Three Myths About Fixing Social Security

By Brenton Smith – Re-Blogged From Newsmax

Social Security is the largest, and arguably most important, program in the federal government. It is a life-line for millions. For the rest of us the program is a set of never-ending, polarizing arguments.

The contentiousness is caused in large part by the number and conflicting nature of the urban legends surrounding the system. Everyone has a fact that is someone else’s myth.

These convictions about the program shape who voters elect, and seriously limit what candidates are willing to say to the electorate. These beliefs have so penetrated the public conscience that actual policy makers are left herding unicorns.

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Hypocrisy Most Foul. . .

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

As you all know by now, I have absolutely zero knowledge of anything related to the “blockchain” technology, which translates into “I don’t own Bitcoin and would not touch HIVE Blockchain Technologies Ltd. (HIVE:TSX.V; PRELF:OTC) with a barge pole.” That also means that I am constantly being reminded, primarily by those considerably younger than me, that geriatric anchoring is costing me (and my readers) a great deal of money by avoiding the space which, as you can see from the chart below, has been absolutely true.

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GOP Tax Plan Increases the Most Insidious Tax

By Ron Paul – Re-Blogged From Ron Paul Institute

Last Thursday, congressional Republicans unveiled their tax reform legislation. On the same day, President Trump nominated current Federal Reserve Board Governor Jerome Powell to succeed Janet Yellen as Federal Reserve chair. While the tax plan dominated the headlines, the Powell appointment will have much greater long-term impact. Federal Reserve policies affect every aspect of the economy, including whether the Republican tax plan will produce long-term economic growth.

President Obama made history by appointing the first female Fed chair. President Trump is also making history: If confirmed, Powell would be the first former investment banker to serve as chairman of the Federal Reserve. Powell’s background suggests he will continue Janet Yellen’s Wall Street-friendly low interest rates and easy money policies.

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Stock and Awe, Bears in Bondage

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

The Trump Rally pushed ahead relentlessly through a summer full of high omens and great disasters, all which it swatted off like flies. Even so, all was not perfect in the market as nerves began to jitter midsummer beneath the surface even among the most longtime bulls. Wall Street’s fear gauge (the CBOE Volatility Index) lifted its needle off its lower post to a nine-month high after President Trump’s comments about “fire and fury” if North Korea didn’t toe the line. (Mind you, the high wasn’t very far off the post because of how placid the previous nine months had been.)

As volatility stirred languidly over the threat of nuclear war, stock prices took a little spill with all major stock indices seeing their biggest one-day drop since May. The SPX fall amounted to a 1.4% drop in a day — nothing damaging. The Dow dropped about 1% in a day. But beneath the surface, the market is looking different and shakier.

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The Plan Comes Together?

By Bill Holter – Re-Blogged From http://www.Silver-Phoenix500.com

My original thought was to write further about the left turning on and eating each other. The volume of news, “who” and the timing seemed to indicate something very big coming down. However, another story broke out of the blue this morning from Saudi Arabia that supersedes (though very well may have connections to) the feeding frenzy.

Crowned Prince Mohammed bin Salman had 11 princes and 38 current and former senior officials arrested on corruption and money laundering charges. http://www.reuters.com. Prince Alwaleed bin Talal being the most notable arrested. The thought process of “why” becomes scattered after the initial and obvious thought MBS is consolidating his power after being named as next in line back in June.

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Weekly Climate and Energy News Roundup #289

By Ken Haapala, President, Science and Environmental Policy Project

Brought to You by www.SEPP.org

Quote of the Week. “The important thing is not to stop questioning. Curiosity has its own reason for existing. One cannot help but be in awe when he contemplates the mysteries of eternity, of life, of the marvelous structure of reality. It is enough if one tries merely to comprehend a little of this mystery every day.” – Albert Einstein

Number of the Week: $0.00? Zero?

Funding Climate Science: Internal to the globe, the earth’s climate is partially determined by the movement of two dynamic fluids: 1) the atmosphere; and 2) the oceans. Fluid dynamics is not thoroughly understood; thus, the actions of these fluids cannot be clearly defined.

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New Discoveries in Fight Against Antibiotic Resistance

By – Re-Blogged From  www.seeker.com

Key insights into how bacteria become resistant to antibiotics could reverse the process and renew the efficacy of commonly prescribed medications.

