Can Trump Get 3 Percent Growth?

By Peter Morici – Re-Blogged From Newsmax

President Donald Trump’s economic team paints a rosier picture about what his policies could accomplish than the economics profession is willing to endorse.

His team is formulating budget and tax proposals that project 3 percent annual growth, while the number crunchers at the Congressional Budget Office estimate only 1.9 percent.

How fast the economy can grow comes down to the simple sum of likely worker productivity and labor force growth. Since the financial crisis, productivity has advanced about 1 percent a year, as compared to the 2 percent in prior decades.

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Tech Experts Disagree Wildly on the Future Impact of AI

By Tom Ward – Re-Blogged From Futurism

In Brief
  • Elon Musk has given a doomsday prophecy on the topic of AI, going as far as to invest $1 billion into researching how to use it safely.
  • Other experts have different perspectives on the future of AI, but all are agreed that this is an important topic, and how we use this powerful technology must be thoroughly thought through.

The AI Debate

Our technology prophets are talking in the lexicon of magic, gods, and monsters when it comes to artificial intelligence (AI). They predict every scenario from utopias to apocalypses, overlords to angels.

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Debts, Bastiat And Modern Economics

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

There is a well-worn conundrum told about a stranger, who walks into the hotel in a remote, sleepy village in Mexico, and reserves a room for the night, paying 1,000 pesos in advance. The innkeeper rejoices at this unexpected turn of events, for the village is remote, few people have any reason to go there, and there is very little money. The innkeeper goes to the village butcher, to whom he owes 1,000 pesos, and discharges his debt. The butcher takes the 1,000 pesos and pays it to the farmer, who supplies him with his meat for which he owes the same amount. The farmer hands this money over to Maria, which he in turn owes for her services. Maria, who is the entertainment centre for the village’s men, then goes to the innkeeper and pays off her bar bill, incurred as a necessary expense of her business, and which, as you might have guessed amounts to 1,000 pesos.

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Scientists Are Using CRISPR To “Program” Living Cells

By Dom Galeon – Re-Blogged From Futurism

Scientists from the University of Washington have constructed digital logic gates in living cells. Though they’re not the first to do so, the researchers’ living circuitry is the largest and most complex of any created thus far.

Living Circuits

Thanks to projects like Elon Musk’s Neuralink, a future in which humankind merges with machines is on everyone’s minds. While a brain computer interface (BCI) like the one Musk is proposing would involve making a computer function as part of a human body, other researchers are taking an opposite route. Instead of making machines that can imitate biology, they’re looking for ways to make biological systems function more like computers.

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Moody’s Slashes Hong Kong Rating After China Downgrade

Re-Blogged From http://www.newsmax.com
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Hong Kong saw its debt rating cut by Moody’s Investors Service hours after China’s downgrade, highlighting potential risks from a tightening economic integration.

The former British colony has seen not only its property and stock markets increasingly entwined with the world’s second-largest economy, but its government as well. Moody’s cut the rating on local- and foreign-currency issuances to Aa2 from Aa1, and changed the outlook to stable from negative.

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AI and Robots Will Change the Way We Create and Consume Content

By Benjamin Stecher – Re-Blogged From https://futurism.com
The future of entertainment in on its way toward some major changes. The rapid pace of technological advancement is allowing more content to be
created in more ways. Also, with the rise of automation, more people will be able to pursue creative endeavors.

Counting on Student Loan Forgiveness? Don’t Bet on It

By Bloomberg – Re-Blogged From Newsmax

Nearly half of college students surveyed earlier this year said they expected to be helped by the federal government’s various student loan forgiveness programs. But new government figures suggest that their hoped-for windfall won’t be that generous.

In a first-of-its-kind public analysis, the U.S. Department of the Education projects that borrowers who next year enroll in loan forgiveness programs would, on average, repay every penny they borrowed, and then some. Some debtors in the programs, which cap monthly payments relative to earnings and offer the possibility of debt forgiveness, are projected to pay as much as 76 percent more than they borrowed. The forgiven amount would largely be interest that accrued over what could be as long as 25 years of making payments.

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Robert Shiller is Worried

Re-Blogged From http://reports.pmcapital.com.au

Legendary Economist Robert Shiller is Worried. Maybe You Should Be Too.

Robert Shiller, renowned economist, Yale professor and Nobel Laureate, is worried about the over-priced stock market.  So much so that he is refraining from adding to his own stock positions. One factor, among many, that he says makes him nervous is the CAPE ratio. A recent Bloomberg article notes that while the CAPE metric is still about 30 percent below its high in 2000, it shows stocks are almost as expensive now as they were on the eve of the 1929 crash. “The market is way over-priced,’’ Shiller says. “It’s not as intellectual as people would think, or as economists would have you believe.’’

P.M. Modi and India’s Future

Re-Blogged From http://www.Stratfor.com

It can be difficult to separate the important from unimportant on any given day. Reflections mean to do exactly that — by thinking about what happened today, we can consider what might happen tomorrow.

Indian Prime Minister Narendra Modi’s administration has struggled to make headway on many of its signature initiatives in the face of India’s manifold political constraints. Job growth, a core plank of the 2014 campaign platform on which Modi’s Bharatiya Janata Party (BJP) rose to power, is tepid. Relations with Pakistan, India’s traditional archrival, are on the rocks as protests, cease-fire violations and cross-border militant attacks endure in the disputed territory of Kashmir. And “Make in India,” Modi’s vaunted initiative to transform his country into a global manufacturing hub, has had a hard time landing lucrative deals (outside of defense contracts) since its inception in September 2014.

