via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/GbFsGQTZEXw/story01.htm williambanzai7

Submitted by Charles Hugh-Smith of OfTwoMinds blog,

Being freed from being owned is a form of liberation with many manifestations.

The frenzied acquisition of more stuff is supposed to be an unalloyed good: good for "growth," good for the consumer who presumably benefits from more stuff and good for governments collecting taxes on the purchase of all the stuff.

Liberation isn't profitable, and more's the pity.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/HObXsfljxns/story01.htm Tyler Durden

Submitted by David Stockman va Contra Corner blog,

Here are a couple of reasons why Keynesian economists are truly a menace in today’s bubble ridden and debt-impaled world. It seems that both Harvard’s Kenneth Rogoff and Princeton’s Paul Krugman are on the global advice circuit, peddling what amounts to sheer snake oil to desperate politicians and policy-makers who have already buried themselves – so far to no avail – in unprecedented waves of fiscal and monetary “stimulus”.

But never mind. The professors have a three part solution, and its more, more……and moar! To make room for more monetary stimulus after six-years at the zero bound, therefore, Professor Rogoff has a truly juvenile solution. Namely, to abolish cash. That’s right, this Harvard windbag proposes to confiscate your kids’ piggy bank and any green stuff that may  be left in your wallet.

Meanwhile, Krugman has made a quick circuit through Tokyo, where he apparently was instrumental in convincing Japan’s prime minister to cancel the next installment of the consumption tax increase—a move that was utterly necessary in order to stem the nation’s massive flow of red ink. But why not spend a few more years adding to Japan’s staggering debt burden, which is already at 230% of GDP and rising inexorably in a nation that is fast becoming the world’s foremost retirement colony? After all, Professor Rogoff has now perfected a scheme which will allow central banks to monetize all the debt that even the most profligate government can possibly issue.

So start with Professor Rogoff ‘s incredible assault on the peoples’ cash and coins—a necessary prelude to even more fantastic rates of central bank monetary expansion. Here is exactly what he recently advocated at a “prestigious” international policy forum:

“Harvard economist Kenneth Rogoff even argues in the daily paper FAZ that cash currency should be banned altogether. Central banks could impose negative interest rates more easily that way, he explained. Tax evaders and criminals would also find life more difficult. From this perspective, banknotes and coins appear superfluous, he said at a presentation at the IFO institute in Munich. Measures to spur the economy could be implemented more easily that way.”

In short, central banks would like to escalate their devastating war on savers by driving interest rates even deeper into negative nominal and real territory. But they are now stymied for two reasons.

In the case of their preferred route of driving “real” interest rates more deeply into negative returns by cranking up consumer inflation, they are blocked by economic reality. Households are still buried in debt and can no longer borrow, spend and ratchet-up their balance sheet leverage ratios as they did in the 40 years preceding the 2008 financial crisis. Likewise, a deflationary global economy—–drowning in the excess industrial capacity and malinvestments that have been generated by nearly two decades of worldwide financial repression—– keeps a tight lid on the price of consumer goods. So the tried and true route of inflating governments out of their debt obligations has been precluded.

At the same time, interest rates are already at the zero bound in nominal rate terms, meaning that only significantly negative nominal rates can further reduce the burden of public debt. However, even central bankers are smart enough to realize that if the monetary and fiscal authorities of the state go too far in imposing negative rates on bank deposits or in threatening to “bail-in” depositors, they could incite a run on the bank. Yes, in this age of awesome technology in which people fuel-up at Starbucks by waving their smart phones at the cashier, our Keynesian masters are now worried about erupting stacks of fresh Ben Franklin’s.

And well they should be. Behind all the gee whiz technology of electronic payment systems there is still “deposit money”. That is, there are digital credits somewhere in the system at banks and money funds against which electronic payments are deducted.

Stated differently, here we are a century after paper checks drastically reduced the need for hand-to-hand money, and a half-century after the rise of credit cards nearly finished the jobs. Yet Keynesian central bankers are worried about bulging billfolds and safes and deposit boxes filled to the brim with greenbacks.

