All of us must participate to make sure the programme we’ve put forward works – so says the president in a call for unity to meet South Africa’s potential.President Jacob Zuma called on all South Africans to participate in taking the country forward.The government was doing its part, now do your part and invest in South Africa, he said, calling on business, labour, civil society and residents to form a partnership with the state.He was speaking at a business breakfast briefing, hosted by Brand South Africa, the SABC and The New Age at Grand West Casino in Cape Town on 10 February 2012. Just a few hours before, he had said goodnight to his guests after delivering his fourth State of the Nation Address (SONA) in Parliament.The mood at Grand West was jovial; everyone was relaxed and satisfied. The president himself was fresh-faced and upbeat.At the breakfast were government ministers, deputy ministers and business people, all armed with their questions. The briefing was broadcast live on SABC, and the general public was able to send in their questions for the president on Twitter and SMS.The openness of the dialogue was precedent-setting for a sitting South African president, and certainly marked a change in the government’s way of doing business.“We want to do things differently. We want to take South Africa forward. We believe we’ve made progress, but we know that there are challenges,” he began. The government was tackling the economy in a way that it had not done in the past. “We can’t only do politics; we must also do the economy.”Zuma said the government’s major programme was infrastructure as it believed that building infrastructure would give opportunities to all.The government was creating an enabling environment and building infrastructure, and business needed to invest in opportunities that would open up. This would bring jobs and so improve the quality of life for all.“We have discussed the difficulties of doing business in South Africa. We are opening this. You must participate in this window period.”Partnership was a big theme for Zuma, who called on business to work with the government to deal with the negative impact of job losses. Training was mentioned as a possibility. “We must create the kind of projects that can create jobs.”Asked what was different for workers in his SONA – we’ve heard this all before, was the criticism – he said: “We’ve created an environment where jobs can be created. We have a massive infrastructure programme; there is money for it. The private sector must see the opportunities for investment, and invest. The logical consequence of that is jobs.“You can’t have jobs without investment and the government is creating an environment for investment.”He had three items on his wish list from the private sector: invest in the country, have confidence in the country, and big business must help small business.A hot potato issue, especially given that the Mining Indaba has just finished in Cape Town, is the nationalisation of mines. The final word on the topic came from the president. Setting many minds at rest, and garnering a round of applause, he said: “Nationalisation is not our policy. It is as clear as that. Our policy is a mixed economy.”Of potential, he said Africa was one of the fastest growing regions in the world, and we should invest in that potential. “South Africa has the potential to grow. Working together, we can take advantage of Africa, the Brics countries and the changing economy. Invest in this country; invest in your future.”Brief questionsAsked what keeps him awake at night, the president answered: the plight of the poor. “I am kept awake thinking of ways to alleviate their plight.”He pointed to South Africa’s strategic global importance in regards to shipping, saying it did nothing in its waters for its economy, despite the shipping lanes that passed the country. There were massive opportunities in this sector.Of toll roads, another hot potato, he said they were necessary for road maintenance. However, the issue was not closed. South Africa was unusual in that the government was open to discussion of ideas and policies it had put forward.In answer to a question from the floor, the president said fronting in business – whereby companies use black people as figureheads to up their black economic empowerment ratings – would be punished. The details of what that punishment would be still had to be worked out, though. The law must come first, he said, and the details would come after.Of small towns, their factories and rural areas, he said the government was talking of reviving the economy and development of those regions as part of its plan.Asked about what was being done to stop farm murders, he pointed out that as crime was falling, so were farm murders. The police were working with farmers to stop this crime.The police were also working hard to address the issue of piracy. Many raids had already been carried out.Regarding service delivery, the government had delivered to some degree, but there were still challenges. There was electricity and water available where there had been none before. “The question of infrastructure remains a challenge.”The Italian ambassador offered his country’s and Europe’s help – we could share experiences, promote investments and help you avoid the mistakes we made in industrial policy and job creation, he said, to which Zuma replied that South Africa was certainly keen to learn what went wrong, and what would happen to alleviate the present economic crisis.Questioned about land reform, Zuma again spoke of the Green Paper on Land Reform he had mentioned in his SONA. “We are looking at those issues,” he said. “The fact is that lots of land was taken away and many people were left landless. We can’t let this continue. We need frank views from South Africans on how to solve land issues.”
