One hundred years ago European civilization, as it had been known, was ending its life in the Great War, later renamed World War I. Millions of soldiers ordered by mindless generals into the hostile arms of barbed wire and machine gun fire had left the armies stalemated in trenches. A reasonable peace could have been reached, but US President Woodrow Wilson kept the carnage going by sending fresh American soldiers to try to turn the tide against Germany in favor of the English and French.
The fresh Amerian machine gun and barbed wire fodder weakened the German position, and an armistance was agreed. The Germans were promised no territorial losses and no reparations if they laid down their arms, which they did only to be betrayed at Versailles. The injustice and stupidity of the Versailles Treaty produced the German hyperinflation, the collapse of the Weimar Republic, and the rise of Hitler.
Hitler’s demands that Germany be put back together from the pieces handed out to France, Belgium, Denmark, Lithuania, Czechoslovakia, and Poland, comprising 13 percent of Germany’s European territory and one-tenth of her population, and a repeat of French and British stupidity that had sired the Great War finished off the remnants of European civilization in World War II.
The United States benefitted greatly from this death. The economy of the United States was left untouched by both world wars, but economies elsewhere were destroyed. This left Washington and the New York banks the arbiters of the world economy. The US dollar replaced British sterling as the world reserve currency and became the foundation of US domination in the second half of the 20th century, a domination limited in its reach only by the Soviet Union. Continue reading
Japan has a history of revising its economic figures all over the place. The QQE era seems to have made GDP accounting something of an art form rather than the quantitatively determined “science” of how it is presented. For example, last December the Japan Times ran a story on December 2, 2014, under the headline Japan’s Recession May Be Shallower Than First Thought only to run just six days later another purporting Japan’s Recession Deeper Than Initially Thought. The first article was predicated on a “surprise jump in capital spending” that was supposed to trim the contraction for Q3 2014 initially tallied as -1.6% to “just” -0.6%.
The updated estimate for GDP released on December 8, 2014, was instead a “surprising” -1.9%, leading to the contradiction of the second article.
One year later, Japan is still trying to figure out whether it is in recession or near it, or growing robustly as some like the New York Times recently suggested.
Japan’s latest recession turns out not to have been a recession at all.
The government said on Tuesday that the economy grew at a relatively robust pace last quarter, reversing a more pessimistic estimate it published three weeks ago.
That excited acclamation was based on an upward revision in the second GDP estimate for Q3 2015. Just a few weeks later, the New York Times redistributed a Reuters updatefor that “relatively robust”:
While Japan’s core consumer prices rose for the first time in five months in November, household spending tumbled, casting doubt on the central bank’s view that robust consumption will help accelerate inflation to its 2 percent target.
Indeed, the household spending and income estimates for November were atrocious, just as they were in October. Suddenly the wondrous upgrade for Q3’s GDP seems less of a foundation for future recovery (the same recovery promised in April 2013 and is yet to be delivered) and more so just what Japan’s economy has shown through the whole of Abenomics. It cannot be a healthy economy where households, the Japanese people, are essentially and perpetually devastated. There is no other way to classify it.
Submitted by Mark O’Byrne – GoldCore
Happy New Year. Thank you for all your support in 2015 and wishing you and yours a healthy, prosperous and happy 2016.
David Collum has again conducted a comprehensive, insightful and frequently witty review of the year past. Collum is a professor of Chemistry and Chemical Biology at Cornell University.
In addition to his academic interests, he authors an annual review of the financial, economic and geopolitical year. The review is a must read and includes interesting information about the astute academic’s investment strategy and indeed the breakdown of his investment portfolio:
Precious little of my portfolio changes most years. I began 2015 with the distribution shown below. Owing to downward adjustments in energy and metals prices and upward adjustments of putting savings back into those asset classes, my percent allocations remain about the same.
Cash equiv (short term): 60%
Precious metals etc.: 21%
Standard equities: 9%
‘2015 Year In Review – Scenic Vistas from Mount Stupid’ is in two parts and can be accessed here Continue reading