Tag: finance

If you want a country that respects free markets, believes in listening to the voice of the majority, and is against meddling in global affairs under the guise of “humanitarian, liberating, and democracy-spreading” intervention, move to Switzerland.

If you want a country controlled by a few academic central-planners with no real world experience, in which the executive usurps power issuing one executive order after another with zero checks and balances, and which will incite a global war if it must with the help of doctored YouTube clips in order to achieve its global national interest, then move… anywhere else.

Six months ago, it was this same Switzerland that, contrary to the prerogatives of the pervasive “fairness doctrine” taking the new socialist world by storm, rejected imposing limits on executive pay. Then mere hours ago, in a move that would give president Obama wealth redistribution nightmares for months, a whopping 77% of Swiss voters rejected an initiative for a national minimum wage of 22 francs, or just under $25, per hour, according to projection by Swiss television SRF. And confirming that when it comes to anti-socialism, Switzerland may well be the last bastion, not a single canton supported the measure.

How dare Switzerland not pretend supply and demand doesn’t matter and one can circumvent the laws of common sense and enforce employment and wages by diktat? Simple: Government ministers have fought against the measure and insisted it will damage the economy, running small companies out of business and making it harder for young people to find employment. Perhaps it is time for these same minister to give the US government a few lessons.

“A minimum wage won’t stop poverty“, Economic Minister Johann Schneider-Ammann told The Christian Science Monitor. “This system would be counterproductive.”

Currently the average salary in Switzerland is 29,000 euro a year (around $40,000) and over half the Swiss population earn over 5,000 euro ($6,800) per month.

AP has more from on location:

Initial results suggest that the Swiss have rejected a referendum proposal to create the world’s highest minimum wage, an idea that government and business leaders criticized as likely to drive Switzerland’s high costs even higher.

 

Swiss TV reported Sunday that 77% were rejecting the proposal to create a minimum wage of 22 Swiss francs ($24.70) per hour, based on unofficial vote tallies. Official results were expected later Sunday.

 

The proposal would have eclipsed the existing highest minimum wages in force elsewhere in Europe. Trade unions backed it as a way of fighting poverty in a country that, by some measures, features the world’s highest prices and most expensive cities. But opinion polls indicated that most voters sided with government and business leaders, who argued it would cost jobs and erode economic competitiveness.

 

Switzerland currently has no minimum wage, but the median hourly wage is about 33 francs ($37) an hour.

AP also adds the following tart pearl: “Referendums are a regular feature of democracy in Switzerland, which features a weak central government and strong state governments.“

Meanwhile elsewhere, such as the Eurozone for example, merely hinting at a referendum is enough to get the abovementioned central-planners blow up your bond market and get your thrown out if not facing a firing squad (see G-Pap and Berlusconi).

So congratulations Switzerland for being one of the last bastions of democracy and having your voice heard, even if we, for one, wholeheartedly agree with your choice that free markets trump “fairness” and wealth redistribution every time.

* * *

For those wondering where we stand on this topic, here are excerpt from what we said in April in “Are The Swiss Going Crazy? $25 Minimum Wage Referendum In May.”

Most of our readers probably know what we think of minimum wages, but let us briefly recapitulate: there is neither a sensible economic, nor a sensible ethical argument supporting the idea.

 

Let us look at the economic side of things first: for one thing, the law of supply and demand is not magically suspended when it comes to the price of labor. Price it too high, and not the entire supply will be taken up. Rising unemployment inevitably results.

 

However, there is also a different way of formulating the argument: the price of labor must not exceed what the market can bear. In order to understand what this actually means, imagine just for the sake of argument a world without money. Such a world is not realistic of course, as without money prices the modern economy could not exist. However, what we want to get at is this: workers can ultimately only be paid with what is actually produced.

 

As Mises has pointed out, most so-called pro-labor legislation was only introduced after enough capital per worker was invested to make the payment of higher wages possible – usually, the market had already adjusted wages accordingly.

 

However, unskilled labor increasingly gets priced out of the market anyway, which is where the ethical argument comes in. If a worker cannot produce more than X amount of  goods or services, it is not possible to pay him X+Y for his work. Under minimum wage legislation he is condemned to remain unemployed, even if he is willing to work for less.

