Category: zerohedge

Submitted by Alasdair Macleod via GoldMoney blog,

A number of readers have recently suggested there must be collusion between America and China over the transfer of physical gold from Western capital markets. They assume that governments know what they are doing, so there is a bigger game afoot of which we are unaware.

The truth is that China and Western capital markets view gold very differently. You will hardly find anyone in the London Bullion Market who regards gold as money; and for them if gold is no longer money Chinese demand for it is not a monetary issue. Instead it threatens the bullion banks’ business that a useful financial asset, capable of earning many times its physical value in fees, commissions, turns and interest, is being leeched out of the market by Chinese aunties.

It is clear that nearly all Western central bankers share this view, believing that gold will never play a monetary role again. We also know that Marxist-educated government advisers in China have been sheltered from the Keynesians’ antipathy against gold and instead have been brought up on Marx’s belief that Western capitalism will eventually destroy itself. It therefore follows they believe that western paper currencies will probably be destroyed as well.

Otherwise we can only speculate, but the following conclusions about why the Chinese are accumulating gold seem to make most sense:

• There is a fundamental view in China that gold is ultimately money, so it is always worth accumulating by selling potentially worthless foreign currency.
• Encouraging her citizens to accumulate gold achieves two objectives: if they have real wealth to protect it makes them potentially less rebellious in difficult times; and secondly private buying of gold reduces the trade surplus, which in turn reduces the accumulation of foreign currency reserves.
• Gold is generally accepted as superior money throughout Asia, which is China’s long-term regional interest.
• The Chinese Government (and/or the Communist Party) is buying gold for itself. Assumptions it will use gold to beef up the renminbi makes little practical sense, beyond perhaps some window-dressing for currency credibility. Instead she appears to be accumulating gold for unstated strategic reasons.
• Keeping the West short of gold gives China huge leverage in today’s cold currency war, and even more if the currency war heats up.

The idea that America is colluding with China in the gold market must therefore be nonsense. The truth has everything to do with different philosophies about gold.

Advanced western economies have survived without using gold as money for a considerable time. Currency and credit inflation have created a modern finance industry wholly dependent on fiat paper and everyone in mainstream finance is conditioned to believe in the profitable world of fiat currencies. They are therefore predisposed to dismiss gold as never being money again.

That is why the West is less worried about losing physical gold than it should be, and China is glad of the opportunity to buy it. And she can be expected to continue to do so whatever the price, because she knows that in the final analysis gold is the only true money.

via Zero Hedge http://ift.tt/1mpumnQ Tyler Durden

“Treasuries have turned medium term bullish,” writes Macneil Curry in his latest reports, advising traders to “get ready to buy a dip,” in bonds. At a minimum, he notes, BofAML expects yields to test the 2.691% area, but the most likely outcome is for a push to the multi-month range lows between 2.544% and 2.459%. Curry adds that he expected 5s30s to flatten to around 201bps and while they remain equity bulls he warns, “watchout” as seasonals turn much less constructive once February rolls around and the ratio of 3m-to-1m implied volatility is fast approaching the 1.20 level that traditionally coincides with complacency and market corrections.

 

Via BofAML’s Macneil Curry:

Buy a dip in US Treasuries, the m/term trend is BULLISH

The Friday push to 2.816% in US 10yr Treasury yields completed an impulsive (5 wave) decline from the 3.049% high of Jan-02 and confirms a bullish medium term turn in trend. At a minimum, we expect yields to test the 2.691% area, but the most likely outcome is for a push to the multi-month range lows between 2.544%/2.459%. We could even see a test of the 2.420%/2.399% pivot zone before renewed basing and a resumption of the LONG TERM BEAR TREND to 3.45%/3.50%. Having said that, we cannot recommend longs HERE. After an impulsive decline a market will correct higher before the downtrend resumes. Wait for a pullback into the 2.905%/2.960% before entering into longs. PATIENCE WILL BE REWARDED.

Throughout this move the curve should maintain its strong positive correlation with yields (inverse correlation with price). Looking specifically at 5s30s, we look for a base into 205.2bps/201.0bps from which a counter trend steeping bounce is likely into 225.0bps/230.9bps.
 
Finally, we remain equity market bulls.

