Support the Arctic Sea Ice Forum and Blog

Author Topic: Global economics and finances - impacts  (Read 127070 times)

ccgwebmaster

  • Nilas ice
  • Posts: 1085
  • Civilisation collapse - what are you doing?
    • View Profile
    • CCG Website
  • Liked: 2
  • Likes Given: 0
Re: Global economics and finances - impacts
« Reply #100 on: March 21, 2014, 06:51:51 PM »
You make a good argument for the opposite of empire building and maintenance.  It is obviously going to be impossible to maintain that structure long term so what we should be doing is severing all of those global ties of which it is currently possible to do and deliberately choosing to reduce complexity.  If you know you are going to eventually fall it is better to get closer to the ground before you take the dive.

Very much so.

Increasing resilience and weakening the critical dependencies lets portions of the whole continue operating a lot longer if done in time and done properly (with a theoretical changes to result in something sustainable without crashing down to anything like the floor I envisage and plan for).

One thing I didn't really note in the last comment I made was that while one can only easily decouple so far from those supply chains - a key driver of collapse is when the decoupling is forced before you're ready. So - you are Europe and you need phosphate from Morocco and Jordan? But that supply chain falls over a year or two as that region collapses and you can't afford to send your troops to secure it as they're busy facing down the resurgent cold war border on the East...

Then you're going to have hungry and angry people - and fast.

On the other hand if you were to start rethinking how you approach human waste and fertiliser way ahead of time, you might be able to capture the phosphate being thrown away from that and start closing the loop of nutrients to the land to remove the external dependency (perhaps at some cost to yields, but not as bad as just pulling the carpet from under the existing setup arbitrarily without preparation - and a much more sustainable approach in general).

Generally speaking the long distance international dependencies are not necessary - can never be necessary - as the world worked without anywhere near the present capacity for a long time, and the pace of destruction was greatly amplified with them. Sure - there is carrying capacity loss implied - but only artificial misleading gains produced by the short term "green revolution", gains produced at the expense of sustainability and the cause of an ultimately much worse situation.

Fail to improve resilience and the crash is to a much lower floor and far more violent and abrupt. That is the path we are clearly on currently - abrupt, violent and early. Whether or not one could navigate civilisation through this event with enough sensible policies I am not entirely sure (the stress factors are still going to be colossal, but one should at least be trying).

JimD

  • Nilas ice
  • Posts: 2270
    • View Profile
  • Liked: 5
  • Likes Given: 0
Re: Global economics and finances - impacts
« Reply #101 on: March 21, 2014, 06:55:42 PM »
SH

Here is another one for you to comment on.  It is an article discussing various forms of rent.  I have a big problem with the whole concept of protective rent.  I just do not believe in the real world than the academic concept is in any way functional.  It is just too easy in our capitalist system for the extractive rent companies to use their political and financial power to shift the burden of the protective rent onto the consumer in some way.    This is and always will be a dead end in our current economic system as it has no meaningful effect on shutting down the extraction industries and reducing carbon emissions.  If we were going to price fossil energy at its real aggregate value to civilization then we would have already stopped using it.  Protective rents are just a shell game and are not designed to bring the end of their use.  The consumer always pays for the cost of a service plus the ROI demanded by the owner or our financial system.  The best deal the consumer could ever get would be to own the service and only have to pay costs.   But since we operate a system based upon individual needs and choices there will always be a significant number who make the decision that their needs justify the costs (Hey, I'll be dead before the oceans flood Miami so what do I care? Give me another tanker of oil and f**k those people.).  One can only shut down a service which is harmful in the aggregate sense if there exists a mechanism that can override individual choice in the market.  At least that is what I think.  What do you think of this stuff? 

Quote
Creating protective rent by capping or taxing carbon emissions will shrink extractive rent. Fossil fuel corporations have shown themselves willing to fight hard to defend extractive rent. But the question of who will receive climate protective rent– and who will fight for it – remains up in the air.

One possibility is to return climate protective rent to the people via equal per capita dividends – a policy known as “cap and dividend” in the case of permits or “fee and dividend” in the case of taxes. Another is to give free permits to polluters and let them pocket the rent as windfall profits – a policy known as “cap and trade” but more accurately termed “cap and giveaway.” A third option is to let the government keep the money, as in the case of Europe’s green taxes.

http://www.nakedcapitalism.com/2014/03/rent-global-warming.html
We do not err because truth is difficult to see. It is visible at a glance. We err because this is more comfortable. Alexander Solzhenitsyn

How is it conceivable that all our technological progress - our very civilization - is like the axe in the hand of the pathological criminal? Albert Einstein

JimD

  • Nilas ice
  • Posts: 2270
    • View Profile
  • Liked: 5
  • Likes Given: 0
Re: Global economics and finances - impacts
« Reply #102 on: March 21, 2014, 07:20:43 PM »
Quote
China’s yuan has suffered its biggest one-week fall in 20 years, nearing key trigger levels that threaten a wave of forced selling and mounting stress for those with dollar debts.

The jitters come amid reports of fire-sales of Hong Kong property by Chinese investors desperate to raise cash, some slashing their prices by 20pc for a quick sale. A liquidity squeeze in mainland China has already led to the collapse of Zhejiang Xingrun real estate this week with $570m of debts, the biggest property failure so far.

The yuan weakened sharply on Thursday to 6.23 against the dollar and has now lost 3pc since January, a clear break with China’s long-standing policy of slow appreciation. ...

http://www.telegraph.co.uk/finance/china-business/10712339/Tumbling-Chinese-yuan-sets-off-carry-trade-rout-triggers-derivatives-contracts.html
We do not err because truth is difficult to see. It is visible at a glance. We err because this is more comfortable. Alexander Solzhenitsyn

How is it conceivable that all our technological progress - our very civilization - is like the axe in the hand of the pathological criminal? Albert Einstein

JimD

  • Nilas ice
  • Posts: 2270
    • View Profile
  • Liked: 5
  • Likes Given: 0
Re: Global economics and finances - impacts
« Reply #103 on: March 27, 2014, 07:55:05 PM »
Possible Euro crises

Quote
The German central bank, the Bundesbank, though, opposes OMT on the grounds that it is close to the monetary financing of budget deficits. In other words, OMT implies clear and direct borrowing by governments from their own central banks, which, it is stressed, is banned by the Maastricht Treaty....

The view of the German constitutional court vehemently opposes the OMT programme as being outside the mandate of the ECB; it is, therefore, “incompatible with primary law” and violates the German constitution. It would deprive the German government of its fiscal sovereignty since it would force it to accept any generated losses (see the Financial Times, 8 February 2014). The court considers OMT to be “monetary financing” or “debt monetisation,” whereby a central bank prints money to finance sovereign debt; such practice is outlawed under European treaties, in this view....

One wonders if the US insistence on Russia sanctions far in excess of what is warranted might also be related to the adverse impact they will have on Germany and the Euro.  A stronger dollar, a weaker EU, a worsening of the Euro crisis, all play to Americas advantage in relative terms.

http://www.nakedcapitalism.com/2014/03/second-euro-crisis-possible.html
We do not err because truth is difficult to see. It is visible at a glance. We err because this is more comfortable. Alexander Solzhenitsyn

How is it conceivable that all our technological progress - our very civilization - is like the axe in the hand of the pathological criminal? Albert Einstein

JimD

  • Nilas ice
  • Posts: 2270
    • View Profile
  • Liked: 5
  • Likes Given: 0
Re: Global economics and finances - impacts
« Reply #104 on: March 27, 2014, 08:02:42 PM »
More China stuff

Quote
Mac Bank has its proprietorial China steel mill survey out and the news is poor. Steel profitability has literally collapsed:...

Any steel mill default will trigger renewed panic selling of the huge port pile and downside gapping in spot iron ore. Australian iron ore equities continue to trade on a cloud of hope.

No small and many mid-sized Chinese steel mills are profitable.

Australia better look out.

http://www.macrobusiness.com.au/2014/03/chinese-steel-mills-face-ruin/
We do not err because truth is difficult to see. It is visible at a glance. We err because this is more comfortable. Alexander Solzhenitsyn

How is it conceivable that all our technological progress - our very civilization - is like the axe in the hand of the pathological criminal? Albert Einstein

JimD

  • Nilas ice
  • Posts: 2270
    • View Profile
  • Liked: 5
  • Likes Given: 0
Re: Global economics and finances - impacts
« Reply #105 on: April 06, 2014, 12:27:28 AM »
Europe is in real danger of sliding into deflation.

