another site
Forget easy women, keg-standing frat-boys, and Richard Simmons twerking; this has to be the oddest mixed message marketing by the administration yet…
Perfect for the back of your VW Beetle…
Or your artist sketchpad…
Or your Apple laptop…
We are sure Christopher Gadsden will get the irony as he rolls over in his grave…
via Zero Hedge http://ift.tt/1jdOFZz Tyler Durden
As was reported earlier, the Turkish premier, embroiled in what increasingly appears a career terminating corruption and embezzlement scandal (it is not exactly clear yet just how involved the CIA is in this particular upcoming government overthrow), blocked Turkey’s access to Twitter last night, hours after vowing to “destroy twitter.” The idiocy of this escalation against dissemination of information in the internet age needs no comment. Well maybe one. This is what we said in our post from this morning: “since Turkey will certainly not stop at just Twitter, here is what is coming next: “Last week, Erdogan said the country could also block Facebook and YouTube.” It now appears that at least half of this threat is about to materialize because moments ago Google just announced that it would not remove a previously uploaded video, one in which Erdogan tells his son to hide money from investigators (one which can be seen here), and which Erdogan demanded be pulled from Google (seemingly unaware that by doing so he simply made sure that everyone saw it). This means that within days, if not hours, Turkey will likely block Google-owned YouTube, if not Google itself.
Google Inc. has declined Turkish government requests to remove YouTube videos alleging government corruption, people familiar with the matter said, the latest sign of resistance to a crackdown against social media led by Turkish Prime Minister Recep Tayyip Erdogan.
Turkish authorities have in recent weeks asked Google to block the videos from YouTube’s Turkish website, the people familiar with the matter said. But amid a national scandal over corruption allegations, Google refused to comply because it believes the requests to be legally invalid, the people added.
Google’s refusal to remove videos raises the specter that Turkey could move to block access to YouTube within the country, after blocking the microblogging service Twitter Inc. late Thursday night. Both sites have been central conduits for allegations of corruption against Mr. Erdogan’s government and faced public threats of a blackout by Mr. Erdogan.
Some people within Google had feared a YouTube blackout could be imminent, after the Twitter takedown, the people familiar with the matter said. “We feel an immediate threat,” one of the people said.
Sadly in Erodgan’s berserk regime, this is not only possible but very probable.
Still, one wonders why Google would not relent in this particular case, after recent revelations that the major internet companies have cooperated over the years with the NSA, contrary to their vocal denials in public. Surely, compromising with its principles and ethics would be nothing new to a company which once swore to “do no evil.” Especially since Google realizes quite well by not complying with the government’s demand it is making the overthrow of Erdogan’s regime, violent or otherwise, that much more likely.
Either way, even without Google’s aid it already appeared that Erdogan’s days are numbered when not only the opposition but the figurehead president himself condemned the Twitter blockage.
Opposition politicians decried the move as that of a dictatorship. Turkish President Abdullah Gul, who has a largely symbolic role, also came down against the blackout, using Twitter to write that “wholesale shuttering of social media platforms cannot be approved.”
Alas, with the government in full out despotic mode, however one which would work in the 1970s but certainly not in an age of instant information exchange, further escalations of locking out internet provides will certainly accelerate until finally the information and entertainment starved country says enough.
We eagerly look forward to see which particular pro-Western agent is groomed to take Erdogan’s place. After all remember: those Qatari gas pipelines that in a parallel universe, one without Putin, would have already been transporting nat gas under Syria, would enter Europe under Turkey.
Which makes one wonder – just what is the real goal here?
As for Turkey, we urge the population, largely removed from all Machiavellian moves behind the scenes, to catch up on their favorite YouTube clips: they will shortly disappear for good.
via Zero Hedge http://ift.tt/1lYXO5w Tyler Durden
Authored by Joyce Poon, Gavekal Asia Research Director,
In the 16 months since Japanese Prime Minister Shinzo Abe launched his bold plan to reflate Japan’s shrinking economy the yen has depreciated by 22% against the dollar, 28% against the euro and 24% against the renminbi. The hope was to stimulate trade and push the current account decisively into the black. Yet the reverse has occurred. Japan’s external position has worsened due to anemic export growth and a spiraling energy import bill: in January it recorded a record monthly trade deficit of ¥2.8trn ($27.4bn). Having eked out a 0.7% current account surplus in 2013, Japan may this year swing into deficit for the first time since 1980. So why is the medicine not working?
