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Category Archives: Economics
Warning: Exit The System… Or Else
I have stumbled upon this warning within the comments sections of a number of top news stories today. I’m not sure exactly who is responsible for posting this warning all around the internet, but it is an interesting write-up nonetheless. It took me a short while, but I finally did trace the source of the text to its online origin. Here it is, directly from the author himself… -Ed.
By Jim Sinclair | From Jim Sinclair’s MindSet | On Saturday, April 6th, 2013
Dear CIGAs,
You must now act to exit the system
Bail-in
(excerpt)
The US has already put in place bail-in-like powers as part of the Dodd-Frank financial reform act passed last year. The law includes a resolution scheme that gives regulators the ability to impose losses on bondholders while ensuring the critical parts of the bank can keep running.
Employees would be paid, the lights would stay on and derivatives contracts would not have to be instantly unwound.
Click here to read the full definition…
I have given my all to communicating the most important conclusions concerning your future financially and therefore on every level of life.
1. The operation to depress the gold price since the high was limited in time and is now behind us in terms of maximum pain for the bulls.
2. You must exit the system immediately because the Financial Nazis struck in Cyprus and now are moving directly towards you. This is simple fact, which if you ignore will be akin to the rise of the Nazis in Germany for those that knew they should, but never made the decision to leave that system.
The saddest fact is that many of you have thrown away your gold share and bullion insurances to the enriched Bankster bullies. You will now pay no attention to the need to exit the system. It is as if you are moths attracted to the flame of danger, and a sloth in that you are too lazy to take the actions required to protect yourselves. If you do not pay attention to this interview you are going to sacrifice all you have worked to accomplish in your lives. Most certainly those that are planning any form of retirement are right now dancing on the head of a needle.
Here are a few most important actions you, in my opinion, must take.
Government sponsored retirement tax preferential retirement programs must realize that one of the IMF plans in Cyprus was to nationalize all retirement programs. That means steal your retirement funds and assets, replacing them with some form of future paper assuming Cyprus returns to solvency.
You must, in my opinion, face whatever tax consequences there are and close your retirement programs. You are in clear and present danger of confiscation for questionable paper of whatever you hold in these type accounts. In a financial sense you are exactly what the ghettos in Germany and Poland were when they knew they should run but found any excuse possible not to do what was logically screaming at them to take action.
I am screaming at you from every pulpit I can find, with no personal benefit that you must take various actions and take them now. The fact the IMF, a major international body, had the audacity to demand that Cyprus nationalize all it pensioners and confiscate large percentages of the account values should be like a flashbulb going off in your eye to wake you from your sheeple slumber.
Bite the bullet.
Pay the tax.
Get your assets back.
Get out of the system.
The next action you must take is to get as far away from social media, and the use of credit cards for everything because you are painting a picture for the tax collectors that are going to go ballistic in their effort to collect your money from you in order to create revenue for governments going broke, or who are already hiding the fact they are broke.
It might take some effort, but stop your kids from informing the world of everything you and they have done on their social media. Computer based comparisons of family income to family activities will spur punitive audits when the apparent expenses are greater than the combined declared income.
The revenues services of every country are cranking up their computer search programs to grab information. You must stop so freely providing information, and maybe bragging on social media to make others think your lives are better than they really are. You must turn off the switch on your children use of social media if they are still under your authority. You must suggest to your emancipated children that they are foolish in informing the world of every little thing that do in search of 1000 friends on social media that would not really give a damn if they had a problem.
As an example of the new high tech snoops you are feeding with your credit cards and social media, research the following article.
IRS High-Tech Tools Track Your Digital Footprints – Yahoo! Finance
– Charting and analyzing social media such as Facebook
– Targeting audits by matching tax filings to social media or electronic payments
– Tracking individual Internet addresses and emailing patterns
– Sorting data in 32,000 categories of metadata and 1 million unique “attributes”
– Machine learning across “neural” networks
– Statistical and agent-based modeling
– Relationship analysis based on Social Security numbers and other personal identifiers
Click here to read the full article…
You must eliminate to the greatest degree possible all the agents between you and your assets.
There is no question that leaving assets in street name with your brokers and bankers is a financial death wish. The preferred way of holding shares of stocks has always been in your own name as physical certificates. The second best method, but much better than street name, is to hold your shares in Direct Registration. Do not expect your banks, brokers or companies you are invested in to make it easy to get out of their system. They will fight you all the way, but you have to insist on your rights regardless of their refusal or false dire warning of negative circumstances when you succeed in demanding your rights. Most of it exaggerations of what is really minutia when it comes to protecting yourselves.
Large credit balances in the form of banking accounts in CDs or in pure cash is now holding up a red blanket for the fighting confection bull of governments seeking your assets to hold off their financial collapse from their own spending sins of decades.
We can discuss in open forum, face to face or in writing later what to do with your assets but right now, as Braveheart cried, they must have FREEDOM from the system. There is much more that needs to be done, but what you have here is what should be called first priority. This should be viewed as call to action. I have not been too much off the mark on calling the developments not only of the past 12 years, but for the entirety of my successful career of more than 50 years in finance.
You ignore me at your own severe personal risk.
–
Source: http://www.jsmineset.com/2013/04/06/you-must-act-now/
Stockton, CA, You’re Bankrupt!
By Diana Marcum | From LATimes.com | On Monday, April 1, 2013
Stockton bankruptcy can move forward, judge rules
A pedestrian walks by a Stockton Record newspaper rack. (Justin Sullivan / Getty Images / June 27, 2012)
STOCKTON — A federal judge ruled Monday that Stockton is eligible for bankruptcy protection, over the objection of creditors who argued the city could come up with more money.
U.S. Bankruptcy Judge Christopher Klein said Stockton can move forward with a plan to reorganize debt. He twice stated that the creditors had acted in bad faith and had refused to pay their share of the costs for negotiations.
“The creditors got a big black eye today,” said Karol Denniston, an attorney who helped draft the legislation that guided Stockton’s mandated mediation before filing for bankruptcy protection. “Now the stage is set for the real dogfight.”
In late June, Stockton became the nation’s largest city to fail financially. At that time, all eyes were on the port city of 300,000 as experts warned the action could set off a string of similar filings among cash-strapped municipalities. Since then, a half-dozen cities have filed for Chapter 9 protection under the U.S. Bankruptcy Code, including the city of San Bernardino.
During the 90-day mediation period, Stockton’s creditors refused to negotiate unless the city cut payments to the state pension plan, CalPERS.
By law, the negotiations were confidential, but that detail emerged during the three-day trial that concluded last week.
Klein said the creditors could not legally walk away from the table, but he left the door open for CalPERS obligations to be part of negotiations in the coming phases of the bankruptcy.
At issue will be whether U.S. bankruptcy law trumps California law, which says the pension plan must be funded.
The $900 million Stockton owes to the California Public Employees Retirement System to cover pensions is its biggest debt -– as is the case with many cities in California.
Stockton slashed its police and fire departments, halted bond payments, cut employee benefits and adopted an emergency spending plan that cut many city services. But the city continues to pay into the state pension.