By: Bari Sobelson & Hannah HydePixabay[Coins by Olichel, CC0]Change is important to personal finance managers. I’m not just talking about the kind you find at the bottom of your purse or in your pockets; I’m referring to the inevitable kind that we all face as humans on a regular basis. At its root, personal finance work is about helping clients become aware of, understand, and prepare for the inevitable change that will come with life within the context of their financial planning.So why all of this talk about change?We have an opportunity for you that you won’t want to pass up next month! Starting on September 26th, we will be offering a four-day virtual conference that is all about change! Whether you come as a PFM who is interested in assisting your clients with the multitude of changes they may experience, or as a person who is interested in learning about managing change in your own personal life, this conference is for you!This will be unlike any conference you have attended before—there will be keynotes, opportunities for conversation and networking, and a wide variety of topics surrounding change! So, if you want to keep the change, join us for this conference! You won’t regret it! To find out more information on this virtual conference, click here. We hope to see you there as we all LEARN strategies for managing change, GROW our understanding of our capacity for change, and begin to THRIVE as we connect with colleagues facing similar challenges!This blog was written by Social Media Specialists Bari Sobelson of the MFLN Family Development Team and Hannah Hyde of the MFLN Military Caregiving Team. Find out more about the Military Families Learning Network on our website, Facebook, and Twitter.
A 19-year-old Srinagar boy, enabled by social media platforms, is infusing new life into what is considered the soul of Kashmir’s folk music — the rabab, a long-necked lute.Sufyan Malik’s 45-second video, shot on a mobile phone against the backdrop of the heavy snowfall witnessed on November 3, has stormed the internet, with over 4 lakh views and counting. “I came for a short vacation to Kashmir. As my parents left home in the morning, my friend and I decided to shoot the video with snowfall as the backdrop. Initially, I played it for my friends in Pune, to show them snow. To my surprise, the tune of a local song, ‘Janaat-e-Kashmir’, on the rabab, became an instant rage on Internet,” Mr. Malik, a student of engineering at Pune’s MIT College, told The Hindu.Mr. Malik shot the video 18 times because his hands fingers in the cold weather. “There was no electricity to warm my hands. I had to match the speed. It was hard to play three beats down and one beat up. Finally, we did it,” said Mr. Malik, a resident of Srinagar’s Nowshera area. The effort paid off as the video attracted 1.54 lakh views on Twitter in just a couple of days, with more views on Facebook and Instagram in the weeks that followed. From politicians like National Conference’s (NC) Nasir Sogami to activist Shehla Rashid Shora, the young player earned plaudits from across the spectrum in the Valley and outside. “Snow and the rabab probably reflect our identity. People felt an immediate connection. I have pledged to play the rabab all my life. I will do my Masters in composition to enable the survival of the rabab,” said Mr. Malik, the son of a doctor mother and a hotelier, Wahid Malik, who support their son’s efforts.The makers and listeners of the rabab are both fast dwindling in Kashmir. In north Kashmir, only two families continue with the trade of crafting the rabab, from the dozens of just a few decades ago.Seen in many variants across central Asia, the rabab arrived in Kashmir from Afghanistan many centuries ago. “Compared to the seven strings of the Afghan rabab, the Kashmiri version has 22 strings, with two strings crafted out of goat gut through an elaborate process. It’s these two strings that create its mesmerising echo,” Mr. Malik said.Soul-stirringGhulam Muhammad Ganai, 63, from Ganderbal’s Kangan area, is among the few instrumentalists left from the old school. “I play the rabab only in Sufi mehfils (night-long devotional gatherings). The word ‘rabab’ comes from rooh (soul) and bab (expression). It should stir the soul. Only those who are nearer to god value the instrument. Around 15 of us are left now,” said Mr. Ganai.However, young players like Mr. Malik are bringing the instrument back into mainstream culture. “I played the rabab for a musical fusion called ‘Firdous X-He is a pirate’ based on the theme song of [the film] Pirates of Caribbean and the theme music of [TV show] Game of Thrones in 2017. It was an instant hit here,” he said.On June 28 2018, Mr. Malik played the rabab at The Hilton hotel in Los Angeles. “Many Kashmiri-origin people in the audience wanted to have a workshop for their kids after the show. After the hits we produced in 2017, at least 50 students registered to learn to play the rabab at the Delhi Public School (DPS) in Srinagar,” said Mr. Malik.
