Tag: news

Submitted by Simon Black of Sovereign Man blog,

Thailand is known for a lot of things– quintessential white sandy beaches, hard partying nightlife, quiet Buddhist reverence…

But what a lot of people don’t realize is that Bangkok is probably one of the most important cities in the world when it comes to illegal trafficking.

Human trafficking. Narcotrafficking. Money laundering. Weapons. Forged documents. Etc.

Bangkok is just as vital to these industries as New York or London to the global financial sector.

And now, thanks to India’s sagging economy, they can add one more to this list: gold smuggling.

Recently, India has been in a state of economic turmoil. Beset on all sides by spiraling inflation, economic stagnation, and a rapidly depreciating currency.

In response the Indian government imposed capital controls in a feeble attempt to curb gold imports and reduce its widening current account deficit.

This constitutes theft, plain and simple. By eliminating options to hold anything other than rapidly depreciating paper, Indian politicians essentially stole the purchasing power of people’s savings

India’s government banned gold coin imports outright. And tight restrictions were placed on the importation of other bullion products, replete with excessive taxation and duties to pay.

The private sector hasn’t exactly taken this lying down. History shows that whenever governments create prohibitions, smugglers and bootleggers will always step in to fill the void.

And because of its traditional gold ties, regional commerce, and generous transportation options, Thailand has now become a major transit point for international gold smuggling destined for India.

The World Gold Council recently released its quarterly data on global gold trends, and the numbers are very clear: India’s gold demand cratered, dropping 32% because of the restrictions.

In Thailand, however, gold demand is up 125% from the 3rd quarter of 2012.

I’ve noticed this on the ground; there’s been a surge of gold shops and new inventory in the marketplace, particularly the small ‘biscuit’ bars that are easier to smuggle.

Much of this is bound for India.

Indian customs officials say that the amount of gold seized has soared over 300% this year.

They claim to have found people hiding gold just about everywhere you could imagine– from airplane lavatories to betwixt their butt cheeks. Not exactly the smartest way to smuggle gold… Just imagine being the buyer of those bars!

Of course, most of the gold is making its way into the country. The borders are too porous and there’s just too many people going through.

Based on the markup that gold sells for in India and the cheap cost of air travel in this part of the world, a smuggler can net nearly $10,000 on a single trip bringing 5kg of gold into India.

That’s a fairly solid payoff for a day’s work, though there are obviously risks involved.

But as much as I admire the swashbuckling, unbridled capitalist spirit of these smugglers sticking it to politicians, there is definitely an easier way.

This whole episode really underscores the importance of having at least a portion of your gold (and paper savings) safely held overseas where your home government can’t control it.

If you have gold overseas and some funds in a foreign bank account, then your savings will be protected from the disastrous consequences of capital controls.

Digital currencies like Bitcoin may also be an alternative to paper money; they’re growing in popularity in places like Argentina where people continue to be beaten down by extractive government policies and capital controls.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/ig6tVj15JgA/story01.htm Tyler Durden

Emerging in early 2010, when it became quite clear that the stock market will never have a sustained decline under Bernanke’s central planning (since validated three years later, when even the tiniest drop in the “market”, if not Bernanke’s balance sheet, is bought with unprecedented fury and excitement) the term BTFD became the staple mantra of traders 5 year old (or younger, or older) everywhere.

Unfortunately, now that the BOJ has joined in the Fed’s liquidity tsunami fray (with rumors that it will expand its monthly monetizations as soon as early 2014, and with the ECB hinting it too will start monetizing debt shortly), the D in the BTFD no longer exists for the simple reason that the S&P is now a straight line exponentially higher (on strong fundamentals according to financial comedy tv no less). Perhaps that is why as the following Google Trends chart shows, we can now wave goodbye to BTFD and replace it with our own humorous creation to explain Bernanke’s “market” – BTFATH.

We are confident that the logical question of just what comes after BTFATH will be answered promptly.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/LZOihkyXo8k/story01.htm Tyler Durden

UnitedHealth, the nation's largest provider of privately managed Medicare Advantage plans, has dropped thousands of doctors from its networks in recent weeks citing "substantial funding pressure from the federal government." The WSJ reports that physician groups are protesting as many elderly patients are now unsure about whether they need to switch plans to keep seeing their doctors. Doctors in at least 10 states have received termination letters, some citing "significant changes and pressures in the health-care environment." UnitedHealth said its provider networks are always changing and that it expects its Medicare Advantage network "to be 85% to 90% of its current size by the end of 2014," due to the new health law (Obamacare). More job creation?

 

 

Via WSJ,

…

 

The company said it is managing its network, in part, to provide more value for members, particularly given Medicare's new five-star rating system that ties bonus payments for insurers to certain measures of cost and quality.

