Tag: finance

Submitted by Zachary Zeck via The Diplomat,

 

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Some 83 aircraft have been declared “missing” since 1948, according to data compiled by the Aviation Safety Network. The list includes planes capable of carrying more than 14 passengers and where no trace — bodies or debris — has ever been found.

 

 

Source: Bloomberg

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

Submitted by Brandon Smith of Alt-Market blog,

With the Crimea referendum passed and Russia ready to annex the region, the United States and the European Union have threatened sanctions. The full extent of these sanctions is not yet known, and announcements are pending for the end of March. If these measures are concrete, they will of course be followed inevitably by economic warfare, including a reduction of natural gas exports to the EU and the eventually full dump of the U.S. dollar by Russia and China. As I have discussed in recent articles, the result of these actions will be disastrous.

For those of us in the liberty movement, it is now impossible to ignore the potential threat to our economy. No longer can people claim that “perhaps” there will be a crisis someday, that perhaps “five or 10 years” down the road we will have to face the music. No, the threat is here now, and it is very real.

The loss of the dollar’s world reserve status will destroy the only thread holding up its value, namely, investor faith. There are only two possible outcomes from that point onward:

A) The U.S. will be forced to default because no nation will purchase our Treasury bonds and support our debt spending, causing the dollar’s value to implode.

B) The Fed will choose to restart and expand quantitative easing measures, confiscate pension funds, raid bank accounts or issue new taxes in order to keep the system afloat; this will also end in the eventual collapse of dollar value and hyperinflation.

The consequences will lead to an explosion in prices — first in commodities and necessities like petroleum, imported raw materials, food, electricity, etc. and then in all other goods and services. Austerity measures will be instituted by Federal and State governments. Cuts to social welfare programs, including food stamps, are probable. Civil infrastructure will suffer. The cost effectiveness of maintaining public utilities could become unrealistic. Anyone relying on such services may find themselves cut off for days, weeks or indefinitely. Public suffering will invariably rise, along with public crime.

If events like Hurricane Katrina in New Orleans are any indication, the Federal government’s response will be inadequate, to say the least. The Federal Emergency Management Agency clearly cannot be relied upon to provide food, shelter, medical care or protection for communities. In fact, in the aftermath of Hurricane Katrina, the Feds did far more harm than good, corralling people into camps where death was rampant and disarming outlying neighborhoods so that they could not defend themselves. Tens of millions of dollars in donated and Federally purchased necessities were never delivered to aid survivors. Trucks were turned away, and help from civilian sources was denied.

The point is, if you find yourself in the midst of a national or international catastrophe, you should assume that you will be on your own with whatever preparations you made beforehand. To assume otherwise would be foolish, given our government’s track record.

There are some people who will argue that during an international crisis, such as an economic war or a world war, there is no purpose to preparedness. They will argue that there is nothing an individual or family can do to weather the storm or fight back, because the scale of the threat would be “too great.” There is no place for such defeatism in the life of the liberty-minded. The scale of the threat is irrelevant, and only cowards give up a fight before it even begins. Survival and freedom require an unwavering conviction. Nihilists will fulfill their own prophecies, suffering a fate exactly as they imagine for the rest of us; living in fear, slavery, and obscurity.

That said, it is also important to acknowledge the truth that the majority of Americans today are utterly unready for a minor localized disaster, let alone a national or global crisis. This problem, though, could be easily remedied with a few simple beginning steps. I find that most people are not averse to the idea of preparedness, but many have trouble taking the first steps in the right direction. For longtime preparedness champions, the information listed here might seem like old-hat. However, I challenge each liberty movement member to approach at least one friend or family member who could benefit from the steps below. Prepping appears daunting to the uninitiated; show them how simple it can actually be.

Below is a list of goals that every liberty movement member and American can easily achieve starting today and continuing over the course of the next month. If enough citizens were to take the initiative to do these things, all threats — no matter how imposing — could be overcome.

