The Great China Ponzi

By David Stockman – Re-Blogged From http://www.Silver-Phoenix500.com

There is an economic and financial train wreck rumbling through the world economy. Namely, the Great China Ponzi. In all of economic history, there has never been anything like it. It is only a matter of time before it ends in a spectacular collapse, leaving the global financial bubble of the last two decades in shambles.

But here’s the Wall Street meme that is stupendously wrong and that engenders blind complacency with respect to the impending upheaval. To wit, the same folks who brought you the myth of the BRICs miracle would now have you believe that China is undergoing a difficult but doable transition——-from an economy driven by booming exports and monumental fixed asset investment to one based on steady as she goes US-style consumption and services.

There may well be some bumps and grinds along the way, we are cautioned, such as the recent stock market and currency turmoil. But do not be troubled—–the great locomotive of the world economy will come out the other side better and stronger. That’s because the wise, pragmatic and powerful leaders and economic managers who deftly guide China’s version of capitalism have the capacity to make it all happen.

No they don’t!

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Where Oh Where Has the Rally Gone?

By David Haggith – Re-Blogged From The Great Recession Blog

Last week began the blackout period for companies buying back their own shares, as we are nearing the end of a quarter, when stock buybacks are put on hold. It also began the bust of the stock market’s recent rally. If you followed my last article, you’d see that this is exactly what I expected the stock market to do because nearly all of the buoyancy in the recent market rally has been created by companies buying back stocks and sometimes focusing the buybacks on specific major shareholders.

The big players use stock buybacks to save themselves

Take a look at the chart above, which shows how the stock market is almost exactly tracking stock buybacks. Note the last time buybacks hit a zenith (in 2008) similar to the present. As soon as stock buybacks ended, the stock market crashed. As the market grew more desperate, there were more buybacks by corporations in an attempt to keep their share prices rising but perhaps also as an engineered exit for major stockholders. (Use the company money to buy back shares so that massive buybacks don’t have any negative impact on stock prices.)

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Duplication of Taxpayer Efforts in Climate Change Research

By Bob Tisdale – Re-Blogged From http://www.WattsUpWithThat.com

There are numerous duplications of effort in the US Global Change Research Program (USGCRP): from multiple U.S.-funded climate-modeling groups, to multiple producers of the same climate-related data. Why are taxpayers supporting all of those duplications of effort?

THE ANNUAL COSTS OF CLIMATE RESEARCH

According to the 2014 Climate Change Expenditures Report from The White House, costs to U.S. taxpayers of the US Global Change Research Program (USGCRP) run about $2.5 billion annually.

CLIMATE MODELS – Duplication of Effort Example 1

Climate models are the basis for long-term prognostications of the impacts of human-induced global warming and climate change. Unknown to most climate laypersons, climate models are not simulating Earth’s climate as it existed in the past, as it exists now, or as it might exist in the future.

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Hidden Force Behind Oil’s Rise: Sabotage by Terrorists

 

Oil prices have surged on hopes of a freeze in global production. But a more hidden factor is also fueling the price spike: terror attacks on oil facilities.

Sabotage to key oil pipelines have driven global supply outages to “elevated” levels estimated at more than 3 million barrels per day, according to the Royal Bank of Canada.

For instance, last month a critical pipeline in Nigeria was bombed, taking around 250,000 barrels of crude offline until May.

Extremist groups pose a “clear and present danger” to energy facilities, especially those in oil-rich North Africa, RBC wrote in a recent research report.

Oil prices have rallied recently to around $40 today from $26 a barrel in mid-February. The sharp rise has been largely attributed to an effort to “freeze” oil output by Saudi Arabia, Russia and other producers. Investors are also betting U.S. production will decline sharply in 2016.

But geopolitical jitters and supply outages are also playing an important role. That’s a change from much of the past two years when these concerns were overshadowed by the epic supply glut and Iran’s efforts to ramp up production.

“OPEC outages in hotspots like those recently seen in Iraq and Nigeria are a good reminder of how quickly volumes can be sidelined,” RBC wrote. “As the market gradually tightens, we think these hotspots will return to center stage.”

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Goldman Is Dead Wrong

By Michael Pento – Re-Blogged From http://www.Gold-Eagle.com

Goldman Sachs has been predicting the demise of gold for the past few years. Back in July of 2015, Jeff Currie (Global Head of Commodities Research at the investment firm) went on record predicting the price of the yellow metal would fall below $1,000 per ounce by the start of 2016. However, that prediction failed to materialize; despite the fact that gold was already below $1,100 at the time he made the call.

Nevertheless, being wrong on the direction of gold last year did not prevent him from once again urging investors to short the commodity in February of this year; claiming it would fall to $1,000 per ounce within 12 months.  His rationale for anticipating the price decline is that gold is primarily a “safe haven” asset in times of economic and market turmoil and that the U.S. faced very little recession risk—so there is no reason for investors to seek the shelter of gold.

However, Goldman Sachs, which is a bastion of Keynesian apologists–like most on Wall Street, fails to grasp what really drives the price of gold…and what has caused it to surge 18% so far in 2016.

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Our 2nd Amendment

By Senator Mark Green – Re-Blogged From Freedom Outpost

On December 15, 1791, the states of our fledgling democracy ratified ten amendments, which became known as the Bill of Rights.

The preamble to the Bill of Rights states it clearly, “the conventions of a number of states …expressed a desire, in order to prevent misconstruction or abuse of its powers.” The intent of the Bill Of Rights was to restrain government abuses. These were designed to be checks and balances on the government. The second amendment reads: “A well regulated Militia, being necessary to the security of a free state, the right of the people to keep and bear arms, shall not be infringed.”

Here, the founders state that to keep the state free, people have the right to keep and bear arms. The “why” we need a second amendment is clear: to protect a free state – to protect freedom.

James Madison initially proposed these amendments on June 8, 1789. Only six years prior to their proposal, the Treaty of Paris, ending the War with King George, was signed in 1783. The final agreement with England on America’s boundaries did not occur until 1795, with the Jay Treaty. The Bill of Rights was passed within eight years of a bloody war where citizen soldiers picked up their own weapons and overthrew a tyrannical government. It is clear that the authors of the second amendment intended to provide the citizenry a means to defend freedom from government, both at home and abroad.

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Weekly Climate and Energy News Roundup #220

The Week That Was: March 26, 2016 – Brought to You by www.SEPP.org

By Ken Haapala, President, Science and Environmental Policy Project

Lack of Evidence: For the past several weeks, TWTW has addressed the evidence supporting EPA’s finding that human greenhouse gas emissions, particularly carbon dioxide (CO2), endanger human health and welfare (EPA Endangerment Finding). We found little or no physical evidence supporting the finding. Without this finding the EPA has no legal basis for regulating CO2, and the administration has no logical basis for its energy plan of eliminating coal-fired power plants through CO2 regulations. These regulations are based on a controversial 2007 Supreme Court decision stating that CO2 is a pollutant under the Clean Air Act, even though it is not a defined category pollutant. According to the decision, before regulating, the EPA must find greenhouse gases (particularly CO2) endanger public health.

The five assessment reports (ARs) of the UN Intergovernmental Panel on Climate Change (IPCC) produce some excellent science, but also misleading assertions. The so-called “hot spot”, mistakenly called the distinct human fingerprint in IPCC’s second assessment report of Working Group I (AR-2 1995), has not been found to exist. There is no discernible increase in atmospheric warming trends over the tropics centered at about 33,000 feet. (Note: it is the warming trends over time, increasing with altitude, that are important. A lapse rate, the decline in actual temperatures with increasing altitude would still be observed, but the rate should decline over time.) In fact, the AR-2 synthesis report, which followed the Working Group I report, makes no mention of the hot spot in the section titled: “The Balance of Evidence Suggests a Discernible Human Influence on Global Climate.” (p. 22).

