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Gary Edwards

Jim Kunstler's 2014 Forecast - Burning Down The House | Zero Hedge - 0 views

www.zerohedge.com/...14-forecast-burning-down-house

Banksters

shared by Gary Edwards on 08 Jan 14 - No Cached
  • Gary Edwards on 08 Jan 14
     
    Incredible must read analysis. Take away: the world is going to go "medevil". It's the only way out of this mess. Since the zero hedge layout is so bad, i'm going to post as much of the article as Diigo will allow: Jim Kunstler's 2014 Forecast - Burning Down The House Submitted by Tyler Durden on 01/06/2014 19:36 -0500 Submitted by James H. Kunstler of Kunstler.com , Many of us in the Long Emergency crowd and like-minded brother-and-sisterhoods remain perplexed by the amazing stasis in our national life, despite the gathering tsunami of forces arrayed to rock our economy, our culture, and our politics. Nothing has yielded to these forces already in motion, so far. Nothing changes, nothing gives, yet. It's like being buried alive in Jell-O. It's embarrassing to appear so out-of-tune with the consensus, but we persevere like good soldiers in a just war. Paper and digital markets levitate, central banks pull out all the stops of their magical reality-tweaking machine to manipulate everything, accounting fraud pervades public and private enterprise, everything is mis-priced, all official statistics are lies of one kind or another, the regulating authorities sit on their hands, lost in raptures of online pornography (or dreams of future employment at Goldman Sachs), the news media sprinkles wishful-thinking propaganda about a mythical "recovery" and the "shale gas miracle" on a credulous public desperate to believe, the routine swindles of medicine get more cruel and blatant each month, a tiny cohort of financial vampire squids suck in all the nominal wealth of society, and everybody else is left whirling down the drain of posterity in a vortex of diminishing returns and scuttled expectations. Life in the USA is like living in a broken-down, cob-jobbed, vermin-infested house that needs to be gutted, disinfected, and rebuilt - with the hope that it might come out of the restoration process retaining the better qualities of our heritage.
Paul Merrell

Tomgram: Laura Gottesdiener, Security vs. Securities | TomDispatch - 0 views

www.tomdispatch.com/...ner%2C_security_vs._securities

banksters housing-market foreclosures equity-firms Blackstone Progress-Residential

shared by Paul Merrell on 23 Jun 14 - No Cached
  • I live in Washington, D.C.'s Capitol Hill neighborhood. I can more or less roll out of bed into the House of Representatives or the Senate; the majestic Library of Congress doubles as my local branch. (If you visit, spend a sunset on the steps of the library's Jefferson Building. Trust me.) You can't miss my place, three stories of brick painted Big Bird yellow. It's a charming little corner of the city. Each fall, the trees outside my window shake their leaves and carpet the street in gold. Nora Ephron, if she were alive, might've shot a scene for her latest movie in one of the lush green parks that bookend my block. The neighborhood wasn't always so nice. A few years back, during a reporting trip to China, I met an American consultant who had known Capitol Hill in a darker era. "I was driving up the street one time," he told me, "and walking in the opposite direction was this huge guy carrying an assault rifle. Broad daylight, no one even noticed. That's what kind of neighborhood it was." Nowadays, row houses around me sell for $1 million or more. I rent.
  • Washington's a fun place to live if you're young and employed. But as a recent Washington Post story pointed out, the nation's capital is slowly pricing out even its yuppies who, in their late-twenties and early-thirties, want to start families but can't afford it. "I hate to say it, but the facts show that the D.C. market is for people who are single and relatively affluent," a real estate researcher told the Post. The District's housing boom just won't stop; off go those new and expecting parents to the suburbs. And we're talking about the lucky ones. Elsewhere in the country, vulnerability in the housing market isn't a trend story; it's the norm. The Cedillo family, as Laura Gottesdiener writes today, went looking for their version of the American housing dream and thought they found it in Chandler, Arizona. They didn't know that the house they chose to rent rested on a shaky foundation -- not physically but financially. It had been one of thousands snapped up and rented out by massive investment firms making a killing in the wake of the housing collapse. As Gottesdiener -- who has put the new rental empires of private equity firms on the map for TomDispatch -- shows, the goal of such companies is to squeeze every dime of profit from their properties, from homes like the Cedillos', and that can lead to tragedy.
  • Drowning in Profits A Private Equity Firm, a Missing Pool Fence, and the Price of a Child’s Death By Laura Gottesdiener
  • ...4 more annotations...
  • Security is a slippery idea these days -- especially when it comes to homes and neighborhoods. Perhaps the most controversial development in America’s housing “recovery” is the role played by large private equity firms. In recent years, they have bought up more than 200,000 mostly foreclosed houses nationwide and turned them into rental empires. In the finance and real estate worlds, this development has won praise for helping to raise home values and creating a new financial product known as a “rental-backed security.” Many economists and housing advocates, however, have blasted this new model as a way for Wall Street to capitalize on an economic crisis by essentially pushing families out of their homes, then turning around and renting those houses back to them. Caught in the crosshairs are tens of thousands of families now living in these private equity-owned homes.
  • The same month that the family rented the house at 1471 West Camino Court, Progress Residential purchased more homes in Maricopa Country than any other institutional buyer. Nationally, Blackstone, a private equity giant, has been the leading purchaser of single-family homes, spending upwards of $8 billion between 2012 and 2014 to purchase 43,000 homes in about a dozen cities. However, in May 2013, according to Michael Orr, director of the Center for Real Estate Theory and Practice at the W. P. Carey School of Business at Arizona State University, Progress Residential bought nearly 200 houses, surpassing Blackstone's buying rate that month in the Phoenix area. The condition and code compliance of these houses varies and is rarely known at the time of the purchase. Mike Anderson, who works for a bidding service contracted by Progress Residential and other private equity giants to buy houses at auctions, was sometimes asked to go out and look at the homes. But with the staggering buying rate -- up to 15 houses a day at the peak -- he couldn’t keep up. “There’d be too many, you couldn’t go out and look at them,” he said. “It’s just a gamble. You never know what you’ve got into.”
  • Global private equity firms have not been, historically, in the business of dealing with pool fences and the other hassles of maintaining single-family houses. But following the housing market collapse, the idea of buying a ton of these foreclosed properties suddenly made sense, at least to investors. Such private-equity purchases were to make money in three ways: buying cheap and waiting for the houses to gain value as the market bounced back; renting them out and collecting monthly rental payments; and promoting a financial product known as “rental-backed securities,” similar to the infamous mortgage-backed securities that triggered the housing meltdown of 2007-2008. Even though the buying of the private equity firms has finally slowed, economists (including those at the Federal Reserve) have expressed concern about the possibility that someday those rental-backed securities could even destabilize -- translation: crash -- the broader market.
  • ince Wall Street was overwhelmingly responsible for the original collapse of the housing market, many have characterized these new purchases as a land grab. In many ways, Progress CEO Donald Mullen is the poster-child for this argument. An investment banker who enjoyed a brief flurry of fame after losing a bidding war to Alec Baldwin at an art auction, he was the leader of a team at Goldman Sachs that orchestrated an infamous bet against the housing market. Known as “the big short,” it allowed that company to make “some serious money“ when the economy melted down, according to Mullen’s own emails. (They were released by the Senate Permanent Subcommittee on Investigations in 2010.) As Kevin Roose of New York magazine has written, “A guy whose most famous trade was a successful bet on the full-scale implosion of the housing market is now swooping in to pick up the pieces on the other end.”
Gary Edwards

'Clinton death list': 33 spine-tingling cases - 0 views

www.wnd.com/...-list-33-most-intriguing-cases

Clinton-Body-Count

shared by Gary Edwards on 05 Feb 17 - No Cached
  • Gary Edwards on 05 Feb 17
     
    "(Editor's note: This list was originally published in August 2016 and has gone viral on the web. WND is running it again as American voters cast their ballots for the nation's next president on Election Day.) How many people do you personally know who have died mysteriously? How about in plane crashes or car wrecks? Bizarre suicides? People beaten to death or murdered in a hail of bullets? And what about violent freak accidents - like separate mountain biking and skiing collisions in Aspen, Colorado? Or barbells crushing a person's throat? Bill and Hillary Clinton attend a funeral Apparently, if you're Bill or Hillary Clinton, the answer to that question is at least 33 - and possibly many more. Talk-radio star Rush Limbaugh addressed the issue of the "Clinton body count" during an August show. "I swear, I could swear I saw these stories back in 1992, back in 1993, 1994," Limbaugh said. He cited a report from Rachel Alexander at Townhall.com titled, "Clinton body count or left-wing conspiracy? Three with ties to DNC mysteriously die." Limbaugh said he recalled Ted Koppel, then-anchor of ABC News' "Nightline," routinely having discussions on the issue following the July 20, 1993, death of White House Deputy Counsel Vince Foster. In fact, Limbaugh said, he appeared on Koppel's show. "One of the things I said was, 'Who knows what happened here? But let me ask you a question.' I said, 'Ted, how many people do you know in your life who've been murdered? Ted, how many people do you know in your life that have died under suspicious circumstances?' "Of course, the answer is zilch, zero, nada, none, very few," Limbaugh chuckled. "Ask the Clintons that question. And it's a significant number. It's a lot of people that they know who have died, who've been murdered. "And the same question here from Rachel Alexander. It's amazing the cycle that exists with the Clintons. [Citing Townhall]: 'What it
Gary Edwards