Well, charge 4% for the privilege of storing deposit money at a regulated bank or money fund, for example, and the demand for hand-to-hand money will indeed soar. In that context, cash would be the peoples’ last resort against the arbitrary confiscation of their wealth by the financial authorities of the state. Odd as it may sound, in a world where Keynesian money printers have literally gone berserk squashing honest price discovery in the market for money deposits and debt, crisp greenbacks may be the last barrier against central bank destruction of liquid savers.

So, yes, in the year 2014 we have a Harvard professor running around trying to do Franklin Roosevelt one better. FDR took the people’s gold in 1933. Now Professor Rogoff wants their cash—–the last refuge where citizens can anonymously safeguard their wealth from the depredations of the state.

The entire Rogoff plan, therefore, contains an ominous warning. The leading lights of the Keynesian mafia realize that the massive debt that their policies have created around the world can only be managed by a permanent regime of financial repression and enslavement of savers. Yet if carried far enough, the latter would result in growing flight from “deposit money” that the state can control to “hand-to-hand money” that would circulate and function outside its dictates.

And that gets us to Professor Krugman’s regrettable trip to Japan. They very last thing that the mad men of Abenomics need is another spurious Keynesian justification for even more deficit spending.

Honda, 59, an academic who’s known Abe, 60, for three decades and serves as an economic adviser to the prime minister, had opposed the April move and was telling him to delay the next one. Enter Krugman, the Nobel laureate who had been writing columns on why a postponement was needed. ‘That nailed Abe’s decision — Krugman was Krugman, he was so powerful’ Honda said… ‘I call it a historic meeting.’ It was in a limousine ride from the Imperial Hotel — the property near the emperor’s palace… that Honda told Krugman, 61, what was at stake for the meeting. The economist… had the chance to help convince the prime minister that he had to put off the 2015 increase.”

Let’s see. Since its original financial crisis in 1989, Japan has made deficit spending a way of life. During the last 10 years, for example, its budget has been in deficit continuously and has averaged new borrowings of nearly 7% of GDP annually.

All of these giant deficits, however, surely did not “stimulate” Japan’s GDP in the slightest. In fact, its nominal GDP today is the same as it was two decades ago.

Accordingly, Japan is now in a debt trap: year upon year of giant fiscal deficits in the face of a static nominal GDP have caused its government leverage ratio to soar.  Relative to national income, it’s public debt is now 7X bigger than in was in 1980, and is 2X greater than any other DM nation.

Indeed, since the mid-1990s Japan’s general government revenues have been stuck in the range of 45 trillion yen annually while it spending for highways and bridges to nowhere and support of an aging population has steadily climbed toward 100 trillion yen annually. Consequently, until its recent increase in consumption tax from 5% to 8%, it was actually collecting in taxes only 50 cents on every dollar spent.

So of course it needed to implement at least this token revenue raising gesture. Even then, the April consumption tax increase that Krugman remonstrated against will only raise about 4 trillion yen on an annual basis, leaving a fiscal gap which has which festered for more than two decades now largely in tact.

Yes, the April’s consumption tax increase did take money out of consumers pockets and the second installment from 8% to 10% would have extracted even more. Once upon a time that was called paying your bills; and, in light of the fiscal lunacy portrayed in the graph above, it would have been hailed as a long overdue step toward fiscal sanity.

But government everywhere in the world have lost their fiscal bearings; Japan is only the leading edge case. Having postponed the second installment of its long over-due consumption tax increase until 2017, Japan is now entering the Keynesian end game.

For all practical purposes, it has chosen to permanently finance more than half of its government budget by borrowing, and then to monetize 100% of the incremental annual debt. That will surely lead to a thundering crash of the yen and the destruction of what remains of Japan’s once vaunted savers. It will mean that the world first national retirement colony will spend its days in fiscal crisis and economic penury.

Some day it will be said that on this archipelago lies the work of financial mad men and terrorists. If the survivors could mount a plaque, they would list Professor Rogoff and Krugman on the very top.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/p3FQNi6AwFk/story01.htm Tyler Durden

Days after Ferguson was torched by angry rioters following a grand jury verdict not to indict police officer Darren Wilson in the shooting death of Michael Brown, the policeman’s lawyer announced moments ago that he has resigned from the Ferguson, Mo., Police Department.