How Google and MSM Use “Fact Checkers” to Flood Us with Fake Claims

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

The Left implemented a novel technique of the Big Lie that I will call a Flooding Fake here.  This technique was especially widely used by climate alarmism.  This is what it looks like:

  1. An important figure or organization on the Left is caught doing something wrong, saying something outrageous, or blatantly lying.
  2. The Left injects into public discourse an absolutely fake, but believable, account of this action and immediately “debunks” this account.
  3. The fake narrative is accepted by the public as truth because the public knows that something similar has happened.  The immediate debunking is rejected as a cover-up attempt.
  4. Later, when people accuse the original wrongdoer they use elements of the fake narrative.  This is when “fact checkers” jump on them.  Fake news networks accuse honest statesmen and commentators of spreading fake news.  The liberals’ conviction that the conservatives are stupid and uninformed gets deeper.  Google buries honest pieces far from public sight.  Facebook tries to prevent their sharing.  Leftist politicians cry that they lost elections because of fake news.

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In China, Innovation Cuts Both Ways

By Matthew Bey – Re-Blogged From https://worldview.stratfor.com

China is in a bind. The heavy industry that propelled the country’s economy through three decades of dizzying growth has reached its limits. To escape the dreaded middle-income trap, China will need to shift its focus from low-end manufacturing to other economic industries, namely the technology sector. Beijing has put tech at the center of its long-term economic strategy through campaigns such as Made in China 2025 and Internet Plus. But these initiatives alone won’t push the Chinese economy past its current plateau. The tech sector is notorious for relentless innovation. And innovation requires flexibility.

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Cost of Climate Change Damage Far Less Than Cost of Decarbonization!

By David Middleton – Re-Blogged From http://www.WattsUpWithThat.com

H/T to ivankinsman for bringing this to my attention.

Government report calls on Trump to act on climate change

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By Eli Watkins, CNN
Updated 1441 GMT (2241 HKT) October 24, 2017

Washington (CNN)A government report released Monday is sounding an alarm over the threat of climate change, and the government’s response.

The US government has spent more than $350 billion over the past decade in response to extreme weather and fire events, and the Government Accountability Office report estimated the US would incur far higher costs as the years progress if global emission rates don’t go down.

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Interview with István Markó

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

István Markó (1956 – 2017) was a professor and researcher in organic chemistry at the Université catholique de Louvain. Prof. Dr. Marko was an outspoken defender of the skeptical view on the issue of human-caused/anthropogenic global warming, appearing in numerous French-language media on the Internet, in public debates and diverse English-language blog postings. He also joined with Anglo-Saxon climate skeptics, publishing several articles together on Breitbart News.

  Grégoire Canlorbe: Climate activism is thought of as Marxism’s Trojan horse, a way for its followers to proceed with their face masked, in the never-ending holy war that Marxism claims will be necessary to establish communist totalitarianism. Yet it was actually Margaret Thatcher, the muse of conservative libertarianism, who kick-started the IPCC. How do you make sense of this?

  István Markó: More precisely, Margaret Thatcher, although a trained chemist and therefore aware of the mendacious character of such an allegation about carbon dioxide (CO2), was the first proponent to use the excuse of climate implications posed by CO2 to achieve her political ends. At the time, that is, in the mid-1980s, Thatcher was waging war with the almighty coal union. In those days, the UK coal unions were remunerating themselves with public monies and by lobbying via the Labour Party had managed to pass an enormous number of laws and subsidies to keep an industry afloat that was no longer profitable on its own.

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Weekly Climate and Energy News Roundup #288

By Ken Haapala, President, The Science and Environmental Policy Project

Brought to You by www.SEPP.org

Quote of the Week. “The modern world, after all, is not the product of a successful search for consensus. It’s what’s emerged from centuries of critical enquiry and hard clash.” – Tony Abbott, former Prime Minister of Australia

Number of the Week: 2.2 million workers needed to replace 52,000?

Letter To Scott Pruitt: On October 17, SEPP President Kenneth Haapala sent EPA Administrator Scott Pruitt a letter requesting action on two science-based petitions for reconsideration of the Endangerment Finding for Greenhouse Gases, one filed by the Concerned Household Electricity Consumers Council (CHECC) and one filed jointly by the Competitive Enterprise Institute (CEI) and the Science and Environmental Policy Project. The letter stated a willingness to assist in a new Endangerment Finding assessment that is carried out in a fashion that is legally consistent with the relevant statute and case law. The letter contained the names of over 60 supporters of the petitions with expertise in climate science and related science fields or energy, public health, and welfare.