 

"That's what's driving our actions," said Austin Pittman, president of UnitedHealth's networks. He also said, "It's no secret that we are under substantial funding pressure from the federal government."

 

…

 

Medicare Advantage, an alternative to traditional Medicare, combines hospital and doctor coverage and often includes prescription drugs and perks like gym memberships. Enrollment has more than doubled since 2004 to 13 million in 2012, which represents about 27% of Americans on Medicare.

 

The federal government pays private insurers a per-capita fee to manage the benefits. The rate is currently about 12% more than the average Medicare patient spends annually. The Obama administration plans to cut those extra payments to insurers by about $150 billion over the next 10 years to help pay for the health law. Some experts expect enrollment in Medicare Advantage plans to decline sharply if that occurs.

 

…

 

UnitedHealth is the biggest player, with nearly three million members in Advantage plans, many of them sold under the AARP brand. The company says it had over 350,000 doctors in its Advantage provider networks.

 

…

 

"Instead of a scalpel, United is using a chain saw," said Michael Saffir, a rehabilitation specialist and president of the Connecticut State Medical Society, which estimates the insurer has cut 2,200 doctors across the state.

 

…

 

A spokeswoman for the Centers for Medicare and Medicaid Services said CMS is reviewing UnitedHealth's and other provider's networks "to ensure that beneficiaries have full, transparent and timely information and access to needed care."

 

"We recognize that change is hard," said Mr. Pittman. "This is about meeting the needs of patients in specific geographic areas, improving the quality and sustainability of our networks and deepening our relationships with providers over the long term." The company said it had no comment about the investigations.

 

…

So yet another unintended (and yet foreseeable) consequence of government intervention in free-markets…

"Fewer practitioners mean longer waits, longer drives, less convenience,"

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/Xbs8NxgnMn8/story01.htm Tyler Durden

UnitedHealth, the nation's largest provider of privately managed Medicare Advantage plans, has dropped thousands of doctors from its networks in recent weeks citing "substantial funding pressure from the federal government." The WSJ reports that physician groups are protesting as many elderly patients are now unsure about whether they need to switch plans to keep seeing their doctors. Doctors in at least 10 states have received termination letters, some citing "significant changes and pressures in the health-care environment." UnitedHealth said its provider networks are always changing and that it expects its Medicare Advantage network "to be 85% to 90% of its current size by the end of 2014," due to the new health law (Obamacare). More job creation?

 

 

Via WSJ,

…

 

The company said it is managing its network, in part, to provide more value for members, particularly given Medicare's new five-star rating system that ties bonus payments for insurers to certain measures of cost and quality.

 

"That's what's driving our actions," said Austin Pittman, president of UnitedHealth's networks. He also said, "It's no secret that we are under substantial funding pressure from the federal government."

 

…

 

Medicare Advantage, an alternative to traditional Medicare, combines hospital and doctor coverage and often includes prescription drugs and perks like gym memberships. Enrollment has more than doubled since 2004 to 13 million in 2012, which represents about 27% of Americans on Medicare.

 

The federal government pays private insurers a per-capita fee to manage the benefits. The rate is currently about 12% more than the average Medicare patient spends annually. The Obama administration plans to cut those extra payments to insurers by about $150 billion over the next 10 years to help pay for the health law. Some experts expect enrollment in Medicare Advantage plans to decline sharply if that occurs.

 

…

 

UnitedHealth is the biggest player, with nearly three million members in Advantage plans, many of them sold under the AARP brand. The company says it had over 350,000 doctors in its Advantage provider networks.

 

…

 

"Instead of a scalpel, United is using a chain saw," said Michael Saffir, a rehabilitation specialist and president of the Connecticut State Medical Society, which estimates the insurer has cut 2,200 doctors across the state.

 

…

 

A spokeswoman for the Centers for Medicare and Medicaid Services said CMS is reviewing UnitedHealth's and other provider's networks "to ensure that beneficiaries have full, transparent and timely information and access to needed care."

 

"We recognize that change is hard," said Mr. Pittman. "This is about meeting the needs of patients in specific geographic areas, improving the quality and sustainability of our networks and deepening our relationships with providers over the long term." The company said it had no comment about the investigations.

 

…

So yet another unintended (and yet foreseeable) consequence of government intervention in free-markets…

"Fewer practitioners mean longer waits, longer drives, less convenience,"

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/Xbs8NxgnMn8/story01.htm Tyler Durden

 

It’s now clear that the spate of positive economic data coming out of Europe prior to the German Federal Election in September 2013 was just political gaming to get Angela Merkel back into office.

 

The reasoning here is obvious: Merkel has walked a tightrope act between appearing to play “hardball” with bankrupt EU nations while effectively writing every check needed to keep the EU project together.

 

Consider that the alternative to Merkel was a completely anti-Euro party that wanted Germany out of the Euro, it’s fairly obvious who EU-leaders would be supporting during this election.

