Perspectives on the global economic changes

Austin · Post by **Austin** » 24 Oct 2013 11:04

Audio Inverview with Michael Ben-Gad, a professor from City University London, whose research focuses on Dynamic Macroeconomics

US debt won’t be a disaster for Europe or the rest of the world - expert

ramana · Post by **ramana** » 24 Oct 2013 23:46

About six years after the sub-prime crisis, the true costs of the housing mortgage market collapse are slowly sinking in.

~10Million that is a number larger than Michigan population were rendered homeless and $19.7 trillion equity vanished.

BTW this number is larger than the Dust Bowl era migrations, and the 55 year exodus of the Great Migration post Civil war.

We will see the impacts in ten years or so....

There is no Robert MacIlvane to write about it.

vina · Post by **vina** » 25 Oct 2013 04:11

There is no Robert MacIlvane to write about it.

Or a John Stenibeck to immortalize it and sear it into memory.

TSJones · Post by **TSJones** » 25 Oct 2013 04:13

India to rollover $15 billion subsidies cost to next year:

http://finance.yahoo.com/news/exclusive ... 48709.html

Chidambaram had planned to cap the subsidies for the likes of fuel and food at 2 percent of GDP, or about $38 billion. But finance ministry officials said it could cost as much as 2.9 percent of GDP, or $55 billion, this fiscal year.

Chidambaram had said earlier this month that the jump in subsidy spending must be tackled sooner rather than later to help stabilise an economy shaken this year by the rupee's slump and a record current account deficit. India imports nearly 80 percent of its oil needs and the rupee drop made government fuel subsidies more costly.

svinayak · Post by **svinayak** » 25 Oct 2013 21:46

India news must be posted in the Indian thread. Not here

Export Slowdown Threatens World Economy

Export Slowdown Threatens World Economy
By Simon Kennedy - Oct 25, 2013 6:01 AM PT

When HSBC Holdings Plc’s economists from around the world recently pooled their forecasts, virtually all had a similar source of growth in mind for the region they monitored: exports.
The impossibility of every nation being able to sell more than it buys means some of the analysts must be wrong -- unless the rest of the solar system becomes a source of demand for the globe’s products, Stephen King, HSBC’s chief economist, told an Oct. 16 conference in London, flashing a slide of the planets.

“Export claims are just far too optimistic,” said King, a former U.K. Treasury official.
The bet on trade is flopping for companies and policy makers who had hoped it would power recoveries held back by weak domestic demand. This week alone, Caterpillar Inc. (CAT) and Unilever (UNA) complained of sliding overseas buying and data showed global trade volumes fell in August by the most since February.

Neshant · Post by **Neshant** » 27 Oct 2013 11:34

Sandeep Jaitley on the "new" Austrian School of Economics.

I'm not for the gold standard per say but I have to listen to this again before I understand what he's really saying.

Not all of it sunk into my brain the first time.

Neshant · Post by **Neshant** » 28 Oct 2013 06:24

Once a nation parts with the control of its currency and credit,
it matters not who makes the nations laws. Usury, once in control,
will wreck any nation. Until the control of the issue of currency
and credit is restored to government and recognized as its most sacred
responsibility, all talk of the sovereignty of parliament and
of democracy is idle and futile.

William Lyon Mackenzie King, 10 June 1942
10th PM of Canada

Christopher Sidor · Post by **Christopher Sidor** » 28 Oct 2013 12:37

^^^
It is true, once we hand over financial sovereignty to somebody else, everything is lost. Classic case PIIGS. And unfortunately in case of India we have not reached the situation where we are financially independent. We are still beholden to benevolence of outsiders, more than 60 years after our political independence.

panduranghari · Post by **panduranghari** » 28 Oct 2013 20:00

Neshant wrote:Sandeep Jaitley on the "new" Austrian School of Economics.

I'm not for the gold standard per say but I have to listen to this again before I understand what he's really saying.

Not all of it sunk into my brain the first time.

Neshant he is saying exactly what I was harping on. Gold as a store of value. Currency for day to day trade. In this situation gold is very very valuable.

