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Paul Merrell

What Does Today's "Rate Hike" Mean? -- Paul Craig Roberts - PaulCraigRoberts.org - 0 views

www.paulcraigroberts.org/...e-hike-mean-paul-craig-roberts

banksters Fed rate-hike fraud

shared by Paul Merrell on 18 Dec 15 - No Cached
  • Paul Craig Roberts The Federal Reserve raised the interbank borrowing rate today by one quarter of one percent or 25 basis points. Readers are asking, “what does that mean?” It means that the Fed has had time to figure out that the effect of the small “rate hike” would essentially be zero. In other words, the small increase in the target rate from a range of 0 to 0.25% to 0.25 to 0.50% is insufficient to set off problems in the interest-rate derivatives market or to send stock and bond prices into decline.
  • However, the fact of the matter is that the available liquidity exceeded demand in the old rate range. The purpose of raising interest rates is to choke off credit demand, but there was no need to choke off credit demand when the demand for credit was only sufficient to keep the average rate in the midpoint of the old range. This “rate hike” is a fraud. It is only for the idiots in the financial media who have been going on about a rate hike forever and the need for the Fed to protect its credibility by raising interest rates.
  • Thus, the rate hike has the effect of making smaller banks pay higher interest expense to the mega-banks favored by the Federal Reserve. A different way of putting it is that the “rate hike” favors banks sitting on excess reserves over banks who are lending to businesses and consumers in their community. In other words, the rate hike just facilitates more looting by the One Percent.
Gary Edwards

Rand Paul's Tea Party Response: Full Text - 0 views

www.newsmax.com/...490118

Rand-Paul Libertarian USA-Constitution

shared by Gary Edwards on 13 Feb 13 - No Cached
  • With my five-year budget, millions of jobs would be created by cutting the corporate income tax in half, by creating a flat personal income tax of 17%, and by cutting the regulations that are strangling American businesses.
  • America has much greatness left in her. We will begin to thrive again when we begin to believe in ourselves again, when we regain our respect for our founding documents, when we balance our budget, when we understand that capitalism and free markets and free individuals are what creates our nation’s prosperity.
  • Gary Edwards on 13 Feb 13
     
    Outstanding statement about what made America great, an dhow are government is destroying that greatness.  This is the full Text of Sen. Rand Paul's Tea Party Response to Obama's State of the Union Address: I speak to you tonight from Washington, D.C. The state of our economy is tenuous but our people remain the greatest example of freedom and prosperity the world has ever known. People say America is exceptional. I agree, but it's not the complexion of our skin or the twists in our DNA that make us unique. America is exceptional because we were founded upon the notion that everyone should be free to pursue life, liberty, and happiness. For the first time in history, men and women were guaranteed a chance to succeed based NOT on who your parents were but on your own initiative and desire to work. We are in danger, though, of forgetting what made us great. The President seems to think the country can continue to borrow $50,000 per second. The President believes that we should just squeeze more money out of those who are working. The path we are on is not sustainable, but few in Congress or in this Administration seem to recognize that their actions are endangering the prosperity of this great nation. Ronald Reagan said, government is not the answer to the problem, government is the problem. Tonight, the President told the nation he disagrees. President Obama believes government is the solution: More government, more taxes, more debt. What the President fails to grasp is that the American system that rewards hard work is what made America so prosperous. What America needs is not Robin Hood but Adam Smith. In the year we won our independence, Adam Smith described what creates the Wealth of Nations. He described a limited government that largely did not interfere with individuals and their pursuit of happiness. All that we are, all that we wish to be is now threatened by the notion that you can have something for nothing, that you can have your cake and ea
Gary Edwards

The Fix Is Already in for This Election - The Daily Reckoning - 0 views

dailyreckoning.com/fix-already-election

Trump Federal-Reserve-Bankster-Cartel GOLD

shared by Gary Edwards on 03 Sep 16 - No Cached
  • But Yellen isn’t going to let any normal course of events happen before Election Day, especially since a Trump presidency would be every central banker’s worst freaking nightmare…Trump is deeply suspicious of the Fed… as many of us are.He’s rightfully and repeatedly said that Fed policies have created a stock market bubble that will burst. He’s called the Fed’s QE nonsense a bad economic idea that produced “phony numbers.”He told GQ that he prefers the gold standard to a Fed-manipulated fiat currency: “Bringing back the gold standard would be very hard to do — but boy, would it be wonderful. We’d have a standard on which to base our money.”And he also supports an extensive audit of the Fed to bring transparency and accountability to the secretive “central bank” that’s brought devastating boom-and-bust cycles for decades.
  • Of course, nobody knows if Trump will follow through on these promises if elected. Once in Washington, he could very well become just another lying politician. But right now, the last thing Yellen and her New World Order cronies want to do is take a chance on President Trump.They want to keep their unchecked power to create endless amounts of money out of thin air… to build and pop one financial bubble after another… all to redistribute from the little people to the elites… and destroy free-market capitalism in the name of state-manipulated Ponzi finance.We know that won’t change under Clinton. And maybe it won’t change under Trump. But you can bet central bankers don’t trust that business as usual will continue with Trump.So come the next Fed meeting in mid-September, expect a lot of sophisticated talk from Yellen about this or that economic item, assorted indecipherable mumblings and an army of TV talking heads lapping it all up as if an economic god had spoken.Just don’t hold your breath waiting for a rate hike… no matter what the economy’s doing.
  • Gary Edwards on 03 Sep 16
     
    "Trump is staging a fierce comeback… Hillary Clinton's post-convention lead in the polls has nearly disappeared. Prominent pollster Rasmussen Reports now has Trump leading Clinton 40% to 39%. Trump also has a 3% lead (45% to Hillary's 42%) in the Los Angeles Times poll. And Hillary's edge in the polls in which she's still leading has narrowed sharply. There'll be more back-and-forth momentum swings in the horse race to come, but these new polls show one thing: The odds of a Trump presidency shot higher this week. And that means the odds of a Fed interest rate hike before Election Day got lower… The fix is in… Look, Janet Yellen isn't going to do anything to jeopardize a Clinton presidency. They're both card-carrying Deep Staters. They're both liberals who served under Obama. They both dress the same: Mao chic. And most of all, Yellen wants to keep her job when her term expires in February 2018. She's a lock to stay on in a Clinton administration. But it won't happen in Trump's. He's already told TheWall Street Journal that he wouldn't keep Yellen as Fed chair. I don't see how Yellen can raise rates between now and Election Day… if Trump can win. If she did, it would tank the stock market, nail the economy and give Trump the White House. When the Fed raised rates in December 2015, the stock market plunged, with the Dow dropping more than 1,300 points in the month following. A plunging market would wipe out trillions in paper wealth and slam the economy into recession."
Paul Merrell