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Steve Forbes: ‘When You Have a Good Economy, a Lot of Sins Are Forgiven’

By F McGuire – Re-Blogged From Newsmax

Steve Forbes, chairman and editor-in-chief of Forbes Media, told Newsmax TV that it is crucial for Republican lawmakers’ survival to quickly forge a tax-cut plan that will benefit all Americans.

If not, the GOP stands to pay a very dear and steep price.

Image: Steve Forbes: 'When You Have a Good Economy, a Lot of Sins Are Forgiven'

“I think Republicans in Congress are beginning to realize that if they don’t get a good growth tax cut through this year, they’re going to be pursuing many of the new opportunities after the elections next year,” Forbes told Sunday’s “The Income Generation Show.”

Renounce Climate Alarmism

By Leo Goldstein – Re-Blogged From http://www.WattsUpWithThat.com

“There is no greater mistake than to try to leap an abyss in two jumps”

– David Lloyd George, British Prime Minister in WWI

I think the Republican administration should renounce climate alarmism and climate pseudo-science sharply, unequivocally, and irrevocably.

Climate alarmism is a tool used to wreck America and possibly the rest of Western civilization. It is not about science. It is not about energy policy. It is not even about the power and politics. Climate alarmism is like a memetically engineered weapon of mass destruction unleashed on the U.S. and destroying our country from the inside.

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Volatility of the Copper Markets Combined with the ‘Trump’ Effect

By Stuart Edwards – Re-Blogged From http://www.Gold-Eagle.com

Much like other commodities, traders have always devoted a certain level of attention towards copper. There are two key reasons for this observation. First, this red metal is highly indicative of industrial demand and therefore, the health of domestic economies. Secondly, political policy shifts and fiscal plans can have a knock-on effect in regards to its pricing. We have witnessed a great deal of volatility during the past few months and while the medium-term outlook remains positive, many are wondering if a support level will soon be reached. Let us take a look at the root causes of this volatility as well as what to expect in the coming months.

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The Commodity Cycle: What It Means for Precious Metals Prices

By Stefan Gleason – Re-Blogged From https://www.moneymetals.com

The cycle for any commodity follows the same basic pattern…

When prices are low, production falls. As new supplies diminish, the market tightens and prices move higher. The higher prices incentivize producers to invest in production capacity and increase output. Eventually, the market becomes oversupplied, prices fall, and the cycle starts all over again.

Of course, this is a simplified model of what drives commodity cycles. Booms and busts can be amplified and extended by speculators, by unexpected shifts in demand, or even by interventions from central banks and governments.

Regardless of the causes, commodity markets will always be cyclical in nature. Commodities as a group can be pressured upward or downward by extrinsic forces such as monetary inflation or credit contraction.

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China makes ‘flammable ice’ breakthrough in South China Sea

By Alec Macfarlane – Re-Blogged From CNN/Money

China is talking up its achievement of mining flammable ice for the first time from underneath the South China Sea.

The fuel-hungry country has been pursuing the energy source, located at the bottom of oceans and in polar regions, for nearly two decades. China’s minister of land and resources, Jiang Daming, said Thursday that the successful collection of the frozen fuel was “a major breakthrough that may lead to a global energy revolution,” according to state media.

This is what flammable ice looks like

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Oxfam’s Climate Warriors Declare War on Poor People

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

Oxfam have written a report which claims coal power will create more poverty. In my opinion this claim is a disgusting direct attack on the coal fired industrialisation, jobs and opportunities currently lifting a growing number of people out of chronic poverty in Asia and Africa.

Energy Use 2010-2015

Energy Use for Aluminium Smelting 2010-2015. Source World Aluminium Institute

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There’s No Easy Way Out of Africa for French Forces

Re-Blogged From Stratfor

Forecast Highlights
  • The weakness of Sahel states, including Mali and Niger, will continue to force them to rely on foreign powers, such as France, for security.
  • France will continue working to prevent a security crisis from developing in any of its partner states in the terrorist-rich Sahel.
  • Newly elected French president Manuel Macron will be limited in his ability to militarily disengage from Mali and Africa more broadly.

Despite all of France’s pressing domestic issues, its newly elected president, Emmanuel Macron, traveled to Mali during his first week in office, sending a clear message to the world: France still considers Africa a top priority. On the trip, Macron met May 19 with Malian President Ibrahim Boubacar Keita and with some of the more than 3,000 French troops stationed in the country under the aegis of Operation Barkhane. Though Macron’s political strategy is still solidifying from campaign promises into actual policy, his administration will face the same severe constraints in the Sahel region as did his predecessors, including institutional weakness, resilient Islamic militant groups and rough physical terrain — which will make a military drawdown difficult.

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What Not to Buy in Today’s Stock Market

By Vitaliy Katsenelson – Re-Blogged From IMA
Dear reader, if you are overcome with fear of missing out on the next stock market move; if you feel like you have to own stocks no matter the cost; if you tell yourself, “Stocks are expensive, but I am a long-term investor”; then consider this article a public service announcement written just for you.
Before we jump into the stock discussion, let’s quickly scan the global economic environment. The health of the European Union did not improve in 2016, and Brexit only increased the possibility of other “exits” as the structural issues that render this union dysfunctional went unfixed.
Japan’s population has not gotten any younger since the last time I wrote about it — it is still the oldest in the world. Japan’s debt pile got bigger, and it remains the most indebted developed nation (though, in all fairness, other countries are desperately trying to take that title away from it). Despite the growing debt, Japanese five-year government bonds are “paying” an interest rate of –0.10 percent. Imagine what will happen to its government’s budget when Japan has to start actually paying to borrow money commensurate with its debtor profile.