Buy Three Months Of Food Stock

Food supply is the greatest Achilles’ heel of the American populace. Most homes store less than one week’s worth of food items at any given time. The average person needs between 2,000 and 3,000 calories per day to maintain sufficient energy for survival. It takes around four to six weeks for a person to die of starvation and malnutrition. In a collapse scenario, most deaths will likely occur within the first few months, either by weakness and illness, or by looting and violence. The idea is to at least get through this first catastrophic phase without becoming a villain, or falling victim to one. One person removed from starvation is one possible threat removed from the equation.

Three months of supply is not ideal by any means, but it will buy you precious time. Start with 2,000 calories per day per person. Bulk foods can be purchased cheaply (for now) and can at the very least provide sustenance during emergencies. A 20-pound bag of rice, for instance, can be had for less than $15 and provides about 30,000 calories, or 2,000 calories per day for 15 days for one person. Supplement with beans, canned vegetables and meats, honey for sugar, or freeze-dried goods, and you will be living more comfortably than 90 percent of the population.

Food stockpiling is one of the easiest and most vital measures a person could take. Yet, sadly, it is one of the last preparations on people’s minds.

Buy A Water Filter

Do not count on city water to remain functional. Even during a drawn-out economic downturn rather than an immediate crisis, there is a good chance that some utilities will be sporadic and unreliable. This means you will have to focus on rainwater collection, as well as water from unclean sources. Boiling the water will kill any bacteria, but it will not kill the taste of sediments and other materials floating around. A high-grade survival filter is the best way to get clean water that tastes good.

The average person needs about a gallon of water per day to remain healthy and hydrated. I highly recommend the Sawyer Mini Water Filter, which is a compact washable filter that can cleanse up to 100,000 gallons of water. It uses no moving parts, making it harder to break; and it costs only $20.

Buy A Small Solar Kit

Try going a week or two without electricity, and you may find how dismal life can truly be. The very absence of light at night reduces one’s productivity time drastically, and using fuel for lanterns is not practical in the long term. Solar power is truly the way to go for a grid-collapse scenario.

I’ve heard much whining about the cost of solar power, but small systems that will serve most electrical needs can be set up for less than $1,000. Two 100-watt panels, a power inverter, charge controller and four to six 12-volt deep-cycle batteries are enough to deal with most electrical needs in a survival situation; and all these items can be contained in a portable foot locker for minimal cost. New solar panels are much more effective in low-light conditions and winter weather as well, making solar a must-have prep item.

Store A Fuel Source

Twenty gallons of gasoline treated with fuel saver is not expensive to purchase today, but in the midst of hyperinflation, it may be impossible to obtain tomorrow. Kerosene is useful for heating and cooking. Propane can be stored for decades and runs numerous appliances. If you live in a forested area, dried wood can be had for free, and can keep you warm throughout the winter months (keep in mind the your local danger factor when using fire). It is vital to have a means to stay warm and fed during the most difficult seasonal changes, especially during a grid down scenario.

Find Alternative Shelter

There are no guarantees during a full-spectrum disaster. Having all your eggs in one basket is not only stupid, but unnecessary. Always have a plan B. That means scouting an alternative location for you and your family in the event that your current shelter comes under threat. This location should be far enough away from large population centers but still within a practical range for you to reach them. It should also have a nearby water source, and be defensible. Establishing supply caches near this site is imperative. Do not assume that you will be able to take all of your survival supplies with you from your home. Expect that surprises of a frightening variety will arise.

Buy One Semi-Automatic Rifle

At this point I really don’t care what model of rifle people purchase, as long as they have one, preferably in high capacity and semi-automatic. AR-15, AK-47, Saiga, SKS, M1A: just get one! Every American should be armed with a military-grade rifle. If you are not, you are not only negligent in your duty as a free citizen, but you are also at a distinct disadvantage against the kind of opponents you are likely to face in a collapse situation.

Buy 1,000 Rounds Of Ammunition

Again, this is by no means an ideal stockpile, but it is enough to get you through a couple rough patches if you train furiously. Cheap AK-47 ammo can be had for $5 for a box of 20 rounds. Get what you can while you can, because the prices are only going to skyrocket in the near term.

