June 12, 2012 Leave a comment
Financial markets, monetary policy, geopolitics, precious metals, frauds, news and other delusions
June 12, 2012 Leave a comment
May 5, 2012 Leave a comment
I’m sick of war.
Officially the cost of the war on terror has been $1.3 trillion. And military spending — especially the interest on debt to pay for past wars — keeps growing year on year:
As General Eisenhower noted:
Every gun that is made, every warship launched, every rocket fired, signifies in the final sense a theft from those who hunger and are not fed, those who are cold and are not clothed.
This world in arms is not spending money alone. It is spending the sweat of its labourers, the genius of its scientists, the hopes of its children. The cost of one modern heavy bomber is this: a modern brick school in more than 30 cities. It is two electric power plants, each serving a town of 60,000 population. We pay for a single fighter with a half-million bushels of wheat. We pay for a single destroyer with new homes that could have housed more than 8,000 people. This is not a way of life at all, in any true sense. Under the cloud of threatening war, it is humanity hanging from a cross of iron.
The cost in life was been ever steeper; over a million Iraqis died.
But it’s more than cost; this a problem of responsibility. George W. Bush and Dick Cheney live a comfortable life of wealth and leisure, four years after leaving office having started two destructive, costly and ineffective wars of choice. They didn’t fight. None of their children fought. But lots of American and British soldiers and innocent Arabs got their limbs and heads blown off.
May 2, 2012 Leave a comment
As the US beefs up its military presence in the Persian Gulf region, Pentagon strategists estimate that they would need less than a month to defeat Iranian forces should a military conflict take place.
US Central Command (CENTCOM) believes it can destroy or significantly degrade Iran’s conventional armed forces in about three weeks using air and sea strikes, a defense source told The Washington Post.
“We plan for any eventuality we can and provide options to the president,” Army Lt. Col. T.G. Taylor, a spokesman at CENTCOM told the newspaper. “We take our guidance from the secretary of defense and from our civilian bosses in [Washington] DC. So any kind of guidance they give us, that’s what we go off of [sic].”
The American military has been building up its presence in the region amid rising tension in the area.
The US Navy currently has two aircraft carriers deployed near Iran and is upgrading mine-detection and removal capabilities.
The US Air Force recently dispatched a number of F-22 Raptor strike fighters to a base in the United Arab Emirates. The move caused backlash from Tehran, which said Wednesday it threatened regional stability.
Deploying a “floating base” in the Persian Gulf – a converted transport ship that would serve as a semi-stationary base of operations for the US military – is also on the table. USS Ponce is expected to host mine-sweeping helicopters, speed boats and probably commando teams.
The Pentagon has also intensified training of elite troops of its allies in the region. The members of the Joint Special Operations Task Force-Gulf Cooperation Council commando team, who serve as instructors, may be ordered to go into the field as well, should such a need arise.
The measures are taken as contingency for possible attack by Iran on US troops or blocking of the Strait of Hormuz, the vital oil transit route, the US says.
CENTCOM says there are about 125,000 US troops in close proximity to Iran. The majority of them – 90,000 – are deployed in or around Afghanistan. Some 20,000 soldiers are ashore elsewhere in the Near East region; and a variable 15,000 to 20,000 serve on naval vessels.
April 16, 2012 Leave a comment
Geithner April 2011: “Is there a risk that the United States could lose its AAA credit rating? Yes or no?” – Tim Geithner: “No risk of that.”
Geithner April 2012: “If we don’t deal with these debt problems we are going to be Greece in two years” – Tim Geithner: “No risk of that.”
On Friday we learned that in 2011, the president paid a less than “fair” 20.5% in taxes on his joint income, substantially less than pretty much most Americans who listen to the now virtually daily sermons on the fairness of class warfare. It prompted us to wonder if the president has not been taking tax advice from the likes of the Treasury secretary, best known not for destroying the US economy, but for having some tax “underpayment” issues of his own, which however TurboTax was delighted to take the blame for. Which explains why now that the president may appear just somewhat disingenuous when discussing tax “fairness”, it is up to the lackey who made tax evasion cool all over again, to defend the “fairness” of the Buffett Rule (shown graphically here) in today’s episode of 60 Minutes. Oddly enough we were expecting Timmy to tell everyone to just use TurboTax… and some creative imagination when it comes to reporting income: he did not, instead he said “If we don’t push for things that make sense, then we’re not governing“. No comment there.