ClubOrlov: Whiplash! - 0 views

cluborlov.blogspot.com/...whiplash.html

oil-market forecast pipelinestan-wars geopolitics

shared by Paul Merrell on 21 Jan 15 - No Cached
  • Over the course of 2014 the prices the world pays for crude oil have tumbled from over $125 per barrel to around $45 per barrel now, and could easily drop further before heading much higher before collapsing again before spiking again. You get the idea. In the end, the wild whipsawing of the oil market, and the even wilder whipsawing of financial markets, currencies and the rolling bankruptcies of energy companies, then the entities that financed them, then national defaults of the countries that backed these entities, will in due course cause industrial economies to collapse. And without a functioning industrial economy crude oil would be reclassified as toxic waste. But that is still two or three decades off in the future.
  • An additional problem is the very high depletion rate of “fracked” shale oil wells in the US. Currently, the shale oil producers are pumping flat out and setting new production records, but the drilling rate is collapsing fast. Shale oil wells deplete very fast: flow rates go down by half in just a few months, and are negligible after a couple of years. Production can only be maintained through relentless drilling, and that relentless drilling has now stopped. Thus, we have just a few months of glut left. After that, the whole shale oil revolution, which some bobbleheads thought would refashion the US into a new Saudi Arabia, will be over. It won't help that most of the shale oil producers, who speculated wildly on drilling leases, will be going bankrupt, along with exploration and production companies and oil field service companies. The entire economy that popped up in recent years around the shale oil patch in the US, which was responsible for most of the growth in high-paying jobs, will collapse, causing the unemployment rate to spike.
  • The game they are playing is basically a game of chicken. If everybody pumps all the oil they can regardless of the price, then at some point one of two things will happen: shale oil production will collapse, or other producers will run out of money, and their production will collapse. The question is, Which one of these will happen first? The US is betting that the low oil prices will destroy the governments of the three major oil producers that are not under their political and/or military control. These are Venezuela, Iran and, of course, Russia. These are long shots, but, having no other cards to play, the US is desperate. Is Venezuela enough of a prize? Previous attempts at regime change in Venezuela failed; why would this one succeed? Iran has learned to survive in spite of western sanctions, and maintains trade links with China, Russia and quite a few other countries to work around them. In the case of Russia, it is as yet unclear what fruit, if any, western policies against it will bear. For example, if Greece decides to opt out of the European Union in order to get around Russia's retaliatory sanctions against the EU, then it will become entirely unclear who has actually sanctioned whom.
  • ...3 more annotations...
  • The US is making a desperate attempt to knock over a petro-state or two or three before its shale oil runs out, with the Canadians, their tar sands now unprofitable, hitching a ride on its coat-tails, because if this attempt doesn't work, then it's lights out for the empire. But none of their recent gambits have worked. This is the winter of imperial discontent, and the empire is has been reduced to pulling pathetic little stunts that would be quite funny if they weren't also sinister and sad.
  • But a bunch of deluded people muttering to themselves in a dark corner, while the rest of the world points at them and laughs, does not an empire make. With this level of performance, I would venture to guess that nothing the empire tries from here on will work to its satisfaction.
  • Because it will recover. The fix for low oil prices is... low oil prices. Past some point high-priced producers will naturally stop producing, the excess inventory will get burned up, and the price will recover. Not only will it recover, but it will probably spike, because a country littered with the corpses of bankrupt oil companies is not one that is likely to jump right back into producing lots of oil while, on the other hand, beyond a few uses of fossil fuels that are discretionary, demand is quite inelastic. And an oil price spike will cause another round of demand destruction, because the consumers, devastated by the bankruptcies and the job losses from the collapse of the oil patch, will soon be bankrupted by the higher price. And that will cause the price of oil to collapse again. And so on until the last industrialist dies. His cause of death will be listed as “whiplash”: the “shaken industrialist syndrome,” if you will. Oil prices too high/low in rapid alternation will have caused his neck to snap.
  • Paul Merrell on 21 Jan 15
     
    Dmitry Orlov with a humorous yet inscisient take on the state and future of the oil market. Spoiler: He sees signs of desperation amongst the leaders of the American Empire, reduced to no viable options. 
  • Paul Merrell on 21 Jan 15
     
    "inscisient"? Make that "incisive." Follow reading Orlov's piece by reading Mike Whitney's latest at http://www.counterpunch.org/2015/01/20/are-plunging-petrodollar-revenues-behind-the-feds-projected-rate-hikes/ A lot of confirmation of what Orlov said in Whitney's article, citing hard numbers. Mass layoffs in the U.S. and Canadian oil industry; the petrodolar has stopped providing liquidity for the dollar; and the Fed plans to raise interest rates to force an influx of dollars from developing nations, in order to replace the petrodollar liquidity crisis. Whitney makes a strong case that it's a plot by the big banksters to steal another huge pile of cash at the expense of a huge number of jobs in the U.S. Both Orlov and Whitney say that it's going to be a very rough ride for the 99 per cent and for the population of developing nations. Indeed, Whitney's numbers say we are already over the precipice on jobs and well into free-fall.
  • Paul Merrell on 21 Jan 15
     
    But last night, Obama had the gall to claim that all is just peachy-k een on the jobs front. As he helps the banksters offshore another huge number of U.S. jobs.
Gary Edwards

