Sunday, September 13, 2015

Today's links

1--Syrian Conflict Can't Be Resolved Without Putin German Politicians

Horst Seehofer, the leader of one of Germany's main conservative parties, the Christian Social Union in Bavaria (CSU),  has called for closer cooperation with Russia in settling the Syrian military conflict, adding that it can't be resolved without the help of President Putin, according to Spiegel magazine.

A similar comment was voiced on Saturday by Chancellor Merkel, who also urged the Western powers to turn to Russia for help.
“Germany and other Western European powers need to work with Russia as well as the United States to solve the crisis in Syria,” she was quoted as saying by the country’s media

2--Corbyn on the issues

3--A world convulsed by crises; “death agony of capitalism”?

international financial markets have swung wildly between massive gains and losses, as governments and central banks have sought desperately to counter the impact of a gathering slump in production and investment that threatens to topple the financial house of cards built up since the Wall Street crash of 2008.
The Chinese economy, world capitalism’s premier cheap-labor platform, which provided the bulk of economic growth after the financial crash, is foundering, along with a host of other so-called “emerging market economies.”
On the geopolitical front, tensions between the major capitalist powers are sharpening under the impact of social disasters produced by imperialist wars that have ravaged entire countries, from Afghanistan to Iraq, Libya, Syria, Yemen and large parts of Africa. The ruination of much of Central Asia and the Middle East by US imperialism and its European and Gulf allies has unleashed a flood of desperate refugees on a scale not seen since the end of World War II. ....

Leon Trotsky wrote in 1938 in the Transitional Program, the founding program of the Fourth International, “Under the increasing tension of capitalist disintegration, imperialist antagonisms reach an impasse at the height of which separate clashes and bloody local disturbances (Ethiopia, Spain, the Far East, Central Europe) must inevitably coalesce into a conflagration of world dimensions.”
Trotsky coined the phrase “death agony of capitalism” to denote the nature of the epoch—our epoch today.

4--A New Global Recession
Mike Dolan at Reuters:
According to the International Monetary Fund, the dollar value of foreign currency reserves held by all developing nations ballooned by almost $7 trillion in just one decade to a peak of some $8.05 trillion by the middle of last year. While China was the main driver, accounting for about half of that increase, its economic boom created a commodity supercycle that flooded the coffers of resource-rich nations from across Asia to Russia, Brazil and the Gulf. As the vast bulk of this hard cash was banked in U.S. Treasury and other low risk, rich-country bonds, they were at least one critical factor in the halving of U.S. Treasury and other Group of Seven government borrowing costs over the same period.
Here’s a graphic our research team created to help you get a clearer picture of what’s been going on…

Those foreign exchange reserves have now peaked. Dolan:
Emerging market forex reserves fell by about half a trillion dollars between mid-2014 and the end of the first quarter of 2015, IMF data shows, and this is likely far from the end.Deutsche Bank estimated on Tuesday the high water-mark of almost two decades of reserve accumulation had now been reached and central banks will by the end of next year dump as much as $1.5 trillion to counter capital outflows.

5--The Cult of Abenomics

The Japanese economy has now had two decades of near zero growth, a hangover from the ebullient 1990s, where a massive housing and stock market bubble imploded, leaving a huge mountain of private debt that has been transformed into a huge mountain of public debt.
Whereas the US Federal Reserve has enacted 3 quantitative easing programs since the GFC, the Bank of Japan has done 19 and recently announced an effective endless line of them, with ¥80 trillion annually, in what almost everyone can see is a failed attempt at creating inflation ...

Apparently the only true economic danger in Japan, as elsewhere, is not the actual economy (which is always terrific or just about to be) but the evil, dreaded “deflationary mindsight.” So the BoJ upped its ante in case Japanese people start thinking unhappily about what QQE might not be able to do with, apparently, no real basis for them to actually think that way...

What none of those have amounted to is an actual and sustainable economic advance; NONE, no matter how you count them...

Even 20 years later, there is too much private debt and even at zero interest rate, deflationary forces will continue until its cleared or the public debt mountain shadows it so much, the entire mountain range collapses.

6--Krugman's "deflationary mindset" scam

Japan needs to reach a point where everyone believes that it has pulled out of deflation, he said. "And then if that can be believed, then it may be able to stay out of trouble thereafter,” he said.
Some BOJ officials see a growing likelihood the central bank will lower its inflation outlook and again delay the time frame for reaching its target due to cheaper oil prices, people familiar with the discussions said earlier  See?  It's all in your head.)