Quote
The European Central Bank has let it happen. Inflation has been running at an annual rate of minus 1.5% in the eurozone over the past five months, adjusted for austerity taxes.

Prices have been falling at a rate of 5.6% in Italy, 4.7% in Spain, 4% in Portugal and 2% in Holland since September....

It is hard to judge at what point deflation becomes embedded in the system. Factory gate prices have been slipping since mid-2012. The pace quickened to minus 1.7% in February, the steepest decline since the Lehman crisis. But this time it is not the one-off effect of a financial crash. It is chronic and insidious.....

The bank said “lowflation” would cause debt ratios to jump 10 percentage points in France to 105% of GDP, 15 points in Italy to 148% and 24 points to 118% in Spain. These countries face a Sisyphean task. Whatever they achieve through austerity is overwhelmed by the greater power of debt-deflation. The same “denominator effect” — a debt burden rising faster than nominal GDP — would engulf the private sector as well, still the Achilles heel for Spain, Portugal and Ireland....

http://business.financialpost.com/2014/04/04/how-europe-is-incubating-an-even-bigger-debt-crisis-by-letting-deflation-take-root/
We do not err because truth is difficult to see. It is visible at a glance. We err because this is more comfortable. Alexander Solzhenitsyn

How is it conceivable that all our technological progress - our very civilization - is like the axe in the hand of the pathological criminal? Albert Einstein

JimD

  • Nilas ice
  • Posts: 2270
    • View Profile
  • Liked: 5
  • Likes Given: 0
Re: Global economics and finances - impacts
« Reply #106 on: April 09, 2014, 05:19:54 PM »
This is a very interesting development.  Especially in light of the recent moves by Russia and China to price oil contract in rubles or yuan instead of dollars.

The no 1 surest way to break down the dominance of the US in the world is to grow competing reserve currencies and then transition away from using the dollar as the dominant currency.  This would be a huge blow to the US empire.

Quote
Is the yuan tearing down the the US dollar?


At least 40 central banks have invested in the yuan and several others are preparing to do so, putting the mainland currency on the path to reserve status even before full convertibility, Standard Chartered said.

Twenty-three countries have publicly declared their holdings in yuan, in either the onshore or offshore markets, yet the real number of participating central banks could be far more than that, said Jukka Pihlman, Standard Chartered’s Singapore-based global head of central banks and sovereign wealth funds.

Pihlman, who formerly worked at the International Monetary Fund advising central banks on asset-management issues, said at least 12 central banks had invested in yuan assets without declaring they had done so.

The US dollar is still the world’s most widely held reserve currency, accounting for nearly 33 per cent of global foreign exchange holdings at the end of last year, according to IMF data. That ratio has been declining since 2000, when 55 per cent of the world’s reserves were denominated in US dollars.

A drop from 55% to 33% in 14 years.  This has potential to have big impact.  The recent moves by Russia and China are undoubtedly party in response to the US meddling in Ukraine.  The US must be in fits inside the administration.

http://www.macrobusiness.com.au/2014/04/is-the-yuan-tearing-down-the-the-us-dollar/
We do not err because truth is difficult to see. It is visible at a glance. We err because this is more comfortable. Alexander Solzhenitsyn

How is it conceivable that all our technological progress - our very civilization - is like the axe in the hand of the pathological criminal? Albert Einstein

ccgwebmaster

  • Nilas ice
  • Posts: 1085
  • Civilisation collapse - what are you doing?
    • View Profile
    • CCG Website
  • Liked: 2
  • Likes Given: 0
Re: Global economics and finances - impacts
« Reply #107 on: April 09, 2014, 10:59:41 PM »
This is a very interesting development.  Especially in light of the recent moves by Russia and China to price oil contract in rubles or yuan instead of dollars.

The no 1 surest way to break down the dominance of the US in the world is to grow competing reserve currencies and then transition away from using the dollar as the dominant currency.  This would be a huge blow to the US empire.

I think the US is headed on the down slope now. In some ways I feel it can't come soon enough, in others I wonder if the new superpowers will be any better.

One suspects it could be toppled quite a bit faster - but there's a strong incentive to convert as many dollars as you can into tangible assets first, if you've got a great big pile of them. I don't think the Chinese are to be underestimated, on the whole.

JimD

  • Nilas ice
  • Posts: 2270
    • View Profile
  • Liked: 5
  • Likes Given: 0
Re: Global economics and finances - impacts
« Reply #108 on: April 13, 2014, 05:48:37 PM »
Quote
Biggest Credit Bubble in History Flashes Warning: ‘Seek Cover’

Hidden in the IMF’s just released 188-page Global Financial and Stability Report is a doozie of a chart that screams not only “credit bubble” but also flashes a red warning sign: “seek cover, implosion in sight.” It depicts US issuance of covenant-lite loans and second-lien loans since 2001, including their phenomenal bubble that so spectacularly collapsed in 2008, and the even greater bubble currently underway – with an equally spectacular future....

The longer it goes on, and the more of this reeking debt with a high probability of default is piling up on the books of banks and other lenders, the more damaging the implosion will be. And so covenant-lite debt has become a flashing red light of a credit bubble in its final throes. A record $238 billion were issued in 2013, according to Thomson Reuters. Over 50% of the market, another hair-raising record.

The IMF chart shows the prior bubble as expressed in covenant-lite loans (green line, right scale) and second-lien loans (red line, left scale) and where it all ended so spectacularly – namely in the financial crisis. It also shows the current bubble through 2013. Covenant-lite loans started setting new records last year, but second-lien loans, a particularly nasty contraption for banks, haven’t quite caught up yet. Up to us to figure out where it ends:

Check out the chart!

http://www.testosteronepit.com/home/2014/4/10/biggest-credit-bubble-in-history-flashes-warning-seek-cover.html

http://www.nakedcapitalism.com/2014/04/bubble-retail-investors-told-smart-money-bails.html
We do not err because truth is difficult to see. It is visible at a glance. We err because this is more comfortable. Alexander Solzhenitsyn

How is it conceivable that all our technological progress - our very civilization - is like the axe in the hand of the pathological criminal? Albert Einstein

JimD

  • Nilas ice
  • Posts: 2270
    • View Profile
  • Liked: 5
  • Likes Given: 0
Re: Global economics and finances - impacts
« Reply #109 on: April 15, 2014, 04:27:26 PM »
If your country sells iron ore it is time to watch out.

Quote
Chinese steel traders at breaking point

...A two-year slump in Chinese steel prices has driven many steel traders to the wall, touching off a brutal credit crunch as loose collateral pledges and loan guarantees messily unwind. State news agency Xinhua predicted on Feb. 7 that at least a third of the country's 200,000 steel trading companies will fail. Their travails are already having an impact on China's banks...

More than 20 banks in southeast China have ceased lending to steel traders since last August, according to Moneyweek, a Shanghai-based financial magazine. "Almost all banks in the city of Hangzhou have stopped approving loans to them," said Xu Saizhu, a manager at industry information site Mysteel.

     "Every day, I hear of debtors running off," said one Shanghai steel trader from Shunde, Guangdong Province. Local media have reported steel traders fleeing overseas or committing suicide. "It's the worst time I've seen," said the trader.
 

http://asia.nikkei.com/Markets/Commodities/Chinese-steel-traders-at-breaking-point
We do not err because truth is difficult to see. It is visible at a glance. We err because this is more comfortable. Alexander Solzhenitsyn

How is it conceivable that all our technological progress - our very civilization - is like the axe in the hand of the pathological criminal? Albert Einstein

JimD

  • Nilas ice
  • Posts: 2270
    • View Profile
  • Liked: 5
  • Likes Given: 0
Re: Global economics and finances - impacts
« Reply #110 on: April 15, 2014, 04:35:16 PM »
China.  Insignificant defaults?  Or not.

Significant bailouts.

It is hard to read this any not feel uncomfortable about the consequences.

Quote
China engineers ‘Potemkin defaults’ to mask debt reality

http://www.ft.com/cms/s/0/0053a036-c3aa-11e3-a8e0-00144feabdc0.html#ixzz2yxvOGyU0


These systemically insignificant financial failures are being hyped up by China’s state-controlled media – and then unwittingly amplified by the international press – as part of a campaign of government-sanctioned “Potemkin defaults”.