Saul Alinsky Leaves the White House | The American Spectator - 0 views

spectator.org/alinsky-leaves-the-white-house

Obama

shared by Gary Edwards on 19 Jan 17 - No Cached
  • Gary Edwards on 19 Jan 17
     
    "When Barack Obama leaves the White House tomorrow, he leaves with his worst dreams unrealized. Still, what he leaves behind is awful. Thank goodness he'll be gone. The very day after Obama was elected in 2008, I predicted in this space that his team would steal the Senate by hook and crook (see: Al Franken); nuke the filibuster at least for judicial nominees; liberalize voting laws (or enforcement thereof) to make fraud easier while charging opponents with "vote suppression"; drum up spurious allegations of civil rights violations; punish anti-abortion protesters; enact "copious new regulations, especially environmental, to be used selectively to ensnare other conservative malcontents"; invasively use the IRS to harass conservative organizations; and tacitly encourage civil unrest in furtherance of Obamite goals. All those predictions of course came true. Obama and company also waged bureaucratic war against independent inspectors general; tried their hardest (even illegally) to hobble fossil fuels industries; evaded Congress's intent by sending cash and uranium to a near-nuclear-ready Iran; fumbled and stumbled while veterans suffered virtually criminal neglect; wasted hundreds of billions of taxpayer dollars on projects that were not "shovel-ready" and did not create many jobs; oversaw an economy in which the workforce participation rate dropped to historically low levels while real median household income also fell and personal debt rose, and in which food stamp rolls grew to a number larger than the population of Spain; horrendously politicized the Justice Department; and saw race relations worsen for the first time in decades. In what should have been treated by the media as major scandals (or more major than the media represented them), the Obama administration encouraged illegal gun-running to Mexican cartels, with untold numbers of resultant deaths; failed to provide adequate security before or rescue during the Benghazi tragedy; provide
Gary Edwards

The Libertarian View: Are Tariffs Bad? - 1 views

www.ronpaulforums.com/showthread.php

Libertarian Austrian-Economics Tariffs-NAFTA China Ron-Paul

shared by Gary Edwards on 26 Jan 12 - No Cached
  • Gary Edwards on 26 Jan 12
     
    As many know, i spent quite a bit of time working for a Chinese Company seeking to enter the USA-European software market.  My task was to research the market, discover and define a market opportunity, design the product, and then work as product manager to get that service to market.  I took this job to better understand the Chinese marketplace and how sovereign Chinese companies work.  What i learned is how the Chinese seek to exploit and totally dominate open markets.  Software is just a category whose time has come.  and there are thousands of Chinese companies lining up.  The first step though is to fine tune the existing blueprint used by other Sina sovereigns.  amazing stuff. My take away from this experience is that the USA MUST set up a 30% tariff on ALL imports, and do so IMMEDIATELY!!!  Yesterday is not soon enough! As a newly minted libertarian, i wondered about the obvious conflict with Austrian Economics and their dedication to free markets and free trade?  I found the answer at this Libertarian forum, where many members were in heated discussion.  Comment #7 sums it up best i think.  Including a link to Ron Paul's Tariff-NAFTA speech. The thing is, the 30% Tariff should be part of an overall TAX REDUCTION PLAN.  I support the FAIR TAX and the Balanced Budget Amendment.  As an alternative to the Fair Tax, I would also support a 17% flat tax with no exceptions.  The ideal situation being an immediate, uncompromising, no exceptions 30% tariff on ALL imports coupled with the Fair Tax and the Balanced Budget Amendment.   And yes, i do believe this plan is consistent with the Founding Fathers Constitution.  But it took some kind of research to establish that opinion.   I've also concluded that "conservatism" is a convenient philosophical vehicle for the corrupt crony corporatism of both the military-industrial-complex, banksters and, international corporations.  Free trade and open markets concepts are perverted to become a thin veil
Gary Edwards

Arthur Laffer: Tax Hikes and the 2011 Economic Collapse - WSJ.com - 1 views

online.wsj.com/...4113504575264513748386610.html

arthur-laffer obammunism tax-hike

shared by Gary Edwards on 07 Jun 10 - Cached
  • Gary Edwards on 07 Jun 10
     
    People can change the volume, the location and the composition of their income, and they can do so in response to changes in government policies. It shouldn't surprise anyone that the nine states without an income tax are growing far faster and attracting more people than are the nine states with the highest income tax rates. People and businesses change the location of income based on incentives.
Paul Merrell

