brendan Dassey, who were given life sentences for murder without any tangible evidence linking them to the crime. As admirable as the documentary was, however, it focused on a case where the main defendant, Avery, had competent defense. He was also white. The blatant corruption of, and probable conspiracy by, the Manitowoc County Sheriff’s Office in Wisconsin and then-Calumet County District Attorney Ken Kratz is nothing compared with what goes on in the well-oiled and deeply cynical system in place in inner-city courts. The accused in poor urban centers are lined up daily like sheep in a chute and shipped to prison with a startling alacrity. The attempts by those who put Avery and Dassey behind bars to vilify them further after the release of the film misses the point: The two men, like most of the rest of the poor behind bars in the United States, did not receive a fair trial. Whether they did or did not murder Teresa Halbach—and the film makes a strong case that they did not—is a moot point.
Once you are charged in America, whether you did the crime or not, you are almost always found guilty. Because of this, as many activists have discovered, the courts already are being used as a fundamental weapon of repression, and this abuse will explode in size should there be widespread unrest and dissent. Our civil liberties have been transformed into privileges—what Matt Taibbi in “The Divide: American Injustice in the Age of the Wealth Gap” calls “conditional rights and conditional citizenship”—that are, especially in poor communities, routinely revoked. Once rights become privileges, none of us are safe.
In any totalitarian society, including an American society ruled by its own species of inverted totalitarianism, the state invests tremendous amounts of energy into making the judicial system appear as if it functions impartially. And the harsher the totalitarian system becomes, the more effort it puts into disclaiming its identity. The Nazis, as did the Soviet Union under Stalin, broke the accused down in grueling and psychologically crippling interrogations—much the same way the hapless and confused Dassey is manipulated and lied to by interrogators in the film—to make them sign false confessions. Totalitarian states need the facade of justice to keep the public passive.
The Guardian newspaper reported: “The Innocence Project has kept detailed records on the 337 cases across the [United States] where prisoners have been exonerated as a result of DNA testing since 1989. The group’s researchers found that false confessions were made in 28 percent of all the DNA-related exonerations, a striking proportion in itself. But when you look only at homicide convictions—by definition the most serious cases—false confessions are the leading cause of miscarriages of justice, accounting for a full 63% of the 113 exonerations.”
“[T]he interrogator-butcher isn’t interested in logic,” Alexander Solzhenitsyn writes in “The Gulag Archipelago,” “he just wants to catch two or three phrases. He knows what he wants. And as for us—we are totally unprepared for anything. From childhood on we are educated and trained—for our own profession; for our civil duties; for military service; to take care of our bodily needs; to behave well; even to appreciate beauty (well, this last not really all that much!). But neither our education, nor our upbringing, nor our experience prepares us in the slightest for the greatest trial of our lives: being arrested for nothing and interrogated about nothing.”
If the illusion of justice is shattered, the credibility and viability of the state are jeopardized. The spectacle of court, its solemnity and stately courthouses, its legal rituals and language, is part of the theater. The press, as was seen in the film, serves as an echo machine for the state, condemning the accused before he or she begins trial. Television shows and movies about crime investigators and the hunt for killers and terrorists feed the fictitious narrative. The reality is that almost no one who is imprisoned in America has gotten a trial. There is rarely an impartial investigation. A staggering 97 percent of all federal cases and 95 percent of all state felony cases are resolved through plea bargaining. Of the 2.2 million people we have incarcerated at the moment—25 percent of the world’s prison population—2 million never had a trial. And significant percentages of them are innocent.
Judge Jed S. Rakoff in an article in The New York Review of Books titled “Why Innocent People Plead Guilty” explains how this secretive plea system works to thwart justice. Close to 40 percent of those eventually exonerated of their crimes originally pleaded guilty, usually in an effort to reduce charges that would have resulted in much longer prison sentences if the cases had gone to trial. The students I teach in prison who have the longest sentences are usually the ones who demanded a trial. Many of them went to trial because they did not commit the crime. But if you go to trial you cannot bargain away any of the charges against you in exchange for a shorter sentence. The public defender—who spends no more than a few minutes reviewing the case and has neither the time nor the inclination to do the work required by a trial—uses the prospect of the harshest sentence possible to frighten the client into taking a plea deal. And, as depicted in “Making a Murderer,” prosecutors and defense attorneys often work as a tag team to force the accused to plead guilty. If all of the accused went to trial, the judicial system, which is designed around plea agreements, would collapse. And this is why trial sentences are horrific. It is why public attorneys routinely urge their clients to accept a plea arrangement. Trials are a flashing red light to the accused: DO NOT DO THIS. It is the inversion of justice.
The wrongly accused and their families, as long as the fiction of justice is maintained, vainly seek redress. They file appeal after appeal. Those convicted devote hundreds of hours of study in the law library in prison. They believe there has been a “mistake.” They think that if they are patient the “mistake” will be rectified. Playing upon such gullibility, authorities allowed prisoners in Stalin’s gulags to write petitions twice a month to officials to proclaim their innocence or decry mistreatment. Those who do not understand the American system, who are not mentally prepared for its cruelty and violence, are largely helpless before authorities intoxicated with the godlike power to destroy lives. These authorities advance themselves or their agendas—Joe Biden when he was in the Senate and Bill Clinton when he was president did this—by being “tough” concerning law and order and national security. Those who administer the legal system wield power largely in secret. They are accountable to no one. Every once in a while—this happened even under the Nazis and Stalin—someone will be exonerated to maintain the fiction that the state is capable of rectifying its “mistakes.” But the longer the system remains in place, the longer the legal process is shrouded from public view, the more the crime by the state accelerates.
The power elites—our corporate rulers and the security and surveillance apparatus—rewrite laws to make their criminal behavior “legal.” It is a two-tiered system. One set of laws for us. Another set of laws for them. Wall Street’s fraud and looting of the U.S. Treasury, the obliteration of our privacy, the ability of the government to assassinate U.S. citizens, the revoking of habeas corpus, the neutralizing of our Fourth Amendment right against unreasonable searches and seizures, the murder of unarmed people in the streets of our cities by militarized police, the use of torture, the criminalizing of dissent, the collapse of our court system, the waging of pre-emptive war are rendered “legal.” Politicians, legislators, lawyers and law enforcement officials, who understand that leniency and justice are damaging to their careers, and whom Karl Marx called the “leeches on the capitalist structure,” have constructed for their corporate masters our system of inverted totalitarianism. They serve this system. They seek to advance within it. They do not blink at the victims destroyed by it. And most of them know it is a sham.
“We have to condemn publicly the very idea that some people have the right to repress others,” Solzhenitsyn warned. “In keeping silent about evil, in burying it so deep within us that no sign of it appears on the surface, we are implanting it, and it will rise up a thousandfold in the future. When we neither punish nor reproach evildoers, we are not simply protecting their trivial old age, we are thereby ripping the foundations of justice from beneath new generations.”
The Mirage of Justice
If you are poor, you will almost never go to trial—instead you will be forced to accept a plea deal offered by government prosecutors. If you are poor, the word of the police, who are not averse to fabricating or tampering with evidence, manipulating witnesses and planting guns or drugs, will be accepted in a courtroom as if it was the word of God. If you are poor, and especially if you are of color, almost anyone who can verify your innocence will have a police record of some kind and thereby will be invalidated as a witness. If you are poor, you will be railroaded in an assembly-line production, from a town or city where there are no jobs, through the police stations, county jails and courts directly into prison. And if you are poor, because you don’t have money for adequate legal defense, you will serve sentences that are decades longer than those for equivalent crimes anywhere else in the industrialized world.
If you are a poor person of color in America you understand this with a visceral fear. You have no chance. Being poor has become a crime. And this makes mass incarceration the most pressing civil rights issue of our era.