The ESH4 intra-day consolidation below 1846.50 is best described as a bullish continuation pattern, with a break of 1846.50 clearing the way for 1865/1876. However, seasonality and the slope of the volatility curve say that once these targets are reached, WATCHOUT.

Seasonals turn much less constructive once February rolls around and the ratio of 3m-to-1m implied volatility is fast approaching the 1.20 level that traditionally coincides with complacency and market corrections

via Zero Hedge http://ift.tt/KDpyyR Tyler Durden

“Treasuries have turned medium term bullish,” writes Macneil Curry in his latest reports, advising traders to “get ready to buy a dip,” in bonds. At a minimum, he notes, BofAML expects yields to test the 2.691% area, but the most likely outcome is for a push to the multi-month range lows between 2.544% and 2.459%. Curry adds that he expected 5s30s to flatten to around 201bps and while they remain equity bulls he warns, “watchout” as seasonals turn much less constructive once February rolls around and the ratio of 3m-to-1m implied volatility is fast approaching the 1.20 level that traditionally coincides with complacency and market corrections.

 

Via BofAML’s Macneil Curry:

Buy a dip in US Treasuries, the m/term trend is BULLISH

The Friday push to 2.816% in US 10yr Treasury yields completed an impulsive (5 wave) decline from the 3.049% high of Jan-02 and confirms a bullish medium term turn in trend. At a minimum, we expect yields to test the 2.691% area, but the most likely outcome is for a push to the multi-month range lows between 2.544%/2.459%. We could even see a test of the 2.420%/2.399% pivot zone before renewed basing and a resumption of the LONG TERM BEAR TREND to 3.45%/3.50%. Having said that, we cannot recommend longs HERE. After an impulsive decline a market will correct higher before the downtrend resumes. Wait for a pullback into the 2.905%/2.960% before entering into longs. PATIENCE WILL BE REWARDED.

Throughout this move the curve should maintain its strong positive correlation with yields (inverse correlation with price). Looking specifically at 5s30s, we look for a base into 205.2bps/201.0bps from which a counter trend steeping bounce is likely into 225.0bps/230.9bps.
 
Finally, we remain equity market bulls.

The ESH4 intra-day consolidation below 1846.50 is best described as a bullish continuation pattern, with a break of 1846.50 clearing the way for 1865/1876. However, seasonality and the slope of the volatility curve say that once these targets are reached, WATCHOUT.

Seasonals turn much less constructive once February rolls around and the ratio of 3m-to-1m implied volatility is fast approaching the 1.20 level that traditionally coincides with complacency and market corrections

via Zero Hedge http://ift.tt/KDpyyR Tyler Durden

Americans have doubted the NSA – and Obama’s intention to rein in its spying – ever since the Snowden leaks started.

People didn’t buy Obama’s “big speech”. And see this.

Polls show that – even after the speech – Americans ain’t buying NSA’s claims.

Indeed, the only effect of the NSA and White House’s massive propaganda campaign is to destroy what little remaining trust the American people still had in their government.

Indeed, government representatives have been caught lying so often – and have so blatantly disregarded what people want to help out the fatcats – that very few people like their politicians, and people are more afraid of the government than of terrorists.

via Zero Hedge http://ift.tt/LC212m George Washington

The world may or may not have closure on the IRS’ targeting of Conservative groups (it doesn’t), but by the time the media is finished with Chris Christie, he will be too. Case in point: today’s report from the Hill that as a result of Bridgegate, the New Jersey Govenor has seen his popularity plummet in a head-to-head match-up against Hillary Clinton, based on a new Quinnipiac poll. “Christie dropped 9 percentage points in the poll, and now trails Clinton 46 percent to 38 percent in a potential general election matchup. That reverses a December poll that showed Christie leading Clinton 42 percent to 41 percent.“

Where Christie suffered the biggest loss is the one constituency that would be critical if the governor is to be successful in the 2016 elections against Hiillary: independents. 

The biggest turnaround comes from independent voters. Christie bested Clinton among independents by 15 percentage points in December. Now he trails her by 1 percentage point.

 

The amount of voters who believe Christie would make a good president has also dropped by 14 points in a month. Thirty-five percent of people think he would make a good president — down from 49 percent in December.

 

Thirty-six percent of voters think he would not make a good president, up from 31 percent last month.