As ABC reports, Wilson has been on administrative leave since the shooting. One of his attorneys, Neil Bruntrager, said the resignation is effective immediately.

Though Wilson was cleared of criminal charges by the grand jury, the Justice Department is conducting a civil rights investigation into the shooting as well as a separate probe of police department practices. Wilson, who has been in seclusion since the fatal shooting, said this week in an interview with “Good Morning America” anchor George Stephanolpoulos that he had gotten married since the Aug.9 shooting and that he and his new wife are expecting a baby.

Wilson’s resignation is unexpected because in that interview he announced that wanted to spend his career with the police force, and hoped to one day be promoted to sergeant. “I wanted to stay on the road for 30 years and then retire as sergeant and have a retirement,” Wilson said. “That’s all that I wanted.”

But he said that after what happened, he was not sure he could return to the Ferguson Police Department. He was a member of the department for six years. “I’m not sure it’s possible. I mean, you think they would accept me? You think it’d be safe for me?” Wilson asked.

 

He said his notoriety could also put his fellow officers in jeopardy, and asked: “Can I put them in that situation?”

 

Though in the interview he said he had not made a final decision on returning to the force, he offered some thoughts on what else he might want to do.

 

“I would love to teach people. I would love to give more insight on … into the use of force and anything I can,” he said. “Anything that I can get out of this career I’ve had so far and of the incident, I would love to give to someone else.”n is unexpected

Wilson’s full resignation letter is below:

“I, Darren Wilson, hereby resign my commission as a police officer with the City of Ferguson effective immediately. I have been told that my continued employment may put the residents and police officers of the City of Ferguson at risk, which is a circumstance that I cannot allow. For obvious reasons, I wanted to wait until the grand jury made their decision before I officially made my decision to resign. It was my hope to continue in police work, but the safety of other police officers and the community are of paramount importance to me. It is my hope that my resignation will allow the community to heal. I would like to thank all of my supporters and fellow officers throughout this process.”

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/9Rz7XK8DRlc/story01.htm Tyler Durden

Even with having existed for millions of years, the process for humans to reach 1 billion in population was long and arduous. It is only about 12,000 years ago that humans started engaging in sedentary agriculture. This allowed humans to settle and consistently produce food, rather than hunt and gather throughout.

However, it is with the Industrial Revolution that the means for exponential human population increases was created. New technology, boosts in productivity, and the use of energy allowed for a new frontier in increasing health, sanitation, and standard of living. It is also around this time – in 1804 to be exact – that the earth’s population hit 1 billion people.

Fast forward two hundred years, and the impact of the Industrial Revolution is loud and clear. Now with over 7 billion people, global population has risen so fast that by one estimate, 14% of all human beings that have ever existed are alive today.

Based on a recent UN study, by 2100, our global population is predicted to be between 9.6 and 12.3 billion people. The world will be much different than we know it today in the future.

For starters, the vast majority of growth will happen in the less developed regions of the world. As an example, Nigeria’s population will increase five-fold, from around 174 million today to almost a billion people. It will likely be the 3rd most populous country behind India and China in 2100. Sub-Saharan Africa as a whole could hold up to almost half of the world’s population in the future.

While population has exploded exponentially, unfortunately the resources on our planet are finite. The ecological term for this is “carrying capacity”, which is the maximum population that an environment and resources can sustain indefinitely.

Human carrying capacity is very complex and takes into account many factors, including nutrients, fresh water, environmental conditions, space, technology, medical care, and sanitation. The carrying capacity for humans is not static, and can be changed by adding or subtracting resources from the ecosystem.

While technology has saved the human race time after time, we have not yet found ways to address many of the problems tied to overpopulation such as consumption, changes to climate, inequality, and scarcity of resources.

There are certain realities we will have to face. Here are just some of the issues:

• By 2025, 1.8 billion people will be living in countries or regions with absolute water scarcity.
• The United States uses 1 million gallons of oil every 2 minutes.
• The marginal cost of producing oil and metals has never been higher.
• Food prices are skyrocketing, and availability of essential nutrients (like phosphorus) needed to grow food is becoming scarcer.
• Governments continue to create new currency and debt at unprecedented and unsustainable levels.
• Potential collapses in biodiversity and changes in our climate.