US's Saudi Oil Deal from Win-Win to Mega-Loose | nsnbc international - 0 views

nsnbc.me/...eal-from-win-win-to-mega-loose

must-read banksters big oil Saudis Russia shale-oil U.S.-foreign-policy

shared by Paul Merrell on 09 Aug 15 - No Cached
  • Who would’ve thought it would come to this? Certainly not the Obama Administration, and their brilliant geo-political think-tank neo-conservative strategists. John Kerry’s brilliant “win-win” proposal of last September during his September 11 Jeddah meeting with ailing Saudi King Abdullah was simple: Do a rerun of the highly successful State Department-Saudi deal in 1986 when Washington persuaded the Saudis to flood the world market at a time of over-supply in order to collapse oil prices worldwide, a kind of “oil shock in reverse.” In 1986 was successful in helping to break the back of a faltering Soviet Union highly dependent on dollar oil export revenues for maintaining its grip on power. So, though it was not made public, Kerry and Abdullah agreed on September 11, 2014 that the Saudis would use their oil muscle to bring Putin’s Russia to their knees today.
  • It seemed brilliant at the time no doubt. On the following day, 12 September 2014, the US Treasury’s aptly-named Office of Terrorism and Financial Intelligence, headed by Treasury Under-Secretary David S. Cohen, announced new sanctions against Russia’s energy giants Gazprom, Gazprom Neft, Lukoil, Surgutneftgas and Rosneft. It forbid US oil companies to participate with the Russian companies in joint ventures for oil or gas offshore or in the Arctic. Then, just as the ruble was rapidly falling and Russian major corporations were scrambling for dollars for their year-end settlements, a collapse of world oil prices would end Putin’s reign. That was clearly the thinking of the hollowed-out souls who pass for statesmen in Washington today. Victoria Nuland was jubilant, praising the precision new financial warfare weapon at David Cohen’s Treasury financial terrorism unit. In July, 2014 West Texas Intermediate, the benchmark price for US domestic oil pricing, traded at $101 a barrel. The shale oil bonanza was booming, making the US into a major oil player for the first time since the 1970’s. When WTI hit $46 at the beginning of January this year, suddenly things looked different. Washington realized they had shot themselves in the foot.
  • They realized that the over-indebted US shale oil industry was about to collapse under the falling oil price. Behind the scenes Washington and Wall Street colluded to artificially stabilize what then was an impending chain-reaction bankruptcy collapse in the US shale oil industry. As a result oil prices began a slow rise, hitting $53 in February. The Wall Street and Washington propaganda mills began talking about the end of falling oil prices. By May prices had crept up to $62 and almost everyone was convinced oil recovery was in process. How wrong they were.
  • ...5 more annotations...
  • Since that September 11 Kerry-Abdullah meeting (curious date to pick, given the climate of suspicion that the Bush family is covering up involvement of the Saudis in or around the events of September 11, 2001), the Saudis have a new ageing King, Absolute Monarch and Custodian of the Two Holy Mosques, King Salman, replacing the since deceased old ageing King, Abdullah. However, the Oil Minister remains unchanged—79-year-old Ali al-Naimi. It was al-Naimi who reportedly saw the golden opportunity in the Kerry proposal to use the chance to at the same time kill off the growing market challenge from the rising output of the unconventional USA shale oil industry. Al-Naimi has said repeatedly that he is determined to eliminate the US shale oil “disturbance” to Saudi domination of world oil markets. Not only are the Saudis unhappy with the US shale oil intrusion on their oily Kingdom. They are more than upset with the recent deal the Obama Administration made with Iran that will likely lead in several months to lifting Iran economic sanctions. In fact the Saudis are beside themselves with rage against Washington, so much so that they have openly admitted an alliance with arch foe, Israel, to combat what they see as the Iran growing dominance in the region—in Syria, in Lebanon, in Iraq.
  • This has all added up to an iron Saudi determination, aided by close Gulf Arab allies, to further crash oil prices until the expected wave of shale oil company bankruptcies—that was halted in January by Washington and Wall Street manipulations—finishes off the US shale oil competition. That day may come soon, but with unintended consequences for the entire global financial system at a time such consequences can ill be afforded. According to a recent report by Wall Street bank, Morgan Stanley, a major player in crude oil markets, OPEC oil producers have been aggressively increasing oil supply on the already glutted world market with no hint of a letup. In its report Morgan Stanley noted with visible alarm, “OPEC has added 1.5 million barrels/day to global supply in the last four months alone…the oil market is currently 800,000 barrels/day oversupplied. This suggests that the current oversupply in the oil market is fully due to OPEC’s production increase since February alone.” The Wall Street bank report adds the disconcerting note, “We anticipated that OPEC would not cut, but we didn’t foresee such a sharp increase.” In short, Washington has completely lost its strategic leverage over Saudi Arabia, a Kingdom that had been considered a Washington vassal ever since FDR’s deal to bring US oil majors in on an exclusive basis in 1945.
  • That breakdown in US-Saudi communication adds a new dimension to the recent June 18 high-level visit to St. Petersburg by Muhammad bin Salman, the Saudi Deputy Crown Prince and Defense Minister and son of King Salman, to meet President Vladimir Putin. The meeting was carefully prepared by both sides as the two discussed up to $10 billion of trade deals including Russian construction of peaceful nuclear power reactors in the Kingdom and supplying of advanced Russian military equipment and Saudi investment in Russia in agriculture, medicine, logistics, retail and real estate. Saudi Arabia today is the world’s largest oil producer and Russia a close second. A Saudi-Russian alliance on whatever level was hardly in the strategy book of the Washington State Department planners.…Oh shit! Now that OPEC oil glut the Saudis have created has cracked the shaky US effort to push oil prices back up. The price fall is being further fueled by fears that the Iran deal will add even more to the glut, and that the world’s second largest oil importer, China, may cut back imports or at least not increase them as their economy slows down. The oil market time bomb detonated in the last week of June. The US price of WTI oil went from $60 a barrel then, a level at which at least many shale oil producers can stay afloat a bit longer, to $49 on July 29, a drop of more than 18% in four weeks, tendency down. Morgan Stanley sounded loud alarm bells, stating that if the trend of recent weeks continues, “this downturn would be more severe than that in 1986. As there was no sharp downturn in the 15 years before that, the current downturn could be the worst of the last 45+ years. If this were to be the case, there would be nothing in our experience that would be a guide to the next phases of this cycle…In fact, there may be nothing in analyzable history.”
  • October is the next key point for bank decisions to roll-over US shale company loans or to keep extending credit on the (until now) hope that prices will slowly recover. If as strongly hinted, the Federal Reserve hikes US interest rates in September for the first time in the eight years since the global financial crisis erupted in the US real estate market in 2007, the highly-indebted US shale oil producers face disaster of a new scale. Until the past few weeks the volume of US shale oil production has remained at the maximum as shale producers desperately try to maximize cash flow, ironically, laying the seeds of the oil glut globally that will be their demise. The reason US shale oil companies have been able to continue in business since last November and not declare bankruptcy is the ongoing Federal Reserve zero interest rate policy that leads banks and other investors to look for higher interest rates in the so-called “High Yield” bond market. Back in the 1980’s when they were first created by Michael Millken and his fraudsters at Drexel Burnham Lambert, Wall Street appropriately called them “junk bonds” because when times got bad, like now for Shale companies, they turned into junk. A recent UBS bank report states, “the overall High-Yield market has doubled in size; sectors that witnessed more buoyant issuance in recent years, like energy and metals mining, have seen debt outstanding triple or quadruple.”
  • Assuming that the most recent downturn in WTI oil prices continues week after week into October, there well could be a panic run to sell billions of dollars of those High-Yield, high-risk junk bonds. As one investment analyst notes, “when the retail crowd finally does head for the exits en masse, fund managers will be forced to come face to face with illiquid secondary corporate credit markets where a lack of market depth…has the potential to spark a fire sale.” The problem is that this time, unlike in 2008, the Federal Reserve has no room to act. Interest rates are already near zero and the Fed has bought trillions of dollars of bank bad debt to prevent a chain-reaction US bank panic. One option that is not being discussed at all in Washington would be for Congress to repeal the disastrous 1913 Federal Reserve Act that gave control of our nation’s money to a gang of private bankers, and to create a public National Bank, owned completely by the United States Government, that could issue credit and sell Federal debt without the intermediaries of corrupt Wall Street bankers as the Constitution intended. At the same time they could completely nationalize the six or seven “Too Big To Fail” banks behind the entire financial mess that is destroying the foundations of the United States and by extension of the role of the dollar as world reserve currency, of most of the world.
  • Paul Merrell on 09 Aug 15
     