Within the GOP, Christie’s status remains stable, where he ranks in third place with 12% of the vote, behind Rep. Paul Ryan (R-Wis.) and Sen. Rand Paul (R-Ky.), the same as last month.

However, the damage may be worse. As was made abundantly clear over the weekend, the mayor of Hoboken, N.J. Dawn Zimmer, accused Christie’s administration of threatening to hold up Hurricane Sandy relief funds, unless a private development was approved. This despite her tweet from just this very August saying that “I am very glad Governor Christie has been our (governor).”

Since the Qunnipiac poll was conducted before those allegations were made, the ultimate damage for Christie may be far greater… Or far less, depending if independents see Democrats as now piling in indiscriminately (including, somehow, Olympic sprinter Carl Lewis).

That said, all of this is nothing but entertaining fodder for easily-distracted masses. For those curious about the “important” people, we direct your attention to Davos where those who really matter are situated. That said, good luck getting within 500 meters without the proper, very expensive accreditation confirming one is a sycophant member of the fawning, “access-starved” media, or a bulletproof vest…

via Zero Hedge http://ift.tt/KzWvgg Tyler Durden

Submitted by Charles Hugh-Smith of OfTwoMinds blog,

The domino of retail CRE will not fall in isolation; it will topple the domino of debt next to it.

That the retail trade is stagnating has been well-established: for example, The Retail Death Rattle (The Burning Platform).

Equally well-established is the vulnerability of the bricks-n-mortar commercial real estate sector to this downturn: yesterday’s analysis by Mark G. makes the case:After Seven Lean Years, Part 2: US Commercial Real Estate: The Present Position and Future Prospects.

I’d like to extend Mark’s excellent analysis a bit because it suggests that the retail CRE (commercial real estate) sector will likely be the first domino to fall in the next financial crisis–the one we all know is brewing.

Let’s start with two charts of retail that I have marked up: the first is a chart of retail traffic from The Burning Platform story above. Note the phenomenal building boom in retail space from 2000 to 2008: nine straight years of adding about 300 million square feet of retail space each year.

The second chart shows department store sales, which fell by 15% during the retail building boom.

It might be possible to argue that this additional 2.7 billion square feet of retail space was needed as competitors ate the department store chains’ lunches, but let’s start by considering the foundation of retail sales: consumer income and credit.

One way to measure income to adjust it for inflation (i.e. real income) and measure it per person (per capita) on a year-over-year (YoY) basis. Notice how real income per capita has absolutely cratered in the “too big to fail” quantitative easing (QE) era masterminded by the Federal Reserve: if this is success, I’d hate to see failure.

Another way to measure median household income:

There’s a big problem with both per capita and median income measures: a significant gain in the the top 10%’s income will mask the decline in the bottom 90%’s income. If households earning $150,000 annually get a boost to $200,000, that $50,000 increase not only offsets the decline of nine households who saw their income decline from $35,000 to $31,500 annually, but pushes both the median and per capita income metrics higher even as 9 of 10 households experienced a 10% decline in income.

The point here is that the declines are far deeper for the bottom 90% than shown on these charts, as the top 10%’s increase in income has skewed median and per capita income higher. We can see this clearly in this chart:

Notice how the income of the top 10% diverged from the bottom 90% once the era of financialization and asset bubbles started in the early 1980s. Each asset bubble–housing in the late 1980s, tech in the 1990s and housing again in the 2000s–nudged the incomes of the bottom 90% briefly into marginally positive territory while it spiked the incomes of the top 10% into the stratosphere.

There are only two ways households can buy stuff: with income or credit/debt, as in charging purchases on credit cards. We’ve seen that income has tanked for the bottom 90%; how about credit/debt?

Courtesy of Chartist Friend from Pittsburgh, we can see that revolving consumer credit has flatlined:

There’s another component to the erosion of bricks-n-mortar and the ascent of eCommerce, as Chartist Friend from Pittsburgh explains:

This M2 (money) velocity chart is better because it reminds us of the days when you would drive to the mall to make a purchase, and while you were there you’d stop at the food court to have lunch, and then maybe you’d walk around afterwards and see some other item you wanted to buy, or run into friends and decide to catch a movie or have a drink, etc. At the mall there are lots of ways for money to change hands – online not so much.