 

Germany's exceptionalism is obvious. Whereas electorates across the European Union have punished their governments for the Great Recession and the euro crisis, Germans re-elected Chancellor Angela Merkel and displayed strong support for her party, the Christian Democratic Union (CDU), in the recent election…

 

Elsewhere, populist anti-European parties of the right have been gaining ground with campaigns directed against immigrants and minorities, especially Muslims….   Germany, by contrast, has no anti-European party with any serious support. Even the newly formed Alternative for Germany – which did unexpectedly well in the recent election, finishing just short of the 5% threshold needed to enter the Bundestag – insists that its anti-euro agenda is not anti-Europe. They want to end the common currency, because, in their view, it is undermining the European ideal. 

 

http://www.europeanvoice.com/article/2013/november/falling-for-germany/78619.aspx

 

Merkel’s Germany is effectively the glue holding the whole EU mess together. And it is not surprising that those EU-political leaders (PMs in Spain, Greece, Portugal, etc) in danger of being ousted by anti-Euro parties in their home countries are exceedingly “pro-Merkel.” No Merkel= no Euro = no more political career for most of this crowd.

 

Note in the below article how the improvement in unemployment for August was revised down after Germany’s elections.

 

The unemployment rate across the 17-country eurozone hit a record 12.2 percent in September, with about 19.5 million people classed as jobless by EU data agency Eurostat.

 

Thursday's figures showed the August rate had been revised up from 12.0 percent to 12.2 percent…

 

Analysts said the "revising away" in August of previous falls dented hopes of the labour market having bottomed out.

 

http://www.france24.com/en/20131031-eurozone-unemployment-hit-record-122-september

 

Economic data can be and is commonly used as a political tool. The EU is just the latest example of this. In the US we’ve seen this same game played out using GDP numbers.

 

The reason for this is that all “adjusted” GDP data involves a “deflator” metric that is meant to adjust for inflation. The Feds often use an inflation adjustment that is even lower than their official Consumer Price Index metric (which is already massaged to downplay inflation) in order to make GDP growth look greater.

 

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.

 

Using nominal GDP, it’s clear the US is back in recession as the year over year change has brought us to a reading of sub-4. Every time this has happened in the last thirty years the US economy has been in recession.

 

 

Economic metrics have become effective tools for political propaganda. Don’t fall for them.

 

For a FREE Special Report outlining how to protect your portfolio a market collapse, swing by: http://phoenixcapitalmarketing.com/special-reports.html

 

Best Regards,

 

Phoenix Capital Research

 

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/PuB-xCMbOOk/story01.htm Phoenix Capital Research

Submitted by Charles Hugh-Smith of OfTwoMinds blog,

The only way to keep the status quo from imploding is to banish common-sense.

I was surprised to find that many people took my satire/parody last month seriously: Obama Administration Proposes 2,300-Page "New Constitution"(October 10, 2013). A number of people wrote me asking for the source of the story, and others chastized me for not labeling the essay "satire/parody," as so many others didn't seem to get the joke. (The permanent link was constitution-parody10-13.)

I thought the absurdity of hundreds of pages of the "New Constitution" being too secret for the public to read (i.e. redacted) would make the joke obvious, but I was wrong: apparently we are collectively ready to believe that an American administration would propose a law of the land that was too secret for the citizenry to read.

Even readers who suspected the post was satirical felt the need to confirm this was indeed the case. Other readers reported the essay had unleashed a torrent of vitriol on other sites' forums.

My first thought was that we may be losing our collective sense of humor. Readers of the zany satirical zine The Onion still appreciate that a good satire takes an element of truth and exaggerates it for humorous effect: for example, today's Onion headline Man Who Drinks 5 Diet Cokes Per Day Hoping Doctors Working On Cure For Whatever He’s Getting.

But as the gulf between the official state-cartel-Empire narrative ("everything is going great, but we will all die if Central Bankers don't run the world") and reality widens, people are losing their ability to separate satire from reality and truth from officially sanctioned fiction ("unemployment rate declines to 7%.")

The strains created by this cognitive dissonance (or perhaps more accurately, a double-bind that leads to alienation and a form of induced madness, as per psychiatrist R.D. Laing's extension of Gregory Bateson's concept) lead to short tempers, loss of perspective, emotional hair-trigger reactions and a host of other unhealthy responses.

The target of my mockery was not the Obama Administration per se but the nonsensical belief that a 1,300-page piece of legislation can possibly accomplish anything but strip us of the ability to actually solve critical problems.

Legislation running into the thousands of pages creates a complexity fortress that protects the state-cartel rentier arrangements that are stripmining our economy and society: sickcare, the financial sector, the defense industry, the national security state, Big Pharma, the educrat/Higher Education cartel, and so on.