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Gold, The Misery Index And Insanity

By Gary Christenson – Re-Blogged From The Deviant Investor

In 1980 Ronald Reagan spoke about the Misery Index.  An economist had added the inflation rate to the unemployment rate, called it the Misery Index, and used it to indicate the social costs and economic difficulty for the middle class.

Today the Misery Index is much smaller than in 1980, thanks to … intelligent fiscal management, economically beneficial monetary policy from the Federal Reserve, and wise political policy from the White House.  If you believe any of those, read no further.

Most people will agree that the Misery Index is much smaller today because the numbers have been gimmicked.  Does anyone believe a few percent for inflation or around 5% unemployment?   Massage (torture) the numbers and the Misery Index declines, incumbent politicians are re-elected, while far too many people remain out of work, earning practically nothing on their savings, and paying too much for food, clothing, drugs, medical care, college, transportation and so on.

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Price Discovery – Nucleus Of Capitalism

By Gordon Long and Michael Pento – Re-Blogged From http://www.Silver-Phoenix500.com

FRA Co-founder Gordon T. Long is joined by Michael Pento in discussing topics from the government debt problem, the current boom in gold and the outlook of the dollar.

Mr. Pento is the President and Founder of Pento Portfolio Strategies (PPS). PPS is a Registered Investment Advisory Firm that provides money management services and research for individual and institutional clients. Mr. Pento is a well-established specialist in the Austrian School of economics and a regular guest on CNBC, Bloomberg, FOX Business News and other national media outlets. His market analysis can also be read in most major financial publications, including the Wall Street Journal. He also acts as a Financial Columnist for Forbes, Contributor to thestreet.com and is a blogger at the Huffington Post.

Prior to starting PPS, Mr. Pento served as a senior economist and vice president of the managed products division of another financial firm. There, he also led an external sales division that marketed their managed products to outside broker-dealers and registered investment advisors. Additionally, Mr. Pento has worked for an investment advisory firm where he helped create ETFs and UITs that were sold throughout Wall Street. Earlier in his career Mr. Pento spent two years on the floor of the New York Stock Exchange. He has carried series 7, 63, 65, 55 and Life and Health Insurance Licenses. Mr. Pento graduated from Rowan University in 1991.

Keynesian Interest Rate Manipulation

“You cannot take interest rates down to zero percent and then in the negative territory, constantly increase the amount of something I like to call ‘quantitative counterfeiting’ and ultimately hope for a good ending. It’s just not possible.”

They’re constantly pushing interest rates lower and lower and now to the point where if you’re going to loan money to somebody, you’re going to pay them to do it. The reason their doing this as a method to make their debt serviceable; they need to make ends-meat so they borrow at lower cost. We know there is going to be a collapse because markets have been aggravated and not allowed to function for years.

“30% of all the worlds sovereign debt now has a negative sign in front of it, that’s $7 trillion.”

Here’s the main issue, let’s consider Japan: There is -0.1% for the Japanese 10yr note, an all-time record low. You’re loaning money to Japan, a nation that has 250% debt-GDP and you’re loaning this money going out for 10 years. All for the deal that you’re going to lose money each and every year in nominal terms, and then they have an inflation target and assuming they meet it, Japanese authorities will eventually step in and all of a sudden begin fighting inflation. The only thing this can lead to is an enormous implosion.

“Price discovery is essential, it is the nucleus of capitalism and we haven’t had it in decades.”

Sustaining Government Debt

“As debt has increased, interest rates have gone lower; it is all that they can do.”

When you base a nation’s growth, not on productivity and the size of the labour force, rather on market bubbles, furthermore when you consider there is 19-20 trillion in the US of outstanding debt; there is just no tax base that can finance this.

Look what Draghi had to do, it was not enough to buy $60 billion euros a month, they went to 80 billion, and why just buy government debt when you can buy corporate debt? These practise make no sense, seemingly there is no rationally thinking individual that enforces decisions.

We are stuck until we are hit with an inevitable implosion. The trigger will be when they reach their inflation targets and then become inflation fighters. There will be a period of time following this where you will see bond yield completely unravel, they will soar, and consequently stock prices and economic growth will plummet.

Central Bank Patterns

Local banks have their excess reserves at the central bank, and now the central banks rather than paying to keep the reserves, they are charging for the reserves. They are doing this so banks can go out looking for someone who cannot pay back in taking out a loan, else they will simply go buy more sovereign debt.

“Have we become such children in this world where grown men and women cannot just come forth and admit they have made a mistake and admit there will be a year or two of a recession or depression followed by prosperity?”

If you have so much debt which you cannot pay back, something has to change; the debt needs to be restructured. Debt is not fixed by artificially taking out interest rates and forcing individuals to take out more debt. We are not adjusting we just keep rolling the debt over and over.

“Capitalist systems do not work unless you have a cleansing at some point of excess debt. It is a healthy and necessary part of growth.”

The Gold Boom

Well now in a time where if you stick your money in a sovereign note in a bank, you either get nothing from it or even charged for doing so, gold is definitely lucrative now more than ever. Additionally the ratio between gold miners and gold has never been lower than it is now. As interest rates go more and more negative across the globe, more and more money will be put into gold because for every ounce of gold you’ll pull out just that, an ounce of gold.

“The only escape is a deflationary depression on a global scale from the likes of which the world has never seen.”

Advice for Investors

“Gold is going to be a winner no matter what happens, there is no losing scenario for gold.”

To have 20-25% of my portfolio in mining shares which is high as far as Wall Street is concerned. So have gold, short in the market, and the only place being long is with energy. being long with energy as of late has proven to show great results. Forget base metals and in terms of energy it’s a great hedge in being short in the market.

The Future of The Dollar

“As I predicted, I have been on record in December of 2015 in saying the dollar will fall hard…and it did. I knew it was going to happen, because I knew the economic data wasn’t supportive of floor rate hikes and this is what the dollar was priced in. It is important to question not what the dollar is going to do against the Yen and Euro, but moreover intrinsically against gold. I believe all the currencies out there are going to lose their value, the reason being that the real money out there and it has been for thousands of years, is none other than gold. “

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An Open Letter to U.S. Presidential Candidates

By Bob Tisdale – Re-Blogged From http://www.WattsUpWithThat.com

Date:  March 27, 2016

Subject:  Extreme Weather and Rising Sea Levels

From:  Bob Tisdale – Independent Researcher/Climate Change

To: United States Presidential Candidates

Dear Presidential Candidates:

While reading this letter, please put aside your beliefs about human-induced global warming and climate change.

Extreme weather events existed long before the industrial revolution and mankind’s emissions greenhouse gases.  That is, tornados, hurricanes, blizzards, heat waves, cold spells, floods, droughts and so on are facts of life on this planet and in this country. Regardless of whether you believe our emissions of greenhouse gases are now contributing to or enhancing them, those extreme weather events exist now, and they are not going to disappear at any time in the future.

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SEC Forces Exxon Climate Disclosure Vote

By Eric Worrall – Re-Blogged From http://www.WattsUpWithThat.com

The U.S. Securities and Exchange Commission has ruled that Exxon must allow a shareholder vote, on whether Exxon should include information about specific risks posed by climate change in company reports. Exxon claims that the proposal is too vague to properly address.

The Securities and Exchange Commission has ruled Exxon Mobil must include a climate change resolution on its annual shareholder proxy, a defeat for the world’s largest publicly traded oil producer, which had argued it already provides adequate carbon disclosures.

In a Tuesday letter to Exxon XOM -0.43% seen by Reuters, the SEC said the oil producer cannot keep a proposal spearheaded by New York state’s comptroller from a full shareholder vote at the company’s annual meeting in May.