Fewer trips to the mall (correlated to maxed out credit cards, declining real disposable income and the ease of online shopping) also translates into fewer miles driven and fewer gallons of gasoline purchased:

All this boils down to one simple question: can the top 10% (roughly 11 million households) support the billions of square feet of retail space that were added in the 2000s? If the answer is no, as it clearly is, then the retail CRE sector is doomed to implode.

Let’s try a second simple question: what’s holding the retail CRE sector up? Answer: leases that will soon expire or be voided by insolvency, bankruptcy, etc. as retailers close stores and shutter their businesses.

One last question: who’s holding all the immense debt that’s piled on top of this soon-to-collapse sector? The domino of retail CRE will not fall in isolation; it will topple the domino of debt next to it, and that will topple the lenders who are bankrupted by the implosion of retail-CRE debt. And once that domino falls, it will take what’s left of the nation’s illusory financial stability down with it.

via Zero Hedge http://ift.tt/KzWoRT Tyler Durden

DSC07926

I’m rapidly unveiling what’s been brewing in the BoomBust labs over the last few months – UltraCoin an intelligent derivative layer of smart financial contracts that sit on top of the Bitcoin architecture. In short, the recreation of the banking industry in software – without the trust and counterparty risk issues!

For those of you who are still skeptical re: cryptocurrencies, I please read the most excellent article by David Z. Morris, which also happens to grace the front page of Fortune magazine today.

Fortune Front Cover

I’ll excerpt some choice snippets:

Some still doubt bitcoin’s usefulness and durability, but 2014 may leave skeptics even further behind — developers and entrepreneurs are already hard at work building features on top of the Bitcoin protocol that will allow for the decentralized execution of financial services, from currency hedging to loans to stock issuance to rental and purchase contracts…

In the long term, peer-to-peer finance threatens to weaken banks and other financial agents just as peer-to-peer file sharing did the music industry –– and some of the architects of this financial Napster seem gleeful about the possibility.

Ya damn skippy!!!

 That means loans without banks, contracts without lawyers, and stocks without brokers, executed and recorded across hundreds of servers at all corners of the earth.

__________________

Independent entrepreneurs are also working to build this infrastructure. One of these is Reggie Middleton, currently building a client called BTC Swap.

This will be marketed as UltraCoin! Wasn’t completely ready for the interview, but will be shown live at the North American Bitcoin Conference in Miami Beach this weekend!

Middleton, gravelly voiced, dapper, and businesslike, doesn’t fit the stereotype of woolly young bitcoin developers. But he slyly describes himself as “not quite an anarchist,” and BTC Swap is a shot directly across the bow of the financial industry.

Believe it!

Still in early development, BTC Swap is planned to facilitate a variety of what Middleton calls “Zero-Trust Digital Contracts,” which recreate financial functions in software code by matching offered and desired transactions between parties without the need for intermediary institutions. Because these contracts are automated, instantaneous, and executed with assets already represented in the Bitcoin blockchain, Middleton says they eliminate counterparty risk while also subtracting conventional banking and brokerage fees.

David was correct in that it was in early development when he saw it, but we’ve been busting our collective asses (analysts, financial engineers, software engineers, programmers, website designers, the whole crew) and we’ll not only be demonstrating live but will be trading risk down in Miami, right in front of your eyes!

The most immediate function Middleton envisions for his system is for hedging bitcoin against existing national currencies. With bitcoin’s valuation still showing huge volatility, Middleton claims the availability of distributed hedging will both ensure the value of bitcoin for individuals holding the asset and provide systemic stability. (Given persistent skepticism, there should be plenty of takers to short bitcoin against the dollar.) And the entire system relies on decentralization for its security and integrity: “My contracts are peer-to-peer,” says Middleton. “If you hack my servers, there’s nothing to get.” Somebody call Target (TGT).

Somebody? Anybody? Target, drop me a line at reggie.middleton at ultra-coin.com if you want my assistance in getting in on this distributed, peer-to-peer bitcoin thingy. My next post will show how my UltraCoins can add 15% to Overstock.com’s bottom line. That’s pretty damn good if you ask me! As a matter of fact, it’s pretty damn good even if you didn’t ask me

Such hedging functions have particularly unique promise because of the extremely low transaction costs of peer-to-peer currency. Bitcoin makes microtransactions ranging down to fractions of a cent viable, but Middleton says that “right now, if you do micropayments, the volatility of bitcoin can really take you out.” Because of the low cost of Middleton’s swaps, “I can let [payees] manage risk and decrease volatility at the micro-level.”