Led by the People’s Bank of China, the central bank, which has responsibility for maintaining stability in the financial system, Beijing has launched a campaign of highly public, but controlled defaults as a way to tackle moral hazard and impose market discipline.

At the same time, for any bankruptcy or default that could threaten regional or systemic stability, the government continues to step in quietly and co-ordinate loan rollovers and bailouts.

That is not to say the small defaults that have happened are fake or there are no serious risks in the debt-laden Chinese system.

The risks have ballooned as China has added new credit roughly equal to the size of the entire US banking system in just the past five years.

Total debt as a percentage of GDP has increased from 130 per cent in 2008 to about 220 per cent at the end of last year, according to estimates from Fitch Ratings.

An increase of that speed and scale has almost always been succeeded by a crisis in other economies.
....

http://www.ft.com/intl/cms/s/0/0053a036-c3aa-11e3-a8e0-00144feabdc0.html?siteedition=intl#axzz2yv7YpZTz
We do not err because truth is difficult to see. It is visible at a glance. We err because this is more comfortable. Alexander Solzhenitsyn

How is it conceivable that all our technological progress - our very civilization - is like the axe in the hand of the pathological criminal? Albert Einstein

JimD

  • Nilas ice
  • Posts: 2270
    • View Profile
  • Liked: 5
  • Likes Given: 0
Re: Global economics and finances - impacts
« Reply #111 on: April 17, 2014, 09:41:17 PM »
In the early years of WW III the primary antagonists feinted and bluffed and used their proxy forces in the Ukraine and Syria.  But the real war was fought in the trenches of the banking system.  Who would have thought that the world could  be devastated without the use of soldiers and that we were delivered to this state of penury by such a simple seeming form of attack.  The lessons we learn over time!  And how we come to regret them........

Quote
US financial showdown with Russia is more dangerous than it looks, for both sides

The United States has constructed a financial neutron bomb. For the past 12 years an elite cell at the US Treasury has been sharpening the tools of economic warfare, designing ways to bring almost any country to its knees without firing a shot.

The strategy relies on hegemonic control over the global banking system, buttressed by a network of allies and the reluctant acquiescence of neutral states. Let us call this the Manhattan Project of the early 21st century.

"It is a new kind of war, like a creeping financial insurgency, intended to constrict our enemies' financial lifeblood, unprecedented in its reach and effectiveness," says Juan Zarate, the Treasury and White House official who helped spearhead policy after 9/11.

“The new geo-economic game may be more efficient and subtle than past geopolitical competitions, but it is no less ruthless and destructive,” he writes in his book Treasury's War: the Unleashing of a New Era of Financial Warfare....

The stealth weapon is a "scarlet letter", devised under Section 311 of the US Patriot Act. Once a bank is tainted in this way - accused of money-laundering or underwriting terrorist activities, a suitably loose offence - it becomes radioactive, caught in the "boa constrictor's lethal embrace", as Mr Zarate puts it......

This can be a death sentence even if the lender has no operations in the US. European banks do not dare to defy US regulators. They sever all dealings with the victim.

So do the Chinese, as became clear in 2005 when the US hit Banco Delta Asia (BDA) in Macao for serving as a conduit for North Korean commercial piracy. China pulled the plug. BDA collapsed within two weeks. China also tipped off Washington when Mr Putin proposed a joint Sino-Russian attack on Fannie Mae and Freddie Mac bonds in 2008, aiming to precipitate a dollar crash.

Mr Zarate told me that the US can "go it alone" with sanctions if necessary. It therefore hardly matters whether or not the EU drags its feet over Ukraine, opting for the lowest common denominator to keep Bulgaria, Cyprus, Hungary and Luxembourg on board. Washington has the power to dictate the pace for them.

The new arsenal was first deployed against Ukraine - of all places - in December 2002. Its banks were accused of laundering funds from Russia's organised crime rings. Kiev capitulated in short order.

Nairu, Burma, North Cyprus, Belarus and Latvia were felled one by one, all forced to comply with US demands. North Korea was then paralysed. The biggest prize yet has been Iran, finally brought to the table. "A hidden war is under way, on a very far-reaching global scale. This is a kind of war through which the enemy assumes it can defeat the Iranian nation," said then-president Mahmoud Ahmadinejad to Iran's Majlis. He meant it defiantly. Instead it was prescient.

Nairu, Burma, North Cyprus, Belarus and Latvia were felled one by one, all forced to comply with US demands. North Korea was then paralysed. The biggest prize yet has been Iran, finally brought to the table. "A hidden war is under way, on a very far-reaching global scale. This is a kind of war through which the enemy assumes it can defeat the Iranian nation," said then-president Mahmoud Ahmadinejad to Iran's Majlis. He meant it defiantly. Instead it was prescient.....

The US Treasury faces a more formidable prey with Russia, the world's biggest producer of energy with a $2 trillion economy, superb scientists and a first-strike nuclear arsenal. It is also tightly linked to the German and east European economies. The US risks endangering its own alliance system if it runs roughshod over friends......


He thinks it may already too late to stop Eastern Ukraine spinning out of control, but not too late to inflict a high cost. "If the US Treasury says three Russian banks are "primary money-laundering concerns", do you think that UBS, or Standard Chartered will have anything to do with them?"

This will graduate to sanctions on Russian defence firms, mineral exports and energy - trying not to hurt BP assets in Russia too much, he adds tactfully - culminating in a squeeze on Gazprom should all else fail. Whether you are for or against such action, be under no illusion as to what it means. We would be living in a different world, and Wall Street's S&P 500 would not be trading anywhere near 1,850.......


Yet as the old proverb goes: "Russia is never as strong as she looks; Russia is never as weak as she looks."

Princeton professor Harold James sees echoes of events before the First World War when Britain and France imagined they could use financial warfare to check German power.

He says the world's interlocking nexus means this cannot be contained. Sanctions risk setting off a chain-reaction to match the 2008 shock. "Lehman was a small institution compared with the Austrian, French and German banks that have become highly exposed to Russia’s financial system. A Russian asset freeze could be catastrophic for European – indeed, global – financial markets," he wrote on Project Syndicate. ....

The greatest risk is surely an "asymmetric" riposte by the Kremlin. Russia's cyber-warfare experts are among the best, and they had their own trial run on Estonia in 2007. A cyber shutdown of an Illinois water system was tracked to Russian sources in 2011. We don't know whether US Homeland Security can counter a full-blown "denial-of-service" attack on electricity grids, water systems, air traffic control, or indeed the New York Stock Exchange, and nor does Washington.

"If we were in a cyberwar today, the US would lose. We're simply the most dependent and most vulnerable," said US spy chief Mike McConnell in 2010.

The US defence secretary Leon Panetta warned of a cyber-Pearl Harbour in 2012. "They could shut down the power grid across large parts of the country. They could derail passenger trains or, even more dangerous, derail passenger trains loaded with lethal chemicals. They could contaminate the water supply in major cities, or shut down the power grid across large parts of the country,” he said......



Quote
I do not know with what weapons World War III will be fought, but World War IV will be fought with sticks and stones.

ALBERT EINSTEIN

I'm betting Albert got this one mostly right.

Read more at http://www.notable-quotes.com/w/war_quotes.html#prSLsqhW5fskJSfY.99

http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/10771069/US-financial-showdown-with-Russia-is-more-dangerous-than-it-looks-for-both-sides.html
We do not err because truth is difficult to see. It is visible at a glance. We err because this is more comfortable. Alexander Solzhenitsyn

How is it conceivable that all our technological progress - our very civilization - is like the axe in the hand of the pathological criminal? Albert Einstein

JimD

  • Nilas ice
  • Posts: 2270
    • View Profile
  • Liked: 5
  • Likes Given: 0
Re: Global economics and finances - impacts
« Reply #112 on: April 19, 2014, 03:39:43 PM »
It looks like the US is reigning in Japan.

Quote
It looks like QE is going to end with a whimper instead of a bang.