If approved, the proposal would force Exxon to outline specific risks that climate change or legislation designed to curb it could pose to its ability to operate profitably.

Exxon had argued that the proposal was vague and that it already publishes carbon-related information for shareholders, including a 2014 report on its website entitled, “Energy and Carbon – Managing the Risks.”

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The Coming Market Rout

cropped-bob-shapiro.jpg   By Bob Shapiro

Several days ago, IM Vronsky wrote that the big banks are in deep trouble. Since the financial reporting of these companies leave out much of the data necessary to evaluate these companies, he pointed to the price history (and technicals) of several bank stocks.

While stock prices reflect only the collective market sentiment based on the incomplete reporting, it does indicate that all is not well in River City.

Looking at the overall market first, we find that prices peaked about a year ago and since have turned down. Lets look at some factors affecting stock prices.

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Gold Stocks’ Spring Rally

By Adam Hamilton – Re-Blogged From http://www.Gold-Eagle.com

The red-hot gold stocks have spent most of March in consolidation mode, grinding sideways near their 2016 highs.  Interestingly this month’s rally pause is par for the course seasonally in gold-stock bull markets.  Like gold itself, this sector tends to slump to a seasonal low in mid-March before embarking on a strong spring rally in April and May.  With gold stocks back in a bull, their seasonality warrants consideration.

Seasonality is the tendency for prices to exhibit recurring patterns at certain times during the calendar year.  While seasonality doesn’t drive price action, it quantifies annually-repeating behavior driven by sentiment, technicals, and fundamentals.  We humans are creatures of habit and herd, which naturally colors our trading decisions.  The calendar year’s passage affects the timing and intensity of buying and selling.

Gold exhibits high seasonality, which seems counterintuitive.  Unlike grown commodities like crops, the mined supply of gold is constant year-round.  But supply is only half of the fundamental supply-demand equation that drives pricing.  Gold’s investment demand happens to be highly seasonal, and that’s what sets gold prices at the margin.  Investors favor gold buying far more at some parts of the year than others.

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Banks Brutally Bleeding

By IM Vronsky – Re-Blogged From http://www.Gold-Eagle.com

All avid students well know a nation’s economy depends a great deal upon the strength of its financial system…to wit: the stability of its banks.  To be sure most major banks are “crowing” stability, strength and all that exemplifies security.  But is it true?! What is really the financial solidarity of major world banks?

This analysis will reveal the international banking system as a House of Cards (at best) and a rickety, fragile, unsound, unstable, weak and unsound Garage for Storing Cash (at worst).

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Washington’s Despotic Lawlessness

By Paul Driessen – Re-Blogged From http://www.WattsUpWithThat.com

We’ve had a “try and stop me” president who gave $500 million away to the U.N. climate fund without Congressional approval. Now we need one who will invalidate those actions.

Guest essay by Paul Driessen

Washington is out of control. Legislators, judges and unelected bureaucrats want to control our lives, livelihoods and living standards, with no accountability even for major errors, calculated deception, or deliberate, often illegal assaults on our liberties and on citizens who resist the advancing Leviathan.

These themes animate Republican and conservative politics because they are happening – regularly.

The Competitive Enterprise Institute is renowned for its annual Ten Thousand Commandments reports on federal rules. A scary but mesmerizing new analysis now maps how the Washington bureaucracy lawlessly imposes agendas that all too frequently contravene or disregard what We the People support, what is best for the nation, and even what Congress has enacted or refused to encode in legislation.

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Circuit Court Seems to Think Collusion Between Green Activists and EPA is A-OK

By Anthony Watts – Re-Blogged From http://www.WattsUpWithThat.com

E&E LEGAL’S STATEMENT RE: D.C. CIRCUIT COURT’S DECISION TO DENY BRIEF ILLUSTRATING EXTENSIVE COLLUSION BETWEEN EPA AND GREEN GROUPS IN WRITING CLEAN POWER PLAN

The Energy & Environmental Legal Institute (E&E Legal) is extremely disappointed that the DC Circuit three judge panel refused to consider whether the EPA was improperly influenced by so called ‘green’ groups when the agency put forth the Clean Power Plan (CPP) that intended to “bankrupt” coal power plants and eliminate coal miners jobs throughout the country. We have painstakingly gathered evidence of improper ex parte contact between these outside groups and key EPA employees while the rule was being drafted, yet the Court has decided not to look at it in this case. The ex parte contact was extreme and included meetings at coffee shops across the street from EPA, extensive use of private e-mail servers by agency officials, and the ‘green groups’ clear involvement in the drafting and editing of the CPP.

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Two Down – Two to Go

By Peter Schiff – Re-Blogged From Euro Pacific Capital

The Federal Reserve’s years-long campaign to sheepishly back away from its own policy forecasts continued in earnest last week when it officially reduced the four expected 2016 quarter point hikes, suggested back in December, to just two. Given the deteriorating economic outlook, I believe there can be little doubt that the Fed will soon complete the capitulation process and remove all expectations for additional hikes this year. Even before that happens, savvy observers should have already concluded that the Federal Reserve is stuck in the monetary mud just as firmly now as it has been since the dawn of the financial crisis back in 2008.
Rather than actively voicing its retreat in either its March policy statement or in Chairwoman Janet Yellen’s press conference, the market-moving policy shift was buried in the minutia of the Fed’s “dot plot” information array, in which each voting committee member signals their assumptions of where interest rates will be in various points in the future. Those tea leaves needed to be read to reach the conclusion that policy just got significantly  more dovish. But despite the Fed’s soft peddling, the policy shift made an immediate impact on markets, with the dollar getting hit by a variety of rival currencies and gold (and more significantly gold miners) climbing to multi-month highs.

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Stock Market Chart Similarities

By David Haggith – Re-Blogged From The Great Recession Blog

Compare the Great Depression to the Great Recession, and you’ll see a similar pattern in how the Dow Jones Industrial Average graphs out. That pattern appears to be repeating now. The nation’s most notorious stock market crash in 1929 did not occur as a single fall off a cliff, but started with high points that rounded downward as the market bounced off a lowering ceiling; then it experienced a sharp plunge for about a month, then rallied, and then it experienced the huge crash we’ve heard about all our lives. After that, it experienced many more rallies and crashes before it found its absolute bottom.

What people forget is that each of the cliffs was made distinct by brief rallies and sometimes by extended rallies in between. The Great Depression was never a smooth path to the bottom.

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Government Ramps Up Borrowing As Private Sector Slows

By John Rubino – Re-blogged From http://www.Silver-Phoenix500.com

This morning, US existing home sales plunged and the Chicago Fed’s national activity index turned negative. Both are obvious signs of a slowing economy.

Anticipating this kind of news, Credit Bubble Bulletin’s Doug Noland in his most recent column analyzed the Federal Reserve’s quarterly Z.1 Report for signs of changing financial trends, and found something potentially serious. The following three charts tell the tale:

First, corporate borrowing slowed dramatically in 2015’s fourth quarter…

…while households scaled back their mortgage borrowing:

And guess who stepped in to save the credit bubble? That’s right. Federal government borrowing soared:

Writes Noland: “This more than offset the private-sector slowdown, ensuring that overall Non-Financial Debt growth accelerated to an 8.6% pace in Q4.”

In other words, monetary policy (QE and low/negative interest rates) has stopped working and now we’re reverting to deficit spending to juice the economy. If this is the beginning of a trend, expect to see a torrent of announcements in coming months touting new government programs on infrastructure, health care and/or the military.

It’s as if the people making these decisions have forgotten that 1) the world borrowed $57 trillion post-2008 and got next to nothing for it and 2) the new debt will have to be rolled over at higher rates if interest rates are ever to be normalized, thus decimating government finances.