Please pardon me for the heavy excerpts taken from this article, but it is really… just.. that.. good!!! And it gets even better. Check it out:

The functions that advocates say could be automated through the Bitcoin network seem nearly endless, including peer-to-peer investment funds, Kickstarter-like crowdfunding, binding arbitrations, and even non-financial transactions such as naming rights management and encrypted communication.

I actually have much of this stuff oven already. All I need is the funds to help accelerate development becuase “you know who” is likely to get their bonus pool panties in a bunch and start coming after me

And all could be executed without a cut for intermediaries. Bitcoin partisans, from developers down to rank-and-file users, often seem to revel in the idea that they are threatening the control and profits of Wall Street institutions, who they see as rent-seeking fat cats. If it were limited to the loss of fees on payments and transfers, bitcoin’s threat to existing financial institutions would still be substantial. But with a full array of commission-free financial services on the horizon, there is even more reason to take heed.

Oh, and I love this part…

Middleton sounds a bit like an 18th-century pirate striking back against the Empire when he declares that “what I’m doing right now is a direct threat to fiat merchant banking.” For him, excitement over value fluctuations in the bitcoin currency is missing the point: “It’s not a threat as people sit there and ponder whether bitcoin is a bubble or not. But if people go through the protocol and use their imagination, the existing system is threatened.”

And here comes the rain on the parade

However, there is a substantial obstacle to this coming revolution. Despite the emergence in 2013 of entities like Coinbase that have drastically streamlined the process, it is still difficult to exchange bitcoin for national currencies in a quick, reliable manner. It’s unclear how Middleton’s automated dollar-bitcoin hedging will work without a lightning-quick and reliable dollar-bitcoin exchange platform.

UltraCoin was in early beta stage when David saw it. It’ll be ready to strut much of its stuff in Miami, making things much clearer.

So, the true “automation” of bitcoin functions that integrate with the economy as a whole may require a reconciliation with existing trading platforms.

Oh, I wouldn’t bet the farm on that one.

 Untitled

via Zero Hedge http://ift.tt/KzWlpl Reggie Middleton

Having been un-shunned and then re-shunned by the UN and US over the Syria peace conference, an Iranian news agency has confirmed that for the first time in history, Iran’s navy has dispatched warships on a mission to the Atlantic Ocean. No specific military mission or targets were announced but previous statements had discussed the move to protect the country’s cargo ships and oil tankers against pirate attacks. Iran’s Rear Admiral had a message of peace and friendship for the rest of the world and said the nation only sought to display its defensive capabilities (just like China, then?).

Via Times of Israel,

The flotilla, consisting of a Khark logistic and helicopter-carrier warship and Sabalan destroyer, could journey as much as 25,000 nautical kilometers in the next three months, Fars News reported Tuesday.

 

No specific military mission was identified, and no ports of call were mentioned.

 

Bidding farewell to the crews, Rear Admiral Seyyed Mahmoud Moussavi said Iran has a message of peace and friendship for the nations of the world and only seeks to display its defensive power capabilities.

 

But previous statements by high-ranking Iranian naval personnel had declared Iran’s intention to dispatch a next flotilla of warships to the high seas at around this date to protect the country’s cargo ships and oil tankers against pirate attacks.

 

According to navy Commander Rear Admiral Habibollah Sayyari, “The navy’s next flotilla will be dispatched to either the Pacific Ocean or the Atlantic on January 21 – February 20.” He underlined that the flotilla will pass through the Mediterranean Sea to reach the Atlantic Ocean.

 

Since November 2008, the Iranian navy has been operating anti-piracy patrols in the Gulf of Aden, after Somali buccaneers hijacked the Iranian-chartered cargo ship, MV Delight, off the coast of Yemen.

 

The Gulf of Aden — which links the Indian Ocean to the Mediterranean via the Suez Canal — is a critical energy corridor and the primary route for Persian Gulf oil shipped to Western markets.