Housing Boom and Bust - Thomas Sowell - National Review Online - 0 views

www.nationalreview.com/...thomas-sowell

shared by Gary Edwards on 24 Mar 12 - No Cached
  • Gary Edwards on 24 Mar 12
     
    A classic dissection of the financial collapse of 2008.  Genius! excerpt: EDITOR'S NOTE: The following is adapted from Thomas Sowell's new book, The Housing Boom and Bust. Let us go back to square one to consider the empirical consequences of policies in the housing market. Politicians in Washington set out to solve a national problem that did not exist - a nationwide shortage of "affordable housing" - and have now left us with a problem whose existence is as undeniable as it is painful. When the political crusade for affordable housing took off and built up steam during the 1990s, the share of their incomes that Americans were spending on housing in 1998 was 17 percent, compared to 30 percent in the early 1980s. Even during the housing boom of 2005, the median home took just 22 percent of the median American income. What created the illusion of a nationwide problem was that, in particular localities around the country, housing prices had skyrocketed to the point where people had to pay half their income to buy a modest-sized home and often resorted to very risky ways of financing the purchase. In Tucson, for example, "roughly 60% of first-time home buyers make no down payment and instead now use 100% financing to get into the market," according to the Wall Street Journal. Almost invariably, these locally extreme housing prices have been a result of local political crusades in the name of locally attractive slogans about the environment, open space, "smart growth," or whatever other phrases had political resonance at the particular time and place.
Paul Merrell

Big Pharma Accused Of Illegal Price-Fixing, What You're Not Being Told - 0 views

www.mintpressnews.com/...223290

Big-Pharma antitrust price-fixing epiPen litigation corruption

shared by Paul Merrell on 19 Dec 16 - No Cached
  • A lawsuit filed Thursday in the U.S. District Court for the District of Connecticut alleges Heritage Pharmaceuticals, EpiPen-maker Mylan NV, and others conspired to manipulate U.S. drug prices. The suit was filed on behalf of the states of Connecticut, Delaware, Florida, Hawaii, Idaho, Iowa, Kansas, and at least 12 others. Naming Heritage Pharmaceuticals Inc. as the “ringleader” of the alleged conspiracy, the suit claims the prices of doxycycline hyclate, an antibiotic, and glyburide, a treatment drug for diabetics, were kept artificially high due to a scheme involving Mylan, Mayne Pharma, Aurobindo Pharma, Teva Pharmaceuticals, and Citron Pharma LLC. Federal prosecutors claim the price-fixing scheme was orchestrated by executives who have left Heritage. The suit is part of an ongoing, two-year long antitrust investigation conducted by the U.S. Department of Justice. According to the New York Attorney General’s Office, former Heritage executives Jeffrey Glazer and Jason Malek conspired with others to avoid competition by “[entering] into numerous illegal conspiracies in order to unreasonably restrain trade, artificially inflate and manipulate prices and reduce competition.” By resorting to price-fixing, companies involved may have believed they would secure their market shares without presenting a major risk to one another. This alleged scheme, the suit argues, has caused “significant, lasting and ultimately harmful rippling effect in the United States healthcare system.” The 20 states named as plaintiffs in the suit claim the companies were aware of the legal ramifications of their actions and took steps to hide their intent and actions as soon as the investigation was launched.
  • Recently, Mylan was chastised for inflating the price of the EpiPen, a device used to combat life-threatening allergic reactions. As Anti-Media reported in August, news organizations “had a field day” when reports showed the price of the autoinjector had gone from $57 each in 2007 to $600 for a double package in 2016. During a hearing before Congress over the EpiPen scandal, Mylan CEO Heather Bresch called the outraged reactions to the price hike “overblown.” Adding that the price of the autoinjectors wouldn’t change anytime soon, Bresch defended the company’s decision, claiming “[Mylan]’s profit on its $609 EpiPen two-packs is about $50 per pen.” When examining Mylan’s involvement in politics since Bresch was named the company’s executive, it becomes apparent that Mylan may have had the opportunity to approach regulators from a privileged position due to the fact Sen. Joe Manchin (D-WV) is the CEO’s father. By 2010, the Food and Drug Administration (FDA) had changed federal guidelines associated with epinephrine prescriptions, allowing Mylan to change its EpiPen labels. By shifting packaging and selling twin-packs instead of single pens while marketing the devices to “anyone at risk,” Mylan widened the EpiPen market. In 2013, a congressional bill pressuring states to have stocks of EpiPens on hand was signed into law. It was conceived after a local seven-year-old died due to an allergic reaction to peanuts.
  • Mylan lobbied heavily for this bill and spent over $1 million that year alone in lobbying efforts. Due to this legislative success, up to 47 states now “require or encourage schools to stock the devices.” But as the company led the fight to introduce the EpiPen to a larger audience, it also led a legal battle to bring its competitors to their knees by influencing regulation that artificially raises costs of doing business for other companies. From our August report: “In 2009, Pfizer Inc., the world’s biggest drugmaker, and Mylan sued Teva Pharmaceutical Industries Ltd. over a patent infringement. At the time, the Israeli company was accused of using Mylan’s design without permission. But in 2012, both parties reached an agreement, and Teva was allowed to seek approval from the FDA for its epinephrine injecting device. “According to Gizmodo, Teva has failed to obtain approval from the FDA to develop affordable generic versions of the EpiPen. The company says it won’t try to go through the same process again until 2017. “The only other device that was closer to competing with Mylan’s EpiPen was Auvi-Q, and it was also driven out of the market. In 2015, the company launched a recall campaign claiming the devices could be delivering faulty dosages.”
  • ...1 more annotation...
  • What this story shows us is that if companies conspire among themselves to keep competitors at bay, the federal government will accuse them of breaking antitrust laws. But when Congress approves increased regulation, effectively barring smaller companies from competing while creating monopolies, price-fixing is perfectly acceptable. Instead of a lawsuit against Heritage and Mylan, how about the People v. United States Congress? After all, if it weren’t for their relentless pursuit of special interest protections, companies wouldn’t have turned into the conglomerates they have become.
Gary Edwards

The Housing Chart That's Worth 1000 Words : Clusterstock's Henry Blodgett - 0 views

www.businessinsider.com/-thats-worth-1000-words-2009-2

finacial-crisis real-estate housing-prices

shared by Gary Edwards on 22 Feb 09 - Cached
  • Gary Edwards on 22 Feb 09
     
    "Here's the big problem with almost all the current rhetoric about the housing crisis: It presumes that the goal should be to get house prices rising again.  The problem with that idea is that, even after a 25% decline, house prices are still way too high. " Even if there is a government mechanism that could stop house prices from plummeting and artificially pump them up again, therefore, it would just postpone the inevitable....." Henry covers the infamous Robert Schiller Housing Graph tracking home prices since 1890 to the present. He also includes an excerpt from James Quinn's acerbic but highly informed article. Mr. Quinn spares nothing in his loathing of congress, Barney Frank and Obama.
Gary Edwards

A Government Failure, Not a Market Failure - WSJ.com - 0 views

online.wsj.com/...SB124631486277570583.html

clinton-housing clinton-finance fed-bubbles

shared by Gary Edwards on 19 Jul 09 - Cached
  • Gary Edwards on 19 Jul 09
     
    Excerpt: After 2000, the national push toward home ownership intensified in three dimensions, leading to a doubling of housing prices in just five years' time. First, the Federal Reserve Board's interest-rate policy drove down the cost of borrowing money to unprecedented lows. Second, a common conviction arose that home ownership should be available even to those who, under prevailing conditions, could not afford it. Finally, private agencies charged with determining the risk and value of securities were exceptionally generous in their assessment of the financial products known as "derivatives" whose collateral resided in the value of thousands of mortgages bundled together. The rating agencies understated the risks from these bundled mortgages by assuming that home prices were simply going to rise forever. When the housing bubble burst in 2006, the damage to the financial system pushed the global economy into the worst contraction since the Great Depression. In the midst of the pain and suffering that have accompanied financial collapse and economic contraction-over $15 trillion in wealth has been lost by American households alone while, to date, more than 6 million job losses have boosted the unemployment rate to 9.4 percent-much of the blame has been placed on unregulated financial markets whose behavior is said to have revealed a terrible flaw in the foundation of capitalism itself. This was a market failure, we are told, and the promise of capitalism has always been that the self-correcting mechanisms built into the system would preclude the possibility of a systemic market failure. But the housing bubble only burst after government subsidies pushed house prices up so fast that marginal buyers could no longer afford to chase prices even higher. A bubble created by rigged financial markets and a government-sponsored obsession with home ownership is not a result of market failure, but rather, a result of bad public policy. The belief that home ownership,
Gary Edwards

"The Burning Platform" by James Quinn. FSO Editorial 02/18/2009 - 0 views

www.financialsense.com/...0218.html

financial-crisis housing-prices james-quinn burning-platform david-walker banksters

shared by Gary Edwards on 22 Feb 09 - Cached
  • “Basically what happens is that after a period of time, economies go through a long-term debt cycle -- a dynamic that is self-reinforcing, in which people finance their spending by borrowing and debts rise relative to incomes and, more accurately, debt-service payments rise relative to incomes. At cycle peaks, assets are bought on leverage at high-enough prices that the cash flows they produce aren't adequate to service the debt. The incomes aren't adequate to service the debt. Then begins the reversal process, and that becomes self-reinforcing, too. In the simplest sense, the country reaches the point when it needs a debt restructuring. We will go through a giant debt-restructuring, because we either have to bring debt-service payments down so they are low relative to incomes -- the cash flows that are being produced to service them -- or we are going to have to raise incomes by printing a lot of money.
  • Gary Edwards on 22 Feb 09
     