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Gold Stocks’ Winter Rally

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

The gold miners’ stocks have largely ground sideways this year, consolidating their massive 2016 gains. That lackluster trading action, along with vexing underperformance relative to gold, has left gold stocks deeply out of favor. But these uninspiring technicals and resulting bearish sentiment should soon shift. The gold stocks are just now entering their strongest seasonal rally of the year, the super-bullish winter rally.

Gold-stock performance is highly seasonal, which certainly sounds odd. The gold miners produce and sell their metal at relatively-constant rates year-round, so the temporal journey through calendar months should be irrelevant. Based on these miners’ revenues, there’s little reason investors should favor them more at certain times of the year than others. Yet history proves that’s exactly what happens in this sector.

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Central Banks Start Major Change

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

– Bank of England raised interest rates for the first time in ten years
– President Trump announces Jerome Powell as his choice to lead the U.S. Federal Reserve
– Most investors outside the US Dollar and Euro see gold prices climb after busy week of central bank news
– Inflation now at five-year high of 3%
– Inflation, low-interest rate, debt crises and bail-ins still threaten savers and pensioners

This week has been a significant week for central banks. The Bank of England raised interest rates for the first time in ten years, the Federal Reserve indicated that a December rate hike may happen and President Trump named Powell as his choice for leader of the Federal Reserve.

Gold reacted positively to Trump’s announcement as markets see little change ahead with a Powell-led Federal Reserve.

The interest rate decision is arguably the most interesting at present. Announcements on both sides of the pond suggest that the age of easy money is coming to an end, albeit slowly.

Since the financial crisis central banks have flooded markets with easy money, kept interest rates near zero and bought trillions of dollars in government and corporate bonds. Now most central banks (excluding Japan) have indicated that the party must soon stop.

The problem is, no one is sure how economies will cope when the moreish juice of central bank assistance will be taken away. None of the financial centres have managed to meet inflation targets which they were all so vocal about. Instead, they are suddenly aware that the encouraged financial excesses of the last ten years may well lead to another crash and something must be done to curb their enthusiasm.

Adding to the uncertainty is the issue that three of the world’s four most important central bank chiefs are nearing the end of their terms and may be well replaced. The jump in the gold price and fall in the dollar is just the first indication with how markets feel about such changes.

But is the age of easy money really coming to an end and are interest rate hikes a sign that central bankers have confidence in the economic recovery? Yesterday’s drop in the pound suggests markets aren’t buying it. They weren’t helped by Mark Carney’s dovish comments regarding the UK’s post-Brexit future.

All in all, anyone hoping they might finally earn some interest on their savings, see a slowdown in the devaluation of their wealth or a reduction in the counterparty risk their cash is exposed to, needs to think again. The UK along with the rest of the world remain very vulnerable and will take investors along for the ride.

A Whole New World With Little Hope

Here in the UK a whole generation of homeowners are waking up to a world where interest rate rises can really happen. There are 8 million homeowners, many of whom will have bought in the last ten years and as a result have never experienced a rate rise in their adult lives.

Bloomberg explained how much the world has changed since the Bank of England last increased interest rates:

The world was drastically different the last time the Bank of England hiked interest rates: the iPhone was less than a week old; Gordon Brown was Prime Minister; the average price of a home in London was £261,000 (it’s now  £470,632).

In interest rate terms how much has changed? Very little. The rise merely cancels out the cut that happened following the Brexit referendum.

It’s likely the hike in interest rate could do more harm than good. Previously savers, pensioners and investors suffered as a result of (arguably) negative real interest rates. Now the rate hike makes little difference to their current situation but propels debtors into further issues.

Those on variable mortgages will be facing rate hikes whilst the millions who have personal, unsecured loans will also be facing increased payments. All to contend with against a backdrop of rising inflation, pressure on wages and a slowing economy.

No Change, Nothing To See Here

A decade of damage by easy monetary policy has caused unforeseen damage which cannot be undone by a few quarter-percent hikes over the next two years.

Low rates have created problems for savers and pensioners around the globe. Pension funds are in trouble with rising levels of unfunded liabilities. Consider the 2016 PWC report that found pension fund deficits have expanded by £100bn over the past year to total £700bn. This gives a “debt” of £26,000 per UK household.

Debt levels continue to rise from unsustainable to even more unsustainable. Here in the UK we are facing a £1 trillion crisis as pension deficits and consumer loans snowball out of control.

And lest we forget how low rates have distorted financial markets and created asset price bubbles in shares, property and investments across markets.