Stockton’s bankruptcy is expected to be closely watched for precedent, and could be appealed as high as the U.S. Supreme Court.
–
Source: http://www.latimes.com/local/lanow/la-me-ln-stockton-bankrupt-20130401,0,7979388.story
Cyprus Banks Remain Closed To Avert Run On Deposits
By Michele Kambas and Karolina Tagaris | From Reuter.com | On Monday, March 25th, 2013
Anti-Troika protesters hold a "Hands off Cyprus" banner during a demonstration outside the EU offices in Nicosia March 24, 2013. REUTERS/Yannis Behrakis
(Reuters) – The president of Cyprus assured his people a bailout deal he struck with the European Union was in their best interests, but banks will remain closed until Thursday – and even then subject to capital controls to prevent a run on deposits.
Returned from fraught negotiations in Brussels, President Nicos Anastasiades said late on Monday the 10-billion euro ($13 billion) rescue plan agreed there in the early hours of the morning was “painful” but essential to avoid economic meltdown.
He agreed to close down the second-largest bank, Cyprus Popular, and inflict heavy losses on big depositors, many of them Russian, after Cyprus’s outsize financial sector ran into trouble when its investments in neighboring Greece went sour.
European leaders said a chaotic national bankruptcy that might have forced Cyprus from the euro and upset Europe’s economy was averted – though investors in other European banks are alarmed by the precedent of losses for depositors in Cyprus.
“The agreement we reached is difficult but, under the circumstances, the best that we could achieve,” Anastasiades said in a televised address to the nation on Monday evening.
“We leave behind the uncertainty and anxiety that we all lived through over the last few months and we look forward now to the future with optimism,” he told compatriots who face an immediate, deep recession and years of hardship unlikely to be milder than those experienced by Irish, Greeks and Portuguese.
Many Cypriots say they felt anything but reassured by the bailout deal, however, and are expected to besiege banks as soon as they reopen after a shutdown that began over a week ago.
Reversing a previous decision to start reopening at least some banks on Tuesday, the central bank said late on Monday that they would all now stay shut until Thursday to ensure the “smooth functioning of the whole banking system”.
Little is known about the restrictions on transactions that Anastasiades said the central bank would impose, but he told Cypriots: “I want to assure you that this will be a very temporary measure that will gradually be relaxed.”
Capital controls, preventing people moving funds out of the country, are at odds with the European Union’s ideals of a common market but the government may fear an ebb tide of panic that would cause even more disruption to the local economy.
Without an agreement by the end of Monday, Cyprus had faced certain banking collapse and risked becoming the first country to be pushed out of the European single currency – a fate that Germany and other northern creditors seemed willing to inflict on a nation that accounts for just a tiny fraction of the euro economy and whose banks they felt had overreached themselves.
Backed by euro zone finance ministers, the plan will wind down the largely state-owned Cyprus Popular Bank, known as Laiki, and shift deposits under 100,000 euros to the Bank of Cyprus to create a “good bank”, leaving problems behind in, effectively, a “bad bank”.
Deposits above 100,000 euros in both banks, which are not guaranteed by the state under EU law, will be frozen and used to resolve Laiki’s debts and recapitalize the Bank of Cyprus, the island’s biggest, through a deposit/equity conversion.
PRECEDENT SET
The raid on uninsured Laiki depositors is expected to raise 4.2 billion euros of the 5.8 billion euros the EU and IMF had told Cyprus to raise as a contribution to the bailout, Dutch Finance Minister Jeroen Dijsselbloem said.
Cyprus government spokesman Christos Stylianides said losses for uninsured depositors would be “under or around 30 percent”.
Laiki will effectively be shuttered, with thousands of job losses. Officials said senior bondholders in Laiki would be wiped out and those in Bank of Cyprus would have to make a contribution – setting a precedent for the euro zone.
Comments by Dijsselbloem on the need for lenders to banks to accept the potential risks of their failure had a knock-on effect in the euro zone, raising the cost of insuring holdings of bonds issued by other banks, notably in Italy and Spain.
Global equity markets and the euro retreated on his comment that the Cyprus bailout could be a template for solving other problems, by shifting more risk to depositors and stakeholders:
“What we’ve done last night is what I call pushing back the risks,” Dijsselbloem, who heads the Eurogroup of euro zone finance ministers, told Reuters and the Financial Times.
A first attempt at a deal 10 days ago had collapsed when the Cypriot parliament rejected a proposed levy on all deposits, large and small. That proposal outraged ordinary Cypriots, leading to queues at bank cash machines.
The central bank has imposed a 100-euro daily limit on withdrawals from ATMs at the two biggest banks to avert a run.
PUBLIC SCEPTICAL
Russia signaled it would back the bailout even though it would impose big losses on Russian depositors, who by some estimates may hold a third of all deposits in Cypriot banks.
President Vladimir Putin ordered officials to restructure a loan Moscow granted to Cyprus in 2011 – having rejected Nicosia’s request for easier terms in crisis talks last week.
Among Cypriots sipping coffee in warm sunshine, there was a mood of wariness about the deal: “How long will it last?” asked Georgia Xenophontos, 23, a hotel receptionist in Nicosia.
“Why should anyone believe anything this government says?”
In the morning, a public holiday, residents of the capital lined the streets to watch a parade by soldiers and students to mark Greek Independence Day, waving the Greek and Cypriot flags.
“On this day I’m proud to be Greek, but at the same time I feel humiliated,” said Marios Charalambous, 56, a print-shop owner. “I’m worried what will happen when the banks reopen.”
Cyprus’ tottering banks held 68 billion euros in deposits, including 38 billion in accounts of more than 100,000 euros – enormous sums for an nation of 860,000 people that could never sustain such a big financial system on its own.
The U.S. Treasury, noting the importance to the United States of financial stability in Europe, its largest trading partner, said it was now up to Cypriots to rebuild their economy: “It is critical to lay the foundation for a return to financial stability and growth in Cyprus,” the Treasury said.
(Additional reporting by Luke Baker, John O’Donnell, Robin Emmott, Philip Blenkinsop and Rex Merrifield in Brussels, Costas Pitas in Nicosia and Lionel Laurent in Paris; Writing by Giles Elgood and Matt Robinson; Editing by Alastair Macdonald)
–
Source: http://www.reuters.com/article/2013/03/25/us-cyprus-parliament-idUSBRE92G03I20130325
Citizens Of Cyprus: This Bailout Is Gonna Cost You…
Cyprus Works On Last-Minute Deal To Soften Bank Levy
By Michele Kambas |From Reuters.com | On Sunday, March 17th, 2013
(Reuters) – Cyprus was working on a last-minute proposal to soften the impact on smaller savers of a bank deposit levy after a parliamentary vote on the measure central to a bailout was postponed until Monday, a government source said.
In a radical departure from previous aid packages, euro zone finance ministers want Cyprus savers to forfeit a portion of their deposits in return for a 10 billion euro ($13 billion) bailout for the island, which has been financially crippled by its exposure to neighboring Greece.
The decision, announced on Saturday morning, stunned Cypriots and caused a run on cash points, most of which were depleted within hours. Electronic transfers were stopped.