 

* * *

 

The first salient point is the fact that once this new minimum wage law is introduced, upward pressure on all wages would likely ensue. Note in this context that Switzerland is awash in newly created deposit money due to the ministrations of the SNB, which is manipulating the Swiss franc’s exchange rate (a few charts on Swiss monetary inflation over recent years can be seen in our article ‘How Safe is the Swiss Franc?’. The article is slightly dated, but it still serves to illustrate the point). So there is no brake on prices and wages due to  a lack of money supply inflation – rather the opposite. Naturally, wages would not be the only thing rising under these circumstances – prices would be adjusted accordingly, and in the end the purchasing power of the higher wages would not be greater than before.

 

The second important point is the one about which enterprises would suffer the most on account of such legislation. When the union official cynically comments that ‘only businesses that cannot be outsourced will be hit’ (i.e., those who cannot vote with their feet and simply flee), he forgets to mention that small and medium-sized companies as a rule cannot ‘outsource’ their operations either, almost regardless of what they are producing. We felt reminded of something a friend of ours mentioned to us recently: “The problem of today’s form of capitalism is that there are not enough capitalists:”

 

Indeed, an individual entrepreneur running a small business has a very difficult life already, as every new imposition is much harder to overcome for a small business than it is for a large corporation. This is also why we often find that big corporations don’t resist new regulations: they reckon they are likely to keep competition from upstarts at bay. It is laudable that several big Swiss corporations are evidently not following this trend.

 

If Swiss voters agree to introducing a new minimum wage law, they would end up doing incalculable damage to Switzerland’s entrepreneurial culture. At the moment, Switzerland is still one of the freest economies in the world. It has been extremely successful so far and its achievements would clearly be put at risk. Hopefully Switzerland’s voters won’t be swayed by union’s arguments.

They weren’t.

via Zero Hedge http://ift.tt/1o3BxVX Tyler Durden

China began evacuating hundreds of its nationals from Vietnam (via at least 2 planes and 5 ships) as the anti-China protests have become increasingly deadly following Beijing's attempt to deploy an oil drill in Vietnamese dispuited waters (detailed here, here, here, and here)…

• *CHINA SENDING 5 SHIPS TO VIETNAM TO EVACUATE CHINESE: XINHUA
• *HUNDREDS OF VIETNAMESE SECURITY IN CENTRAL HO CHI MINH CITY
• *VIETNAM PRIME MINISTER ISSUES DIRECTIVE TO PREVENT PROTESTS
• *VIETNAM GOVT TAKES ACTION TO PREVENT RIOTS: BINH

Hundreds of police and security forces are in central Ho Chi Minh city and the Chinese consulate is under heavy guard. Tensions across the ASEAN region are growung as Taiwan is on "high alert" but the bloc’s inability to craft a united response to Chinese aggression signals a further decline in its regional clout.

 

 

Anti-China protests in #Vietnam: ST reader Ben Beo was at the scene last night & took this pix http://t.co/hIVx5U1P0R http://ift.tt/1sFUwpN

— ST Foreign Desk (@STForeignDesk) May 14, 2014

 

The Vietnamese government has called for an end to the protests…

Vietnam's prime minister appealed for calm last night ahead of expected anti-China demonstrations in Ho Chi Minh City today.

 

A text message from Nguyen Tan Dung was sent to every cellphone in the country urging citizens not to "commit violations of the law" in defence of the "sovereignty of the sacred fatherland".

 

His office also ordered the police and local leaders to halt further illegal demonstrations. His plea came after China's deployment of an oil rig in the disputed Paracel Islands in the South China Sea unleashed a wave of deadly protests.

But the Chinese are clearly not leaving anything to chance… (Via PTI)

More than 3,000 Chinese nationals have been evacuated so far from Vietnam after the recent deadly violence, China's Foreign Ministry said today.

 

They returned to China with the assistance of Chinese Embassy to Vietnam, the Foreign Ministry said in a press release.

 

China says two of its nationals were killed in the violence and more than 100 others injured while the official death toll was put at 21.