Easy monetary policy came at a time when governments should have been implementing policies that dealt with an ageing population. Instead they have increased inflation and discouraged conservative money management –  creating incentives in totally the wrong direction.

The rise in inflation to 3% today also means that even those who have opted to keep cash in the bank have seen its value slowly eaten away. Those who chose to embrace low rates are inevitably in a debt-hole that is increasingly difficult to climb out from.

No Faith In Post-Brexit Britain

Interest rate hikes are ideally supposed to be an indicator that a central bank has faith in the economy’s recovery but the Bank of England statement yesterday suggested this wasn’t the case for post-Brexit Britain.

Carney expressed his concerns over the strength of the UK’s economic recovery heading into and following our departure from the EU. He is also likely to be considering the risks the weak exchange rate poses to Britain’s ability to finance its current account deficit.

So bleak is Carney et al’s outlook that they are only considering a two further rate rises by the end of 2020. Even this might not be guaranteed. Consider the state of the global financial system and where that could drag the UK.  Last time the BoE increased rates, it was soon forced to cut  them by 4.75 percentage points in the following 18 months as the global financial crisis dragged the UK into a recession.

Little Hope For Savers

The EU has already set the precedent of official negative interest rates, but in truth inflation combined with low rates does mean we are already in negative territory. Now, a 0.25% interest rate hike to 0.5% won’t do much to contend with the forces of excess money supply and falling value of the pound.

Add to this the ongoing threat of bail-ins, courtesy of the EU government. Even if interest rates were hiked up to levels of the early 1990s then savers’ cash is still not safe.

Investors need to be prepared for the ongoing threats that exist in our banking system whether thanks to Brexit or our own governments.

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Lies and Manipulation: The Sorry State of Global Climate Alarmism

By Vijay Jayaraj – Re-Blogged From http://www.WattsUpWithThat.com

As a citizen of a third-world country, I bring a different perspective about climate change from that held by most people in wealthy countries. While they fret about possible tenth-of-a-degree changes in global average temperature, I think about how a billion of my fellow Indians and I will obtain the food, water, health care, and other things we need that our richer neighbors take for granted.

So we puzzle when we observe climate alarmists on a scaremongering crusade following the recent hurricanes in the Atlantic. They saw hurricanes Harvey, Irma, and Maria as providing another opportunity to blame climate change. Indeed, they tend to hold human-driven climate change guilty for the occurrence of any natural disaster.

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Oil Prices and Oil Stock Prices

   By Bob Shapiro

I see in the commodities markets that the price of oil has gotten into the mid 50s, after spending years it seems in the 40-50 Dollar range. Prices always fluctuate, but this uptick at least bears watching.

As with many resources, oil exploration and development takes years, so once the decision is made, the cost to produce oil from any particular well or oil field are known. Yes, costs also fluctuate for oil production, but in a very narrow band. So, what happens when prices fluctuate is that it is magnified when the bottom line is calculated.

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‘Bottom Up’ Versus ‘Top Down’ Thinking

By Neil Lock Re-Blogged From http://www.WattsUpWithThat.com

Today, I’m going to look at two diametrically opposed ways of thinking, and at the practitioners of those two ways. One way, I call bottom up; the other, top down.

Bottom up thinking is like the way we build a house. Starting from the ground, we work upwards, using what we’ve done already as support for what we’re working on at the moment. Top down thinking, on the other hand, starts out from an idea that is a given. It then works downwards, seeking evidence for the idea, or to add detail to it, or to put it into practice.

These two opposed methods bear on far more than just the way we think. The idea of bottom up versus top down can be applied to many dimensions of our lives. It can be applied to our overall world view, and to our views on religion. To how we seek knowledge. To our ethical and political views. To our conception of government and law. To our opinions on economics and environment. To how we communicate with others. To our views on education and media; and many more. Bottom up versus top down isn’t a single scale of (say) 0 to 100, but a multi-dimensional space, in which each individual’s position is represented on many different axes.

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A Skeptic Attempts to Break the ‘Pal Review’ Glass Ceiling in Climate Modeling

By Pat Frank – Re-Blogged From http://www.WattsUpWithThat.com

Propagation of Error and the Reliability of Global Air Temperature Projections

Regular readers at Anthony’s Watts Up With That will know that for several years, since July 2013 in fact, I have been trying to publish an analysis of climate model error.

The analysis propagates a lower limit calibration error of climate models through their air temperature projections. Anyone reading here can predict the result. Climate models are utterly unreliable. For a more extended discussion see my prior WUWT post on this topic (thank-you Anthony).

