Tag: news

Alan Greenspan: Ron Paul Was Right About The Gold Standard

As John Rubino eloquently puts it, “when the history of these times is written, former Fed Chair Alan Greenspan will be one of the major villains, but also one of the greatest mysteries. This is so because he has, in effect, been three different people.” Greenspan started his public life brilliantly, as a libertarian thinker who said some compelling and accurate things about gold and its role in the world. An example from 1966: “This is the shabby secret of the welfare statists’ tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists’ antagonism toward the gold standard.”

Yet everything changed a few decades later when Greenspan was put in charge of the Federal Reserve in the late 1980s, instead of applying the above wisdom, for example by limiting the bank’s interference in the private sector and letting market forces determine winners and losers, he did a full 180, intervening in every crisis, creating new currency with abandon, and generally behaving like his old ideological enemies, the Keynesians. Predictably, debt soared during his long tenure.

Along the way he was also instrumental in preventing regulation of credit default swaps and other derivatives that nearly blew up the system in 2008. His view of those instruments:

The reason that growth has continued despite adversity, or perhaps because of it, is that these new financial instruments are an increasingly important vehicle for unbundling risks. These instruments enhance the ability to differentiate risk and allocate it to those investors most able and willing to take it. This unbundling improves the ability of the market to engender a set of product and asset prices far more calibrated to the value preferences of consumers than was possible before derivative markets were developed. The product and asset price signals enable entrepreneurs to finely allocate real capital facilities to produce those goods and services most valued by consumers, a process that has undoubtedly improved national productivity growth and standards of living.

In the aftermath of the dot com crisis Greenspan cut interest rates to near-zero in the early 2000s, igniting the housing bubble, which neither he nor anyone else at the Fed was able to detect along the way. He even made it into the dictionary, as the “Greenspan put” became the term for government bailing out its Wall Street benefactors. From this the leveraged speculating community learned that no risk was too egregious and no profit too large, because government – that is, the Fed – had eliminated all the worst-case scenarios. Put another way, under Greenspan profit was privatized but loss was socialized.

Then, another metamorphosis took place: after Greenspan retired from the Fed in 2006 he began morphing back into his old libertarian self. A cynic might detect a desire to avoid the consequences of his past actions, while a neurologist might suspect senility. But either way the transformation has been breathtaking.

Consider Greenspan’s latest public address. In an extended interview published in the World Gold Council’s Gold Investor February issue, Greenspan repeated his now standard warning about the risk of coming stagflation, which would send the price of gold higher: “The risk of inflation is beginning to rise…Significant increases in inflation will ultimately increase the price of gold.” As such, “investment in gold now is insurance. It’s not for short-term gain, but for long-term protection.”

Going back to his libertarian roots, it was the idea of returning to a gold standard that Greenspan focused on: a gold standard that he said would help mitigate risks of an “unstable fiscal system” like the one we have today.

“Today, going back on to the gold standard would be perceived as an act of desperation. But if the gold standard were in place today, we would not have reached the situation in which we now find ourselves,” he said.“[T]here is a widespread view that the 19th Century gold standard didn’t work. I think that’s like wearing the wrong size shoes and saying the shoes are uncomfortable! It wasn’t the gold standard that failed; it was politics.”

And the punchline: “We would never have reached this position of extreme indebtedness were we on the gold standard, because the gold standard is a way of ensuring that fiscal policy never gets out of line.” 

To be sure, this is something we discussed exactly two years ago, when we showed a chart showing the sudden end of prosperity for the “bottom 90%” of US earners at the time Nixon ended the US Gold Standard in August 1971, unleashing what ultimately would be the “Great Moderation”, an unprecedented increase in US debt, and the stagnation of real incomes and net worth for all but the “top 1% of earners.”

As we said then, in retrospect it is no wonder “why the 1% hates the gold standard” and added that the chart above, “should also clarify just why to the “1%”, including their protectors in the “developed market” central banking system, their tenured economist lackeys, their purchased politicians and their captured media outlets, the topic of a return to a gold standard is the biggest threat conceivable.“

As for Greenspan’s repeated attempts to undo the past by admitting his mistakes, the jury is out. As Rubino concludes, “one of the nice things about the information age is that public figures leave long paper trails and can’t therefore easily escape their pasts. Greenspan’s past, being perhaps the best documented of any central banker in history, will haunt him forever.”

That said, at least Greenspan is going out a gold bug.

