Washington Has Resurrected The Threat Of Nuclear War

Submitted by Dr. Paul Craig Roberts – Institute for Public Economy

Foreign Affairs is the publication of the elitist Council on Foreign Relations, a collection of former and current government officials, academics, and corporate and financial executives who regard themselves as the custodian and formulator of US foreign policy. The publication of the council carries the heavy weight of authority. One doesn’t expect to find humor in it, but I found myself roaring with laughter while reading an article in the February 5 online issue by Alexander J. Motyl, “Goodbye, Putin: Why the President’s Days Are Numbered.”

I assumed I was reading a clever parody of Washington’s anti-Putin propaganda. Absurd statement followed absurd statement. It was better than Colbert. I couldn’t stop laughing.

To my dismay I discovered that the absolute gibberish wasn’t a parody of Washington’s propaganda. Motyl, an ardent Ukrainian nationalist, is a professor at Rugers University and was not joking when he wrote that Putin had stolen $45 billion, that Putin was resurrecting the Soviet Empire, that Putin had troops and tanks in Ukraine and had started the war in Ukraine, that Putin is an authoritarian whose regime is “exceedingly brittle” and subject to being overthrown at any time by the people Putin has bought off with revenues from the former high oil price, or by “an Orange Revolution in Moscow” in which Putin is overthrown by Washington orchestrated demonstrations by US financed NGOs as in Ukraine, or by a coup d’etat by Putin’s Praetorial guards. And if none of this sends Putin goodbye, the North Caucasus, Chechnya, Ingushetia, Dagestan, and the Crimean Tarters are spinning out of control and will do Washington’s will by unseating Putin. Only the West’s friendly relationship with Ukraine, Belarus and Kazakstan can shield “the rest of the world from Putin’s disastrous legacy of ruin.”

When confronted with this level of ignorant nonsense in what is alleged to be a respectable publication, we experience the degradation of the Western political and media elite. To argue with nonsense is pointless.

What we see here with Motyl is the purest expression of the blatant propagandistic lies that flow continually from the likes of Fox “News,” Sean Hannity, the neocon warmongers, the White House, and executive branch and congressional personnel beholden to the military/security complex. Continue reading

The Greek Betrayal and Pan-European Solidarity

Submitted by JC Collins  –  philosophyofmetrics

It has Greecenow become common knowledge that the promises made by the new Greek Syriza government have been broken. The voting population of Greece were fed a steady stream of propaganda on how Syriza was going to stand up to the Troika, or trifecta of the European Commission, European Central Bank, and the International Monetary Fund.

Before the election I had been provided a copy of the Syriza Policy Paper which detailed their proposed negotiating position with the Troika.  The paper was segmented into 3 sections:

  1. Negotiating Stance with the Troika: Reconstruction of the Banking Sector and Debt Relief
  2. A Domestic Action Program
  3. The Modest Proposal, with a Pan European Solidarity Program, to be discussed at the first European Summit under the new government

It was very clear in the policy paper that Syriza had no intention of keeping the promises which their political platform had been built around.  In fact, the Syriza party was the economic Trojan Horse which was used by the Troika to implement the broader multilateral reforms and restructuring of the Greek banking system.

One of the main components of this restructuring is the “offer” to pass direct managerial control of Greek banks to the ESM, or European Stability Mechanism. This transitioned will include bank mergers and is to be implemented under the supervision of the ECB.

But it doesn’t stop there.

The proposed policy defines three categories:

  1. Debt Mutualization
  2. Common Bank Supervision
  3. Pan-European Investment Program
  4. Pan-European Solidarity Program, which is segmented into the following:
  • Common Unemployment Insurance
  • A Basic Food and Electricity Security Program
  • A European Pension Union
  • A Topping-Up Program for Low Earners
  • A Common Minimum Wage

Greek Prime Minister Alexis Tspiras and Finance Minister Yanis Varoufakis have clearly been positioned to sell further consolidation of the European economic zone to the Greek population.  I had asked Mr. Varoufakis how Greece intended on keeping the promises of exiting the European Union and implementing economic policies which are independent of the larger macro multilateral changes which are taking place, not just in Europe, but internationally as well.

No answer was forthcoming. Continue reading

Yellen Can’t Get Cooperation

Submitted by Jeffrey Snider  –  Alhambra Investment Partners

Janet Yellen’s testimony concluded, no one gets any more clarity about what the FOMC actually thinks. However, that itself is in one sense an indication as she vacillated a little too much about making a firm commitment to either the recovery or “transitory” oil prices. QE3 ended months ago and we are seven years into this thing already, but there is still debate about whether or not the economy has taken full form despite the presence of four QE’s and annual assurances they have worked.