A spell of heavy and widespread snowfall in the plains and upper reaches of the Kashmir Valley on Friday uplifted the mood here. In contrast to grim, violence-related pictures and posts, hundreds of local netizens, for a change, took to social media to live-stream snowfall or post selfies.The entire Kashmir valley, including capital Srinagar, received snowfall in the afternoon on Friday, as predicted by the Meteorological Department. As more snow fell, locals took to social media platforms to post videos of dancing kids, images of snowmen, and live-streamed driving through snow-clogged roads.Former chief minister and National Conference vice president Omar Abdullah also took to the Twitter to express his happiness. “Fresh snow is always gorgeous. It’s time to go back inside, leaving just footprints in the snow,” wrote Mr. Abdullah, as he uploaded his pictures with snow in the backdrop, and a video.Srinagar received the season’s second snowfall on Friday. Tourist hotspots of Gulmarg and Pahalgam recorded several feet of snowfall. “Weather will remain wet till January 6. Visibility will improve after the wet spell ends. Day temperature will also improve,” said Deputy Director, Met. Dept., Dr. Mukhtar Ahmad. Avalanche warning Snowfall did, however, play spoilsport for travellers as the Srinagar-Jammu and Srinagar-Poonch highways were closed “due to slippery road conditions and fears of landslides.” The Srinagar airport cancelled all flights scheduled in the afternoon,. An avalanche warning has been issued for all vulnerable areas of Anantnag, Kulgam, Budgam, Baramulla, Kupwara, Bandipora, Ganderbal, Kargil and Leh.
Luka Modrić Modric adds to Real Madrid injury worries ahead of PSG return Joe Wright 21:35 2/20/18 FacebookTwitterRedditcopy Comments(0) Getty Images Real Madrid Leganés v Real Madrid PSG v Real Madrid Leganés PSG UEFA Champions League Primera División Zinédine Zidane The Croatian midfielder is the latest player to be a doubt for next month’s trip to the French capital, along with Marcelo and Toni Kroos Real Madrid midfielder Luka Modric could be a doubt for the clash with Paris Saint-Germain on March 6 due to a hamstring injury, Zinedine Zidane has confirmed.The Croatia international missed training on Tuesday and is set to sit out Wednesday’s La Liga meeting with Leganes at Butarque.Head coach Zidane hopes the injury is only minor but is uncertain how long Modric will be out of action. Article continues below Editors’ Picks Lyon treble & England heartbreak: The full story behind Lucy Bronze’s dramatic 2019 Liverpool v Man City is now the league’s biggest rivalry and the bitterness is growing Megan Rapinoe: Born & brilliant in the U.S.A. A Liverpool legend in the making: Behind Virgil van Dijk’s remarkable rise to world’s best player “Modric has a hamstring issue,” he told a news conference. “I always have faith in the staff here, the physios and doctors, so he will be back with us quickly. I don’t think it is serious.”The injury is the latest to hit the Madrid squad since their 3-1 win over PSG in the first leg of the Champions League last 16 last week.Toni Kroos has picked up a knee problem and Marcelo limped out of Sunday’s 5-3 win over Real Betis with another suspected hamstring issue.Zidane remains hopeful, though, that all three could return for the meeting at Parc des Princes.”I am always positive,” he said. “I do not like to see today that we have three or four players out injured. I hope they are not out too long, but we will see. I hope it is short.”It can be that, when there are certain [injury] problems, it’s because of an enormous effort. But, at the same time, in order to cope with matches like the one against PSG, we have to repeat those efforts.”We have to maintain the pressure in every game and to keep doing it for 90 minutes. And doing it every three days is positive.”When you’re winning playing every three days, you’re more optimistic. That’s what we need now.”
PITTSBURGH, PA – MARCH 17: Grayson Allen #3 of the Duke Blue Devils looks on against the Rhode Island Rams during the second half in the second round of the 2018 NCAA Men’s Basketball Tournament at PPG PAINTS Arena on March 17, 2018 in Pittsburgh, Pennsylvania. (Photo by Justin K. Aller/Getty Images)Duke and Louisville are locked into a tight battle at Cameron Indoor Stadium. The Blue Devils led by as many as 14 but now trail late in the contest.During the second half, Duke’s Grayson Allen drove to the basket and was knocked down. While he was on the ground, he appeared to intentionally trip Louisville’s Raymond Spalding, who had corralled the ball and was dribbling up court.yep, that’s a trip by Grayson Allen … https://t.co/hAfZbZaFGb— Ryan Fagan (@ryanfagan) February 9, 2016Definitely looks like he meant to do that.
APTN National NewsOne of the world’s largest oil companies says they are running out of oil.In its annual financial report, energy giant Exxon Mobil says that for every 100 barrels of oil it has in reserves, it can only replace 95.The Alberta government sees that as its ace in the hole.APTN National News reporter Noemi LoPinto has more.