* * *

Below are the key excerpts from his Gold Investor interview:

Q. In recent months, concerns about stagflation have been rising. Do you believe that these concerns are legitimate?

We have been through a protracted period of stagnant productivity growth, particularly in the developed world, driven largely by the aging of the ‘baby boom’ generation. Social benefits (entitlements in the US) are crowding out gross domestic savings, the primary source for funding investment, dollar for dollar. The decline in gross domestic savings as a share of GDP has suppressed gross nonresidential capital investment. It is the lessened investment that has suppressed the growth in output per hour globally.

 

Output per hour has been growing at approximately ½% annually in the US and other developed countries over the past five years, compared with an earlier growth rate closer to 2%. That is a huge difference, which is reflected proportionately in the gross domestic product and in people’s standard of living.

 

As productivity growth slows down, the whole economic system slows down. That has provoked despair and a consequent rise in economic populism from Brexit to Trump. Populism is not a philosophy or a concept, like socialism or capitalism, for example. Rather it is a cry of pain, where people are saying: Do something. Help!

 

At the same time, the risk of inflation is beginning to rise. In the United States, the unemployment rate is below 5%, which has put upward pressure on wages and unit costs generally. Demand is picking up, as manifested by the recent marked, broad increase in the money supply, which is stoking inflationary pressures. To date, wage increases have largely been absorbed by employers, but, if costs are moving up, prices ultimately have to follow suit. If you impose inflation on stagnation, you get stagflation.

* * *

Q. As inflation pressures grow, do you anticipate a renewed interest in gold?

Significant increases in inflation will ultimately increase the price of gold. Investment in gold now is insurance. It’s not for short-term gain, but for long-term protection.

 

I view gold as the primary global currency. It is the only currency, along with silver, that does not require a counterparty signature. Gold, however, has always been far more valuable per ounce than silver. No one refuses gold as payment to discharge an obligation. Credit instruments and fiat currency depend on the credit worthiness of a counterparty. Gold, along with silver, is one of the only currencies that has an intrinsic value. It has always been that way. No one questions its value, and it has always been a valuable commodity, first coined in Asia Minor in 600 BC.

* * *

Q. Although gold is not an official currency, it plays an important role in the monetary system. What role do you think gold should play in the new geopolitical environment?

The gold standard was operating at its peak in the late 19th and early 20th centuries, a period of extraordinary global prosperity, characterised by firming productivity growth and very little inflation.

 

But today, there is a widespread view that the 19th century gold standard didn’t work. I think that’s like wearing the wrong size shoes and saying the shoes are uncomfortable! It wasn’t the gold standard that failed; it was politics. World War I disabled the fixed exchange rate parities and no country wanted to be exposed to the humiliation of having a lesser exchange rate against the US dollar than it enjoyed in 1913.

 

Britain, for example, chose to return to the gold standard in 1925 at the same exchange rate it had in 1913 relative to the US dollar (US$4.86 per pound sterling). That was a monumental error by Winston Churchill, then Chancellor of the Exchequer. It induced a severe deflation for Britain in the late 1920s, and the Bank of England had to default in 1931. It wasn’t the gold standard that wasn’t functioning; it was these pre-war parities that didn’t work. All wanted to return to pre-war exchange rate parities, which, given the different degree of war and economic destruction from country to country, rendered this desire, in general, wholly unrealistic.

 

Today, going back on to the gold standard would be perceived as an act of desperation. But if the gold standard were in place today we would not have reached the situation in which we now find ourselves. We cannot afford to spend on infrastructure in the way that we should. The US sorely needs it, and it would pay for itself eventually in the form of a better economic environment (infrastructure). But few of such benefits would be reflected in private cash flow to repay debt. Much such infrastructure would have to be funded with government debt. We are already in danger of seeing the ratio of federal debt to GDP edging toward triple digits. We would never have reached this position of extreme indebtedness were we on the gold standard, because the gold standard is a way of ensuring that fiscal policy never gets out of line.

* * *

Finally, buried at the very end of the interview was perhaps the most interesting statement by Greenspan : the former Fed Chair’s implicit admission that Ron Paul was right all along:

Q. Against a background of ultra-low and negative interest rates, many reserve managers have been large buyers of gold. In your view, what role does gold play as a reserve asset?

When I was Chair of the Federal Reserve I used to testify before US Congressman Ron Paul, who was a very strong advocate of gold. We had some interesting discussions. I told him that US monetary policy tried to follow signals that a gold standard would have created. That is sound monetary policy even with a fiat currency. In that regard, I told him that even if we had gone back to the gold standard, policy would not have changed all that much.

For those unfamiliar, here is Ron Paul ‘s explanation of his plan for monetary freedom and a return to a gold standard.