The bottom line is that when it comes to a CO2 effect on global climate, no one knows what they’re talking about.

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Stores Try to Survive ‘Retail Apocalypse’

By Associated Press – Re-Blogged From Newsmax

Stores are trying to step up their game online and in person for the critical holiday season, from dangling more discounts to livening up their stores. And Amazon, which is expanding into more areas, has opened its online store of Black Friday discounts.

Department store chain Kohl’s is hoping to woo new customers by emphasizing the exact amount people can save by stacking coupons and other deals. It’s also opening at 5 p.m. on Thanksgiving, an hour earlier than last year. “Retail is changing. And there is market share to gain,” said CEO-elect Michelle Gass.

America’s Stagflation

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

The accumulation of monetary policy errors by the Fed is increasingly certain to culminate in the credit crisis that always marks the end of the credit cycle. Credit crises are the result of globally coordinated monetary policies nowadays, so the timing of the forthcoming crunch is not only dependant on the Fed’s actions, but is equally likely to be triggered from elsewhere. Candidates for triggering a global credit crisis include economic and financial developments in Europe, Japan and China.

The next crisis is set to be more serious than the global crisis of 2008/09, given the greater level of debt involved, and the exceptionally high rate of monetary inflation since. It is a story I have covered elsewhere. This article will concentrate on the prospects for the US economy ahead of the next credit crisis, and the implications for the dollar and its associated financial markets.

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Survey Reveals Just How Many Americans Think Political Correctness Is ‘A Big Problem’

By Tre Goins-Phillips – Re-Blogged From Independent Journal Review

A recently released survey reveals the majority of Americans believe political correctness is “a big problem” in the United States.

According to the Cato Institute’s new study — “The State of Free Speech and Tolerance in America” — 70 percent of Americans agreed with the following statement: “A big problem this country has is being politically correct.”

In addition, 71 percent of Americans believe political correctness has only served to “silence important discussions” our society needs to have. And a staggering 58 percent of Americans said today’s political climate leads them to self-censor their opinions and beliefs.

Only 28 percent of respondents believe political correctness “has done more to help people avoid offending others.”

While, per Cato, liberals are “more likely than conservatives” to see a variety of political opinions as “offensive or hateful,” they also feel more comfortable sharing their own views:

Democrats (53%) are more likely than Republicans (26%) and independents (39%) to feel they can express their opinions. […] Nearly three-fourths (73%) of Republicans and 58% of independents are afraid to share some of their true beliefs because of the political climate.

Cato rightly suggested the discrepancy could be due to the fact that, ultimately, “cultural sources of power, such as media, academia, and entertainment, may matter more” than which party — Republican or Democratic — occupies the White House.

Regardless, President Donald Trump certainly tapped into a growing concern among a majority of Americans. On the campaign trail in 2016, then-candidate Trump said, “I think the big problem this country has is being politically correct.”

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Bad News Banksters Double Cross Their Customers

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

Crooked bankers are all over the headlines again.

The world’s largest metals hedge fund, Red Kite Management, Ltd., is suing Barclays for rigging copper prices. Federal prosecutors launched an investigation of Wells Fargo bankers working on its foreign exchange desk Friday. And on October 23rd, a jury in New York convicted an HSBC trader of fraud.

The HSBC trader, Mark Johnson, said he “thought we got away with it” to his coworkers after cheating their client in a massive foreign exchange transaction. But he was wrong. The jury found him guilty for his involvement in a 2011 exchange in which the Cairn Energy Plc converted $3.5 billion dollars to British pounds.

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Investor Optimism Highest Since Crash of ’87

By Rob Williams – Re-Blogged From Newsmax

The stock market’s seemingly unstoppable rise to record highs has boosted investor optimism to levels not seen since the Crash of ’87 – a very worrisome sign.

The difference between bulls and bears hasn’t been this high in 30 years, according to Investors Intelligence. The last time investor sentiment was this far apart, stocks rallied – until they didn’t. The Dow Jones Industrial Average collapsed 22 percent on Oct. 19, 1987, the worst one-day selloff in history.

Euphoria is a dangerous stage in the market cycle — when investors feel invulnerable and start to overpay for stocks. They become complacent with the expectation that they can sell their stocks to a “bigger sucker.”

Image: Survey: Investor Optimism Highest Since Crash of '87
(Dreamstime)

NYC Terror Victims Are ‘Martyrs to a Diversity Cult Worshipped by Our Ruling Class’

By Sam Dorman – Re-Blogged From Independent Journal Review

Following news that an Uzbekistan immigrant perpetrated a terrorist attack in New York on Tuesday, Fox News host Tucker Carlson tore into American elites for supporting a lottery system that would allow that person to enter the U.S. in the first place.