The originally proposed levies on deposits are 9.9 percent for those exceeding 100,000 euros and 6.7 percent on anything below that.
The Cypriot government on Sunday discussed with lenders the possibility of changing the levy to 3.0 percent for deposits below 100,000 euros, and to 12.5 percent for above that sum, a source close to the consultations told Reuters on condition of anonymity.
The source said the discussions had the “blessing” of a troika of lenders from the European Commission, the IMF and the European Central Bank.
In Brussels, a spokesman for Olli Rehn, the European commissioner in charge of economic affairs, said discussions were still under way in Cyprus.
“If the Cypriot leaders agree on a more progressive scale for the one-off levy, in view of making it fairer for smaller savers and provided this would have the same financial impact, the Commission would be ready to recommend that the Eurogroup endorse such an agreement,” the spokesman said.
The move to take a percentage of deposits, which could raise almost 6 billion euros, must be ratified by parliament, where no party has a majority. If it fails to do so, President Nicos Anastasiades has warned, Cyprus’s two largest banks will collapse.
One bank, the Cyprus Popular Bank, could have its emergency liquidity assistance (ELA) funding from the European Central Bank cut by March 21.
A default in Cyprus could unravel investor confidence in the euro zone, undoing the improvements fostered by the European Central Bank’s promise last year to do whatever it takes to shore up the currency bloc.
A meeting of parliament scheduled for Sunday was postponed for a day to give more time for consultations and broker a deal, political sources said. The levy was scheduled to come into force on Tuesday, after a bank holiday on Monday.
BREAKS A TABOO
Making bank depositors bear some of the costs of a bailout had been taboo in Europe, but euro zone officials said it was the only way to salvage Cyprus’s financial sector.
European officials said it would not set a precedent.
In Spain, one of four other states getting euro zone help and seen as a possible candidate for a sovereign rescue, officials were quick to say Cyprus was a unique case. A Bank of Spain spokesman said there had been no sign of deposit flight.
But the chief of Greece’s main opposition, the anti-bailout Syriza party, Alexis Tsipras, blamed the move on German Chancellor Angela Merkel, according to Greek state news agency ANA.
“We must all together raise a shield to protect the peoples (of Europe) from Ms Merkel’s criminal strategy,” said Tsipras, who wants a pan-European debt conference to forgive debt.
The crisis is unprecedented in the history of the Mediterranean island, which suffered a war and ethnic split in 1974 in which a quarter of its population was internally displaced.
Anastasiades, elected only three weeks ago, said savers will be compensated by shares in banks guaranteed by future natural gas revenues.
Cyprus is expecting the results of an offshore appraisal drilling this year to confirm the island is sitting on vast amounts of natural gas worth billions.
In a televised address to the nation on Sunday, Anastasiades said he had to accept the tax in return for international aid, or else the island would have faced bankruptcy.
“The solution we concluded upon is not what we wanted, but is the least painful under the circumstances,” Anastasiades said.
With a gross domestic product of barely 0.2 percent of the bloc’s overall output, Cyprus applied for financial aid last June, but negotiations were stalled by the complexity of the deal and the reluctance of the island’s previous president to sign.
International Monetary Fund Managing Director Christine Lagarde, who attended the meeting, said she backed the deal and would ask the IMF board in Washington to contribute to the bailout.
RUSSIANS, EUROPEANS
According to a draft copy of legislation, failing to pay up would be a criminal offence liable to three years in jail or a 50,000 euro fine.
Those affected will include rich Russians with deposits in Cyprus and Europeans who have retired to the island, as well as Cypriots themselves.
“I’m furious,” said Chris Drake, a former Middle East correspondent for the BBC who lives in Cyprus. “There were plenty of opportunities to take our money out; we didn’t because we were promised it was a red line which would not be crossed.”
“I’ve lost several thousand,” he told Reuters.
British finance minister George Osborne told the BBC on Sunday that Britain would compensate its 3,500 military personnel based in Cyprus.
Anastasiades’ right-wing Democratic Rally party, with 20 seats in the 56-member parliament, needs the support of other factions for the vote to pass. It was unclear whether even his coalition partners, the Democratic Party, would fully support the levy.
Cyprus’s Communist party AKEL, accused of stalling on a bailout during its tenure in power until the end of February, would vote against the measure. The socialist Edek party called EU demands “absurd”.
“This is unacceptably unfair and we are against it,” said Adonis Yiangou of the Greens Party, the smallest in parliament but a potential swing vote.
Many Cypriots, having contributed to bailouts for Ireland, Portugal and Greece – Greece’s second bailout contributed to a debt restructuring that blew the 4.5 billion euro hole in Cyprus’s banking sector – are aghast at their treatment by Europe.
Cyprus received a “stab in the back” from its EU partners, the daily Phileleftheros said.
But it and another newspapers highlighted the danger of plunging the banking system into further turmoil if lawmakers sat on the fence.
“Even if the final agreement is wrong, if this is not approved by parliament the damage will be even greater,” Politis economics editor Demetris Georgiades said in an editorial.
–
Source: http://www.reuters.com/article/2013/03/17/us-cyprus-parliament-idUSBRE92G03I20130317
Developing Basic Barter Networks
By Partisan | from GuerrillaAmerica.com | On October 9th, 2012
Rule Number 1: You will live in a barter economy and you must be a producer or offer a valuable service. Those who own the means of production or who can independently produce a valuable good, who are proficient in their trades, or who can readily prepare and distribute products to market are economic survivors, plain and simple.
Rule Number 2: You must have cash, durable goods, or precious metals to use as currency. There could be a disruption of the system that doesn’t harm the perceived value of the dollar, which is a great reason to keep some on hand – especially if you can offload them for something you need after a catastrophic event occurs.
Rule Number 3: The width and depth of your “tribal network” will determine the quality of your life above survival. Pre-collapse, you must meet medical providers, those with means of mass transportation (truck drivers, delivery drivers, etc.), others in the “merchant class”, radio operators, local law enforcement, and all your neighbors. These people are going to facilitate transactions so you can meet your immediate needs.
Rule Number 4: You must have a means of communication aside from land line or cellular phones. In a grid down situation, cellular towers will not work. You need a shortwave radio and a citizens band radio, at a very minimum, to keep up-to-date with your environment, external factors, and emergencies. These will allow you to communicate short range with your neighbors and others in your community; and will be a highly effective way to barter or make trade agreements. Information regarding external factors such as aid or community meetings will be communicated over radio waves. Finally, if you cannot communicate in an emergency, you or someone you know will become a casualty. Similarly, your community must set up its own farmers market/trading post. Supply and demand will make themselves aware here. Farmers markets aren’t just for goods; they’re also places where you can make yourself available if you provide a service or find someone who provides a service you need.
Rule Number 5: Your community must have a mechanism to enforce basic laws. Theft, unlawful violence, and the unlawful threat of violence can derail your community’s ability to trade. If you have goods to trade or you need goods from someone else, those items must arrive safely and on time. Maybe your local law enforcement will not be affected; but maybe it will – and what then? If you have no plan to secure yourself and your property then you will not thrive, much less survive.