    I give a lot of credibility to this article's author when it comes to matters involving the oil market. Remember when reading that the only thing propping up the U.S. dollar is the Saudi (later extended to all OPEC nations) insistence that they be paid for their oil and natural gas in U.S. dollars, which creates artificial demand for the dollar globally. If the Gulf Coast States begin accepting payment in rubles or yuan, it is curtains for the U.S. dollar in global markets.  
Paul Merrell

Russia Abandons PetroDollar By Opening Reserve Fund - 0 views

oilprice.com/...r-By-Opening-Reserve-Fund.html

war & peace economic-warfare Russia U.S. 2015 oil-forecast

shared by Paul Merrell on 19 Jan 15 - No Cached
  • 2015 has not been good to Russia; the spread between Brent and WTI is gone in anticipation of US exports and both benchmarks have flirted with sub $45 prices. A hostage to such prices, the ruble has yet to begin its turnaround and the state’s finances are in extreme disarray. President Vladimir Putin’s approval ratings remain sky-high, but his country has not faced such difficult times since he took office more than 15 years ago. Since the turn of the new year the ruble has fallen over 13 percent and Russia’s central bank and finance department are running out of options – to date, policy makers have hiked interest rates to their highest level since the 1998 Russian financial crisis and embarked on a 1 trillion-ruble ($15 billion) bank recapitalization plan to little effect. Their latest, and most dramatic, plan is to abandon the dollar – at least somewhat.
  • In late December, the Kremlin ordered five large state-owned exporters – including oil and gas giants Rosneft and Gazprom – to sell their foreign currency reserves. Specifically, the companies must bring their foreign reserves to October levels by the beginning of March. To comply, the exporters may have to sell a combined $1 billion per day until March. Private companies have not yet been hit by these soft capital controls, but have instead been advised to manage their foreign exchange maneuvers responsibly. More recently, the Kremlin announced it will open its $88 billion sovereign wealth fund and flip it for rubles. The plan will see Russia convert as much as $8 billion to rubles (~500 billion) over a two-month span and place them in deposits for banks. Overall, the move will provide the Russian economy with some much needed liquidity and could speed up the healing if oil were to rebound, but it sends the wrong signals to investors and Economy Minister Alexei Ulyukaev believes the country’s credit rating will soon be marked below investment grade.
  • In any case, the move does little for the country’s ailing oil industry. The domestic market is projected to shrink amid the economic slowdown, and competition for market share abroad is increasingly competitive. Production forecasts are no rosier and the EIA predicts Russian crude production growth will be among the worst performers in both 2015 and 2016 – contrasted by continued growth in North America. Russia’s gas industry has fared no better. Gazprom’s 2014 output was historically awful and LNG is ever more a counter to the country’s pipeline politics.
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  • While Russia likely envisioned abandoning its dollars under far better circumstances, the news is just as worrying for the United States and its dollar hegemony. Along with Russia, energy exporters worldwide are pulling their petrodollars out of world financial markets and other USD-denominated assets in favor of greater, and certainly necessary, spending domestically. In the past, these dollars have given life to the loan market and helped fund debt among energy importers, contributing to overall growth.
  • Petrodollar exports – otherwise known as petrodollar recycling – were negative in 2014 for the first time in nearly two decades. The result is falling global market liquidity, record low US Treasury rates, and higher borrowing costs for everyone – a tough pill to swallow for energy producers if oil prices remain low. The US dollar remains the global reserve currency for now, but the fact remains that nations are increasingly transacting on their own terms, and often times without the USD.
  • Paul Merrell on 19 Jan 15
     
    Re: "EIA predicts Russian crude production growth will be among the worst performers in both 2015 and 2016 - contrasted by continued growth in North America." That's not what is being reported. Many shale oil production facilities are no longer profitable in North America and credit for new efforts has completely dried up. And unless Congress can raise enough votes in both houses to overried Obama's promised veto of a bill to alow construction of the KXL Pipeline, Most of Canada's new oil production capacity will never reach the market. (Canada has ruled out pipelines from the Alberta tar sands to its own ocean coasts, so there is no alternative to KXL.)
Paul Merrell

US Sending Troops To Somalia For The First Time In 24 Years - 0 views

www.mintpressnews.com/...226853

war & peace U.S.-foreign-policy Somalia boots-on-the-ground

shared by Paul Merrell on 15 Apr 17 - No Cached
  • In October 1993, during the Battle of Mogadishu (the Black Hawk Down incident), 18 US soldiers were killed and 73 wounded, with a pair of Black Hawk helicopters shot down. The US responded by ceasing military operations, and within a few months had withdrawn all troops from Somalia. Today, they are headed back. The new deployment, which US African Command (AFRICOM) is presented as a simple training operation, will be the first time US ground troops are officially deployed to Somalia, though of course the US has had some special forces present on the ground on and off, conducting occasional operations and spotting for US airstrikes. AFRICOM also insists the new deployment was at the request of the Somali government, though indications in recent weeks has indicated that military officials have been pushing for an escalation of US intervention in the country at any rate, aimed at fighting al-Shabaab.
  • When commanders want to push for fighting in Somalia, al-Shabaab is presented as either ISIS or al-Qaeda affiliated, though in practice the group is largely an independent Islamist operation with a similar ideology. The group’s operations are confined almost exclusively to Somalia, though they have launched some strikes into neighboring countries, as retaliation for those countries (particularly Kenya) being involved in interventions against them. A lot has changed in Somalia in the 24 years between direct US interventions, with the country undergoing a long period of comparatively stable anarchy followed by a protracted war designed to prop up a self-proclaimed government. It was this war, and African Union interventions to try to claim territory for this government, that largely fueled the creation of al-Shabaab.
  • Paul Merrell on 15 Apr 17
     