Full Greenspan interview below
(link)

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The Billionaire-Owned, Corporate Media is as Worthless as Ever

I think the U.S. citizenry is being afflicted by a sort of mass insanity at the moment. There are no good outcomes if this continues. As a result, I feel compelled to provide a voice for those of us lost in the political wilderness. We must persevere and not be manipulated into the obvious and nefarious divide and conquer tactics being aggressively unleashed across the societal spectrum. If we lose our grounding and our fortitude, who will be left to speak for those of us who simply don’t fit into any of the currently ascendant political ideologies?

From the post: Lost in the Political Wilderness

Rather than focus its journalistic energy on chronicling the economic insecurity plaguing so many of our fellow Americans, the billionaire-owned corporate media appears entirely obsessed with chattering endlessly about Russia conspiracy theories and domestic coup plots. Instead of looking in the mirror and admitting how its countless errors and propaganda pushing led to multiple humanitarian disasters over the last couple of decades, the oligarch-owned mainstream media outlets insist upon a narrative that Trump the individual is the root of our problems, as opposed to an entrenched executive branch with excessive power. This is because the mainstream media isn’t actually concerned about our cancerous, systemic metastasizing statism, it merely doesn’t want Trump in charge of it. I, on the other hand, want to dismantle that unconstitutional state entirely and transfer power to the American people where it belongs — self-government. Does anyone actually think for a second the media would be this adversarial if Hillary won?

Yesterday’s article by Nicholas Kristoff in The New York Times represents a sort of coming out party for the billionaire-owned, corporate media. More than anything else I’ve seen, it perfectly demonstrates how completely disconnected and worthless billionaire-owned media truly is. It’s the height of absurdity that these media organizations, owned by billionaires or giant corporate conglomerates, are playing the victim in all this when they have been the world primary abuser for the entire 21st century.

You can be a staunch defender of the free press and the 1st Amendment while at the same time saying billionaire owned media has failed us. This is my position, and Trump’s election hasn’t changed that. The handful of corporations and billionaires who control the mainstream press does not constitute the entirely of “the press.” They (and the deep state) are currently trying to convince the public that they are the only ones who stand resolutely in between you and fascism. This is complete stupidity, and if we fall for it, we will get what we deserve.

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Trumps Picks Retired General McMaster As National Security Adviser

In a brief statement from Mar-a-Lago, President Trump has confirmed retired Lt. General H.R. McMaster  as his national security adviser.

 

 

Foreign Policy'sThomas Ricks says, picking McMaster is not a bad thing. I’ve known him since he was major. He’s smart, energetic, and tough. He even looks like an armored branch version of Harward. (That’s him, working out with a punching bag in Iraq, in the foto. I took it in the citadel in downtown Tell Afar one sunny winter day about 10 years ago.) (Btw, Harward was scheduled to appear on ABC’s “This Week” yesterday morning, but backed out an hour before airtime. )

As I said at the end of my Friday post, once Trump was turned down by Harward, it became more likely that he would turn to the active duty military for his 3rd pick for the job. McMaster is among the best of them out there. For his Ph.D. dissertation, he wrote one of the best books on the Vietnam War, Dereliction of Duty: Johnson, McNamara, the Joint Chiefs of Staff, and the Lies That Led to Vietnam.

He has good combat experience, he was a good trainer, and he led the 3rd Armored Cavalry Regiment well in his deployment to Iraq, most notably in pacifying Tell Afar, to the west of Mosul.

I wrote about his operations there in my book The Gamble. I am traveling so I don’t have it with me, but I remember him telling his soldiers that understanding counterinsurgency really wasn’t hard: “Every time you disrespect an Iraqi, you’re working for the enemy.” They even had “Customer Satisfaction Forms” that detainees were asked to fill out upon release: Were you treated well? How was the food? What could we do better?

There are two big differences between him and Harward: First, he is on active duty. (Though the Army inexplicably couldn’t find a four star job for him, and had told him to plan to retire later this year.) Second, his wife won’t kill him if he takes the job, as Harward’s wife might have.

That said, the basic problems remain. To do the job right, McMaster needs to bring in his own people. And it remains unclear if he can get that.

As for relations with the Pentagon: McMaster knows Mattis, but not well. (They both spoke at a conference at the University of North Carolina in April 2010.) But they are similar people and will respect each other.

I don’t know how McMaster will work Trump. McMaster once wrote that the American war plans for Afghanistan and Iraq were “at times . . . essentially narcissistic.” (Good line, but I think it is more illuminating to say that they were minimalist plans for maximalist goals, which is of course a bad combination.) At any rate, McMaster may learn a lot more about narcissism in the coming months.

Over the weekend, I did an informal poll of people who have worked for McMaster, asking if they would be willing to follow him to the National Security Council staff. To a surprising degree, they replied, Yes, they would. That’s an indication of loyalty to and confidence in him.