The size and complexity of 1,000+ pages of legislation make it impossible for anyone but paid lobbyists and cartel shills to understand the bill's intricacies. The only institutions with the motivation and budget to pore over the thousands of pages are those who need to game the new laws to insure their fat skim of the national income continues to grow.

The citizenry are reduced to sheep led off for shearing–which is of course the whole idea behind 1,000+ page legislation. A 30-page bill might actually be read and understood as a rentier-skimming operation; so the "solution" for cartel-corporate lobbyists and the politico toadies, lackeys and apparatchiks is to embed this systemic predation into a 1,700-page bill that "we have to pass to find out what's in it."

(Nancy Pelosi, welcome to the Orwell Hall of Fame. You have raised the art to a new level.)

But on further reflection, I now think it's even worse than I first thought: we're losing our collective common-sense. Common-sense tells us 1,700-page bills cannot possibly do anything but serve those cartels and constituencies that the bill affects.

Common-sense tells us that a central state shrouded in secrets–not just secret agencies, but what amounts to secret laws and procedures–is incompatible with democracy and liberty.

Common-sense tells us that politicians and "leaders" who approve 1,700-page bills cannot possibly be anything but paid-for toadies, lackeys and apparatchiks.

Common-sense tells us that a stock market that rises over 10% in a few weeks is tracing a trajectory that history informs us is undeniably a bubble–yet our Central Bank (Federal Reserve) "leadership" insists history, fact and common-sense are all wrong: there is no bubble, in any asset class.

If the Fed started buying bat guano and the price subsequently shot up 1,000%, Janet Yellen would be obligated to insist that there was no bubble in the price of bat guano. Our political class of toadies, lackeys and apparatchiks would accept this assurance with a straight face out of fear that any emergence of common-sense might bring their entire edifice of propaganda, deceptions, cover-ups, official half-truths, juiced statistics and central bank manipulation crashing down around them.

The only way to keep the status quo from imploding is to banish common-sense.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/IiBu_4EsN6A/story01.htm Tyler Durden

“Historically, there is no reason to fear deflation,” Nobel Laureate Thomas Sargent explains to Germany’s Wiwo.de, “we all benefit from lower prices.” Crucially, he continues, “countries with declining prices, such as Greece, must improve the competitiveness they have lost in recent years,” requiring falling wages and rising productivity (and falling unit labor costs) which will lead to companies cutting prices, “this is not a dangerous deflation, but part of the necessary correction so that these countries are internationally competitive again.” That central banks pursue an inflation rate of around 2%, Sargent blasts, is because they consider it their job to “make bad debt good debt,” adding that inflation is “a major redistribution machine – reducing the real debt burden for the benefit of creditors and devaluing the assets of the creditors.” A return to a gold standard,he concludes, to prevent governments and central banks from limitless money-printing “would not be foolish.”

 

Thomas Sargent (via Wiwo.de) dares to go there (and is likely about to be stripped of his Nobel)…

“The countries with declining prices is troubled countries like Greece. They must make their price competitiveness, they have lost in recent years, again. This requires falling wages and rising productivity. As a result, unit labor costs go back, and the company may cut prices. This is not a dangerous deflation, but part of the necessary correction so that these countries are internationally competitive again, “Sargent said in an interview.

 

In addition, there are, according Sargent “historically no reason to fear deflation.”

 

On the contrary: “We all benefit when technological progress lowers the prices, such as computers,” said Sargent.

 

That central banks pursue an inflation rate of around two percent, according to Sargent is because they consider it their job to “make bad debt good debt”. Of an inflation governments benefited with high debt.

 

Sargent: “Inflation is a major redistribution machine, which reduces the real debt burden for the benefit of creditors and devalued the assets of the creditors.”
To prevent this, according to Sargent, the reintroduction of the gold standard would be possible, “I would not necessarily say that it would be the best solution, but it would not be foolish.”

 

Until the First World War, had the gold standard, to prevent that governments and their central banks print money limitless. During this time the prices would indeed have fluctuated, but had compensated over the years.

and specific to Europe, Thorstein Polleit adds (via Wiwo.de),

“The ECB will continue to push the rate toward zero percent and then buy government bonds,” Polleit said. Background of this development are falling consumer prices in the euro-crisis countries and the resulting fear of deflation.

 

At the same time Polleit warns against the consequences of the low interest rate policy. “You can defer the market-based adjustment of the credit boom of the past few years through lower interest rates and the printing of new money most, but not prevent,” said Polleit. In the medium term there is no way to lead a massive correction, coupled with cuts and debt deflation.

Polleit’s conclusion seems very apt givne the current melt-up:

“The longer you postpone this process, the more destructive is its effect.”

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/1Jgv4_M4iyg/story01.htm Tyler Durden