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Source: http://guerrillamerica.com/2012/10/developing-basic-barter-networks/
20 Signs That The U.S. Economy Is Heading For Big Trouble
By Michael Snyder | From BlacklistedNews.com | On Thursday, February 21st, 2013
Is the U.S. economy about to experience a major downturn? Unfortunately, there are a whole bunch of signs that economic activity in the United States is really slowing down right now. Freight volumes and freight expenditures are way down, consumer confidence has declined sharply, major retail chains all over America are closing hundreds of stores, and the “sequester” threatens to give the American people their first significant opportunity to experience what “austerity” tastes like. Gas prices are going up rapidly, corporate insiders are dumping massive amounts of stock and there are high profile corporate bankruptcies in the news almost every single day now. In many ways, what we are going through right now feels very similar to 2008 before the crash happened. Back then the warning signs of economic trouble were very obvious, but our politicians and the mainstream media insisted that everything was just fine, and the stock market was very much detached from reality. When the stock market did finally catch up with reality, it happened very, very rapidly. Sadly, most people do not appear to have learned any lessons from the crisis of 2008. Americans continue to rack up staggering amounts of debt, and Wall Street is more reckless than ever. As a society, we seem to have concluded that 2008 was just a temporary malfunction rather than an indication that our entire system was fundamentally flawed. In the end, we will pay a great price for our overconfidence and our recklessness.
So what will the rest of 2013 bring?
Hopefully the economy will remain stable for as long as possible, but right now things do not look particularly promising.
The following are 20 signs that the U.S. economy is heading for big trouble in the months ahead…
#1 Freight shipment volumes have hit their lowest level in two years, and freight expenditures have gone negative for the first time since the last recession.
#2 The average price of a gallon of gasoline has risen by more than 50 cents over the past two months. This is making things tougher on our economy, because nearly every form of economic activity involves moving people or goods around.
#3 Reader’s Digest, once one of the most popular magazines in the world, has filed for bankruptcy.
#4 Atlantic City’s newest casino, Revel, has just filed for bankruptcy. It had been hoped that Revel would help lead a turnaround for Atlantic City.
#5 A state-appointed review board has determined that there is “no satisfactory plan” to solve Detroit’s financial emergency, and many believe that bankruptcy is imminent. If Detroit does declare bankruptcy, it will be the largest municipal bankruptcy in U.S. history.
#6 David Gallagher, the CEO of Town Sports International, recently said that his company is struggling right now because consumers simply do not have as much disposable income anymore…
“As we moved into January membership trends were tracking to expectations in the first half of the month, but fell off track and did not meet our expectations in the second half of the month. We believe the driver of this was the rapid decline in consumer sentiment that has been reported and is connected to the reduction in net pay consumers earn given the changes in tax rates that went into effect in January.”
#7 According to the Conference Board, consumer confidence in the U.S. has hit its lowest level in more than a year.
#8 Sales of the Apple iPhone have been slower than projected, and as a result Chinese manufacturing giant FoxConn has instituted a hiring freeze. The following is from a CNET report that was posted on Wednesday…
The Financial Times noted that it was the first time since a 2009 downturn that the company opted to halt hiring in all of its facilities across the country. The publication talked to multiple recruiters.
The actions taken by Foxconn fuel the concern over the perceived weakened demand for the iPhone 5 and slumping sentiment around Apple in general, with production activity a leading indicator of interest in the product.
#9 In 2012, global cell phone sales posted their first decline since the end of the last recession.
#10 We appear to be in the midst of a “retail apocalypse”. It is being projected that Sears, J.C. Penney, Best Buy and RadioShack will also close hundreds of stores by the end of 2013.
#11 An internal memo authored by a Wal-Mart executive that was recently leaked to the press said that February sales were a “total disaster” and that the beginning of February was the “worst start to a month I have seen in my ~7 years with the company.”
#12 If Congress does not do anything and “sequestration” goes into effect on March 1st, the Pentagon says that approximately 800,000 civilian employees will be facing mandatory furloughs.
#13 Barack Obama is admitting that the “sequester” could have a crippling impact on the U.S. economy. The following is from a recent CNBC article…
Obama cautioned that if the $85 billion in immediate cuts — known as the sequester — occur, the full range of government would feel the effects. Among those he listed: furloughed FBI agents, reductions in spending for communities to pay police and fire personnel and teachers, and decreased ability to respond to threats around the world.
He said the consequences would be felt across the economy.
“People will lose their jobs,” he said. “The unemployment rate might tick up again.”
#14 If the “sequester” is allowed to go into effect, the CBO is projecting that it will cause U.S. GDP growth to go down by at least 0.6 percent and that it will “reduce job growth by 750,000 jobs”.
#15 According to a recent Gallup survey, 65 percent of all Americans believe that 2013 will be a year of “economic difficulty”, and 50 percent of all Americans believe that the “best days” of America are now in the past.
#16 U.S. GDP actually contracted at an annual rate of 0.1 percent during the fourth quarter of 2012. This was the first GDP contraction that the official numbers have shown in more than three years.
#17 For the entire year of 2012, U.S. GDP growth was only about 1.5 percent. According to Art Cashin, every time GDP growth has fallen this low for an entire year, the U.S. economy has always ended up going into a recession.
#18 The global economy overall is really starting to slow down…
The world’s richest countries saw their economies contract for the first time in almost four years during the final three months of 2012, the Organisation for Economic Co-operation and Development said.
The Paris-based thinktank said gross domestic product across its 34 member states fell by 0.2% – breaking a period of rising activity stretching back to a 2.3% slump in output in the first quarter of 2009.
All the major economies of the OECD – the US, Japan, Germany, France, Italy and the UK – have already reported falls in output at the end of 2012, with the thinktank noting that the steepest declines had been seen in the European Union, where GDP fell by 0.5%. Canada is the only member of the G7 currently on course to register an increase in national output.
#19 Corporate insiders are dumping enormous amounts of stock right now. Do they know something that we don’t?
#20 Even some of the biggest names on Wall Street are warning that we are heading for an economic collapse. For example, Seth Klarman, one of the most respected investors on Wall Street, said in his year-end letter that the collapse of the U.S. financial system could happen at any time…
“Investing today may well be harder than it has been at any time in our three decades of existence,” writes Seth Klarman in his year-end letter. The Fed’s “relentless interventions and manipulations” have left few purchase targets for Baupost, he laments. “(The) underpinnings of our economy and financial system are so precarious that the un-abating risks of collapse dwarf all other factors.”
So what do you think is going to happen to the U.S. economy in the months ahead?
Please feel free to express your opinion by leaving a comment below…
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This article was originally posted at http://www.blacklistednews.com/20_Signs_That_The_U.S._Economy_Is_Heading_For_Big_Trouble_In_The_Months_Ahead/24357/0/0/0/Y/M.html
Prominent U.S. Scientists Call For Eco-Dictatorship Under UN Rule
By Jurriaan Maessen | From BlackListedNews.com | On Thursday, February 21st, 2013
Upcoming Scientific Publication: “(…) governments can and even should move beyond existent levels of public permission in order to shift norms, allowing public sentiment to later catch up with the regulation.”