    As Congressional moron after Congressional moron goes on the usual Sunday talk show circuit and says we must stop home prices from falling, I wonder whether these people took basic math in high school. Are they capable of looking at a chart and understanding a long-term average? The median value of a U.S. home in 2000 was $119,600. It peaked at $221,900 in 2006. Historically, home prices have risen annually in line with CPI. If they had followed the long-term trend, they would have increased by 17% to $140,000. Instead, they skyrocketed by 86% due to Alan Greenspan's irrational lowering of interest rates to 1%, the criminal pushing of loans by lowlife mortgage brokers, the greed and hubris of investment bankers and the foolishness and stupidity of home buyers. It is now 2009 and the median value should be $150,000 based on historical precedent. The median value at the end of 2008 was $180,100. Therefore, home prices are still 20% overvalued. Long-term averages are created by periods of overvaluation followed by periods of undervaluation. Prices need to fall 20% and could fall 30%. Instead of allowing the housing market to correct to its fair value, President Obama and Barney Frank will attempt to "mitigate" foreclosures. Mr. Frank has big plans for your tax dollars, "We may need more than $50 billion for foreclosure [mitigation]". What this means is that you will be making your monthly mortgage payment and in addition you will be making a $100 payment per month for a deadbeat who bought more house than they could afford, is still watching a 52 inch HDTV, still eating in their perfect kitchens with granite countertops and stainless steel appliances. Barney thinks he can reverse the law of supply and demand by throwing your money at the problem. He will succeed in wasting billions of tax dollars and home prices will still fall 20% to 30%. Unsustainably high home prices can not be sustained. I would normally say that even a 3rd grader could understand this conce
Gary Edwards

Peter J. Wallison: The Price for Fannie and Freddie Keeps Going Up - WSJ.com - 0 views

online.wsj.com/...3278604574624681873427574.html

financial-crisis socialist-scourge obammunism banksters

shared by Gary Edwards on 31 Dec 09 - Cached
  • Gary Edwards on 31 Dec 09
     
    Whoa.  This is bad stuff.  The facts, the numbers, the players.  They all point to our Federal government, the Clinton Administration in 1993, Democrat obstruction of much needed reform, and a Democratic Congress in 2007 as the catalist that blew an $18 Trillion dollar hole in our economy.  Miserable socialist bastardos!! excerpt:  Fannie and Freddie's congressional sponsors-some of whom are now leading the administration's effort to "reform" the financial system-have a lot to answer for. Rep. Barney Frank (D., Mass.), chairman of the House Financial Services Committee, sponsored legislation adopted in 2008 that established a new regulatory structure for the GSEs. But by then it was far too late. The GSEs had begun buying risky loans in 1993 to meet the "affordable housing" requirements established under congressional direction by the Department of Housing and Urban Development (HUD). Most of the damage was done from 2005 through 2007, when Fannie and Freddie were binging on risky mortgages. Back then, Mr. Frank was the bartender, denying that there was any cause for concern, and claiming that he wanted to "roll the dice" on subsidized housing support. View Full Image Associated Press In 2005, the Senate Banking Committee, then controlled by Republicans, adopted tough regulatory legislation that would have established more auditing and oversight of the two agencies. But it was passed out of committee on a partisan vote, and with no Democratic support it never came to a vote. By the end of 2008, Fannie and Freddie held or guaranteed approximately 10 million subprime and Alt-A mortgages and mortgage-backed securities (MBS)-risky loans with a total principal balance of $1.6 trillion. These are now defaulting at unprecedented rates, accounting for both their 2008 insolvency and their growing losses today. Since 2008, under government control, the two agencies have continued to buy dicey mortgages in order to stabilize housing prices. There is more to th
Paul Merrell

'Empire of Chaos' in the House - RT Op-Edge - 0 views

rt.com/...19-empire-saudi-usa-king-obama

war & peace economic-warfare pipelinestan-wars Saudis Russia U.S.-foreign-policy

shared by Paul Merrell on 29 Jan 15 - No Cached
  • And yet, Air Force One, we got a problem. High-level US financial sources assure this correspondent the trip is all about Obama shoring up the new King’s support for their financial/economic war on Russia as the House of Saud is starting to have second thoughts. The Saudi role in this war has been to come up with the oil price shock – which is hurting not only Russia but also Iran and Venezuela, among others. Besides, the US puppet theoretically in charge in Ukraine, Petro Poroshenko, has just visited Saudi Arabia. Russia is not Iran – with all due respect to Iran. If the House of Saud really believes they are talking to the head of a superpower rather than a ventriloquist’s puppet – which is Obama’s role – they are effectively doomed. Nothing Obama says means a thing. The real ‘Masters of the Universe’ who run the ‘Empire of Chaos’ want the House of Saud to do most of their dirty work against Russia; and in a later stage they will take care of the “towel heads” - as the saying goes in Washington - over their development of nuclear missiles with Pakistan. And especially because the Saudi-launched oil price war is bound to destroy the US oil industry - against US national interests.
  • The House of Saud has absolutely nothing to gain from this undeclared financial/economic war on Russia. The Saudis have already “lost” Yemen and Iraq. Bahrain is held by mercenary troops containing the alienation of the Shia majority. They are freaking out with the possibility of ultimate “enemy” Iran reaching a nuclear deal with His Master’s Voice. They are desperate that “Assad won’t go”. They want every Muslim Brotherhood in sight – or the vicinity – jailed or beheaded. They fear any Arab Spring-style stirrings as worse than the plague. And then there’s the fake Caliphate of ISIS/ISIL/Daesh threatening to go all the way to Mecca and Medina. The House of Saud is effectively surrounded.
  • Meanwhile, as the tempest approaches, all is smiles – amid a silent family bloodbath. The powerful Sudairi clan has exacted their “revenge” as King Abdullah’s corpse was still warm. King Salman, almost 80, and with Alzheimer’s about to turn him into mush, took no time to appoint his nephew Mohammed bin Naif as deputy crown prince. And just in case nepotism was not evident enough, he also appointed his son Prince Mohammed bin Salman as defense minister. Mohammed bin Naif is a Pentagon/CIA darling; the House of Saud’s head of counterterrorism.
  • ...1 more annotation...
  • But playing the ‘Empire of Chaos’ game – financial/economic war on Russia - is a game-changer, as in playing with fire. US/EU sanctions, attacks on the oil price and the ruble by giant derivative players as agents, are something way above the Saudi pay grade. The House of Saud swore that they didn’t change their production quota during 2014. But there was an excess supply – and it was brought into the market to help cause the oil price crash, alongside the manipulation by derivatives speculators. Scores of oil analysts still can’t figure out why the House of Saud went after Russia; all reasons are political, not economical (Russian support for Syria and Iran, the Americans agreeing with the strategy, etc.). The fact is Moscow did perceive it as a declaration of economic war by Saudi Arabia. Petroleum Intelligence Weekly, cautiously, has already hinted it may get much worse, as in “potential for disruption in Mideast Gulf monarchies.” Beware of an Emperor bearing gifts – or mourning a late King. The ‘Empire of Chaos’ is essentially asking the House of Saud to keep going kamikaze all the way against Russia. Sooner or later someone in Riyadh will realize this is the roadmap to House suicide.
Paul Merrell

Crude price drop triggers major layoffs in US oil industry - RT USA - 0 views

www.rt.com/...217959-us-oil-industry-prices

war & peace economic warfare U.S.-foreign-policy blowback oil-buttle

shared by Paul Merrell on 29 Dec 14 - No Cached
  • Thousands of recently highly paid workers have been laid off after the oil price plummeted 50 percent in 2014. At least four American oil-producing states are already facing budget problems due to decreasing oil revenues. The price plunge has affected petroleum production in all oil-extracting countries, including the US.
  • For Texas, which has a far larger and more diversified economy than Louisiana, the oil price downturn is no good either. In just October and November Texas lost 2,300 oil and gas jobs, the federal Bureau of Labor Statistics reported last week. Through the last half a year the state has been losing $83 million in potential revenue every day, the Greater Houston Partnership recently reported. They blamed this on crashing price of its West Texas Intermediate crude oil, which has depreciated to $54.73 per barrel this week, from more than $100 six months ago.
  • This doesn’t apply to the state of Alaska. According to the NYT, approximately 90 percent of state’s budget is formed from oil revenues. Alaska’s government is considering a 50 percent capital-spending cut for bridges and roads in the face of the oil price drop, with Moody’s, the credit rating service, lowering Alaska’s credit outlook from stable to negative. The state of Louisiana’s 2015-16 budget is going to be $1.4 billion short, with 162 state government positions already eliminated and more to be discontinued starting from January. Contracts and projects are being either reduced or frozen in state agencies. According to the state’s chief economist Greg Albrecht, for every $1 fall in price of an annual average barrel of oil, Louisiana loses $12 million.
  • ...4 more annotations...
  • Now according to Tom Runiewicz, a US industry economist at IHS Global Insight, if oil stays around $56 a barrel till the middle of the next year, companies providing services to oil and gas industry could lose 40,000 jobs by the end of 2015, while oil and gas equipment manufacturers could slash up to 6,000 jobs.
  • The situation in other oil-extracting states could be even worse. In a study published last year, the Council on Foreign Relations warned the largest job losses caused by sharp decline in oil prices are going to take place in North Dakota, Oklahoma and Wyoming, where the number of drilling rigs is decreasing.
  • Currently cheap fuel is still believed to be providing an overall boost to the US economy, as consumers can spend less on gasoline and more on shopping and services. But for the American energy sector the future looks less bright. It’s effecting places like Alaska, Louisiana, Oklahoma and Texas, the New York Times reports. US oil experts recall the 1980s oil price downturn, accompanied by economic disasters around the globe and arguably becoming one of the causes of the fall of the Soviet Union. Some experts are positive and say America’s oil-producing states won’t suffer too much because they “diversified their economies.”
  • These workers can earn more than $1,700 a week, much higher than the average $848 a week payment for other workers, the WSJ reported. When experienced workers lose their highly paid jobs, they stop paying their bills. There are also fears of a house-price slump. Fitch Ratings has already warned that with the price of oil continuing to plummet, home prices in Texas “may be unsustainable.”
  • Paul Merrell on 29 Dec 14
     
