Global Economy: DEBT MASQUERADING AS GROWTH!

The market Oracle reports: "The greatest economic, political and societal collapse in recorded history is unfolding and has been doing so ever since the final denouement of partially sound money occurred at Bretton Woods II in August 1971 – thereby allowing governments, the financial systems and elites to substitute money printed out of thin air and politically correct/corrupt legislation for sound economic policies.  This process has been unfolding for 40 years and is nearing its demise.  

Growth now is a function of expanding credit, financing government and consumer consumption and calling it GDP.  The developed world has become Something for nothing societies are like locusts they eat everything right down to its roots, including next year’s seed corn.  They will issue debt until it no longer can be sold. 

They will print money until it is no longer accepted.  This process is well established and underway (think Venezuela, Greece, Argentina, this is the future).  To illustrate the LACK of GROWTH, look at this chart of GDP from Chris Wood at CLSA and subtract the deficit:

Most economists are PREDICTING accelerating GDP growth in 2014; you sure wouldn’t come to that conclusion based upon median family incomes since 2008;  

Or the crash in PERSONAL incomes over the last year  

As you can see, the only period that compares to this CURRENT CRASH in disposable income in the last 20 years was the crash of 2007-2009.  Do you think this reflects a robust economy in 2014 as predicted by the MSM and Keynesians?  To grow the economy, we must borrow money to finance spending and report it as GDP.  DEBT MASQUERADING as GROWTH! 

Now, the developed world’s economies have been hollowed out (by runaway regulation, taxes and crony capitalism) and much of the wealth creation occurs in the emerging world.  Crony capitalists and their minions in government just attack the private sector where future growth and productivity must come from. 
 
They carve it up and destroy the future creative destruction (aka “Capitalism”) which must occur for growing middle classes and economies.  The powers that be are MINTING fire hoses of NEW money, creating at least 8000 million dollars/yen a DAY (2 million million a year or 2+ trillion per year) to support the global economy, bankrupt sovereigns and financial systems.   

Very little BAD can happen when they are printing and injecting this amount of money into the financial system and government coffers on a daily/yearly basis. “Currencies don’t float they just SINK at different rates”

Asset-backed economies provide the ILLUSION of growth in the developed world driven by currency depreciation (ASSET prices rise/reprice as the purchasing power of the currency they are denominated in sinks) and never-ending leverage to fund consumption and HIGHER ASSET prices.  This is insane behavior, but now is the last refuge of the powers that be.
 
Insanity in individuals is something rare - but in groups, parties, nations and epochs, it is the rule." 

EU-Digest

Sochi Olympics - the Netherlands: Dutch have it all to dominate the Olympic oval - by Raf Casert

Skating is in the Dutch blood

There is nothing more mythical in Dutch sports than an age-old 11-city race skating across lakes and canals in bone-numbing cold from dawn to dusk. No wonder the Netherlands is the greatest speedskating nation in the world.

And with Sven Kramer and Ireen Wust leading the way on the big Olympic oval in Sochi, they are bent on proving it again.

Time and again over the last half century, the Dutch have been top or near the top of the Olympic speedskating standings - a nation of 16.8 million defying giants like the United States, Russia or Germany. In Sochi too, the Dutch have a realistic chance of a half dozen gold medals on the big oval.

They won more long-track speedskating medals than any other nation in Vancouver, and federation sporting director Arie Koops said the only way forward is to become even more dominating.

"The goal is to improve on Vancouver. And considering our current level of form, that is a realistic goal," he told The Associated Press.

Read more: Dutch have it all to dominate the Olympic oval- by Raf Casert

Global Economy Turmoil: Nervous Markets Rattle in China, Turkey, USA, Mexico, Europe and Argentina - by Richard Barley

A trouble shared is a trouble halved, or so the saying goes. But the troubles are piling up quickly for emerging markets.

Jitters about China, the meltdown in the Turkish lira, violent protests in Ukraine and the plummeting Argentine peso—underlaid with continuing nerves about the withdrawal of U.S. monetary stimulus—have all combined to hit risk appetite. The problems aren't particularly new and don't have much in common, but the combination is proving toxic.