But wait there’s more: in a disastrous attempt to prevent the repeat of last August, when a 3 month showdown over the US debt limit ended up crashing the stock market, and culminated with the downgrade of America’s AAA rating, Geithner, who previously said there is no risk of the US ever being downgraded (4 months before it was), urged Congress against repeating last year’s “very damaging” debate over the debt limit, adding that the economy is stronger than at any time in the past several years. We wonder though – very damaging to whom exactly: the liars who claim that ‘America’s economy is stronger than ever’, courtesy of well over $2 trillion in debt in the past two years? Or that the debt ceiling will be breached all over again before the presidential election, confirming that the Treasury secretary can’t even budget the worst case scenario one year in advance? Finally, since there will be a protracted debt ceiling fight, certainly during the tail end of the presidential campaign, is Geithner’s plea really just to prevent Congress from making him into a running gag punchline for the second year in a row (all the while blaming the Bush presidency as usual)?
But the absolute kicker, and here we flashback to April 2011 when Timmy said there was “No risk” of a US downgrade, was Geithner using his favorite catchphrase, this time in response to whether the US may become Greece in two years: “No risk.”
“It would be good for the country, if this time, they did it with less drama and less politics and less damage to the country than they did last summer,” Geithner said on NBC’s “Meet the Press” program today, referring to lawmakers’ reluctance to raise the debt ceiling until an 11th-hour agreement with the Obama administration in August.
Actually it would be far gooder for the country if the debt ceiling debate did not have to arise ever 6 months or so. But since the US economy is now terminally broken, and the Treasury generates more cash from debt issuance than from tax refunds, only idiots could possibly fall for the outgoing Treasury secretary’s sad platitudes at this point.
Geithner has said the U.S. won’t hit its debt limit again until late in the year.
Which means the debt limit will be breached in a few short months as calculated here.
“Americans generally should feel much more confident about the basic strength of the economy than they would have felt any time in the last four or five, six years,” Geithner said. Still, “it’s a very tough economy.”
Well if they were drinking nothing but the same hopium and KoolAid dispersed by the administration over the past 3 years, they would. Alas, they no longer do. And the reality is diametrically opposite.
When all else fails, blame it on Europe and evil, evil speculators who drive oil prices higher, but never on saintly stock speculators who do the same with equities:
“Obviously, we’ve got a lot of challenges ahead and some risks and uncertainty ahead,” Geithner said on ABC. Those risks include the European debt crisis and oil prices, he said.
Finally, for those who wonder why Geithner gets paid the big bucks:
Geithner, asked what the U.S. jobless rate will be on election day, told CBS that “if the economy continues to gradually strengthen like it’s been doing, then the unemployment rate will be lower.”
Actually, it is not the economy strengthening, it is the labor pool imploding. So yes, if civilian labor force ratio drops to 58% or less (a divergence that can be seen perfectly here), the unemployment rate will not only be lower, it will be negative - something which every treasury secretary is all too aware of in an election year.
April 3, 2012 Leave a comment
Unpaid parking tickets? That’s a strip search. And no leash on your doggie? That’s a strip search too. It might sound weird, and a wee bit terrifying, but that’s the verdict out of the United States Supreme Court this week.
The US Supreme Court decided in a 5-4 vote made Monday that law enforcement officials have the right to conduct invasive strip searches on any arrested persons, no matter how minor the alleged offense might be. The decision comes after the highest court in America examined an earlier case in which a man was wrongly arrested due to a processing error over an unpaid fine and then brought to two separate holding facilities where he was subjected to searches he says were“humiliating.“
Albert Florence was arrested in New Jersey back in 2005 after his pregnant wife was pulled over for driving their car above the posted speed limit. Responding officers identified Mr. Florence on the scene in the passenger seat and discovered a warrant for his arrest stemming from unpaid fines. An investigation would later reveal that the fines in question had indeed been paid in full, but before law enforcement could come to that conclusion, Mr. Florence spent a week behind bars. While detained, Florence was forced to strip naked, squat and manipulate his genitals twice for inspecting officers examining him for contraband, gang-related markings and communicable diseases.
Florence would go on to argue that the way he was handled over a minor (and incorrect) offense violated his rights under both the Fourth and Fourteen Amendments of the US Constitution, an argument a Federal District Court agreed with during an initial hearing. A Third Circuit Court would later rule, however, that strip-searching nonindictable offenders without reasonable suspicion was not a constitutional violation, which in turn brought the case to the Supreme Court. On Monday, five justices sided with the appeal and agreed that any detained alleged criminal, regardless of the crime, could be strip searched if deemed necessary by law enforcement.