Via 2 Planes…

China S Airlines on Sun will arrange two Airbus A320 fly btw to Vinh City – Guangzhou to transport about 300 Chinese nationals back to China

— People's Daily,China (@PDChina) May 17, 2014

and 5 ships…

China is to send five ships to Vietnam today to evacuate Chinese nationals after protests against Chinese in the country last week, the official Xinhua News Agency reports in a one-paragraph report, citing the Ministry of Transport

The official death toll is unclear…

• *VIETNAM CONFIRMS 2 CHINESES DIE IN RIOT, ABOUT 140 INJURED

The tension is spreading across the ASEAN region…

*TAIWAN ON HIGH ALERT OVER PROTESTS IN VIETNAM TODAY

 

And the lackluster response from ASEAN is extremely serious… (via The Diplomat)

As Vietnamese and Chinese ships jostled and fired water cannons at each other – the best ASEAN could do was issue another summit statement urging restraint and expressing “serious concern,” timidly avoiding any mention of China.

 

Furious protesters have trashed 15 Chinese factories in Vietnam, forcing Chinese investors and tourists to flee across the border and into the safety of Cambodia. Golfers in Danang reported fighter jets overhead, heading out to sea.

 

Observers said it was the first time Vietnam had allowed the state-run press to freely cover the protests, which the government also allowed to proceed. However, Singapore-based Channel News Asia was taken off the air after flagging a report on the protests.

 

At least 200 people have been arrested and the Vietnamese government has pledged to crack down on hooliganism.

 

“It is clear that China’s new assertiveness is triggering anxieties among its neighbors,” said  Ernest Bower, of the Center for Strategic and International Studies.

 

ASEAN has long been ridiculed as a toothless tiger and its behavior amid the current standoff between China and Vietnam – perhaps the greatest challenge to face the group – only reinforces the claims.

 

If ASEAN genuinely wants to be taken seriously, now might be an appropriate time for a united public front on China’s territorial ambitions in the seas that divide the bloc’s 10 nations. If it is unable to do that, then individual member states face the daunting task of dealing with Beijing on their own, further relegating ASEAN to the political sidelines and undermining its diplomatic credentials.

 

The bloc’s inability to craft a united response to Chinese aggression signals a further decline in its regional clout.

 

via Zero Hedge http://ift.tt/1mGEv2N Tyler Durden

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via Zero Hedge http://ift.tt/1jHDwd6 williambanzai7

Submitted by Mike Krieger of Liberty Blitzkrieg blog,

As spring unfolds here in the Northern Hemisphere, the future of the free and open Internet hangs in the balance. As such, I strongly believe everyone should have at least some understanding of what is at stake. When most people hear or read the words “net neutrality” their eyes glaze over with a feeling of confusion and despair: “I can’t remember, am I supposed to be for or against this?” This is exactly how the lawyers and lobbyists in D.C. want it, but unless the citizenry is informed we could lose the most important weapon of free speech in the history of mankind.

Recognizing the convoluted nature of the subject, I did my best to lay out what “net neutrality” is and what is at stake with the current FCC rule-making process in my recent post: Say Goodbye to “Net Neutrality” – New FCC Proposal Will Permit Discrimination of Web Content.

Well the FCC voted on its proposal yesterday and it passed with a 3-2 vote. More on that later, first I want to share an article I recently read on The Verge, which is extremely important to understand before you form an opinion on what should be done.

The first buzzword you need to familiarize yourself with is “Title II regulation.” Title II refers to a key section of the Communications Act, which has to do with the classification of telephone providers as “common carriers,” and subjects them to increased regulation and oversight. When the Communications Act was updated in 1996, it appears that broadband providers would not be deemed “common carriers,” which would allow them to be largely unregulated. Yet, Verizon decided it wanted to be regulated under Title II when building out its broadband network. Why would it do this?

It turns out that building a huge broadband network isn’t cheap, and being more “regulated” actually gave Verizon a tremendous cost advantage. Verge notes that: “Title II designation gives carriers broad power to compel other utilities — power, water, and so on — to give them access to existing infrastructure for a federally controlled price, which makes it simpler and more cost-effective for cables to be run.“

Here’s the really despicable thing. Now that Verizon has used Title II to build out much of its network, it now wants to turn around and play unregulated entity when it comes to pricing services that it built out under the guise of it being a heavily regulated business. You can’t make this stuff up. More from The Verge:

At issue is how (or if) the FCC will protect the internet’s openness, free of special treatment and data “fast lanes” offered to the highest bidders. And while Verizon, Comcast, AT&T, and others have been clamoring to prevent heavy regulation from being considered this week, it turns out that communications providers have actually been working the system for years, using exactly this kind of regulation to their advantage. In fact, strict FCC rules have helped Verizon build a largely unregulated network — a network that’s valued in the tens of billions of dollars.