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Climate Scientist Josh Willis Shows You How to Deal With Your Climate Change Denying Uncle

By Dave Burton – Re-Blogged From http://www.WattsUpWithThat.com

Josh Willis, of NASA JPL, has a new video out entitled, “Straw Men of the Apocalypse – How to deal with your climate change denying uncle.”

clip_image002

Notice that “catastrophic” is apparently not scary enough, these days. Global warming is now “the Apocalypse.”

The video starts out with two guys crawling along the parched ground under the blazing desert sun. One of them says to the other, “We’re gonna die out here, man. If only society had done more to fight climate change.” And it goes downhill from there.

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Markets Should Fear Central Banks More Than Trump

By Michael Pento – Re-Blogged From Pento Portfolio Strategies

Trump’s economic agenda has become further delayed by what seems like daily leaks from the White House. This may finally bring about the long-awaited equity market pullback of at least 5 percent. However, what will prove to be far more troubling than Trump’s ongoing feuds with the DOJ and the press, is the upcoming market collapse due to the removal of the bids from global central banks.

The markets have been feeding off artificial interest rates from our Federal Reserve and that of the European Central Bank and the Bank of Japan for years. In addition, the global economy has been stimulated further by a tremendous amount of new debt generated from China that was underwritten by the PBOC. After it reached the saturation point of empty cities, China is now building out its “Belt and Road Initiative” that could add trillions of dollars to the debt-fueled stimulus scheme that has been spewed out over the world-wide economy.

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Everything Bubble: Code Red

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

The US economy and markets are now the BIGGEST BUBBLES in history.  In 2000, we experienced the Tech Bubble.  In 2008, we suffered both a Stock Market and Housing Bubble.  However, today…we are in the “EVERYTHING BUBBLE.”

This is an excellent video presentation by Mike Maloney at GoldSilver.com.  Mike puts together some of the best quality videos in the precious metals industry.  This one is a MUST SEE.  If you are frustrated with the performance of gold and silver since 2012, this video shows just how insane the markets have become.

[You can start at the 2:10 mark without losing anything. -Bob]

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Republicans Fear for Their Safety as Threats Mount

By Cristina Marcos – Re-Blogged From The Hill

A growing number of House Republicans are facing physical threats from angry constituents in their districts, leading many to fear for their safety.

In the last few weeks alone, the FBI arrested a man threatening Rep. Martha McSally’s (R-Ariz.) life, a woman pursued Rep. David Kustoff (R-Tenn.) in her car, and Rep. Tom Garrett (R-Va.) heightened security at a town hall event in response to death threats.

Other Republicans still holding town halls say they haven’t felt physically threatened by protesters, but they worry about the depth of anger from some constituents in the polarized environment and what it means for political civility.

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California Governor Brown Imposing Massive Regulations for Meaningless Climate Goals

By Larry Hamlin – Re-Blogged From http://www.WattsUpWithThat.com

California Governor Brown’s SB 32 law requiring the state to reduce greenhouse gas emissions to levels 40% below levels measured in 1990 is necessitating the development of massive numbers of new regulations and policy that will allow the state government to control and dictate virtually every aspect of Californian’s lives including:

  • where and how they can live,
  • what kind of jobs and businesses they can work in,
  • what kind of housing they can have,
  • what kind of car they can drive (if any),
  • how many miles can they drive,
  • what kind of public transportation they must use,
  • how many times they must walk and bicycle,
  • how much and what kind of energy they can use,
  • what kind and how food can be farmed,

etc, etc.

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Gold Juniors’ Q1’17 Fundamentals

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

The junior gold miners’ stocks suffered a serious thrashing between mid-April and early May.  Relentless heavy selling blasted many back down near deep mid-December lows, leaving sentiment in tatters.  But traders distracted by weak technicals need to keep their eyes on the fundamental ball.  The gold juniors just finished their Q1 earnings season, which was solid.  Their low stock prices are disconnected from reality.

Four times a year publicly-traded companies release treasure troves of valuable information in the form of quarterly reports.  These are generally due by 45 days after quarter-ends in the US and Canada.  They offer true and clear snapshots of what’s really going on operationally, shattering the misconceptions bred by the ever-shifting winds of sentiment.  There’s no junior-gold-miner data that is more highly anticipated.

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China’s Demographic Woes Worsen as Women Opt for Work Over Kids

Re-Blogged From Newsmax

Even after the government cleared the way for couples to have a second child, working women are reluctant to expand their family–or have any children at all.

That’s according to a new survey by Zhaopin.com, one of the nation’s biggest online recruitment websites, which found  about 40 percent of working women without children don’t want to have any and roughly two thirds of those with a child don’t want a second.

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Is American Foreign Policy The Key To Economic Growth?