Elites, Carlson argued, “worshipped” diversity with cult-like reverence and blindly valued diversity more than the American people’s well-being. “That’s literally true,” Carlson said on Wednesday during his show, “Tucker Carlson Tonight.”

Tucker Carlson 11-1-17

 

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Revelation Numbers

By Michael Pento – Re-Blogged From PentoPort

The federal budget deficit widened in the fiscal year 2017 to the sixth highest on record, creating a budget shortfall of $666 billion. That is up $80 billion, or 14%, from the fiscal year 2016. The overspend resulted primarily from an increase in spending for Social Security, Medicare, and Medicaid, as well as higher interest payments on the debt due to rising rates that drove up outlays to $4 trillion, which was 3% higher than the previous fiscal year.

The deficit as a percentage of gross domestic product (GDP), totaled 3.5%, up from 3.2% the year prior. This budget gap will be piled on to the ballooning National Debt that in the fiscal year of 2016 grew to whopping 106% of GDP.

But the Trump administration isn’t spending a lot of time tweeting about the looming debt crisis. In fact, they would like us to believe that their recently proposed tax reform will not only pay for itself but will actually reduce debt and deficits. Treasury Secretary Steven Mnuchin noted recently that, “Through a combination of tax reform and regulatory relief, this country can return to higher levels of GDP growth, helping to erase our fiscal deficit.”

But the truth is that the proposed tax reform will not completely pay for itself–let alone reduce the deficit or pay down the debt. The Senate has recently congratulated themselves for approving a budget resolution that would allow Congress to collect $1.5 trillion less in federal revenues over the next ten years, yet they are still in search of new revenue to pass tax reform.

And since there are still some remnants of the fiscal hawks in Congress, Republicans are in a frenzy to find new revenue opportunities to get the necessary votes; in search of an elusive “sacred cow” that isn’t that sacred.

Following the election of Donald Trump, the House supported a Border Adjustment Tax (BAT); a cash windfall that dovetailed brilliantly with Trump’s America first agenda. However, it didn’t take long for lobbying groups to crush that proposal, and the BAT tax wound up biting the dust.

The next target was the deductibility of state and local taxes and the mortgage interest deduction–but the Republicans soon realized they have representatives seeking re-election in high tax states too…and this idea has also quickly fallen by the wayside.

On October 20th, the New York Times reported that “House Republicans are considering a plan to sharply reduce the amount of income American workers can save in 401(k) accounts, reportedly to as low as $2,400 per year (The current figure is $18,000, rising to $18,500 next year, with $6,000 additional in catch-up contributions permitted to those 50 and over.)”   However, President Trump quickly killed this with a tweet too.

Now we hear rumblings of a higher tax bracket; this may get the support of some Democrats, but the truth is there are not enough one-percenters to make the numbers work.

The Senate can pass tax reform with a simple majority but there is a catch. To use what is called the budget reconciliation process it cannot add to the deficit beyond the 10-year budget window. Therefore, a feasible solution may be to include an additional upper-income bracket to throw a bone to the Democrats and bring some on board to get to 60 votes. But the problem is that under either Reconciliation or Regular Order, passing tax cuts would mean that deficits would soar.

Our economy did prosper after the Regan tax cuts. But here is the rub, in the 1980’s the National debt was 45% of GDP; but now it is 106% of GDP.

According to Carmen Reinhart and Ken Rogoff, in their book, “This Time Is Different” – 800 years of financial history proves that high government debt ratios lead to low economic growth. And though some of their data have been questioned regarding the magnitude of their findings, their basic premise that high debt leads to weaker growth has held true under aggressive scrutiny.

Cutting taxes in an environment of massive debt and ballooning deficits, without a commensurate reduction in spending, is not going to grow the economy over 3%–at least it hasn’t worked in the past 800 years.

Declining government revenues and long-term costs associated with an aging population, including higher Social Security and Medicare spending, are expected to continue pushing up deficits over the coming decades. Real tax reform is needed but it should be paid for in order to ensure that we grow the private sector as we shrink the public sector. That means cutting taxes, eliminating loopholes and reducing spending. Sadly, few in Washington espouse such an agenda. Without such cuts, the economic boost from lower taxes would be more than offset by spiking debt service payments on the record amount of outstanding debt.

