Economic Articles from 2017
Washington Is Behind India’s Brutal Demonetization Project
By Norbert Haering
Posted October 13, 2017
In early November 2016, without warning, the Indian government declared the two largest denomination bills invalid, abolishing over 80 percent of circulating cash by value. Amidst all the commotion and outrage this caused, nobody seems to have taken note of the decisive role that Washington played in this. That is surprising, as Washington’s role has been disguised only very superficially.
he business interests of the US-companies that dominate the gobal IT business and payment systems are an important reason for the zeal of the US-government in its push to reduce cash use worldwide, but it is not the only one and might not be the most important one. Another motive is surveillance power that goes with increased use of digital payment. US-intelligence organizations and IT-companies together can survey all international payments done through banks and can monitor most of the general stream of digital data. Financial data tends to be the most important and valuable. More…
New Economic Study Presents a Disturbing Map of the United States
By Pam Martens and Russ Martens
Posted October 7, 2017
A new study backs up a theory that many Americans have long suspected: the U.S. is no longer the land of opportunity, despite what national statistics would have us believe. Rather, America is now narrowly constrained to zip codes of opportunity.
The new research comes from the Economic Innovation Group (EIG), a bipartisan public policy organization funded by successful tech entrepreneurs. The study provides detailed data on the economically distressed communities that have fundamentally changed the economic landscape of America.
One of the most disturbing findings is that the so-called “economic recovery” has been a cruel illusion to a large swath of the U.S. The authors write: “Most distressed zip codes contain fewer jobs and places of business today than they did in 2000.” More…
Financialization and The Destruction of the Real Economy
by Charles Hugh Smith
Posted October 3, 2017
Strip an economy of capital, productive incentives, talent and yes, ethics, and what are we left with? An economy spiraling toward an inevitable collapse.
The key dynamic is that financialization creates irresistible incentives to ramp up debt and leverage at the expense of the real economy. Those who fail to exploit financialization will underperform the market and be fired.
As Gordon explains, if a CEO refuses to load a company up with debt, a private-equity financier with access to cheap Federal Reserve credit will scoop up the company in a private buyout, fire the management, extract immense profits by loading the company with debt, then take the hollowed-out shell public again, reaping another windfall of financialized gains.
Note that the private-equity financiers have every incentive to lay off employees, especially experienced workers who earn higher salaries, to reduce costs before they take the hollowed-out shell public. More…
The Perfect Robbery, The Cashless Society
By Samantha King
Posted September 30, 2017
What seemed almost like science fiction to our parents is coming scarily close to the realm of feasibility: more and more countries are talking about stopping the production and use of cash in their economies. The message is carried by the most prominent link of the monetary chain: States. But the push is coming from somewhere else. Powerful lobbies are pushing ever stronger, in order to achieve total and absolute control of our economies.
Cash is problematic to banks. It is expensive to manage, hard to take from customers and, worst of all, it is a possible gaping wound, if a bank run occurs. In a world without cash, customers would be forced to remain within the banking system, where all sorts of fees can be discretely and quietly shaven off millions of accounts. But banks and online payment solutions can hardly present those arguments in their race to kill cash. Instead, they invoke online financial performance, digital innovation, fighting tax evasion, fighting crime and corruption and all the other woes attributable to physical currency. More…
Pension Storm Warning
By John Mauldin
Posted September 27, 2017
This time is different are the four most dangerous words any economist or money manager can utter. We learn new things and invent new technologies. Players come and go. But in the big picture, this time is usually not fundamentally different, because fallible humans are still in charge. (Ken Rogoff and Carmen Reinhart wrote an important book called This Time Is Different on the 260-odd times that governments have defaulted on their debts; and on each occasion, up until the moment of collapse, investors kept telling themselves “This time is different.” It never was.)
Nevertheless, I uttered those four words in last week’s letter. I stand by them, too. In the next 20 years, we’re going to see changes that humanity has never seen before, and in some cases never even imagined, and we’re going to have to change. I truly believe this. We have unleashed economic and technological forces we can observe but not entirely control. More…
Which is Fraudulent – Bitcoin or JP Morgan?
by Michael Krieger
Posted September 24, 2017
I’m really grateful JP Morgan CEO Jamie Dimon decided to once again lash out in anger at Bitcoin, as it provides us with ample opportunity to highlight a practice very near and dear to how the bank operates. Fraud.
The way the news cycle works, any topic that isn’t already at the forefront of enough people’s minds will be largely ignored irrespective of its importance. The fact that Jamie Dimon ironically called Bitcoin a fraud, allows us to ask highlight some very important facts about the seemingly systemic fraud inherent in America’s largest bank, JP Morgan.
What he once saw as competition, he now seems increasingly terrified of, which is notable in its own right. Beyond that, the most interesting aspect of his recent comments was the use of the word fraud, which provides us with a textbook case of psychological projection. After all, it’s there’s anything Jamie Dimon seems intimately familiar with, it’s fraud. More…
Equifax is Not Your Friend: Should Everyone Freeze Their Account?
by Mish Shedlock
Posted September 18, 2017
The Equifax security breach scandal keeps growing and growing. Their handling of the data breach that affected as many as 143 million accounts has been horrendous.
Executives dumped their shares before reporting the stolen data. Following the breach, their website did not function properly, people got signed up for programs they did not want or need, and customer service has been dismal all around.
Unless you intend to open up new credit cards, get a car loan, or home equity loan, etc, there is every reason to freeze your account and be done with it. Everyone else should monitor their accounts closely. More…
Trillions into the black hole of war while infrastructure continues to decay
By Michael Payne
Posted September 17, 2017
The U.S. invests only 2.4% of its gross domestic product on infrastructure; in Europe it’s 5% and in China it’s 9/%. Why the great difference? Because these other countries don’t waste theirs on war.
The more taxpayer dollars that are sucked into that black hole of war the more cracks appear in the foundation of America, its national infrastructure, at the center of almost everything that goes on in America; from the transportation of goods to people driving to work and a great deal in between.
This government’s ongoing obsession with war, together with the massive costs of the U.S, military empire are, in effect, contributing to this deterioration which is happening all across America; with the interstates, main highways, local roads, and the rail system. There are areas of substantial decay that we can’t really see, such as bridges, dams, waterways, sewer systems and the electrical grid. More…
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