    The oil bubble is beginning to burst. Blowback. 
Paul Merrell

Central asset bubbles, currency wars are destroying emerging markets | Sunday Guardian - 0 views

www.sundayguardianlive.com/...re-destroying-emerging-markets

economy Fed Bank-of-England European-Central-Bank hdge-funds bubbles real-estate

shared by Paul Merrell on 31 Jan 17 - No Cached
  • as the out-of-control cabal of central banks inflated grotesque asset bubbles in global property, stock, and fixed-income markets? Or are we to believe traditional media’s “fake news” mantra of “it’s different this time?” Well, bad news, folks. It’s never different, not this time, not anytime, never.  Capitalism is being destroyed The US Federal Reserve, the Bank of England, and the European Central Bank have become gargantuan, out-of-control, rogue hedge funds. They are loaded with non-elected academics operating in opaque groupthink bubble chambers, repeating the broken Keynesian economic mantra of “whatever it takes, more debt is good”. They have magicked-up 100s of trillions in debt and guarantees, while the US Federal Reserve has gobbled up over 90% of the US mortgage market. Global stock market valuations are buoyed by stock buybacks, funded by record corporate debt, and enabled by reckless central bank zero-interest-rate policies. Pay no attention to the fact that in the past few years, US stock indices have surged over 70% to new all-time highs, while profits have only risen an anaemic 2%. Today’s record amount of corporate debt is cannibalising corporations, by bringing future earnings forward, which makes future stagnation and collapse into bankruptcy a certainty. For the near term, CEOs will continue to receive record pay packets for out-performing the market, as their stock prices bubble like a rocket ship into outer space, while these actions decimate any long-term growth prospects.
  • In 2005, preceding the credit crisis and the subsequent nationwide property price collapse, US Federal Reserve chairman, Dr Ben Bernanke was asked about risks associated with a dangerous subprime housing bubble that could destabilise the economy.  Bernanke stated that “I disagree with your premise. We’ve never had a decline in house prices on a nationwide basis. So, what I think is more likely is that house prices will slow, maybe stabilise: might slow consumption spending a bit. I don’t think it’s going to drive the economy too far from its full employment path, though.” So, what led to history’s biggest financial crisis in 2006? Too much debt, credit, and leverage—proving that Fed Chair Ben Bernanke was dead wrong. What did we learn? Nothing, a big fat zero. In fact, property prices have recently eclipsed previous 2006 highs, bubbling to frothy new all-time highs, while real wages declined and high-paying jobs have disappeared. 
  • Real estate is an asset but not an asset class because it lacks liquidity. It takes time to sell property and the difference between what a buyer is willing to pay and what a seller is willing to sell for may be huge. For example, a buyer may be willing to pay $750,000, but the seller will only sell at $900,000. In good times, frenzied buyers create “bidding wars” on coveted properties, sometimes rocketing the price 30% above the original offer. This is terrific if you are a property owner or property seller, but not so much if you are a first-time buyer. In bad times, prices collapse and the only price a buyer is willing to pay for the $900,000 home above is $90,000. Great for buyers, but not so great for the owner, who holds a mortgage of $700,000 that must be repaid to a bank.  During these boom times, optimism bias creeps into the minds of buyers, allowing them to pay off the charts, wildly inflated, irrational prices for fear of “missing out”. Optimism bias is a cognitive bias that causes a person to (mistakenly) believe nothing negative could ever happen to them. It is a “close your eyes and buy at new all-time highs” belief system. If the prices collapse, the banks can require more capital. If you do not have more capital, the bank can take your property. If the government wants to increase your taxes, you must pay or they will confiscate your property. In fact, property confiscations are already happening in Greece and Italy.  Commercial and residential real estate are now grotesque asset bubbles ready to explode. 
Joseph Skues

Why capitalism can't meet human needs - 0 views

www.workers.org/socialism

jobs capitalism OVERPRODUCTION

shared by Joseph Skues on 14 Aug 10 - Cached
  • This crisis began when the housing bubble burst. Capitalist banks were lending money to profit-seeking real estate developers to build houses. The same banks were lending money to mortgage companies to make as many loans as they could. The goal was to boost profits. Soon there were more houses than the workers and the middle class could buy. The prices of homes fell. Mortgages could not be refinanced. Workers could not pay the steep increases in interest rates built into their loans. Banks stopped lending. Millions of households went into foreclosure. Put simply, people became homeless because there were too many houses! Not too many houses that were needed or already here, but too many houses that can be sold at a profit. Furthermore, the workers who build homes and all the workers who make the things that go into homes are losing their jobs because these homes can no longer be sold at a profit. That is the essence of all the capitalist crises that have occurred since the first crisis in 1825. It is the crisis of overproduction.
  • Now the crisis of overproduction is sweeping the auto industry. From the auto industry and the housing industry it is spreading throughout the economy. The stock markets are plummeting because the financial bailouts, the pumping of trillions of dollars into the banks, cannot stop the capitalist economic crisis.
  • Profits consist of unpaid labor.
  • ...17 more annotations...
  • Under the system of capitalist exploitation wealth flows to the top, and the level of inequality is obscene.
  • the super-rich who have all the levers of power in society, owned 34.3 percent of the wealth in 2004.
  • Racism and national oppression
  • distribution of wealth under capitalism
  • the median wealth (that is, savings and other assets) of households by race in 2004 was $140,700 for whites, $20,600 for African Americans and $18,600 for Latin@s
  • Oppression and economic discrimination also fall on women and lesbian, gay, bi and trans people under capitalism
  • sex and gender bias as a way to divide and conquer.
  • A system in which people are homeless because there are too many homes must go
  • How else could 1 percent of the population dominate the workers and oppressed
  • As the present crisis engulfs wider and wider sections of the workers, the potential for bringing about that unity is growing stronger.
  • The Pentagon is nothing more than an enforcer for U.S. capitalism
  • The growing witch-hunt against undocumented workers has the same poisonous, divisive goal.
  • in which workers are losing their jobs and being plunged into poverty because they have produced too much wealth
  • which cannot provide jobs and education but imprisons 2.4 million people
  • majority of them Black and Latin@, is bankrupt
  • where production takes place for human need, not for profit. The class that produces the wealth, the multinational working class, should own and distribute that wealth.
  • Trillions of dollars are now being used to bail out the banks and fund the Pentagon under capitalism. Under socialism, that money would guarantee that everyone would have a decent job and income, free health care, affordable housing, free education, low-cost transportation, healthy, reasonably priced food and much more. The well-being of the multinational working class would be the goal of society, not their exploitation as it is under capitalism.
Gary Edwards