The standard response revolves around timing issues: the so called J-curve effect usually means that the boost to exports after a currency devaluation lags the rise in the value of imports by about 12-18 months. In addition, consumers may be busily buying goods ahead of April’s scheduled sales tax increase, temporarily jacking up imports. On a more structural note, there is also the suspicion that exports are not benefitting from the cheaper yen partly because so much production has been pushed offshore.
This may all be true, but there is more to the story than the trade data. After all, a big devaluation has a ricochet effect across the broad economy that changes the outlook for producers, consumers, the government and providers of capital. The transmission mechanism can be thought as working in the following way. Consumers are immediately hit with an implicit “tax” as imported goods cost more, while export-oriented firms get an effective subsidy. In the capital markets, the effect is to lower the value of domestic bonds in foreign currency terms, with the result that yields rise. This means that the cost to the government of financing its deficit rises, forcing a reduction in government spending. As a result of these effects, resources are shifted from the household and government sectors and into the corporate sector. The effect of this resource reallocation should be to boost productivity, which in turn initiates a virtuous circle of rising incomes and ultimately higher consumption.
Unfortunately, Japan defies this textbook paradigm because in addition to devaluing, it is also engaging in massive quantitative easing. This keeps bond yields low, enabling the government to keep financing its deficit at low cost. There is thus no incentive for the government to cut spending— and in fact the consumption tax hike will be offset by even more spending. Furthermore, low bond yields suppress the financial income of household savers.
The end result of all this is that the government bears none of the burden of the adjustment and the household sector bears all of it, through higher import costs and lower financial income. With the household sector’s spending power thus crimped, companies have no incentive to invest in domestically-focused production. Instead, all their investment will be geared toward exports—mercantilism on steroids.
A mercantilist policy can feel like it is working during periods when strong global growth allows excess exports to be absorbed without ruinous price falls. Between 2001 and 2006 the yen devalued by almost 40% on a real effective exchange rate basis and Japan’s current account improved sharply. Japan may not have won back its global competitiveness (its share of the global export pie fell by 1.5 percentage points in the period), but strong external conditions did allow exports to grow 9% a year in dollar terms.
Today, Japanese exporters do not face such benign conditions and any successful mercantilist boost can only come from eating the lunch of rivals.
Since all the leading economies favor policies that support production over consumption, the world is getting more goods than it can absorb. The result is ongoing price declines, which have the effect of deferring the ultimate global recovery.
What this means is that Japan’s ultra-mercantilism is self defeating. In a global environment of weak demand and disinflation any volume increase in its exports will have to be paid for through price reductions. To be sure, in the short term the trade balance is likely to improve somewhat as a result of the J-curve effect taking hold. But in the longer term Japan looks to be entering a cycle where it must run harder just to stand still.
There are a few ways this could all end happily. Japan might embrace a structural reform agenda that boosts productivity, raises wages and pushes up domestic demand. Alternatively, world growth could surprise on the upside, creating a rerun of 2001-06. Energy prices could collapse, closing Japan’s trade deficit and reducing the incentives for mercantilist policy. But we are not holding our breath on any of these possibilities.
Instead, Japan’s most likely path is that the yen keeps falling, the BoJ keeps printing money, and the dollar value of exports stagnates as devaluation and price cuts offset any volume increases. And so, paradoxically, the current account will continue to deteriorate into permanent deficit, despite ultra-mercantilism. At this point the game will have changed in Japan and Abenomics will have manifestly failed to deliver on its stated objectives.
via Zero Hedge http://ift.tt/1jjfTK4 Tyler Durden
With home-ownership rates collapsing and the likelihood of 'wealth taxes' potentially weighing on even the oligarchs and 1%-ers willingness to throw cash at US housing, we thought the following rusting hulks of a bye-gone era in a strorage yard deep in Middle America…
The American Homeownership Dream is officially dead…
And here are the bodies…
h/t SandP
via Zero Hedge http://ift.tt/1inhzCU Tyler Durden
Submitted by Pater Tenebrarum of Acting-Man blog,
Look who is warning us again about the great harm conspiracy theories are doing to the minds of impressionable citizens everywhere: Cass Sunstein has emerged at Bloomberg, to once again plead for 'correction' of the many conspiracy theories that are disseminated on that pesky new medium, the intertubes, seemingly without inhibition. Contrary to the infamous paper in which he described how to precisely combat the spreading of false information that lacks the government's seal of approval, he doesn't list his favored censorship and disinformation techniques outright this time, but it is certainly implied that 'something must be done'.