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Weekly Climate and Energy News Roundup #219

The Week That Was: March 19, 2016 – Brought to You by www.SEPP.org

By Ken Haapala, President, Science and Environmental Policy Project

Witch Hunt: The prospect of the Federal government investigating, and possibly prosecuting, those skeptical of claims that human emissions of carbon dioxide (CO2) are the primary cause of recent global warming/climate change is again in the news. Last week, TWTW linked to articles stating that US Attorney General Loretta E. Lynch has referred the issue to the criminal investigative division of the Federal Bureau of Investigation (FBI). Twenty scientists, (the RICO 20) signed a letter to Attorney General Lynch, and others, suggesting that global warming skeptics be prosecuted under the Racketeer Influenced and Corrupt Organizations Act (RICO), a law created to prosecute mobsters. Senator Sheldon Whitehouse of Rhode Island was a leader of a group of politicians promoting the investigation. Earlier, Mr. Whitehouse claimed he advocated investigation, but not prosecution. Recently, he has been silent on this fine distinction.

On March 15, the Wall Street Journal had a solid editorial on this issue. Roy Spencer, the co-discoverer of the manner of using satellites to measure atmospheric temperatures, the finest global measurements available, wrote that he was identified as a possible target. Many of the RICO 20 actively promote human-caused dangerous global warming within the American Meteorological Society (AMS). The disposition of RICO-20 member Edward Maibach of George Mason University in Virginia by Chris Horner of the Competitive Enterprise Institute is revealing.

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How Trump Can Realign American Politics

By David Stockman – Re-Blogged From Stockmans Contra Corner

It’s actually pretty easy. At an apt moment very soon, Trump should offer Governor Kasich the VP slot and Senator Cruz the vacant Supreme Court seat.

Such a grand bargain would not only clear the primary field and quash any backroom hijacking of the nomination by the Washington GOP establishment; it would also permit each man to play his highest and best role at this great inflection point in the nation’s history.

That is, Donald Trump’s job is to destroy the Republican/Neocon establishment and bring working class America back into a modern version of a McKinley-style Republican Party. Ted Cruz’ task is to spend a lifetime bringing strict constructionism back to the high court, thereby helping to restore constitutional restraints on a leviathan state that fundamentally threatens personal liberty and economic freedom and prosperity in America.

And, yes, there really isn’t much for a washed-out, me-too Republican pol like Kasich to do at all. Except to get out of the way and exercise his apparent talent for preacherly uplift as America’s eulogist-in-chief at foreign state funerals.

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Negative Interest Rates Boost Gold Demand Overseas

By Frank Holmes – Re-Blogged From http://www.Gold-Eagle.com

Strengths

  • The best performing precious metal for the week was silver, up 2.87 percent. Investors own the most silver in exchange-traded products in seven months, boosting holdings from a three-year low, according to ZeroHedge. This rebound comes as hedge funds and other money managers hold a near-record bet on further price gains.
  • Physical gold ETF holdings have increased by over 270 tonnes since reaching their cycle-low in early January, reports TD Securities, coinciding with an 18 percent rally in the gold price. In contrast, only three tons of gold have been collected so far in India’s newly announced deposit plan. Macquarie raised its 2016 gold forecast for the precious metal by 4.8 percent, while Morgan Stanley announced its gold price outlook for the year up 8 percent to $1,173 per ounce.

NASA Testing Whether Potatoes Can Grow on Mars

By Eric Worrall – Re-Blogged From http://www.WattsUpWithThat.com

The humble potato is apparently so adaptable to different climatic conditions, NASA scientists are conducting serious tests, to see if the hardiest varieties could grow on the planet Mars. My question – what does this radical adaptability say about climatic food resilience, back here on Earth?

Echoing Ridley Scott’s The Martian, Nasa is running tests to see if potatoes could survive the climatic extremes of the red planet

“The Martian is completely possible,” says astrobiologist Julio Valdivia-Silva, the principal scientist working on the experiment in Peru.

Valdivia-Silva says the technology is growing at an “exponential” rate just as efforts to learn more about Mars are gathering pace.

Valdivia-Silva and his team aim to replicate Mars-like conditions on earth using a dome to create the same atmosphere, and soil consisting of sands brought from the Pampas de la Joya desert, part of the Atacama desert in southern Peru and one of the world’s driest and most nutrient-poor ecosystems.

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Is This The Debt Jubilee?

By John Rubino – Re-Blogged From Dollar Collapse

Not so long ago the financial world viewed certain numbers as limits beyond which lay trouble. Interest rates near zero, for instance, were thought to risk destabilizing the banking system. And government fiscal deficits above 3% were considered so dangerous that exceeding this level was prohibited by the Maastricht treaty that all euorzone members were required to sign.

Those numbers — 0% and 3% — are still considered bad. But now for the opposite reason: They’re insufficiently aggressive.

A big part of the world, as everyone now knows, operates with negative interest rates. And prominent economists are urging even greater negativity as a way to make government debt profitable and get people borrowing and spending again.

More recently, fiscal deficits — barely below 3% of GDP in the developed world — have come to be seen as dangerously inadequate and in need of dramatic expansion. From today’s Bloomberg:

Say good-bye to the bond vigilantes and hello to the budget brigade

A passel of investors, academics and even central bankers are calling on governments to spend more and tax less to provide a budgetary boost to the struggling global economy. That’s a 180 degree turn from the bond vigilantes of yore who pressed for smaller deficits and less debt about a quarter century ago.

To hear the budget backers tell it, bigger shortfalls are a no-brainer. With interest rates at — or even below — zero in much of the industrial world, central bankers are pushing up against the limits of what they can do to buttress growth. Yet those same low interest rates make it exceedingly cheap for governments to borrow money to finance bigger budget shortfalls.

“A large part of what monetary policy can do, it has done,” former Treasury Secretary Lawrence Summers told Bloomberg television last month. “In Japan, in Europe, and perhaps on a forthcoming basis, in the U.S., we need further impulses to growth,” including from fiscal policy.

The dirty little secret is that budgets are starting to be loosened in some countries after years of austerity. Yet in many cases, that is more by happenstance than by intent. And the size of the resulting stimulus is small and far short of the more sweeping steps advocated by card-carrying members of the budget brigade.

“There’s pretty widespread consensus in the financial community that fiscal policies should come to the rescue,” said Joachim Fels, global economic adviser for Pacific Investment Management Co., which oversees $1.43 trillion in assets.

Even central bankers are shedding their traditional reticence to stray into the political arena to sound off on the need for a more balanced growth strategy.

Lever ‘Disabled’

“It remains a pity that the fiscal lever seems to have been disabled,” Federal Reserve Vice Chairman Stanley Fischer said in a March 7 speech in Washington.

Canadian Prime Minister Justin Trudeau is leading the charge among government leaders in calling for a more active fiscal policy. “Don’t fall into the trap that thinking that balancing the books” is an end in itself, he said in a March 2 interview with Bloomberg. “It’s a means to an end.”

Budget constraints are in fact being eased by some countries. Government spending will boost U.S. growth about 0.2 percentage point this year, according to the Congressional Budget Office, thanks in part to a deal between President Barack Obama and Republican lawmakers to loosen caps on discretionary outlays. Even such a modest contribution would be the biggest since 2009.

In Germany, it’s stepped-up spending on refugees that’s turning fiscal policy more supportive of growth.

“Germany was neutral in 2015 and is now highly expansionary this year,” Ludger Schuknecht, director general of economic policy and international economy at the country’s Ministry of Finance, told a meeting of economists in Washington on March 8.

