“Should you find yourself in a chronically leaking boat,
energy devoted to changing vessels is likely to be more productive than energy
devoted to patching leaks.”
Warren
Buffett.
This weekend, why
electing good government matters. Why populist socialists find out that there
isn’t a tooth fairy, pixie dust, or a magic free money tree. Why deficits do matter. Why the socialism of
Comrade Agent Corbyn’s New UK Communist Labour Party always ends in
disaster. The tragic downside of when
the wheels come flying off the socialist, wealth envy, delusional economy.
Sadly when the end
comes, it affects nearly everyone by destroying their fiat money savings, their
pensions, lifestyle, health care, and all too often, society.
Below, reasons to be
very concerned. Where we are all headed next decade, if we don’t get back to
adult economics and sound government. Where we are all headed if we don’t bring
about a major reform of the world’s fatally flawed, fiat money, dollar reserve,
trading system.
Barely two months in
to an escalating Trump trade war and rising fiat currency disorder, our
increasingly fractious world is headed towards a monetary calamity next decade. Assuming that is, that Trumps trade wars and arbitrary
sanctions, don’t pull it forwards into this decade.
Never has an
appropriate holding of fully paid up physical gold and silver been more
critical, yet never since the Great Nixonian Error of Fiat Money began in
August 1971, has the gold and silver insurance policy been more complacency
shunned.
“Shortly after taking the Treasury post, Connally famously
told a group of European finance ministers worried about the export of American
inflation that the dollar "is our currency, but your problem." “ He
was wrong, it’s everyone’s problem now.
August 18, 2018 / 1:00 AM
Maduro orders 96 percent devaluation in hyperinflation-stricken Venezuela
CARACAS
(Reuters) - Venezuela’s president Nicolas Maduro announced on Friday a single
exchange rate pegged to his socialist government’s petro cryptocurrency,
effectively devaluing by 96 percent in a move economists said would fan
hyperinflation in the chaotic country.
In one of
the biggest economic overhauls of Maduro’s five-year government, the former bus
driver and union leader also said he would hike the minimum wage by over 3,000
percent, boost the corporate tax rate, and increase highly-subsidized gas
prices in coming weeks.
“I want the
country to recover and I have the formula. Trust me,” Maduro said in a
nighttime speech broadcast on state television.
But
economists expressed doubts that Venezuela’s cash-strapped government, which
faces U.S. sanctions and has defaulted on its bondholders, would succeed.
Venezuelans
will see their meager salaries further erodedand companies will struggle with
major increases to both taxes and the minimum wage, they said.
“Amid this
aggressive devaluation and monetary expansions due to salaries and bonuses, we
are expecting a much more aggressive stage of hyperinflation. All the more so
in a context where the elimination of excessive money printing is not credible.
The worst of all worlds,” said Venezuelan economist Asdrubal Oliveros of
consultancy Ecoanalitica.
The
International Monetary Fund has predicted that inflation in Venezuela would hit
1 million percent this year.
After a
decade-long oil bonanza that spawned a consumption boom in the OPEC member,
many poor citizens are now reduced to scouring through garbage to find food as
monthly salaries amount to a few U.S. dollars a month.
Hundreds of
thousands of Venezuelans have emigrated by bus across South America in one of
the region’s worst migration crises.
“World
champions in economic disasters!” opposition leader Henrique Capriles tweeted
after Maduro’s announcement. “No Venezuelan deserves to live this tragedy or
that these incapable people destroy our nation!”
More
Turkey: the perils of Erdogan’s power grab
Critics say the roots of the crisis lie in the sidelining of
critics and the weakening of institutions
17
August 2018
Recep Tayyip Erdogan had never even heard of a pastor from North Carolina
called Andrew Brunson until last spring, according to one senior Turkish
official. It was during a briefing ahead of a visit to the White House, the
official claims, that the Turkish president first encountered the name of the
evangelical preacher who has been trapped in the Turkish court system and whose
fate has triggered a diplomatic meltdown, thrust Turkey into a currency crisis
and sparked fears of global contagion.