With regard to conspiracy theories, there is a long history of dangerous thought entering the minds of deluded citizens. There were people who long doubted the official version of the Gulf of Tonkin incident, or those who believed that the government's minions were capable of thinking up other 'false flag' activities such as 'Operation Northwoods', or the poor confused souls who argued that Iraq's 'weapons of mass destruction' were a trumped-up pretext for war based on thoroughly politicized intelligence, or the mean-spirited traitors who charged that the US military killed a Reuter journalist and his helpers in Iraq and then covered it up, or the completely delusional paranoiacs who asserted for many years that the NSA was literally recording everything. Next they're going to say that the official version of the WTC attack lacks credibility, in spite of its enshrinement as unassailable truth following the government's decision to investigate itself!
We incidentally even know of certain people who routinely assert that the scientific and utterly wertfrei monetary policy enacted by well-meaning central banks is harmful and favors certain groups in society over others! Surely such highly dangerous attempts to foment popular dissent need to be properly suppressed before they irreparably disturb the social harmony of the Collective.
Also, consider for a moment the honest and well-intentioned politicians and bureaucrats who advanced the schemes listed above in the national interest. It was only their self-less concern for our well-being that drove them to make a tiny mistake here or there. By accusing them of nefarious motives, the conspiracy theorists have undoubtedly deeply hurt their feelings. It is an outrage crying out for rectification.
Cass Sunstein certainly knows what needs to be done to ensure that the geistige Volksgesundheit is maintained. The intertubes simply must be corralled to reduce the great harm all this conspiracy theorizing inflicts. In his 2008 paper 'Conspiracy Theories' written with Adrian Vermeule, he proposed the following eminently reasonable measures:
- Government might ban conspiracy theorizing.
- Government might impose some kind of tax, financial or otherwise, on those who disseminate such theories.
- Government might itself engage in counter-speech, marshaling arguments to discredit conspiracy theories.
- Government might formally hire credible private parties to engage in counter-speech.
- Government might engage in informal communication with such parties, encouraging them to help."
Surely number (1) would be most effective and help to conserve resources. But where would be the fun in that? Intellectual combat with the deluded masses is surely more satisfying. We are therefore informed that:
However, the authors advocate that each "instrument has a distinctive set of potential effects, or costs and benefits, and each will have a place under imaginable conditions. However, our main policy idea is that government should engage in cognitive infiltration of the groups that produce conspiracy theories, which involves a mix of (3), (4) and (5)”
We should be grateful that these social engineers are thinking up such excellent ways of protecting the already overloaded neural circuits of the citizenry. Incidentally, it seems actually quite possible that the NSA has heard about these useful proposals, considering that its agents “Infiltrate the Internet to Manipulate, Deceive, and Destroy Reputations” according to Glenn Greenwald. See, we are already protected!
As a result, have every reason to feel all 'snuggly and secure', as Mark Fiore points out in the video below, which nicely summarizes why we have absolutely nothing to fear.
Snuggly and secure! You have nothing to fear, citizen! As long as you have nothing to hide, are not blowing any whistles you treasonous leaker, or exhibit undue interest in the Bill of Rights.
Sunstein's recent Bloomberg article is quite interesting though in that it nicely demonstrates the demagogic techniques employed in advancing statist interests. One can immediately see that he has learned a few lessons from the push-back he received the first time around. As noted above, he refrains this time from telling us in detail what government should actually do in order to 'reduce the harm from conspiracy theories'.
He merely asserts that such harm exists, encouraging readers to think about how it might be reduced. He mentions in closing that 'we' need to “persuade the conspiracy theorists to find their way around to the truth”, but he doesn't say how.
Whenever an author invokes 'us', asserting that 'we' must do this or that, what he really means is actually that the government's apparatus of coercion and compulsion must be set into motion to attain certain goals the author approves of. In recent weeks we have e.g. heard that 'we' must bail out the Ukraine financially, or that 'we' must punish Mr. Putin and his henchmen with sanctions, but this is of course not a call to voluntarily engage in these activities. It is simply an announcement, informing us that those steering the government apparatus will do all these things. 'We' only figure in the sense that 'we' are going to pay for it all (and certainly not voluntarily).
So when Sunstein says that 'we' must 'help' those poor deluded conspiracy theorists, he is actually saying the same things he was saying before, only in a less direct manner. It means the government must intervene.