The bigwigs in the G-20 have put the kibosh on Japan’s money printing extravaganza. While most analysts expect the Bank of Japan (BoJ) to announce more “easing” in the days ahead to counter weakening economic data and droopy stock prices; it’s not going to happen. Why? Because the big boys have told the BoJ to knock it the hell off, that’s why? Here’s the scoop from the Japan Times:.....

In other words, ‘Stop what you are doing…NOW”.

Of course, the BoJ could resist and defend its independence, but how likely is that? That would suggest that the BoJ doesn’t get its marching orders from Washington, which it does, just like everyone else in the western banking cartel.
....


Quote
Keep in mind that reducing asset purchases by the Fed (“tapering”) has already wreaked holy hell on the emerging markets which are still experiencing capital outflows and (potential) currency crises. And, the funny thing is, the Fed hasn’t even started trimming its $4 trillion asset pile yet, let alone raised rates! So, just imagine, for a minute, what’s going to happen when the BoJ stops printing at the same time the Fed starts to pare-down its balance sheet. That’s the nightmare scenario, because the supply of financial assets is going to skyrocket and send stock prices off a cliff. Did someone say “1929″?


Quote
Here’s how White slammed QE in a recent interview:


“The honest truth is no one has ever seen anything like this. Not even during the Great Depression in the Thirties has monetary policy been this loose. And if you look at the details of what these central banks are doing, it’s all very experimental. They are making it up as they go along. I am very worried about any kind of policies that have that nature…

Today, the Fed still acts as if it was in crisis management. But we’re six years past that. They are essentially doing more than what they did right in the beginning. There is something fundamentally wrong with that. Plus, the Fed has moved to a completely different motivation. From the attempt to get the markets going again, they suddenly and explicitly started to inflate asset prices again. The aim is to make people feel richer, make them spend more, and have it all trickle down to get the economy going again. Frankly, I don’t think it works, and I think this is extremely dangerous…

Quote
This is really brilliant analysis and it covers QE’s main flaws, so let’s summarize. White says:

1—QE is entirely “experimental” and that central banks are “making it up as they go along.”

Check.

2–There’s no longer any need for “crisis management”. (after 6 freaking years!) The Fed is merely “inflating asset prices”. (aka–Bubblemaking)

Check, again.

3–Most important: The essential problem has NOT been fixed. Government policy still supports the zombie banks and other financial institutions which have not been nationalized, not been restructured, and are still sucking the life out of the real economy. These lumbering mastodons need to be euthanized so their debt-pile can be eliminated, their books cleared, and the economy reset. QE has merely perpetuated the problem by providing the means by which these institutions can continue to roll over their debts at zero cost to themselves creating the illusion of solvency. The US is following the same path as Japan into deflation and severe economic stagnation.

Check, check, and more check.

That sums it up perfectly. The only thing he left out was that QE has been the biggest wealth shifting scam in history.

What you ask does this have to do with AGW?  Well think about what it means when you start thinking about paying for fixing things.  We are just starting to wind down the wealth shifting mechanism stripping assets from the non-rich ands they are going to be worse off.  Since we have arranged taxes to hit them hardest and not the rich who exactly is going to pay for the fix?  Finances are going to be increasingly constrained over time and it will become harder and harder to pay for infrastructure changes as required by all of the various BAU fixes.
 
http://www.counterpunch.org/2014/04/18/g-20-and-us-tell-japan-to-end-qe/
We do not err because truth is difficult to see. It is visible at a glance. We err because this is more comfortable. Alexander Solzhenitsyn

How is it conceivable that all our technological progress - our very civilization - is like the axe in the hand of the pathological criminal? Albert Einstein

Shared Humanity

  • Young ice
  • Posts: 3939
    • View Profile
  • Liked: 403
  • Likes Given: 47
Re: Global economics and finances - impacts
« Reply #113 on: April 19, 2014, 05:04:35 PM »
I have only one problem with this analysis. They suggest that extraordinary measures should not still be in place 6 years after the crisis. I would argue that we are still in the midst of the crisis which is structural, identical to the Great Depression. Capitalism is facing the largest deleveraging event in its history. It dwarfs the one in the Great Depression because the system of capitalism is far larger, having absorbed the entire planet. Deleveraging is always associated with massive demand destruction. It is the demand destruction that is knocking the hell out of the middle class across the planet.

While QE is certainly evidence of loose monetary policy, it is not having the intended effect. The intent is to stimulate borrowing and cause the resultant growth in investment, fiscal demand and GDP. The simple truth is that there are a paucity of investments with an ROI that warrants borrowing. This is the identical structural problem that was facing capitalism in the 1930's. It triggered WWII as the major industrial powers fought to preserve their markets for exports and the supply of raw materials needed to fuel their economies. The problem was solved post WWII by the expansion of the modern industrial economy to include all of the remaining nations on the planet. By expanding to the undeveloped areas of the planet, there was suddenly a seemingly endless supply of high ROI investments. As the third world catches up to the West, this is no longer the case.

Think of capitalism as a growth system with two interconnected boxes. The first is the existing production box which generates GDP. This in turn grows the 2nd box which is the accumulated wealth of the system. A portion of this wealth is then fed back to the productive box as funds for investment which expands GDP. As high ROI investments become scarce the share of wealth needed to invest grows in order to continue to expand GDP and the further accumulation of wealth. This continues until any further expansion of GDP requires that all wealth be fed back as investment. This is the structural dilemma that the system is facing. GDP and wealth begins to shrink when the system encounters this structural problem. No amount of wealth diversion to the investment stream is able to sustain a growth in GDP and wealth. The system stagnates.

Unfortunately, in this case, we are running out of areas of the planet to rape. It is not as if the system will not continue to look for areas to exploit, however. The optimistic articles about exploiting Arctic resources, fracking or tar sands can be found everywhere, the growth system is desperately looking for that next big thing. This is what is driving bubbles all over the planet, housing, the dot.com crisis etc.

Many on this site talk about EROI (energy return on investment) or the amount of energy that has to be expended in order to produce a certain amount of energy. As the energy expended approaches the amount of energy produced, no further investment makes sense. Think of the structural issues facing the larger system of capitalism in this manner except it is far more encompassing as it involves all manner of economic activity. We are running out of areas where further investment makes sense. This problem is not going to go away. It will only get worse. When we do find such an area to exploit, there will be a burst of investment activity (read bubble) until this high ROI investment is exhausted. Fracking for natural gas is just such a phenomena. Because there is so much money on the sidelines waiting for investment opportunities, any new high ROI opportunities will be burned through rapidly.

Once a bubble has popped, it is very unlikely to re-inflate as the popping renders this area of the economy incapable of delivering ROI that is sufficient to warrant further investment. I am sorry to say, the U.S. housing market will never return to its former glory. If you are underwater on a home, you have two options. Pay off the debt and hunker down or sell and take the loss.

This growth system, the modern industrial economy, has been around for less than 3 centuries. It is a mere blip in humanities historical era and even more insignificant when you include modern humanity's prehistory. The system we think is the finest way to organize human civilization can only be considered a failed experiment. The sooner we recognize this, the sooner we can begin to work on solutions.
« Last Edit: April 19, 2014, 08:58:32 PM by Shared Humanity »

JimD

  • Nilas ice
  • Posts: 2270
    • View Profile
  • Liked: 5
  • Likes Given: 0
Re: Global economics and finances - impacts
« Reply #114 on: April 19, 2014, 06:39:28 PM »
SH

Thanks.  That was excellent.
We do not err because truth is difficult to see. It is visible at a glance. We err because this is more comfortable. Alexander Solzhenitsyn

How is it conceivable that all our technological progress - our very civilization - is like the axe in the hand of the pathological criminal? Albert Einstein

JimD

  • Nilas ice
  • Posts: 2270
    • View Profile
  • Liked: 5
  • Likes Given: 0
Re: Global economics and finances - impacts
« Reply #115 on: April 19, 2014, 08:52:32 PM »
Ian Welsh - The Rapid Destructon of Countries

Quote
My regular readers have no doubt noticed by near-obsession with the Ukrainian crisis.  Part of it is the risk of real war, but most of it is that the Ukraine is yet another country being destroyed.  Even if it had been kept together, even if the Russians had taken the Maidan coup sitting down, the coup signaled the Ukraine’s destruction, because it meant that IMF austerity, meaning slashing pensions 50%, increasing gas prices by 50%, selling off the industries worth selling and the agricultural land which is the most valuable thing the Ukraine has, would occur.  Massive debt would be piled onto Ukraine, at higher rates than Russia was offering, and the economy would be looted.