Guest Post By Helen Robinson From Best Vacuum for Stairs

It is evident that American foreign policy has been and still is a major influence on economic growth. The US has been trying to maintain good relationships with other countries. In fact, the policy states that the US will try to maintain peace with other countries provided they have mutual interest. However, there are some conflicts, such as the war in the Middle East and North Korea testing missiles, that have drawn the USA into conflicts. The USA also has tried to solve most of these conflicts in an amicable way without escalating the conflicts. The US has even been sending troops to these areas with conflicts to try and deal with the conflicts.

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Unvaccinated Children Have Much Lower Rates of Chronic Illness, Jackson State Study Finds

By Robert F. Kennedy, Jr. – Re-Blogged From https://worldmercuryproject.org

The first peer-reviewed study comparing health outcomes of vaccinated children versus unvaccinated was recently published in the Journal of Translational Science  by epidemiologists from the School of Public Health at Jackson State University.  The study’s conclusions are likely to inflame the fierce debate over whether vaccines and a mercury-containing vaccine preservative may be culprits in the dramatic rise in certain neurodevelopmental disorders in our children, including autism.

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The 5 Costliest Financial Regulations Of The Past 20 Years

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

Last year, the Federal Register—the U.S. government’s depository of rules and regulations—hit an all-time high of 81,640 pages. Among the industries that bear the greatest regulatory oversight is financials, which has seen a disproportionate amount of scrutiny in recent years, especially following the 9/11 attacks and subprime mortgage crisis.

Although I agree with the need to have and play by the rules, financial regulations have become so onerous that they render all but the largest firms noncompetitive. It’s a game whose rules are continually shifting, and there often seems to be more referees than players. A recent Thomson Reuters survey found that more than a third of all financial firms spend at least a whole work day every week tracking and analyzing regulatory changes. This is an obligation most companies simply can’t afford in the long term.

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New List of Extreme Weather Mortality Events Shows Events of the Past Were Worse Than Today

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

Measuring the human impact of weather – WMO issues new records of weather impacts in terms of lives lost

ARIZONA STATE UNIVERSITY

The World Meteorological Organization (WMO) has announced today world records for the highest reported historical death tolls from tropical cyclones, tornadoes, lightning and hailstorms. It marks the first time the official WMO Archive of Weather and Climate Extremes has broadened its scope from strictly temperature and weather records to address the impacts of specific events.

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Importance Of Randomness

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

The greatest strength of a truly free market economy, where money is sound and does not corrupt prices, is the absence of cyclical action. With sound money, and consumers deciding for themselves their wants and satisfactions, having to choose between this or that instead of deploying unbacked credit to have this and that, there can be no cycle of credit, and no credit-driven business cycles.

Central bank manipulation of money is intended to force everyone to act the same way at the same time. Central banks direct the quantity of money and credit to encourage us en masse to spend money we do not have, supplanting the randomness of Schumpeter’s “creative destruction” with a synchronized destruction, deferred to the end of the credit cycle.

The constructive and continually evolving process of reallocation of capital from uneconomic projects to more productive uses is ruined by unsound money. To this damage can be added extensive regulation, promoted by governments as being in the public interest, but more accurately, designed to protect established businesses from competition. You cannot sell ice cream without a license, and even then, its composition is regulated by the state.

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OPEC ‘No Longer in Control’ of Oil Prices

By Matt Egan – Re-Blogged From http://money.cnn.com

For decades, OPEC’s sway on oil prices was unparalleled.

But the cartel’s immense influence has been dealt a huge blow by the dramatic boom in US shale.

“Saudi Arabia and OPEC are no longer in control,” Douglas Rachlin, managing director at Neuberger Berman’s Rachlin Group, said on Wednesday at the SALT Conference in Las Vegas.

The emergence of US shale as a key global player that can pump even during low oil prices means OPEC can no longer “manipulate prices,” Rachlin said. “The shale revolution has changed a lot of things.”

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Stanford Engineers Develop New Air Filter That Could Help Beijing Residents Breathe Easily

By Bjorn Carey – Re-Blogged From http://news.stanford.edu

Stanford’s Yi Cui and his students have turned a material commonly used in surgical gloves into a low-cost, highly efficient air filter. It could be used to improve facemasks and window screens, and maybe even scrub the exhaust from power plants.

Video by Kurt Hickman

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A Robot Just Performed the First-Ever Surgery Inside the Human Eye

Re-Blogged From https://futurism.com

A new retinal surgery, guided by human surgeons but performed by robots, has just passed clinical trials. Robots bring much more control to delicate surgeries than can be achieved by humans alone. Soon, surgical robots will enable surgeons to perform entirely new operations which the human hand, until now, has been too clumsy to accomplish.

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Weekly Climate and Energy News Roundup #270

By Ken Haapala – Brought to You by www.SEPP.org

The Science and Environmental Policy Project

Biases in UAH Data? Repeated testing of assumptions, calculations, and models and publicly reporting the results are marks of a rigorous scientific program. The results of such testing are not found in the reports of the UN Intergovernmental Panel on Climate Change. (IPCC). Yet, defenders of the IPCC process have criticized the efforts of the Earth Systems Science Center at the University of Alabama, in Huntsville (UAH) for continuing to test their products and publicly report the results.