-----“The
pastor Brunson case is just one example of the dysfunctional nature of the
Turkish judiciary,” says Faruk Logoglu, a former Turkish ambassador to
Washington and a senior member of the main opposition party. Mr Brunson has
been accused of espionage and abetting terrorists — charges he calls “slander”.
“If there had been a speedy trial, a proper trial, maybe he would have been
convicted — I don’t know. But the case would have been closed.” Daron Acemoglu,
an MIT economist and co-author of the book Why Nations Fail, argues that the
origins of a currency crisis that has seen the lira plunge by a third against
the dollar this year, also lie in the disembowelling and disempowerment of
bodies such as the central bank. Mr Acemoglu says that they are vital to
“create the right kind of economic dynamism and create the buffers for any kind
of fluctuations”. He adds: “The buffers are not there in the Turkish case.”
The
Turkish lira had been steadily declining this year even before the crisis that
erupted when Donald Trump announced sanctions at the start of August on a
fellow Nato member state in a bid to force the release of the jailed pastor.
But the extreme swings since the row began — falling as much as 17 per cent in
a single day last week — have wreaked havoc. Warehouses filled up with stock as
businesses struggled to set prices. Families cancelled holidays because they
could no longer afford to buy euros.
Even Turkey’s football clubs were
affected, in an echo of the problems facing Turkish companies struggling with
foreign currency debt. “The top players’ salaries cost €2m or €3m a year,” said
a panicked executive at one of the country’s biggest teams. “All our revenues
are in lira.”
----
But over the past decade, much of the growth has been powered by cash that
flooded the markets after the global financial crisis. Instead of funding
investments in productive, high-tech sectors that could boost Turkey’s exports,
the money was funnelled mainly into construction and consumption. When Mr
Erdogan took power there were 53 shopping malls in Turkey, according to
Turkey’s Council of Shopping Centres. Today that figure is 403. One result has
been an increase in inflation. Another has been a surge in imports, causing a
larger trade deficit that needs to be financed with inflows of foreign money.
With foreign direct investment down sharply in recent years, most of that
funding comes from “hot money” flows that can change direction sharply at a
moment’s notice.
More
Opinion: Turkey has torn up the playbook on dealing with emerging-market crises
Published: Aug 17, 2018 4:09 p.m. ET
LAGUNA BEACH, Calif. (Project Syndicate) — Whether by accident or design, Turkey is
trying to rewrite the chapter on crisis management in the emerging-market
playbook. Rather than opting for interest-rate hikes and an external funding
anchor to support domestic-policy adjustments, the government has adopted a mix
of less direct and more partial measures — and this at a time when Turkey is in
the midst of an escalating tariff tit-for-tat with the United States, as well
as operating in a more fluid global economy.How all this plays out is important not only for Turkey, but also for other emerging economies that already have had to cope with waves of financial contagion.
The initial phases of Turkey’s crisis were a replay of past emerging-market currency crises. A mix of domestic and external events — an over-stretched credit-led growth strategy; concerns about the central bank’s policy autonomy and effectiveness; and a less hospitable global liquidity environment, owing in part to rising U.S. interest rates — destabilized the foreign-exchange market.
A political spat with the U.S. accelerated the run on the Turkish lira USDTRY, +3.2826% by fueling a self-reinforcing dynamic. And all of this occurred in the context of a more uncertain and — aside from the U.S. — weakening global economy.
In keeping
with the traditional emerging-market-crisis script, Turkey’s currency crisis
spilled over onto other emerging economies. As is typically the case, the first
wave of contagion was technical in nature, driven mainly by generalized
outflows from Turkey’s currency and bond markets. The longer this contagion
continues, the greater the concern that it will lead to more disruptive
financial and economic outcomes.
As such,
central banks in several emerging economies — as diverse as Argentina, Hong
Kong, and Indonesia — felt compelled to take counter-measures.