Gold...get you some.

I listened to it again. Everything that he has said is spot on.

What took me 3 years (since 2008 crash) to understand and digest, Sandeep Jaitley has done it in 40 mins. Please listen to it and digest it.

I loved the way he ended the interview,' I would like people to take more responsibility and be more aware of what is going on. The people are not doing what they are doing willingly, they have Mercedes, holiday cottage, children in private schools, holidays in the south of france, every year.They don't question as they have all their ends satisfied. one day everything will be taken away from them. they wont have an idea why it happened. people will have to introspect. you will get what you deserve, there is no one to blame per se.'

I question the great and good on this forum who will perhaps listen to this interview,' will you introspect before the implosion happens'?

panduranghari · Post by **panduranghari** » 28 Oct 2013 20:04

Neshant · Post by **Neshant** » 29 Oct 2013 08:49

interesting stats

but can it be that dire ? median income in the US (assuming the stats are real) is still quite high.

Neshant · Post by **Neshant** » 29 Oct 2013 10:12

panduranghari wrote:Neshant he is saying exactly what I was harping on. Gold as a store of value. Currency for day to day trade. In this situation gold is very very valuable.

Gold...get you some.

Its a store of wealth only if you buy it at below its long term market price. What its long term market price will be depends a lot on what happens from here on out on the debt & economic front.

By now of course, you've surely run into many gold bugs who will tell you to buy more gold - partly because he believes it and partly because he's sitting on a wad of gold himself (yours truly included).

One thing you have to realise is that banking goons are not going to give up their control of the monetary system and go quietly into the night. They are not going to implode a monetary system when their very employment depends on it.

What I think will come in the US is a national sales tax - thereby extending the debt collapse scenario for at least 10 years, even if it puts a crimp in consumer spending. Japan's implementation of a sales tax on its goods & services is a clue as to what will transpire in the US to hold its debt to GDP ratio steady. Gold bugs could be left waiting years for the hyper-inflationary fiat collapse scenario they're hoping for.

RoyG · Post by **RoyG** » 29 Oct 2013 11:04

panduranghari · Post by **panduranghari** » 29 Oct 2013 19:22

Neshant wrote:
panduranghari wrote:Neshant he is saying exactly what I was harping on. Gold as a store of value. Currency for day to day trade. In this situation gold is very very valuable.

Gold...get you some.

Its a store of wealth only if you buy it at below its long term market price. What its long term market price will be depends a lot on what happens from here on out on the debt & economic front.

By now of course, you've surely run into many gold bugs who will tell you to buy more gold - partly because he believes it and partly because he's sitting on a wad of gold himself (yours truly included).

One thing you have to realise is that banking goons are not going to give up their control of the monetary system and go quietly into the night. They are not going to implode a monetary system when their very employment depends on it.

What I think will come in the US is a national sales tax - thereby extending the debt collapse scenario for at least 10 years, even if it puts a crimp in consumer spending. Japan's implementation of a sales tax on its goods & services is a clue as to what will transpire in the US to hold its debt to GDP ratio steady. Gold bugs could be left waiting years for the hyper-inflationary fiat collapse scenario they're hoping for.

Neshant saar,

Think the way how people used to think about money about 100 years plus. If possible speak to your grandparent about what they think about money in general. what I mean to say is they will obviously say money is important. But ask them about what is their opinion about old paisa. Ask them how 1 anna, 4 anna etc has changed. I have had some very enlightening discussions with my grand father when he was alive. He bought our ancestral property in 1927 for rs 5. It was a princely sum then.

If you can critique this please do so.
History of money

Neshant · Post by **Neshant** » 30 Oct 2013 09:36

I'm already well versed in all propaganda related to gold.

I started buying gold as an investment in 2003 well before the fad caught on.

Most of those preaching the gospel of gold only showed up much later.

There are way too many people talking about gold now - which makes me more cautious about buying.