The Real Reason for the Iraq War | VICE United Kingdom - 1 views

www.vice.com/...asnt-waged-for-oil-greg-palast

Oil Iraq neocons Saudi Banksters Oilsters

shared by Gary Edwards on 29 Mar 13 - No Cached
  • Like most lefty journalists, I assumed that George Bush and Tony Blair invaded Iraq to buy up its oil fields, cheap and at gun-point, and cart off the oil. We thought we knew the neo-cons true casus belli: Blood for oil. But the truth in the Options for Iraqi Oil Industry was worse than "Blood for Oil". Much, much worse.
  • Within days, our chief of investigations, Ms Badpenny, delivered to my shack in the woods outside New York a 323-page, three-volume programme for Iraq's oil crafted by George Bush's State Department and petroleum insiders meeting secretly in Houston, Texas. I cracked open the pile of paper – and I was blown away.
  • I'd already had in my hands a 101-page document, another State Department secret scheme, first uncovered by Wall Street Journal reporter Neil King, that called for the privatisation, the complete sell-off of every single government-owned asset and industry. And in case anyone missed the point, the sales would include every derrick, pipe and barrel of oil, or, as the document put it, "especially the oil". That plan was created by a gaggle of corporate lobbyists and neo-cons working for the Heritage Foundation. In 2004, the plan's authenticity was confirmed by Washington power player Grover Norquist. (It's hard to erase the ill memory of Grover excitedly waving around his soft little hands as he boasted about turning Iraq into a free-market Disneyland, recreating Chile in Mesopotamia, complete with the Pinochet-style dictatorship necessary to lock up the assets – while behind Norquist, Richard Nixon snarled at me from a gargantuan portrait.) The neo-con idea was to break up and sell off Iraq's oil fields, ramp up production, flood the world oil market – and thereby smash OPEC and with it, the political dominance of Saudi Arabia.
  • ...6 more annotations...
  • General Jay Garner also confirmed the plan to grab the oil. Indeed, Secretary of Defense Donald Rumsfeld fired Garner, when the General, who had lived in Iraq, complained the neo-con grab would set off a civil war. It did. Nevertheless, Rumsfeld replaced Garner with a new American viceroy, Paul Bremer, a partner in Henry Kissinger's firm, to complete the corporate takeover of Iraq's assets – "especially the oil".
  • But that was not to be. While Bremer oversaw the wall-to-wall transfer of Iraqi industries to foreign corporations, he was stopped cold at the edge of the oil fields. How? I knew there was only one man who could swat away the entire neo-con army: James Baker, former Secretary of State, Bush family consiglieri and most important, counsel to Exxon-Mobil Corporation and the House of Saud.
  • There was no way in hell that Baker's clients, from Exxon to Abdullah, were going to let a gaggle of neo-con freaks smash up Iraq's oil industry, break OPEC production quotas, flood the market with six million bbd of Iraqi oil and thereby knock the price of oil back down to $13 a barrel where it was in 1998.
  • Big Oil could not allow Iraq's oil fields to be privatised and taken from state control. That would make it impossible to keep Iraq within OPEC (an avowed goal of the neo-cons) as the state could no longer limit production in accordance with the cartel's quota system. The US oil industry was using its full political mojo to prevent their being handed ownership of Iraq's oil fields. That's right: The oil companies didn't want to own the oil fields – and they sure as hell didn't want the oil. Just the opposite. They wanted to make sure there would be a limit on the amount of oil that would come out of Iraq. Saddam wasn't trying to stop the flow of oil – he was trying to sell more. The price of oil had been boosted 300 percent by sanctions and an embargo cutting Iraq's sales to two million barrels a day from four. With Saddam gone, the only way to keep the damn oil in the ground was to leave it locked up inside the busted state oil company which would remain under OPEC (i.e. Saudi) quotas. The James Baker Institute quickly and secretly started in on drafting the 323-page plan for the State Department. With authority granted from the top (i.e. Dick Cheney), ex-Shell Oil USA CEO Phil Carroll was rushed to Baghdad in May 2003 to take charge of Iraq's oil. He told Bremer, "There will be no privatisation of oil – END OF STATEMENT." Carroll then passed off control of Iraq's oil to Bob McKee of Halliburton, Cheney's old oil-services company, who implemented the Baker "enhance OPEC" option anchored in state ownership.
  • This week, VICE readers can download, for free, Greg Palast's investigation of the war in Iraq in the BBC film, Bush Family Fortunes, at www.GregPalast.com – as well as the illustrated poster of "The Secret History of War over Oil in Iraq" from Palast's international bestseller, Armed Madhouse, also at www.GregPalast.com
  • Some oil could be released, mainly to China, through limited, but lucrative, "production sharing agreements". And that's how George Bush won the war in Iraq. The invasion was not about "blood for oil", but something far more sinister: blood for no oil. War to keep supply tight and send prices skyward. Oil men, whether James Baker or George Bush or Dick Cheney, are not in the business of producing oil. They are in the business of producing profits. And they've succeeded. Iraq, capable of producing six to 12 million barrels of oil a day, still exports well under its old OPEC quota of three million barrels. The result: As we mark the tenth anniversary of the invasion this month, we also mark the fifth year of crude at $100 a barrel. As George Bush could proudly say to James Baker: Mission Accomplished!
  • Paul Merrell on 29 Mar 13
     
    The Sherman Act forbids conspiracies in restraint of trade and is at its zenith in price-fixing cases. This looks to be the mother of all price-fixing cases, to say the least.   
  • Gary Edwards on 30 Mar 13
     
    Wow, Marbux has it right.  This report from the legendary Greg Palast of the BBC News Network is a stunning reversal of what everyone believed to be the truth.  To wit, the militarist and global strategist - resource control hungry neocon contingent of the Repubican party was always thought to be behind the Iraqi war.  For control of cheap, plentiful oil and, the protection / destruction of Israel's enemies.   Funny, but it turns out America was fighting for higher oil prices and limited supplies.  Just as in the first Gulf War, Americans were fighting to protect Saudi and big oil profits. excerpt: Big Oil could not allow Iraq's oil fields to be privatised and taken from state control. That would make it impossible to keep Iraq within OPEC (an avowed goal of the neo-cons) as the state could no longer limit production in accordance with the cartel's quota system. The US oil industry was using its full political mojo to prevent their being handed ownership of Iraq's oil fields. That's right: The oil companies didn't want to own the oil fields - and they sure as hell didn't want the oil. Just the opposite. They wanted to make sure there would be a limit on the amount of oil that would come out of Iraq. Saddam wasn't trying to stop the flow of oil - he was trying to sell more. The price of oil had been boosted 300 percent by sanctions and an embargo cutting Iraq's sales to two million barrels a day from four. With Saddam gone, the only way to keep the damn oil in the ground was to leave it locked up inside the busted state oil company which would remain under OPEC (i.e. Saudi) quotas. The James Baker Institute quickly and secretly started in on drafting the 323-page plan for the State Department. With authority granted from the top (i.e. Dick Cheney), ex-Shell Oil USA CEO Phil Carroll was rushed to Baghdad in May 2003 to take charge of Iraq's oil. He told Bremer, "There will be no privatisation of oil - END OF STATEMENT." Carroll then passed off control
Gary Edwards

What 1946 Can Tell Us About 2010 - The American, A Magazine of Ideas - 0 views

www.american.com/...at-1946-can-tell-us-about-2010

michael-barone fdr truman 1946

shared by Gary Edwards on 06 Apr 10 - No Cached
  • In both cases a Democratic president was proposing and a Democratic Congress was considering proposals to substantially increase the size and scope of government beyond previous peacetime limits.
  • The second similarity is that the Democrats in 1945–1946 were closely allied with labor unions, which were deeply involved in politics and were avidly seeking more members and more bargaining power.
  • The Wagner Act passed in 1935 stimulated the growth of Congress of Industrial Organizations (CIO) unions, which through sitdown strikes (which were plainly illegal) and other tactics organized the major auto, steel, and tire manufacturers between 1937 and 1941.
  • ...3 more annotations...
  • Unions also emerged as a political force in the war years—and as a political force entangled with the Communist Party.
  • the stimulus package passed in February 2009 allotted one-third of its funds to state and local governments, which helped preserve the jobs of many public sector union members—and the flow of dues money to public-sector union leaders.
  • 1946. The Republican slogan was “Had enough?”—enough inflation, enough high taxes, enough price controls, enough coddling of unions with their frequent strikes and their entanglement with Communists. The Republicans promised to end controls, lower taxes, and restrict labor unions—an unusually coherent program for a party out of power.
  • Gary Edwards on 06 Apr 10
     
    There are some intriguing similarities between the political situation in 1946 and the political situation today. In the off-year election of 1946, Republicans gained 13 seats in the Senate and emerged with a 51-45 majority there, the largest majority that they enjoyed between 1930 and 1980. They gained 55 seats in the House, giving them a 246-188 majority in that body, the largest majority they have held since 1930. First, Democrats were promising (or threatening) to vastly increase the size and scope of government. Government's share of gross domestic product had risen to over 40% in World War II, and it was obvious that there would be some scaling back. At the same time, the Allied victory in World War II had enhanced the prestige of the state, just as the 1930s Depression weakened faith in free markets. In Britain, the 1942 Beveridge Report urged creating a welfare state after the war, and the Labour Party won a resounding victory in the July 1945 election and promptly proceeded to adopt the Beveridge recommendations and more. In the United States, Franklin Roosevelt in his January 1944 State of the Union address echoed the Beveridge Report. As I pointed out in my 1990 book Our Country: The Shaping of America from Roosevelt to Reagan, he called for "steeply graduated taxes, government controls on crop prices and food prices [and] continued controls on wages . . . Government should guarantee everyone a job, an education, and clothing, housing, medical care, and financial security against the risks of old age and sickness." "True individual freedom," Roosevelt said, "cannot exist without economic security and independence." The similarities between the policy choices facing Congress in 1945-1946 and those facing it in 2009-2010 are obviously far from exact. Nevertheless, there are some. In both cases a Democratic president was proposing and a Democratic Congress was considering proposals to substantially increase the size and scope of gov
Gary Edwards