Is our future littered with disease, famine, stunted growth, currency collapse, and a lower quality of life?

Or should we be optimistic that we can persist? Can technology and smart decisions save the day?

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/dfLw_Qy-Ums/story01.htm Tyler Durden

The StealthFlation Blog

Tis the season for exceptional economic greetings.  The entire energy complex and base metals are in a ferocious free fall, whilst the juiced stock market apologists and U.S. exceptionalist pompom wavers are all out in force emphatically heralding a new found era of unabashed American consumerism which evidently is about to magically materialize.

Apparently, according to these cheerful dreamers, the well documented, severe slowdown of the three largest industrial economies on the planet, after the U.S. (China, Japan, Germany), has absolutely nothing to do with the continuous commodity crash. Not to mention that the 2nd largest economic bloc on the globe, the Eurozone, is mired in a metastasized morasse of malignant monetary malfunction.  Just last week IMF director Christine Lagarde stated that a diet of high debt, low growth and high unemployment may yet become “the new normal in Europe”.

The world economy is undoubtedly standing at a precipice, and yet, all these wall street country club clowns can think about is the multitude of new iChristmas gifts that will undoubtedly be placed under their terrific twinkling trees.

The incessant equity cheerleading doesn’t stop there.  Evidently, the fabulous frenzied flag waving is also trumpeting the jubilant re-coronation of King Dollar, which will keep the big box superstores sizzling with stupendous sales of cheap Chinese crap all season long.  I suppose, the fact that a substantial portion of the meager U.S. GDP growth over the past 5 years, that has come in large part from a rehabilitated export sector operating under more favorable exchange rates, is totally immaterial, and which, by the way, is now fading as fast as green shoots on a vast frozen global economic tundra.

‘Mediocre’ growth plagues world economy

By Mark Thompson   @MarkThompsonCNN October 7, 2014: 9:40 AM ET 

Hate to be the Grinch that iced Christmas, however, there is a frigid, below freezing GDP level, winter blast of a blustery blizzard brewing out there.  The real economic picture is melting like icicles hanging off an old beat up barn, and the only question is whether the roof will cave in first before they swiftly melt away, much like the monetized mountain of artificial liquid snow the FED has blown all over the frozen global economic landscape.

Make no mistake my friends, the rest of the worried weary world is looking at the U.S. as the abominable snowman.   Growth has been put on ice, and thus it’s now a zero sum hockey game on the all world skating rink.  The U.S. has certainly been ignobly and illegally abusing its world reserve currency status to leverage itself against an entirely stale shrinking global economic pie, insidiously printing vast amounts of funny money to sustain a synthetic utterly monetized economy, and the rest of the world is on to it.

China is pressing the IMF to promptly set up the new SDR multilateral monetary regime, and Putin has backed up the gold truck to establish a gold backed Ruble. Meanwhile, the Europeans all want their bullion swiftly repatriated out of NY.  Who will buy our disingenuous diabolical debt once the currency is exposed for the deceitful fraud that it is?   Remember, it’s not about today’s dollar and treasury safe haven bid, it’s about tomorrow’s confidence in our monetary system.

Enjoy the holidays fat and happy while they last, as a chilling New Year awaits.   Just below is the real Christmas carol, and I highly recommend you memorize the stealth chorus lines…….

STEALTHFLATION:  An intractable economic condition that inevitably arises as excessively issued fiat currency compulsively pursues non-productive wealth assets in a grossly overleveraged economy, which has been artificially reflated by monetary authorities in a misguided attempt to synthetically engineer growth via extreme monetization.  (Money Printing & Interest Rate Suppression)

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/u4GrYL495SU/story01.htm Bruno de Landevoisin

Despite all efforts by the US-led coalition, the Islamic state is still going strong. That is the awkward message US propagandists face from no lessor boots on the ground witness than Syrian Foreign Minister Walid al-Moualem. “All the indications say that (Islamic State) today, after two months of coalition air strikes, is not weaker,” Walid al-Moualem emphasized, contrasting the US ‘coalition’ military efforts with a Russian call for restarting the political process between Damascus and ‘the constructive Syrian opposition’. Now that certainly is not a message the west wants the world to hear…

As Sputnik News reports,

Although the US-led coalition has conducted about 300 air strikes in Syria since September, it has evidently failed to weaken the Islamic State, stated Syrian Foreign Minister Walid al-Moualem.