Using a paper published by the American Meteorological Society (AMS), The Guardian newspaper launched into a criticism on the procedures used and reported by UAH, personally Roy Spencer and John Christy. Spencer and Christy have repeatedly demonstrated that the atmosphere is not warming as projected in the models used by the IPCC and the climate establishment. The greenhouse gas effect occurs in the atmosphere, not on the surface and in the oceans. The atmosphere where the greenhouse effect occurs can be defined as the troposphere, up to 50,000 feet. This is where we should see a greenhouse warming. Yet, the Guardian article avoids these details and states:

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Bernanke’s Confetti Courage

By Michael Pento – Re-Blogged From http://www.gold-eagle.com

Former Fed Chairman Ben Bernanke’s book titled “The Courage to Act” is now available in paperback. This isn’t a surprise because, after all, his proclivity to print paper encompasses the totality of what his courage to act was all about. The errors in logic made in his book are too numerous to tackle in this commentary; so I’ll just debunk a few of the worst.

Bernanke claimed on one of his book tour stints that the economy can no longer grow above a 3% rate due to systemic productivity and demographic limitations. But his misdiagnosis stems from a refusal to ignore the millions of fallow workers outside of the labor force that would like to work if given the opportunity to earn a living wage. Mr. Bernanke also fails to recognize the surge of productivity from the American private sector that would emerge after the economy was allowed to undergo a healthy and natural deleveraging cycle.

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The #Dilbert Sunday Comic Strip Hilariously Disses Climate Science Certainty

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

From the “That’s going to leave a mark” department.

Scott Adams, who has recently written on his blog about his doubts about the certainty of climate science predictions, takes on climate science and the ugliness surrounding it with his Sunday comic strip. It’s hilarious how he states so clearly the issue at hand in a simple final panel. Of course, the usual suspects will scream foul, probably demand retractions and boycotts, and maybe even at the next pointless climate march, we’ll’ see “Down with Dilbert!” signs.  Michael Mann might even sue due to the scientist looking something like him.

The response will be entirely predictable, but for those people that aren’t climatic automatons, the fact that a worldwide read major comic strip has taken a position will likely sink in.

Due to copyright limitations, I can’t show the entire strip, only the first few panels, but click the image to see the entire Sunday comic, or follow this link.

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Europe’s Biggest Solar Company Goes Up In Smoke

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

Meanwhile: African Nations To Build More Than 100 New Coal Power Plants

Germany’s SolarWorld, once Europe’s biggest solar power equipment group, said on Wednesday it would file for insolvency, overwhelmed by Chinese rivals who had long been a thorn in the side of founder and CEO Frank Asbeck, once known as “the Sun King”. A renewed wave of cheap Chinese exports, caused by reduced ambitions in China to expand solar power generation, was too much to bear for the group, which made its last net profit in 2014. —Reuters, 11 May 2017

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Update On Brexit

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

This article looks at the background to Brexit negotiations and concludes that Britain is negotiating from a position of strength, while the EU is increasingly in a position of financial difficulty. Not only will the European Commission be forced to scale back its spending and redistribution of resources, but the euro project is threatened by capital flight between member states, despite the early signs of economic recovery which should be restoring market confidence. Politicking aside, pressure is mounting on the EU to defuse the disruption of Brexit by agreeing to a mutually beneficial deal as soon as possible.

EU Finances Are Getting Desperate

The EU cannot afford to prevaricate over Brexit because a bad Brexit risks causing it immeasurable harm. Not only does big business in Europe want a Britain with which it can freely trade, but confidence in the European Project is rapidly diminishing. The EU is a mega-state that is fading, and no one knows how to ensure its survival. Inevitably, the failings of the EU are catching up with it, and Britain’s leaving exposes the financial consequences of decades of bad management, capital destruction through wasteful redistribution and the lack of any contingency planning.

Britain’s €8bn annual contribution to the EU budget is almost the same as the cost of administering the whole Brussels establishment, so Brexit will create a budget shortfall that is almost total, which Brussels will have to make up from the remaining members. Inevitably, some of the redistribution to Brussel’s pet projects will end up being cut as well. It is for this reason that the Brussels politicians hope for a capital payment from Britain.

The Commission also has a commitment to redistribute member funds estimated at €238bn. It must have assumed prior to last year’s referendum that Britain would vote to remain and pay its share. Instead, it voted for Brexit, and the Commission will have to find the money from a capital contribution either from Britain, somewhere else, or cancel some of the projects. With these problems, the Commission is in a difficult position, wrong-footed by Brexit. And when Theresa May says no deal is better than a bad deal and means it, it really could mean an end to Brussels as we know it.

TARGET2 Deteriorates Further

Probably the most alarming statistic coming out of the Eurozone is the continual growth in TARGET2 imbalances. The chart below shows the latest position.

In a normally functioning TARGET2 system, imbalances should be minimal, as they were before the financial crisis. But the ECB says there’s nothing to worry about, which would be true if these imbalances are just a passing phase, to be reversed when normality returns. After nine years, this appears increasingly unlikely.

These imbalances arise because of capital flows, whereby money moves from one nation to another without any underlying trade. If a Spanish bank has deposits withdrawn from it, the Banco de España steps in and covers it. This creates an asset on the Bank of Spain’s balance sheet, matched by a liability on TARGET2. The redeposit in Germany is reflected by an increase in the German bank’s reserves held at the Bundesbank. The Bundesbank’s liability to the German bank is matched with a credit on TARGET2.