When the Muses Strike: Creative Ideas of Physicists and Writers Routinely Occur During Mind WanderingShelly L. Gable, Elizabeth A. Hopper, and Jonathan W. Schooler Conceptually Rich, Perceptually Sparse: Object Representations in 6-Month-Old Infants’ Working MemoryMelissa M. Kibbe and Alan M. Leslie Read about the latest research published in Psychological Science: A Tight Spot: How Personality Moderates the Impact of Social Norms on Sojourner AdaptationNicolas Geeraert, Ren Li, Colleen Ward, Michele Gelfand, and Kali A. Demes How do contextual factors and personality traits affect how individuals adapt to a new culture when they temporarily move to a different country? To answer this question, Geeraert and colleagues analyzed data from a longitudinal acculturation project that measured young adults’ personality and cultural adaptation during and after a temporary move to a different country. These measures were collected on three occasions: 3 months before departure as well as 2 weeks and 5 months after arrival to the host country. Overall, participants who moved to a tight culture (i.e., one with strong norms and little tolerance for deviance) showed less adaptation than those who moved to a loose culture (i.e., one with less rigid norms), but participants originally from a tight culture showed more adaptation than those from a loose culture. Participants who scored higher on agreeableness and honesty-humility were less likely to feel the negative effects of cultural tightness or to return early to their home country. These results may help ensure a good fit between individuals’ personalities and their destination culture, which will increase the benefits of the rapid increase in international mobility. Do infants remember conceptual information about an object (e.g., the object is a ball) even when they do not remember perceptual information (e.g., the object is round and green)? This study indicates that they do. Six-month-old infants were familiarized with a yellow and red striped ball and a doll’s head with brown skin and eyes. The two objects were then hidden one at a time in separate locations. One of the objects then reappeared at the location where the first object was hidden; critically, this object could be the same one that had been hidden there or the other object. The experimenters measured the time that infants spent looking at this object. Infants looked longer when the object had been swapped, indicating that they remembered the hidden object’s conceptual information. This effect did not occur when the doll’s head was inverted and therefore not processed as a face. It also did not occur when the ball was swapped for a green ball with red polka dots or when the doll’s head was swapped for a doll’s head with pink skin and blue eyes, indicating that infants’ memory for the first object hidden relied on conceptual details (e.g., is the object a ball or a head?) but not on perceptual details (e.g., does the object have brown or blue eyes?). These results suggest that infants may encode the conceptual category of a hidden object, even when perceptual features are lost. Mind wandering, which involves thoughts that are both independent from the task at hand and different from one’s previous thoughts on the matter, can generate creative ideas experienced as “aha” moments, this study suggests. Every day for 1 or 2 weeks, physicists and writers listed their most important creative idea of the day, described what they were thinking and doing when the idea occurred, and rated the importance of the idea and whether it felt like an “aha” moment or not. Participants reported that about 20% of their most important ideas occurred when their minds were wandering, and these ideas were rated as being equally important and creative as the ideas formed while working on task. After 3 or 6 months, they rated all these previous ideas as slightly more creative but less important. Overall, ideas generated during mind wandering were more likely to be rated as “aha” moments, compared with ideas generated while working. Hence, profession-related ideas that occur outside of work when people are not thinking about the topic can be inventive and create sudden insights, showing a positive side of mind wandering.
(Click to enlarge) Renewed Fiscal Crisis by Early September At present, the US Treasury is playing daily accounting games in order keep its borrowings—subject to the debt ceiling—from exceeding the ceiling. The July 3, 2013 Daily Treasury Statement showed those borrowings to be just $25 million shy of the roughly $16,999.421 billion ceiling. The US Treasury estimates that the ability to play games will end, and the debt limit will have to be raised, sometime early in September 2013. The long-postponed and unresolved budget-deficit conflicts within the Congress and with the White House are likely to surface anew at that time. What is being played out here is still part of the fiscal-crisis confrontation of July and August 2011, which almost collapsed the US dollar and brought about a downgrade in the sovereign credit rating of the United States. The issues never were resolved. They were put off until after the 2012 election, and other than for minimal sequestration, they remain in play, going into a post-Labor Day 2013 showdown. The global markets, which broke into brief but extreme turmoil with the unresolved crisis in 2011, await a resolution. The markets have been patient with the US dollar through the ensuing sequestration, and continued postponements of serious negotiations that have accompanied successive displays of the political inability of the US government to address its long-range solvency issues. Further efforts at delay and/or obfuscation not only should invite an intensifying crisis of global confidence in the US dollar, but also will invite a further downgrade to the sovereign credit rating of the United States. The crux of the dollar-debasement and ultimate, severe-inflation/hyperinflation issues indeed is this political inability of the United States to cover its long-range obligations, other than by printing the money it needs. Based on the US Treasury’s financial accounting of the federal