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Why Its Big Bet On Westinghouse Nuclear Is Bankrupting Toshiba

Submitted by Michael Shellenberger via EnvironmentProgress.org,

Toshiba, the venerable 80 year old Japanese electronics giant, appears to be going bankrupt.

Toshiba was supposed to have announced at least $6.3 billion in losses during an earnings call yesterday. Instead, it cancelled the report, saying "it was not able to immediately secure the approval of its auditor."

Financial Times reports that "The delay to publication of Toshiba’s earnings came as the company said lawyers were examining claims by a whistleblower in the US that Westinghouse mishandled its takeover of Stone & Webster."

Toshiba's losses stem from its construction of new nuclear plants in the United States.

The collapse of Toshiba will result in the halting of all new nuclear power plant construction by its US-based subsidiary, Westinghouse.

Toshiba's failure also raises the question of what happens to the Vogtle plants if Toshiba fails? Does it open two southeastern U.S. utilities — Southern and SCANA — up to exposure to Toshiba shareholder lawsuits? And who will build future U.S. nuclear plants?

How Bad Is It?

The loss estimate is already $2.6 billion higher than the estimate Toshiba gave in December, and could go higher.

The reason it could go higher is that nobody knows how long it will take to finish the U.S. plants, which are three years behind schedule and billions over budget.

Toshiba as recently as last June had as its goal the construction of 45 nuclear reactors around the world, including two in the UK, six in India, and possibly two more in Georgia, all using Westinghouse’s design, the AP-1000. Future Westinghouse reactors will either be built by some other company or not at all.

Toshiba's last auditor, Ernst and Young, was fined $17.5 million in 2015 after failing to blow the whistle on an accounting scandal. In January, Japanese prosecutors charged that Toshiba executives exaggerated profits by $339 million over three years.

The announcement comes less than two years after the $5.3 billion bail-out by the French government of Areva, its state-owned nuclear company, currently undergoing a massive reorganization.

Nuclear energy is, simply, in a rapidly accelerating crisis:

·      Demand for nuclear energy globally is low, and the new reactors being built may not keep up with the closure of nuclear plants around the world. Half of all U.S. nuclear plants are at risk of closure over the next 13 years.

·      Japan has only opened two of its 42 shuttered nuclear reactors, six years after Fukushima. Most experts estimated it would have two-thirds open by now. The reason is simple: low public acceptance.

·      While some still see India as a sure-thing for nuclear, the nation has not resolved key obstacles to building new plants, and is likely to add just 16 GW of nuclear by 2030, not the 63 GW that was anticipated.

·      Vietnam had worked patiently for 20 years to build public support for a major nuclear build-out before abruptly scrapping those plans in response to rising public fears and costs last year. Vietnam now intends to build coal plants.

·      Last month Entergy, a major nuclear operator, announced it was getting out of the nuclear generation business in states where electricity has been de-regulated, including New York where it operates the highly lucrative Indian Point.

With the French nuclear industry crippled and Toshiba-Westinghouse out of the nuclear construction business, the West is effectively ceding the future of nuclear energy to China, Korea and Russia.

What Happened to Standardization?

The AP-1000 is a “Generation III+” design like the European Pressurized Reactor (EPR). The EPR, like the AP-1000, has experienced construction delays — only far more extreme. Construction began on its FOAK Finland in 2005 and was supposed to have finished in 2009. It now says it will open in 2019.

The conventional wisdom among nuclear experts had been that the AP-1000 was superior to the over-built EPR with its ostentatious double containment dome. The AP-1000 would be built faster and more cheaply than the EPR, many thought. 

While the EPR’s delays will likely be longer, and while Toshiba and Areva will restructure their nuclear businesses differently, it is notable that both companies bet — and lost — big on radically new designs.

Why did Westinghouse push forward with a new and untested design — the AP-1000 — in the first place, instead of building more of the same reactors it had in the past? 

Already by the early 1970s, U.S. nuclear plant operators were seeking to standardize nuclear plant design to reduce the time and cost of licensing and construction.

In the 1980s, a utility coalition came up with a Utility Requirements Document to identify the things utilities wanted in a reactor to come up with a standard design, rather than plants unique to each site. AP-1000 was the outcome of that process of seeking standardization.

With the AP-1000, the idea was that the Nuclear Regulatory Commission (NRC) would license the plant and reactor design just once, giving its owners the security of moving forward with construction plans without fear that their design would be rejected by NRC.

Standardization was expected to also be important in mass-manufacturing modules that could then be assembled on site.

It didn't turn out that way. There were significant delays in both construction of the basic foundation, and in manufacturing the modules. 

In the U.S. and China, AP-1000 plants are three years behind schedule.