In explaining the five high judges that concurred with the Supreme Court ruling, Justice Anthony M. Kennedy writes that courts cannot second-guess how correctional officers decide to handle incoming detainees at American institutions. Kennedy acknowledges in the opinion that even with 13 million people being sent to prisons in the US on an annual basis, it is still often in the best interest of law enforcement to subject all suspects, regardless of the severity of their alleged crime, to strip searches.
“People detained for minor offenses can turn out to be the most devious and dangerous criminals,” the five concurring justices agree.
“Every detainee who will be admitted to the general population may be required to undergo a close visual inspection while undressed,” writes Kennedy. The justice also acknowledged the harsh conditions inside American prisons, supporting any sort of search of an alleged criminal. “It is not surprising that correctional officials have sought to perform thorough searches at intake for disease, gang affiliation and contraband,” Justice Kennedy writes. “Jails are often crowded, unsanitary and dangerous places.”
March 30, 2012 Leave a comment
A judge has rejected the demands of anti-war activists for a march to be held in Chicago during a NATO summit planned for November. The activists say the city’s arguments against the march defy logic.
Anti-war activists filed a request to court after their initial demands for a march to be rescheduled were rejected by the City of Chicago.
Andy Thayer, an activist leader, says he will still be marching on May 20, the day the NATO summit opens.
“I can say definitively we are marching on May 20,” he noted, as quoted by Reuters. “We will hold a peaceful protest.”
The anti-war demonstrators originally planned to hold a march on May 19, the day another meeting of global leaders, the G8 Summit, closes in Chicago. However, when the summit’s venue was changed to Camp David, the activists decided to move their march a day forward to coincide with the start of the NATO summit.
But this request was rejected by the Chicago Transportation Department.
The department wrote back to Thayer, saying there were not enough on-duty police officers or other employees authorized to regulate traffic.
March 29, 2012 Leave a comment
By Nile Gardiner on The Telegraph
Ronald Reagan, together with Margaret Thatcher, stood up to Moscow, and brought the Soviet Empire to its knees. In contrast, Barack Obama has gone on his knees to grovel before the Russians. The exchange between President Obama and his Russian counterpart Dmitry Medvedev in Seoul was a display of supplication before a major strategic adversary on an issue of great importance for US national security – missile defence. The private conservation was picked up on microphone, and relayed by ABC News correspondent Jake Tapper:
President Obama: On all these issues, but particularly missile defense, this, this can be solved but it’s important for him to give me space.
President Medvedev: Yeah, I understand. I understand your message about space. Space for you…
President Obama: This is my last election. After my election I have more flexibility.
President Medvedev: I understand. I will transmit this information to Vladimir.
The US President has tried to downplay the remarks, according to a report by The Wall Street Journal, which quotes him as saying:
“I don’t think it’s any surprise that you can’t start that a few months before presidential and congressional elections in the United States, and at a time when they just completed elections in Russia,” Mr. Obama said Tuesday as he as sat down to meet with Mr. Medvedev and the president of Kazakhstan. “This is not a matter of hiding the ball.”
Barack Obama’s comments are disturbing on several levels. First, they display a willingness to placate America’s enemies, and cede ground over issues of national interest. Second, Obama is linking foreign policy decision-making to the timetable of the US presidential election, openly telling the Russians that he will deliver when he is no longer constrained by seeking re-election. This demonstrates contempt for the American people, suggesting that what he tells the Russians may be completely different to his message at home. Third, they reveal a dismissive approach towards America’s friends in eastern and central Europe, as well as US allies in the Gulf states, who must be wondering now if they will be sold out next.
President Obama’s remarks should be viewed against a backdrop of an astonishing surrender to Moscow over Third Site missile defence in September 2009, where he dropped plans for missile defence installations in Poland and the Czech Republic in the face of Russian opposition, a move that was seen as a betrayal of US allies.