Approach One Friend Or Neighbor

Community is what will make the difference between life and death during a SHTF collapse. I challenge everyone in the liberty movement to find at least ONE other person to work with in the event of disaster. Lone-wolf operations may be strategically practical for short periods of time; but everyone needs rest, and everyone needs someone else to watch his back. Do not fall into the delusion that you will be able to handle everything on your own.

Learn One Barter Skill

Learn how to fix one vital thing or provide one vital service. Try emergency medical training, gunsmithing or metal working, as long as it is an ability that people will value. You have to be able to produce something that people want in order to sustain yourself beyond the point at which your survival stockpile runs out. Be sure that you are seen as indispensable to those around you.

Grow A Garden

Spring is upon us, and now is the perfect opportunity to grow your own food supply. If you have even a small yard, use that space to grow produce. Focus on high-protein and high-vitamin foods. Buy a dehydrator or canning supplies and save everything. Use heirloom seeds so that you can collect new seed from each crop to replant in the future. If every American had a garden in his backyard, I wouldn’t be half as worried about our survival as I am today.

Prepare Your Mind For Calamity

The most valuable resource you will ever have is your own mind. The information held within it and the speed at which you adapt will determine your survival, whether you have massive preparations or minimal preparations. Most people are not trained psychologically to handle severe stress, and this is why they die. Panic equals extinction. Calm readiness equals greater success.

The state of our financial system is one of perpetual tension. The structure is so weak that any catalyst or trigger event could send it tumbling into the abyss. Make no mistake; time is running out. We may witness a terrifying breakdown tomorrow, in a year, or if we are lucky, a little longer. The path, though, has been set and there is no turning back. All of the items above can be undertaken with minimal cash flow. If you receive a regular paycheck, you can establish a survival supply for yourself and your family. There are no excuses.

Take the steps above seriously. Set your goals for the next four weeks and see how many of them you can accomplish. Do what you can today, or curse yourself tomorrow. What’s it going to be?

via Zero Hedge http://ift.tt/OG56ja Tyler Durden

Earlier this week, we wrote about how inflation is hidden both by the Feds and by corporations.

 

Why hide inflation? Well for one thing, understating inflation allows you to overstate GDP growth.

 

One of the biggest games played by the bean counters in Washington. in the US is the overstatement of GDP growth by understating inflation.

 

Consider this simple example. Let’s say that the US GDP grew by 10% last year. Now let’s say that inflation also grew by 10%.

 

In this scenario, real inflation adjusted GDP growth was ZERO. However, announcing ZERO GDP growth is a major problem politically.

 

So what do the Feds do? They claim that inflation was just 8%, and BOOM you’ve got 2% GDP growth announced for a year in which real GDP growth was actually zero.

 

This game is played all the time via a metric called the GDP “deflator.” Technically what this is meant to do is remove the effects of inflation from the GDP growth numbers to show what real growth was.

 

However, what it actually ends up being is an accounting gimmick that allows the numbers to overstate GDP growth.

 

By now, we all know that the CPI numbers understate inflation significantly. But the Federal Government uses a GDP deflator that is even lower the CPI.

 

This is like measuring your height in “inches” that are actually centimeters. In reality you’re still the same height, but nominally you look a lot taller.

 

Inflation is a very real problem for the economy and for the US financial system. We’ve been told to believe that it is a necessary evil, but the reality is that it concentrates wealth, weakens the US dollar and raises the cost of living.

 

None of those are beneficial to the US as a whole.

 

Since 2007, the world’s Central Banks have collectively put more than $10 trillion into the financial system since 2008. To put that number into perspective, it’s equal to roughly 15% of global GDP.

 

This kind of money printing is literally unheard of in modern history. And it has set the stage for a roaring wave of inflation to hit the financial system. Indeed, the first signs are already showing up… not in the “official” Government data (which is bogus) but in how those who run businesses around the globe are acting.

 

 

For a FREE Special Report on how to protect your portfolio from inflation, swing by

http://ift.tt/RQfggo

 

Best Regards

Phoenix Capital Research

 

 

 

via Zero Hedge http://ift.tt/1j9LJgp Phoenix Capital Research

Via Scotiabank’s Guy Haselmann,

Models vs. Real World

Yellen’s press conference was panned by some as confusing and ambiguous. I personally would have given her an A+ had she not made the critical unintentional mistake of reintroducing a time frame. Her stumble pushed her grade to B+.  When repeatedly pressed during Q&A to explain what “considerable time” meant, she stumblingly said “six months”.