The 10-part online documentary “Making a Murderer,” by writer-directors Moira Demos and Laura Ricciardi, chronicles the endemic corruption of the judicial system. The film focuses on the case of Steven Avery and his nephew, Brendan Dassey, who were given life sentences for murder without any tangible evidence linking them to the crime. As admirable as the documentary was, however, it focused on a case where the main defendant, Avery, had competent defense. He was also white. The blatant corruption of, and probable conspiracy by, the Manitowoc County Sheriff’s Office in Wisconsin and then-Calumet County District Attorney Ken Kratz is nothing compared with what goes on in the well-oiled and deeply cynical system in place in inner-city courts. The accused in poor urban centers are lined up daily like sheep in a chute and shipped to prison with a startling alacrity. The attempts by those who put Avery and Dassey behind bars to vilify them further after the release of the film misses the point: The two men, like most of the rest of the poor behind bars in the United States, did not receive a fair trial. Whether they did or did not murder Teresa Halbach—and the film makes a strong case that they did not—is a moot point.
Once you are charged in America, whether you did the crime or not, you are almost always found guilty. Because of this, as many activists have discovered, the courts already are being used as a fundamental weapon of repression, and this abuse will explode in size should there be widespread unrest and dissent. Our civil liberties have been transformed into privileges—what Matt Taibbi in “The Divide: American Injustice in the Age of the Wealth Gap” calls “conditional rights and conditional citizenship”—that are, especially in poor communities, routinely revoked. Once rights become privileges, none of us are safe.
In any totalitarian society, including an American society ruled by its own species of inverted totalitarianism, the state invests tremendous amounts of energy into making the judicial system appear as if it functions impartially. And the harsher the totalitarian system becomes, the more effort it puts into disclaiming its identity. The Nazis, as did the Soviet Union under Stalin, broke the accused down in grueling and psychologically crippling interrogations—much the same way the hapless and confused Dassey is manipulated and lied to by interrogators in the film—to make them sign false confessions. Totalitarian states need the facade of justice to keep the public passive.
The Guardian newspaper reported: “The Innocence Project has kept detailed records on the 337 cases across the [United States] where prisoners have been exonerated as a result of DNA testing since 1989. The group’s researchers found that false confessions were made in 28 percent of all the DNA-related exonerations, a striking proportion in itself. But when you look only at homicide convictions—by definition the most serious cases—false confessions are the leading cause of miscarriages of justice, accounting for a full 63% of the 113 exonerations.”
“[T]he interrogator-butcher isn’t interested in logic,” Alexander Solzhenitsyn writes in “The Gulag Archipelago,” “he just wants to catch two or three phrases. He knows what he wants. And as for us—we are totally unprepared for anything. From childhood on we are educated and trained—for our own profession; for our civil duties; for military service; to take care of our bodily needs; to behave well; even to appreciate beauty (well, this last not really all that much!). But neither our education, nor our upbringing, nor our experience prepares us in the slightest for the greatest trial of our lives: being arrested for nothing and interrogated about nothing.”
If the illusion of justice is shattered, the credibility and viability of the state are jeopardized. The spectacle of court, its solemnity and stately courthouses, its legal rituals and language, is part of the theater. The press, as was seen in the film, serves as an echo machine for the state, condemning the accused before he or she begins trial. Television shows and movies about crime investigators and the hunt for killers and terrorists feed the fictitious narrative. The reality is that almost no one who is imprisoned in America has gotten a trial. There is rarely an impartial investigation. A staggering 97 percent of all federal cases and 95 percent of all state felony cases are resolved through plea bargaining. Of the 2.2 million people we have incarcerated at the moment—25 percent of the world’s prison population—2 million never had a trial. And significant percentages of them are innocent.
Judge Jed S. Rakoff in an article in The New York Review of Books titled “Why Innocent People Plead Guilty” explains how this secretive plea system works to thwart justice. Close to 40 percent of those eventually exonerated of their crimes originally pleaded guilty, usually in an effort to reduce charges that would have resulted in much longer prison sentences if the cases had gone to trial. The students I teach in prison who have the longest sentences are usually the ones who demanded a trial. Many of them went to trial because they did not commit the crime. But if you go to trial you cannot bargain away any of the charges against you in exchange for a shorter sentence. The public defender—who spends no more than a few minutes reviewing the case and has neither the time nor the inclination to do the work required by a trial—uses the prospect of the harshest sentence possible to frighten the client into taking a plea deal. And, as depicted in “Making a Murderer,” prosecutors and defense attorneys often work as a tag team to force the accused to plead guilty. If all of the accused went to trial, the judicial system, which is designed around plea agreements, would collapse. And this is why trial sentences are horrific. It is why public attorneys routinely urge their clients to accept a plea arrangement. Trials are a flashing red light to the accused: DO NOT DO THIS. It is the inversion of justice.
The wrongly accused and their families, as long as the fiction of justice is maintained, vainly seek redress. They file appeal after appeal. Those convicted devote hundreds of hours of study in the law library in prison. They believe there has been a “mistake.” They think that if they are patient the “mistake” will be rectified. Playing upon such gullibility, authorities allowed prisoners in Stalin’s gulags to write petitions twice a month to officials to proclaim their innocence or decry mistreatment. Those who do not understand the American system, who are not mentally prepared for its cruelty and violence, are largely helpless before authorities intoxicated with the godlike power to destroy lives. These authorities advance themselves or their agendas—Joe Biden when he was in the Senate and Bill Clinton when he was president did this—by being “tough” concerning law and order and national security. Those who administer the legal system wield power largely in secret. They are accountable to no one. Every once in a while—this happened even under the Nazis and Stalin—someone will be exonerated to maintain the fiction that the state is capable of rectifying its “mistakes.” But the longer the system remains in place, the longer the legal process is shrouded from public view, the more the crime by the state accelerates.
The power elites—our corporate rulers and the security and surveillance apparatus—rewrite laws to make their criminal behavior “legal.” It is a two-tiered system. One set of laws for us. Another set of laws for them. Wall Street’s fraud and looting of the U.S. Treasury, the obliteration of our privacy, the ability of the government to assassinate U.S. citizens, the revoking of habeas corpus, the neutralizing of our Fourth Amendment right against unreasonable searches and seizures, the murder of unarmed people in the streets of our cities by militarized police, the use of torture, the criminalizing of dissent, the collapse of our court system, the waging of pre-emptive war are rendered “legal.” Politicians, legislators, lawyers and law enforcement officials, who understand that leniency and justice are damaging to their careers, and whom Karl Marx called the “leeches on the capitalist structure,” have constructed for their corporate masters our system of inverted totalitarianism. They serve this system. They seek to advance within it. They do not blink at the victims destroyed by it. And most of them know it is a sham.
“We have to condemn publicly the very idea that some people have the right to repress others,” Solzhenitsyn warned. “In keeping silent about evil, in burying it so deep within us that no sign of it appears on the surface, we are implanting it, and it will rise up a thousandfold in the future. When we neither punish nor reproach evildoers, we are not simply protecting their trivial old age, we are thereby ripping the foundations of justice from beneath new generations.”
Saturday, January 16, 2016
SC132-14
http://www.informationclearinghouse.info/article43955.htm
'China To Spark Global Financial ICE AGE With Depression Sending Markets Crashing By 75%'
CHINA is set to plunge the world into an economic crisis sending stock markets crashing by 75 per cent - with devastating consequences for the US and UK, a leading city expert has warned.
By Lana Clements
January 16, 2016 "Information Clearing House" - "The Express " - The sinking value of the Chinese currency is already crippling British industry as it can’t compete with China’s cheap exports.
Other Western nations are also feeling the strain.