Since 9/11 we have been destroying countries at a ferocious rate:...

Though not as bad, the austerity driven destruction of countries has been even more common.  Austerity is crazy, it says “take on vastly more debt and cut spending”, but what happens is that the economy contracts due to the reduced spending, so that the debt becomes even more injurious, and the country then has to borrow even more money.  Greece is more in debt, with a smaller economy, than when the Troika started “helping” them.

This destruction is done for the benefit of various elites: the south of Europe has been shoved into poverty so that financial elites didn’t lose their money, and so that they can make even more money off loans effectively guaranteed by the IMF, ECB and northern European governments.

The correct thing to do, of course, was to force financial elites to take their losses, toss those who had engaged in fraud in jail (which is to say almost all of the executive class), and bail out ordinary workers. ....

And remember, the core is shrinking. Greeks and Italians and Cypriots and Spaniards and Irish—they thought they were members of core countries; that they were Europeans, that Germany and France and the ECB and the IMF wouldn’t destroy their countries.

The core is shrinking: the moment elites neither need nor fear you, you are disposable.  Are you willing to do anything, absolutely anything, to stay on the inside? If you are, and you can claw your way over the bodies of the others competing for the shrinking spots, well, you may live a good life as a retainer.  Otherwise one day you too will be surplus to needs.

http://www.ianwelsh.net/the-rapid-destructon-of-countries/
We do not err because truth is difficult to see. It is visible at a glance. We err because this is more comfortable. Alexander Solzhenitsyn

How is it conceivable that all our technological progress - our very civilization - is like the axe in the hand of the pathological criminal? Albert Einstein

JimD

  • Nilas ice
  • Posts: 2270
    • View Profile
  • Liked: 5
  • Likes Given: 0
Re: Global economics and finances - impacts
« Reply #116 on: May 09, 2014, 06:03:20 PM »
Quote
Deflation Threatens Europe. Policy Makers Wait.

Europe is staring into the face of the kind of deflationary cycle that has paralyzed the Japanese economy for the better part of two decades. Prices are rising far more slowly than its central bank wants, against a backdrop of astronomical unemployment on much of the Continent.

This low inflation is dangerous for Europe for a few reasons. It makes the large overhang of debts more onerous; repaying what they owe is harder for consumers, businesses and governments. It is intertwined with a rise in the value of the euro on currency markets, making European exporters less competitive on the global marketplace by increasing their costs relative to competitors in the United States or Asia. And it risks becoming self-fulfilling, as the Japanese know too well, as stagnant or falling prices lead people to hoard cash rather than spend freely.

The lowflation, as people have taken to calling it, is particularly dangerous in that it could easily turn into outright deflation, or falling prices, should one nasty shock come along. For example, if tension between Ukraine and Russia boils over into a full-scale war, it could easily tip the European economy back into recession and send prices tumbling.
........

http://www.nytimes.com/2014/05/09/upshot/why-caution-is-risky-for-europes-central-bankers.html?partner=rss&emc=rss&_r=0
We do not err because truth is difficult to see. It is visible at a glance. We err because this is more comfortable. Alexander Solzhenitsyn

How is it conceivable that all our technological progress - our very civilization - is like the axe in the hand of the pathological criminal? Albert Einstein

sofouuk

  • New ice
  • Posts: 82
    • View Profile
  • Liked: 0
  • Likes Given: 15
Re: Global economics and finances - impacts
« Reply #117 on: May 16, 2014, 12:51:23 PM »
"... China is a grotesque economic aberration that bears no relationship to prior economic history or any conventional economic models – not even to the export-mercantilism model originally developed by Japan, and which has now proven itself wholly unsustainable. Instead, China is a nation that has gone mad building, speculating, and borrowing on the back of a credit bubble so monumental (and dangerously unstable) that its implications are resolutely ignored by observers deluded by the notion that China embodies a unique economic model called “red capitalism.”

But when a nation’s debt outstanding explodes from $1 trillion to $25 trillion in 14 years, that’s not capitalism, even if it’s red. What it represents is monetary madness driven by the state

... during the two-year period 2011-2012, which was the peak of China’s much praised “aggressive” stimulus response to the Great Recession in the Developed Markets world, China consumed more cement than did the United States during the entire 20th century!"

http://www.testosteronepit.com/home/2014/5/14/why-china-will-implode-its-a-monumental-building-aberration.html

JimD

  • Nilas ice
  • Posts: 2270
    • View Profile
  • Liked: 5
  • Likes Given: 0
Re: Global economics and finances - impacts
« Reply #118 on: May 16, 2014, 05:16:45 PM »
And we have the new Indian Prime Minister just elected.  Tell me how this is good news in a country not long from being the most populous on earth.

Quote
India's next prime minister, Narendra Modi, is the son of a poor tea seller and has long set his sights on the highest elected office in the world's largest democracy.....

But despite playing up his folksy, common-man credentials, the 63-year-old Modi is widely seen as the darling of India's corporate world and a decisive, 21st-century administrator expected to revive job creation and economic growth.

Modi's singular message on the economy has helped him ignore or beat back criticism of his personal life - including his strong links to a right-wing Hindu nationalist group, as well as his four-decade marriage to a retired school teacher he had never mentioned publicly until last month.

.....His rise marks a paradigm shift for the secular democracy after decades of welfare policies that have emphasized lifting the country's impoverished. Modi has extolled the merits of trickle-down economics through industrialization.

He also has maintained strong links with the conservative, paramilitary Hindu nationalist group Rashtriya Swayamsevak Sangh, or RSS, which some describe as neo-fascist.

The RSS "will have a substantial check on Modi. He is not going to be entirely his own man," said political analyst Kamal Mitra Chenoy of the Jawaharlal Nehru University in New Delhi.....


Another example of a very pro-business, BAU, proto-fascist rising to the top.  Does anyone want to make a big bet on how India deals with AGW going forward?   It is going to get ugly.

http://www.aol.com/article/2014/05/16/indias-next-pm-has-humble-roots-focus-on-economy/20887105/
We do not err because truth is difficult to see. It is visible at a glance. We err because this is more comfortable. Alexander Solzhenitsyn

How is it conceivable that all our technological progress - our very civilization - is like the axe in the hand of the pathological criminal? Albert Einstein

Shared Humanity

  • Young ice
  • Posts: 3939
    • View Profile
  • Liked: 403
  • Likes Given: 47
Re: Global economics and finances - impacts
« Reply #119 on: May 16, 2014, 07:03:24 PM »
"... China is a grotesque economic aberration that bears no relationship to prior economic history or any conventional economic models – not even to the export-mercantilism model originally developed by Japan, and which has now proven itself wholly unsustainable. Instead, China is a nation that has gone mad building, speculating, and borrowing on the back of a credit bubble so monumental (and dangerously unstable) that its implications are resolutely ignored by observers deluded by the notion that China embodies a unique economic model called “red capitalism.”

But when a nation’s debt outstanding explodes from $1 trillion to $25 trillion in 14 years, that’s not capitalism, even if it’s red. What it represents is monetary madness driven by the state

... during the two-year period 2011-2012, which was the peak of China’s much praised “aggressive” stimulus response to the Great Recession in the Developed Markets world, China consumed more cement than did the United States during the entire 20th century!"

http://www.testosteronepit.com/home/2014/5/14/why-china-will-implode-its-a-monumental-building-aberration.html

I largely agree with this except for this statement: "What it represents is monetary madness driven by the state"

This is certainly one of, if not the largest, bubble in the history of capitalism but China has only facilitated, not driven the bubble. This bubble, like all bubbles before, is driven by the insatiable demand that capital has for high ROI investments. The race by capital to Asia, China but also Korea, Taiwan, Indonesia, Vietnam etc., was caused by a paucity of investment opportunities in the developed world. Beginning post WWII and accelerating after nations moved to floating exchange rates (triggered by the U.S. going off the gold standard in 1971). Capital was  unshackled and now free to roam the planet.