 

Today New York’s Public Utility Law Project (PULP) published a report, authored by New Networks, which contains previously unseen documents. It demonstrates how Verizon deliberately moves back and forth between regulatory regimes, classifying its infrastructure either like a heavily regulated telephone network or a deregulated information service depending on its needs. The chicanery has allowed Verizon to raise telephone rates, all the while missing commitments for high-speed internet deployment.

 

In submitting to regulation, AT&T was designated a “common carrier” — in broad terms, an organization that will deliver something from anyone to anyone else — under a critical section of the Communications Act called Title II. When the Communications Act was updated in 1996, it appeared that broadband internet providers might fall under the same strict rules, but after a series of hearings, the FCC ultimately ruled in 2002 that cable modems were “information services,” a far less restrictive designation. In 2005, it ruled that DSL fell into the same category; today, effectively all internet connections are beyond the reach of Title II.

 

When Verizon talked about this broadband infrastructure with local regulators, however, it made clear it would lay the fiber for its next-generation network as a “common carrier pursuant to Title II of the Communications Act of 1934.” In other words, Verizon was making a move that, at a glance, seems counterintuitive: it asked for more regulation by building its fiber network under the same tight rules as the old telephone lines.

 

Why would Verizon — which, like all big telecom companies, is generally averse to government regulation — make a point of repeatedly noting that its fiber network fell under the same strict rules as the telephone system?

 

There are two reasons. First, Title II designation gives carriers broad power to compel other utilities — power, water, and so on — to give them access to existing infrastructure for a federally controlled price, which makes it simpler and more cost-effective for cables to be run. And that infrastructure adds up: poles, ducts, conduits running beneath roads, the list goes on. Second, Title II gave Verizon a unique opportunity to justify boosting telephone rates in discussions with regulators, arguing that these phone calls would run over the same fiber used by FiOS, Verizon’s home internet service. According to PULP’s report, Verizon raised traditional wired telephone rates in New York some 84 percent between 2006 and 2009, blessed by regulators in return for its “massive investment in fiber optics.”

 

Of course, telephone service isn’t the real reason Verizon has spent billions on fiber: landlines have long been a dying business, expedited on their trip to the grave by the smartphone revolution of the past decade. Rather, the fiber was laid to carry data — the very data Verizon doesn’t want subject to Title II regulation. It’s for FiOS in the home and for wireless backhaul, the backbone that connects cellular towers (including Verizon Wireless’ own) to the internet.

 

And as landline telephones lose ground to newer, better, and faster technologies, the folks left on these copper wires disproportionately skew toward low-income populations and the elderly — the demographics least likely to be able to take advantage of broadband. Yet it was their rate increases that were being used to subsidize the investment in Verizon’s fiber network. The PULP report estimates these rate increases have generated $4.4 billion in additional revenue for Verizon in New York alone, money that’s funneled directly from a Title II service to an array of services that currently lie beyond Title II’s reach.

 

Still, the tactic strikes many as hypocritical. “The network has to be built as a common carrier network, because there is no way to get that infrastructure in place without it,” says Earl Comstock, a lawyer at Eckert Seamans specializing in net neutrality who helped draft the Telecommunications Act of 1996. “Verizon knows it needs to offer just enough basic voice services on its fiber to claim that designation. But it doesn’t live up to those promises when it’s done building it out.”

 

With broadband internet’s anemic competitive landscape, this lack of regulatory accountability becomes even more troubling. According to a 2012 FCC report, roughly 27 percent of US households had only one choice to get a wired connection of 6Mbps or greater. Uncompetitive markets are the ripest for regulation; the dominant players in those markets, of course, would disagree. And while we wait to see whether the FCC will move to bring the internet under Title II to codify it as the public utility that is has become, Verizon and others are playing a regulatory shell game, spinning in and out of Title II rules at their leisure.

So always bear that in mind when you hear arguments from internet service providers (ISPs) about how devastating regulation is. As usual, it’s all about the money, and when it was profitable to be “regulated” Verizon had no issues playing that role.