What that may amount to is there are far more concerns than there are “supposed” to be at this point.

Analysts said the testimony did little to nail down the likely date of a rate hike, with her testimony and answers to questions veering between confidence in a “solid” recovery and continuing concerns about weak wages and other signs the labor market is not fully healthy.

Fed Chairs are known for the ability to say nothing while saying a lot, obfuscation being the primary job qualification, but we are not talking about a minor adjustment in the fed funds target from 4% to 4.25% during an otherwise solid growth state. Those downside concerns are not what was supposed to accompany the dramatic decline in the unemployment rate. Orthodox economics posits a robust and direct relationship between the unemployment rate and levels of spending and economy, but the lack of wage growth has clearly prevented any proportionality, thwarting Yellen’s best confidence.

Worse, however, is that such a pitiful condition is emblematic of other economies (as if they were separated meaningfully at the margins, including global finance) treading similar rough spells.

But the lack of inflation has made some Fed policymakers hesitant to commit to raising rates until they are more certain the United States is not headed down the same path as Europe or Japan, mature industrial economies that are struggling to maintain growth.

TV economists are apparently struggling with Yellen’s struggles, somehow justifying that the economy in her mind is somehow the economy in fact where no amount of contradictory assessments can have any improvement upon the interpretation of the unemployment rate alone.

The Pundits (Liesman) are suggesting Janet feels the economy is strong but that the “data just isn’t cooperating”. What does that even mean??

That might be the perfect encapsulation of 2015, as so far the data has been even more atrocious than the Polar Vortex vexation of winter 2014. Despite the huge run in the Establishment Survey job count, revised significantly upward of course, spending remains mired at recessionary levels. The Thomson Reuters index of same store sales (SSSI) grew at 2% (estimated) in Q4, which was an improvement upon immediately prior quarters, but still does not represent a meaningful abandonment of the current rut – one that increasingly is worn down by continued household attrition.

ABOOK Feb 2015 Yellen SSSI

Continue reading

The Pathetic ‘Talk Therapy’ Of Janet Yellen

What in god’s name does Janet Yellen think she is doing? Just a few weeks ago she established the ridiculous Fedspeak convention that “patient”  means money market rates will not rise from the zero bound for at least two meetings. Now she has modified that message into “not exactly”.

As her Wall Street Journal megaphone, Jon Hilsenrath, was quick to amplify:

Ms.. Yellen signaled the Fed is moving toward dropping the reference to being patient from its statement, but sought to dispel the notion it would mean rate increases were certain or imminent.

“It is important to emphasize that a modification of the [interest-rate] guidance should not be read as indicating that the [Fed] will necessarily increase the target rate in a couple of meetings,” Ms.. Yellen told the Senate panel.

So two meetings is no longer two meetings. That’s worse than Greenspan’s double talk at his worst, and here’s why. It’s all make believe!

After 74 months of ZIRP, a hairline increase in the money market rate to 25 bps or even 100 bps will have absolutely no impact on the main street economy—–nor on whether the “in-coming” data deviates up or down by a few decimal points from 5.7% on the U-3 unemployment rate or 1.7% on the CPI.

The Fed is absolutely incapable of impacting the short-run ticks on its so-called inflation and unemployment “mandates” because its “credit channel” of monetary transmission is broken and done. The household sector is still saturated by peak debt and the ZIRP fueled runaway stock market rewards corporate executives for share buybacks and M&A deals, not investment in productive assets—even with borrowed money.

So there is absolutely no reason to peg interest rates at freakishly low levels. It has manifestly not enabled household to supplement spending from their tepidly growing incomes by means of ratcheting up their leverage ratios. That Fed trick worked for about 45 years until households used up their balance sheet runway in 2007 and thereupon smacked straight into “peak debt”.

The graph below shows household debt relative to wage and salary incomes, and the latter is the true denominator for computing leverage ratios. The Wall Street stock peddlers—who are pleased to call themselves economists—-always use personal income as the denominator, but that’s completely misleading. Upwards of 25% of personal income represents transfer payments including more than $1 trillion of Medicare, Medicaid and housing vouchers. Try paying sending you credit card bill to your Medicare carrier for reimbursement!