Anyway I've got my gold ticket ready in case this thing ever takes off into the stratosphere.

panduranghari · Post by **panduranghari** » 30 Oct 2013 13:26

I made my first purchase in 2004 and have been buying consistently since. Would you be unhappy if the dollar denominated price of gold falls to $200 per oz? Do you think about your wealth as so much dollars or rupees or do you count the ounces? Do you think that it is a typical western thinking to state wealth, measure it, be on Forbes all time rich list?

When you say too many people talking gold, are you talking about 'paper traders' or are you talking of poor non descript folks in the so called 'third world'?

Austin · Post by **Austin** » 30 Oct 2013 15:13

5 simple facts about US ‘easy money’

While US financial policymakers continue to mull over the best solution, RT Business spoke to Natalia Orlova, a chief economist from Alfa-Bank, and Chris Weafer, a senior partner at Macro Advisory, a Moscow-based consulting firm to find out what the mysterious “QE” term means on both a global and individual level.

1. What does quantitative easing mean? What is it primarily aimed at?

The so-called policy of "easy money" introduced in the US in 2008 after the financial crisis broke out means simple dollar printing, aimed at filling the gaps in the country’s financial system. An estimated $3.6 trillion has been printed in the last 5 years, and the money was mostly used to buy debt instruments and junk financial instruments from the market to provide the financial system with enough cheap cash. “In theory, businesses, investors and consumers should be able to access cheaper credit with which to invest or purchase,” Weafer explained.

2. Can it help the real economy, or does it just feed financial markets?

Theory says it should, while practice shows little success has been achieved. Easier access to credits should provide for better economic activity and again theoretically “such an increase in activity by both investors and consumers will help pull the economy out of the slump and boost growth. Once growth has been re-established, the idea is to then withdraw the quantitative easing program as there should be enough momentum in the economy to then continue growing without the Central Bank’s help,” Weafer added.

But Igor Nikolaev, director of the strategic analysis department at PKF, told RT that all the latest economic fundamentals show that massive financial injections have so far failed to provide fruit for the real economy. GDP growth remains modest , unemployment is still far above the normal level of 5.5 percent - at 7.2 percent in September - and inflation is running well below the Fed’s two percent target.

3. How much scope is there for extending monetary stimulus? Is there any limitation on the amount of dollars the US can print?

“There is no technical limit to the amount of money the US can print,” Weafer said. While quantitative easing creates uncertainty and unpredictability in economies, the US will most likely keep switching on its printing press until it becomes sure the economic fundamentals like GDP, unemployment and inflation become sustainable.

“On the other hand, an abundant supply of cheap money in the wake of weak economic growth creates risks of new financial bubbles, mainly in real estate and financial markets,” Orlova added.

Acting timely is crucial for the success of quantitative easing in the US. “It is a fine balancing act for the Fed and one that the chairman, Ben Bernanke, has been warning off; keeping the program in place too long may undermine confidence and prevent normal market mechanisms from returning. Taking it off too soon may result in a reversal of the fragile recovery seen to date and risk recession. Bernanke has reminded us many times that this is what happened in the 1930s and led to a quick return to recession and a collapse in the equity market,” Weafer explained.

4. Has any round of the quantitative easing program reached the goals set?

Experts agree that certain progress has been achieved, though it may not be sustainable. “The US has been growing at one to two percent in recent years, while the government sharply cut the budget deficit - from 10 percent of GDP in 2010 to four percent this year,” Orlova said.

However, “we will not know for sure if the QE measures have worked until they are withdrawn and we then see if the major economies, especially in the US, can sustain and expand the growth trend,” Weafer said.

“This is why the Fed and the US government are so nervous about the timing of the easing of the QE program. Neither is very sure as to how strong the underlying economy is. Most likely, the Fed will ease back very, very slowly when it starts the so-called tapering program, just in case,” Weafer concluded.

5. What effects can quantitative easing - its failure or success - have on everyday people?

"Easy money" in the US has helped keep interest rates low, which means everyday people pay low amounts for their debts, Orlova said.

“The objective of the QE program is to reboot growth in the economy. That means a return to sustainable growth and job creation. That benefits all of the people if successful,” Weafer said.