Moving along to the FCC proposal vote, it is important to bear in mind that this is just the very beginning of the entire process and nothing has been decided yet. In fact, we have now entered into a 120 day public comment period. Specifically, the public will have until July 15 to submit initial comments on the proposal to the commission, and until Sept. 10 to file comments replying to the initial discussions.

To me, the most interesting aspect of the run-up to the proposal vote was a group of hardcore activists who camped outside of the FCC for a week in order to get their points across. I strongly recommend checking out the site OccupytheFCC and suggest signing their petition. When I signed it yesterday, it had over 200,000 signatures.

It appears this group had a meaningful impact and should be congratulated. For instance, the DailyDot reported that:

Wheeler has since amended his proposed rule changes, which will go before a vote Thursday, to be friendlier to net neutrality, though he still faces significant criticism.

 

“What’s exciting is seeing this mounting public pressure having a huge impact at the FCC,” Evan Greer, campaign manager at Fight For the Future, one of the groups organizing the protest, told the Daily Dot.

 

“A culture shift has happened here in the last week alone. This is a building almost no one goes to unless they’re an AT&T, Comcast, or Verizon lobbyist. Now it’s filled with flyers for net neutrality, carried in by employees handed them on their way to work,” she said.

 

But those activists, like most, want the Internet to be classified as a utility, like water and electricity, saying that would both give the FCC more regulatory control and accurately describes the reality of how important the Internet is to people’s everyday lives.

As a reminder, when you hear activists call for the Internet to be classified as a utility, they are essentially talking about Title II regulation discussed earlier.This is an extremely complicated subject, and I don’t have all or any of the answers. That said, from my research I would say that fast and slow lanes for web content based on who pays more or less money is completely and totally unacceptable.

I’m also not sure if regulating the Internet under Title II makes the most sense, but what I can say is that if a company like Verizon built out it’s network under a regulated environment then it should be responsible financially to contribute in a major way financially toward whatever solution makes the most sense to maintain a free and open Internet.

Finally, I want to highlight the following video of protesters being thrown out of the FCC hearing yesterday. It’s short and already has  over 125,000 views.

A Liberty Blitzkrieg commenter summarized the scene witnessed above perfectly when replying to a post yesterday by stating:

“The FCC meeting today, this 30 second video says EVERYTHING YOU NEED TO UNDERSTAND.

 

A room FULL OF LAWYERS. A FEW COPS AND HUMAN BEINGS SPEAKING REALITY TO THEM.

 

I know the lawyers , I am one, I can pick them out. This is a room full of lawyers.”

No wonder the Republic is in the state it’s in.

via Zero Hedge http://ift.tt/1t3DUdx Tyler Durden

Be afraid… be very afraid. This is not your father’s – or even your older brother’s equity market. As we have discussed for over 5 years and Michael Lewis dragged kicking-and-screaming into the world’s eyeballs, there is something very different about the world’s capital markets than ever before. ConvergEx’s all-encompassing “Traders Guide to Global Equity Markets” is, simply put, everything you wanted to know (and perhaps did not) about the world’s stock markets but were afraid to ask. The subtle title they chose to explain the various order types and market structure dynamics – “Trading Minefields” – you can’t avoid them unless you know where they are.

 

 

Traders Guide to Global Equity Markets

via Zero Hedge http://ift.tt/TgfHV6 Tyler Durden

Hardly a day goes by without some new revelation regarding the US surveillance leviathan’s reach. In the following (part 1 of a 2-part series), PBS’ FrontLine reveals the dramatic inside story of how the U.S. government came to monitor and collect the communications of millions of people around the world – and the lengths they went to trying to hide the massive surveillance program from the public. From 9/11 to Edward Snowden and on to NSA reform – what must be done… a must-watch for all US citizens (if they can spare some time away from The Voice or Flappy Birds).

 

via Zero Hedge http://ift.tt/1oC0zxV Tyler Durden

Normally, prices are self-limiting, notes Citi's Matt King: yields rise – inflows hit – prices rise – yields drop – outflows hit – price drops, and back to yields rising. But, it appears for now that we are in a positive feedback (or hyperbolic) loop, where – thanks to central banks pushing too much money to chase too few assets – prices rising implores inflows creates "higher returns" which in turn encourages more inflows (as risk is ignored). King's analogy for this precaiorus situation is pulling a brick with a piece of elastic – nothing happens for a long time… and then – all of a sudden – woosh. Ring any bells?