Oil prices are spiking a little this morning though we are not sure the move is related to this action – perhaps just more reflective of the farce that the Syria peace conference has become.

via Zero Hedge http://ift.tt/1fWFGue Tyler Durden

Having been outspoken over capitalism and the rise of income inequality; for the first time, an address from the leader of the world’s 1.2 billion Catholics was read to the political and business elites at the World Economic Forum in Davos. Pope Francis pulled no punches as he implored attendees to remember that “humanity is served by wealth and not ruled by it,” and called for “decisions, mechanisms and processes directed to a better distribution of wealth.” The guilt-ridden tone was heavy as The Holy See admonished, “I wish to emphasize the importance that the various political and economic sectors have in promoting an inclusive approach which takes into consideration the dignity of every human person and the common good. I am referring to a concern that ought to shape every political and economic decision, but which at times seems to be little more than an after-thought.”

 

Via The Vatican,

To Professor Klaus Schwab, Executive Chairman of the World Economic Forum:

I am very grateful for your kind invitation to address the annual meeting of the WorldEconomic Forum, which, as is customary, will be held at Davos-Klosters at the end of this month. Trusting that the meeting will provide an occasion for deeper reflection on the causes of the economic crisis affecting the world these past few years, I would like to offer some considerations in the hope that they might enrich the discussions of the Forum and make a useful contribution to its important work.

Ours is a time of notable changes and significant progress in different areas which have important consequences for the life of humanity. In fact, “we must praise the steps being taken to improve people’s welfare in areas such as health care, education and communications” (Evangelii Gaudium, 52), in addition to many other areas of human activity, and we must recognize the fundamental role that modern business activity has had in bringing about these changes, by stimulating and developing the immense resources of human intelligence.

Nonetheless, the successes which have been achieved, even if they have reduced poverty for a great number of people, often have led to a widespread social exclusion. Indeed, the majority of the men and women of our time still continue to experience daily insecurity, often with dramatic consequences.

In the context of your meeting, I wish to emphasize the importance that the various political and economic sectors have in promoting an inclusive approach which takes into consideration the dignity of every human person and the common good. I am referring to a concern that ought to shape every political and economic decision, but which at times seems to be little more than an after-thought.

Those working in these sectors have a precise responsibility towards others, particularly those who are most frail, weak and vulnerable. It is intolerable that thousands of people continue to die every day from hunger, even though substantial quantities of food are available, and often simply wasted.

Likewise, we cannot but be moved by the many refugees seeking minimally dignified living conditions, who not only fail to find hospitality, but often, tragically, perish in moving from place to place.

I know that these words are forceful, even dramatic, but they seek both to affirm and to challenge the ability of this assembly to make a difference. In fact, those who have demonstrated their aptitude for being innovative and for improving the lives of many people by their ingenuity and professional expertise can further contribute by putting their skills at the service of those who are still living in dire poverty.

What is needed, then, is a renewed, profound and broadened sense of responsibility on the part of all. “Business is – in fact – a vocation, and a noble vocation, provided that those engagedin it see themselves challenged by a greater meaning in life” (Evangelii Gaudium, 203). Such men and women are able to serve more effectively the common good and to make the goods of this world more accessible to all. Nevertheless, the growth of equality demands something more than economic growth, even though it pre-supposes it. It demands first of all “a transcendent vision of the person” (Benedict XVI, Caritas in Veritate, 11), because “without the perspective of eternal life, human progress in this world is denied breathing-space” (ibid.).

It also calls for decisions, mechanisms and processes directed to a better distribution of wealth, the creation of sources of employment and an integral promotion of the poor which goes beyond a simple welfare mentality.

I am convinced that from such an openness to the transcendent a new political and businessmentality can take shape, one capable of guiding all economic and financial activity within the horizon of an ethical approach which is truly humane. The international business community can count on many men and women of great personal honesty and integrity, whose work is inspired and guided by high ideals of fairness, generosity and concern for the authentic development of the human family. I urge you to draw upon these great human and moral resources and to take up this challenge with determination and far-sightedness. Without ignoring, naturally, the specific scientific and professional requirements of every context, I ask you to ensure that humanity is served by wealth and not ruled by it.