government using generally accepted accounting principles (GAAP), the GAAP-based federal budget deficit was $6.6 trillion in fiscal-year 2012 (year ended September 30). Well beyond the simple cash-based deficit of $1.1 trillion in fiscal 2012, the GAAP-based annual deficits have been in the range of $4 to $5 trillion for the six years leading up to 2012. The largest difference here is that the GAAP numbers include annual deterioration in the net present value of unfunded liabilities for programs such as Social Security and Medicare. Those GAAP levels are not sustainable or containable. Beyond the likelihood that the economy is at the tipping point on taxes, where higher taxes actually would increase the deficit due to resulting slower economic growth, the government cannot raise taxes enough to cover the actual deficit in any given year. The annual shortfalls also are so large that every penny of government spending (including defense) could be cut to zero except for the social programs, and the fiscal circumstance still would be in deficit. The options open to those running the government are limited in terms of new taxes and have to include significant spending cuts and restructurings of Social Security, Medicare, etc., so that those programs are solvent over the long haul. Such actions are a political impossibility at the moment. Given continued political contentiousness and the use of overly optimistic economic assumptions to help ten-year budget projections along, little but gimmicked numbers and further smoke and mirrors are likely to come out of pending negotiations or confrontations. Economic Plunge and Recovery versus Plunge and Stagnation The official version of recent economy activity is that a deep recession began in December 2007, hit bottom in June 2009, and that business activity has been in recovery since. That pattern is reflected in the accompany graph of headline, real (inflation-adjusted) gross domestic product (GDP). The economy regained its pre-recession high in fourth-quarter 2011 and has been expanding ever since. Unfortunately, no other major economic series has shown the full and expanded recovery suggested by GDP reporting. Those “errant” series include payroll employment, industrial production, consumer confidence, and housing starts, among others. (Click to enlarge) Other Factors Impacting the US Dollar, Inflation, and Precious Metals Highlighted here have been several issues where recent shifts in market sentiment have neutralized or reversed the impact or otherwise had been significant, negative elements for the outlook of the US dollar, and supportive elements of the outlook for domestic inflation and the prices of gold and silver. Market sentiments should shift again, both as the economy shows an intensifying downturn and as the clock runs out on fiscal-crisis delaying tactics. A new factor—not yet widely anticipated in the markets—is that still-developing political scandals tied to the Obama administration could threaten global perceptions of political stability in the United States, placing significant downside pressure on the value of the US currency. The popular press generally has been highly sympathetic to the political needs of the administration, so increasingly negative press in these areas suggests that recognition of the “scandals” has gained some momentum. In the event that a Watergate-type circumstance evolves from the current hubbub of touted misdeeds, it could become a seriously negative factor for the US dollar. After Nixon floated the US dollar in March 1973, the Watergate scandal began to break open with Congressional hearings. Despite other turmoil of the time, including an Arab-Israeli war and an Arab oil embargo, the day-to-day developments in the Watergate scandal dominated day-to-day trading in the US currency. When the US dollar again comes under heavy selling pressure, oil prices will spike anew, separate from the effects of political crises in the Middle East. The inflation, so driven, should reflect dollar weakness from Federal Reserve policies that Mr. Bernanke will find he cannot escape, and from dollar weakness reflecting the inability of the US government to address its long-term sovereign-solvency issues. Ongoing economic weakness will exacerbate the dollar-negative circumstances, intensifying the problems with Fed easing and US fiscal deterioration. The inflation will be driven by US dollar weakness, not by strong domestic demand for goods and services. As fundamental dollar selling kicks in, full-fledged dollar dumping along with heavy sales of dollar-denominated paper assets are likely to unfold. Preceding, or coincident with that, the global reserve status of the US dollar should be challenged. As the rest of the world moves out of the dollar, domestic confidence in the US currency will falter as well, eventually fueling severe domestic inflation, and setting the early base of a likely hyperinflation. Such an environment is one for which physical gold and silver would serve as primary hedges against the ultimate debasement of, and loss of purchasing power in the US dollar. Economist Walter J. “John” Williams publishes www.shadowstats.com. ShadowStats specializes in assessing the reliability of government economic data and in looking at alternative economic measures from the standpoint of common experience, net of heavily politicized methodological changes of recent decades (inflation, unemployment and GDP). Other analyses include estimates of ongoing money supply M3, which the Fed ceased publication in 2006, or less-commonly followed series such as the federal government’s GAAP-based financial statements. Articles related to the accompanying comments on the understatement of official inflation and federal-deficit reality, and an article outlining risks of a US hyperinflation, are available to the public in the upper right-hand column of the ShadowStats home page. (Click to enlarge) Closer to common experience, there never was a recovery following the economic downturn that began in 2006 and collapsed into 2008 and 2009. What followed was a protracted period of business stagnation that began to turn down anew in second- and