 

Normally, price movements are self-limiting (a negative feedback loop)…

 

But as Matt King explains…

 

Bubbles, however, behave differently…

 

The question is – obviously – which process are we following in which asset class?

Interconnections make for stickiness – but also fragility…

 

But everyone is looking at inflows…

Market movements have become much more correlated with positions…

 

So what happens when the flows taper? Or when markets start to turn down (stocks) or up (Treasuries)?

And that disilusionment is starting one asset at a time…

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

Submitted by Michael Snyder of The Economic Collapse blog,

As the price of meat continues to skyrocket, will it soon be considered a "luxury item" for most American families?  This week we learned that the price of meat in the United States rose at the fastest pace in more than 10 years last month.  Leading the way is the price of shrimp.  According to the U.S. Bureau of Labor Statistics, the price of shrimp has jumped an astounding 61 percent compared to a year ago.  The price of pork is also moving upward aggressively thanks to a disease which has already killed about 10 percent of all of the pigs in the entire country.  And the endless drought in the western half of the country has caused the size of the U.S. cattle herd to shrink to a 63 year low and has pushed the price of beef to an all-time high.  This is really bad news if you like to eat meat.  The truth is that the coming "meat crisis" is already here, and it looks like it is going to get a lot worse in the months ahead.

A devastating bacterial disease called "early mortality syndrome" is crippling the shrimping industry all over Asia right now.  According to Bloomberg, this has pushed the price of shrimp up 61 percent over the past 12 months…

In March, shrimp prices jumped 61 percent from a year earlier, according to the U.S. Bureau of Labor Statistics. The climb is mainly due to a bacterial disease known as early mortality syndrome. While the ailment has no effect on humans, it’s wreaking havoc on young shrimp farmed in Southeast Asia, shrinking supplies.

This disease has an extremely high mortality rate.  In fact, according to the article that I just quoted, it kills approximately nine out of every ten shrimp that it infects…

Cases of early mortality syndrome, which destroys the digestive systems of young shrimp, were first reported in China in 2009, said Donald Lightner, a professor of animal and comparative biomedical sciences at University of Arizona in Tucson.

 

The disease, which kills about 90 percent of the shrimp it infects, traveled from China to Vietnam to Malaysia and then to Thailand, he said. Cases also were reported in Mexico last year, Lightner said.

A different disease is driving up the price of pork in the United States.  It is known as the porcine epidemic diarrhea virus, and in less than a year it has spread to 30 states and has killed approximately 7 million pigs.

The price of bacon is already up 13.1 percent over the past year, but this is just the beginning.

It is being projected that U.S. pork production could be down by as much as 10 percent this year, and Americans could end up paying up to 20 percent more for pork by the end of 2014.

The price of beef has also moved to unprecedented heights.  Thanks to the crippling drought that never seems to end in the western half of the nation, the size of the U.S. cattle herd has been declining for seven years in a row, and it is now the smallest that is has been since 1951.

Over the past year, the price of ground chuck beef is up 5.9 percent.  It would have been worse, but ranchers have been slaughtering lots of cattle in order to thin their herds in a desperate attempt to get through this drought.  If this drought does not end soon, the price of beef is going to go much, much higher.

As prices for shrimp, pork and beef have risen, many consumers have been eating more chicken.  But the price of chicken is rising rapidly as well.

In fact, the price of chicken breast is up 12.4 percent over the past 12 months.

Unfortunately, this could just be the very beginning of this meat crisis.  As I wrote about recently, some scientists are warning that we could potentially be facing "a century-long megadrought".

And right now, there are no signs that the drought out west is letting up.  Just check out the map posted below.  It comes from the U.S. Drought Monitor, and it shows how the drought in California has significantly intensified since the beginning of the year…

And considering how much the rest of the nation relies on the agricultural production coming out of California, it is very alarming to see that the drought is getting even worse.

Right now, things are so bone dry in most of the state that it is easy for wildfires to get out of control.  In fact, Governor Jerry Brown has just declared a state of emergency in San Diego County because of the vicious wildfires that are raging there…

Officials ordered another round of evacuations early Thursday north of San Diego as gusty winds and near 100-degree temperatures offer little relief from at least nine fires that have consumed a 14-square mile area of Southern California.