March 26, 2012 Leave a comment
Submitted by Tyler Durden on 03/26/2012 14:50 -0400
It is a fact that when it comes to the oddly resilient Japanese hyperlevered economic model, the bodies of those screaming for the end of the JGB bubble litter the sides of central planning’s tungsten brick road. Yet in the aftermath of last month’s stunning surge in the country’s trade deficit, this, and much more may soon be finally ending. Because as Caixin’s Andy Xie writes “The day of reckoning for the yen is not distant. Japanese companies are struggling with profitability. It only gets worse from here. When a major company goes bankrupt, this may change the prevailing psychology. A weak yen consensus will emerge then.” As for the bubble pop, it will be a sudden pop, not the 30 year deflationary whimper Mrs. Watanabe has gotten so used to: “Yen devaluation is likely to unfold quickly. A financial bubble doesn’t burst slowly. When it occurs, it just pops. The odds are that yen devaluation will occur over days. Only a large and sudden devaluation can keep the JGB yield low.Otherwise, the devaluation expectation will trigger a sharp rise in the JGB yield. The resulting worries over the government’s solvency could lead to a collapse of the JGB market.” It gets worse: “Of course, the government will collapse with the JGB market.” And once Japan falls, the rest of the world follows, says Xie, which is why he is now actively encouraging China, and all other Japanese trade partners of the world’s rapidly declining 3rd largest economy to take precautions for when this day comes… soon. Oh, and this: ” If the bond yield rises to 2 percent, the interest expense would surpass the total expected tax revenue of 42.3 trillion yen.”
Why has Japan been able to sustain its deflationary collapse for over 3 decades? Simply - an ever rising currency.
A strong yen, deflation and rising government debt form a short-term equilibrium that lasts as long as the market believes it is sustainable. The yen has seen a relentless upward trend since it depegged from the dollar in 1971, up to 83.4 from 360 again to the dollar. When wages and asset prices rise, a strong currency can be justified. When wages and asset prices fall, a strong currency is suicide. Japan’s nominal GDP peaked in 1997 and its nominal wages did too. Its property prices have declined every year since. The Nikkei rose in only four out of the last fifteen years and is still close to a three-decade low.
Japanese policymakers, businesses, academics, currency traders and the average Mrs. Watanabe all believe in a strong yen. This belief is wrong but self-fulfilling. It has lasted so long because the Japanese government adopts policies to offset the destabilizing effects of deflation due to a strong yen. Hence, Japan’s national debt has marched upwards along with the value of yen. It is expected to top yen 1,000 trillion in 2012, 215 percent of GDP, 7.8 million yen (or roughly US$ 94,000) per person, and about half of net household wealth per capita.
The sustainability of Japan’s deflationary path depends on the market’s confidence in Japan’s debt market. As Japanese institutions and households hold almost all of the government’s debts, their faith in the government’s creditworthiness is the mojo for Japan’s seemingly harmless deflationary spiral.
There’s that. And also that it is nothing but a ponzi. In Xie’s words.
March 25, 2012 Leave a comment
Editor’s Note: Amid a host of concerns that include, but are not limited to, rising crime, a lack of law enforcement during a crisis such as an economic collapse and, most notably, the potential re-election of President Barack Obama for another four years, Americans are stocking up on firearms and ammunition like never before. Last year alone we saw sales of guns in the United States exceed 10,000,000, and according to a recent report some three million Americans are among those preparingfor worst case scenarios.
They are purchasing supplies that include self defense armaments, long-term food storage, and off-grid survival tools. Demand is so high for these essential “post-collapse” survival commodities that in December of 2010 it prompted Mountain House, the largest freeze dried food manufacturer in the world, to delay orders for months at a time. Now, similar to the ammunition shortages leading up to the 2008 Presidential election, Americans are increasingly worried about what may happen to their Second Amendment rights under another Obama term. This has, once again, led to unprecedented demand. Ammunition shortages in popular calibers, for example, have been reported by numerous sources. Likewise, overwhelming demand for firearms has forced one of the world’s largest gun manufacturers to suspend all new firearms production orders because they simply cannot keep up.
Here is the Official Statement form Ruger:
SOUTHPORT, CT –Sturm, Ruger & Company, Inc. (NYSE-RGR), announced today that for the first quarter 2012, the Company has received orders for more than one million units. Therefore, the Company has temporarily suspended the acceptance of new orders.
Chief Executive Officer Michael O. Fifer made the following comments:
- The Company’s Retailer Programs that were offered from January 1, 2012 through February 29, 2012 were very successful and generated significant orders from retailers to independent wholesale distributors for Ruger firearms.
- Year-to-date, the independent wholesale distributors placed orders with the Company for more than one million Ruger firearms.
- Despite the Company’s continuing successful efforts to increase production rates, the incoming order rate exceeds our capacity to rapidly fulfill these orders. Consequently, the Company has temporarily suspended the acceptance of new orders.
- The Company expects to resume the normal acceptance of orders by the end of May 2012.