And with even more to come experts have predicted an 'ice age' for the world’s economies – including Britain’s.
Global deflation is going to wipe around 75 per cent in value off the American S&P stock market, as western firms will be unable to compete with cheap Chinese exports, according to analyst Albert Edwards from french bank Societe Generale.
He gave the stark warning in an investment note to clients.
And he blamed the upcoming 'carnage' on American central bank (the Fed) and its British and European counterparts for inflating prices in the first place.
American Quantitative Easing (QE) - injecting extra money into the financial system - has pushed up global asset prices, teeing up a disastrous fall, Mr Edward believes.
He said: "Investors are coming to terms with what a Chinese renminbi devaluation means for Western markets.
"It means global deflation and recession.
"A commodity bubble and the resultant US shale investment boom were all consequences of the Fed’s QE.
"The illusion of prosperity is shattered as boom now turns to bust.
"But I do hope this time around the Queen won’t ask, as she did in November 2008, why nobody saw this coming!"
Pumping extra money into the economy was reaction to the 2008 crisis that was also followed by the Bank of England and European Central Bank - essentially creating millions of pounds of extra money to buy bonds and other financial assets, pushing up prices.
Mr Edwards said: "I believe the Fed and its promiscuous fraternity of central banks have created the conditions for another debacle every bit as large as the 2008 Global Financial Crisis.
"I believe the events we now see unfolding will drive us back into global recession."
In reference to the central banks, he said: "Why can't these incompetents understand that they are, once again, the midwife to yet another global unfolding economic crisis?
"But unlike 2007, this time around the US and Europe sit on the precipice of outright deflation.
"Indeed, it is all around us. But don’t expect the central bankers to comprehend the hole they now find themselves in."
The analyst said the western service sectors won't be able to withstand the pressure from Chinese deflation.
He said: "When an economy is hurtling towards recession it is almost always the manufacturing sector that takes the less volatile services sector by the hand and leads it into a recessionary underworld."
The situation is bound to be a catastrophe for people and the economy, according to Mr Edwards.
The banker is an outspoken pessimist on the global economy, but his fears have been echoed by other leading figures.
Legendary investor George Soros has also said the Chinese crisis is set to plunge the world into another economic depression.
And this week RBS urged clients to 'sell everything' as commodity and share prices are set to plunge.
..........
Societe Generale seconds RBS doomsday prophecy and predicts collapse of the eurozone
By Kedar Grandhi
January 16, 2016 "Information Clearing House" - "IBT" - Albert Edwards, a strategist at Société Générale bank, has warned of an impending global financial crisis similar to the one that occurred in 2008-09. This time, he said, it could lead to the collapse of the eurozone.
The warning follows a recent note issued by analysts at Royal Bank of Scotland (RBS) to investors to "sell everything" ahead of an imminent stock market crash. It also comes at a time when global markets see a short period of relief from the bearish trend that commenced since the New YEar.
At an investment conference in London, Edwards said: "Developments in the global economy will push the US back into recession. The financial crisis will reawaken. It will be every bit as bad as in 2008-09 and it will turn very ugly indeed. Can it get any worse? Of course it can."
He explained that while value of currencies in emerging markets was on the decline, the appreciation of the US dollar was crushing the corporate sector and that the credit expansion in the country was not for real economic activity, but was borrowings to finance share buybacks.
Edwards stressed that the US economy was in far worse shape than what the US Federal Reserve had realised and that America's central bank had failed to learn the lessons of the housing bubble that led to the financial crisis and slump in 2008-09. "They didn't understand the system then and they don't understand how they are screwing up again. Deflation is upon us and the central banks can't see it," he said.
The Société Générale strategist compared US with Japan and said that the dollar had risen by as much as the Japanese yen in the 1990s – a move which had then put Japan into deflation and caused solvency problems for banks in the Asian country, according to The Guardian.
Regarding the euro, he said that efforts by the European Central Bank to push for growth and lower the euro would not matter in the event of a fresh downturn. "If the global economy goes back into recession, it is curtains for the eurozone," he said.
Rising unemployment that would be associated with another recession would not be accepted by countries such as France, Spain and Italy. "What a disaster the euro has been: it is a doomsday machine in favour of the German economy," Edwards claimed.
He also said that the declining demand for credit in China was another sign of the crisis to come. "That happens when people lose confidence that policymakers know what they are doing. This is what is going to happen in Europe and the US."
'China To Spark Global Financial ICE AGE With Depression Sending Markets Crashing By 75%'
CHINA is set to plunge the world into an economic crisis sending stock markets crashing by 75 per cent - with devastating consequences for the US and UK, a leading city expert has warned.
By Lana Clements
January 16, 2016 "Information Clearing House" - "The Express " - The sinking value of the Chinese currency is already crippling British industry as it can’t compete with China’s cheap exports.
Other Western nations are also feeling the strain.
And with even more to come experts have predicted an 'ice age' for the world’s economies – including Britain’s.
Global deflation is going to wipe around 75 per cent in value off the American S&P stock market, as western firms will be unable to compete with cheap Chinese exports, according to analyst Albert Edwards from french bank Societe Generale.
He gave the stark warning in an investment note to clients.
And he blamed the upcoming 'carnage' on American central bank (the Fed) and its British and European counterparts for inflating prices in the first place.
American Quantitative Easing (QE) - injecting extra money into the financial system - has pushed up global asset prices, teeing up a disastrous fall, Mr Edward believes.
He said: "Investors are coming to terms with what a Chinese renminbi devaluation means for Western markets.
"It means global deflation and recession.
"A commodity bubble and the resultant US shale investment boom were all consequences of the Fed’s QE.
"The illusion of prosperity is shattered as boom now turns to bust.
"But I do hope this time around the Queen won’t ask, as she did in November 2008, why nobody saw this coming!"
Pumping extra money into the economy was reaction to the 2008 crisis that was also followed by the Bank of England and European Central Bank - essentially creating millions of pounds of extra money to buy bonds and other financial assets, pushing up prices.
Mr Edwards said: "I believe the Fed and its promiscuous fraternity of central banks have created the conditions for another debacle every bit as large as the 2008 Global Financial Crisis.
"I believe the events we now see unfolding will drive us back into global recession."
In reference to the central banks, he said: "Why can't these incompetents understand that they are, once again, the midwife to yet another global unfolding economic crisis?
"But unlike 2007, this time around the US and Europe sit on the precipice of outright deflation.
"Indeed, it is all around us. But don’t expect the central bankers to comprehend the hole they now find themselves in."
The analyst said the western service sectors won't be able to withstand the pressure from Chinese deflation.
He said: "When an economy is hurtling towards recession it is almost always the manufacturing sector that takes the less volatile services sector by the hand and leads it into a recessionary underworld."
The situation is bound to be a catastrophe for people and the economy, according to Mr Edwards.
The banker is an outspoken pessimist on the global economy, but his fears have been echoed by other leading figures.
Legendary investor George Soros has also said the Chinese crisis is set to plunge the world into another economic depression.
And this week RBS urged clients to 'sell everything' as commodity and share prices are set to plunge.
..........
Societe Generale seconds RBS doomsday prophecy and predicts collapse of the eurozone
By Kedar Grandhi
January 16, 2016 "Information Clearing House" - "IBT" - Albert Edwards, a strategist at Société Générale bank, has warned of an impending global financial crisis similar to the one that occurred in 2008-09. This time, he said, it could lead to the collapse of the eurozone.
The warning follows a recent note issued by analysts at Royal Bank of Scotland (RBS) to investors to "sell everything" ahead of an imminent stock market crash. It also comes at a time when global markets see a short period of relief from the bearish trend that commenced since the New YEar.