Theo_Fidel · Post by **Theo_Fidel** » 30 Oct 2013 20:23

As a reality check, here is the looong term UK experience with Debt and Interest rates. Note the low interest rates during periods of high debt. For the 100 year period, from 1750-1850, when UK was piling on the debt, its power was increasing and interest rates remained low. Reality refuses to go along with ideology.

Debt is good/bad depending on the situation one is in.

vishvak · Post by **vishvak** » 31 Oct 2013 00:07

It would be interesting to see how UK reduced debt during the British empire time. Post end of barbaric colonial times, there is a criss-crossing of national debt and long term debt so UK managed that well. Post 1975 national debt as well as long term debt decreased for some reason which is also great. However USA is still betted for India in comparison I think as against UK because UK is majorly multinational center for banking while India isn't.

TSJones · Post by **TSJones** » 31 Oct 2013 04:06

He bought our ancestral property in 1927 for rs 5. It was a princely sum then.

Just as I thought. When the brits were in charge there wasn't very much currency in circulation. The poor suffered.

panduranghari · Post by **panduranghari** » 31 Oct 2013 18:14

TSJones wrote:
He bought our ancestral property in 1927 for rs 5. It was a princely sum then.
Just as I thought. When the brits were in charge there wasn't very much currency in circulation. The poor suffered.

Theo_Fidel · Post by **Theo_Fidel** » 31 Oct 2013 18:56

When the British were around large fraction/majority of transactions were by barter. Even in the late 1960's I remember sitting in my grandfathers clinic and folks would pay him in chicken(live), peanut bags, rice, coir, coconuts, etc for medicine and the check up. There was never any money to pay for stuff. I do remember that many a time the bank would run out of cash. The BM, my dad, would then issue little letters that told the local grain kaddai that the customer was good for the purchase and would debit the account in the ledger. Though this might have been more a 'printing' issue. Yes there is a problem if you don't print enough money as well. Even now the RS10 note is hard to get and the Rs 5 is only known in myth and legend.

TSJones · Post by **TSJones** » 01 Nov 2013 02:57

The Brits were firm belivers in scarce currency and of course they participated in the gold standard along with the US. Earlier, the US colonies, could not get Brit currency and had to use foreign coinage, specifically Spanish pieces of eight. Very popular with the pirates. Arrrgh!

Neshant · Post by **Neshant** » 02 Nov 2013 09:23

Here's an interesting book from 1890 about the private bankers who use their control over the issuance of money to bankrupt states & individuals & put society in debt to them.

Its astounding how much the present system of central banking (aka private banker monopoly) parallels the system back then. It seems this racket of private banker monopoly over the issuance of currency has been going on for a LOT longer than most people know.

The guy writing the book has strong anti-Semetic views. He believe the bankers are all Jews. His views were likely typical for his time. Other than his occasional ranting against Jews, he does demonstrate a very solid understanding of economics & history. Buried in this book are hints of where things might be headed in the present day scenario.

The Great Red Dragon : London Money Power
BY L. B. WOOLFOLK
http://www.biblestudysite.com/reddragon.htm

Neshant · Post by **Neshant** » 04 Nov 2013 06:20

basically half the gold is not there.
__________________
Finland's Gold

http://www.zerohedge.com/news/2013-11-0 ... lands-gold

On Wednesday Finland gave in to public pressure and revealed where she stores her gold reserves. The statement followed a press release by the Bank of Sweden on similar lines released on Monday. All was 'normal' until the head of communications added some more color on what exactly the Finnish central bank does with its gold..."half of the gold has been within investment activity over the years. Gold has been invested among other things in deposits similar to money market deposits and using gold interest rate swaps. Gold investment activity is common for central banks."

Theo_Fidel · Post by **Theo_Fidel** » 04 Nov 2013 06:52

^^^

Neshant,

His real title is the Reverend L.B.Woolfolk, and what he is advocating is part of the blood libel against Jews. The Dragon is an image of the anti-Christ and the Red Dragon means the anti christ will be the jewish head of the financial world. For this purpose he uses the bible, esp. revelations in his book as means of 'dog whistles' to the christian right wingers.