 

Gov. Jerry Brown declared a state of emergency for San Diego County, which frees up special resources and funding for the firefight.

 

The fires, coming earlier than normal in the wildfire season, are being fed by brush and trees left brittle by prolonged drought. They are also being whipped by a Santa Ana wind system that reverses the normal flow of wind from the Pacific Ocean and creates tinderbox fire conditions.

 

For the first time in its 14-year-history, the U.S. Drought Monitor, a federal website that tracks drought, designated the entire state of California as in a severe (or worse) drought.

If you do not live out west, you may have no idea how very serious this all really is.

For years, I have been warning about the potential for dust bowl conditions to return to the western half of the country.

Now it is actually starting to happen.

And we already have tens of millions of people in this country that are struggling to feed themselves.  If you doubt this, please see my previous article entitled "Epidemic Of Hunger: New Report Says 49 Million Americans Are Dealing With Food Insecurity".

So what happens if drought, diseases and plagues continue to cause food production in this country to plummet?

Those that have studied these things tell us that there is a clear correlation between food prices and civil unrest.  For example, the following is a short excerpt from a recent Scientific American article…

Since the beginning of 2014, riots have occurred in countries including Thailand and Venezuela. Although they’re different cultures on different continents, these mass protests movements may all have one commonality; increasing food prices may have contributed to their occurrence. The cost of food has been steadily increasing in both Thailand and Venezuela; last month demonstrators in Caracas took to the streets marching with empty pots to protest food shortages. According to Dr. Yaneer Bar-Yam and fellow researchers at the New England Complex Systems Institute (NECSI), events such as these may be anticipated by a mathematical model that examines rising food costs.

 

The events of 2014 aren’t without precedent; the price of food has provoked (and placated) throughout history, beginning in Imperial Rome when Augustus introduced grain subsidies. In recent years, the Middle East has been particularly affected by the cost of grain. Centuries after Egypt developed bread as we recognize it, the nation experienced a bread intifada – the country rioted for two days in January 1977 following Anwar Sadat’s decision to drastically decrease food subsidies. More recently, under the rule of Hosni Mubarak, the price of grain rose 30 percent between 2010 and 2011. Then, on January 25, 2011 a new revolution began in Egypt.

Could rapidly rising food prices cause civil unrest in the United States eventually?

It won't happen today, and it won't happen tomorrow, but some day it might.

Meanwhile, you might want to start carving out a significantly larger portion of the family budget for food for the foreseeable future.

via Zero Hedge http://ift.tt/1sFj2Hu Tyler Durden

Welcome to the real world, debt serfs…

 

 

Source: Cagle

via Zero Hedge http://ift.tt/1j88G1F Tyler Durden

On Thursday GM shocked the world when it announced the latest 5 recalls in a seemingly endless series ever since it went under fire before Congress for hiding its unprecedented quality control problem earlier this year, in which it was revealed the bailed out company was willing to risk the lives of its customers just to avoid the cost of recalls, bringing the total number of recalls for 2014 alone to 24, resulting in some 12.8 million cars recalled globally. Putting this number in context:

• GM sold 9.7 million cars in all of 2013
• GM had less than 1 million recalls in 2013
• GM had 9 million recalls in the five year period from 2008 to 2013
• GM’s domestic recalls so far in 2014 amount to11.1 million, just shy of its previous one year recall record of 11.8 attained in 2004

And here is the chart showing that there is never just one cockroach, especially not when Congress comes sniffing around:

 

As USA Today noted:

A significant number are products of the “new GM” formed in the government-scripted bankruptcy reorganization in 2009. The new company was supposed to be freed from the financial stress and corner-cutting of “old GM.”

 

“The volume and steady drip of recalls at GM are certainly taking their toll on the brand. In the eyes of many, the ‘new GM’ is looking like the old GM — poor quality,” says Daniel Hill, president of Ervin-Hill Strategy, a public relations and government-affairs consultant.

And here is the table confirming that indeed new GM is about as bad as old GM, and worse when one considers the current “old” management team will hide the truth about its quality control. Or lack thereof.

 

Or, as Fight Club explained, AxB=X <> Cost of recall…

via Zero Hedge http://ift.tt/1jGW6Ca Tyler Durden