The biggest repercussions have been in the foreign-exchange markets, where even currencies of countries with relative fundamental strengths, such as the Polish zloty and the Mexican peso, have started to show signs of strain. Pressures have also emerged in asset classes that have so far remained resilient, such as U.S.-dollar-denominated emerging-market bonds. That will understandably make investors nervous.

But some of the concerns may ease. China is seeking to shift from an economy led by investment to one driven by consumption. This is such a vast and complex process that worries about how it is progressing will be with us for a long time yet. The small dip in China's manufacturing purchasing managers index that some cite as a key reason for the market turmoil seems just a pretext.

Ukraine and Argentina both look worrying, but their impact on global financial markets should be limited. If other Latin American or Eastern European currencies get hit, but are supported by relatively strong economies, that could make them look good value in time.

Turkey bears watching closely. The solution to the continuing selloff in the Turkish lira—which Friday hit a fresh record low of 2.33 to the dollar—seems clear: the Central Bank of Turkey needs to raise interest rates. But political turmoil means it is unwilling to do so; its interventions in support of the lira are inadequate in the meantime.

This could cause larger problems. Turkish companies have large foreign-debt exposures, and the lira's slide could cause balance-sheet strains. That suggests that the central bank will ultimately have to hike rates to avoid a bigger crisis. But the situation could get much more uncomfortable before that happens.

Meanwhile, the risk aversion in developed markets smacks of using the situation to exit some very popular and profitable bets. Southern European government bonds and stocks, hybrid securities that blend features of equity and debt and subordinated bank bonds have all had a strong start to the year; but they are also volatile. No wonder investors might take the chance to step back.

Read more: Heard on the Street: Emerging Mix Rattles Nervous Markets - WSJ.com

The Netherlands Try To Cure 'Dutch Disease': Welfare State - by Elise Hilton

Dutch River Scene

Far too few governments rein in their countries’ bloated welfare states before disaster strikes. As a result, some citizens eventually suffer the economic equivalent of a heart attack: wrenching declines in living standards as they are victimized by unsustainable programs’ endgame. Greece and the city of Detroit are only the most recent grim examples.

Many more suffer from the meager growth and barely rising incomes that result from the toxic combination of government overspending, burdensome regulations, and corrosive taxation. Much of Europe fits this category of economic stagnation.

Occasionally, however, governments stage successful retreats from welfare-state dysfunction. Canada reduced spending by over 8% of GDP in the 1990’s, and the United States reduced non-military spending by 5% of GDP beginning in the mid-1980’s – a trend sustained by center-right and center-left governments alike.

fare dependency and restore work incentives, it is worth noting – especially when that country is the Netherlands, which built one of the world’s most expansive welfare states in the 1960’s and 1970’s.

Recently, the Netherlands’ King Willem-Alexander, delivering his first annual address to Parliament, said, “Our labor market and system of public services no longer fully meet the demands of the twenty-first century….The classical welfare state is slowly but surely evolving into a participation society.”

That represents a genuinely remarkable shift. From the 1960’s and 1970’s on, those writing about the Netherlands often lamented the “Dutch disease.” There were so many generous subsidies, grants, and transfer payments – aimed at everyone from the truly needy to artists unable to sell their work – that after-tax wages were often barely higher than benefits. So people rarely returned to work after they lost or left a job, or did so in the underground economy, with its unreported cash payments.

Whether one considered the Dutch welfare state humane and generous, or bloated and foolhardy, its largesse took a heavy toll on the economy. But unlike, say, the French, the Dutch have responded to their past excesses with a series of policies designed to promote a return to work in the formal labor market. Indeed, they deserve an orange-hued salute for innovative reforms that governments worldwide might usefully emulate in the interest of maintaining a targeted, effective, and affordable safety net.