    Here we go ...
Paul Merrell

Credit unions fight back against tax repeal efforts - Business Monday - MiamiHerald.com - 0 views

www.miamiherald.com/...unions-fight-back-against.html

banksters credit-unions Congress Obama lobbying Competition

shared by Paul Merrell on 16 Sep 13 - No Cached
  • At the moment, it’s a war of words, but very soon the debate to tax credit unions will hit the streets. This week, credit union supporters from South Florida and throughout the country will descend on Washington, D.C. to “Hike the Hill” and meet with lawmakers to stress the importance of keeping in place the federal tax exemption for credit unions. The debate is nothing new. For years, the big banks have lobbied Congress to repeal the tax exemption status. This time around, they declared war. Earlier this year, the American Bankers Association began advertising its anti-credit union message throughout Washington, and last month ABA executives wrote letters to President Barack Obama and Congress requesting a repeal of the tax exemption status. The ABA and their lobbyists complain that the growing financial stature of credit unions throughout the country proves that they should be taxed like banks. They even refer to the tax exemption as a government “expenditure,” which they claim should be eliminated as part of a larger tax reform and budget reduction package.
  • What the bankers fail to mention was that credit unions only hold 6 percent of all the financial assets in the United States while banks hold 93 percent. They also fail to mention that 96 million Americans are satisfied members of credit unions, and that for every dollar in new taxes the government might gain, it would be eliminating $10 of credit union member benefits. The Federal Credit Union Act of 1934 established the tax-exemption status of credit unions because the structure and goals of credit unions are far different from traditional banks. All credit unions are designated as not-for-profit, which means any and all profits made are redistributed back to credit union members in the form of higher interest rates on savings accounts and reduced fees. They offer loans at the lowest possible interest rates because their mandate is to cultivate community development by assisting working families, low income households, small businesses and the middle class.Banks operate very differently. Led by small groups of shareholders who seek to maximize return on their investment, they raise fees regardless of how much profit they accumulate. They offer loans at the highest possible interest rate because their mandate is to make money, not to assist anyone, including and especially the middle class. (It wasn’t long ago we learned this the hard way as predatory banks helped fuel the Great Recession.) The truth is, big banks want one thing and one thing only: to get bigger. They want to merge and grow and rack-in record profits so they can grow even bigger. Credit unions are the only thing standing in the way of an oligarchy of a few major banks from controlling all of the deposited funds in the country. Their pursuit to tax credit unions is aimed at eliminating their only competition so they can be free to charge as much interest and fees as they wish without restraint.
Paul Merrell

IMF Loans to Ukraine: Deadly "Economic Medicine" Aimed at Total Destabilization | Globa... - 0 views

www.globalresearch.ca/...5431677

war & peace Ukraine banksters IMF austerity U.S.-foreign-policy

shared by Paul Merrell on 01 Mar 15 - No Cached
  • On February 12, Christine Lagarde, Managing Director of the International Monetary Fund, announced that the IMF had reached an agreement with the Ukrainian government on a new economic reform program. Ms Lagarde’s statement, made in Brussels, came only minutes after peace negotiations between the heads of the German, French, Russian und Ukrainian governments in Minsk, Belarus, had ended. The timing was no coincidence. Washington had been left out of the negotiations and now reacted by sending its most powerful financial organization to the forefront in order to deliver a clear message to the world: that the US will not loosen its grip on the Ukraine, if not by sending weapons, then at least economically and financially.
  • The loans will be based on the terms of an economic program for Ukraine for 2015 – 2020, passed by the Kiev parliament in December 2014, and are tied to harsh conditions laid down in a letter of intent, signed by prime minister Yatseniuk and president Poroshenko in August 2014. Some of the measures have already been implemented, others will follow. Among those already in force is the flexible exchange rate regime which has not only led to a 67% devaluation of the hrivna, lowering the average monthly wage of Ukrainian workers to less than $ 60, but has also opened the doors for international currency speculators who have already made millions by indebting themselves in hrivnia and repaying their debts in euros and dollars. The rate of inflation, running at 25 % in 2014 and expected to rise even higher in 2015, and a hike in gas prices by 50 % in May 2014 made survival almost impossible for the weakest 20 % of the population who already lived below the poverty line in 2013. Among the measures still to come are the layoff of 10 % of the country’s public employees and the partial privatization of health care and education. The retirement age for women is to be raised by 10 years, that for men by 5 years, most benefits for old age pensioners are to be abolished, the pharmaceuticals market is to be deregulated. Retirement pensions will be frozen, and there will be no more free lunches for school children and patients in hospitals. Benefits for victims of the 1986 nuclear disaster in Chernobyl are to be cut, and the boundaries of the officially designated radioactive hazard zone will be revised. The country’s monthly minimum wage is to remain at 1,218.00 hrivna ($ 46 at the current rate of exchange) until at least November 2015.
Gary Edwards

The obscure legal system that lets corporations sue countries | Claire Provost and Matt... - 0 views