China Spending

And China unveiled plans for a record fiscal deficit this year as part of its effort to bolster its sagging economy. The Finance Ministry’s budget indicated on March 6 that the shortfall would increase to 3 percent of GDP from 2.3 percent.

Yet such steps fall short of the efforts advocated by the likes of Summers, who has repeatedly warned that the world economy faces a persistent deficiency of demand that policy makers need to address.

Angel Ubide, a managing director in Washington at Goldman Sachs & Co., complained that government officials are stuck with a long-standing “mindset” that fiscal policy shouldn’t be used to manage the ups and downs of the economy — except, according to Fischer, “in extremis, as in 2009.”

“We should not put fiscal policy in a corner and say we cannot use it,” Ubide said. “With interest rates as low as they are, there are surely public investment opportunities that generate positive returns.”

Mohammed El-Erian, chief economic adviser at Allianz SE, said he’s worried that it would take a downturn in the global economy to prompt concerted action on the fiscal front.

“That is my fear,” said El-Erian, who is also a Bloomberg View columnist. “How much of a crisis do we need as a wake-up call” for policy makers?, he asked rhetorically.

The sense of panic is palpable, and not surprising given the troubles that beset pretty much every part of the global economy. Latin America’s biggest countries are in various kinds of crisis. Japan’s Abenomics policy is widely seen as a failure. Europe has both negative interest rates and deflation, which seems like a deadly combination. US manufacturing is contracting and corporate profits are shrinking. China’s slowdown has sparked the kind of labor unrest that terrifies its leaders.

Hence the calls from the architects of the policies that got us here for something dramatic to save their reputations and investment portfolios. But the one thing that seems to be missing from these glib prescriptions is an acknowledgement that we’ve been there, done that, without the miraculous results now being promised. Post-2008, the world ran huge fiscal deficits. The US nearly doubled its federal debt, China borrowed even more and Japan (already running big deficits) kept on without missing a beat. At this point it’s helpful to revisit the McKinsey & Company study showing that the world took on $57 trillion of new debt between 2007 and 2014:

So the question that’s been dogging proponents of negative interest rates — if zero didn’t work why should we expect -1% to do better — needs to be asked of deficit fans: If $57 trillion of new debt didn’t produce a robustly-growing global economy, why gamble on another $57 trillion?

Meanwhile, the two concepts — NIRP and deficits — dovetail in a fairly terrifying way: All the new debt we take on to rekindle growth will have to be refinanced in the future. So the more we borrow now the more we’ll have to roll over then — and the bigger the impact on government budgets of an eventual rate normalization. Unless the ultimate plan is to never raise rates to old-school positive levels, in which case the world of the future is so different from that of the past that we may as well toss existing theories of market dynamics and individual freedom out the window.

A final thought: One way to sell ramped-up government deficits in the face of lingering doubts will be to give the money directly to citizens. This has appeal across the political spectrum — on the left because giving away free money is always popular and on the populist right because it bypasses the much-hated big banks. Coupled with a requirement that recipients pay down existing debts, such a “QE for the people” might bring along even traditional debt-averse economists. In other words, this might finally be the year of the debt jubilee.

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Japan Plans To Meet Paris Commitments, By Building Coal Plants

By Eric Worrall – Re-Blogged From http://www.WattsUpWithThat.com

Japan, which hilariously defined investment in high efficiency coal plants as “climate finance“, now plans to meet Paris commitments, by building even more coal plants.

In the wake of the 2011 Fukushima disaster Japan mothballed its fleet of nuclear reactors, relying on fossil fuel imports to meet energy demand.

But last week prime minister Shinzo Abe said these would need to be switched back on to meet energy demand.

“Our resource-poor country cannot do without nuclear power to secure the stability of energy supply while considering what makes economic sense and the issue of climate change,” he said.

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Profit Margin Perceptions

By Mark J Perry – Re-Blogged From American Enterprise Institute

The public thinks the average company makes a 36% profit margin, which is about 5X too high.

I find this totally fascinating, though not completely unexpected. When a random sample of American adults were asked the question “Just a rough guess, what percent profit on each dollar of sales do you think the average company makes after taxes?” for the Reason-Rupe poll in May 2013, the average response was 36%! That response was very close to historical results from the polling organization ORC’s polls for a slightly different, but related question: What percent profit on each dollar of sales do you think the average manufacturer makes after taxes? Responses to that question in 9 different polls between 1971 and 1987 ranged from 28% to 37% and averaged 31.6%.

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ECB And John Law

By Alasdair Macleod – Re-Blogged From http://www.Gold-Eagle.com

Last week, the ECB extended its monetary madness by pushing deposit rates yet more negative. It is extending quantitative easing from sovereign debt into non-financial investment grade bonds, while increasing the pace of acquisition to €80bn per month. The ECB also promised to pay the banks to take credit from it in “targeted longer-term refinancing operations”.

Any Frenchman with a knowledge of his country’s history should hear alarm bells ringing. The ECB is running the Eurozone’s money and assets in a similar fashion to that of John Law’s Banque Generale Privée (renamed Banque Royale in 1719), which ran those of France in 1716-20. The scheme at its heart was simple: use the money-issuing monopoly granted to the bank by the state to drive up the value of the Mississippi Company’s shares using paper money created for the purpose. The Duc d’Orleans, regent of France for the young Louis XV, agreed to the scheme because it would provide the Bourbons with much-needed funds.

This is pretty much what the ECB is doing today, except on a far larger Eurozone-wide basis. The need for government funds is of primary importance today, as it was then.

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Oil Price Prospects

cropped-bob-shapiro.jpg   By Bob Shapiro

Crude oil prices have fallen from $100+ two years ago to around $37 today, after going under $30 briefly last month. Not surprisingly, there are differing views on the direction of prices going forward.

Lets look at where we are now.

The Shale Boom has catapulted the US to the top world producer spot, surpassing Saudi Arabia. This has greatly reduced US imports of oil and is a major contributor to the price break we’ve seen. As an aside, the US Balance of Payments has been much reduced by US Shale Oil production, even though the Deficit once again is running at over $500 Billion a year.

But, there are other factors greatly affecting the supply-demand balance for oil.

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Two Amazing Stories With One Inevitable Result

By John Rubino – Re-Blogged From http://www.Silver-Phoenix500.com

Anyone who doubts that the global financial system has run out of (good new) ideas has only to track the recent words and deeds of central bankers and mainstream economists: Slightly-negative interest rates didn’t lead people to borrow more? We’ll go more negative! Buying up all the government bonds didn’t prevent deflation? We’ll start buying corporate bonds and equities!

Still, it’s shocking to see where this endless repetition of the same actions takes us. A recent Bloomberg article, for instance, notes that even though corporate profits are falling and individual investors are dumping equity mutual funds, company share buybacks are surging:

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Cutting the Army Corps of Engineers

By Chris Edwards – Re-Blogged From Downsizing Government

The U.S. Army Corps of Engineers is a federal agency that constructs and maintains a wide range of infrastructure for military and civilian purposes.1 This essay concerns the civilian part of the agency, which employs about 23,000 people and will spend about $9.2 billion in fiscal 2012.2

The civilian part of the Corps—called “civil works”—builds and operates locks, channels, and other navigation infrastructure on river systems. It also builds flood control structures, dredges seaports, manages thousands of recreation sites, and owns and operates hydroelectric power plants across the country.

While the Army Corps has built some impressive infrastructure, many of its projects have been economically or environmentally dubious. The agency’s activities have often subsidized private interests at the expense of federal taxpayers. Furthermore, the Corps has a history of distorting its cost-benefit analyses in order to justify its projects.