The other technique on display is the 'straw man' technique. Discussing conspiracy theories in detail, Sunstein deliberately lists many that can either be very easily disproved, or of which it can be assumed that most readers will immediately classify them as nonsense.
At one point he tries to assure us that his approach is evenhanded by conceding that a number of conspiracy theories have later turned out to be the truth, but he immediately reverts to his previous condescending tone, belittling those who show an interest in investigating government misdeeds. He lists three examples: the Watergate scandal, the CIA's MK Ultra program, and the fact that 'aliens have really landed in Roswell' – in other words, he only lists two examples and immediately downplays their importance by adding a plainly ridiculous third one to the list.
It could even be conceded arguendo that Sunstein succeeds in demonstrating that harm is sometimes inflicted, as e.g. in the context of conspiracy theories surrounding vaccines (we actually don't know what these theories assert, not having delved into the subject in detail; however, the history of modern medicine certainly suggests that a great many scourges that have plagued mankind have been successfully vanquished with the help of vaccines).
So it may be true that there are a small handful of cases when belief in a conspiracy theory might actually harm those believing it. But so what?
Sunstein's proposals as formulated in his original paper (and we have no reason to believe that he has changed his opinion on these points) are infinitely more harmful. Life is never without risks, but the wrongheaded belief held by social engineers that the government must eliminate every last one of them by intervening in every nook and cranny of our lives can ultimately only end in tyranny.
The ubiquitous and all-encompassing surveillance state that has been installed to allegedly 'protect us from terrorists' is actually an excellent example of how extremely misguided these attempts to shield us from every conceivable evil are. The reality is in this case that the threat is statistically minuscule; as we have previously noted, more Americans die from drowning in their bathtubs and even from merely falling off a chairs than from terrorist attacks. And yet, no-one has proposed to spend tens of billions every year to keep tabs on the citizenry's evil furniture, at least not yet. The danger that the gathering of every last scrap of data will be abused is orders of magnitude greater than the danger emanating from terrorists.
Central bank policy is yet another example: the attempt to spare us the pain of economic busts only leads to even bigger economic catastrophes down the road. This has only recently been demonstrated when the interventions following the bursting of the technology bubble resulted in its replacement by the housing bubble. In the end, a far more painful recession than the one the initial intervention sought to mitigate resulted. The same principle will be demonstrated again when the current echo bubble bursts at some point in the future.
Finally, it should be clear that what one might term a 'conspiracy theory of history' often comes a lot closer to the truth than the officially approved line that is taught in public schools. The one thing that should be clear to every astute observer is that governments routinely lie. They sometimes even admit it, such as JC Juncker did in his function as president of the euro group of finance ministers (this incident serves as an example of how brazen the ruling class has become in modern times; they don't even care anymore how transparent they are).
The fact that governments are lying routinely and are keeping a great many of their activities secret in allegedly 'free societies' is what provides the fertilizer for conspiracy theories. Even in the rare cases when governments tell the truth, many people are no longer inclined to believe them. Distrust of government is however not akin to a mental disease – it is rather a sign that one is alert and keeping one's eyes open. It is also a necessary and healthy approach that provides a small, but important contribution to keeping government abuses in check.
As Murray Rothbard pointed out:
“Anytime that a hard-nosed analysis is put forth of who our rulers are, of how their political and economic interests interlock, it is invariably denounced by Establishment liberals and conservatives (and even by many libertarians) as a "conspiracy theory of history," "paranoid," "economic determinist," and even "Marxist." These smear labels are applied across the board, even though such realistic analyses can be, and have been, made from any and all parts of the economic spectrum, from the John Birch Society to the Communist Party. The most common label is "conspiracy theorist," almost always leveled as a hostile epithet rather than adopted by the "conspiracy theorist" himself.
It is no wonder that usually these realistic analyses are spelled out by various "extremists" who are outside the Establishment consensus. For it is vital to the continued rule of the State apparatus that it have legitimacy and even sanctity in the eyes of the public, and it is vital to that sanctity that our politicians and bureaucrats be deemed to be disembodied spirits solely devoted to the "public good." Once let the cat out of the bag that these spirits are all too often grounded in the solid earth of advancing a set of economic interests through use of the State, and the basic mystique of government begins to collapse.”