In a peer-reviewed paper by the American Institute of Biological Sciences titled “Social Norms and Global Environmental Challenges” (available ahead of print), to be published in the march 2013 edition of the Institute’s yearly journal BioScience, a group of well-known scientists calls on government and scientists to start with the planned social engineering of “norms” and “values” in regards to environmental policies. In addition, they propose putting into effect all sorts of environmental fines and regulations in the spirit of Agenda 21 to hasten the social acceptance of increased governmental control. Also, they propose that the scientific community as a whole should align itself with government “through a concerted effort to change personal and social norms”.
The group of scientists involved in the upcoming publication include two Nobel Prize winners, economist Kenneth Arrow and political scientist Elinor Ostrom, as well as behavioral scientists, mathematicians, biologists- not to mention population scientists, the most well-known of whom are Paul Ehrlich and Gretchen C. Daily- whose professional relationship dates back to the Ecoscience days. The authors start out by stating:
“Some have argued that progress on these (global environmental) problems can be made only through a concerted effort to change personal and social norms. They contend that we must, through education and persuasion, ensure that certain behaviors (…) become ingrained as a matter of personal ethics.” Stating that education and persuasion are insufficient to accomplish behavioral changes, they note:
“Substantial numbers of people will have to alter their existing behaviors to address this new class of global environmental problems. Alternative approaches are needed when education and persuasion alone are insufficient. Policy instruments such as penalties, regulations, and incentives may therefore be required to achieve significant behavior modification.”
Proposing that “effective policies (…) are ones that induce both short-term changes in behavior and longer-term changes in social norms”, the collection of prominent scientists assert that “government is uniquely obligated to locate the common good and formulate its policies accordingly.”
The upcoming report however stresses that scientists are given the tools to have a hand in “government policies intended to alter choices and behaviors” such as “active norm management, changing the conditions influencing behaviors, financial interventions, and regulatory measures.”
Each of these policy instruments potentially influences personal and social norms in different ways and through different mechanisms. Each also carries the danger of backfiring, which is often called a boomerang effect in the literature—eroding compliance and reducing the prevalence of the desired behaviors and the social norms that support those behaviors”.
“Eroding compliance”, it is called. Anticipating that an increase in regulatory interventions by government are sure to create resistance among the target population, the scientists express confidence that their recommendations “can be carried out in a way that abides by the principles of representative democracy, including transparency, fairness, and accountability.”
Despite these on-the-surface soothing words, the authors stress that government (and the scientific community) should ultimately “move beyond” public consent when it comes to top-down regulations imposed on the American people:
“Some have argued that regulations are inherently coercive and cannot or should not exceed implied levels of public permission for such regulations. An alternative viewpoint is that governments can and even should move beyond existent levels of public permission in order to shift norms, allowing public sentiment to later catch up with the regulation”.
By admitting they are willing to “move beyond existent levels of public permission” to push ahead with draconian environmental policies, these prominent scientists (among whom we find two Nobel laureates and one Paul Ehrlich) have proven their willingness to deceive the American population for their “environmental” control model. As Aaron Dykes put it while interviewing Lord Christopher Monckton,, the environmental “cause” is nothing more than “an absolute valued pretext for their absolute control model”.
The engineering of public “norms” serves not so much any environmental cause, but another one, namely that environmental policies, even draconian ones, will finally be perceived by the US population as being consistent with their own personal norms.
The way in which government may go about it shifting norms, the scientists argue, is by on the one hand “managing norms” through “such things as advertising campaigns, information blitzes, or appeals from respected figures”. The other aspect involved is the use of financial incentives and disincentives with the aim of conditioning the public to accept an increasing governmental control over personal behavior. The paper continues by saying that the best way to alter existing behaviors is through persuasive government regulations “such as penalties, regulations, and incentives” in order to “achieve significant behavior modification.”
“Fines can (…) be an effective way to alter behavior, in part because they (like social norm management) signal the seriousness with which society treats the issue.”
By extension, the authors express hope that behaviors and values will “coevolve” alongside increased government control in the form of state regulations and “fines”:
“A carbon tax might (…) prove effective even in the face of near-term opposition. What needs to be assessed is the possibility that behaviors and values would coevolve in such a way that a carbon tax—or other policy instrument that raises prices, such as a cap-and-trade system—ultimately comes to be seen as worthy, which would therefore allow for its long-term effectiveness”
In the context of this idea that shifting norms will “coevolve” alongside increased government regulations, the authors state:
“Each of the government interventions can influence both personal and social norms, although they do so through different mechanisms. Only social norm management directly targets norms. Choice architecture, financial instruments, and regulations can all alter social norms by causing people to first change their behaviors and then shift their beliefs to conform to those behaviors.”
In other words: the scientists propose arousing the concept of cognitive dissonance in the minds of people in order to guide the herd towards “proenvironmental” citizenship.
“When it comes to environmental issues”, the scientists write, “two different types of social norms are at play in these dynamics: social norms of conformity or cooperation and proenvironment social norms. Only the first type need be present to induce proenvironment behaviors (although proenvironment personal norms may emerge from this through, e.g., cognitive dissonance, experience, or associating the positive feeling from social approval for an act with the act itself).”
In the upcoming publication the concepts of peer-pressure and cognitive dissonance are being brought into the equation as effective norm-determining factors:
“(…) norms of conformity and cooperation are far more universal than are proenvironment norms and are therefore far more powerful in inducing proenvironment behaviors that do not conflict with preexisting values or preferences. In other words, proenvironment values are not a necessary prerequisite to proenvironment behaviors.”
While the authors express their hope that government expands control through all kinds of environmental regulations, they argue that scientists (especially life scientists) should align with big government, join forces in an unrelenting campaign to gradually create changes in behavior so environmental policies will be more easily accepted over the course of some time.
“Life scientists could make fundamental contributions to this agenda through targeted research on the emergence of social norms”, the group asserts.
“(…) many of the empirical studies cited in this article originate in law, psychology, economics, behavioral economics, anthropology, political science, and sociology. We know, for example, that the effective management of any commons requires sensitivity to local conditions, sound monitoring, graduated sanctions, and conflict-resolution mechanisms.”
Who better to guide the sheep towards “good environmental citizenship” than those scientists specialized in social engineering:
“Life scientists have a role to play in this by extending their existing theoretical analyses. To be effective, scholars of all stripes will have to extend their capacity to collaborate with decision- and policymakers in order to ensure realism and relevance.”
The scientists would, in such an environmental dictatorship, also have a monitoring capacity:
“Scientists could (…) effectively examine how combinations of different policy interventions and of the relative timing of deployment play out.”
The paper is concluded with three distinct recommendations to both scientists and governmental agencies:
“(1) the greater inclusion of social and behavioral scientists in periodic environmental policy assessments; (2) the establishment of teams of scholars and policymakers that can assess, on policy-relevant timescales, the short- and long-term efficiency of policy interventions; and (3) the alteration of academic norms to allow more progress on these issues.”