www.theguardian.com/...rtations-sue-states-ttip-icsid

ISDS TTIP Banksters World-Banksters

shared by Gary Edwards on 10 Jun 15 - No Cached
  • Every year on 15 September, thousands of Salvadorans celebrate the date when much of Central America gained independence from Spain. Fireworks are set off and marching bands parade through villages across the country. But, last year, in the town of San Isidro, in Cabañas, the festivities had a markedly different tone. Hundreds had gathered to protest against the mine. Gold mines often use cyanide to separate gold from ore, and widespread concern over already severe water contamination in El Salvador has helped fuel a powerful movement determined to keep the country’s minerals in the ground. In the central square, colourful banners were strung up, calling on OceanaGold to drop its case against the country and leave the area. Many were adorned with the slogan, “No a la mineria, Si a la vida” (No to mining, Yes to life). On the same day, in Washington DC, Parada gathered his notes and shuffled into a suite of nondescript meeting rooms in the World Bank’s J building, across the street from its main headquarters on Pennsylvania Avenue. This is the International Centre for the Settlement of Investment Disputes (ICSID): the primary institution for handling the cases that companies file against sovereign states. (The ICSID is not the sole venue for such cases; there are similar forums in London, Paris, Hong Kong and the Hague, among others.) The date of the hearing was not a coincidence, Parada said. The case has been framed in El Salvador as a test of the country’s sovereignty in the 21st century, and he suggested that it should be heard on Independence Day. “The ultimate question in this case,” he said, “is whether a foreign investor can force a government to change its laws to please the investor as opposed to the investor complying with the laws they find in the country.”
  • Most international investment treaties and free-trade deals grant foreign investors the right to activate this system, known as investor-state dispute settlement (ISDS), if they want to challenge government decisions affecting their investments. In Europe, this system has become a sticking point in negotiations over the controversial Transatlantic Trade and Investment Partnership (TTIP) deal proposed between the European Union and the US, which would massively extend its scope and power and make it harder to challenge in the future. Both France and Germany have said that they want access to investor-state dispute settlement removed from the TTIP treaty currently under discussion. Investors have used this system not only to sue for compensation for alleged expropriation of land and factories, but also over a huge range of government measures, including environmental and social regulations, which they say infringe on their rights. Multinationals have sued to recover money they have already invested, but also for alleged lost profits and “expected future profits”. The number of suits filed against countries at the ICSID is now around 500 – and that figure is growing at an average rate of one case a week. The sums awarded in damages are so vast that investment funds have taken notice: corporations’ claims against states are now seen as assets that can be invested in or used as leverage to secure multimillion-dollar loans. Increasingly, companies are using the threat of a lawsuit at the ICSID to exert pressure on governments not to challenge investors’ actions.
  • “I had absolutely no idea this was coming,” Parada said. Sitting in a glass-walled meeting room in his offices, at the law firm Foley Hoag, he paused, searching for the right word to describe what has happened in his field. “Rogue,” he decided, finally. “I think the investor-state arbitration system was created with good intentions, but in practice it has gone completely rogue.”
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  • The quiet village of Moorburg in Germany lies just across the river from Hamburg. Past the 16th-century church and meadows rich with wildflowers, two huge chimneys spew a steady stream of thick, grey smoke into the sky. This is Kraftwerk Moorburg, a new coal-fired power plant – the village’s controversial next-door neighbour. In 2009, it was the subject of a €1.4bn investor-state case filed by Vattenfall, the Swedish energy giant, against the Federal Republic of Germany. It is a prime example of how this powerful international legal system, built to protect foreign investors in developing countries, is now being used to challenge the actions of European governments as well. Since the 1980s, German investors have sued dozens of countries, including Ghana, Ukraine and the Philippines, at the World Bank’s Centre in Washington DC. But with the Vattenfall case, Germany found itself in the dock for the first time. The irony was not lost on those who considered Germany to be the grandfather of investor-state arbitration: it was a group of German businessmen, in the late 1950s, who first conceived of a way to protect their overseas investments as a wave of developing countries gained independence from European colonial powers. Led by Deutsche Bank chairman Hermann Abs, they called their proposal an “international magna carta” for private investors.
  • In the 1960s, the idea was taken up by the World Bank, which said that such a system could help the world’s poorer countries attract foreign capital. “I am convinced,” the World Bank president George Woods said at the time, “that those … who adopt as their national policy a welcome [environment] for international investment – and that means, to mince no words about it, giving foreign investors a fair opportunity to make attractive profits – will achieve their development objectives more rapidly than those who do not.” At the World Bank’s 1964 annual meeting in Tokyo, it approved a resolution to set up a mechanism for handling investor-state cases. The first line of the ICSID Convention’s preamble sets out its goal as “international cooperation for economic development”. There was sharp opposition to this system from its inception, with a bloc of developing countries warning that it would undermine their sovereignty. A group of 21 countries – almost every Latin American country, plus Iraq and the Philippines – voted against the proposal in Tokyo. But the World Bank moved ahead regardless. Andreas Lowenfeld, an American legal academic who was involved in some of these early discussions, later remarked: “I believe this was the first time that a major resolution of the World Bank had been pressed forward with so much opposition.”
  • now governments are discovering, too late, the true price of that confidence. The Kraftwerk Moorburg plant was controversial long before the case was filed. For years, local residents and environmental groups objected to its construction, amid growing concern over climate change and the impact the project would have on the Elbe river. In 2008, Vattenfall was granted a water permit for its Moorburg project, but, in response to local pressure, local authorities imposed strict environmental conditions to limit the utility’s water usage and its impact on fish. Vattenfall sued Hamburg in the local courts. But, as a foreign investor, it was also able to file a case at the ICSID. These environmental measures, it said, were so strict that they constituted a violation of its rights as guaranteed by the Energy Charter Treaty, a multilateral investment agreement signed by more than 50 countries, including Sweden and Germany. It claimed that the environmental conditions placed on its permit were so severe that they made the plant uneconomical and constituted acts of indirect expropriation.
  • With the rapid growth in these treaties – today there are more than 3,000 in force – a specialist industry has developed in advising companies how best to exploit treaties that give investors access to the dispute resolution system, and how to structure their businesses to benefit from the different protections on offer. It is a lucrative sector: legal fees alone average $8m per case, but they have exceeded $30m in some disputes; arbitrators’ fees at start at $3,000 per day, plus expenses.
  • Vattenfall v Germany ended in a settlement in 2011, after the company won its case in the local court and received a new water permit for its Moorburg plant – which significantly lowered the environmental standards that had originally been imposed, according to legal experts, allowing the plant to use more water from the river and weakening measures to protect fish. The European Commission has now stepped in, taking Germany to the EU Court of Justice, saying its authorisation of the Moorburg coal plant violated EU environmental law by not doing more to reduce the risk to protected fish species, including salmon, which pass near the plant while migrating from the North Sea. A year after the Moorburg case closed, Vattenfall filed another claim against Germany, this time over the federal government’s decision to phase out nuclear power. This second suit – for which very little information is available in the public domain, despite reports that the company is seeking €4.7bn from German taxpayers – is still ongoing. Roughly one third of all concluded cases filed at the ICSID are recorded as ending in “settlements”, which – as the Moorburg dispute shows – can be very profitable for investors, though their terms are rarely fully disclosed.
  • “It was a total surprise for us,” the local Green party leader Jens Kerstan laughed, in a meeting at his sunny office in Hamburg last year. “As far as I knew, there were some [treaties] to protect German companies in the [developing] world or in dictatorships, but that a European company can sue Germany, that was totally a surprise to me.”
  • While a tribunal cannot force a country to change its laws, or give a company a permit, the risk of massive damages may in some cases be enough to persuade a government to reconsider its actions. The possibility of arbitration proceedings can be used to encourage states to enter into meaningful settlement negotiations.
  • A small number of countries are now attempting to extricate themselves from the bonds of the investor-state dispute system. One of these is Bolivia, where thousands of people took to the streets of the country’s third-largest city, Cochabamba, in 2000, to protest against a dramatic hike in water rates by a private company owned by Bechtel, the US civil engineering firm. During the demonstrations, the Bolivian government stepped in and terminated the company’s concession. The company then filed a $50m suit against Bolivia at the ICSID. In 2006, following a campaign calling for the case to be thrown out, the company agreed to accept a token payment of less than $1. After this expensive case, Bolivia cancelled the international agreements it had signed with other states giving their investors access to these tribunals. But getting out of this system is not easily done. Most of these international agreements have sunset clauses, under which their provisions remain in force for a further 10 or even 20 years, even if the treaties themselves are cancelled.
  • There are now thousands of international investment agreements and free-trade acts, signed by states, which give foreign companies access to the investor-state dispute system, if they decide to challenge government decisions. Disputes are typically heard by panels of three arbitrators; one selected by each side, and the third agreed upon by both parties. Rulings are made by majority vote, and decisions are final and binding. There is no appeals process – only an annulment option that can be used on very limited grounds. If states do not pay up after the decision, their assets are subject to seizure in almost every country in the world (the company can apply to local courts for an enforcement order).
  • While there is no equivalent of legal aid for states trying to defend themselves against these suits, corporations have access to a growing group of third-party financiers who are willing to fund their cases against states, usually in exchange for a cut of any eventual award.
  • Increasingly, these suits are becoming valuable even before claims are settled. After Rurelec filed suit against Bolivia, it took its case to the market and secured a multimillion-dollar corporate loan, using its dispute with Bolivia as collateral, so that it could expand its business. Over the last 10 years, and particularly since the global financial crisis, a growing number of specialised investment funds have moved to raise money through these cases, treating companies’ multimillion-dollar claims against states as a new “asset class”.
  • El Salvador has already spent more than $12m defending itself against Pacific Rim, but even if it succeeds in beating the company’s $284m claim, it may never recover these costs. For years Salvadoran protest groups have been calling on the World Bank to initiate an open and public review of ICSID. To date, no such study has been carried out. In recent years, a number of ideas have been mooted to reform the international investor-state dispute system – to adopt a “loser pays” approach to costs, for example, or to increase transparency. The solution may lie in creating an appeals system, so that controversial judgments can be revisited.
  • Brazil has never signed up to this system – it has not entered into a single treaty with these investor-state dispute provisions – and yet it has had no trouble attracting foreign investment.
  • Gary Edwards on 10 Jun 15
     