I strongly recommend you remove such material from BRF if only because when these folks are done with the jews they will come after the other 'exotic' folks, meaning you and me.

chanakyaa · Post by **chanakyaa** » 04 Nov 2013 08:11

Things That Make You Go Hmmm... Like India's 'Gold Refuge' From "The Establishment"

India's love affair with gold is well-understood in Asia but completely misunderstood in the West — a phenomenon we have always found fascinating — but recently, as Grant Williams exclaims, it has become abundantly clear that this disconnect is widening almost daily as the Western fixation with 'The Gold Price' and the Eastern obsession with 'The Price of Gold' take ever more divergent paths...

http://www.zerohedge.com/news/2013-11-0 ... ablishment

Neshant · Post by **Neshant** » 04 Nov 2013 10:27

Neshant · Post by **Neshant** » 04 Nov 2013 10:38

Theo_Fidel wrote: His real title is the Reverend L.B.Woolfolk, and what he is advocating is part of the blood libel against Jews. The Dragon is an

Nah I don't think it should be removed.

The book was written way back in 1890 and the guy is long since dead. His views probably reflect those of society back then - or at least some segment of the population. Now you know where folks like Hitler got their ideas about Jews having screwed Germany economically. Probably from guys like good Reverend.

If you bypass his ranting on Jewish bankers however, you'll see he has a pretty in depth understanding of how monopoly over the issuance of money is used to enslave entire nations. The parallel between what he's talking about and what's happening today is uncanny.

Ironically, he is against the gold standard. Too few people control too much gold and can expand & contract the supply of gold to bankrupt & enslave industries & nations.

Something really sinister is about to happen over the next few years that will plunge a whole lot of humanity into poverty and destitution. Trillions of dollars of liabilities and losses will be downloaded onto the backs of the people ...and tons of their savings & earnings will be uploaded to the heavens. Its best we research what's going on through any & all means possible lest we find ourselves on the receiving end.

Austin · Post by **Austin** » 06 Nov 2013 21:47

In this episode of the Keiser Report, Max Keiser and Stacy Herbert “remember, remember it’s yet again the 5th of November and banksters and conmen still rule”, whether with Obamacare’s privatisation of healthcare or private equity as the new slumlord toll collectors. In the second half, Max interviews Charles Hugh Smith about peak retirement, peak jobs and the chances of China holding the next reserve currency.

http://rt.com/shows/keiser-report/episo ... eiser-186/

Austin · Post by **Austin** » 06 Nov 2013 21:49

Video: Risk of bond market bubble: Bullard

akashganga · Post by **akashganga** » 07 Nov 2013 04:40

Theo_Fidel wrote:^^^

Neshant,

His real title is the Reverend L.B.Woolfolk, and what he is advocating is part of the blood libel against Jews. The Dragon is an image of the anti-Christ and the Red Dragon means the anti christ will be the jewish head of the financial world. For this purpose he uses the bible, esp. revelations in his book as means of 'dog whistles' to the christian right wingers.

I strongly recommend you remove such material from BRF if only because when these folks are done with the jews they will come after the other 'exotic' folks, meaning you and me.

I agree with this comment. There is a large christian right wing community in the west specially US who are also fiscally conservative and believe in anti-christ. These people are more dangerous to us than islamists. At least we know who islamists are and what they stand for.

RoyG · Post by **RoyG** » 07 Nov 2013 07:06

They are a danger to us because they are evangelicals. It's not because they believe in fiscal responsibility.

akashganga · Post by **akashganga** » 08 Nov 2013 04:18

Apologize if this has been posted before. This is a fascinating must see video:

The Wall Street Code - high frequency trading:

http://www.youtube.com/watch?feature=pl ... EAGdwHXfLQ

panduranghari · Post by **panduranghari** » 08 Nov 2013 12:16

The long-term trend is that the commodity bull/dollar bear market ended more than a year ago, even though dollar inflation *policy* is firmly in place. Shortly after that, the GLD drain began. And shortly after that, support for "foreign dollar settlement with CB storage" reversed and began declining. This is very close to what FOA said in one of his last posts: "The game is to let the US economy suffer from its own bloated expansion by moving slowly away from supporting foreign dollar settlement with CB storage. This is more than enough to end the dollar's timeline as we are already stretched to the leverage limit. They know that [the Fed] has but one policy to use and that will be super printing."