All bubbles, driven by this flow of capital, behave the same. They inflate, often rapidly, and then they burst. The bursting is generally proportional to the rapidity of the prior inflation. While they behave the same, the impact is dependent on the nature of the bubble. Some bubbles involve an industrial sector. The high tech bubble that resulted in the dot.com bust was just such a  bubble. When this bubble collapsed, the impact was felt on those areas of the world economy that were driven by the bubble. Silicon Valley got hurt in addition to other high tech areas such as Boston. NASDAQ was decimated and it took a decade to recover.

The bursting of the housing industry bubble, again driven by capital, has decimated the U.S. housing industry. Despite rosy forecasts by the industry, housing will never achieve its former glory. Other nations, most notably in Europe also saw a dramatic drop in prices and activity.

Other bubbles are more regional in nature. Japan embarked on a remarkable period of growth, post WWII. This accelerated to dizzying levels until it burst in the mid 80's. While the Japanese government certainly directed and facilitated much of this development through economic policy, the engine was the capital made available by developed nations. Post bubble, due in part to Japan's failure to accept the financial damage, they have suffered persistent low growth.

China's bubble is also regional although, with 1.3 billion people, it is a huge region. The overbuilding is not merely housing, but industry as well. They have far more production capacity than needed across all kinds of industries. Popping this bubble will have a disastrous effect on the real economy in China. The only impact on the rest of the world will be via financial institutions.

Shared Humanity

  • Young ice
  • Posts: 3939
    • View Profile
  • Liked: 403
  • Likes Given: 47
Re: Global economics and finances - impacts
« Reply #120 on: May 16, 2014, 07:34:49 PM »
And we have the new Indian Prime Minister just elected.  Tell me how this is good news in a country not long from being the most populous on earth.

Quote
India's next prime minister, Narendra Modi, is the son of a poor tea seller and has long set his sights on the highest elected office in the world's largest democracy.....

But despite playing up his folksy, common-man credentials, the 63-year-old Modi is widely seen as the darling of India's corporate world and a decisive, 21st-century administrator expected to revive job creation and economic growth.

Modi's singular message on the economy has helped him ignore or beat back criticism of his personal life - including his strong links to a right-wing Hindu nationalist group, as well as his four-decade marriage to a retired school teacher he had never mentioned publicly until last month.

.....His rise marks a paradigm shift for the secular democracy after decades of welfare policies that have emphasized lifting the country's impoverished. Modi has extolled the merits of trickle-down economics through industrialization.

He also has maintained strong links with the conservative, paramilitary Hindu nationalist group Rashtriya Swayamsevak Sangh, or RSS, which some describe as neo-fascist.

The RSS "will have a substantial check on Modi. He is not going to be entirely his own man," said political analyst Kamal Mitra Chenoy of the Jawaharlal Nehru University in New Delhi.....


Another example of a very pro-business, BAU, proto-fascist rising to the top.  Does anyone want to make a big bet on how India deals with AGW going forward?   It is going to get ugly.

http://www.aol.com/article/2014/05/16/indias-next-pm-has-humble-roots-focus-on-economy/20887105/

I am even more concerned how this Hindu nationalist will deal with its Moslem minority of 160 million people as well as the neighboring Moslem countries of Bangladesh and Pakistan.

sofouuk

  • New ice
  • Posts: 82
    • View Profile
  • Liked: 0
  • Likes Given: 15
Re: Global economics and finances - impacts
« Reply #121 on: May 17, 2014, 01:53:44 AM »
china has received plenty of FDI which you could probably hold partly responsible for overcapacity in some industries, but there's no doubt that responsibility for the construction boom can be laid squarely at the door of the state. it's not hot money from global finance which has fueled the construction frenzy, it's mostly speculation by local governments

JimD

  • Nilas ice
  • Posts: 2270
    • View Profile
  • Liked: 5
  • Likes Given: 0
Re: Global economics and finances - impacts
« Reply #122 on: May 17, 2014, 06:25:56 AM »
I am even more concerned how this Hindu nationalist will deal with its Moslem minority of 160 million people as well as the neighboring Moslem countries of Bangladesh and Pakistan.

I don't think there is much doubt what will happen when the Bangladeshi's have to migrate to India due to rising sea levels.

My big worry is the fall out from that is likely to be when the Indian's and the Pakistani's decide to use their nukes on each other.
We do not err because truth is difficult to see. It is visible at a glance. We err because this is more comfortable. Alexander Solzhenitsyn

How is it conceivable that all our technological progress - our very civilization - is like the axe in the hand of the pathological criminal? Albert Einstein

TerryM

  • First-year ice
  • Posts: 5138
    • View Profile
  • Liked: 352
  • Likes Given: 5
Re: Global economics and finances - impacts
« Reply #123 on: May 17, 2014, 08:54:07 PM »
JimD


I share your concerns about Modi. Not good for Muslims, India or the world.


Are others seeing a shift to more authoritarian leaders throughout the world? It seems as though when people perceive that things are spinning out of control they gravitate to strongmen who assure them that they have all the answers. Can Global Weirding be intensifying such feelings?


Terry

Shared Humanity

  • Young ice
  • Posts: 3939
    • View Profile
  • Liked: 403
  • Likes Given: 47
Re: Global economics and finances - impacts
« Reply #124 on: May 17, 2014, 09:58:13 PM »
china has received plenty of FDI which you could probably hold partly responsible for overcapacity in some industries, but there's no doubt that responsibility for the construction boom can be laid squarely at the door of the state. it's not hot money from global finance which has fueled the construction frenzy, it's mostly speculation by local governments

Never the less, the bubble in China is regional and popping it will  not have the same  financial effect globally as did the financial crisis is the U.S. and Europe.

http://time.com/57158/chinas-growing-debt-problem/

"A financial crisis in China isn’t the same as one in the U.S. For one, Chinese debt is almost completely Chinese-owned. A large chunk of it is in the public sector, and the central government, which holds some $4 trillion in reserves, can bail out firms at will. Indeed, as the Conference Board’s China economist Andrew Polk points out, they’ve done that more than 20 times in the past two years, a measure of how long the crisis has been brewing. “It will be difficult for China to have a Lehman moment,” he says, “because China can always find a buyer of last resort somewhere in the state system.”

When the bubble bursts, and it will although the Chinese government could bail out failures so that it will look more like  a long slow deflation of the bubble, the main exposure to areas outside of China is in the equity markets, not financial markets.

JimD

  • Nilas ice
  • Posts: 2270
    • View Profile
  • Liked: 5
  • Likes Given: 0
Re: Global economics and finances - impacts
« Reply #125 on: May 20, 2014, 03:06:58 PM »
Any of our EU readers who think they live in democracies might want to read this.

http://www.nakedcapitalism.com/2014/05/ilargi-european-democracy-roadkill.html
We do not err because truth is difficult to see. It is visible at a glance. We err because this is more comfortable. Alexander Solzhenitsyn

How is it conceivable that all our technological progress - our very civilization - is like the axe in the hand of the pathological criminal? Albert Einstein

Laurent

  • Young ice
  • Posts: 2535
    • View Profile
  • Liked: 5
  • Likes Given: 23

Shared Humanity

  • Young ice
  • Posts: 3939
    • View Profile
  • Liked: 403
  • Likes Given: 47
Re: Global economics and finances - impacts
« Reply #127 on: May 22, 2014, 05:55:32 PM »
Laurent....to expand on the 30 year gas deal.......

Anyone living in the U.S. is or should be aware of the current administrations intense efforts to complete the negotiations on the Trans Pacific Partnership (TPP) trade agreement. Despite domestic population opposition across Asia and even in the U.S., President Obama has redoubled his efforts to complete this agreement before the end of his 2nd term.

http://thediplomat.com/2014/03/trans-pacific-partnership-time-for-some-american-hustle/

Why is this so important to the U.S.?

The nature of global trade has been going under a profound shift since the 1990's. While global trade continues to grow, the areas of rapid growth are increasingly regional while trans global trade has stagnated and, in some cases, shrunk slightly. Growth in the Asian economies continues at rates that far exceed the rest of the world and this growth is being fueled by dramatic growth in interdependencies. Within a decade the Asian regional economy will exceed the U.S. and Europe and the gap will widen into the indefinite future.

The U.S. is hoping that the TPP agreement will halt or reverse this trend. While it may help, it will fail to accomplish what it is designed to do. While governments can work to influence trade, due to the increasingly seamless integration of markets, actual trade volumes are being driven by pure economics, businesses conduct business where it makes the most sense. I realize the 3rd  chart is very difficult to read but it shows that, given the rapid growth, Asia intra-regional trade will soon be as large as U.S trade with the entire world.