third-quarter 2012. The “recovery” seen in headline GDP reporting was a statistical illusion generated by the use of understated inflation in calculating the inflation-adjusted series. During the last three decades, a number of methodological changes were made to inflation-estimation techniques that have had the effect of artificially reducing annual inflation rates. Of particular relevance to GDP estimation has been the introduction of hedonic quality adjustments, which adjust inflation rates for the effects of nebulous quality changes. These changes—ranging from new features with computers and washing machines to the use of colored pictures in college textbooks—cannot be measured directly, only estimated by econometric models, with the usual effect of reducing related inflation. The lower the inflation rate that is used in adjusting a series, such as GDP, for inflation impact, the stronger will be the resulting inflation-adjusted growth. When the US first used this process in its GDP reporting, countries such as Japan and Germany did not follow. Hence, stronger relative US versus Japanese GDP growth at the time reflected the difference of use in inflation gimmicks, more so than actual differences in economic activity. The hedonic changes used in US GDP estimates never have been applied consistently and do not reflect common experience. The following graph of corrected real GDP is adjusted for the removal of roughly two percentage points of aggregate, hedonically understated annual inflation. It shows a pattern of economic plunge and stagnation, as opposed to the official pattern of plunge and recovery. Our guest contributor today needs no introduction, but I’ll give him one anyway. John Williams, founder of Shadow Government Statistics (often referred to as “ShadowStats”), has been debunking federal government statistics for years. John adjusts government economic data to be more honest and realistic, and publishes the results on his website. Among other statistics, John has developed his own inflation, unemployment, and GDP measurements that aim to more accurately describe reality than the government’s own numbers. In some cases, the government has made his job easy—John simply uses the government’s own calculations from many years ago, before they were massaged, revised, and “improved” to the point that they’re hardly recognizable. For others, he strips out distortions and adjusts the statistics to more truthfully describe the real world. For instance, I’d bet that your grocery bill would agree that ShadowStats’ inflation rate of 9% is much closer to reality than the government’s own calculation of 1.4%. To whet your appetite, I grabbed two more of the more stunning stats from John’s piece below: The government reports its 2012 deficit as $1.1 trillion. If you calculate the deficit using generally accepted accounting principles, as publicly traded companies in the US are required to, the deficit would be $6.6 trillion. So far in 2013, the Federal Reserve purchased 90.5% of the US government’s net issuance of debt. The article is equal parts eye opening and sobering. Before moving on to the article, however, a brief announcement. A Casey phyle is starting up in Charlotte, NC. If anyone reading is interested in joining it, please drop an email to firstname.lastname@example.org to learn more. I’ll keep it short today by signing off here, as I’m still putting the final touches on this month’s The Casey Report, due out on Thursday. It’s going to be a good one, as we’re analyzing when nasty inflation might return to the US. If you’re not a subscriber already, check it out—it’s absolutely risk-free. See you next week. Dan Steinhart, Managing Editor of The Casey Report Market Shocks Ahead Should be Positive for Gold, Negative for the US Dollar By John Williams, Founder, ShadowStats.com Nothing is normal: not the economy, not the financial system, not the financial markets and not the political system. The financial system still remains in the throes and aftershocks of the 2008 panic. A number of underlying problems of that time, tied to the risks of a near-systemic collapse and the related, extreme economic downturn, were pushed into the future—not resolved—by the extraordinary liquidity and systemic-intervention actions taken by the Federal Reserve and federal government. Further panic is possible, and severe US dollar debasement and inflation remain inevitable. Nonetheless, several major misperceptions appear to have developed in the last month or two concerning an end to the Federal Reserve’s quantitative easing, the level of crisis posed by US fiscal imbalances, and an unfolding recovery in the US economy. Contrary to currently hyped expectations in the popular financial media, chances are negligible for any serious, near-term reduction in the Federal Reserve’s purchases of US Treasury securities. The Fed has locked itself into ongoing quantitative easing, with fair prospects of expanded, not reduced accommodation in the year ahead. Separately, the long-term solvency issues of the United States should return to the center of attention for the global financial markets by early September 2013. At present, prospects of the US government meaningfully addressing its extreme fiscal imbalances are nonexistent. Exacerbating financial-system solvency concerns for the Fed and intensifying US fiscal instabilities, the US economy never recovered from its 2008 plunge, and now it is slowing anew. Increasing recognition of these factors, complicated by the potential of a domestic political scandal taking on Watergate-style status, promise difficult times ahead for the US dollar, with resulting domestic inflation problems and significant upside pressure on the prices of gold and silver. Federal Reserve’s Primary Function Is to Preserve Banking-System Solvency Despite a Congressional mandate that the Federal Reserve pursue policies to foster sustainable US economic growth in an environment of contained inflation, those issues are secondary to the Federal Reserve’s primary mission, which is to preserve the stability of the banking system. While Fed Chairman Ben Bernanke has acknowledged that there is little the Fed can