Toshiba’s losses stem from Westinghouse’s purchase of CB&I’s Stone and Webster, one of the main construction companies building the AP-1000 in Georgia and South Carolina.  

Stone and Webster had been bought earlier by Shaw Group. 

None of them had had any experience building nuclear plants. 

Westinghouse made the purchase to settle the lawsuit against it by CB&I and by Southern and Scana, and because it thought it could do a better job than Stone and Webster.

All parties had sued Westinghouse saying they had been misled into believing the design was done. “Westinghouse’s response was effectively don’t blame us and you should have known better,” a person close to the situation told me.

China made similar complaints years earlier. “People felt we paid full price for a half-completed design,” a Chinese nuclear engineer told me in 2015. The result was three years of delay, higher costs, and deteriorating relationship between China and Westinghouse.

How Construction Failed

Construction began in China and in the US before all of the performance testing had been completed. There was less “learning-by-doing,” the American source told me, than there should have been since the Chinese and American projects were overlapping instead of sequential.

As part of its settlement, Toshiba reaffirmed its fixed price guarantee, even though it did not have a good handle on how much was left to do.

The American side was inexperienced. "Although an experienced nuclear engineer, [Westinghouse's] Mr. Benjamin had never actually overseen construction of a new nuclear-power plant," noted Brian Spegele of Wall Street Journal in December.

The things that caused delays were often mundane: simply laying concrete and re-bar in accordance with the drawings. “The plant’s containment and cooling towers are done,” a different source told me. “It’s all the re-bar and concrete work that’s taking time.”

Vogtle’s builders struggled to create the special materials required for the plant as well as with documentation to meet NRC’s stringent standards.

That didn’t always work. I was told that a dispute between an on-site NRC inspector and project manager over whether a 1973 or 1990 standard should be used delayed construction for six months. The area in question was just 20 cubic yards in a 2,000 cubic yard foundation.

The Georgia PSC and Georgia Power have tried to streamline regulations to reduce conflicts over change orders, but it’s not clear how much of it has worked.

One of the problems was that NRC imposed new regulations on the AP-1000 after it had already approved the Westinghouse design in 2006. The first was the Aircraft rule and the second were rules created after Fukushima.

“The design revisions required to meet the Aircraft Rule changes involved at least three more design revisions that did not get final approval until Jan 2012,” noted Rod Adams. “Completely different construction techniques needed to be invented, tested, litigated and approved.”

However, I was also told that Westinghouse sought an alternative construction technique for the shield building, and that the company could have stayed with its standard construction and not experienced delays.

How Lack of Demand and Over-Regulation Slowed Construction

Deliberate foot-dragging to raise costs by US plant builders and module manufacturers appears to have been a significant factor in addition to poor management and inexperience.

Once it became clear to suppliers and contractors there would not be any more AP-1000 nuclear power plant builds in the US thanks to low natural gas prices and the absence of subsidies that make building wind and solar attractive, suppliers had no incentive to perform their work quickly.

“If he could get cement change orders,” one person told me, “all the better for adding cost. And there’s no downside to being embarrassed because of slow or poor work since there’s no future market.”

NRC in 2013 took action against CB&I to fix its workplace culture, and NRC inspectors are at CB&I’s Louisiana site.

Disincentives for operating efficiently combined with lack of experience and over-regulation to result in delays. When managers would complain about the slow pace and seek to speed things up, some workers would say that any effort to make the process faster would compromise on safety. That would often be enough to make managers under the watchful eyes of NRC inspectors err on the side of slowness.

“The cost overrun situation is driven by a near-perfect storm of societal risk-aversion to nuclear causing ultra-restrictive regulatory requirements, construction complexity, and lack of nuclear construction experience by the industry,” Lake Barrett, a former official at the U.S. Nuclear Regulatory Commission, told Japan Times.

The NRC had turned down requests by anti-nuclear groups to impose Aircraft rule in 1982, 1985 and again in 1994. After 9/11, the NRC caved in to demands, even as it declared point blank that the Aircraft Rule would not improve safety, and that it would only apply the rule to new plants — including non-light water reactors.

Nuclear power’s worst accidents cause less harm than the normal operation of fossil power plants and yet the latter, unburdened by debates over how to pour 20 cubic feet of cement, can be constructed far more quickly.

There is unlikely to be higher demand and lower costs for nuclear without higher social acceptance, and there is unlikely to be higher social acceptance without overcoming the fears.

Nations are unlikely to buy nuclear from nations like the US, France and Japan that are closing (or not opening) their nuclear power plants. 

“They hear the Japanese telling potential customers, ‘Nuclear is safe enough for you, but not for me,’” a source close to Toshiba told me. "That's not going to work."