The Daily Bell - Richard Ebeling on Higher Interest Rates, Collectivism and the Coming ... - 0 views

www.thedailybell.com/...tivism-and-the-Coming-Collapse

Richard-Ebeling The-Daily-Bell Austrian-Economics Liberty-Tryanny

shared by Gary Edwards on 17 Jun 13 - No Cached
  • The "larger dysfunction," as you express it, arises out of a number of factors. The primary one, in my view, is a philosophical and psychological schizophrenia among the American people.
  • While many on "the left" ridicule the idea, there is a strong case for the idea of "American exceptionalism," meaning that the United States stands out as something unique, different and special among the nations of the world.
  • the American Founding Fathers constructed a political system in the United States based on a concept on which no other country was consciously founded:
  • ...95 more annotations...
  • But the American Revolution and the US Constitution hailed a different conception of man, society and government.
  • n the rest of the world, and for all of human history, the presumption has been that the individual was a slave or a subject to a higher authority. It might be the tribal chief; or the "divinely ordained" monarch who presumed to rule over and control people in the name of God; or, especially after the French Revolution and the rise of modern socialism, "the nation" or "the people" who laid claim to the life and work of the individual.
  • the idea of individual rights.
  • That is, as long as the individual did not violate the equal rights of others to their life, liberty and property, each person was free to shape and guide his own future, and give meaning and value to his own life as he considered best in the pursuit of that happiness that was considered the purpose and goal of each man during his sojourn on this Earth.
  • Governments did not exist to give or bestow "rights" or "privileges" at its own discretion.
  • Governments were to secure and protect each individual's rights, which he possessed by "the nature of things."
  • The individual was presumed to own himself. He was "sovereign."
  • The real and fundamental notion of "self-government" referred to the right of each individual to rule over himself.
  • Each individual, by his nature and his reason, had a right to his life, his liberty and his honestly acquired property.
  • during the first 150 years of America's history there was virtually no Welfare State and relatively few government regulations, controls and restrictions on the choices and actions of the free citizen.
  • But for more than a century, now, an opposing conception of man, society and government has increasingly gained a hold over the ideas and attitudes of people in the US.
  • It was "imported" from Europe in the form of modern collectivism.
  • The individual was expected to see himself as belonging to something "greater" than himself. He was to sacrifice for "great national causes."
  • He was told that if life had not provided all that he desired or hoped for, it was because others had "exploited" him in some economic or social manner, and that government would redress the "injustice" through redistribution of wealth or regulation of the marketplace.
  • If he had had financial and material success, the individual should feel guilty and embarrassed by it, because, surely, if some had noticeably more, it could only be because others had been forced to live with noticeably less.
  • left on its own, free competition tends to evolve into harmful monopolies and oligopolies, with the wealthy "few" benefiting at the expense of the "many."
  • They are the crises of the Interventionist-Welfare State: the attempt to impose reactionary collectivist policies of political paternalism and redistributive plunder on a society still possessing parts of its original individualist and rights-based roots.
  • it is in the form of communism's and socialism's critique of capitalism.
  • Unregulated capitalism leads to "unearned" and "excessive" profits; unbridled markets generate the business cycle and the hardships of recessions and depressions;
  • These two conflicting conceptions of man, society and government have been and are at war here in the United States.
  • And if it cannot be gotten and guaranteed through the redistributive mechanisms of the European Union and the euro, well, maybe we should return power to our own nation-states to provide the jobs, the social "safety nets" and the financial means to pay for it through, once again, printing our own national paper currencies.
  • This is the political-philosophical bankruptcy of the West and the dead ends of the collectivist promises of the last 100 years.
  • Ludwig von Mises's book, Socialism: An Economic and Sociological Analysis, originally published in 1922, demonstrated how and why a socialist, centrally planned system was inherently unworkable.
  • The nationalization of productive property, the abolition of markets and the prohibition of all competitive exchange among the members of society would prevent the emergence and operation of a price system, without which it is impossible to know people's demands for desired goods and the relative value they place on them.
  • It also prevents the emergence of prices for the factors of production (land, labor, capital) and makes it impossible to know their opportunity costs – the value of those factors of production in alternative competing uses among entrepreneurs desiring to employ them.
  • Without such a price system the central planners are flying blind, unable to rationally know or decide how best to utilize labor, capital and resources in productively efficient ways to make the goods and services most highly valued by the consuming public.
  • Thus, Mises concluded, comprehensive socialist central planning would lead to "planned chaos."
  • And, therefore, there is no guarantee that the amount of investments undertaken and their time horizons are compatible with the available resources not also being demanded and used for more immediate consumer goods production in the society.
  • As a consequence, financial markets do not work like real markets.
  • Thus, the interventionist state leads to waste, inefficiency and misuses of resources that lower the standards of living that we all, otherwise, could have enjoyed.
  • We cannot be sure what the amount of real savings may be in the society to support real and sustainable investment and capital formation.
  • Government intervention prevents prices from "telling the truth" about the real supply and demand conditions thus leading to imbalances and distortions in the market.
  • We cannot know what the "real cost" of borrowing should be, since interest rates are not determined by actual, private sector savings and investment decisions.
  • Government production regulations, controls, restrictions and prohibitions prevent entrepreneurs from using their knowledge, ability and capital in ways that most effectively produce the goods consumers actually want and at the most cost-competitive prices possible.
  • This is why countries around the world periodically experience booms and busts, inflations and recessions − not because of some inherent instabilities or "irrationalities" in financial markets, but because of monetary central planning through central banking that does not allow market-based financial intermediation to develop and work as it could and would in a real free-market setting.
  • But in the United States and especially in Europe, government "austerity" means merely temporarily reducing the rate of increase in government spending, slowing down the rate at which new debt is accumulating and significantly raising taxes in an attempt to close the deficit gap.
  • The fundamental problem is that over the decades, the size and scope of governments in the Western world have been growing far more than the rates at which their economies have been expanding, so that the "slice" of the national economic "pie" eaten by government has been growing larger and larger, even when the "pie" in absolute terms is bigger than it was, say, 30 or 40 years ago.
  • European governments, in general, take the view that "austerity" means squeezing the private sector more through taxes and other revenue sources to avoid any noticeable and significant cuts in what government does and spends.
  • So there is "austerity" for the private sector and a mad rush for financial "safety nets" for the government and those who live off the State.
  • In reality, of course, it is the burdens of government regulation, taxation and impediments to more flexible labor and related markets that have generated the high unemployment rates and the retarded recovery from the recession.
  • Instead, the "common market" ideal has been transformed into the goal of a European Union "Super-State" to which the individual countries and their citizens would be subservient and obedient.
  • Keynesian policies offer people and politicians what they want to hear. Claiming that any sluggish business or lost jobs are due to a lack of "aggregate demand," Keynes argued that full employment and profitable business could only be reestablished and maintained through "activist" government monetary and fiscal policy – print money and run budget deficits.
  • What Britain and Europe should have as its goal is the ideal of the classical liberal free traders of the 19th century – non-intervention by governments in people's lives, at home and abroad. That is, a de-politicization of society, so people may freely work, trade and travel as they peacefully wish, with government merely the protector of people's individual rights.
  • Take the benefits away and tell people they are free to come and work to support themselves and their families. Restore more flexibility and competitiveness to labor markets and reduce taxes and business regulations.
  • Then those who come to Britain's shores will be those wanting freedom and opportunity without being a burden upon others.
  • What was needed was a change in ideas from the statist mentality to one of individual freedom and unhampered free markets.
  • In an epoch of collectivist ideas, don't be surprised if governments regulate, control, intervene and redistribute wealth.
  • The tentacle of regulations, restrictions and politically-correct social controls are spreading out in every direction from Brussels and its European-wide manipulating and mismanaging bureaucracy.
  • In the name of assuring "national prosperity," politicians could spend money to buy the votes that get them elected and reelected to government offices.
  • And every special interest group could make the case that government-spending programs that benefitted them were all reasonable and necessary to assure a fully employed and growing economy.
  • Furthermore, the Keynesian rationale for government deficit spending enabled politicians to seem to be able to offer something for nothing. They could offer, say, $100 of government spending to voters and special interest groups but the tax burden imposed in the present might only be $75, since the remainder of the money to pay for that government spending was borrowed. And that borrowed money would not have to be repaid until some indefinite time in the future by unspecific taxpayers when that "tomorrow" finally arrived.
  • instability
  • Keynes argued that the market economy's inherent
  • arose from the
  • who were subject to irrational and unpredictable waves of "optimism" and "pessimism."
  • animal spirits" of businessmen
  • Mises argued that there was nothing inherent in the market economy to bring about these swings of economic booms followed by periods of depression and unemployment.
  • If markets got out of balance with the necessity of an eventual correction in the economy to, once again, set things right, the source of this instability was government monetary policy.
  • Central banks too often followed a policy of trying to create "good times" in the economy by expanding the money supply through the banking system.
  • With new, excess funds created by the central bank available for lending, banks lower rates of interest to attract borrowers.
  • But this throws savings and investment out of balance, since the rate of interest no longer serves as a reliable indicator and signal concerning the availability of real savings in the economy in relation to those wanting to borrow funds for various investment purposes.
  • The economic crisis comes when it is discovered that all the claims on resources, capital and labor for all the attempted consumption and investment activities in the economy are greater than the actual and available amounts of such scarce resources.
  • The recession period, in Mises's view, is the necessary "correction" period when in the post-boom era, people must adapt and adjust to the newly discovered "real" supply and demand conditions in the market.
  • Any interference with the "rebalancing" of the economy by government raising taxes, imposing more regulations, or new artificial government "stimulus" activities merely makes it more difficult and time-consuming for people in the private sector to get the economy back on an even keel.
  • Friedrich A. Hayek, once observed, unemployment is not "caused" by stopping an inflation, but rather inflation induces the artificial employments that cannot be sustained and which inevitably disappear once the inflation is reined in.
  • The recession of 2008-2009 was the result of several years of central bank stimulus.
  • From 2003 to 2008, the Federal Reserve increased the money supply by about 50 percent.
  • Interest rates for much of this time, when adjusted for inflation, were either zero or negative.
  • Awash in cash, banks extended loans to virtually anyone, with no serious and usual concern about the borrower's credit-worthiness.
  • This was most notably true in the housing market, where government agencies like Fannie May and Freddie Mac were pressuring banks to make mortgage loans by promising a guarantee that they would make good on any bad home loans.
  • Since 2008-2009, the Federal Reserve has, again, turned on the monetary spigot, increasing its own portfolio by almost $3 trillion, by buying US Treasuries, US mortgages and other assets.
  • So why has there not been a complementary explosion of price inflation?
  • In some areas there has been, most clearly in the stock market and the bond market, But the reason why all that newly created money has not brought about a higher price inflation is due to the fact that a large part of all newly created money is sitting as unlent reserves in banks.
  • This is because the Federal Reserve has been paying banks a rate of interest slightly above the market interest rates to induce banks not to lend.
  • (a) general "regime uncertainty," that is, no one knows what government policy will be tomorrow; will ObamaCare be fully implemented after January 2014?;
  • Among the reasons for the sluggish jobs growth in the US are:
  • (b) what will taxes be for the rest of the current president's term in the White House
  • (c) what will the regulatory environment be like for the next three years – in 2012, the government implemented around 80,000 pages of regulations as printed in the Federal Registry;
  • (d) how will the deficit and debt problems play out between Congress and the White House and will it threaten the general financial situation in the country; an
  • (e) what wars, if any, will the government find itself involved in, in places like the Middle East?
  • China
  • is still a controlled and commanded society, with a government that works hard to try to determine what people read, see and think.
  • All these building projects have been brought into existence by a government that not only controls the money supply and manipulates interest rates but also heavy-handedly tells banks whom to specifically loan to and for what investment activities.
  • Central planning is alive and well in China, with the motives being both power and profits for those inside and outside the Communist Party having the most influence and connections in "high" places.
  • In my opinion, China is heading for a great economic crisis, resulting from a highly imbalanced and distorted economic system still guided far more by politics than sound market decision-making.
  • global financial markets in any foreseeable future. It is a money that still primarily exists to serve the political purposes of those who sit in the "inner circles" of power in Beijing.
  • One hundred years ago, in 1913, how many could have predicted that a year later a European-wide war would break out that would lead to the destruction of great European empires and set the stage for the rise of totalitarian collectivism that resulted in an even worse global war two decades later?
  • Thus, whether, at the end of the day, freedom triumphs and the future is one of liberty and prosperity is partly on each one of us.
  • Near the end of his great book, Socialism, Ludwig von Mises said:
  • "Everyone carries a part of society on his shoulders; no one is relieved of his share of responsibility by others. And no one can find a safe way out for himself if society is sweeping towards destruction. Therefore, everyone, in his own interest, must thrust himself vigorously into the intellectual battle. None can stand aside with unconcern; the interests of everyone hang on the result. Whether he chooses or not, every man is drawn into the great historical struggle, the decisive battle into which our epoch has plunged us . . . Whether society shall continue to evolve or where it shall decay lies . . . in the hands of man."
  • In my view, the idea of a "soft landing" is an illusion based on the idea held by central bankers, themselves, that they have the wisdom and ability to know how to "micro-manage" the all the changes and adjustments resulting from their own manipulations of the monetary aggregates. They do not have this wisdom and ability. So hold on for what is most likely to be another rocky road.
  • It was Mises's clear vision that once society has broken the relationship between value and payment, sooner or later people would not know the price of anything.
  • At this point, investment ceases and business becomes furtive and transactional.
  • People cannot plan for the future because they do not understand the reality of the present.
  • Society begins to sink.
  • Gary Edwards on 17 Jun 13
     