FOFOA

Neshant · Post by **Neshant** » 11 Nov 2013 04:46

The IMF published a paper suggesting euro govts do a Cyprus on their people and steal a portion (10%) of the bank deposits.

After that paper got some unexpected publicity, the IMF quickly retracted/watered down the suggestion claiming it was only a theoretical idea.

IMF Suggests 10 % Bank Deposit Taxation
http://www.primevalues.org/market-watch ... oAX1UuEgnM

The IMF's response:
http://www.imf.org/external/np/sec/pr/2013/pr13427.htm

Neshant · Post by **Neshant** » 11 Nov 2013 05:06

I tracked down the paragraph in the IMF document suggesting the stealing of bank deposits.

Box 6. A One-Off Capital Levy

The sharp deterioration of the public finances in
many countries has revived interest in a “capital levy”—
a one-off tax on private wealth—as an exceptional
measure to restore debt sustainability.1 The appeal is
that such a tax, if it is implemented before avoidance
is possible and there is a belief that it will never be
repeated, does not distort behavior (and may be seen
by some as fair). There have been illustrious supporters,
including Pigou, Ricardo, Schumpeter, and—until he
changed his mind—Keynes. The conditions for success
are strong, but also need to be weighed against the risks
of the alternatives, which include repudiating public
debt or inflating it away (these, in turn, are a particular
form of wealth tax—on bondholders—that also falls on
nonresidents).

There is a surprisingly large amount of experience to
draw on, as such levies were widely adopted in Europe
after World War I and in Germany and Japan after
World War II. Reviewed in Eichengreen (1990), this
experience suggests that more notable than any loss of
credibility was a simple failure to achieve debt reduction,
largely because the delay in introduction gave
space for extensive avoidance and capital flight—in turn
spurring inflation.

The tax rates needed to bring down public debt to
precrisis levels, moreover, are sizable: reducing debt
ratios to end-2007 levels would require (for a sample of
15 euro area countries) a tax rate of about 10 percent
on households with positive net wealth.

Austin · Post by **Austin** » 12 Nov 2013 22:24

Andrew Huszar: Confessions of a Quantitative Easer
We went on a bond-buying spree that was supposed to help Main Street. Instead, it was a feast for Wall Street.

TSJones · Post by **TSJones** » 13 Nov 2013 11:54

ECB forced to act:

http://www.economist.com/blogs/freeexch ... s-rate-cut

A WEEK ago Eurostat’s preliminary estimate for consumer prices showed that inflation in the euro zone had plunged from an already low 1.1% in September to 0.7% in October. Today the European Central Bank responded by cutting its main policy rate from 0.5%, where it has stood since May, to 0.25%, a new record low. The ECB also extended the time that banks can borrow unlimited amounts from it from mid-2014 to mid-2015.

The decision came as a surprise–the euro fell sharply against the dollar-even though the collapse in inflation had brought it a percentage point under the central bank’s target of “below but close to 2%. Traders and analysts had convinced themselves that any rate cut would be delayed until December. That’s partly because the ECB usually moves in a ponderous way. It’s also because the 23-strong governing council would then have available new staff forecasts for growth and inflation in 2015 as well as 2014.

panduranghari · Post by **panduranghari** » 13 Nov 2013 16:50

Neshant wrote:I tracked down the paragraph in the IMF document suggesting the stealing of bank deposits.

Box 6. A One-Off Capital Levy

The sharp deterioration of the public finances in
many countries has revived interest in a “capital levy”—
a one-off tax on private wealth—as an exceptional
measure to restore debt sustainability.

interesting. They are suggesting capital levy on the fiat wealth. If one does not keep their wealth in fiat currency then what are they going to do. Marc Faber says stay in one country, keep your wealth in another and hold a pass port of a third country. Makes eminent sense for those who can afford it, coz there is no limit to idiocy of the banksters.