Therefore, TARGET2 reflects capital flight, or silent runs on some of the national banking systems. The surpluses at the Bundesbank, the Banque du Luxembourg and the Finnish Central Bank are all rising into new record territory. The Netherlands Central bank saw a dip ahead of the recent election, but that balance is on the rise again as well. On the most recent figures to March these balances totalled €1.186tn, up €119bn over Q1. The balance at the Bundesbank rose a further €14bn in April to €843bn, the figures for the other NCBs not yet being available. It is clear from these numbers that capital flight, particularly from Italy and Spain, is still increasing, despite reports of a tentative economic recovery.

The third largest negative balance is of the ECB itself at €183bn, which relates to the ECB’s QE policy. The negative balances at the NCBs are net of the credits created thereon, implying that the degree of capital flight from these countries is understated.

The imbalances on TARGET2 are ultimately the liability of the ECB, not the individual NCBs. Yet, there’s no provision in the ECB’s accounts for the risk of an NCB leaving the system. This is a good reason why a nation cannot be allowed to leave the Eurozone.

By the end of January, the ECB had bought an estimated €1.34tn of government bonds, €230bn of covered bonds (mostly pooled mortgages), and €60bn of corporate bonds. To these purchases can be added a further total of €220bn to date, giving us a total today of €1.85tn. The valuation risks on these bonds are not reflected on the ECB’s balance sheet, which at December 2016 disclosed only €160.8bn, listed under “Securities held for monetary purposes”. So, only 11% of the total bonds bought through QE by end-December are shown on the ECB’s balance sheet. Where the price risk lies on the other 89% is important, because when interest rates are normalised, the losses could be considerable.

In that event, the allocation of losses is decided by the ECB’s Governing Council, ruling on both the way and the extent to which losses are distributed between the NCBs and the ECB. And if price inflation really takes hold, not only will government finances and private sector debt be enmeshed in a debt trap, but the ECB and the NCBs will all need to be recapitalised as well.

EU Politicians Are In Panic Mode

Concerns over the EU’s finances are almost certainly behind the wild statements being made by some EU leaders. According to Jean-Claude Junker, Theresa May is living in another galaxy, which begs the question about his own galactic residence, relatively speaking. After requests from several member states, which suddenly realise they are going to lose subsidies, the Commission has mechanically increased its demand for an up-front payment by Britain from €60bn to €100bn. This is despite the EU’s own legal advice from the Commission’s lawyers that no money can be claimed. France, Hungary, Italy, Spain and Poland also want Britain to continue to pay their farmers after Britain has left the EU.

It’s become like an opera buffa, a satire on a barely tangential relationship between the EU Commission and British democracy. Jean-Claude Junker, prefacing a recent speech in French said somewhat absurdly that English is losing its importance in Europe due to Brexit, despite it being the most commonly spoken. This is the mentality against which Britain will be negotiating.

The politicking of the senior commissioners is far removed from democratic reality. When David Davis for the UK sits down opposite Michel Barnier for the EU, does he counter the demand for an up-front payment of €100bn with a lesser amount, or a counter-claim for Britain’s share of the estimated €154bn of assets owned by the EU, which the EU side fails to mention? A claim on EU assets is equally flaky. Davis can only accept a position in accordance with his legal advice, or at least not very far adrift from it, because he has democratic accountability, though Barnier does not. Both the EU’s and Britain’s lawyers say there’s no capital liability for Britain, and there’s no mention of it in Article 50, or articles referred to in it. Capital payments and asset claims are just a try-on.

The British position is that no treaty is better than a bad treaty, so most of the movement in negotiations must come from the EU side. As their treatment of Greece illustrated (conveniently reminded to us last week by Yanis Varoufakis in his new book, Adults in the Room), the EU might be obstinate to the point of destruction. Fortunately for Britain, it is not in the position Greece was, and can afford to walk away.

But the Commissioners know of no other approach other than to bully. Remember that when Ireland refused to ratify the Nice Treaty in a referendum, the EU told them to vote again, and get it right. They did the same again to Ireland over the Lisbon Treaty. Denmark was told to hold a second referendum on Maastricht, and to get it right as well. Perhaps they thought that by upping the cost of leaving, the UK might back down and go for a soft Brexit, or even decide to stay after a second referendum. So, when Junker had dinner with Theresa May on 26th April and was told plainly Britain’s point of view, he threw his toys out of the pram.

All they have achieved is to get the British electorate’s collective backs up, just as Obama did when he said Britain would go to the back of the queue on T-TIP. Thanks to these threats, it is now likely that Mrs May will have an even greater landslide victory in the upcoming general election, with an increased number of ardent Brexiteers for MPs.

All that is for public consumption. Fortunately, behind the scenes the officials doing the real negotiation are quietly making progress. Politicking is one thing, practicality is another. According to Daniel Korski, who was deputy head of the No 10 Policy Unit, writing in an article for last Wednesday’s Daily Telegraph, EU negotiators now accept it is in everyone’s interest to avoid a cliff-edge. Many months ago, Iain Duncan-Smith reported that German manufacturers had secretly agreed with Angela Merkel’s administration that any trade barriers would be minimal. The reality behind the rhetoric is European business, which after all employs EU residents and collects and pays the bulk of the taxes, will determine the outcome.

In theory, Britain has two years from March before formally leaving, though Article 50(3) allows for this period to be extended by agreement. This opens the possibility for transitional arrangements if need be. Furthermore, the EU side will be able to ratify the decision on the new basis of qualified majority voting. This means the support of Germany, France, Italy and Spain for an agreement should be sufficient, so Britain is likely to target these governments behind the scenes, along with their major corporations. The reality is European businesses want to protect their markets and investments in the UK, and perhaps to use the UK after Brexit as a springboard for global business.