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Weekly Climate and Energy News Roundup #218

The Week That Was: March 12, 2016 – Brought to You by www.SEPP.org

By Ken Haapala, President, Science and Environmental Policy Project

Quest for Precision: One of the characteristics of scientific activities is the quest for precision to describe the physical world. Precision in understanding the error, or uncertainty, of one’s knowledge is an example of this quest. In some of his many essays on the philosophy of modern science Bertrand Russell, a prolific writer, used the ability to articulate uncertainty of knowledge as an example of what separates a scientist from an ideologue. The scientist defines with empirically established boundaries of the certainty of his findings. For example, a finding may be within plus or minus 5% using rigorous procedures that are well established. The ideologue is certain, absolutely, without boundaries of error.

Another issue is false precision, that is presenting numerical data in a manner that implies greater precision than is possible with the instrumentation or procedures used or knowledge current. Combining high precision data with low precision data and using the error range of the high precision data is a common example. To others, this practice gives the illusion of greater understanding and overconfidence in the accuracy of the results. Scientists and engineers have various techniques to correct for false precision.

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Greenhouse Conspiracy on YouTube

By Anthony Watts – Re-Blogged From http://www.WattsUpWithThat.com

The Greenhouse Conspiracy (1990) A “Channel 4” documentary, was recently added to YouTube (h/t to Leo Hickman) Video follows. It is interesting to see what was being said 25 years ago in the context of what we know today. On the day it aired in August of 1990, the Sunday Times ran a 3,000+ word feature story by Hilary Lawson, the program’s producer and presenter.

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$50 Million Renewable Energy Scam

By Eric Worrall – Re-Blogged From http://www.WattsUpWithThat.com

A Pennsylvania newspaper has reported details of a $50 million alleged renewable energy scam. More shocking is how easy it was, to allegedly defraud government subsidies.

An Easton engineer has admitted he rubber-stamped false reports to the U.S. Environmental Protection Agency for the owners of two Lehigh Valley biofuel companies charged in a $50 million clean energy scam.

money_hole

According to the charges against Barnes [the engineer], company officials at Smarter Fuel and Environmental Energy Recycling hired Barnes in 2010 to complete engineering reviews of their plants to document their capacities as they applied for the EPA’s renewable fuel credit program.

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Keep The Money Game Churning

By GE Christenson – Re-Blogged From http://www.Gold-Eagle.com

There is money to be made so the game must be played…  It’s always “ShowTime” in the financial markets.  What is the game plan?

Levitate the bond market. See chart below.  Keep those interest rates dropping so the bond market continues its 35-year climb.  Oops – $7 Trillion in bonds with negative interest rates, at last count, with more from Japan this week.  Have we reached a limit?  Probably not, but what could go wrong lending money to insolvent governments who guarantee they will return less than they borrowed in 10 years?

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Hard Money Benefits

cropped-bob-shapiro.jpg   By Bob Shapiro

If and when the Dollar returns to being a Hard Currency – one backed by or actually containing Gold or Silver – there will be numerous changes which will occur.

One will be the elimination of constant and continuous growth of the money supply. A stable money supply is likely to result in a stable price level (CPI) – or even a continuous decline as the US saw during the 1800s.

But, there will be other, sometimes much less obvious benefits, and I’d like to consider one possibility today – the effect on the Price of Copper.

Copper is one of the most widely used base metals worldwide, mostly in electrical components like wire and motors. It has an active futures market, where because its ups and downs in price coincide with the ups and downs of the Economy, it has acquired the nickname of Dr. Copper.

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California Has a Bill That Would Disable Encryption on All Phones

By Andrew Crocker – Re-Blogged From Electronic Frontier Foundation

Smartphone users in California take notice: a new CA State Assembly bill would ban default encryption features on all smartphones. Assembly Bill 1681, introduced in January by Assemblymember Jim Cooper, would require any smartphone sold in California “to be capable of being decrypted and unlocked by its manufacturer or its operating system provider.” This is perhaps even more drastic than the legal precedent at stake in Apple’s ongoing showdown with the Justice Department, in which the government is trying to force a private company to write code undermining key security features in specific cases.

Both Apple and Google currently encrypt smartphones running their iOS and Android operating systems by default. A.B. 1681 would undo this default, penalizing manufacturers and providers of operating systems $2,500 per device that cannot be decrypted at the time of sale.

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Peddling Fiction, Ignoring Fact

By Peter Schiff – Re-Blogged From Euro Pacific Capital

In his seventh, and final, State of the Union address this January, President Obama, clearly looking to bolster his legacy as the president who vanquished the Great Recession, boldly asserted that “Anyone claiming that America’s economy is in decline is peddling fiction.”  Unfortunately for the President, more and more Americans seem to believe (with an adequate basis in proof) that the fiction is emanating from the White House.
It’s hard to imagine how anyone can really assert with a straight face that the economy is currently “strong.” The most recent Gross Domestic Product (GDP), from 4th Quarter 2015, shows us barely inching along at a 1% annualized growth rate (Bureau of Economic Analysis, 2/26/16). Given that moderate growth used to be measured in the 3%-4% range, and that recent declines in the trade balance could further subtract from both 4th (2015) and 1st quarter GDP, we could be forgiven for raising an eyebrow or two in reaction to Obama’s boast. Continue reading

Weekly Climate and Energy News Roundup #217

The Week That Was: March 5, 2016 – Brought to You by www.SEPP.org

By Ken Haapala, President, Science and Environmental Policy Project

Atmospheric Data – Re-Analysis and Confirmation: An issue developed this week that illustrates the importance of proper re-analysis of data and independent confirmation. The issue regarding temperature trends in the middle troposphere was noticed by Anthony Watts, WUWT, discussed in several other posts, with an expanded discussion by Roy Spencer. Spencer and John Christy developed the method of measuring temperatures using data from satellites, for which they received significant recognition. Their findings are publicly posted monthly, with the data going back to December 1978. These data, known as the University of Alabama in Huntsville (UAH) data are the most comprehensive estimates of global temperatures in existence. The group is funded by NOAA.

A private group, publicly and privately funded, is headed by Frank Wentz, with Carl Mears the chief scientist, Remote Sensing Systems (RSS) provides the other well-known analysis. Some years ago, this group discovered that the UAH data, at that time, did not properly account for orbital decay of satellites, giving a cooling bias to the data. Once this bias became known and demonstrated, UAH adjusted for it. This is the way science works, correcting mistakes. Unfortunately, this incident led some global warming promoters to declare that the UAH data is discredited, which it is not.

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The War on Energy

cropped-bob-shapiro.jpg   By Bob Shapiro

Economies the world over depend on cheap, dependable energy. If you made a list of countries according to their per capita use of energy, you would find that your list correlates very well with per capita GDP. GDP also is an indication of the wealth, the Standard of Living, of the people in the country.

Also in most countries the world over, there is a War on Energy. Now those waging the war would never describe it in those terms. They would say that they were trying to save the earth from the evil humans who use that cheap, dependable energy.

If it’s fossil fuels, then the claim is that CO2 will scorch the earth and kill all life on the planet, even though much evidence shows they are wrong. If it’s nuclear, the Energy Warriors say they want to save us from possible radioactive catastrophes, even though not a single American has ever died from a nuclear power plant. If it’s hydro – well they just don’t count hydro in what they consider to be pollution free, renewable, sustainable energy.

While they make their arguments in our name – to save all of humanity – the effects of their war, if it were successful, would be to push us back in time to when solar and wind energy were among the best available sources.

For solar, lenses & reflectors were used in ancient Greece to light torches, in Rome the first glass windows were used for the Emperor’s sun-room and eventually for communal bathhouses, and in the US, the Anasazi Indians built their dwellings facing the sun. It turns out that solar never was a best source of energy, except for niches like powering calculators.