What has
followed is what makes this episode of emerging-market crisis different, at
least so far. Rather than sticking with the approach taken by numerous other
countries — including Argentina earlier this year — by raising interest rates
and seeking some form of support from the International Monetary Fund, Turkey
has shunned both in a very public manner, including through strident remarks by
President Recep Tayyip Erdoğan.
----The question is whether this response will be enough to act as a circuit breaker, thus giving the Turkish economy and its financial system time to regain their footing. This is particularly important because continued currency turmoil would tip the economy into recession, raise inflation, stress the banking system, and increase corporate bankruptcies.
With this
comes the toughest question of all for the government: Can it bring about
recovery without reneging on its pledge not to raise interest rates or approach
the IMF? It is possible, but not probable.
Absent
additional measures, it is unlikely that a critical mass of corrective steps
has been attained in Turkey.
More
August 17, 2018 / 8:11 AM
For Greece's austerity-hit elderly, bailout 'will never end'
ATHENS
(Reuters) - With two euros in his pocket, Yorgos Vagelakos, an 81-year-old
retired factory worker, scouts the farmer’s market in his working-class Athens
neighbourhood for anything he can afford.
Like
most pensioners, he was hit hard by Greece’s economic crisis. Over eight years,
the country’s international bailouts took aim at its pension system and more
than a dozen rounds of cuts pushed nearly half its elderly below the poverty
line.
Now, the
country is looking to the end of its third and final rescue package next week
[nL5N1V71XX], but for Vagelakos, there is little to cheer about.
“For the oranges
I’m going to buy I’ll pay you next week,” he tells a vendor at the market. Half
his money has already gone to a few bunches of grapes.
“Two euros
next week. Will you be here?” he asks, picking up his bag of fruit. The
response is affirmative, and he jokes:
“Well then I
won’t come so I won’t have to pay you!”
Reuters
first interviewed Vagelakos in 2012, when Greece signed up to a second bailout
that saved it from bankruptcy and a euro zone exit. Back then, he was going to
the market with 20 euros in his pocket. His monthly income, including his
pension and benefits, had been cut to about 900 euros from 1,250 euros.
Today it is
down to 685 euros and debts are growing, he said.
With
unemployment reaching almost 28 percent at its peak, a quarter of children
living in poverty and benefits slashed, many families grew dependent on
grandparents for handouts during the downturn. Vagelakos can no longer support
the families of his two sons and can barely cover his and his wife’s needs.
“I wake up
in the morning to a nightmare,” he said. “How will I manage my finances and my
responsibilities? This is what I wake up to every morning.”
More
August 16, 2018 / 11:17 AM
If rupee slump persists, it can hurt India's Modi
NEW
DELHI/MUMBAI (Reuters) - The rupee’s plunge to a record low has worried a wide
cross-section of India’s society: companies, importers, those going on vacation
and students planning to study overseas. But if the weakness persists, Prime
Minister Narendra Modi’s job could become a lot harder just before big state
and national elections.
India is a big buyer of everything from crude oil and electronics to gold and edible oil, and its import bill was expected to cross $600 billion in the fiscal year ending in March 2019, from about $565 billion in the previous year.
The 9.3 percent fall in the rupee INR=D2 this year has already led to a surge in local prices of goods with an imported component. July was the ninth straight month in which India's inflation was higher than the central bank's medium-term target of 4 percent.
The
currency fell to a fresh low of 70.40 to the dollar on Thursday.
----Besides the next general election due by May, three big BJP-ruled states in India’s heavily populated northern plains go to the polls over the next four months.
Satish
Misra, senior fellow at the Observer Research Foundation in New Delhi, said
although the rupee slide was a result of several factors, it was affecting the
image of the Modi government.
“As prices
shoot up and products become costlier, the middle class will begin to get
angry,” Misra told Reuters. “Since the middle class is the opinion maker, the
BJP will suffer electorally.”
The
government has said the depreciation is due to the economic woes in Turkey that
has dragged down currencies of emerging market countries around the world.