Why Korea Won

Korea is winning the global competition to build new nuclear plants against China and Russia despite being a fraction of the size, at just 50 million people, and energy-poor.

It has done so through focus: standard design, standard construction of plants, standard operation and standard regulation. Korea's nuclear plants are plug-and-play.

Studies show that standardized designs, multiple reactors on one site, and a vertically integrated builder were the keys to declines in the cost of building nuclear power plants in France and Korea.

It’s easy to understand why. New designs interrupt the process of learning-by-doing and continuous improvement that allow things to move more quickly.

Standardization is especially important to nuclear because so many people and institutions — the designer, the builder and many subcontractors, and the regulator — are needed to work in synchrony to do anything. Any single actor can slow the process down.

Realizing the benefits of standardization requires repetition. Because it takes so long to build a nuclear plant — between two and ten years on average — a senior construction manager will only have a limited amount of experience building before retiring.

Korean nuclear construction managers are promoted as they go from project to project, their careers as well-planned as the projects themselves.

What’s true for construction is also true for operation. After Three Mile Island meltdown in 1979, nuclear operators organized to improve safety and performance.

Increasing nuclear power plant efficiency from 1980 to today came from two areas: first, improvements to how operators re-fuel reactors, and keep plants and their workers safe; second, increasing the heat and electrical generation of plants through “up-rates.”

Both required greatly improved training systems and industry cooperation. So-called “soft” factors like safety culture, regular training, and the constant re-writing of procedure manuals proved crucial.

Since then, U.S. nuclear plants have gone from producing power about half the time to producing power 92 percent of the time.

AP-1000 was a radical innovation. Based on a plant that had never existed — the AP-600 — the plant was, like Areva's European Pressurized Reactor (EPR), a radical break from the past.

Everybody who has an innovative design to sell promises that their design will triumph over all others, and become the industry standard. A few years later, someone else has a better design to sell.

Radical breaks from past designs sometimes work in industries that require little up-front capital, like Internet companies.

It's now clear that they are deadly when it comes to nuclear.

 

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This Oil Nation Aims To Colonize Mars

Submitted by Irina Slav via OilPrice.com,

The UAE may not be the first country that comes to mind when one thinks of space exploration, but it has big plans to colonize mars, and it’s got the oil money to do it.

The plan is already in the works, complete with a concept design for a mini city, to be built by robots.

Though space exploration usually conjures up visions of Russia and the U.S., the UAE has a long history of high-profile, futuristic technological developments, for everything from artificial islands to the world’s first rotating skyscraper and 3D printing.

This time, however, the Emiratis are in no rush: their project is called Mars 2117 and media have praised them for not being overambitious, unlike, some say, Elon Musk and NASA, with their plans to start sending people to Mars some time over the next few decades. As one author points out, neither SpaceX, nor NASA have the money needed to advance space transportation technology quickly enough.

The Emiratis, however, are starting slow, from square one. According to a press release from the government of Dubai, the initial stage of the project will focus on developing the skills and expertise necessary to move forward. This stage will in effect involve a change in the educational system of the emirate, to enable future generations to sprout the engineers who will take the project further.

In a poetic summary, the emirate’s ruler, Sheikh Mohamed bin Zayed, said that “The new project is a seed that we plant today, and we expect future generations to reap the benefits, driven by its passion to learn to unveil a new knowledge.”

One cannot help but appreciate the sober, rational approach, devoid of the urge for quick results. It is this approach that has the biggest chance of success, after all, and we – or rather our descendents – may see the Emirati-international team in a nose-to-nose race with SpaceX because, to be fair, Elon Musk has not set a tight deadline for SpaceX’s manned mission to Mars. It could take place in 40 to 100 years.

So, the interesting question is: will the Emiratis team up with Musk to take people to Mars? It’s not unlikely, to say the least.

The UAE’s space agency was set up just three years ago and has yet to build sufficient expertise and experience to enable the education of those future engineers we mentioned. SpaceX, on the other hand, has been around for 13 years and is already sending rockets to space and getting them back, too. The company has scheduled its 10th commercial launch for tomorrow, to take supplies and science reports to the International Space Station.

It’s a perfect fit, really. SpaceX and Elon Musk have the expertise, the experience, and the skills, and Dubai has the money. Of course, just because they look like a perfect fit this doesn’t mean they will team up. And yet, on a speculative note, let’s recall that Musk last week opened a Tesla showroom in Dubai. That’s the first Tesla presence in the Middle East and many considered it an exceptionally bold move, given the Emirates’ oil focus.