    Incredible.  A simple explanation that explains everything.  Rchard Ebeling's "Unified Theory of Everything" is something every American can understand.  If only they would take a break from "Dancing with the Stars" and pay attention to the future of their country and the world.  It's a future where either "individual freedom", as defined by our Constitution and Declaration of Independence, will win out; or, the forces of fascist socialism / marxism will continue to roll and rule.  Incredible read!!!!
Gary Edwards

Ron Paul: Blame the Fed for the Financial Crisis - WSJ.com Oct 20, 2011 - 0 views

online.wsj.com/...4346104576637290931614006.html

Banksters Federal-Reserve Federal-Reserve-Bankster-Cartel Ron-Paul banksters

shared by Gary Edwards on 20 Oct 11 - No Cached
  • The manner of thinking of the Federal Reserve now is no different than that of the former Soviet Union, which employed hundreds of thousands of people to perform research and provide calculations in an attempt to mimic the price system of the West's (relatively) free markets. Despite the obvious lesson to be drawn from the Soviet collapse, the U.S. still has not fully absorbed it.
  • The Fed fails to grasp that an interest rate is a price—the price of time—and that attempting to manipulate that price is as destructive as any other government price control. It fails to see that the price of housing was artificially inflated through the Fed's monetary pumping during the early 2000s, and that the only way to restore soundness to the housing sector is to allow prices to return to sustainable market levels.
  • Gary Edwards on 20 Oct 11
     
    Maybe the best statement to date as to why we, the people, need to take back control of the Federal Reserve.  Ron Paul has noticeably tempered down his close the Fed rhetoric, moving to a audit-control the Fed position.   excerpt: The Federal Reserve has caused every single boom and bust that has occurred in this country since the bank's creation in 1913. It pumps new money into the financial system to lower interest rates and spur the economy. Adding new money increases the supply of money, making the price of money over time-the interest rate-lower than the market would make it. These lower interest rates affect the allocation of resources, causing capital to be malinvested throughout the economy. So certain projects and ventures that appear profitable when funded at artificially low interest rates are not in fact the best use of those resources. Eventually, the economic boom created by the Fed's actions is found to be unsustainable, and the bust ensues as this malinvested capital manifests itself in a surplus of capital goods, inventory overhangs, etc. Until these misdirected resources are put to a more productive use-the uses the free market actually desires-the economy stagnates. Enlarge Image Bloomberg Fed Chairman Ben Bernanke The great contribution of the Austrian school of economics to economic theory was in its description of this business cycle: the process of booms and busts, and their origins in monetary intervention by the government in cooperation with the banking system. Yet policy makers at the Federal Reserve still fail to understand the causes of our most recent financial crisis. So they find themselves unable to come up with an adequate solution.
Paul Merrell

Rents Are Rising But People Aren't Making Any More Money - 0 views

thinkprogress.org/...rent-up-wages-flat

financial-collapse housing-rental cost-of-living

shared by Paul Merrell on 04 Jul 14 - No Cached
  • The average apartment rent hit $1,099 in the second quarter of the year, new data from a real estate research firm shows, as the gap between the typical American’s cost of living and the wages she earns from working continued to widen.
  • Average rents rose by 0.8 percent from March to June, and are now up 3.4 percent over the past year, according to Reis Inc. data. In total, the average monthly rent price is now up almost 15 percent since 1990, after adjusting for inflation. By comparison, the median household income has grown exactly zero percent since 1990, the Wall Street Journal notes:
  • Even those gloomy national figures paint a rosier picture than the reality that tens of millions of American families face. If you do the math using the top-line numbers, rents still seem affordable: the average calculates out to about 26 percent of a person’s yearly income going toward rent. But that’s not how it actually operates on the ground. A full 50 percent of American renters spend more than 30 percent of their income on housing, which is what researchers define as the cutoff for affordable housing. More than a quarter face extremely unaffordable housing costs, meaning they spend more than half their income on housing. A New York Times and Zillow analysis found that median rent was above the 30 percent affordability threshold in 90 different U.S. cities, even before this most recent quarterly rise in rent prices. Rents are outpacing earnings in part because the demand for rental housing has exploded since the financial crisis. Foreclosed homeowners and others unable to afford or obtain a mortgage are turning instead to the rental market. Cuts to government housing aid spending and the broader stagnation of wages for working people increase the reliance on rental even more.
Paul Merrell