(emphasis added)
And this, in a nutshell, is what is really behind Mr. Sunstein's concern with 'conspiracy theories'. It is all about preserving the State's perceived right to rule by letting nothing intrude on the notion that politicians and bureaucrats are 'disembodied spirits solely devoted to the public good' rather than people who pursue their own personal interests.
Former government advisor Cass Sunstein: still concerned about 'conspiracy theories'
via Zero Hedge http://ift.tt/OIQW0N Tyler Durden
“Ghost gazumping is when the seller asks the buyer for more money at the last minute, even though there is no rival offer.”
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Via Planet Ponzi: The Chancellor Said This Time Would Be Different
via Zero Hedge http://ift.tt/1f0OhGp williambanzai7
Despite the total collapse (flattening) in the Treasury yield curve in the last 2 days, Citi's FX Technicals group is convinced that we have seen a turn in fixed income that will see significantly higher yields in the years ahead and notably higher yields by this yearend also. Furthermore, they believe this will initially come from the belief in a continued taper, and the curve will initially steepen (2’s versus 5’s and 2’s versus 10’s). This normalization, they add, will be a good thing – QE encourages misallocation of capital and poor business decisions which has a negative feedback loop into the economy – but add (as long as yields do not go too far too fast like last year).
Citi FX Technicals,
We continue to expect a return to test and likely break the trend highs posted in Sept 2013 (2 and 5 year yields) and Jan 2014 (10 and 30 year yields)
2’s versus 5’s chart (One of our favourite charts of all time) making a comeback?
This is a chart that we have historically referred to as “the best interest rate chart in the World”
On 3 occasions in the last quarter century we have seen this chart go to +161 basis points and on 3 occasions we have seen it move to the area around -20 basis points. In 5 of those 6 periods we have seen this being a precursor to a shift in Fed policy.
The exception to this rule was when we turned off the +161 level seen in 2009. In the prior 2 occasions the flattening off this level was a “bear-flattening” as the market anticipated that we were moving to a tightening in Fed policy (Just as the rises from inversion were bull steepenings as the market anticipated an easing of Fed policy.)
The flattening we saw from the 2009 peak was NOT a bear flattening and it was NOT the market anticipating a Fed tightening but quite the contrary. The flattening was “interference”, more commonly known as QE. This caused the curve to bull flatten as Fed monetary policy moved to the long end of the curve….so it really was “different this time”
However, in early May 2013 as this curve stood around +45 basis points we got the very first compelling suggestion from the Fed (Ben Bernanke) that this ultra-loose unorthodox monetary policy may have served his purpose and that tapering may come into play (Not a moment too soon in our view)
Since then the curve has been “bear steepening”. Some people (the Fed included) will tell you that this is not tightening. Wake up call- If the part of the curve you are now playing in moves up in yield because of what you (the Fed) has said or done then you have been responsible for a tightening in monetary conditions. That is ok. It is the right thing to do, but call it like it is.
So long term rates are “normalizing”. Normalizing is not the “dirty word” that most people would like you to believe. Normalizing is a good thing. It starts to discourage misallocation of capital. It stops mispricing of risk. It forces companies to make investment/business decisions. It allows financial markets to function. Normal is better than abnormal.
So with the Fed “moving out of the way” long term yields headed higher and the curve above steepened again. We had no real concern with that, although felt that the initial move was “too far too fast” and might create a drag that would need time to offset.
In mid-March (A week after our bulletin on 07 March titled “Major reversal higher in US yields looks likely”) 10 year yields stood at 2.60%-Just shy of our 2.50% target expressed at the start of the year and just above the low of this year’s down move at 2.57%. More importantly that was the same level we had seen in last year’s up move by June 2013.
So after the initial surge in yields we have had the correction/consolidation necessary to “work that move off” (relatively unchanged levels for about 9 months) and set the platform, in our view, for the next move higher.
So what do we expect now?
US 2 year yield: New highs in the move look imminent
Following the recent 76.4% pullback the 2 year yield is now re-testing the Jan high at 43 basis points.
A close above would suggest gains towards the channel top at 59 basis points quite quickly.
A close above here would suggest that it could revisit the 2011 peak around 88-89 basis points.
US2 year yield minus Fed funds- Has it just become relevant again for the first time in 7 years?
