Sunday, February 1, 2015

Today's Links

1--Canada is about to blow, Wolf Street


2--Europe's creditors play with 'political fire' in pushing Greece to the brink, Telegraph


"The creation of the euro was a terrible mistake but breaking it up would be an even bigger mistake. Anything could happen," warns former IMF bail-out chief...


 “We will not accept the self-reinforcing crisis of deflation and debt,” said the new finance minister, Yanis Varoufakis...... Spain’s Podemos party – much in evidence at Syriza’s victory party in Athens, and even more mutinously radical – is leading national polls at 27pc. Marine Le Pen’s Front National won the EU elections in France with calls for a return to the franc and a return to sovereign borders. The three biggest opposition parties in Italy are now hostile to the euro. This is not contagion from Greece. It is running in parallel. Yet how it is handled will spill over with emotional force into the internal debates everywhere in Europe...


There has been no fundamental move to fiscal union. This month's compromise deal on QE means each national central bank will be responsible for 80pc of its own debt purchases, entrenching EMU fragmentation. The EU banking union belies its name. It is in fact a supervisory union. Leaders never delivered on their pledge to end the “vicious circle” in which bank crises and sovereign debt crises feed on each other


3--March to Folly in Ukraine, Margolis


4--Eurozone QE Re-Ignites Global Currency Wars, CP Jack Rasmus


5--U.S. Spy Agencies Used 1,000 Nazis, NYT


6--Turning Japanese , Frances Coppola


Ignoring these facts is leading America to turn Japanese. The same chart for Japan from 1980 (ten years before its “Bubble Economy” collapsed) until today shows a remarkable similarity. 
Since 1990, each tentative revival in Japan has become another collapse back into recession. This is because the Japanese government uses QE to stimulate the economy, then, just as the economy shows shoots of recovery, the government tries to reduce its own haemorrhaging debt. That starts a return to private sector deleveraging – where the rate of change of private debt is actually negative. This takes money out of the economy, and causes another recession. To offset this the government invests a fortune to provide stimulus and so it continues. The lost decade has become the lost quarter-century.
Main article image
The US’s peak level of private debt wasn’t as extreme as Japan’s, but just as Japan attempted to revive its economy without reducing private debt significantly, so now America is doing the same. 
A sustained recovery could start today if private debt levels were drastically reduced. But without such a reduction, the US economy will fail to achieve sustained growth.
...
The only way that austerity can work is with increasing revenue from the external sector (export of goods and service industries). But the Euro means that Spain and Greece cannot devalue currency to make their external sector more competitive. That leaves deflation as the single option, but that makes the debt burden worse. So the ECB’s austerity policy is having the opposite effect of its aim


7--Eurozone QE: could it possibly work?,

The ECB has at last given in to market pressure and unveiled a sovereign bond buying programme. It is larger than expected, at €60 billion a month, and includes sovereign debt, supranational debt (EIB/ESM), plus the asset-backed securities and covered bonds that the ECB was already buying. Bonds of all maturities over 2 years are included as are inflation-linked bonds. Purchases will start in March, and will be continued “until we see a sustained adjustment in the path of inflation which is consistent with our aim of achieving inflation rates below, but close to, 2% over the medium term.”


8--Cockburn on Greece


Of the €227bn (£170bn) in loans from the eurozone lenders and IMF, just 11 per cent has gone for government spending while almost all the rest barely touched Greece before going to prevent the write-down of bad loans.
All this looks horribly tangled, but, unlike other world crises involving Isis or Ukraine, it is fairly easily soluble. The Greeks cannot pay their enormous debts and the German voters see write-downs and write-offs as theft of their taxes.


8 October 1942 [Ciano tells Mussolini about the Greek situation and quotes his reply]: “If we lose this war it will be because of the political stupidity of the Germans who have not even tried to use common sense, and have made Europe as hot and treacherous as a volcano.”


9--The rise of the working poor: when having a job cannot prevent poverty, independent


10--Pro-Russia separatists say they've trapped thousands of Ukraine troops, LA Times


“We have practically encircled 8,000 to 10,000 Kiev junta troops in the area around” the town of Debaltseve, Eduard Basurin, chief political officer of the self-proclaimed Donetsk People's Republic armed forces, said by phone. “The only road connecting them with the other troops is under our close artillery fire day and night and they can survive only if they raise a white flag and surrender.”
Ukrainian troops had refused to surrender, the separatist senior commander said, “so we will have to destroy all of them.”


11---Top German Editor: CIA Bribing Journalists, Russian insider


12--Donetsk shelled as Kiev ‘orders massive fire’ on militia-held E. Ukraine, RT


13--Iran Proposes Transferring Azerbaijani Gas to Europe, sputnik


14--G├╝lenists in Turkey cooperating with Israel’s Mossad, Erdo─čan says , Hurriyet


15--Ukraine chief of staff ‘thwarts Western allegations’ by admitting no combat with Russian troops, RT


16--Globalization is barbarous, multinationals rule world – Marine Le Pen, RT


17--Constant shelling in Donetsk as peace talks in Minsk end in blame game, RT


18--The Falluja Option, saker


The Ukrainian coup, intended to make from Kiev not only an eternal source of enmity between Russia and the EU, but also a black hole devouring Moscow’s resources, has not fulfilled any of its tasks -- a year after the coup, Ukraine continues to devour the US resources.

But since Ukraine is just one of many sites of global confrontation between Moscow and Washington, the further concentration of efforts on this site becomes unprofitable for the US. They cannot quit, because then the site will be taken by Russia, which would be a geopolitical defeat of Washington. Therefore, the site must be destroyed. Let the winner occupy the ruins; if they could not entangle him by the whole Ukraine, let he be entangled by the rotting and decaying corpse of Ukraine.







19--Economy grows, incomes shrink , david cay Johnson


The first data on 2013 incomes show continuing bad news for Americans, my analysis of a new Internal Revenue Service report shows.
Average income fell 2.6 percent in 2013, even though the economy grew 3.2 percent in real terms over 2012.


Average inflation-adjusted income in 2013 was 8 percent lower than in 2007, the last peak economic year, and 6.9 percent less than in 2000, the year President George W. Bush set as the standard to evaluate the effect of his tax cuts and regulatory policies.
This is the latest sign of a disturbing trend. An ever-shrinking share of national income flows to individuals while corporate profits expand.


Labor share of national income falls



Created with Highcharts 4.0.1Nonfarm business sector labor share194719501953195619591962196519681971197419771980198319861989199219951998200120042007201020139095100105110115Highcharts.com



Note: Index with 2009 at 100.
Source: Federal Reserve Bank of St. Louis, U.S. Bureau of Labor Statistics.

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