Russia Deploys Exotic New Weapon: A “Budget Surplus”

By John Rubino – Re-Blogged From Dollar Collapse

The price of oil is rising, which is obviously good news for those who sell it to the rest of us. Russia in particular seems to be enjoying the current trend, so much so that — if I’m understanding this correctly – Moscow is now receiving more in taxes than it’s spending. This is producing something called a “budget surplus,” which is a kind of currency war weapon that can be deployed to improve a country’s geopolitical position. Here’s a quick overview:

Russia To See Oil Revenues Jump Fivefold

Continue reading

Advertisements

Argentina Joins Venezuela In The Currency Crisis Club

By John Rubino – Re-Blogged From Dollar Collapse

In interviews, whenever I try to make the case that US policies are leading to the kinds of currency disruptions common in developing countries, I say something like, “For a glimpse of America’s future, take a look at Argentina, where they’re eating cats and dogs because of hyperinflation … wait, no, I meant Venezuela.”

Mixing up countries kind of dilutes the power of the statement, but for some reason I can’t seem to help it.

Continue reading

Tiny Bahrain’s Big Oil Discovery Will Boost the Country’s Fortunes – Eventually

Re-Blogged From Stratfor

Highlights

  • Bahrain’s discovery of the Khaleej Al Bahrain oil and gas field has the potential to make a material change in the country’s financial crisis, but there are roadblocks.
  • It will be five to 10 years before production begins in substantial volumes, it will be expensive, and it’s not clear how much of the oil and gas can be recovered.
  • In the meantime, Bahrain will use the long-term potential of increased oil and gas production — and the state revenue that comes with it — to attract new investment.
  • An increase in oil revenue will allow the country to boost some of the social services that it provides to its restive population and reduce the need for painful economic adjustments.

A map shows the location of Bahrain in the Middle East.

(200MM/iStock)

Continue reading

Sacrificing Future Spending

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

Financial sacrifices are so obvious and commonplace they are seldom acknowledged.

Borrowing money on a credit card, mortgage or car loan to purchase something is typical. You have sacrificed future spending for use in the present.

Continue reading

White House Seeks 72 Percent Cut to Clean Energy Research

From the Washington Post

The Trump administration is poised to ask Congress for deep budget cuts to the Energy Department’s renewable energy and energy efficiency programs, slashing them by 72 percent overall in fiscal 2019, according to draft budget documents obtained by The Washington Post.

Many of the sharp cuts would probably be restored by Congress, but President Trump’s budget, due out in February, will mark a starting point for negotiations and offer a statement of intent and policy priorities.

Continue reading

David Stockman: Soaring Federal Deficits

By Rob Williams – Re-Blogged From Newsmax

David Stockman, the former budget director for President Ronald Reagan, said the spending plan now being hammered out in Congress will add trillions of federal debt and smother the U.S. economy.

Congress on Wednesday night released the text of the 652-page budget deal that will raise strict spending caps on domestic and military spending in this fiscal year and the next one by about $300 billion. It includes almost $90 billion in disaster relief in response to last year’s hurricanes and wildfires, and would lift the federal debt limit until March 2019, the New York Times reported.

Continue reading

Will Macro-Economists Ever Learn?

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

As we lurch through successive credit crises, central bankers and economists believe they learn valuable lessons every time, and that the ultimate prize, the suppression of business cycles through monetary policy, will be achieved. Enormous effort is put into computer models to enable economists to predict the future, and no doubt, the modellers are now working with artificial intelligence to improve their accuracy.

We saw, over Brexit, how wrong the Bank of England’s and the UK Treasury’s models were, and these errors were also evident in the OECD’s model. Brexiteers smelled conspiracy, but in the absence of evidence, perhaps we should give them the benefit of the doubt and assume the errors were genuine. If so, all computer economic modelling has been a waste of time.

Continue reading