At an investment conference in London, Edwards said: "Developments in the global economy will push the US back into recession. The financial crisis will reawaken. It will be every bit as bad as in 2008-09 and it will turn very ugly indeed. Can it get any worse? Of course it can."
He explained that while value of currencies in emerging markets was on the decline, the appreciation of the US dollar was crushing the corporate sector and that the credit expansion in the country was not for real economic activity, but was borrowings to finance share buybacks.
Edwards stressed that the US economy was in far worse shape than what the US Federal Reserve had realised and that America's central bank had failed to learn the lessons of the housing bubble that led to the financial crisis and slump in 2008-09. "They didn't understand the system then and they don't understand how they are screwing up again. Deflation is upon us and the central banks can't see it," he said.
The Société Générale strategist compared US with Japan and said that the dollar had risen by as much as the Japanese yen in the 1990s – a move which had then put Japan into deflation and caused solvency problems for banks in the Asian country, according to The Guardian.
Regarding the euro, he said that efforts by the European Central Bank to push for growth and lower the euro would not matter in the event of a fresh downturn. "If the global economy goes back into recession, it is curtains for the eurozone," he said.
Rising unemployment that would be associated with another recession would not be accepted by countries such as France, Spain and Italy. "What a disaster the euro has been: it is a doomsday machine in favour of the German economy," Edwards claimed.
He also said that the declining demand for credit in China was another sign of the crisis to come. "That happens when people lose confidence that policymakers know what they are doing. This is what is going to happen in Europe and the US."
Monday, January 11, 2016
SC132-13
http://www.truthdig.com/report/item/the_great_forgetting_20160110
The Great Forgetting
America’s refusal to fund and sustain its intellectual and cultural heritage means it has lost touch with its past, obliterated its understanding of the present, crushed its capacity to transform itself through self-reflection and self-criticism, and descended into a deadening provincialism. Ignorance and illiteracy come with a cost. The obsequious worship of technology, hedonism and power comes with a cost. The primacy of emotion and spectacle over wisdom and rational thought comes with a cost. And we are paying the bill.
The decades-long assault on the arts, the humanities, journalism and civic literacy is largely complete. All the disciplines that once helped us interpret who we were as a people and our place in the world—history, theater, the study of foreign languages, music, journalism, philosophy, literature, religion and the arts—have been corrupted or relegated to the margins. We have surrendered judgment for prejudice. We have created a binary universe of good and evil. And our colossal capacity for violence is unleashed around the globe, as well as on city streets in poor communities, with no more discernment than that of the blinded giant Polyphemus. The marriage of ignorance and force always generates unfathomable evil, an evil that is unseen by perpetrators who mistake their own stupidity and blindness for innocence.
“We are in danger of forgetting, and such an oblivion—quite apart from the contents themselves that could be lost—would mean that, humanly speaking, we would deprive ourselves of one dimension, the dimension of depth in human existence,” Hannah Arendt wrote. “For memory and depth are the same, or rather, depth cannot be reached by man except through remembrance.”
Those few who acknowledge the death of our democracy, the needless suffering inflicted on the poor and the working class in the name of austerity, and the crimes of empire—in short those who name our present and past reality—are whitewashed out of the public sphere. If you pay homage to the fiction of the democratic state and the supposed “virtues” of the nation, including its right to wage endless imperial war, you get huge fees, tenure, a television perch, book, film or recording contracts, grants and prizes, investors for your theater project or praise as an pundit, artist or public intellectual. The pseudo-politicians, pseudo-intellectuals and pseudo-artists know what to say and what not to say. They offer the veneer of criticism—comedians such as Stephen Colbert do this—without naming the cause of our malaise. And they are used by the elites as attack dogs to discredit and destroy genuine dissent. This is not, as James Madison warned, the prologue to a farce or a tragedy; we are living both farce and tragedy.
“The withdrawal of intellectuals from political concerns is itself a political act,” sociologist C. Wright Mills wrote. “Which is to say that it is at best a pseudo-withdrawal. To withdraw from politics today can only mean ‘in intent’; it cannot mean ‘in effect.’ For its effect is to serve whatever powers prevail, even if only by distracting public attention from them. Such attempts may be the result of fear or fashion; or of sincere conviction—induced by success. Regardless of the motive, the attempted withdrawal means to become subservient to prevailing authorities and to allow the meaning of one’s own work to be determined, in effect, by other men.”
Amid the swelling disparity between reality and reality as the corporate state seeks to have it portrayed, the idiocy and mendacity of the elites and their courtiers grow more ludicrous. The institutions that educated the public and fostered the common good are even more fiercely attacked, defunded and rendered anemic. The dumbing down of the country—fed by the crippling of the safe spaces where ideas, dissent and creativity could be expressed, where structures and assumptions could be questioned—accelerates.
Presidential candidate Donald Trump may be boorish, narcissistic, stupid, racist and elitist, but he does not have Hillary Clinton’s carefully honed and chilling amoral artifice. It was she, and an ethically bankrupt liberal establishment, that created the fertile ground for Trump by fleecing the citizens on behalf of corporations and imposing the neoliberal project. If she is elected, Trump may disappear, but another Trump-like figure, probably even more frightening, will be vomited up from our cultural and political sewer.
Trump and Clinton, along with fellow candidate Bernie Sanders, refuse to admit what they know: Our most basic civil and political rights have been taken from us, the corporate oligarchy will remain entrenched in power no matter who wins the presidency, and elections are a carnival act. The downward spiral of lost jobs and declining incomes, of shredded civil liberties, of endless war, is unstoppable as long as we use the traditional mechanisms of reform, including elections, to try to cope with the existential threat we face. A vote for Clinton, in essence, is a vote for Trump or someone as bad as Trump. Right-wing populism, here and in Europe, is not the product of an individual but the disenfranchisement, rage and despair stemming from the damage caused by globalization. And until we wrest back control of our destiny by breaking corporate power, demagogues like Trump, and his repugnant doppelgangers in Europe, will proliferate.
The institutions that make possible wisdom, knowledge, self-criticism and transcendence are in ruins. Public radio and public television, created to give a voice to those not beholden to the elites, are now echo chambers for the privileged and the powerful. The arts, like public broadcasting a victim of massive cuts by government, have descended to the lowest common denominator. Symphony orchestras are closing along with libraries. Music and art have been removed from school curriculums. Theater, along with the film industry, has been taken over by corporations such as Disney. Audiences on Broadway and in movie houses participate in exorbitantly priced forms of escapism that, at their core, celebrate American power and narcissism.
There was a time, a few decades ago, when the work and thought of intellectuals and artists mattered. Writers and social critics such as Mills, Dwight Macdonald, James Baldwin, Martin Luther King Jr., Malcolm X, Noam Chomsky, Susan Sontag, Mary McCarthy, Ralph Nader, Howard Zinn and Jane Jacobs wrote for and spoke to a broad audience. Authors William Faulkner, F. Scott Fitzgerald, Richard Wright, Ralph Ellison, Flannery O’Connor, Gore Vidal, Toni Morrison, Ken Kesey, Russell Banks and Norman Mailer, along with playwrights such as Eugene O’Neill, Arthur Miller, Lorraine Hansberry, Tennessee Williams, August Wilson, David Mamet, Ntozake Shange, Sam Shepard, Marsha Norman, Edward Albee and Tony Kushner, held up a mirror to the nation. And it was not a reflection many people wanted to see. Orson Welles and Stanley Kubrick in film, Allen Ginsberg and Amiri Baraka in poetry, Bob Dylan, Curtis Mayfield, Bruce Springsteen and Patti Smith in music shook the social, cultural and political landscape.