 

“All the indications say that (Islamic State) today, after two months of coalition air strikes, is not weaker,” Walid al-Moualem emphasized in an interview with the Beirut-based Al Mayadeen TV broadcast, as quoted by Reuters.

 

The Syrian Foreign Minister stressed that the terrorists will not be totally destroyed unless Turkey maintained close control over its borders with Syria.

 

“If the Security Council and Washington do not force Turkey to control its borders then all of this action will not eliminate (Islamic State),” Moualem said, pointing to the fact that foreign jihadists are entering the country across the Syrian-Turkish border, which stretches over 560 miles. Turkey, however, “has strongly denied accusations it has supported militant Islamists, inadvertently or otherwise, in its enthusiasm to help Syrian rebels topple Assad,” the Guardian notes.

 

…

 

In his interview with RT TV channel, Moualem stated that as long as the external interference continues, which is represented by the actions of the international coalition and in the flow of terrorists crossing Syrian borders, it would not be possible to establish an internal dialogue between the conflicting sides in Syria.

 

The minister added that the major problem for Syria now is the conspiracy of the neighboring countries against it, including Turkey, Saudi Arabia, Qatar, Jordan and others. He stated that external and regional interference in Syrian affairs hindered the de-escalation of the crisis.

 

Syrian minister explained that this is the reason why Syria’s Russian friends think that internal dialogue in Syria would be more useful than the dialogue held in Geneva before.

*  *  *
More proxy wars… and more sanctions will fix this!

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/LpnXBPIPRMQ/story01.htm Tyler Durden

This is why America is in the shape that it’s in…

 

 

The best slave is a slave that doesn’t know he’s a slave.

h/t @ChrisVandaele

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/nC46sYnffCE/story01.htm Tyler Durden

Meet MONIAC – Monetary National Income Analogue Computer – the 7-foot-tall, 70-year-old ‘Rube Goldberg’ hydraulic contraption that was the machine that analyzed data, simulated the economy, and made predictions about the future for the central planners of yore…

As Wired.com reports,

There was a time when computers ran on water.

 

No, really. They did. Check out the video above, a recent demonstration of a machine called the MONIAC, originally built in 1949. The MONIAC—short for Monetary National Income Analogue Computer—was a machine that analyzed economic data using, yes, hydraulics. Basically, it pumped water through pipes and tanks in an effort to simulate an economy and make predictions about its future.

 

The seven-foot-tall Rube Goldberg contraption may seem like a strange way to handle economic calculations, especially given that—ahem—drier computers of day could handle similar tasks. But as computer historian Doron Swade explains in an article for Inc., Phillips wanted a way to visualize the economy, and in those days, computers didn’t have monitors.

 

Only about 14 MONIACs were made. Most of them are corroding in university basements around the world, but there are at least two working order, one at the Reserve Bank Museum in New Zealand and another at the University of Cambridge. The video above is an excerpt from a MONIAC demonstration by Cambridge engineering professor Allan McRobie, who restored the university’s machine a few years ago.

 

The machine’s various tanks and flows represent different parts of an economy, such as banks, consumer spending, personal savings, taxes, foreign holdings, and more. As McRobie explains, if you find that the personal savings tank is getting too full and you want to encourage more investment, you can simulate a drop in interest rates by widening the bank’s valve so that money flows more freely through the system.

*  *  *

We have certainly come a long way since then… as central planners have refined economic ‘management’ to one simple rule:

If S&P 500 Futures are down, Slam The VIX (which creates wealth, jobs, and Venezuelan utopia)

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/VpSd7MvE4oA/story01.htm Tyler Durden