“Recent
developments relating to Turkey have generated global risk aversion towards
emerging market currencies and the strengthening of the dollar,” said senior
cabinet minister Arun Jaitley.
More
Finally,
compare and contrast policing in Canada and America. You really couldn’t make
this sort of thing up. Oh America!
“Police who
tasered an 87-year-old grandmother while she was collecting dandelions say they
did so "rather than using deadly force".”
Concerning the difference between man and the
jackass: some observers hold that there isn’t any. But this wrongs the jackass.
Mark Twain.
Canada schoolgirls stopped by police after planning adventure to London
The teenagers had a hand-drawn map
that showed "home" as the starting point and the English capital as
the final destination.
Friday
17 August 2018
Two Canadian schoolgirls were
stopped in their tracks after sneaking out of a sleepover and planning to
travel to London.
The girls, aged 10 and 12,
were in their pyjamas and carrying a hand-drawn map when they boarded a bus in
British Columbia just before midnight.
Their map shows
"home" as the starting point and the UK capital as the final
destination.
Bus driver Ed Boleak alerted
police when the two girls boarded his service in the city of Burnaby.
Officers from nearby Vancouver
came to collect the girls and return them to their "anxious parents".
Metro Vancouver Transit Police
posted on Facebook: "See something out of the ordinary on your bus?
"Let Transit Police know!
"Transit Operator Ed
Boleak did exactly that on Monday night when two pajama-clad children, ages 10
and 12, boarded his bus in Burnaby just before midnight.
"Ed contacted Transit
Police, and Constable Cho and Constable Cantera arrived to pick up the children
and bring them home to their anxious parents.
87-year-old woman tasered by US police while cutting dandelions in Georgia
Police say the grandmother was using
a knife so they tasered her "rather than using deadly force to stop the
situation".
12:38, UK, Friday 17 August 2018
Police who tasered an
87-year-old grandmother while she was collecting dandelions say they did so
"rather than using deadly force".
A worker at the Murray County
Boys & Girls Club in Chatsworth, Georgia, called 911 after seeing Martha al
Bishara, who does not speak English, using a knife to cut the flowers in the
club's grounds near her home.
Ms al Bishara, who is
originally from Syria and speaks only Arabic, needed the dandelions to prepare
a salad for her 71-year-old husband.
When officers arrived with
guns drawn, they struggled to make themselves clear.
"We began trying to
communicate with her, telling her of course to drop the knife," said
Chatsworth police chief Josh Etheridge.
"We didn't know if she
just didn't understand us or was having some type of issue."
Police say they dropped their
own knives on the ground to signal what they wanted Ms al Bishara to do.
Mr Etheridge said the use of a
taser was justified, adding: "An 87-year-old woman with a knife still has
the ability to hurt an officer."
He said the taser was deployed
"rather than using deadly force to stop the situation".
Ms al Bishara was put in
handcuffs and arrested.
Her granddaughter, Martha
Douhne, said she "obviously did not look violent".
The pensioner has been having
trouble sleeping since being tasered and is scared to go outside.
"She thought she got
shot," Ms Douhne told NBC.
"We have never really
told her about stun guns or Tasers, and so she doesn't know what that is."
The officer who tasered her
remains on duty, and the force is reviewing the situation, Mr Etheridge said.
"By
a continuing process of inflation, governments can confiscate, secretly and
unobserved, an important part of the wealth of their citizens. There is no
subtler, no surer means of overturning the existing basis of society than to
debauch the currency. The process engages all the hidden forces of economic law
on the side of destruction, and does it in a manner which not one man in a million
is able to diagnose."
Lord
Keynes.
The monthly Coppock Indicators finished July.
DJIA: 25,415 +213 Down. NASDAQ:
7,672 +259 Down. SP500: 2,816 +166 Down.
All
three slow indicators moved down in March and have continued down ever since.
For some a new bear signal, for others a take profits and get back to cash
signal.
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