7--Deflation Japan style

The core gauge of Japanese consumer prices was flat from a year earlier in February, deepening worries Japan is heading back toward deflation two years after its central bank launched a radical economic-revival program.
The government said Friday the core consumer-price index hit 0%, the lowest level since May 2013 and far from the 2% target that the central bank had pledged to hit by this spring. The index excludes fresh food prices and effects of a tax increase.
The price data underscores the ongoing difficulties Prime Minister Shinzo Abe faces in pulling the world’s third-largest economy out of its long slump and eradicating the deflation that had long ailed the nation. Bank of Japan Gov. Haruhiko Kuroda insists he is still on track, albeit on a delayed timetable, to reach his price goal.
That, however, hasn’t translated into more spending by consumers. Household spending fell 2.9% from a year earlier in February, marking the 13th consecutive decline. Retail sales fell 1.8% from a year earlier.
Big companies like Toyota Motor Corp. have reported record profits...
“The BOJ’s easing has been exerting its intended effects and it seems safe to say that the measure works both in theory and practice,” Mr. Kuroda said at a news conference on March 20...

Some of that has been the result of developments outside the central bank’s control. The sales tax increase enacted last April to curb Japan’s government debt doused much of the gains from the BOJ’s stimulus. A plunge in oil prices has dragged down inflation and is seen as having just a temporary impact on prices.
But at core, BOJ officials say they have found it much more difficult than expected to smash what Mr. Kuroda calls “the deflationary mind-set” of more than a decade of cautious pessimism that has suppressed risk-taking, and fed a downward cycle of falling prices, wages, spending and investment.
In total, the BOJ has purchased assets worth ¥150 trillion ($1.3 trillion) in the past two years, a 114% increase since the pre-Kuroda level. The BOJ’s balance sheet assets are equal to 66% of Japan’s GDP, well above the peak levels for other major central banks engaged in easing programs. The bank has mopped up almost all new Japanese government bonds sold by Tokyo recently. Critics say such hefty purchases would disrupt market activities and risks being regarded as funding the government debt at rock-bottom level
8---So What Are the Russians Really Doing in Syria?

I think that a week after Ynet broke the story about a Russian military intervention in Syria we can confidently say that that this was a typical AngloZionist PSYOP aimed at inhibiting the Russian involvement in the Empire’s war against Syria and that it had no basis in reality

What appears to be happening is this: the Russians are, apparently, sending some limited but important gear to provide immediate assistance to the Syrian forces. In doing so, they have also created the conditions to keep their options open. So while there is not massive Russian intervention taking place, something has definitely shifted in the Syrian conflict.

I would like to add here that while the government forces have recently lost the Idlib air base in the north of the country (and not too far from Latakia), all my sources confirm to me that the Syrian forces are in a much better position than Daesh and that the war is going very badly for the Takfiris. The Syrians have recently freed the city of Zabadan and they are on the offensive in most locations and while it is true that Daesh still controls a lot of land, most of that is desert

9--Refugee Flows: a Grand Strategic Weapon of Mass Destruction

Sooner or later, if this humanitarian catastrophe continues to worsen, any remaining empathy held by our allies in Europe and neutral parties around the world for the foreign policy of United States will dissolve into finger pointing, particularly if domestic politics in the US continue to foment war on behalf of Israel, while using the politics of fear to make the US people even more immigration phobic.

10--Why the US and Iran aren’t cooperating against IS

Indeed, it has become evident to all - besides those who are determined for their own reasons not to see it - that the army intent on setting up an Islamic caliphate has the potential to dissolve the basic international order that has governed the Middle East for a century. So the logic of Iran-US strategic cooperation against Daesh (as the IS group is referred to in Arabic) is no less compelling than was the logic of the Nixon administration in reaching an understanding with Maoist China to counter-balance their common Soviet adversary.But that logical development isn’t happening, contrary to the fears of some and hopes of others, and it isn’t likely to happen any time soon, despite the nuclear agreement and the Obama administration’s success in beating back the unprecedented campaign by the Israel lobby to defeat it. The reason is that it is not the logic of geopolitics, in the end, that is governing the problem. - ....

Khamenei declared: “If the counterpart stops its bad behaviour, one could expand this experience to other issues, but if the counterpart continues its bad behaviour, it would only reinforce our experiences of the past and distrust in the United States.” ...

The power of the Israel lobby in Washington, primarily but not exclusively over Congress, is well known, and that has imposed a rigid political and legal framework of hostility toward Iran on the US government for two decades, beginning with a complete trade embargo that remains in place and creates major obstacles to any shift in policy.

What is seldom acknowledged, however, is that the interests of the Pentagon, the CIA and the NSA have become tightly intertwined with those of the anti-Iran coalition in the Middle East. A set of mutually reinforcing bureaucratic interests now binds US policy to an alliance structure and military and intelligence programmes in the Middle East that have come to replace objective analysis of regional realities in determining US policy.