These artists and intellectuals, who did not cater to the herd, were nationally known figures. They altered our perceptions. They were taken seriously. They sparked contentious debate, and the elites attempted, sometimes successfully, to censor their work. It is not that new independent, brilliant and creative minds are not out there; it is that nearly all of them—Tupac Shakur and Lupe Fiasco having been two exceptions—are locked out. And this has turned our artistic, cultural and intellectual terrain into a commercialized wasteland. I doubt that a young Bruce Springsteen or a young Patti Smith, or even a young Chomsky, all of whom exhibit the rare quality of never having sold out the marginalized, the working class and the poor, and who are not afraid of speaking truths about our nation that others will not utter, could today break into the corporatized music industry or the corporatized university. Sales, branding and marketing, even in academia, overpower content.
T.S. Eliot, seven decades ago, warned of a condition that now enmeshes us. In his “What Is a Classic?” address to the Virgil Society in 1944 he argued that a civilization that did not engage with its greatest artists and intellectual traditions, that did not protect and nurture its artistic and intellectual patrimony, committed suicide.
“In our age,” Eliot said, “when men seem more than ever prone to confuse wisdom with knowledge, and knowledge with information, and to try to solve problems of life, in terms of engineering, there is coming into existence a new kind of provincialism, not of space, but of time; one for which history is merely the chronicle of human devices which have served their turn and been scrapped, one for which the world is the property solely of the living, a property in which the dead hold no shares. The menace of this kind of provincialism is, that we can all, all the peoples on the globe, be provincials together: and those who are not content to be provincials, can only become hermits.”
The Great Forgetting
America’s refusal to fund and sustain its intellectual and cultural heritage means it has lost touch with its past, obliterated its understanding of the present, crushed its capacity to transform itself through self-reflection and self-criticism, and descended into a deadening provincialism. Ignorance and illiteracy come with a cost. The obsequious worship of technology, hedonism and power comes with a cost. The primacy of emotion and spectacle over wisdom and rational thought comes with a cost. And we are paying the bill.
The decades-long assault on the arts, the humanities, journalism and civic literacy is largely complete. All the disciplines that once helped us interpret who we were as a people and our place in the world—history, theater, the study of foreign languages, music, journalism, philosophy, literature, religion and the arts—have been corrupted or relegated to the margins. We have surrendered judgment for prejudice. We have created a binary universe of good and evil. And our colossal capacity for violence is unleashed around the globe, as well as on city streets in poor communities, with no more discernment than that of the blinded giant Polyphemus. The marriage of ignorance and force always generates unfathomable evil, an evil that is unseen by perpetrators who mistake their own stupidity and blindness for innocence.
“We are in danger of forgetting, and such an oblivion—quite apart from the contents themselves that could be lost—would mean that, humanly speaking, we would deprive ourselves of one dimension, the dimension of depth in human existence,” Hannah Arendt wrote. “For memory and depth are the same, or rather, depth cannot be reached by man except through remembrance.”
Those few who acknowledge the death of our democracy, the needless suffering inflicted on the poor and the working class in the name of austerity, and the crimes of empire—in short those who name our present and past reality—are whitewashed out of the public sphere. If you pay homage to the fiction of the democratic state and the supposed “virtues” of the nation, including its right to wage endless imperial war, you get huge fees, tenure, a television perch, book, film or recording contracts, grants and prizes, investors for your theater project or praise as an pundit, artist or public intellectual. The pseudo-politicians, pseudo-intellectuals and pseudo-artists know what to say and what not to say. They offer the veneer of criticism—comedians such as Stephen Colbert do this—without naming the cause of our malaise. And they are used by the elites as attack dogs to discredit and destroy genuine dissent. This is not, as James Madison warned, the prologue to a farce or a tragedy; we are living both farce and tragedy.
“The withdrawal of intellectuals from political concerns is itself a political act,” sociologist C. Wright Mills wrote. “Which is to say that it is at best a pseudo-withdrawal. To withdraw from politics today can only mean ‘in intent’; it cannot mean ‘in effect.’ For its effect is to serve whatever powers prevail, even if only by distracting public attention from them. Such attempts may be the result of fear or fashion; or of sincere conviction—induced by success. Regardless of the motive, the attempted withdrawal means to become subservient to prevailing authorities and to allow the meaning of one’s own work to be determined, in effect, by other men.”
Amid the swelling disparity between reality and reality as the corporate state seeks to have it portrayed, the idiocy and mendacity of the elites and their courtiers grow more ludicrous. The institutions that educated the public and fostered the common good are even more fiercely attacked, defunded and rendered anemic. The dumbing down of the country—fed by the crippling of the safe spaces where ideas, dissent and creativity could be expressed, where structures and assumptions could be questioned—accelerates.
Presidential candidate Donald Trump may be boorish, narcissistic, stupid, racist and elitist, but he does not have Hillary Clinton’s carefully honed and chilling amoral artifice. It was she, and an ethically bankrupt liberal establishment, that created the fertile ground for Trump by fleecing the citizens on behalf of corporations and imposing the neoliberal project. If she is elected, Trump may disappear, but another Trump-like figure, probably even more frightening, will be vomited up from our cultural and political sewer.
Trump and Clinton, along with fellow candidate Bernie Sanders, refuse to admit what they know: Our most basic civil and political rights have been taken from us, the corporate oligarchy will remain entrenched in power no matter who wins the presidency, and elections are a carnival act. The downward spiral of lost jobs and declining incomes, of shredded civil liberties, of endless war, is unstoppable as long as we use the traditional mechanisms of reform, including elections, to try to cope with the existential threat we face. A vote for Clinton, in essence, is a vote for Trump or someone as bad as Trump. Right-wing populism, here and in Europe, is not the product of an individual but the disenfranchisement, rage and despair stemming from the damage caused by globalization. And until we wrest back control of our destiny by breaking corporate power, demagogues like Trump, and his repugnant doppelgangers in Europe, will proliferate.
The institutions that make possible wisdom, knowledge, self-criticism and transcendence are in ruins. Public radio and public television, created to give a voice to those not beholden to the elites, are now echo chambers for the privileged and the powerful. The arts, like public broadcasting a victim of massive cuts by government, have descended to the lowest common denominator. Symphony orchestras are closing along with libraries. Music and art have been removed from school curriculums. Theater, along with the film industry, has been taken over by corporations such as Disney. Audiences on Broadway and in movie houses participate in exorbitantly priced forms of escapism that, at their core, celebrate American power and narcissism.
There was a time, a few decades ago, when the work and thought of intellectuals and artists mattered. Writers and social critics such as Mills, Dwight Macdonald, James Baldwin, Martin Luther King Jr., Malcolm X, Noam Chomsky, Susan Sontag, Mary McCarthy, Ralph Nader, Howard Zinn and Jane Jacobs wrote for and spoke to a broad audience. Authors William Faulkner, F. Scott Fitzgerald, Richard Wright, Ralph Ellison, Flannery O’Connor, Gore Vidal, Toni Morrison, Ken Kesey, Russell Banks and Norman Mailer, along with playwrights such as Eugene O’Neill, Arthur Miller, Lorraine Hansberry, Tennessee Williams, August Wilson, David Mamet, Ntozake Shange, Sam Shepard, Marsha Norman, Edward Albee and Tony Kushner, held up a mirror to the nation. And it was not a reflection many people wanted to see. Orson Welles and Stanley Kubrick in film, Allen Ginsberg and Amiri Baraka in poetry, Bob Dylan, Curtis Mayfield, Bruce Springsteen and Patti Smith in music shook the social, cultural and political landscape.