Personally, I believe the U.S. will fail to complete the TPP agreement and this will not be due to the opposition of populations in the negotiation partners. It will be due to the fact that the Asian partners are beginning to recognize that their futures are more linked to China than the U.S. Without it, the U.S. will not be able to halt its slide towards irrelevance in the global economy.
« Last Edit: May 22, 2014, 06:07:48 PM by Shared Humanity »

Shared Humanity

  • Young ice
  • Posts: 3939
    • View Profile
  • Liked: 403
  • Likes Given: 47
Re: Global economics and finances - impacts
« Reply #128 on: May 22, 2014, 06:07:02 PM »
In contrast to the U.S.'s difficulties in completing the TPP trade agreement, trade agreements within Asia are being negotiated and signed rapidly.

Laurent linked to the Russia/China agreement on gas.

China has also become Iran's largest trading partner.....

http://www.presstv.com/detail/2014/03/03/353028/iran-china-set-200bn-trade-target/

...and Russia and  Iran are also close to signing a trade agreement.

http://america.aljazeera.com/articles/2014/1/10/sources-iran-andrussiaclosinginontradearrangement.html

Why have these trade agreements been so easy to complete as compared to the TPP? It is because the agreements simply recognize and acknowledge the importance of the economic relationships that are already in place.

Meanwhile, China calls for a  Russian/China/Iran security agreement.

http://www.cbsnews.com/news/china-calls-for-new-security-pact-with-russia-iran/
« Last Edit: May 22, 2014, 06:17:36 PM by Shared Humanity »

TerryM

  • First-year ice
  • Posts: 5138
    • View Profile
  • Liked: 352
  • Likes Given: 5
Re: Global economics and finances - impacts
« Reply #129 on: May 22, 2014, 07:46:29 PM »
Pushing Russia away over the Ukraine won't help Europe but will strengthen BRICS. The US has been working to undermine the UK since Independence Day. Convincing Europe that Russia is the enemy will harm Europe as it strengthens Russia and China. Europe undoubtedly is aware of the costs and may decide that this is the time to split with the US, or at least time to act in their own best interests.
Not sure that's what the US had in mind when it financed the coup.
Terry

Laurent

  • Young ice
  • Posts: 2535
    • View Profile
  • Liked: 5
  • Likes Given: 23

Laurent

  • Young ice
  • Posts: 2535
    • View Profile
  • Liked: 5
  • Likes Given: 23
Re: Global economics and finances - impacts
« Reply #131 on: June 07, 2014, 05:52:54 PM »
Standard and poor's is taking climate change into account...
https://www.spratings.com/economic-research/Climate-Change.html

Laurent

  • Young ice
  • Posts: 2535
    • View Profile
  • Liked: 5
  • Likes Given: 23
Re: Global economics and finances - impacts
« Reply #132 on: June 16, 2014, 11:28:17 AM »

Laurent

  • Young ice
  • Posts: 2535
    • View Profile
  • Liked: 5
  • Likes Given: 23

JimD

  • Nilas ice
  • Posts: 2270
    • View Profile
  • Liked: 5
  • Likes Given: 0
Re: Global economics and finances - impacts
« Reply #134 on: August 01, 2014, 05:01:22 PM »
We do not err because truth is difficult to see. It is visible at a glance. We err because this is more comfortable. Alexander Solzhenitsyn

How is it conceivable that all our technological progress - our very civilization - is like the axe in the hand of the pathological criminal? Albert Einstein

Shared Humanity

  • Young ice
  • Posts: 3939
    • View Profile
  • Liked: 403
  • Likes Given: 47
Re: Global economics and finances - impacts
« Reply #135 on: August 01, 2014, 06:47:22 PM »
An interesting read.

http://www.nakedcapitalism.com/2014/08/ilargi-say-bye-bubble.html

Great article!

While not comprehensive, it accurately portrays the continuing debt crisis which is, more than anything, evidence of a fundamental structural problem in the world economy. Entire industries are becoming increasingly unable to provide adequate returns on capital investment. This was exactly the problem of the Great Depression. This structural problem was overcome by expanding capitalism to include the rest of the world. Post WWII, returns on investment in emerging economies fueled unprecedented growth of the world economy (the system of capitalism). Capitalism, a growth system, depends on a very simple equation. A portion of the profits from any business or industry must be able to be reinvested in a manner that grows revenue and profits which will then be used to fund further investment. As an increasingly large percentage of these profits are required to be reinvested to continue growth, the businesses, entire industries actually, stagnate and decline. One vivid example is the world wide construction industry, commercial and residential. Another is covered in this article, the petroleum industry.

This structural problem began to resurface in the 1980's and has become increasingly pervasive. The most prominent and visible features of this structural problem are the financial crises that have emerged periodically across the world. Capital has been chasing the next big play in an increasingly frantic effort to secure acceptable returns, creating and popping bubbles. When these returns decline, entire industries resort to cannibalization of competitors and themselves. Governments across the world have responded by reducing the costs of borrowing in an effort to stimulate investment. In many cases, real interest rates are negative. Lenders, banks and governments, are paying borrowers to take their money.

We live in interesting times.
« Last Edit: August 03, 2014, 06:26:58 PM by Shared Humanity »

JimD

  • Nilas ice
  • Posts: 2270
    • View Profile
  • Liked: 5
  • Likes Given: 0
Re: Global economics and finances - impacts
« Reply #136 on: August 30, 2014, 03:55:03 PM »
I post this here because it is a good read of course.  But also as a push back on the many conversations I have had here regarding German responsibility for the economic disaster in southern Europe - especially Greece.

Quote
In this article I ask a question on everyone’s lips: Almost everyone agrees that the Eurozone was a one-legged giant; a monetary union lacking a political ‘leg’ to stabilise it. If so, why has the Euro Crisis (which surely strengthened that view on the back of its ferocity and durability) not strengthen the hand of the federalists? Of those who were, supposedly, waiting to pounce upon any opportunity to create a United States of Europe? (This article was compiled from extracts of a keynote speech I have on 25th August 2014 at the University of Tampere, Finland, in the context of a conference entitled Power, Knowledge and Society.)

Monetary Union is an attempt to usher in Federation through the back door.” Margaret Thatcher, 1990

We now know that Mrs Thatcher was wrong. The Euro Crisis, that broke out in th aftermath of the 2008 global financial implosion, was a splendid opportunity for federalists in Berlin, Brussels and Paris to push for the federal moves that they, purportedly, always planned to make on the back on the common currency.

Just look at the so-called Banking Union that the EU has agreed. The unification of banking sectors across the Eurozone, which was and is absolutely essential for the survival of the Eurozone, was recently proclaimed in name to be denied in practice.

This raises a poignant question: The United States also had serious trouble consolidating its union, its federation. It took a century of deliberation, a bloody civil war, a series of banking crises and depressions and, of course, the Great Crash of 1929, not to mention the civil rights marches in the 1960s (which spawned Lyndon B. Johnson’s Great Society) for the United States to achieve proper political unity. But with every crisis, the United States pulled closer together.

Europe is doing the opposite. It is coming apart. Even though we came to the brink in 2012, when Mr Mario Draghi, the head of the ECB, admitted that the euro was about to collapse (famously invoking the ‘convertibility risk’), not only did we not come closer together but, indeed, we did precisely the opposite, if one looks at the reality behind the rhetoric..........

http://www.nakedcapitalism.com/2014/08/europe-coming-together-response-euro-crisis.html
We do not err because truth is difficult to see. It is visible at a glance. We err because this is more comfortable. Alexander Solzhenitsyn

How is it conceivable that all our technological progress - our very civilization - is like the axe in the hand of the pathological criminal? Albert Einstein

Laurent

  • Young ice
  • Posts: 2535
    • View Profile
  • Liked: 5
  • Likes Given: 23
Re: Global economics and finances - impacts
« Reply #137 on: September 09, 2014, 08:23:16 PM »

JimD

  • Nilas ice
  • Posts: 2270
    • View Profile
  • Liked: 5
  • Likes Given: 0
Re: Global economics and finances - impacts
« Reply #138 on: September 12, 2014, 05:13:46 PM »
As things get tougher going forward in time the dictates of our basic natures will worsen the trends not ameliorate them.  We are already programmed by evolution to respond to declining growth and risky times with a set of behaviors.