This entire publication is a clear and unmistakable sign that a scientific dictatorship is emerging under the pretext of environmentalism. More government control through regulations and fines combined with a proactive scientific community, brainwashing people into accepting this increasing governmental control where they would otherwise reject it. And guess who should be the coordinating body of this scientific dictatorship, according to the report:
“Teams might be supported by permanent entities that maintain communication with policymakers; these will differ among nations but could be attached to the United Nations and its subsidiary bodies in the international context. One potential model is a national commitment of scientific talent in the service of United Nations agencies.”
The United Nations. Of course!
“These teams could also be charged with anticipating crises and evaluating potential policy responses in advance, since detailed evaluation in the midst of a crisis may be problematic; such emergency preparedness would probably focus on the immediate effects of policies on behaviors rather than on changing social norms, because this is likely to be of greatest relevance in a crisis.”
All this talk of putting the UN behind the steering wheel of American government and the American scientific community points to the coming of age of the dreaded scientific dictatorship, against which many observers have warned us.
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Heading Towards an Economic Collapse? Preparing for Financial Armageddon
By Off Grid Survival | From OffGridSurvival.com | On Tuesday, February 19th, 2013
Our county sits at over 16 trillion dollars in debt, with unfunded obligations that make the actual debt number about $120 trillion. The reality of the situation is there’s really no way out of the situation. Our government, thanks to both political parties, has spent us into a hole that we cannot dig ourselves out of. The facts, that nobody seems to want to talk about, indicate our country is still heading towards a complete meltdown of the financial system.
You can choose to believe the lies that are being spoon feed to you by the mainstream media, or you can look at the reality of the situation; our Economy is still facing some enormous challenges, and the prospects for a full economic recovery don’t look very good. The financial problems that lead to the housing / financial market crash of 2008 have not been fixed; in fact, many of these problems are even worse today than they were in 2008.
Preparing for an economic collapse
Twenty years ago, most people would have said you were crazy for thinking our system could collapse. Even today, most of our country is either unaware, or has forgotten how closely we came to a complete collapse of the financial system during the banking crisis of 2008.
Here we sit five years after our government spent $700+ billion to bailout a system they told us would never fail, and our system is still in just as much danger of collapse as it was in 2008, maybe more. If you’re not prepared, you need to start taking steps to protect yourself and your family from future troubles.
Keep an eye on the markets, and keep an eye on the banks.
Before depositing any kind of money in the bank, you need to research the financial soundness of that bank. Since the so called end of the financial crisis, when the government spent over $700 billion dollars to “fix the system”, over 440 banks have failed.
That means almost every week since 2008, the FDIC has had to shut down at least one troubled bank. It’s estimated that they have already had to pay out over $65 billion to cover these FDIC insured deposits.
With so many banks still going under, you really have to wonder how long the FDIC can continue to pay out on these insured deposits. With banking industry assets sitting at somewhere around $13.6 trillion, there is little reason to believe the FDIC can actually cover these insured deposits during a full scale collapse.
While many people believe they’re money is protected by the FDIC, the simple truth is, there’s not enough money to protect everyone. If the system collapses, your FDIC insured account is anything but certain.
Realize your dollars may become worthless.
You must seriously look at the possibility of an all-out collapse of the system. If this were to happen, your dollars would quickly become worthless.
You must start to take a balanced approach to being financially prepared for the future. While investing in your financial future is important, the same can most definitely be said for investing in your ability to survive future disasters. If you haven’t started preparing for the possibility of economic troubles, now is the time to seriously consider stocking up to survive future problems, financial or otherwise.
To do this I recommend investing in long-term consumable goods.
This means stocking up on items that you will need and use in the future, or stocking items that you can barter with in case the system fails. By stocking up on food, water, survival gear & supplies, and bartering goods; you will have a nice stockpile of supplies that will help see you through almost any disaster situation.
Another upside to investing in consumable goods is these goods are completely secure from financial market volatility, and will continue to hold their value after the collapse. In fact, most consumables will probably skyrocket in value in a post collapse world.
Always have cash on hand.
If you’re wondering why I recommend keeping cash, especially after telling you your dollars may become worthless, you need to realize that during the initial stages of a collapse, most people are going to be doing anything they can to get their hands on money.
People do what they know; during an economic collapse, 99% of the population will still perceive paper currency as something that has value. Most will be in denial, making your paper money useful for buying goods for at least a couple weeks after the collapse, maybe months. If you’re 100% certain the system has collapsed, you should immediately use this money to stock up on any last minute supplies or bartering items.
Remember, you can’t count on any of the money you have in the bank; most banks simply don’t have enough cash to deal with a run on the bank. During a collapse situation, your money is probably as good as gone. To prepare for the possibility of collapse, you need to have some cash on hand at all times.
It’s time to take action.
While I would never advise anyone to completely give up on our financial system, I do advise preparing for a worst case scenario.
There are some very real problems that have yet to be addressed by our politicians in Washington. When it comes to protecting your wealth, and ensuring you will be able to live a comfortable life in the future, you are the only person that can guarantee your long term financial security. You must decide what that means for yourself and your family, and then take the necessary steps to ensure your future security.
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This article was originally posted at http://offgridsurvival.com/economiccollapse-preparingfinancialarmageddon/
Crumbling Global Economy Passes Point of No Return
By Lee Rogers | From BlacklistedNews.com | On Sunday, February 17th, 2013
As bad as the global economy is right now, it is unfortunately going to get far worse. Many central banks around the world are now racing to devalue their currencies through the implementation of debt monetization programs and low interest rates. Despite statements coming out of the G20 saying otherwise, many insiders and former insiders are fully admitting that there is an on-going global currency war and that this war is accelerating. The Bank of Japan’s recent announcement of a massive bond purchase program is the latest episode in an already sorry state of affairs. It is a historical fact that prosperity has never been obtained by devaluing a nation’s money which makes it all the more insane that the central planners are actually trying to sell the general public on these policies. In fact if monetary devaluation resulted in economic growth, Zimbabwe which recently experienced a period of rampant hyperinflation would easily be the wealthiest nation in the world instead of one of the poorest. Ancient Rome had a strong monetary unit when the nation rose to prominence but degenerated after the ruling powers decided to devalue its coinage. In more recent times both the British Empire and the United States reached great heights when they maintained a sound money system. With this said, you really don’t need to be an economics guru to figure out that the result of today’s monetary policies will eventually result in a complete disaster for the global economy.
Despite all of the absurd propaganda from the major news networks, there is no question that much of the world is in a depression. The only reason there has not been a total collapse of the system is because of the fact that central banks have maintained artificially low interest rates and propped up sovereign bond markets by purchasing bonds with money that they created out of nothing. Taxpayer bailouts, stimulus programs and other nonsense haven’t helped matters either. These policies which were implemented following the crash of 2008 have simply set the world up for a much larger collapse in the future. There would have at least been an outside chance to fix the system had the central planners not intervened but now the situation is becoming increasingly hopeless. Take for example what happened in Iceland immediately following the 2008 financial crisis. The Icelandic people voted against using taxpayer money to prop up failed Icelandic banks. Even though there was a great deal of short term economic pain with foreign depositors and foreign bond holders losing billions, the country is now on the road to recovery.