Dear Mr Chairman and friends, I hope that you may see in these brief words a sign of my pastoral concern and a constructive contribution to help your activities to be ever more noble and fruitful. I renew my best wishes for a successful meeting, as I invoke divine blessings on you and the participants of the Forum, as well as on your families and all your work.

via Zero Hedge http://ift.tt/LOIiwU Tyler Durden

Having been outspoken over capitalism and the rise of income inequality; for the first time, an address from the leader of the world’s 1.2 billion Catholics was read to the political and business elites at the World Economic Forum in Davos. Pope Francis pulled no punches as he implored attendees to remember that “humanity is served by wealth and not ruled by it,” and called for “decisions, mechanisms and processes directed to a better distribution of wealth.” The guilt-ridden tone was heavy as The Holy See admonished, “I wish to emphasize the importance that the various political and economic sectors have in promoting an inclusive approach which takes into consideration the dignity of every human person and the common good. I am referring to a concern that ought to shape every political and economic decision, but which at times seems to be little more than an after-thought.”

 

Via The Vatican,

To Professor Klaus Schwab, Executive Chairman of the World Economic Forum:

I am very grateful for your kind invitation to address the annual meeting of the WorldEconomic Forum, which, as is customary, will be held at Davos-Klosters at the end of this month. Trusting that the meeting will provide an occasion for deeper reflection on the causes of the economic crisis affecting the world these past few years, I would like to offer some considerations in the hope that they might enrich the discussions of the Forum and make a useful contribution to its important work.

Ours is a time of notable changes and significant progress in different areas which have important consequences for the life of humanity. In fact, “we must praise the steps being taken to improve people’s welfare in areas such as health care, education and communications” (Evangelii Gaudium, 52), in addition to many other areas of human activity, and we must recognize the fundamental role that modern business activity has had in bringing about these changes, by stimulating and developing the immense resources of human intelligence.

Nonetheless, the successes which have been achieved, even if they have reduced poverty for a great number of people, often have led to a widespread social exclusion. Indeed, the majority of the men and women of our time still continue to experience daily insecurity, often with dramatic consequences.

In the context of your meeting, I wish to emphasize the importance that the various political and economic sectors have in promoting an inclusive approach which takes into consideration the dignity of every human person and the common good. I am referring to a concern that ought to shape every political and economic decision, but which at times seems to be little more than an after-thought.

Those working in these sectors have a precise responsibility towards others, particularly those who are most frail, weak and vulnerable. It is intolerable that thousands of people continue to die every day from hunger, even though substantial quantities of food are available, and often simply wasted.

Likewise, we cannot but be moved by the many refugees seeking minimally dignified living conditions, who not only fail to find hospitality, but often, tragically, perish in moving from place to place.

I know that these words are forceful, even dramatic, but they seek both to affirm and to challenge the ability of this assembly to make a difference. In fact, those who have demonstrated their aptitude for being innovative and for improving the lives of many people by their ingenuity and professional expertise can further contribute by putting their skills at the service of those who are still living in dire poverty.

What is needed, then, is a renewed, profound and broadened sense of responsibility on the part of all. “Business is – in fact – a vocation, and a noble vocation, provided that those engagedin it see themselves challenged by a greater meaning in life” (Evangelii Gaudium, 203). Such men and women are able to serve more effectively the common good and to make the goods of this world more accessible to all. Nevertheless, the growth of equality demands something more than economic growth, even though it pre-supposes it. It demands first of all “a transcendent vision of the person” (Benedict XVI, Caritas in Veritate, 11), because “without the perspective of eternal life, human progress in this world is denied breathing-space” (ibid.).

It also calls for decisions, mechanisms and processes directed to a better distribution of wealth, the creation of sources of employment and an integral promotion of the poor which goes beyond a simple welfare mentality.

I am convinced that from such an openness to the transcendent a new political and businessmentality can take shape, one capable of guiding all economic and financial activity within the horizon of an ethical approach which is truly humane. The international business community can count on many men and women of great personal honesty and integrity, whose work is inspired and guided by high ideals of fairness, generosity and concern for the authentic development of the human family. I urge you to draw upon these great human and moral resources and to take up this challenge with determination and far-sightedness. Without ignoring, naturally, the specific scientific and professional requirements of every context, I ask you to ensure that humanity is served by wealth and not ruled by it.

Dear Mr Chairman and friends, I hope that you may see in these brief words a sign of my pastoral concern and a constructive contribution to help your activities to be ever more noble and fruitful. I renew my best wishes for a successful meeting, as I invoke divine blessings on you and the participants of the Forum, as well as on your families and all your work.

via Zero Hedge http://ift.tt/LOIiwU Tyler Durden