These artists and intellectuals, who did not cater to the herd, were nationally known figures. They altered our perceptions. They were taken seriously. They sparked contentious debate, and the elites attempted, sometimes successfully, to censor their work. It is not that new independent, brilliant and creative minds are not out there; it is that nearly all of them—Tupac Shakur and Lupe Fiasco having been two exceptions—are locked out. And this has turned our artistic, cultural and intellectual terrain into a commercialized wasteland. I doubt that a young Bruce Springsteen or a young Patti Smith, or even a young Chomsky, all of whom exhibit the rare quality of never having sold out the marginalized, the working class and the poor, and who are not afraid of speaking truths about our nation that others will not utter, could today break into the corporatized music industry or the corporatized university. Sales, branding and marketing, even in academia, overpower content.
T.S. Eliot, seven decades ago, warned of a condition that now enmeshes us. In his “What Is a Classic?” address to the Virgil Society in 1944 he argued that a civilization that did not engage with its greatest artists and intellectual traditions, that did not protect and nurture its artistic and intellectual patrimony, committed suicide.
“In our age,” Eliot said, “when men seem more than ever prone to confuse wisdom with knowledge, and knowledge with information, and to try to solve problems of life, in terms of engineering, there is coming into existence a new kind of provincialism, not of space, but of time; one for which history is merely the chronicle of human devices which have served their turn and been scrapped, one for which the world is the property solely of the living, a property in which the dead hold no shares. The menace of this kind of provincialism is, that we can all, all the peoples on the globe, be provincials together: and those who are not content to be provincials, can only become hermits.”
Monday, January 4, 2016
SC132-12
http://kunstler.com/clusterfuck-nation/pretend-to-the-bitter-end/
Pretend to the Bitter End
Forecast 2016
There’s really one supreme element of this story that you must keep in view at all times: a society (i.e. an economy + a polity = a political economy) based on debt that will never be paid back is certain to crack up. Its institutions will stop functioning. Its business activities will seize up. Its leaders will be demoralized. Its denizens will act up and act out. Its wealth will evaporate.
Given where we are in human history — the moment of techno-industrial over-reach — this crackup will not be easy to recover from; not like, say, the rapid recoveries of Japan and Germany after the brutal fiasco of World War Two. Things have gone too far in too many ways. The coming crackup will re-set the terms of civilized life to levels largely pre-techno-industrial. How far backward remains to be seen.
Those terms might be somewhat negotiable if we could accept the reality of this re-set and prepare for it. But, alas, most of the people capable of thought these days prefer wishful techno-narcissistic woolgathering to a reality-based assessment of where things stand — passively awaiting technological rescue remedies (“they” will “come up with something”) that will enable all the current rackets to continue. Thus, electric cars will allow suburban sprawl to function as the preferred everyday environment; molecular medicine will eliminate the role of death in human affairs; as-yet-undiscovered energy modalities will keep all the familiar comforts and conveniences running; and financial legerdemain will marshal the capital to make it all happen.
Oh, by the way, here’s a second element of the story to stay alert to: that most of the activities on-going in the USA today have taken on the qualities of rackets, that is, dishonest schemes for money-grubbing. This is most vividly and nauseatingly on display lately in the fields of medicine and education — two realms of action that formerly embodied in their basic operating systems the most sacred virtues developed in the fairly short history of civilized human endeavor: duty, diligence, etc.
I’ve offered predictions for many a year that this consortium of rackets would enter failure mode, and so far that has seemed to not have happened, at least not to the catastrophic degree, yet. I’ve also maintained that of all the complex systems we depend on for contemporary life, finance is the most abstracted from reality and therefore the one most likely to show the earliest strains of crackup. The outstanding feature of recent times has been the ability of the banking hierarchies to employ accounting fraud to forestall any reckoning over the majestic sums of unpayable debt. The lesson for those who cheerlead the triumph of fraud is that lying works and that it can continue indefinitely — or at least until they are clear of culpability for it, either retired, dead, or safe beyond the statute of limitations for their particular crime.
Of course it says something about the kind of society we’ve become that such racketeering has become so normative and pervasive, and that evading responsibility for its consequences has been elevated to a sort of enviable skill-set. In fact, the art of evasion has taken the place of what used to be called honor. We live in a low time that honors only low men. Ironically, we affect to admire only “superheroes” because it has become impossible to imagine mere humans showing courage, fortitude, and respect for truth. All conduct is provisional and equivocal. Every law can be parsed to serve what it was created to oppose. Anything goes and nothing matters.
In this year’s go-round, I’ll try to describe what happened so far, where we stand, and where I think things are going. My method is emergent and heuristic. I’m allergic to charts and graphs, which are among the prime tools of the racketeers and the wishful thinking impresarios for bending the truth. Sadly, also, statistical analysis plays into the fantasy that if you can measure enough things you can control them. (And if you mis-measure things on purpose, you can pretend to be in control.) This illusion of control is the weakest ingredient in the financial system. When it does finally reach failure mode, it tends to produce calamity.
I’m more interested in the longer view than the moment-at-hand. The swirl of events generally includes more vectors and factors than any calculus can manage. Outcomes easily slip away from the linear. Ultimately this is a exercise that might be called a history of the future — that is, just a story.
Banking and Markets
The big event of the year past was the Federal Reserve’s Waiting for Godot act concerning the fed funds rate. When Godot finally showed up two weeks before year’s end, it was in the expected-but-pitiful form of a 25-50 basis point hike — which gives the impression of a possible 50 point rise, but with the way more likely probability of actually sticking to the lowest end of the gradient (and actual overnight lending rates were already a few basis points above zero, so the net was really less than 25 basis points.)
The background of this charade was pretty clear to anyone not brain damaged from the rigors of playing Candy Crush on their phone: the Fed was hiking rates into a wobbling global economy; they were forced to act at year’s end or surrender the last shreds of their credibility (i.e. being taken to mean what they say); and they left the door open to retreat in 2016 if necessary. But the damage to the Fed had already been done. They were unmasked as a propaganda machine powerless against the real tides of economy, creating only mischief and misunderstanding, and ultimately undermining all soundness in the relationship between money and real human activity. Anything they do in the election year ahead will be viewed with suspicion, specifically of pimping for Hillary Clinton’s coronation. And her relationship with the biggest banks is well-understood. So they had to make their grand gesture in December.
The stock markets skidded a little below sideways this year (except for the Nasdaq) which glided up more than 5 percent (techno-grandiosity rules!) — with one upchuck at the end of the summer that was remedied by China bailing out its own janky stock markets and playing games with its currency.
Gold and silver continued their four-year swoon thanks to repeated massive wee hour dumps of futures contracts before the traders in New York even got out of bed. The charts conclusively show this shady activity, raising the question: why would any seller want to hugely undercut the price of what he seeks to sell by selling into a market where no buyers are present… or even awake? The answer seems to be: to make the dollar appear more firm than it really is.
The many years of ZIRP (zero interest rate policy), combined with the previous accumulation of debt unlikely to be paid back has made it ever more difficult to issue new debt with any likelihood of being paid back. But ZIRP has also nullified the relationship between interest rates and risk. In a system unencumbered by central bank interventions, interest rates would have to go a whole lot higher on instruments with such poor prospects. Of course, higher interest rates would only make new bonds that much less likely to be serviced by their issuers, especially governments laboring under Himalayan-scale debt loads. The tension in this equation has been provisionally papered over by the use of interest rate swaps, reverse repos, and other abstruse machinations and derivatives aimed at suppressing true price discovery.
The corporate stock buyback fiesta of 2015 was the perfect example of an anything goes and nothing matters ethos. It happened in full view of everyone, and it happened solely to assure corporate executives that they would enjoy their bonuses and fringe benefits and nobody complained about it. Even so, it barely accomplished anything index-wise. The markets went sideways even with all that insider action because the fundamentals suck and the global economy was obviously sinking into a deflationary contraction.