• The market naturally re-priced by moving forward expectations of the first rate hike from August 2015 to April 2015.  This is because, at the current pace of ‘tapering’, April coincides with the date that is six months after QE ends.

Although she never should have specified an absolute time frame, the market should not have been surprised that “considerable period” corresponds to around “six months”.  Bernanke borrowed the language from Greenspan who first used the language “extended period” in 2003.   They defined it as “2 or 3 meetings” and as “at least six months”.

• Furthermore, in the Fed paper, “The Federal Reserve’s Balance Sheet and Earnings: A Primer and Projections”, the Fed outlined exit strategy assumptions which suggested a period of six months between actions.

The press conference was not as “boring” as some have stated, because the FOMC (represented by Yellen) now appears to be struggling between theory and practice.  This marks a significant shift from the majority of members who had almost entirely been relying on models (theory).  Several had seemed intent on providing stimulus until economic targets were met without sufficiently questioning the effectiveness of such policies, or their potential consequences. There were hints yesterday that the FOMC now recognizes (practice) that the economy, labor markets and the markets may have stresses that are not picked up adequately by models. This is a positive sign. Yellen again admitted that it is hard to know the magnitude of structural factors impacting unemployment.

It must be exceedingly difficult for one person to collectively represent the highly dispersed views of 19 committee members.  In addition, navigating the press conference as the FOMC is in the initial stages of a policy pivot makes it even more difficult.   What is even more impressive is the fact that she is operating in the midst of the most extreme policy initiatives in the Fed’s history while other unprecedented imbalances and pressures exist in China and Japan (not to mention elevated geo-political tensions). Her vagueness was actually informative (because that is ‘qualitative guidance’).  Yet she still showed an ability to discuss a wide range of views.  For all of these reasons, I gave her high marks.

The one thing that seemed perfectly clear is that the Fed plans to continue to unwind the QE program barring some type of disaster.  After that, we will all have to reassess and see how things unfold.

The FOMC’s Global Challenges

A confluence of highly concerning factors are all colliding simultaneously, adding to Yellen’s challenges.  

Massive fiscal and monetary stimulus in recent years have skyrocketed asset prices, but yet developed world economies have only been able to muster 2.5% growth.  The rate of global stimulus in now in decline. 

 

EM central banks (and the RBNZ) have hiked rates.

 

The FOMC is tapering.

 

Japan is raising its consumption tax on April 1st (the third arrow is nowhere in sight).

 

Geo-political tit-for-tat with Russia could spiral out of control. Russia could cause trouble in the Middle East in an attempt to lift oil prices. This would hurt the west (and economic growth), but strengthen the Russia economy.

 

Beijing has decimated levered carry trades by unexpectedly weakening the Yuan.  Beijing is also allowing defaults.  The era of riskless borrowing has come to an sudden end.  If Beijing is not careful, deeply interconnected cross guarantees could unleash an uncontrollable wave of bad loan defaults.  After many years of moral hazard that have fueled the credit bubble, lenders will be more careful.  Growth will surely slow but Beijing is trying to prevent a hard landing.

Most investors are expecting a march to higher Treasury yields in the near term, but I think they will be disappointed.   For the next few weeks, I still prefer:  long 30-yr Treasuries; curve flatteners; long the dollar; and long Treasuries vs. Bunds.

“Theory is when you understand everything, but nothing works.   Practice is when everything works, but nobody understands why. When theory and practice are untied, nothing works and nobody understands why.”