More importantly, transfer payments represent merely the shuffling of already produced income from taxpayers to entitlement recipients. The latter overwhelmingly do not borrow via credit cards, car loans and mortgages because they are not creditworthy, even by today’s lenient standards. So its middle class households which borrow money and which generate wage and salary income; and its the ratio of these two variables which measure the true condition of leverage. Continue reading

“Emperor Has No Clothes” – EU Warns of Debt Dangers Facing Ireland and EU

Submitted by Mark O’Byrne  –  GoldCore

– High “structural” unemployment, high levels of public and private debt and a still vulnerable banking sector are weighing on the Irish economy

 – Report further casts doubt on the “recovery” narrative being touted by governments, banks and vested interests across the world

 – Levels of spin and denial not seen since before the crash of 2008

A report by the EU to be published today reviewing the economies of European countries has identified various problems in the most European economies – including Ireland.

In-depth reviews initiated by the European Commission (EC) found no “excessive macroeconomic imbalances” continue in 16 countries, identified in November as experiencing “macroeconomic imbalances”.


The EC on Wednesday sent a strong signal to Member States to carry out structural reforms and to continue consolidating their public finances.

High unemployment, high debt levels and “residual concerns” in the banking sector pose the greatest risk to Ireland’s economy. The significant dependence of SMEs on bank finance and still very high debt levels were also cited as concerns.

In December, Moody’s warned that Irish and European banks are vulnerable in 2015 due to weak macroeconomic conditions, unfinished regulatory hurdles and the risk of bail-ins according to credit rating agencies.

The report conflicts with the narrative put forth by the government and by economists working in the banking and finance sector and by other vested interests that the worst is over and Ireland is “in recovery.”

Ireland has been “in recovery” despite no notable decline in debt levels, no notable decrease in full time unemployment, an acceleration in home foreclosures, and public services like healthcare deteriorating in an unprecedented crisis.

The same narrative is being spun across Europe where the public is told that the “green shoots” of spring are here. Meanwhile state assets are flogged to favored corporations and the public are forced to pay stealth taxes and forced to pay again for utilities already provided for through taxes.

The ECB is about to begin an enormous money-printing scheme to kickstart the economy despite the fact that the same strategy failed in Japan and has yet to bear fruit in the U.S. Except in that it bolstered the stock markets which was of little consequence to much of the wider public but, oddly, happened to benefit the financial and banking sector enormously, once again.

Money printing is not the practice of a healthy economy. Money printing is an act of total desperation. Neither Ireland, nor anywhere else in the over-indebted Western world is “in recovery”. But it looks like wealth will continue to be extracted from the public on the pretext of recovery for as long as the charade can continue. Continue reading

The Daily Debt Rattle

Submitted by Raúl Ilargi Meijer  –  The Automatic Earth

Edward Meyer School victory garden on First Avenue New York 1944

• Oil Headed For $20-$30 As US Runs Out Of Storage Capacity (CNBC) 
• Yellen Fights Back as Lawmakers Intensify Push to Rein in Fed (Bloomberg) 
• Greece vs. Europe: Who Won? (Bloomberg) 
• Varoufakis Says Funding Problem Lies Ahead (Kathimerini) 
• Varoufakis Counts On ECB to Avoid Greek Default in March (Bloomberg) 
• European Banks vs. Greek Labour: Michael Hudson (TRNN) 
• Former Greek Finance Minister In Court For Tampering With Lagarde List (Guardian) 
• Greek Revenue Shortfall Came To €1 Billion In January (Kathimerini) 
• Noonan Says Greece Should Seek Irish-Style Solution to Debt Woe (Bloomberg) 
• Greek Energy Minister Opposes Privatization (NY Times) 
• Tsipras In Marathon Talks With SYRIZA MPs (Kathimerini) 
• Kiev Decision to Cut Gas to Donetsk ‘Bears Hallmarks of Genocide’ (Sputnik) 
• Ukraine Risks Losing IMF Support for Aid If War Escalates (Bloomberg) 
• China Drops Cisco, Apple And Others For State Purchases (Reuters) 
• China Central Bank Newspaper Warns Of Rising Deflation Risk (Reuters) 
• Naomi Klein: ‘The Economic System We Have Created Global Warming’ (Spiegel) 
• Is Capitalism Destroying Our Planet? (Spiegel) 
• Nestle Pays $2.25 to Bottle and Sell a Million Litres of BC Water (Tyee) 
• Stock-Market Crash Of 2016: The Countdown Begins (Paul B. Farrell) 
• Together We Can Stop The Big Tax Evaders (Hervé Falciani via Beppe Grillo.it) 
• Keynes And The Puzzle Of Falling Prices (Skidelsky) 
• We’re Living Longer, Yes, But Why Not Healthier? (MarketWatch)
• New Theory Could Prove How Life Began – And Has God ‘On The Ropes’ (Ind.)