Windmills were used in many places including Holland and Spain (remember the Man of La Mancha?). It was cheap and dependable for milling grain – when that was the only energy source available.

In a modern world Economy, dependable takes on a whole new meaning. Getting zero energy from a solar array at night and zero energy from a modern windmill if the wind is too weak or too strong, means that if you need the power during those times, your out of luck. Wind and solar thus are said to be non-dispatchable.

Fossil fuels, nuclear, and hydro are dispatchable – they are available whenever you need them. To be dispatchable, wind and solar require back up systems based on (you guessed it) fossil fuels, nuclear, or hydro. Using these as backups make them more costly to use than as the primary source. With alternative energy, I guess cost is no object.

Even without considering the costs of backup systems, the power you get out of wind and solar are much more expensive than fossils fuels, nuclear, and hydro. MUCH more expensive. Wind and solar systems have been killing hundreds of thousands of birds and bats. And, did I mention, the energy is not available whenever you need it?

They are not cheap, and they are not dependable. And yet, the Global Warming Climate Change Alarmists insist that wind and solar must replace fossil fuels & nuclear to save the planet.

In much of the third world countries, preventing the people there from being able to use fossil fuels means they’ll continue to be poor, they will live in poor health due to cooking with wood and dung and not having clean water, and they will die much earlier than you or I.

But Gaia is more important.

In the US, most people rank Global Warming way down at the bottom of most lists of issues. To try to win over more people to their views, the Alarmists do a lot of bad stuff. They ignore overwhelming evidence that first temperatures rise, and then atmospheric CO2 goes up. They ignore natural variation in climate, even going so far as to say that the Little Ice Age and Medieval Warm Period never happened.

They declare that “the Science is Settled” and conspire to keep opposing views from being published (ever hear of ClimateGate?). They phony up/adjust data, claim that the output from models are data, and call opposing researchers names – Denier!

They say that temperatures may rise because of Greenhouse Gas CO2 – or maybe it will fall. We may get floods – or maybe droughts. We may get much more extreme weather – but they ignore the lower numbers of hurricanes & tornadoes.

They’ve made a few predictions which have disproven their CO2 Global Warming Theory, but they refuse to own up to their predictions’ failures.

Their theories are wrong, yet they continue their War on Energy. That War on Energy is making Europe poorer. If we let it continue in the US, the War on Energy will wreck our Economy as well.

Ask your candidates for public office which side are they on in the War on Energy.

The Average American Today Is Richer than John D. Rockefeller

By   – Re-Blogged From The Foundation for Economic Education

This Atlantic story reveals how Americans lived 100 years ago. By the standards of a middle-class American today, that lifestyle was poor, inconvenient, dreary, and dangerous. (Only a few years later — in 1924 — the 16-year-old son of a sitting US president would die of an infected blister that the boy got on his toe while playing tennis on the White House grounds.)

So here’s a question that I’ve asked in one form or another on earlier occasions, but that is so probing that I ask it again: What is the minimum amount of money that you would demand in exchange for your going back to live even as John D. Rockefeller lived in 1916?

21.7 million 2016 dollars (which are about one million 1916 dollars)? Would that do it? What about a billion 2016 — or 1916 — dollars? Would this sizable sum of dollars be enough to enable you to purchase a quantity of high-quality 1916 goods and services that would at least make you indifferent between living in 1916 America and living (on your current income) in 2016 America?

Think about it. Hard. Carefully.

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Maine Food Stamp Work Requirement Cuts Non-Parent Caseload by 80 Percent

By Robert Rector, Rachel Sheffield and Kevin D. Dayaratna – Re-Blogged From The Heritage Foundation

The food stamp program is the nation’s second largest means-tested welfare program; its costs have risen from $20.7 billion in 2000 to $83.1 billion in 2014. Contributing to this rapid expansion is the enrollment of able-bodied adults without dependents, which has risen from nearly 2 million in 2008 to around 4.7 million today. Benefits to these individuals and related administrative expenses cost the taxpayers around $10.5 billion per year. Welfare should not be a one-way handout. In keeping with the success of both the 1990s welfare reform and Maine’s recent food stamp work requirement, the U.S. government should require constructive behavior from able-bodied recipients in exchange for benefits. Specifically, able-bodied adult food stamp recipients without dependents should be required to take a job, prepare for work, perform community service, or at a minimum search for employment in exchange for aid and assistance at the taxpayers’ expense. This reform would save taxpayers $9.7 billion per year. Continue reading

Brexit Vote

By Alasdair Macleod – Re-Blogged From http://www.Silver-Phoenix500.com

David Cameron, Britain’s Prime Minister, has negotiated terms with the other EU member states, which he feels justified to put to voters in an in/out referendum called for 23rd June. At this early stage in the campaign, the terms are not sufficient to give a clear lead in favour a vote to stay, contributing to a slide in sterling on the foreign exchanges. However, if voters do vote to leave the EU, it won’t be just sterling which suffers, but the euro will face considerable challenges as well.

It is thought that arranging for the referendum to be held at the earliest possible date will limit disaffection with the EU. Within this time-scale, the strategy is to emphasise the dangers of Brexit, highlight the advantages of being able to influence EU policies from within, and to emphasise the security benefits of being in as opposed to out. It is essentially a weak and negative campaign strategy designed to scare the electorate against change. Negative campaigns are a weak strategy, which tend to wane through repetition.

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Massive Gold Investment Buying

By Adam Hamilton – Re-Blogged From http://www.Gold-Eagle.com

Gold’s powerful surge in 2016 has been driven by utterly massive investment buying.  This is a marked sea change from recent years, where investors relentlessly pulled capital out of gold.  But with that dire sentiment reversing, they are rushing back in with a vengeance.  Major investment capital inflows into gold are an exceedingly-bullish omen, as they are what transform a mere gold rally into a new bull market.

With gold enthusiasm growing, it’s easy to forget how radically different things looked just a few months ago.  Back in mid-December the day after the Fed hiked rates for the first time in 9.5 years, gold dropped to a miserable 6.1-year secular low of $1051.  The popular level of antipathy towards this asset class by investing professionals was mind-boggling.  They universally believed it was doomed to keep spiraling lower.

But with gold so epically out of favor and loathed, it was a dream buy for the rare contrarians.  On the final trading day of 2015 as gold still languished at $1060, I published an essay titled “Fueling Gold’s 2016 Upleg”.  In it I explained what was going to “fuel a mighty new gold upleg in 2016”, drawing much ridicule.  And that usual pattern of early-upleg gold buying has indeed played out exactly like I forecast.

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Markets Are Misreading the Data

By Graham Summers – Re-Blogged From Gains, Pains & Capital

The US markets are in a quandary.

On the one hand, some of the data (GDP growth, unemployment, etc.) suggests the Fed should continue to hike rates. On the other hand, other data points (food stamp usage, labor participation rate) suggest the US never actually entered a real recovery.

More importantly, how can the jobs data suggest such a strong employment situation… when one in seven Americans are on food stamps?

Let us, consider how the Labor Department calculates the unemployment numbers… those same numbers that the ENTIRE stock market reacts to every few weeks.

Every month, the US Government conducts a “Current Population Survey” through which it calls or visits 60,000 US households and asks them questions about their current employment or lack thereof. This usually occurs on the week of the month containing the 12th.

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Sheen on the Oil Slick Getting Darker

By David Haggith – Re-Blogged From The Great Recession

Last week, I wrote that the day would come soon when oil prices would take another nasty dive because there is nowhere left to store oil, causing the spot price for immediately delivery to dive toward the zero bound. This week we see how close that day is as oil continues to be oversupplied by about a million barrels a day.