Therefore, expect covert briefing by the British for the major European car manufacturers, the banks, and any other major multinationals based in these countries. Contentious issues, such as agricultural subsidies and citizens’ rights, while important, are unlikely to stand in the way of an agreement. However, the procedures of the EU, which involve all 27 nations being consulted, usually involves protracted lead-times. The only way trade and the rights of affected citizens can be agreed within the two-year time scale is for the Commission to initially work with Germany, France, Italy and Spain to complete negotiations, keeping consultations with the other states to the bare minimum, before presenting a final solution to the other states. Otherwise, a lengthy time extension will almost certainly be required.

There can be little doubt where the power lies. Britain can walk away, the EU cannot. Britain’s Commonwealth members rejoice at Brexit. Furthermore, Britain can rapidly come to a Most Favoured Nation agreement with China, which would take decades for the EU to achieve. China is already sending freight by rail to Europe, including the UK. A quick MFN deal with China opens a trade network which will eventually include the whole of Asia and those parts of Europe not bound by the EU. In the fullness of time, this is likely to be a far better arrangement for Britain than being restricted by the EU’s trade agreements. Combining the Commonwealth and Asia in a massive liberated trade arrangement has the benefit of making the UK a suitable base for European companies selling services into what promises to become the largest trading area in the world.

Being free of the EU is a no-brainer, and the British electorate is beginning to understand it. The City is also anticipating the new opportunities with growing relish.

All this assumes that the worrying TARGET2 statistics don’t presage a banking or financial crisis by March 2019. Nobody will be immune to a banking blow-up in Euroland, but from the British point of view there must be an urgency to get out of the EU before it happens. It also assumes Theresa May gets the electoral mandate she seeks on 8th June.

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More Disruptions Feared from Cyber Attack; Microsoft Slams Gov’t Secrecy

Re-Blogged From http://www.newsmax.com

Officials across the globe scrambled over the weekend to catch the culprits behind a massive ransomware worm that disrupted operations at car factories, hospitals, shops and schools, while Microsoft on Sunday pinned blame on the U.S. government for not disclosing more software vulnerabilities.

Cyber security experts said the spread of the worm dubbed WannaCry – “ransomware” that locked up more than 200,000 computers in more than 150 countries – had slowed but that the respite might only be brief amid fears new versions of the worm will strike.

In a blog post on Sunday, Microsoft President Brad Smith appeared to tacitly acknowledge what researchers had already widely concluded: The ransomware attack leveraged a hacking tool, built by the U.S. National Security Agency, that leaked online in April. Continue reading

Global Warming Surprises

By Dr. Fred Singer – Re-Blogged From http://www.WattsUpWithThat.com

Temp data in dispute can reverse conclusions about human influence on climate.

Exploring some of the intricacies of GW [Global Warming] science can lead to surprising results that have major consequences. In a recent invited talk at the Heartland Institute’s ICCC-12 [Twelfth International Conference on Climate Change], I investigated three important topics:

1. Inconsistencies in the surface temperature record.

2. Their explanation as artifacts arising from the misuse of data.

3. Thereby explaining the failure of IPCC to find credible evidence for anthropogenic global warming (AGW).

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Two Competing Narratives on Carbon Dioxide

Is carbon dioxide our friend or our foe?

By Iain Aitken – Re-Blogged From http://www.WattsUpWithThat.com

Here is a dossier of key facts about carbon dioxide (and its role in global warming):

· It is an incombustible, colourless, odourless, tasteless and non-toxic gas

· It is a plant nutrient and, as the ‘fuel’ of photosynthesis and the creation of oxygen, it is absolutely essential to the existence of life on Earth

· Its fertilisation effect has meant that, thanks to our anthropogenic carbon dioxide emissions increasing concentrations in the atmosphere, crop yields have improved dramatically to date and will continue to improve in the future

· It is a weak greenhouse gas

· Global warming precedes, and then causes, increases in carbon dioxide emissions

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Gold Miners’ Q1’17 Fundamentals

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

The gold miners’ stocks have been slammed by a sharp gold pullback in recent weeks, spawning today’s bearish sentiment.  Traders often get caught up in the emotional swings generated by this volatile sector.  But once a quarter earnings season arrives, revealing gold mining’s hard fundamental realities which dispel the obscuring sentiment fogs.  The major gold miners’ profitability actually just exploded higher in Q1!

Four times a year publicly-traded companies release treasure troves of valuable information in the form of quarterly reports.  Companies trading in the States are required to file 10-Qs with the US Securities and Exchange Commission by 45 calendar days after quarter-ends.  Canadian companies have similar requirements.  Some companies in other countries with half-year reporting instead of quarterly even follow suit.

So the world’s major gold miners are just wrapping up their first-quarter earnings season.  After spending decades intensely studying and actively trading this contrarian sector, there’s no gold-stock data I look forward to more than the miners’ quarterly financial and operational reports.  They offer a true and clear snapshot of what’s really going on, shattering the misconceptions bred by the ever-shifting winds of sentiment.

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Video: Analysis of NASA Data Shows Modern Temperature Trends are NOT Uunusual

By Michael Thomas – Re-Blogged From http://www.WattsUpWithThat.com

An important aspect of the climate change debate can be summed up like this: “One position holds that medieval warm temperatures reached levels similar to the late twentieth century and maintained that the LIA was very cold, while another position holds that past variability was less than present extremes and that the temperature rise of recent decades is unmatched”. This video challenges whether the rise of recent decades is unmatched.