The Emiratis, despite the oil price crash, still have a respectable stash in their sovereign wealth fund, the Investment Corporation of Dubai. The fund was worth US$175 billion three years ago, when it launched its international expansion strategy, and now, according to one author, it has reached US$500 billion. With that kind of money—and technological prowess—Mars seems feasible.

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Trump’s Coziness with Putin: New at Reason

TrumpDonald Trump assured Americans Thursday that he is not acting in covert concert with Vladimir Putin. “I have nothing to do with Russia,” he said during his news conference, insisting, “The whole Russian thing, that’s a ruse.”

Those statements followed the firing of his national security adviser, Michael Flynn, after it was reported that Flynn had lied to Vice President Mike Pence about his pre-inauguration phone conversations with the Russian ambassador. Flynn’s deception was notable because it suggested he had something to hide.

When BuzzFeed published a secret dossier on Trump that contained all sorts of disturbing allegations, the fear was that the Russian strongman had the means to blackmail the incoming president. But the salacious bits were so outlandish that they discredited the entire story.

Given his record, the fact that Trump denies something automatically raises strong suspicions that it’s true. Maybe it’s not. But here’s the crucial question: If Trump were in fact being directed by Putin, would he be doing anything different from what he has done? Steve Chapman ponders.

View this article.

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Anti-Trump Rally in NYC Silent During Muslim Call to Prayer

Attended by Mayor Deblasio and all of NYC elites and celebrities, New Yorkers set out to prove to the muslim world that they too are tolerant enough to cede and heel to the intolerance of Islamic law. The sweet and indelible irony in all of this tolerance is that it promotes retrograde level intolerance — that if given enough room to grow and flourish — will literally render all of these leftists extinct.

I call this ‘suicide via liberalism.’

In the following countries sodomy is a capital offense: Afghanistan, Brunei, Iran, Iraq, Mauritania, Nigeria, Saudi Arabia, Sudan, United Arab Emirates and Yemen.

In Algeria, Bahrain, Kuwait, Lebanon, Libya, Morocco, Oman, Qatar, Somalia, Tunisia, Syria and Bahrain, ‘debauchery’ is often met with prison terms up to 10 years.

In Indonesia, women interested in joining the military need to undergo the 2 finger test, to ensure virginity.

In Sudan, women are punished with 40 lashes for wearing trousers — as that sort of garb is deemed unsuitable for a female. In Pakistan, men are permitted to ‘lightly beat’ their wives as a form of discipline.

The helter skelter insanity of laws in different Islamic countries around the world are rooted in religious intolerance where Islam reigns over them with the cerements of oppression. Some of the core tenets of classic liberalism used to be women’s rights, gay rights and separation of Church and State. The modern day version of liberalism eschews vintage activism for human rights in exchange for wanton support of religious extremism that is the essence of intolerance and produces nothing but failed states and dystopian nightmares everywhere it is implemented.

Content originally generated at iBankCoin.com

 

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Prospects For A Quick Obamacare Repeal Are Fading Fast

Back on January 12th, 8 days before Trump even officially moved into the White House, the prospects of a quick repeal and replacement of Obamacare were looking really good when the Senate voted 51-48 to instruct key committees to start drafting legislation to do away with Obama’s crowning “achievement”.  In fact, that early January budget resolution required lawmakers to submit repeal proposals for consideration by January 27th, a lofty goal, but welcome news to conservative voters around the country that were eager for a quick unwind of the controversial legislation.

Alas, today, nearly a full month after the original deadline of January 27th, no replacement plan has been officially introduced and even Trump admits “maybe it will take till sometime into next year, but we are certainly going to be in the process…it’s very complicated.”

Speaking to a crowd in Florida over the weekend, President Trump said that a replacement plan would be introduced within “a couple of weeks” but steered clear of commentary on when such a plan could be expected to be implemented.  Per The Hill:

“We are going to be submitting in a couple of weeks a great healthcare plan that’s going to take the place of the disaster known as ObamaCare,” he said at a campaign rally in Melbourne, Fla. “It will be repealed and replaced.”

 

“Just so you understand, our plan will be much better healthcare at a much lower cost,” he added. “OK? Nothing to complain about.”

 

Meanwhile, a daily tracking poll from Good Judgement pegged the odds of a quick repeal of the individual mandate at 65% back in mid-January, when the Senate passed its budget resolution, but those odds have since dropped to just 35% as the prospects of a long, drawn out repeal are looking more likely with each passing day.

Obamacare Repeal

 

So why are Republicans finding it so difficult to repeal and replace Obamacare?  Some cite general dysfunction within the Trump administration and/or a fundamental difference of opinion between Trump’s policy advisors and economic experts.  Per Axios, a recent photo tweeted out by Reince Priebus added fuel to the cabinet “dysfunction” fire when it revealed that a recent “repeal and replace” meeting included several members of Trump’s health care and policy teams but not a single representative from Treasury.