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

With Ukraine troops being redeployed to other regions on the mainland – as the government appears to have folded on Crimea protection efforts but pledges to "defend our land" – we thought some postcards from the tip of the spear would be useful…

• *RUSSIA TRY TO GRAB EAST UKRAINE WOULD BE ANSWERED: YATSENYUK
• *UKRAINE PM YATSENYUK PLEDGES TO `DEFEND OUR LAND'
• *RUSSIA TRY TO GRAB EAST UKRAINE WOULD SPARK MILITARY REPLY: PM

But

• *UKRAINE HOPES FOR PEACEFUL RESOLUTION WITH RUSSIA: YATSENYUK

 

Life ain't fun on the border…

morning…

 

noon…

and night…

 

Until mom turns up with some food…

 

 

 

The people are 'revolting'

 

Traffic's a bitch in town

 

And country…

 

But they have dug a trench to stop the Russian tanks…

 

And troops continue to train in hand-to-tank combat…

 

But life can be a minefield…

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Submitted by Simon Black of Sovereign Man blog,

As any long-time reader of this column knows, we routinely draw from historical lessons to highlight that this time is not different.

Throughout the 18th century, for example, France was the greatest superpower in Europe, if not the world.

But they became complacent, believing that they had some sort of ‘divine right’ to reign supreme, and that they could be as fiscally irresponsible as they liked.

The French government spent money like drunken sailors; they had substantial welfare programs, free hospitals, and grand monuments.

They held vast territories overseas, engaged in constant warfare, and even had their own intrusive intelligence service that spied on King and subject alike.

Of course, they couldn’t pay for any of this.

French budget deficits were out of control, and they resorted to going heavily into debt and rapidly debasing their currency.

Stop me when this sounds familiar.

The French economy ultimately failed, bringing with it a 26-year period of hyperinflation, civil war, military conquest, and genocide.

History is full of examples, from ancient Mesopotamia to the Soviet Union, which show that whenever societies reach unsustainable levels of resource consumption and allocation, they collapse.

I’ve been writing about this for years, and the idea is now hitting mainstream.

A recent research paper funded by NASA highlights this same premise.

According to the authors:

    “Collapses of even advanced civilizations have occurred many times in the past five thousand years, and they were frequently followed by centuries of population and cultural decline and economic regression.”

The results of their experiments show that some of the very clear trends which exist today– unsustainable resource consumption, and economic stratification that favors the elite– can very easily result in collapse.

In fact, they write that “collapse is very difficult to avoid and requires major policy changes.”

This isn’t exactly good news.

But here’s the thing– between massive debts, deficits, money printing, war, resource depletion, etc., our modern society seems riddled with these risks.

And history certainly shows that dominant powers are always changing.

Empires rise and fall. The global monetary system is always changing. The prevailing social contract is always changing.

But there is one FAR greater trend across history that supercedes all of the rest… and that trend is the RISE of humanity.

Human beings are fundamentally tool creators. We take problems and turn them into opportunities. We find solutions. We adapt and overcome.

The world is not coming to an end. It’s going to reset. There’s a huge difference between the two.

Think about the system that we’re living under.

A tiny elite has total control of the money supply. They wield intrusive spy networks and weapons of mass destruction. The can confiscate the wealth of others in their sole discretion. They can indebt unborn generations.

Curiously, these are the same people who are so incompetent they can’t put a website together.

It’s not working. And just about everyone knows it.

We’re taught growing up that ‘We the People’ have the power to affect radical change in the voting booth. But this is another fairy tale.

Voting only changes the players. It doesn’t change the game.

Technology is one major game changer. The technology exists today to completely revolutionize the way we live and govern ourselves.

Today’s system is just a 19th century model applied to a 21st century society. I mean– a room full of men making decisions about how much money to print? It’s so antiquated it’s almost comical.

But given that the majority of Western governments borrow money just to pay interest on money they’ve already borrowed, it’s obvious the current game is almost finished.

When it ends, there will be a reset… potentially a tumultuous one.

This is why you want to have a plan B, and why you don’t want to have all of your eggs in one basket.

After all, why bother working so hard if everything you’ve ever achieved or provided for your children is tied up in a country with dismal fundamentals?

If you agree with me, then feel free to share this article with your friends below so they also can get a plan B in place. They’ll be glad they did.