For example, disability insurance has become a huge, rapidly growing problem in many countries, despite the dramatic decline in the share of workers in physically demanding and dangerous jobs like construction and manufacturing. To stem the dramatic rise in disability payments, the Dutch now require firms with high claim rates to pay more for disability insurance, thereby creating a strong incentive to ensure greater workplace safety.

But reducing disability claims (and thus payments) is only half of the equation. The other half is returning those who can do so to gainful employment. (In America, fewer than 1% of the disabled return to work.) Early intervention and informational campaigns about return-to-work options are promising possibilities. Much economic research shows that job skills deteriorate the longer one is away from work; so retraining, information, and re-entry programs are very important.

Similarly, the Dutch have embraced welfare reform, much as the United States did in 1996, when a Democratic president, Bill Clinton, and a Republican Congress agreed on time limits, as well as work and training requirements. As a result, the Dutch welfare system now requires beneficiaries to show proof of an active job search prior to eligibility; to perform work or volunteer community service while receiving benefits; and to take a job even if it requires a long commute.

America’s 1996 welfare reform grew out of initiatives in the US state of Wisconsin. And, just as Wisconsin’s reform proved to be a model that was successfully adopted nationally, so reforms in one European Union country could spur policy innovations elsewhere in the EU and around the world. And contagious successful policy reforms are precisely what Europe and most of the world need.

To see why, consider the tax rate necessary to pay for social benefits, which equals the replacement rate (the average level of benefits relative to taxpayer incomes) multiplied by the dependency ratio (the share of the population receiving the benefits). The higher the replacement rate and/or dependency ratio, the higher the tax rate needed to pay for the benefits.

What is absolutely certain is that the dependency ratio will rise virtually everywhere, owing to inexorable demographic trends. The combination of rising life expectancy, lower fertility rates, and, in some countries (including the US), the retirement of the post-World War II baby-boom generation, implies a rapid increase in the old-age dependency ratio.

The US, for example, will go from one retiree for every three workers today to a 1:2 ratio in the next three decades. Italy and Germany will have a 1:1 ratio. And the share of China’s population that will be over 65 a generation from now will be larger than in the US.

Common-sense policy reforms that ought to be adopted for their own sake, like the Dutch disability and welfare reforms, will provide a second dividend by lowering the dependency ratio. That will not be enough to maintain sound public finances indefinitely. But, by demonstrating cures to the “Dutch disease,” the Netherlands is giving all of us an invaluable lesson.

Read more: The Netherlands Try To Cure 'Dutch Disease': Welfare State | Acton PowerBlog

Netherlands: Apple rumored to be planning new European data center in Eemshaven

Apple's infrastructure team is believed to have been focused on the region as a possible expansion location for some time, according to a report from iPhoneClub.nl. The project, code named "Saturn," could bring as many as 200 new jobs to the area.

Eemshaven is a seaport in the Netherlands' Groningen province which has recently become a popular destination for international technology companies seeking an infrastructural foothold in Europe. The port is home to numerous power generating stations, including a 156-megawatt wind farm, and is also the landing point for a high-capacity transatlantic fiber optic cable managed by India's Tata Communications.

Search giant Google currently operates a 10,000 square meter facility in Eemshaven, and Microsoft has begun construction on a similarly-sized datacenter of its own in the area. Microsoft's new datacenter, which is thought to be representative of the type of facility Apple would construct, is being built at a cost of €2 billion ($2.7 billion).

Apple has been on a datacenter construction spree of late. The company completed a $1 billion facility in Maiden, North Carolia in 2012, and is currently in the process of opening similar sites in Prineville, Oregon and Reno, Nevada.

Apple will reportedly make a final decision on whether to officially add the Eemshaven site to its roster by the end of the year.

For more go to Apple Insider

Middle East: BDS leaders say Palestinian human rights are compatible with Israeli Jewish future

The American Studies Association’s (ASA) move to censure Israel sparked a deluge of pro-Israel responses claiming that the boycott, divestment and sanctions (BDS) movement seeks the “destruction” of Israel.

It is a line of attack that conjures up the ghosts of the Holocaust to many Jews.