Why Obama is bombing the Caliph - RT Op-Edge - 0 views

rt.com/...179716-why-obama-bomb-caliph

war & peace ISIL U.S.-foreign-policy Iraq Syria Benghazi Hillary Obama

shared by Paul Merrell on 26 Aug 14 - No Cached
  • This is the way the multi-trillion dollar Global War on Terror (GWOT) ends: not with a bang, but with a bigger bang. The GWOT, since its conceptualization 13 years ago, in the aftermath of 9/11, is the gift that keeps on giving. And no gift is bigger than a Transformer Al-Qaeda on steroids – bigger, brasher, and wealthier than anything Osama Bin Laden and Ayman al-Zawahiri had ever dreamt of; the IS (Islamic State, formerly known as ISIS) of Caliph Ibrahim, former Abu Bakr al-Baghdadi. US President Barack Obama, before deploying his golf holidays in Martha’s Vineyard, casually dropped that bombing the Caliph’s goons in Iraq will take months. One may interpret it as another layer of the Obama administration’s self-avowed “Don't Do Stupid Stuff” foreign policy doctrine, not so subtly mocked by prospective presidential candidate Hillary Clinton. Shock and Awe in 2003 destroyed the whole of Baghdad’s infrastructure in only a few hours. Obama also confirmed the US was showering Iraq again with humanitarian bombing “to protect American interests” (first and foremost) and, as an afterthought, “human rights in Iraq.” One could not possibly expect Obama to declare the US would now bomb “our” allies the House of Saud, who have supported/financed/weaponized IS, in Syria and Iraq. The same erstwhile ISIS that thoroughly enjoyed the marvels of US military training in a secret base in Jordan.
  • Obama also could not possibly explain why the US always supported ISIS in Syria and now decides to bomb them in Iraq. Oh, the perils of ‘Don’t Do Stupid Stuff’. So a quick translation applies.
  • Obama’s bombing of the Caliph’s goons has absolutely nothing to do with US ambassador to the UN Samantha Power’s much beloved R2P (‘responsibility to protect’) doctrine – as in the responsibility to protect up to 150,000 Yazidis, not to mention Kurds and remaining Christians, from a ‘potential’ genocide carried out by the Caliph’s goons. The whole fighter jets + drones bombing exercise, lasting ‘months’, has to do with the Benghazi syndrome. The Caliph’s goons were dead set on conquering Irbil - the capital of Iraqi Kurdistan. The Kurdistan Regional Government (KRG) is led by the wily Massoud Barzani – a long-time US client/vassal. The US maintains a consulate in Irbil. Crammed with CIA types. Or, as the New York Times so lovingly puts it, “thousands of Americans.” Enter Benghazi. This is an electoral year. Obama is absolutely terrified of another Benghazi – which Republicans have been trying non-stop to blame on his administration’s incompetence. The last thing Obama needs is the Caliph’s goons killing ‘diplomats’ in Erbil. That would certainly raise a tsunami of questions all over again about the shady CIA weapon-smuggling racket – as in arming Syrian ‘rebels’ with weapons from Libya - at the time Benghazi took place. As secretary of state, Hillary Clinton, of course, also knew about it all. But then, and especially now, no one should know that the CIA was weaponizing the bulk of the future Caliph’s forces.
  • ...4 more annotations...
  • Obama said this humanitarian bombing adventure could last “months,” but in fact it could last only days. The price is cheap: regime change. As in former Iraqi Prime Minister Nouri al-Maliki blocked from having a third term. That explains why all hell broke loose in Baghdad, as Iraqi parliamentarians clearly saw which way the wind is blowing. Haider al-Abadi was chosen by new President Fuad Masoum, a Kurd, as the new prime minister – hours after Maliki positioned Special Forces in strategic sites in and around the Green Zone and may (or may not) have tried to stage a coup. Maliki maintains that Masoum violated the Iraqi constitution by not selecting him to form a new cabinet; after all, his State of Law bloc got the most votes in last April’s parliamentary elections.
  • Obama, predictably, was delighted. But whatever happens next, Maliki won’t go down quietly – to say the least. Even as the predominant narrative among Sunnis, a substantial number of Kurds and even some Shiite political blocs is that Maliki antagonized Sunnis all-out; and that’s what drove them to support the Caliph en masse (although now many are having second thoughts.) As for the KRG and Barzani, in the Obama administration scheme of things, what matters is that they should not declare independence. As long as Barzani promises to Obama that Kurdistan stays inside Iraq, the KRG will get more bombs and drones and the ‘humanitarian’ operation will speed up. US Special Forces are already deployed all over the huge area where the Caliphate borders the KRG, in so-called desert forward operating positions. And the US for all practical purposes is now the Iraqi Air Force against the Caliph. Watch ‘the Hillarator’ This Obama administration warped R2P – protection for Americans first, refugees second – will accomplish nothing for a key reason; no bombing – ‘humanitarian’ or otherwise - exterminates a political/religious movement, even one as demented as IS. The Caliphate prospers, somewhat, and expands, because unlike that pathetic Free Syrian Army (FSA) it’s winning territory, desert and urban, in both Syria and Iraq; an area bigger than Great Britain already, holding at least 6 million people.
  • As for the much-peddled Washington myth of ‘good’ and ‘bad’ jihadists, the Caliphate also exploded it. Virtually every jihadi Washington - and Riyadh – weaponized and trained in Jordan and in the Turkey-Syria border is now among the Caliph’s goons, wallowing in cash raised from oil smuggling, hardcore blackmail and ‘donations’, and weaponized to their teeth after looting four Iraqi divisions and a Syrian brigade. As for the GWOT gift, it will keep on giving in a bigger and bigger bang because of the dream narrative now displayed for every aspiring multinational jihadi; we are now defending our Caliphate from the mighty Crusader Air Force, no less. The US lost the war in Iraq, miserably, only nine days after the fall of Baghdad, in April 2003. No ‘humanitarian’ bombing will turn it into a victory. And no ‘humanitarian’ bombing will finish the Caliphate off. As for prospective presidential candidate Hillary Clinton, she’s taking no prisoners. She insists the US should have bombed Syria in the first place; then there would be no Caliphate. But now she worries the Caliph will attack Europe and even the US (“I’m thinking a lot about containment, deterrence and defeat”). Predictably positioning herself, Clinton could not but totally dismiss Obama’s foreign policy doctrine, a.k.a. ‘Don’t do stupid stuff’: “‘Don’t do stupid stuff’ is not an organizing principle.” So the world will have to wait until 2017, when she’s finally able to implement her own doctrine/organizing principle: “We came, we saw, he died.”
  • This is the way the multi-trillion dollar Global War on Terror (GWOT) ends: not with a bang, but with a bigger bang. The GWOT, since its conceptualization 13 years ago, in the aftermath of 9/11, is the gift that keeps on giving. And no gift is bigger than a Transformer Al-Qaeda on steroids – bigger, brasher, and wealthier than anything Osama Bin Laden and Ayman al-Zawahiri had ever dreamt of; the IS (Islamic State, formerly known as ISIS) of Caliph Ibrahim, former Abu Bakr al-Baghdadi. US President Barack Obama, before deploying his golf holidays in Martha’s Vineyard, casually dropped that bombing the Caliph’s goons in Iraq will take months. One may interpret it as another layer of the Obama administration’s self-avowed “Don't Do Stupid Stuff” foreign policy doctrine, not so subtly mocked by prospective presidential candidate Hillary Clinton. Shock and Awe in 2003 destroyed the whole of Baghdad’s infrastructure in only a few hours. Obama also confirmed the US was showering Iraq again with humanitarian bombing “to protect American interests” (first and foremost) and, as an afterthought, “human rights in Iraq.”
  • Paul Merrell on 26 Aug 14
     
    "Enter Benghazi. This is an electoral year. Obama is absolutely terrified of another Benghazi - which Republicans have been trying non-stop to blame on his administration's incompetence. The last thing Obama needs is the Caliph's goons killing 'diplomats' in Erbil. "That would certainly raise a tsunami of questions all over again about the shady CIA weapon-smuggling racket - as in arming Syrian 'rebels' with weapons from Libya - at the time Benghazi took place. As secretary of state, Hillary Clinton, of course, also knew about it all. But then, and especially now, no one should know that the CIA was weaponizing the bulk of the future Caliph's forces." Yup. It's the same reason that the House investigation of the Benghazi incident will never punch through to the truth. The War Party doesn't want its Benghazi CIA ratline for Libyan weapons to Turkey being exposed because that leads directly to the fact that ISIS is a U.S.-Saudi creation. Remember Wayne Madsen's article on why Obama backed down from his planned missile and bombing attack on Syria after the Ghouta false flag Sarin attack in August 2013: ""Some within the Pentagon ranks are so displeased with Obama's policies on Syria, they have let certain members of Congress of both parties know that «smoking gun» proof exists that Obama and CIA director John O. Brennan personally authorized the transfer of arms and personnel from Al-Qaeda-linked Ansar al Sharia Islamist rebels in Libya to Syria's Jabhat al Nusra rebels, who are also linked to Al Qaeda, in what amounts to an illegal «Iran-contra»-like scandal." http://www.strategic-culture.org/news/2013/09/04/american-generals-stand-between-war-and-peace.html And the detailed confirmation that events had actually transpired in accordance with that plan by Yossef Bodansky - Director of the Congressional Task Force on Terrorism and Unconventional Warfare of the US House of Representatives from 1988 to 2004 and the center of an enormous global
Paul Merrell

150 House Democrats Bolster Obama's Position on Iran Deal « LobeLog - 0 views

www.lobelog.com/r-obamas-position-on-iran-deal

war & peace Iranian-nukes-myth U.S.-foreign-policy Congress

shared by Paul Merrell on 08 May 15 - No Cached
  • Thursday’s release of a letter signed by 150 House Democrats makes it significantly more likely that a nuclear deal negotiated between the P5+1 and Iran will survive a congressional challenge. The letter, an initiative of Reps. Jan Schakowsky (D-IL), Lloyd Doggett (D-TX), and David Price (D-NC), expresses strong support for Obama’s efforts to conclude an agreement. It has been quietly circulating on Capitol Hill for several weeks and was made public only when 150 lawmakers signed it—several more than needed to sustain an Obama veto of legislation disapproving a deal with Iran. (As most readers of this blog know, overriding a presidential veto requires that at least two-thirds of the membership of each house of Congress vote to do so.) The Washington Post‘s Greg Sargent explained the letter’s implications on his Plum Line blog this morning, and there’s no need for me to repeat what he wrote when you can follow the link. But he made one very good point that deserves attention: “…[T]he goal of the letter isn’t just to signal that a veto would likely be sustained. It’s also meant to signal that there is more Congressional support than expected for the negotiations in order to help along the talks.” The letter is also likely to give Iranian negotiators more confidence that a final deal signed by the U.S. will not be overturned by Congress.
  • The letter is likely to get much less media attention than the Senate’s approval on Thursday of the Corker-Cardin bill without any substantial amendment. If also passed by the House and signed into law by Obama, the legislation will permit Congress to review and potentially block a final deal within 30 days of its submission by the administration. The final vote was 98-1. The lone dissenter was, predictably, Tom Cotton (R-AR), who is quickly establishing himself as the Republicans’ foreign-policy enfant terrible. Sen. Barbara Boxer (D-CA), one of the administration’s closest allies on Iran, did not vote.
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