On the other hand, Ireland which decided to bailout its banking system with taxpayer money is still dealing with the after effects of the crisis. In 2010, Ireland actually had to accept a bailout from the European Union and the International Monetary Fund because the government could no longer afford the burden. Just weeks ago thousands of people rightfully filled the streets of Irish cities protesting against the bank bailouts. Before the bailouts, Ireland had one of the stronger economies in the European Union with one of the lowest debt-to-GDP ratios in Europe. After the bailouts, the Irish economy has struggled even being mentioned in the same breath as Spain and Greece.
Sadly even with all of these monetary stimulus programs, the United States economy is barely treading water. It was recently reported that the U.S. economy shrunk 0.1 percent in Q4 of 2012 according to official numbers from the U.S. Commerce Department. Considering economic statistics from the government are questionable at best, it is quite possible that the real numbers are far worse. If the U.S. economy is actually shrinking with these types of monetary policies in place, it is painfully obvious that the Federal Reserve has no exit strategy from the status quo. Any attempt to defend the value of the U.S. Dollar by suspending debt purchases and raising interest rates would send the economy into a tailspin. Ben Bernanke the Federal Reserve Chairman once famously said that he would throw money out of a helicopter to keep the economy going so we should fully expect him to continue these activities. In fact, we already know through the Federal Reserve’s own policy statements that they will be continuing near zero interest rate policies well into the future. At this point that’s really all they can do since it is politically infeasible for them to tighten the purse strings so they just continue to print more and more money out of nothing.
The Federal Reserve’s bond purchasing programs have effectively fueled a rally in bonds pushing yields of various U.S. government debt instruments towards historical lows. This has fooled people into believing that U.S. government debt is a safe haven play which is astounding on so many levels. The rate of return on these debt instruments is actually negative when factoring in the real rate of inflation. The government and establishment media love to tout the Consumer Price Index or CPI as the ultimate gauge of inflation. However, the CPI doesn’t even include food and energy in its calculation thus making it a completely worthless indicator of true inflation. Maybe if people didn’t eat, didn’t use oil to heat their homes and didn’t fill their automobiles with gasoline the CPI might have some relevance.
In reality, there’s little question that that the CPI is a purposely manipulated figure designed to mislead people into believing that inflation is lower than it actually is. The CPI also provides the basis for cost of living adjustments that directly affects how much money Social Security recipients receive. This allows the government to get away with paying far less than if real inflation was used as the benchmark to calculate these adjustments. The true measure of inflation calculated using the same statistical models used by the U.S. government during the 1970s has inflation closer to 10% on an annual basis. Even if we were to assume that inflation is half of that figure, U.S. Treasury bond holders would still be getting a negative rate of return on their investment.
Cleary, this is a dangerous game that is being played by the world’s central banks. Looking specifically at the Fed they announced late last year that they would be purchasing $85 billion worth of securities on a monthly basis for an indefinite period of time until unemployment is substantially reduced. This adds up to roughly $1 trillion worth of bond purchases per year which is approximately what the federal government’s annual budget deficit has been under the Obama regime. The Fed is essentially monetizing enough debt for the federal government to finance its $1 trillion annual budget deficit. In other words they are creating close to $1 trillion new dollars out of nothing and dumping it into the system. The end result is that you have a larger supply of dollars chasing the same goods and services which ultimately means there will be higher prices because each dollar will be worth less.
This policy is essentially an invisible tax on the average person because it robs them of their purchasing power. Combine this with the fact that the Obama regime actually raised taxes on poor and middle class Americans as part of the recent fiscal cliff deal and the additional burden Obama’s universal healthcare plan has placed on businesses and it is no wonder why the economy is sputtering. Not only is the currency being devalued but they are financially damaging the base from which they collect taxes. Evidence of this economic reality can be seen from a leaked internal e-mail from a Wal-Mart Vice President who stated that sales were a total disaster and that February 2013 sales were off to its slowest start in the 7 years he’s been with the company. Since average people now have less purchasing power to buy things with, it shouldn’t be any surprise that we see reports like this.
One would think sanity would prevail and the Obama regime would at least end the costly foreign wars and make a few domestic spending cuts. Since we live in a world where insanity seems to be the prevailing thought process, we are not going to see this happen. At the recent State of the Union speech Obama actually proposed more spending programs including a ridiculous multi-billion dollar universal preschool initiative. With a debt over $16 trillion, unfunded liabilities that some have argued approach $100 trillion or higher and $1 trillion annual budget deficits where do they think they’ll get the money to pay for these new programs? Either this is pure stupidity of the most epic magnitude or they are intentionally trying to destroy what’s left of the economy. Regardless of what you believe, these policies are leading us towards disaster.
As a result of these crazy policies, huge bubbles are being created in the U.S. Treasury bond market, the U.S. stock market and most importantly in the U.S. Dollar itself. Since the Fed is buying an increasing amount of bonds it has artificially propped up the market causing investors to venture into the stock market for greater returns on investment which has resulted in the Dow Jones Industrial Average hitting the 14,000 level. Contrary to what the talking head clowns on CNBC say, this is not the sign of a healthy economy but instead an indicator of gross manipulations by the Fed which has forced investors to take on more risk to achieve any real rate of return. At some point the market is going to reject these policies when fewer and fewer market participants are willing to purchase U.S. Treasury bonds at historically low yields while the U.S. Dollar is simultaneously devalued. This alone will cause the bond bubble to burst, yields to skyrocket and force the U.S. government to pay even more money to service the interest on the debt. Considering that the U.S. government is already having a difficult time making payments to service the debt with historically low yields, any reversal would be extremely problematic.
It is comical that there are still ratings agencies that rate U.S. sovereign debt with a Triple-A status considering the train wreck we are witnessing. S&P which was the one ratings agency that actually downgraded U.S. sovereign debt is now being sued by the U.S. government over inaccurate securities ratings leading up to the 2008 financial crisis. This is not an attempt to defend S&P by any means, but there are a number of questions as to why they are the only ratings agency being sued. All of the big ratings agencies were guilty of grossly exaggerating the quality of different types of securities in the years leading up to the 2008 financial crash. The only thing that differentiates S&P from the other ratings agencies is that they had the nerve to downgrade U.S. sovereign debt. This lawsuit appears to be retaliation against them for that downgrade and nothing else. If this isn’t the case, than why haven’t lawsuits been filed against all of the major ratings agencies? Clearly, each one of them was involved in some sort of chicanery leading up to the crash. With this said, there is no reason to trust what any of these major ratings firms are saying about U.S. sovereign debt. It is highly probable that their ratings of U.S. sovereign debt are being affected by the possibility that the U.S. government would threaten legal action against them if they fail to provide a favorable analysis.