For Israel advocates, destroying Israel would mean destroying Jews’ place in the Middle East.  Cary Nelson, one of the most prominent scholarly voices against the academic boycott of Israel, distilled this type of  anti-BDS argument in a Wall Street Journal Op-Ed published in response to the ASA boycott and the Modern Language Association convention.

“The fundamental goal of the boycott movement is not the peaceful coexistence of two states, one Jewish and one Palestinian, but rather the elimination of Israel,” he wrote. “One nation called Palestine would rule from the Jordan River to the Mediterranean Sea. Those Jews not exiled or killed in the transition to an Arab-dominated nation would live as second-class citizens without fundamental rights.”

But a survey of some of the leading Palestinian supporters of BDS reveals a starkly different vision: that of a shared future in Israel/Palestine, where the rights of everyone are upheld.

“Freedom, justice and equality, the ultimate goals of the BDS movement, would only ‘destroy’ an unjust regime, not harm any humans. BDS categorically opposes all forms of racism, including anti-Semitism, and consistently advocates for equal rights for all humans,” said Omar Barghouti, a Palestinian human rights activist and a co-founder of the global, Palestinian-led BDS movement for Palestinian rights.

“The Zionist paranoia, whether real or an Oscar-winning act, about BDS aiming to ‘remove Jewish Israelis from the region’ is clearly based on myth and a long record of Zionist ethnic cleansing and destruction of Palestinian society. Criminals always fear that their long oppressed victims will resort to the same criminal techniques if they gain power and turn the tables.”

Note EU-Digest: Human rights abuses by Israel and by Palestinian security forces in the West Bank grew during 2013, Human Rights Watch said today in its World Report 2014.

Israeli forces killed more Palestinian civilians in the West Bank and demolished more Palestinian homes than in 2012. Israel continued to build settlements in the West Bank, violating international law. Palestinian security forces in both the West Bank and Gaza enjoyed virtual impunity from criminal prosecution despite credible allegations of torture. In Gaza, Israel and Egypt impeded rebuilding of the devastated economy by blocking virtually all exports. Israeli and Palestinian security services in the West Bank and Gaza arrested people arbitrarily and unlawfully restricted people from protesting.

“The US talked a lot about peace last year, but said precious little about the victims of Israel’s massive campaign of home demolitions in the West Bank and the Negev,” said Sarah Leah Whitson, Middle East and North Africa director at Human Rights Watch. “The Palestinian Authority’s security forces beat West Bank residents protesting the negotiations with Israel, and Hamas security officials threatened and abused Gaza activists calling for peaceful change.”

In the 667-page report, Human Rights Watch reviews human rights practices in more than 90 countries. Syria’s widespread killings of civilians elicited horror but few steps by world leaders to stop it, Human Rights Watch said. A reinvigorated doctrine of “responsibility to protect” seems to have prevented some mass atrocities in Africa. Majorities in power in Egypt and other countries have suppressed dissent and minority rights. And Edward Snowden’s revelations about US surveillance programs reverberated around the globe.
 
Read more: BDS leaders say Palestinian human rights are compatible with Israeli Jewish future | Mondoweiss

USA Politics - the Koch Brothers - Conservative Money and Influence in America

Looking inside one of the biggest political operations in the country – a sprawling network of politically active nonprofit groups backed by the billionaire industrialists Charles and David Koch and other conservative donors showed some interesting facts.

Working with Robert Maguire, a researcher at the Center for Responsive Politics who tracks nonprofits, we calculated that a coalition of 17 groups raised at least $407 million in the 2012 election cycle. Much of that was spent on get-out-the-vote efforts and ads attacking President Obama and congressional Democrats.

Tracing the flow of money required pouring through hundreds of pages of tax returns and mapping out the connections between the groups. Much of the money was transferred to LLC subsidiaries, known as disregarded entities, that are wholly owned by the recipient groups. The network also gave millions of dollars to other outside groups allied with the GOP.

For more details on how the funds moved through the network, check out The Washington Post's visualization by clicking on the link below.

Read more in the Washington Post