The S&P500 hit a bottom of 666 in March of 2009, which led to the most humongous intrusion into free markets by the U.S. government in its history. Now we have that same foreboding number 666; this time regarding the amount of red ink during the 2017 fiscal year. A mere coincidence I’m sure. Nevertheless, we must pray this rapidly rising debt figure does not forebode yet another step closer for the demise of the middle class.

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Fragmenting Countries, Part 1: Catalonia Is Just The Beginning

By John Rubino – Re-Blogged From Dollar Collapse

Picture a life where you do most of your shopping through Amazon.com and the local farmers’ market, most of your communicating through Facebook and Instagram, much of your travel via Uber, and much of your saving and transacting with bitcoin, gold and silver.

Do you really need an immense, distant, and rapacious central government? Maybe not. Perhaps your region or ethnic group would be better off forming its own independent country.

This question is being asked — and answered — in a growing number of places where distinct cultures and ethnic groups within larger nations now see their government as more burden than benefit. The result: Secession movements are moving from the fringe to mainstream.

In just the past couple of weeks, Iraqi Kurdistan and Spain’s Catalonia declared their independence. Neither succeeded, but the fact that they felt free to try illustrates how times have changed.

This is fascinating on a lot of levels, but why discuss it on a gloom-and-doom finance blog? Because secession is about the messiest event a country can experience short of civil war. And few things are more financially disruptive for an already over-leveraged society than potential dissolution.

Today’s fiat currencies depend for their value on the belief that the governments managing them are coherent and competent. Let a major region break away and plunge a debtor country into political/civil chaos and the markets will abandon its currency in a heartbeat. Note the sense of panic in the following article:

EU TURMOIL: Finland preparing to go against Spain and RECOGNISE Catalonia’s independence

(Express) – FINLAND could be the first country to officially recognise Catalonia as a republic state, in a move that would put the Scandinavian country in direct opposition to the European Union (EU).

The country’s MP for Lapland Mikko Karna has said that he intends to submit a motion to the Finnish parliament recognising the new fledgling country.

Mr Karna, who is part of the ruling Centre Party, led by Prime Minister Juha Sipila, also sent his congratulations to Catalonia after the regional parliament voted earlier today on breaking away from the rest of Spain.

Should Finland officially recognise the new state of Catalonia this will be yet another body blow to the the EU which has firmly backed the continuation of a unified Spain under the control of Madrid.

European Commission President Jean-Claude Juncker warned today that “cracks” were appearing in the bloc due to the seismic events in Catalonia that were causing ruptures through the bloc.

Mr Juncker spoke in favour of unity. He said: “I do not want a situation where, tomorrow, the European Union is made up of 95 different states. We need to avoid splits, because we already have enough splits and fractures and we do not need any more.”

The Scottish Government has also sent a message of support, saying that Catalonia “must have” the ability to determine their own future.

Scotland, of course, is itself considering secession from the UK, which recently voted to leave the European Union.

The political class, meanwhile, is trying to figure out where it went wrong. See the New York Times’ recent What Is a Nation in the 21st Century?

If the combination of long-term financial mismanagement and sudden technological change really has made large, multi-cultural nations dispensable, then some of them are going to fragment. This in turn will contribute to the failure of the fiat currency/fractional reserve banking system that’s ruining global finance. Poetic justice for sure, but of an extremely messy kind.

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Globalism in the Eyes of Two Beholders

By Rodger Baker – Re-Blogged From https://worldview.stratfor.com

The relative peace and prosperity in Europe may have shaped an idealistic approach to globalism.

The world over, the topic of globalism rarely fails to elicit a strongly held opinion. At its extreme in Europe, the march of globalization is accepted as a near-inevitability: In that view, it is no longer merely a path that should be taken, but the inexorable destination of humanity. As such, there is little room for assessing, much less understanding, alternative perceptions about the structure of the world, either internationally or domestically. Whether talking with a German economist, a British investor or an expatriate businessman in Spain, there is a near-bewilderment as to why anyone would want to pursue nationalism over globalism. As such, the bump in popularity for the Alternative for Germany party, the independence referendum in Catalonia and the Brexit are all seen as anti-historical trends. To them, the European Union remains the moral and political compass for the world, the guiding principle upon which the nation-state will be subsumed and a new global society will emerge.