My auditors derive no end of mirth from my attempts to predict the stock markets each year. So, to add to their enjoyment, I’ll be even more precise this time around. I predict that the S & P will top on January 15, 2016, at 2142, and then crumple below 1000 by June. Carnage at the margins of the bond market — high yield paper — will spread to the center and we’ll finally see the re-pricing of risk back in the European sovereign market. French, Spanish, UK, and Italian 10-year paper below 2.0 percent? What a colossal joke that’s been! Fasten your seat belts and check your pension funds.
Oil and Deflation
The oil picture has bamboozled both the broad public and the smaller cohort of supposedly sentient observers. I maintain that the deflationary contraction underway worldwide is largely due to the fact that the world has run out of a particular form of oil: affordable oil. Turns out the peak oil story is still true, just playing out differently than a lot folks predicted. We’re at the mercy of a pretty basic equation: oil over $75-a-barrel destroys industrial economies; oil under $75-a-barrel destroys oil companies. There is no “just right” Goldilocks place on the gradient.
The public got bamboozled by the Ponzi scheme of shale oil. It seemed like a fabulous techno-rescue: the “fracking miracle!” It operated by converting mountains of cheap leveraged capital into a very rapid bump-up in US oil production. It got full traction after a couple of years of $100 oil squashed economic activity — and then squashed demand for oil. Whoops. The problem was that shale oil was very expensive to produce even if reduced demand drove the market price very low. Back at $100-plus a barrel, hardly anyone made any profit on shale. At $40 a barrel shale was a laughable loser. So, in 2015, the shale oil companies laid off thousands of workers, idled the drilling rigs, and kicked back to pray that the price would go back up. Which it didn’t. Incidentally, all kinds of associated ventures went bust with that. The landscape of North Dakota is littered with unfinished garden apartment complexes that may never be completed, and the discharged construction carpenters and roofers drove back to Minnesota ahead of the re-po men coming for their Ford F-110s. Sad, I know….
The rapid ramp-up in shale oil production from 2010 to 2014 was intended as a demonstration project to convince Wall Street to stuff ever more investment capital into oil companies. It was also part of an enormous PR campaign to allow the people running things in business and government to pretend that America’s oil problems were behind us. The “shale miracle” was going to make us “Saudi America,” It was going to boost us into “energy independence.” It played into the Master Wish beneath all the wishful thinking in America: Please, God, let us be able to drive to WalMart forever. It wasn’t so much an evil conspiracy as a feckless collective effort in denial and self-delusion
It happened that a lot of that Wall Street finance came in the form of high-yield (junk) bonds issued by the oil companies — with fat commissions for the big banks to cream off in creating the bonds. So when the price of oil crashed below $50, a lot of oil companies — especially the smaller ones with no cash flow — couldn’t service the interest payments. What lies ahead in 2016 is a debacle of bond defaults and corporate bankruptcies in the US oil patches. What’s more, because of the peculiar geology of shale oil and the rapid depletion of the fracked wells, it is necessary to incessantly drill and frack new wells to keep production even level, let alone rising. That calls for evermore rounds of new financing. But since the current financial obligations can’t be serviced, new financing will not be not forthcoming. And so neither will additional production. All of which means that shale oil production is going to crash in 2016 when the backlog of previously-drilled but untapped wells runs out. I’ll predict that US oil production will go down a million barrels a day before 2017. That includes the roughly 5 percent annual decline of conventional oil.
Some might suppose that such a crash would drive prices back up again as the supply necks down. There are a couple of problems with that supposition. One is that the previous round of $100-plus oil did a lot of permanent damage to the economy, in particular to small businesses and households (i.e. middle-class workers). That damage looks more and more permanent, meaning a smaller aggregate economy and still-shrinking demand base as businesses and citizens go broke and stay broke. If oil prices do return to a level that would justify exploration and production of expensive, hard-to-get oil, (probably north of $110) it will only crash industrial economies again — and there are only so many times this can happen before the system is so damaged recovery is no longer possible. Another problem is that the oil price crash has done significant damage to the oil industry itself, including its credibility as a viable target for investment. Contrary to hopes and expectations, current low oil prices are doing nothing to re-stimulate economic activity. It all has the look of a self-reinforcing feedback loop, a downward spiral in a global complex networked system getting clobbered by the diminishing returns of its principal activities.
Hence I would predict that the price of oil will fall further in 2016, below the $30 mark, and that it will lead to more carnage in the oil industry, in banking and debt defaults, and to new manifestations of geopolitical trouble that could lead to profound oil scarcities and rationing. We can’t seem to face the fact that our techno-industrial paradigm was designed to run on cheap oil, which is just no longer available......
Pretend to the Bitter End
Forecast 2016
There’s really one supreme element of this story that you must keep in view at all times: a society (i.e. an economy + a polity = a political economy) based on debt that will never be paid back is certain to crack up. Its institutions will stop functioning. Its business activities will seize up. Its leaders will be demoralized. Its denizens will act up and act out. Its wealth will evaporate.
Given where we are in human history — the moment of techno-industrial over-reach — this crackup will not be easy to recover from; not like, say, the rapid recoveries of Japan and Germany after the brutal fiasco of World War Two. Things have gone too far in too many ways. The coming crackup will re-set the terms of civilized life to levels largely pre-techno-industrial. How far backward remains to be seen.
Those terms might be somewhat negotiable if we could accept the reality of this re-set and prepare for it. But, alas, most of the people capable of thought these days prefer wishful techno-narcissistic woolgathering to a reality-based assessment of where things stand — passively awaiting technological rescue remedies (“they” will “come up with something”) that will enable all the current rackets to continue. Thus, electric cars will allow suburban sprawl to function as the preferred everyday environment; molecular medicine will eliminate the role of death in human affairs; as-yet-undiscovered energy modalities will keep all the familiar comforts and conveniences running; and financial legerdemain will marshal the capital to make it all happen.
Oh, by the way, here’s a second element of the story to stay alert to: that most of the activities on-going in the USA today have taken on the qualities of rackets, that is, dishonest schemes for money-grubbing. This is most vividly and nauseatingly on display lately in the fields of medicine and education — two realms of action that formerly embodied in their basic operating systems the most sacred virtues developed in the fairly short history of civilized human endeavor: duty, diligence, etc.
I’ve offered predictions for many a year that this consortium of rackets would enter failure mode, and so far that has seemed to not have happened, at least not to the catastrophic degree, yet. I’ve also maintained that of all the complex systems we depend on for contemporary life, finance is the most abstracted from reality and therefore the one most likely to show the earliest strains of crackup. The outstanding feature of recent times has been the ability of the banking hierarchies to employ accounting fraud to forestall any reckoning over the majestic sums of unpayable debt. The lesson for those who cheerlead the triumph of fraud is that lying works and that it can continue indefinitely — or at least until they are clear of culpability for it, either retired, dead, or safe beyond the statute of limitations for their particular crime.
Of course it says something about the kind of society we’ve become that such racketeering has become so normative and pervasive, and that evading responsibility for its consequences has been elevated to a sort of enviable skill-set. In fact, the art of evasion has taken the place of what used to be called honor. We live in a low time that honors only low men. Ironically, we affect to admire only “superheroes” because it has become impossible to imagine mere humans showing courage, fortitude, and respect for truth. All conduct is provisional and equivocal. Every law can be parsed to serve what it was created to oppose. Anything goes and nothing matters.
In this year’s go-round, I’ll try to describe what happened so far, where we stand, and where I think things are going. My method is emergent and heuristic. I’m allergic to charts and graphs, which are among the prime tools of the racketeers and the wishful thinking impresarios for bending the truth. Sadly, also, statistical analysis plays into the fantasy that if you can measure enough things you can control them. (And if you mis-measure things on purpose, you can pretend to be in control.) This illusion of control is the weakest ingredient in the financial system. When it does finally reach failure mode, it tends to produce calamity.