It is also becoming more apparent that the central planners have been suppressing the gold and silver price as part of an effort to maintain the illusion that these debt based currencies still have value. The German Bundesbank recently announced its intention to take delivery of over half of its gold reserves by 2020 from the Fed and other central banks. The main question here is why would it take 7 years to complete this process? China has been buying huge sums of physical gold on the open market and so far have had no logistical problems receiving prompt delivery of their gold. This gives additional credence to the accusations that central banks have been leasing out physical gold as part of a scam to suppress the price. In other words, the gold that Germany is requesting delivery of is no longer available which is why the gold cannot be immediately delivered. In all likelihood, this is why an agreement was struck to deliver the gold over 7 years so the central banks could save face without having to transparently expose the gold manipulation fraud they are engaged in.
Either way, it is quite obvious that the gold and silver markets have both been manipulated for some time now. If you study the daily charts of gold and silver there are often huge price disruptions to the down side that have no fundamental explanation. If other countries follow suit and request physical delivery of their gold, this could put an end to these suppression schemes resulting in a massive upswing in the price of gold.
It is often said that gold goes where wealth is being generated. If we use that as a measuring stick it is clear that wealth is being transferred from the west over to Asia. Specifically of interest is the fact that gold is being purchased in large sums by both the Chinese and Russian governments. There is even speculation that the Chinese are preparing to officially back the Yuan with gold. We also see huge gold demand from India whose gold imports surged 23% this past January. In fact gold demand has been so strong that India just raised taxes on gold imports to try to reduce demand. Unfortunately for the west, these countries that are net buyers of gold are going to be in a very good financial position once the full effect of these debt monetization and low interest policies are felt. Gold is real money and stores value unlike the debt based garbage that these central banks are creating by typing digits into a computer.
There is very little question that the global financial system is at a point where it cannot be repaired. The policies of unlimited money creation that are currently being implemented by the Fed and other central banks are unfortunately going to continue until the entire system collapses. It is now inevitable that there will be a huge crash in the U.S. stock market, the U.S. bond market and eventually the U.S. Dollar. Gold, silver and other precious metals should perform very well as this scenario unfolds so there are safe havens available for people wishing to preserve their wealth. It is unfortunate that the only question remaining now is not if this collapse is going to happen but when this collapse is going to happen.
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This article was originally posted at http://www.blacklistednews.com/Crumbling_Global_Economy_Passes_Point_of_No_Return/24285/0/38/38/Y/M.html
Days After Freezing Prices, Argentina Bans All Advertising
By Tyler Durden | From ZeroHedge.com | On February 9th, 2013
A week after Argentina resorted to every failing authoritarian government’s last ditch measure to (briefly) control inflation before runaway prices flood the nation and result in political and social upheaval, namely freezing retail prices - a decision which never has a happy ending, the country is pressing on through the rabbit hole and in the latest stunner of a government decree (which like Venezuela yesterday is merely a harbinger of what is coming everywhere else), has banned advertising in the Argentina’s newspapers in an attempt to weaken what’s left of a private, independent media, and to punish those who don’t comply with the government’s propaganda.
Supermarkets and electronics retailers say Argentina’s government has ordered them to stop advertising in the country’s top newspapers, in a bid to weaken independent media companies as President Cristina Kirchner turns to increasingly unorthodox policies to prevent inflation from derailing an ailing economy.
The order, confirmed by retailers and newspapers but denied by government officials, comes after retail executives say price-control czar Guillermo Moreno pressured them earlier this week to agree to freeze prices for two months. Executives say Mr. Moreno then told them to pull all newspaper sales ads in hopes this would somehow curb inflation. “This was an imposition, not a request. He simply decided that nobody should publish any ads. It’s not sustainable and will be hard to comply with,” said one retail-sector executive.
And yes, a light bulb just went on over the president’s head when he read the word “price-control czar.”
Why is Argentina resorting to this dictatorial measure? Simple – to stifle the independent press for one simple reason – “misreporting” inflation, or at least reporting inflation numbers which are orders of magnitude higher than the official government numbers.
Mrs. Kirchner played down inflation for years, refusing even to say the word in public. But with economists estimating annual inflation at around 26%, she has been calling on consumers to prevent companies from raising prices. A sluggish economy and Mrs. Kirchner’s confrontational political style have also taken a toll on her popularity.
The Buenos Aires Newspaper Editors Association said the order was a reprisal against those who publish independent inflation estimates. “This is another display of how far authoritarianism can go in a context that is dominated by discretional policies and bullying,” the group said in a harshly worded newspaper ad Friday.
The controversy comes as Mrs. Kirchner attempts to implement a three-year-old media law that would overhaul Argentina’s media industry and dismantle media giant Grupo Clarín SA, which publishes Argentina’s bestselling newspaper, Clarín, and runs a profitable cable-TV and Internet network.
“This aims to inflict economic damage on all independent media companies,” Clarín spokesman Martin Etchevers said. “On the one hand, it’s another attempt to weaken media that don’t depend on government money. On the other, it’s an attempt to keep people in the dark about inflation.“
Two birds with one dictatorial decree stone. However, while the motive is quite clear it shows the danger of having a truly independent media, and one which is not aligned with the government’s propaganda: report the truth and we will starve you by banning all your advertising. Ad revenues in the US must be soaring…
Mrs. Kirchner accuses Clarín of using its sway to undermine her government. Clarín officials say the government started targeting it in 2007, when it began reporting that the government was underestimating inflation.
Just as notably, with the witch hunt against anyone whose inflation numbers differ from the government’s official lies, it is likely that the organizers of the Argentinian equivalent of the Billion Dollar Price project would get the death penalty.
In 2011, the government started fining economists for publishing their own inflation estimates. To protect them, a group of opposition legislators began publishing the economists’ monthly inflation estimates anonymously.
What is most ironic is that it is the same US-based IMF who recently punished Argentina for its inflationary misreporting.
The International Monetary Fund has weighed in on the matter and recently censured Argentina over questions around its economic data. The IMF warned that it could eventually expel Argentina from the organization if the matter isn’t resolved.
But perhaps Argentina is not massaging its inflation numbers – perhaps it is merely doing what the US and every other IMF member nation does: ignore those prices which are soaring, and hedonically adjust everything else far lower, to give the general public the impression that the horsemeat lasagna which went up in price… it didn’t really go up in price.
At the end of the day, this like every other idiotic measure taken by a government in its last throes is just to preserve power one more month, or week, or day:
Gabriel Gómez, an economist at the research firm Consultora Ledesma, said the government is imposing short-term price controls and advertising limits ahead of a key mid-term election in October.
“The only thing the government wants now is to decelerate inflation before October,” he said. “Everyone knows that price controls are counterproductive in the long-run, so that’s the only way to understand the logic behind this.”
Top government officials have called on Mrs. Kirchner to amend the constitution so she can seek re-election in 2015. To do so, her coalition would need to win more congressional seats in October.
Or, as is the case everywhere: when the government’s self preservation is the bottom line, screw the people. Alas, that is the case now in every “developed world” nation, whose status quo is clinging on to dear life as the legacy socioeconomic and financial system implodes.
Keep an eye on just how far Kirchner will go to keep her place in power – that will be a useful indicator of what is coming to every banana republic next, and quite soon.
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This article was originally posted at: http://www.zerohedge.com/news/2013-02-09/after-freezing-prices-argentina-bans-all-advertising