Members of the Trump administration got together on Sunday to talk about President Trump’s plan to repeal and replace Obamacare — but a photo tweeted by White House chief of staff Reince Priebus doesn’t show any Treasury Department officials at the table, despite the likelihood that the plan will involve big tax changes.

 

At the table were many members of the president’s health care and policy teams, including Department of Health and Human Services Secretary Tom Price, yet-to-be confirmed Centers for Medicare and Medicaid Services head Seema Verma, and White House aide Stephen Miller.

 

But no one from the Treasury Department was there, and a source who heard about the snub from a White House economic adviser said the department feels shut out of the process.  “There’s always tension between health policy folks and economic policy folks in any administration, but this is an entirely different level.” 

 

That said, Goldman’s macro team recently provided an alternative explanation that revolves around, among other things, arcane procedural limitations in Congress (see “The Honeymoon Is Over: Goldman Slams Trump’s Economic Plan, No Longer Expects A Border Tax“):

The original strategy of Republican congressional leaders was to repeal major aspects of the law using the budget reconciliation process, which allows certain fiscal legislation to pass with 51 votes in the Senate, i.e., only Republican support, and to follow this with separate legislation to establish a replacement program at some later point. The expectation was that the repeal would take effect with a delay, giving lawmakers perhaps two years, until after the midterm election in November 2018, before the new program would actually need to be implemented.

 

This was intended to serve two purposes. First, it allowed for quick passage of an Obamacare repeal bill using the reconciliation process without the inevitable delays associated with devising a replacement plan. An important consideration was that the budget resolution for a given fiscal year allows for only one reconciliation bill for spending and another for taxes. Since the ACA includes spending and tax provisions, repealing it would use up both reconciliation instructions, leaving no opportunity for tax reform. To address this, Congress is likely to pass two budget resolutions this year. The first, for FY2017, is the resolution that would have normally passed last year and passed a few weeks ago. This will allow the reconciliation process for the ACA legislation. Once that bill has passed, Congress is then likely to pass the FY2018 budget resolution, which will actually guide fiscal decisions over the coming year and lay the procedural groundwork for upcoming tax reform and, possibly, infrastructure legislation. The upshot is that procedural constraints dictate that one bill is passed before the other is considered, and the ACA repeal bill was expected to be the easier task and therefore came first.

 

The second reason for the repeal and replace strategy was that Republican leaders hope to gain bipartisan support for the “replacement” legislation, because it would give the program a greater political mandate than the ACA had—reducing the likelihood that Republicans alone are held accountable for any future problems—and because some of the desired changes are regulatory rather than fiscal in nature and thus cannot be made through the budget reconciliation process, necessitating separate legislation that would require 60 votes in the Senate.

 

However, several Republican senators have objected to this two-stage approach, instead calling for at least some aspects of the “replacement” plan to be included in repeal legislation. While individual lawmakers’ motivations likely differ, among the concerns raised have been the potential problems in the insurance market that prolonged uncertainty regarding the replacement plan would cause, and the possibility that no replacement would ultimately be enacted, leaving some current enrollees without coverage.

So how will the Obamacare repeal process play out…

In our view, Republican leaders have two basic options. First, they could attempt to pass a partial reform of the program—stopping short of a true replacement—through the reconciliation process, with the expectation that it could constitute a sufficient reform once combined with administrative and regulatory changes the Administration can make without Congress. On the legislative side this could include, for example, increasing state flexibility with regard to the Medicaid expansion, and revising the distribution of the refundable tax credits used to finance coverage in the private market, combined with funding for a high risk pool for higher cost enrollees. On the administrative side, this might include changes to required benefits and changes in the regulation of premiums.

 

A second option would be to pause the work on Obamacare repeal and to address it at a later date, during or after the tax reform debate. However, while this might allow Congress to focus on tax reform and other areas that might be of greater significance to financial markets, it would create political problems, as many Republican lawmakers continue to be very focused on repeal.

Campaign promises, meet Washington D.C. realities….

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The Natural Gas Market 2-20-2017 (Video)

By EconMatters


We discuss the fundamentals and technicals of the natural gas market in this video. A very mild winter with a year end run up in natural gas prices has led to quite the position unwind in this commodity. We have more Natural Gas Rigs than a year ago which could bring more future NatGas supply to market. Natural Gas bulls better hope for a very hot summer with air conditioners running at peak demand levels. Gotta love the Natural Gas Market; one of the few markets left that react to fundamental news, and not phony QE artificiality!

 

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