I’m more interested in the longer view than the moment-at-hand. The swirl of events generally includes more vectors and factors than any calculus can manage. Outcomes easily slip away from the linear. Ultimately this is a exercise that might be called a history of the future — that is, just a story.
Banking and Markets
The big event of the year past was the Federal Reserve’s Waiting for Godot act concerning the fed funds rate. When Godot finally showed up two weeks before year’s end, it was in the expected-but-pitiful form of a 25-50 basis point hike — which gives the impression of a possible 50 point rise, but with the way more likely probability of actually sticking to the lowest end of the gradient (and actual overnight lending rates were already a few basis points above zero, so the net was really less than 25 basis points.)
The background of this charade was pretty clear to anyone not brain damaged from the rigors of playing Candy Crush on their phone: the Fed was hiking rates into a wobbling global economy; they were forced to act at year’s end or surrender the last shreds of their credibility (i.e. being taken to mean what they say); and they left the door open to retreat in 2016 if necessary. But the damage to the Fed had already been done. They were unmasked as a propaganda machine powerless against the real tides of economy, creating only mischief and misunderstanding, and ultimately undermining all soundness in the relationship between money and real human activity. Anything they do in the election year ahead will be viewed with suspicion, specifically of pimping for Hillary Clinton’s coronation. And her relationship with the biggest banks is well-understood. So they had to make their grand gesture in December.
The stock markets skidded a little below sideways this year (except for the Nasdaq) which glided up more than 5 percent (techno-grandiosity rules!) — with one upchuck at the end of the summer that was remedied by China bailing out its own janky stock markets and playing games with its currency.
Gold and silver continued their four-year swoon thanks to repeated massive wee hour dumps of futures contracts before the traders in New York even got out of bed. The charts conclusively show this shady activity, raising the question: why would any seller want to hugely undercut the price of what he seeks to sell by selling into a market where no buyers are present… or even awake? The answer seems to be: to make the dollar appear more firm than it really is.
The many years of ZIRP (zero interest rate policy), combined with the previous accumulation of debt unlikely to be paid back has made it ever more difficult to issue new debt with any likelihood of being paid back. But ZIRP has also nullified the relationship between interest rates and risk. In a system unencumbered by central bank interventions, interest rates would have to go a whole lot higher on instruments with such poor prospects. Of course, higher interest rates would only make new bonds that much less likely to be serviced by their issuers, especially governments laboring under Himalayan-scale debt loads. The tension in this equation has been provisionally papered over by the use of interest rate swaps, reverse repos, and other abstruse machinations and derivatives aimed at suppressing true price discovery.
The corporate stock buyback fiesta of 2015 was the perfect example of an anything goes and nothing matters ethos. It happened in full view of everyone, and it happened solely to assure corporate executives that they would enjoy their bonuses and fringe benefits and nobody complained about it. Even so, it barely accomplished anything index-wise. The markets went sideways even with all that insider action because the fundamentals suck and the global economy was obviously sinking into a deflationary contraction.
My auditors derive no end of mirth from my attempts to predict the stock markets each year. So, to add to their enjoyment, I’ll be even more precise this time around. I predict that the S & P will top on January 15, 2016, at 2142, and then crumple below 1000 by June. Carnage at the margins of the bond market — high yield paper — will spread to the center and we’ll finally see the re-pricing of risk back in the European sovereign market. French, Spanish, UK, and Italian 10-year paper below 2.0 percent? What a colossal joke that’s been! Fasten your seat belts and check your pension funds.
Oil and Deflation
The oil picture has bamboozled both the broad public and the smaller cohort of supposedly sentient observers. I maintain that the deflationary contraction underway worldwide is largely due to the fact that the world has run out of a particular form of oil: affordable oil. Turns out the peak oil story is still true, just playing out differently than a lot folks predicted. We’re at the mercy of a pretty basic equation: oil over $75-a-barrel destroys industrial economies; oil under $75-a-barrel destroys oil companies. There is no “just right” Goldilocks place on the gradient.
The public got bamboozled by the Ponzi scheme of shale oil. It seemed like a fabulous techno-rescue: the “fracking miracle!” It operated by converting mountains of cheap leveraged capital into a very rapid bump-up in US oil production. It got full traction after a couple of years of $100 oil squashed economic activity — and then squashed demand for oil. Whoops. The problem was that shale oil was very expensive to produce even if reduced demand drove the market price very low. Back at $100-plus a barrel, hardly anyone made any profit on shale. At $40 a barrel shale was a laughable loser. So, in 2015, the shale oil companies laid off thousands of workers, idled the drilling rigs, and kicked back to pray that the price would go back up. Which it didn’t. Incidentally, all kinds of associated ventures went bust with that. The landscape of North Dakota is littered with unfinished garden apartment complexes that may never be completed, and the discharged construction carpenters and roofers drove back to Minnesota ahead of the re-po men coming for their Ford F-110s. Sad, I know….
The rapid ramp-up in shale oil production from 2010 to 2014 was intended as a demonstration project to convince Wall Street to stuff ever more investment capital into oil companies. It was also part of an enormous PR campaign to allow the people running things in business and government to pretend that America’s oil problems were behind us. The “shale miracle” was going to make us “Saudi America,” It was going to boost us into “energy independence.” It played into the Master Wish beneath all the wishful thinking in America: Please, God, let us be able to drive to WalMart forever. It wasn’t so much an evil conspiracy as a feckless collective effort in denial and self-delusion
It happened that a lot of that Wall Street finance came in the form of high-yield (junk) bonds issued by the oil companies — with fat commissions for the big banks to cream off in creating the bonds. So when the price of oil crashed below $50, a lot of oil companies — especially the smaller ones with no cash flow — couldn’t service the interest payments. What lies ahead in 2016 is a debacle of bond defaults and corporate bankruptcies in the US oil patches. What’s more, because of the peculiar geology of shale oil and the rapid depletion of the fracked wells, it is necessary to incessantly drill and frack new wells to keep production even level, let alone rising. That calls for evermore rounds of new financing. But since the current financial obligations can’t be serviced, new financing will not be not forthcoming. And so neither will additional production. All of which means that shale oil production is going to crash in 2016 when the backlog of previously-drilled but untapped wells runs out. I’ll predict that US oil production will go down a million barrels a day before 2017. That includes the roughly 5 percent annual decline of conventional oil.
Some might suppose that such a crash would drive prices back up again as the supply necks down. There are a couple of problems with that supposition. One is that the previous round of $100-plus oil did a lot of permanent damage to the economy, in particular to small businesses and households (i.e. middle-class workers). That damage looks more and more permanent, meaning a smaller aggregate economy and still-shrinking demand base as businesses and citizens go broke and stay broke. If oil prices do return to a level that would justify exploration and production of expensive, hard-to-get oil, (probably north of $110) it will only crash industrial economies again — and there are only so many times this can happen before the system is so damaged recovery is no longer possible. Another problem is that the oil price crash has done significant damage to the oil industry itself, including its credibility as a viable target for investment. Contrary to hopes and expectations, current low oil prices are doing nothing to re-stimulate economic activity. It all has the look of a self-reinforcing feedback loop, a downward spiral in a global complex networked system getting clobbered by the diminishing returns of its principal activities.
Hence I would predict that the price of oil will fall further in 2016, below the $30 mark, and that it will lead to more carnage in the oil industry, in banking and debt defaults, and to new manifestations of geopolitical trouble that could lead to profound oil scarcities and rationing. We can’t seem to face the fact that our techno-industrial paradigm was designed to run on cheap oil, which is just no longer available......
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