do at present to boost economic activity, the weak economy remains the foil for banking-system difficulties, serving as justification for more easing by the Fed. Accordingly, since the breaking of 2008 crisis, the Fed’s accommodation, liquidity actions, and direct systemic interventions have been aimed at maintaining the stability and liquidity of the banking and financial-market systems. As bank bailouts became politically unpopular, the Fed increasingly used the weakness in the economy as political cover for its systemic-liquidity actions. In response to critics of excessive accommodation, the US central bank recently put forth several rounds of jawboning on exiting quantitative easing, in an effort to quell inflation fears. Those efforts have been a factor in recent gold selling. Comments from the June 19 Federal Open Market Committee meeting and Mr. Bernanke’s subsequent press conference were clear but largely ignored by the markets. The shutdown of quantitative easing—specifically the bond buying of QE3—would not happen until such time as the economy had recovered in line with the relatively rosy economic projections of the Fed. As the stock market began to sell off in response to the Fed chairman’s initial press-conference comments, he sputtered something along the lines of, “No, you don’t understand me. If the economy is weaker, we’ll have to increase the easing.” The economy is going to be weaker; banking problems will persist, and the Fed will continue to ease. Nonetheless, the consensus perception appears to be that QE3 will be gone by the middle of 2014, despite the stated economic preconditions. As will be discussed, though, intensifying economic deterioration should become obvious to the markets in the next several months, and that should help to shift perceptions. The harsh reality remains that the Fed is locked into its extraordinary easing by ongoing solvency issues in the banking system (only hinted at in Bernanke’s post-FOMC press conference), and by the political cover provided by a weakening economy. In the latest version of quantitative easing (QE3), the Fed has been buying US Treasury securities at a pace that is suggestive of fears that the US government otherwise might have some trouble in selling its debt. Through July 3, 2013 and since the expansion of QE3 at the beginning of 2013, the Fed’s net purchases of Treasury securities has absorbed 90.5% of the coincident net issuance of gross federal debt. That circumstance is exacerbated somewhat by gross federal debt currently being contained at its official debt ceiling. Still, in the pre-crisis environment of 2008, the St. Louis Fed’s measure of the monetary base (bank reserves plus cash in circulation) was holding around $850 billion, with roughly $40 billion in bank reserves. As a result of intervening Fed actions, today’s monetary base is around $3.2 trillion, with more than $2.0 trillion in bank reserves (primarily excess reserves). Under normal conditions, the money supply would expand based on the increase in bank reserves, but banks have not been lending normally into the regular flow of commerce, due largely to their impaired balance sheets. While there has been no significant flow-through to the broad money supply from the expanded monetary base, there still appears to have been impact. As shown in the accompanying graph, there is some correlation between annual growth in the St. Louis Fed’s monetary base estimate and annual growth in M3, as measured by the ShadowStats-Ongoing M3 Estimate. The correlations between the growth rates are 58.1% for M3, 39.9% for M2, and 36.7% for M1, all on a coincident basis versus growth in the monetary base. The June 2013 annual growth estimates are based on four weeks of data. The ShadowStats contention, again, remains that the Fed’s easing activity has been aimed primarily at supporting banking-system solvency and liquidity, not at propping the economy. When the Fed boosts its easing but money growth slows, as seen at present, there is a suggestion of mounting financial stress within the banking system. Further, underlying US economic reality is weak enough to challenge domestic banking stress tests. In this environment, the Fed most likely will have to continue to provide banking-system liquidity, while again, still taking political cover for its accommodation activity from the weakening economy. (Click to enlarge) Not only do a number of large, consumer-oriented companies find that the “corrected” pattern of activity more closely resembles their business activity, but this same pattern also is reflected in underlying fundamentals that drive broad activity, such as household income. The primary issues facing the economy are structural liquidity problems for the consumer, who generates more than 70% of GDP activity. Without real income growth, the consumer cannot sustain growth in real consumption, except for the possible use of short-lived credit expansion. Yet, credit availability has been limited. Without credit expansion (all growth in post-debt-crisis consumer credit outstanding remains in federally owned student loans), the consumer is unable to borrow in order to cover the shortfall in living standards. The next graph shows median household income through May 2013, deflated by the CPI-U (data courtesy of Sentier Research). Monthly median household income plunged as the economy purportedly began its strong recovery in June 2009. Further, in the last two years, income has been bottom-bouncing near its cycle low, consistent with the “corrected” GDP series. The numbers here are based on monthly surveying by the US Census Bureau. So long as consumer liquidity remains constrained, the economy has not and cannot recover. Accordingly, any near-term hype from an occasional “good” economic statistic most likely is no more than hype. Economic reality will continue to surprise on the downside, and that is a negative for the US dollar, as well as for budget-deficit and Treasury-funding projections. The US economic weakness is long-term and structural, and increasing global recognition of that in the months ahead will contribute to eventual pummeling of the US dollar in the global markets.