Reasoning simple: When all ships, tank cars, tank trucks and tank farms are finally full, immediate delivery of oil will be nothing but a liability. That kind of delivery is called “an oil spill” because all you can do is pump it onto the ground or into the sea … or start filling swimming pools, as one oil industry analyst said is the next step. Production will have to slow to whatever the rate of consumption is, as it will become a situation of one tank used before one tank is bought.

Oil practically spills over in Rotterdam

The Wall Street Journal reported on Monday that oil tankers are backing up at the world’s largest oil seaport. In fact, buyers and sellers of oil are increasingly sending tankers on longer voyages just to avoid a pile-up of tankers at several ports.

Up to 50 oil tankers are waiting to unload cargo in the port of Rotterdam, the highest number since 2009 and another sign that, amid a glut, crude is struggling to find a home. (WSJ)

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Technology, Prices, and Money Printing

cropped-bob-shapiro.jpg   By Bob Shapiro

What effect, if any, do technological improvements have on the general price level? I believe that technology causes prices to go down. Here’s why.

Back in College Economics 101, a professor explained how prices are set by companies. He said they subtract their cost estimates from various projected selling prices to find the various possible profit margins. Then they chart that against the expected units sold at the various prices.

Where the two graphs cross gives the maximum profit (but companies would trim the volume, and raise the “best” price, to achieve a desired ROI (Return on Investment)). In the real business world, its nowhere near that exact, but the general outline of the process makes some sense.

To be sure, there are a ton of estimates that need to be made. Businesses which do a poor job of the estimation process, risk going out of business (prices set too high -> not enough customers, prices too low -> not enough profit) . Over time, this leaves only better estimators as suppliers of goods and services.

Now, the number that a business can improve is the cost to produce the product. If technology improves, it can reduce the costs to produce. For example, if human technology improves, through employee training for example, quality goes up and reject rate goes down, so the cost for the value offered goes down, leaving room for more profit and a lower selling price.

Image result for technology clipart

If process technology improves, as when Henry Ford introduced the production line, costs fall allowing selling prices also to fall. And, if machinery technology improves, as when CNC controls allowed for greater use of robotics in manufacturing, costs and prices will tend to go down.

The point is that, any time that any form of technology improves, the price of the item sold will go down – or more correctly the value to the customer will go up. Over time, better value will replace lesser value, and the general price level for all items offered onto the market will go down.

Yes, the basket of goods and services offered will change over time. Yes, the concept of combining the prices of apples and oranges into a general price level is sketchy at best. But, if all else were held equal for 100 years (yes, an impossibility), you would expect the prices to be lower, and value to be higher, for eggs & milk, dresses & suits, pots & pans, cars, homes, computers & pianos, and everything else offered for sale.

In fact, during the 1800s, while the US was on a Gold or Gold/Silver Monetary Standard, prices did indeed decline.

FED Monopoly Money

Since the FED (US Federal Reserve) was created in 1913, the supply of paper money – M2 – has increased by about 400 times (that’s NOT 400%!). Over the long term, such debasing of the currency will result in prices which are higher than without the money printing.

The BLS (biased) CPI has gone up about 24 times since then, while others (eg. http://www.ShadowStats.com) show about a 60 times increase in prices. Using a low side guess at technological improvement of 2% a year (3% might be more like it), we might expect a 7 fold improvement in prices/value over that 100+ years since the FED started printing. This gives about a 400 times increase in prices since 1913 (60*7)!

Instead of the price of a $1.00 item in 1913 going down to about $0.14 today, all of the FED’s debasement of the money supply has caused that $1.00 item from 1913 to go up to $24.00 (BLS numbers) or to $60.00 (ShadowStats.com numbers).

Now truly, other factors come into the equation. New items & categories of items are invented, and consumer preferences change.

With Gold and Silver, there can be times of large new supplies of these monies in the short run. But paper Dollars were needed to have the 400 times M2 increase we’ve seen with the FED. The FED has robbed all Americans with that 400 times printing of Dollars. All Americans are paying 400 times more than they would have paid. Americans’ life savings are losing value because of the FED’s unending printing.

We need to ratchet down the FED’s ability to create more paper Dollars, so that eventually, we can end the FED.

“No Bread” – This Is What Happens When Your Economic And Monetary Systems Collapse

By Mac Slavo – Re-Blogged From http://www.freedomoutpost.com

While Americans still enjoy easy access to basic necessities like food and medicine, the last several years have shown us just how bad things can get when it all hits the fan.

When the country of Greece collapsed in 2012 we highlighted the desperate situation faced by its millions of residents:

With untold billions in private and public sector debt, the situation in Greece (and other debt laden European countries like Spain and Italy) has devolved to such an extent that some EU member nations are mobilizing their military personnel in preparation for full spectrum meltdown across the entire region.

Jobs are so scarce that many have been forced into underground barter economies and family farming to make ends meet. From massive austerity spending cuts that have torn to shreds the government social safety net, to shortages in critical life saving medicines and the near breakdown of the nation’s power grid, Greece is experiencing all of the overt signs of a nation on its last leg.

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A Free Market in Interest Rates

By Keith Weiner – Re-Blogged From http://www.ZeroHedge.com

Unless you’re living under a rock, you know that we have an administered interest rate. This means that the bureaucrats at the Federal Reserve decide what’s good for the little people. Then they impose it on us.

In trying to return to freedom, many people wonder why couldn’t we let the market set the interest rate. After all, we don’t have a Corn Control Agency or a Lumber Board (pun intended). So why do we have a Federal Open Market Committee? It’s a very good question.

Someone asked it at the recent Cato Monetary Conference. George Selgin answered: no matter if the Fed stands pat or does something, it’s still setting rates. This is a profound truth, which brings us to a fatal flaw in the dollar.

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Huff Post Explains the Insurance Business to Warren Buffett

By Eric Worrall – Re-Blogged From http://www.WattsUpWithThat.com

Warren Buffett doesn’t understand the insurance industry; Or so suggests the Huffington Post, in a rather hysterical critique of Buffett’s lukewarm acceptance of climate dogma.

Buffett’s case against the resolution boils down to this: “Thinking only as a shareholder of a major insurer, climate change should not be on your list of worries.”

First, he said, his company can handle any possible losses thanks to rising premiums. Because insurance policies are typically written for one year and repriced annually, Buffett’s company can hike premiums to better account for the heightened risk of climate change-driven losses.

Second, Buffett asserts that climate change has produced neither “more frequent nor more costly hurricanes nor other weather-related events covered by insurance.”

But eight of the 10 costliest hurricanes in U.S. history, in terms of insured losses, have occurred since 2000, according to the Insurance Information Institute. Nine of the 10 costliest floods in U.S. history, when measured by payouts from the federal government’s National Flood Insurance Program, also have occurred since 2000, according to the insurance group.

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All In The Same Boat

By Bill Holter – Re-Blogged From http://www.Gold-Eagle.com

No doubt the financial and economic stresses are building.  Without even looking at the various and very weak economic reports, talk of and implementation of “negative interest rates” should tell you all you need to know.  We looked at this last G-20 meeting as a possible venue for some type of concerted action or even the announcement of some sort of re set or major change.  Instead, they “publicly” agreed on nothing.

Earlier today, Zerohedge put out an article regarding China’s shadow banking system

http://www.zerohedge.com/news/2016-02-29/china-faces-15-trillion-bombshell-shadow-banking-sector-collapses and the gross leverage involved.  It has also been reported of China’s real estate market, true bubble conditions exist.  “Flippers” are lining up for days or even weeks to queue up and hilariously a 65 square foot “closet” just sold for $585,000!  The latest news is a layoff of about 6 million workers http://www.reuters.com/article/us-china-economy-layoffs-exclusive-idUSKCN0W33DS , does this maybe sound like a burst to the bubble?

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