In Asia, globalization is seen as a potential path, but not an inevitable one, and is viewed more often in economic than political terms. The nation-state firmly remains the unit of political and social organization, and while there are numerous initiatives to enhance cooperation among national entities, there is little movement toward the creation of a pan-national umbrella along the lines of the European Union. The Association of Southeast Asian Nations (ASEAN), one of the most aggressive Asian attempts at pan-national cooperation, explicitly promotes a policy of noninterference in national politics, recognizing the very different systems in each member country, rather than seeking to replace them with a regionwide political and economic structure.

Over the past 12 months, I have engaged with business leaders, government officials, researchers and members of the media in London, Berlin, Paris, Rome, Barcelona and The Hague, and in Auckland, Seoul, Beijing, Hong Kong and Singapore. Over the course of those discussions, a distinct difference in worldview between the “elites” of Europe and those of Asia became apparent. I use the word elite loosely here to describe the thin layer of society with the economic and social freedom to observe and assess the world in a manner disconnected from daily life. These are the economists, political scientists and bankers, the pundits, heads of major corporations, politicians and journalists. Their views shape much of the popular narrative, but one that often misses the underlying realities and beliefs held by a large portion of the societies in which they reside.

Now, all such broad-brush assessments are, by their nature, simplistic and superficial. There are certainly those in Asia who subscribe to the ideals of extreme globalism, and some among the European elite who recognize clearly that the Continental vision is just that — a vision and not an inevitability. But nonetheless, I noted the striking difference in tone between those I met in Europe and those in Asia. In part, the geopolitical developments in each region over the past several decades could explain this dichotomy.

 

Whereas Europe views the United States in ideological terms, Asia sees it in transactional terms.

Following the end of the Cold War, with the exception of the breakup of Yugoslavia, Europe has experienced perhaps its most stable multidecadal period in centuries. The European experiment appeared to be working. The peace and prosperity that spread across the continent allowed for the European Union to spread in kind, absorbing elements of the former Soviet bloc and even parts of the former Soviet Union itself. In guiding the economic and political directions of individual European nations, the European Union sought to erase the underlying nationalism that had riven Europe for millennia. But that noble goal failed to take into account the realities that remained below the surface. These were exposed dramatically with the global financial crisis in 2008, which forced the differences between the economic, social and political predilections underlying its systems to the surface once again, leaving the Europeans struggling with the growing gap between the globalized ideal and the national realities.

In Asia, no substantial periods of post-Cold War peace and cooperation ever really materialized. Even as it emerged as the region’s dominant economic regional power, China’s attention focused inward as it sought to manage internal social upheavalJapan fell into economic malaise. The two Koreas (despite a brief moment of sunshine) continued to spar. Extra-constitutional political change swept across Southeast Asia. The financial contagion that spread throughout the Asia-Pacific in 1997 sharpened many of these trends, leaving simply no long space of regional economic prosperity and political integration. Moves toward regional economic cooperation never went so far as seeking a common currency or centralized economic authority, and they certainly avoided linkage of economics and domestic politics.

Those differences in fortune play into the way each region views and reacts to both the perceived changes in U.S. policy direction and to rising nationalist sentiment around the world. In Europe, U.S. President Donald Trump is seen as globalization’s greatest threat, caricatured as the dangerous buffoon — a mirror image of the U.S. perception of North Korean leader Kim Jong Un. European nations have found it difficult to manage relations with the United States because they cannot accept that it may be sliding away from the extreme vision of globalization. In Asia, there are concerns about the direction of U.S. policy, but less in regards to globalization and more in terms of its direct economic and security effects. Whereas Europe views the United States in ideological terms, Asia sees it in transactional terms. Thus Asian leaders like Japan’s Shinzo Abe and even China’s Xi Jinping have been more adept at interpreting and engaging with Trump.

The geopolitical currents that have brought the continental neighbors to these dichotomous viewpoints will continue to shape the perceptions of their thought leaders, who in turn influence the political, economic and social directions of their societies. It’s clear that globalism will continue to evolve, both as an ideal and as a reality. Where it ends up may be a matter of perspective.

 

Rodger Baker leads Stratfor’s analysis of Asia Pacific and South Asia and guides the company’s forecasting process. A Stratfor analyst since 1997, he has played a pivotal role in developing and refining the company’s analytical process, internal training programs and geopolitical framework.

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Rob From The Middle Class Economics

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

Much of our financial world functions as a “Rob from the Middle Class” economy. The system robs from the middle class and poor via “money printing” and inflation of the currency supply!

The rich get richer and the poor get poorer.

Mazda Crossovers For Moms

After a 15 year love affair with my Mom SUV, it’s time to think about another. I attended the Houston Auto Show to try on cars like shoes.

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