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

“Markets are distorted,“ was the message Citi’s Matt King implored investors to comprehend in his latest missive, and it appears speculators are growing disillusioned with their ‘faith’ in markets one asset-class at a time. In the interests of simplifying the decision of whether to believe markets are driven by fun-durr-mentals (or not), the following two charts should help clarify your decision to BTFATH…

 

Fundamentals are no longer the driver for credit…

or stock markets…

 

Source: Citi’s Matt King

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Earlier today, heavily-armed masked men in military attire, stormed two Ukraine corvettes, Lutsk and Khmelnitsky, in what is now Russian territory at the port of Sevastopol.

This is what AFP reported:

Pro-Russian crowds seized two Ukrainian warships Thursday and Ukraine said its troops were being threatened in Crimea as the European Union considered new sanctions against Russia for its annexation of the Black Sea peninsula. Tensions in the region remained high despite the release of a Ukrainian naval commander held by pro-Russian forces.

 

Shots were fired but there were no casualties as the Ukrainian corvette Khmelnitsky was seized in Sevastopol, according to an AP photographer at the scene. Another ship, the Lutsk, was also surrounded by pro-Russian forces. The Defense Ministry had no immediate information on the incidents.

Perhaps considering Ukraine said it had pulled its troops from Crimea, they should also have pulled their ships, although it is unclear just where they would pull them to. Regardless, this is what the actual storming of the ships looked like.

h/t Drugoi

via Zero Hedge http://ift.tt/OCeu7S Tyler Durden

With senior German officials expecting discussions among leaders at the EU Summit to solely focused on a second round of sanctions against Russia (and warnings that they "must avoid a spiral of sanctions"), we thought it worth drilling down on just how mutually-dependent the two regions are. As Acting-Man's Pater Tenebrarum notes, the following infographics suggest tit-for-tat sanctions could be a really big problem for Europe and why the EU's leaders are probably quietly praying for the crisis to simply go away.

 

Trade between the EU and Russia (via RT)

 

Trade between Russia and Germany (via Der Spiegel) – Russia is Germany's 11th largest trading partner

 

A list of German companies with big exposure to Russia (also via Der Spiegel)

 

International exposure to Russian debt (via Reuters)

 

Here are details on selected bank exposures (via Reuters):

SOCIETE GENERALE:

 

France's second-biggest bank had exposure of 22.4 billion euros to Russia at the end of June, according to the European Banking Authority's (EBA) data. That equated to 15.7 billion euros in risk-weighted assets.

 

SG Russia, which includes Rosbank and other insurance and financial operations, made operating income of 239 million euros last year, almost double 2012 despite a 41 percent jump in losses from bad debts. The bank said it had 13.5 billion euros of outstanding loans in Russia and deposits of 8.5 billion in the country at the end of 2013.

 

SocGen's equity in its Russian business accounted for 7.7 percent of its group total, Morgan Stanley analysts estimated.

 

UNICREDIT:

 

Italy's biggest bank by assets had exposure of 18.6 billion euros to Russia at the end of June, the EBA data showed.

 

The bank said its revenues from Russia were 372 million euros in the fourth quarter, up 80 percent from a year earlier.

 

UniCredit's equity in its Russian business accounted for 2.7 percent of its group total, Morgan Stanley estimated.

 

RAIFFEISEN BANK INTERNATIONAL:

 

The Austrian lender said it is Russia's 10th biggest bank, with a loan book of 10.2 billion euros, 2.5 million customers and 192 outlets. Its Russian assets represent 12 percent of the group total, and the Russian unit made 507 million euros in the first nine months of last year, most of the group's total.

 

The EBA data showed Raiffeisen had a 13.2 billion euro exposure to Russia at the end of June.

 

Raiffeisen's equity in its Russian business accounted for 15.6 percent of its group total, Morgan Stanley estimated.

 

OTP BANK:

 

The Hungarian bank's exposure to Russia was 4.4 billion euros at the end of June, the EBA data showed.

 

BANK OF CYPRUS:

 

Its exposure to Russia was 1.6 billion euros at the end of June, the EBA data showed.

But apart from that – should be fine?! And this on the heels of Ukraine appearing to fold on any further action suggests Western powers have put themselves in a red-line-crossing MAD box…

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