The overall trend since 1880 when instrumental data started is 0.11 degrees Celsius per decade. This is according to NOAA data for northern hemisphere land records. The most extreme trend occurs between 2006 and 2016 and is, according to NOAA, is 0.38 degrees Celsius per decade.
Eight separate studies of historical data, all of which are referenced by the IPCC in the 2013 report, are examined to see whether the trend between 2006 and 2016 is indeed unmatched over the past two thousand years.

Multiple examples were found where trends equaled or exceeded over the past two thousand years.

Dream Of The Central Banker

By Mark O’Byrne – Re-Blogged From http://www.Silver-Phoenix500.com

The art world and artists have in the main not addressed one of the most important issues of our time – central banks foisting debt on the people and nations of the world and thereby controlling them.

An artist who has the knowledge and courage to look at and address the world of money, the dangers of monetary policies today and currency debasement on a scale that the world has never seen before is an Irish artist called Conor Walton.

The Dream of the Central Banker (Click painting to enlarge)

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Carbon Tax Elders Offer More Bad Advice

By Marlo Lewis Jr. of the Competitive Enterprise Institute

Re-Blogged From http://www.WattsUpWithThat.com

They’re back! The same GOP elders who have been pushing what American Enterprise Institute economist Ben Zycher charitably calls “The Deeply Flawed Case for a Carbon Tax” are now urging President Trump to stay in the Paris Agreement.

Yesterday in the New York Times, former Reagan Secretary of State George P. Shultz and his Climate Leadership Council colleague Ted Halstead, who heads the organization, argue that staying in the pact will “spur new investment, strengthen American competitiveness, create jobs, ensure American access to global markets and help reduce future business risks associated with the changing climate” whereas exiting will “yield the opposite.”

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Insidious Effects Of Monetary Inflation

By Steve Saville – Re-Blogged From http://www.Silver-Phoenix500.com

Most people with a basic grounding in economics know that increasing the supply of money leads to a fall in the purchasing power of money. However, this is usually as far as their understanding goes and explains why monetary inflation is generally not unpopular unless the cost of living happens to be rising rapidly. Monetary inflation would be far more unpopular if its other effects were widely understood.

Here are some of these other effects:

1. A greater wealth gap between rich and poor. For example, monetary inflation is probably a large part of the reason that the percentage of US household wealth owned by the richest 0.1% of Americans has risen from 7% to 23% since the mid-1970s and is now, for the first time since the

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America Needs a Debt Cut Before a Tax Cut

By Michael Pento – Re-Blogged From Pento Portfolio Strategies

President Donald Trump has finally unveiled his broad blueprint for tax reform. Well, at least let’s call it a sketchy outline of one. It would take the top income tax rate for small businesses from 35% to 15%. Theoretically, a business that makes $500k in taxable income, which had been paying roughly $175k in Federal taxes, would then pay closer to $75k. This means our business in this example, which saved 100k in Federal taxes, would have to grow its taxable income to $1,166.666, or by 133% to provide the government with revenue neutrality.

Even though Trump’s proposed tax plan offers more questions than answers, what is clear is that the administration is no longer working off the pretense that tax reform will seek revenue neutrality. Instead, it looks like Trump and the Republicans are leaning towards pretending that dynamic scoring of tax cuts will suffice for a revenue neutral plan.

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Jamie Dimon: School Dropout Rates Are ‘National Catastrophe’

By R Williams – Re-Blogged From Newsmax

Jamie Dimon, chairman and chief executive officer of J.P. Morgan Chase & Co., said America faces a “national catastrophe” from a failing educational system with high dropout rates and young people who aren’t prepared to enter the work force.

“We need to get kids getting out of high school, who go on with a job, or go on to college and that leads to a job,” Dimon said in an interview with Business Insider. Dimon’s bank last week announced a $6 million investment in education for students in the South Bronx, a notoriously blighted part of New York City.

 “Business has to be involved locally with civic society, in this case schools, to get the kids trained to have a job,” Dimon said. “There are plenty of jobs out there.”

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Mexico Warns U.S. of Alternatives on Trade, Points to China

By Thomson/Reuters – Re-Blogged From Newsmax

Mexico sent a stark message to U.S. President Donald Trump on Thursday, saying an upcoming visit by officials from Latin America’s No. 2 economy to China made it clear it had many other export markets if he tore up the NAFTA trade deal.

The North American Free Trade Agreement (NAFTA) underpins Mexico’s economy, prompting the government to try and diversify away from the United States, which takes 80 percent of its exports. Mexico runs a sizeable trade deficit with China, the destination of about 10 percent of its exports.

Trump indicated, in an interview with The Economist published on Thursday, that he wanted to get the U.S.-Mexico trade deficit down to about zero. He wants to renegotiate NAFTA to get a better deal for U.S. companies and workers, and has threatened to end the agreement if he does not get his way. Talks are expected to start later this year.

The Case Of The Missing US Stocks

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

In the last 20 years, the U.S. stock market has undergone an alarming change that too few people are aware of or talking about. Between 1996 and 2016, the number of listed companies fell by half, from 7,300 to 3,600, according to a recent report by Credit Suisse. This occurred despite the U.S. economy growing nearly 60 percent over the same period.

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