    "Luis Parada's office is just four blocks from the White House, in the heart of K Street, Washington's lobbying row - a stretch of steel and glass buildings once dubbed the "road to riches", when influence-peddling became an American growth industry. Parada, a soft-spoken 55-year-old from El Salvador, is one of a handful of lawyers in the world who specialise in defending sovereign states against lawsuits lodged by multinational corporations. He is the lawyer for the defence in an obscure but increasingly powerful field of international law - where foreign investors can sue governments in a network of tribunals for billions of dollars. Fifteen years ago, Parada's work was a minor niche even within the legal business. But since 2000, hundreds of foreign investors have sued more than half of the world's countries, claiming damages for a wide range of government actions that they say have threatened their profits. In 2006, Ecuador cancelled an oil-exploration contract with Houston-based Occidental Petroleum; in 2012, after Occidental filed a suit before an international investment tribunal, Ecuador was ordered to pay a record $1.8bn - roughly equal to the country's health budget for a year. (Ecuador has logged a request for the decision to be annulled.) Parada's first case was defending Argentina in the late 1990s against the French conglomerate Vivendi, which sued after the Argentine province of Tucuman stepped in to limit the price it charged people for water and wastewater services. Argentina eventually lost, and was ordered to pay the company more than $100m. Now, in his most high-profile case yet, Parada is part of the team defending El Salvador as it tries to fend off a multimillion-dollar suit lodged by a multinational mining company after the tiny Central American country refused to allow it to dig for gold."
Paul Merrell

Russia liquidates nearly all its holdings of US debt & invests money in gold - RT Busin... - 0 views

www.rt.com/...1615-russia-liquidates-us-debt

war & peace economic-warfare de-dollarization

shared by Paul Merrell on 21 Oct 18 - No Cached
  • The Central Bank of Russia has continued getting rid of US Treasury bonds in August. The share of Russian investments in American debt is getting close to zero. Russian investments in US securities as of August have fallen to just $14 billion. Back in 2011, Russia was one of the largest holders of US debt with a $180 billion investment.The reason is not only about politics and US sanctions against Russia, a broker at Otkritie bank Timur Nigmatullin told RIA Novosti. The US Federal Reserve is hiking interest rates, which makes American bonds cheaper, he said. “Russia has almost dropped out of the list of holders of US government debt, being the 54th largest holder.”
  • “A further sale of US Treasury bonds by Russia will most likely be compensated by buying gold and opening short-term deposits at banks,” he said. The share of precious metals in the country's foreign reserves has reached a record 18 percent, closely approaching the share of dollar investments.The largest investors in US debt, China and Japan, have also cut their holdings. Chinese holdings of US sovereign debt dropped to $1.165 trillion in August, from $1.171 trillion in July, marking the third consecutive month of declines. Japan has slashed its holdings of US securities to $1.029 trillion in August, the lowest since October 2011.
  • India and Turkey have followed Russia's lead. Turkey has dropped out of the top-30 list of holders of American debt, while India has been liquidating its investment for five consecutive months to $140 billion in August.
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