Going back to the start of the Fed PUT era (beginning with Alan Greenspan, the Ben Bernanke and now Janet Yellen) all policy changes from the cycle low/high in the Fed funds rate have been preceded by a large gap opening up between the 2 year yield and the Fed funds rate ). This gap has regularly been in excess of 100 basis points before the Fed capitulates and moves short-term rates. (Including in 2007)
This may well suggest that we are going to have to see that break of 89 basis points on the 2 year yield and a move towards that 1.43% level before the Fed capitulates on the Fed funds rate (That normally happens earlier than they would guide) and raises short term rates.
If we look at the present Fed funds rate (Zero-25 basis points) this suggests that once we start heading into the 1.20-1.50% range in 2 year yields that a Fed hike is likely pretty imminent. As we mentioned above, we believe that a break of 89 basis points on the 2 year yield may well be the early warning sign that this development is materializing.
1994, 2004, 2014????. Might the shock be that the Fed could be grudgingly tightening by late 2014 (An equal time line to the 1994-2004 gap would suggest end November 2014) just as it was grudgingly easing by late 2007 despite being quite hawkish earlier that year?
US 5 year yield: breaking out of the triangle consolidation
Testing the triangle neckline at 1.73%
Above here resistance is met at:
– 1.86%: (Converged downward sloping and horizontal trend lines)
– 2.42%: Feb 2011 high
– 2.99%: June 2009 high.
US 10 year yield weekly chart- Set to head back to the trend highs.
Posted an outside week 2 weeks ago (As did every part of the curve from 2 year to 30 year yields) suggesting higher yields are in prospect.
We saw this in July 2012 and again in April 2013 as weekly momentum turned up.
That was a precursor to low to high moves of 70 and 144 basis points respectively (Average of about 107 basis points over 8 months).
If repeated, that would suggest the following by later this year (November)
– A repeat of the 2012 move would take us to 3.29%
– A repeat of the average would take us to 3.66%
– A repeat of the 2013 move would take us to 4.03%
A move through the double highs at 3.00-3.05% (Sept-Dec 2013) would suggest a topside acceleration. The top of this channel stands at 3.59% but is rising sharply and will converge with the horizontal resistance around 3.77% in early May.
US 10 year yield monthly chart- Back to test the channel top?
Along with the good resistance at 3.77% (Feb 2011 high) we have some good levels above there
– 3.80-3.85%- Long term channel top going back 20 years
– 4.00-4.01%- double top from June 2009/April 2010
– 4.27%- June 2008 peak
– 5.25-5.32%- 2007 cycle peaks
We are certainly convinced that we will go and re-test that area around 3.77-3.85% (Probably this year) with the potential to head higher still.
Citi's optimistic conclusion:
We have said for a very long time that we were “optimists” on the US coming out of this downturn but that it was going to take longer than people thought. For many years the phrase “green shoots” was used only for hopes to be dashed.
- Are we growing as much as we would like? No
- Has employment improved as much as we would like? No
- Has housing strengthened as much as we would like? No
But the “Green shoots” are definitely there now and need to be “nurtured” by normalization not “flooded” by QE.
We believe ending QE and then moving into a more normal interest rate environment that rewards all savers rather than the marginal borrower, that forces businesses to make business decisions, that encourages risk adjusted allocation of capital and more thoughtful Capex decisions is unequivocally positive.
We applaud Janet Yellen’s bold comments yesterday and encourage her to “hold the line”. It’s the right thing to do, not necessarily the easy thing to do. If her Fed does that it may well be the first Fed since Paul Volcker that has had the nerve to do so and we feel sure that it will culminate in a more positive outcome than the 5 ½ years of misguided QE has yielded.
via Zero Hedge http://ift.tt/1gjXCP4 Tyler Durden
Russia threatened to dump its U.S. treasuries if America imposed sanctions regarding Russia’s action in the Crimea.
Zero Hedge argues that Russia has already done so.
But veteran investor Jim Sinclair argues that Russia has a much scarier financial attack which Russia can use against the U.S.
Specifically, Sinclair says that if Russia accepts payment for oil and gas in any currency other than the dollar – whether it’s gold, the Euro, the Ruble, the Rupee, or anything else – then the U.S. petrodollar system will collapse:
Indeed, one of the main pillars for U.S. power is the petrodollar, and the U.S. is desperate for the dollar to maintain reserve status. Some wise commentators have argued that recent U.S. wars have really been about keeping the rest of the world on the petrodollar standard.
The theory is that – after Nixon took the U.S. off the gold standard, which had made the dollar the world’s reserve currency – America salvaged that role by adopting the petrodollar. Specifically, the U.S. and Saudi Arabia agreed that all oil and gas would be priced in dollars, so the rest of the world had to use dollars for most transactions.