11---Prosecution of white collar crime hits 20 year low
12--Emerging market slump raises fears of capital controls

13---The Roots of the Migration Crisis
The Syrian refugee disaster is a result of the Middle East’s failure to grapple with modernity and Europe’s failure to defend its ideals

The migration crisis enveloping Europe and much of the Middle East today is one of the worst humanitarian disasters since the 1940s. Millions of desperate people are on the march: Sunni refugees driven out by the barbarity of the Assad regime in Syria, Christians and Yazidis fleeing the pornographic violence of Islamic State, millions more of all faiths and no faith fleeing poverty and oppression without end.....

The crisis in the Middle East has to do with much more than the breakdown of order in Syria and Libya. It runs deeper than the poisonous sectarian and ethnic hatreds behind the series of wars stretching from Pakistan to North Africa. At bottom, we are witnessing the consequences of a civilization’s failure either to overcome or to accommodate the forces of modernity. One hundred years after the fall of the Ottoman Empire and 50 years after the French left Algeria, the Middle East has failed to build economies that allow ordinary people to live with dignity, has failed to build modern political institutions and has failed to carve out the place of honor and respect in world affairs that its peoples seek.

14--Interest rate rise: turning point looms for US debt binge

15--US Intelligence Chief: Iraq and Syria May Not Survive As States
16--CIA chief says Zionist dream has been achieved

Iraq and Syria may have been permanently torn asunder by war and sectarian tensions, the head of the United States Defence Intelligence Agency said yesterday in a frank assessment that is at odds with Obama Administration policy.
"I'm having a tough time seeing it come back together," Lieutenant- General Vincent Stewart told an industry conference, speaking of Iraq and Syria, both of which have had large chunks of their territory seized by Isis (Islamic State).

17--US, Foreign Meddling and a Fight for Oil Fueling Syrian Civil War?

Leaked US State Department cables dated as far back as 2006 suggest that Israel ordered the United States to overthrow the Syrian government by “instigating civil strife and sectarianism through partnership with nations like Saudi Arabia, Turkey, Qatar and even Egypt” in order to weaken Tel Aviv’s enemy Iran—Syria’s ally—and the terrorist group Hezbolla.

At the time tensions were rising between the U.S., the European Union and Russia amid concerns that Europe’s gas market would be dominated by Russian gas giant Gazprom....

The Guardian reported that in 2009, Syrian President Bashar al-Assad  “refused to sign a proposed agreement with Qatar that would run a pipeline from the latter's North field, contiguous with Iran's South Pars field, through Saudi Arabia, Jordan, Syria and on to Turkey, with a view to supply European markets — albeit crucially bypassing Russia.”
18--Fed’s Policy Mechanics Retool for a Rise in Interest Rates

Yet the Fed has found itself forced to experiment. The immense stimulus campaign that it started in response to the 2008 financial crisis changed its relationship with the financial markets. It has pumped so many dollars into the system that it cannot easily drain enough money to discourage lending, its traditional approach. Instead, the Fed plans to throw more money at the problem, paying lenders not to make loans.
The Fed, embedded in the banking system, has also concluded that working through the banks is no longer sufficient to influence the broader economy. It plans to strengthen its hold by working directly with an expanded range of lenders.

The Fed) It kept buying Treasuries and mortgage bonds to eliminate safe havens, forcing money into riskier investments that might generate economic activity. As a byproduct, the Fed kept expanding the supply of reserves.
One result is a banking system almost comically awash in money. In June 2008, banks had about $10.1 billion in their Fed accounts. The total is now $2.6 trillion. Picture all of the money in June 2008 as a single brick; the Fed has added 256 bricks of the same size. On top of that first brick, there is now a stack five stories tall....

Paying Banks Not to Lend

For the last seven years, the Fed has encouraged financial risk-taking in the service of its campaign to increase employment and economic growth. By starting to raise interest rates, the Fed intends to gradually discourage risk-taking.
The straightforward part of the plan is persuading banks not to make loans...

the Fed plans to pre-empt the market, paying banks 1 percent interest on reserves in their Fed accounts, so banks have little reason to lend at lower rates. ....As the Fed raises rates, some projections show that it may not transfer a single dollar in some years. Instead, the Fed will pay banks tens of billions of dollars not to use the trillions it paid them previously....

When liftoff arrives, however, the Fed plans to place this machinery inside the familiar language of the old system. It is likely to announce that it is raising the federal funds rate, the interest rate that banks pay to borrow reserves, from its current range of 0 to 0.25 percent to a new range of 0.25 to 0.5 percent. The Fed does not plan to emphasize that this rate is now a stage prop or that the real work of raising rates will be done outside the limelight by its new tools....

When the Fed last raised short-term rates, beginning in 2004, officials were surprised that long-term rates failed to rise because foreign money was pouring into the housing market and other domestic investments. This time, there are plenty of warnings that the weaknesses of other developed economies could once again make it harder for the Fed to raise domestic interest rates.


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