Quote
Economists occasionally point out that societies generally move to the right during periods of sustained low growth and economic stress. Yet left-leaning advocates of low or even no growth policies rarely acknowledge the conflict between their antipathy towards growth and the sort of social values they like to see prevail. While some “the end of growth is nigh” types are simply expressing doubt that 20th century rates of increase can be attained in an era of resource scarcity, others see a low-growth future as attractive, even virtuous, with smaller, more autonomous, more cohesive communities.

Perhaps they should be careful what they wish for.
............


http://www.nakedcapitalism.com/2014/09/are-advanced-economies-mature-enough-to-handle-no-growth.html
We do not err because truth is difficult to see. It is visible at a glance. We err because this is more comfortable. Alexander Solzhenitsyn

How is it conceivable that all our technological progress - our very civilization - is like the axe in the hand of the pathological criminal? Albert Einstein

Laurent

  • Young ice
  • Posts: 2535
    • View Profile
  • Liked: 5
  • Likes Given: 23

Laurent

  • Young ice
  • Posts: 2535
    • View Profile
  • Liked: 5
  • Likes Given: 23
Re: Global economics and finances - impacts
« Reply #140 on: October 03, 2014, 10:45:50 AM »
Quote
Megabanks continue to invest billions in coal and other fossil fuels, even after pledging to go carbon free. Green America's Break Up With Your Megabank Campaign has all the resources you need to move your money to banks and credit unions that invest in local communities and green companies.
http://breakupwithyourmegabank.org/

JimD

  • Nilas ice
  • Posts: 2270
    • View Profile
  • Liked: 5
  • Likes Given: 0
Re: Global economics and finances - impacts
« Reply #141 on: October 08, 2014, 05:08:01 PM »
http://www.theautomaticearth.com/germanys-bad-numbers-are-great-news-for-all-of-us/

Not sure about the use of the word great", but limits are being approached and consequences accumulating. 
We do not err because truth is difficult to see. It is visible at a glance. We err because this is more comfortable. Alexander Solzhenitsyn

How is it conceivable that all our technological progress - our very civilization - is like the axe in the hand of the pathological criminal? Albert Einstein

Laurent

  • Young ice
  • Posts: 2535
    • View Profile
  • Liked: 5
  • Likes Given: 23

JimD

  • Nilas ice
  • Posts: 2270
    • View Profile
  • Liked: 5
  • Likes Given: 0
Re: Global economics and finances - impacts
« Reply #143 on: October 11, 2014, 03:46:54 PM »
Quote
China just overtook US as the world's largest economy, IMF says


China just overtook the US to become the world's largest economy, according to the International Monetary Fund. By the end of 2014, China will make up 16.48% of the world's purchasing-power adjusted GDP (or $17.632 trillion), and the US will make up just 16.28% (or $17.416 trillion).

Guess America needs to get its crap together and grow its economy faster.  Would not want to be number two. 

http://m.csmonitor.com/Business/Latest-News-Wires/2014/1008/China-just-overtook-US-as-the-world-s-largest-economy-IMF-says
We do not err because truth is difficult to see. It is visible at a glance. We err because this is more comfortable. Alexander Solzhenitsyn

How is it conceivable that all our technological progress - our very civilization - is like the axe in the hand of the pathological criminal? Albert Einstein

Laurent

  • Young ice
  • Posts: 2535
    • View Profile
  • Liked: 5
  • Likes Given: 23
Re: Global economics and finances - impacts
« Reply #144 on: October 18, 2014, 09:40:27 AM »

SATire

  • Frazil ice
  • Posts: 483
    • View Profile
  • Liked: 22
  • Likes Given: 3
Re: Global economics and finances - impacts
« Reply #145 on: October 19, 2014, 02:33:26 PM »
Quote
China just overtook US as the world's largest economy, IMF says
...

Guess America needs to get its crap together and grow its economy faster.  Would not want to be number two. 
Dear Jim. I hope that was irony or some kind of sarcasm. If we would like to start a race between the most consuming regions "who consumes the most" that would translate to a continuous accelerating race to death of the planet. If we still rate growth higher than life we will be doomed.

Instead, we should accept that the short periode of imbalance caused by "western colonisation" must come to an end fast for our own benefit. Then, we should focus on the real things and not on that numbers forecasting death of nature. It is the time for austerity and to start learning sustainability.

If we still value growth of consumption over CO2 emission Paris 2015 will also be doomed - BAU. China would continue to accept the challenge by US. Europe would concentrate on increasing the height of their walls: In the north 1 m more on the dikes against the sea and armed fences in the south against the poeple from Africa and near east. That is the easy way because no need to care about any future anymore. That is the suicide plan.

Source of the attached picture: http://www.dailymail.co.uk/news/article-2163610/Fascinating-new-graph-shows-economic-history-world-Jesus.html

Sigmetnow

  • Multi-year ice
  • Posts: 15398
    • View Profile
  • Liked: 403
  • Likes Given: 206
Re: Global economics and finances - impacts
« Reply #146 on: October 19, 2014, 10:25:59 PM »
Up next: suing carbon emitting companies for damage caused by climate change.

Quote
The paper, put out Thursday by the Canadian Centre for Policy Alternatives and West Coast Environmental Law, argues that climate science has advanced enough that current and future damages from climate change could start being divvied up amongst various polluters and companies in fossil fuels. When combined with the workings of international litigation, it opens up the possibility of legal liability for those entities — and not just in their home countries, but in any country where damages from climate change are felt.

In short, the scientific and legal groundwork is in place to start suing carbon emitters, and quite possibly suing them for a lot. Someone just has to try.
http://thinkprogress.org/climate/2014/10/10/3578723/canada-report-climate-change-lawsuits/
People who say it cannot be done should not interrupt those who are doing it.

Laurent

  • Young ice
  • Posts: 2535
    • View Profile
  • Liked: 5
  • Likes Given: 23
Re: Global economics and finances - impacts
« Reply #147 on: October 23, 2014, 10:28:04 PM »
Ed Miliband and Baroness Worthington, the most expensive man and woman in Britain’s history
http://www.telegraph.co.uk/earth/environment/climatechange/11171445/Ed-Miliband-and-Baroness-Worthington-the-most-expensive-man-and-woman-in-Britains-history.html

Baroness Bryony Worthington and Bjorn Lomborg debate Geoengineering and the IPCC Report 2013

Laurent

  • Young ice
  • Posts: 2535
    • View Profile
  • Liked: 5
  • Likes Given: 23
Re: Global economics and finances - impacts
« Reply #148 on: October 29, 2014, 12:35:24 PM »
Ghost Of Milton Friedman Materializes In Chicago, Endorses A Price On Carbon
http://www.huffingtonpost.com/forest-trends/ghost-of-milton-friedman_b_6066348.html?utm_hp_ref=green&ir=Green

JimD

  • Nilas ice
  • Posts: 2270
    • View Profile
  • Liked: 5
  • Likes Given: 0
Re: Global economics and finances - impacts
« Reply #149 on: December 05, 2014, 05:05:06 PM »
http://www.telegraph.co.uk/finance/economics/11274343/ECB-paralyzed-by-split-as-irreversible-deflation-trap-draws-closer.html

To be a bit bold (maybe this will trigger an interesting discussion with our EU friends :).

The EU is essentially dead in the water. One cannot run a large group pf sovereign nations like we run the US (not that it works that great here either) as the wealthy states (yes I am looking at you Germany) must facilitate transfer payments to the periphery (think Greece and Mississippi here) or else the structure will collapse.   Potential economic catastrophe is very near, deflation has set in deep in several countries, and we are already long past the point where a number of member countries should have departed for greener economic pastures.   The situation is spiraling down fast, especially in Italy and Greece. 

You should pull the plug on the Union and search for a system of less complexity.  A return to the basic sovereign nation structure would be a good "first" step on the long down staircase of this collapsing global civilization.  We here in the States will very likely be following you down that same staircase in the not too distant future.       
We do not err because truth is difficult to see. It is visible at a glance. We err because this is more comfortable. Alexander Solzhenitsyn

How is it conceivable that all our technological progress - our very civilization - is like the axe in the hand of the pathological criminal? Albert Einstein