But Reuters notes that Russia may be mere months away from signing a bilateral trade deal with China, where China would buy huge quantities of Russian oil and gas.
Zero Hedge argues:
Add bilateral trade denominated in either Rubles or Renminbi (or gold), add Iran, Iraq, India, and soon the Saudis (China’s largest foreign source of crude, whose crown prince also happened to meet president Xi Jinping last week to expand trade further) and wave goodbye to the petrodollar.
As we noted last year:
The average life expectancy for a fiat currency is less than 40 years.
But what about “reserve currencies”, like the U.S. dollar?
JP Morgan noted last year that “reserve currencies” have a limited shelf-life:
As the table shows, U.S. reserve status has already lasted as long as Portugal and the Netherland’s reigns. It won’t happen tomorrow, or next week … but the end of the dollar’s rein is coming nonetheless, and China and many other countries are calling for a new reserve currency.
Remember, China is entering into more and more major deals with other countries to settle trades in Yuans, instead of dollars. This includes the European Union (the world’s largest economy) [and also Russia].
And China is quietly becoming a gold superpower…
Given that China has surpassed the U.S. as the world’s largest importer of oil, Saudi Arabia is moving away from the U.S. … and towards China. (Some even argue that the world will switch from the petrodollar to the petroYUAN. We’re not convinced that will happen.)
In any event, a switch to pricing petroleum in anything other than dollars exclusively – whether a single alternative currency, gold, or even a mix of currencies or commodities – would spell the end of the dollar as the world’s reserve currency.
For that reason, Sinclair – no fan of either Russia or Putin – urges American leaders to back away from an economic confrontation with Russia, arguing that the U.S. would be the loser.
via Zero Hedge http://ift.tt/1h3wBdL George Washington
Presented with no comment…
h/t The Burning Platform via Cagle Post
And as a gentle reminder of why… here is the full breakdown of "young vs old" jobs since the start of the Depression in December 2007: those 55 and older have gained 4.9 million jobs. Those under 55 are still some 3.1 million jobs below their December 2007 level.
via Zero Hedge http://ift.tt/1h3wAX1 Tyler Durden
An Audio Interview with Cognitive Dissonance
This interview will be posted on TwoIceFloes.com Friday, March 21 at 8 PM EDT
and available for playback any time after
Four years and thirty weeks ago I created an alter ego avatar on ZeroHedge.com by the name of Cognitive Dissonance. My thinking at the time was to craft a safe place to go when commenting on Zero Hedge (ZH) in order to help weather the slings and arrows that were, and still are, the hallmark of Fight Club aka Zero Hedge. In addition Cognitive Dissonance was my mentor of sorts, someone I could speak through, and to, while writing about subjects that were at times as unsettling to me as they were to my readers.
A few months after the birth of Cognitive Dissonance, ZH’s Tyler Durden contacted me and asked if I would like to become a contributing editor. While this was a wonderful opportunity to speak to a wider audience, it also opened me up to the full force of the ZH comment section. I learned a lot about myself during that first year as a ZH contributor, most importantly that I did not need to value myself by what others said about or to me.
Four years and much personal growth later Mrs. Cog and I decided the next step in the evolution of Cognitive Dissonance was to create our own play place, a unique web destination in its own right, and TwoIceFloes.com was born on Valentine’s Day, 2014.
Creating ‘Two Ice Floes’ allowed me to expand the range of Cognitive Dissonance’s ‘voice’ while also creating a safe place where others may gather to share their thoughts and experiences. My intention all along was to expose some of ‘my’ background and perspective in order for my readers to better understand Cognitive Dissonance.
The opportunity to do so came quickly when within a week of opening shop an offer was received from Gemini of Time Monk Radio to interview Cognitive Dissonance and the mind behind the avatar. After a week to mull it over and a few deep discussions with Mrs. Cog the offer was accepted and last weekend (Sunday, March 16, 2014) the two hour interview was recorded.
So…….are you interested in hearing the ‘voice’ of Cognitive Dissonance, to sneak a peek into the thinking and mindset behind the anonymous man who is Cognitive Dissonance? If so, please visit TwoIceFloes.com Friday evening, March 21st @ 8 PM EDT to access the two hour recorded interview.
03-21-2014
Cognitive Dissonance
via Zero Hedge http://ift.tt/1d9d53M Cognitive Dissonance