As stories circulated of Iraqi cities falling to Sunni militia groups, I was struck by the words of Former Marine Staff Sgt. Keith Widaman, who spent a tour in Iraq: “When I left in April 2009, I said, ‘In five years there’ll be a civil war.’” Mr. Widaman was right, as we’ve all seen over the past few days, and the “high officials” were wrong. The result – and I say this with sympathy for the dead, injured, and traumatized – is that the fighting, “nation building,” and trauma were all for nothing. When it comes to war, always believe the men and women who spent time on the streets, not the politicians and generals. Iraq is not going to become a Western country. Afghanistan is not going to become a Western country. There is no foundation for Western life there, and as soon as overwhelming force pulls back, life there will return, more or less, to its usual ways. If you want to change a way of life, you have to change the deep cultural assumptions that give it its shape. Armies and corrupt sycophants won’t cut it. Saddam Was Necessary Please understand that I think Saddam Hussein was a monster, and that I’m pleased he’s no longer running around on this globe killing people. But that said, if you want a country like Iraq to hold together, you need more than the usual level of coercion; you require a tyrant. The borders of Iraq were drawn by the Brits in about 1920. In other words, a conquering power (the Brits ‘won’ World War I) drew lines on the map as it suited them. But when they did, they ignored the fact that they were forcibly grouping Sunnis and Shiites together, and that they hadn’t learned how to mix. Forced grouping is a very important subject, and one that is almost totally ignored by rulers. They control the borders and they expect everyone to get along. They have scribbles on papers called laws, after all! But when you force humans together against their will, all sorts of frictions, insults, and misunderstandings arise… and there is no way to escape them, because the grouping is enforced. If you leave people alone, they generally learn to co-exist. For example, there is a street in my old neighborhood lined with stores owned and run by both Indians and Pakistanis. These people – bloody enemies in their old countries – have learned to get along for one reason: No one forces them to live or work on that street. If they want to open a store or rent an apartment there, they can. If they don’t want to, they don’t have to. The result of freewill grouping is that people eventually learn to get along. The result of forced grouping is resentment, sectarianism, and all too often, blood. If you want a nation of Shias and Sunnis and Kurds to function as a single unit, overwhelming force – permanent overwhelming force – is required. Without it, things fall apart, and civil war is the typical result. So, if the Foggy Bottom Gang (that’s the State Department) is religiously committed to sacred, unchangeable borders, the US must become a colonial dominator. That means a permanent military occupation and our sons and daughters spending years, openly and knowingly oppressing people, “for their own good.” Afghanistan Afghanistan is a more homogenous country than Iraq, but it’s not going to become a Western nation either. I spent time in Afghanistan in 2007, outside of the safe bases where politicians and media show up, take a few photos, and leave. I dealt with real Afghans, from the lowly to high military. I saw a tremendous amount during my short stay, including the worst corruption I’ve ever seen, anywhere. Everything was corrupt, from the lowest levels of bureaucracy and police power to the Western aid agencies. It was a riot of domination, bribery, poverty, skimming, and dirty deals. That place is not going to become normal in any way that we understand. Not for a long time. A Few Have Done Well Seeing that the US government has spent about $2 trillion on these escapades (it was officially $1.283 trillion in 2011), someone had to make money on them. Those people were Dwight Eisenhower’s military-industrial complex (MIC), with the new mega-intelligence complex tacked on for good measure. The people who make killing machines have done very, very well. As have the people who build spying machines. Certain engineering and private military contractors have done very well too, but only those who had contacts inside the MIC. Independents got nothing. The people who were in positions to hand out contracts made a lot of money. Perhaps the oil companies and Middle Eastern royalty did well on it too, but that’s beyond my direct knowledge. Who Lost Badly The worst losers, of course, were the dead. I’m not sure how many Iraqis died; estimates range from 100,000 to over a million. That’s a lot of dead people – all of them sons, daughters, fathers, mothers, brothers, sisters, and friends. The fact that these deaths were far away doesn’t make them any less tragic. The number of injured must be much higher, of course. On the Westerner side, only a number of thousand died, but that’s not trivial either, nor are the many more thousands of injured. And not only that, but returning soldiers are committing suicide in surprising numbers. Aside from the military-industrial-intelligence complex, everyone has lost, and the situations in both Iraq and Afghanistan are “reverting to the mean.” And there they will stay, unless Americans commit their children to serve as international oppressors. It really was all for nothing. Paul Rosenberg FreemansPerspective.com