Tuesday, September 2, 2014

Today's Links

1---Japan's 'Abenomics' feared in trouble as challenges build, Reuters


2---Ukraine, Iraq and a Black Sea Strategy, George Freidman , Stratford


The United States ought to adopt the policy of the Cold War. That consisted of four parts. First, allies were expected to provide the geographical foundation of defense and substantial forces to respond to threats. Second, the United States was to provide military and economic aid as necessary to support this structure. Third, the United States was to pre-position some forces as guarantors of U.S. commitment and as immediate support. And fourth, Washington was to guarantee the total commitment of all U.S. forces to defending allies, although the need to fulfill the last guarantee never arose.


The United States has an uncertain alliance structure in the Greater Black Sea Basin that is neither mutually supportive nor permits the United States a coherent power in the region given the conceptual division of the region into distinct theaters. The United States is providing aid, but again on an inconsistent basis. Some U.S. forces are involved, but their mission is unclear, it is unclear that they are in the right places, and it is unclear what the regional policy is.


Thus, U.S. policy for the moment is incoherent. A Black Sea strategy is merely a name, but sometimes a name is sufficient to focus strategic thinking. So long as the United States thinks in terms of Ukraine and Syria and Iraq as if they were on different planets, the economy of forces that coherent strategy requires will never be achieved. Thinking in terms of the Black Sea as a pivot of a single diverse and diffuse region can anchor U.S. thinking. Merely anchoring strategic concepts does not win wars, nor prevent them. But anything that provides coherence to American strategy has value.


The Greater Black Sea Basin, as broadly defined, is already the object of U.S. military and political involvement. It is just not perceived that way in military, political or even public and media calculations. It should be. For that will bring perception in line with fast-emerging reality.


3---U.S., allies to stage exercises in West Ukraine as battles rage in East , Reuters


As fighting between the army and Russian-backed rebels rages in eastern Ukraine, preparations are under way near its western border for a joint military exercise this month with more than 1,000 troops from the United States and its allies.


4---Somali officials say U.S. struck where al Shabaab were meeting, Reuters


5---​Russia to adjust military doctrine due to NATO expansion, Ukraine crisis, RT


6--This is why it feels like the recession never ended, WA Post


Take a look at this chart. It shows everything you need to know about why Americans are still so down on the economy.
From the start of the recession in 2007 to today, the average price of the things you buy - clothes, food, housing - has risen by 15 percent. This, in itself, isn't a problem at all. The problem is that wages haven't kept pace with that increase. In fact, for all but the top wage earners, real (inflation-adjusted) earnings are actually down over the same period.


Let's put it another way. Say that you're a median wage earner, right in the 50th percentile. And let's say that in 2007 you could buy a week's worth of groceries for $100. Fast forward to today: those exact same groceries cost $115, but you only have $112 dollars in your pocket


7---Frothy again, Economist


8---Factory activity in Europe, Asia cools; demand lull a concern, Reuters


9---Russia’s Gazprom Neft to Sell Oil for Rubles, Yuan, RIA Novotsi


10--U.S. Consumer Spending Flat in August, Gallup
Spending about the same as the $95 average in August 2013




11---QE and the Investor Class---Central Bankers in a Deep Hole, counterpunch


This year’s meeting was particularly important, as the Federal Reserve continues winding down its more than US$4 trillion Quantitative Easing (QE) bond buying program that was launched in 2009, and, even more importantly, as debates intensify within the Fed itself over when and how to raise interest rates after holding them near zero levels after more than five years.


The consequences of the Fed’s US$4 trillion QE program of the past five years are now abundantly clear: QE has done little to stimulate real investment in the USA economy, while contributing increasingly toward creating financial asset bubbles in the US stock, corporate junk bond, leveraged loans, and other global financial securities markets.


QE is always about bailing out bankers and wealthy investors and restoring losses to banks’ and investors’ balance sheets. All the public spin about QE—i.e. that it is about reducing unemployment, creating jobs, stimulating recovery of the housing sector, etc.—is largely ‘ideological cover’ for QE’s real objective: banker-investor balance sheet subsidization and bailout.


The Fed began winding down QE over the past year not because jobs are being created in the USA, but because bankers and investors are now more than fully bailed out and, equally important, because continuing the massive direct liquidity injections into the economy via more QE is now having contradictory, negative effects: it is causing financial asset bubbles to grow worldwide.


Although it won’t be revealed until well into 2015, at Jackson Hole the Fed has decided, this writer believes, that the contradictions  of five years of excessive liquidity injections have reached such a point that it is not sufficient just to phase out QE.  The excess liquidity of five years of QE and near zero rates must somehow also be retracted by the central bank if the financial bubbles are not to explode in yet another financial crash like 2008. And that liquidity retraction will be accomplished by raising interest rates, according to the Fed.




12---Federal reserve’s bad-debt preservation policies weakened the economy, oc housing



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