Tag Archives: GDP

GLOBAL DEBT AT 317% OF GDP

The world’s debt burden stands at a staggering 317 per cent of global gross domestic product, just shy of its all-time high in 2016, according to the Institute of International Finance.   Years of low and negative interest rates have fed the debt habit:   since the 2008 financial crisis, the world has added an extraordinary $70tn in debt, or 25 per cent of GDP, with sovereign debt accounting for nearly 40 per cent of that increase.

“To be clear: responsibly incurred debt can play an important and constructive role in economic development.   Long-term investments that enhance productivity can foster a more prosperous future. Amid subdued growth in many parts of the world and a critical need for infrastructure, there are arguments to be made in support of using debt to foster growth.

“But too much debt is a risk for lenders and borrowers alike, as history has shown time and again.”

(“We need transparency to keep countries out of a debt spiral,” Axel Weber, Financial Times, 6/18)

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CURRENCY WARS

Europe has been warned. Any use of monetary levers to hold down the euro exchange rate will be deemed a provocation by the Trump administration.

Further cuts in interest rates to minus 0.5pc or beyond will be scrutinized for currency manipulation.   A revival of quantitative easing will be considered a devaluation policy in disguise, as indeed it is, since the money leaks out into global securities and depresses the euro.

The Bank for International Settlements says €300bn of Europe’s QE funding reached London alone between 2014 and 2017.

If the ECB copies the Swiss National Bank and starts to amass foreign assets directly to cap currency strength Europe will face certain retaliation.

(“Currency war is the next phase of global conflict and Europe, the chief parasite, is defenceless,” Ambrose Evans-Pritchard, Daily Telegraph, June 19th)

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BRUSSELS BRIEFING

Donald Trump’s found someone else in Europe he doesn’t like.   The US president launched a Twitter tirade against Mario Draghi after the ECB president said he was ready to inject new stimulus into the eurozone, sending the euro tumbling against the dollar.  (Brussels Briefing, Financial Times, 6/1)

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 TRUMP’S WAR

“President Donald Trump cannot want war with Iran.

   Such a war, no matter how long, would be fought in and around the Persian Gulf, through which a third of the world’s seaborne oil travels.   It could trigger a worldwide recession and imperil Trump’s re-election.

   It would widen the “forever war,” which Trump said he would end, to a nation of 80 million people, three times as large as Iraq.   It would become the defining issue of his presidency, as the Iraq War became the defining issue of George W. Bush’s presidency.

 And if war comes now, it would be known as “Trump’s War.”

In conclusion:

“Who wants a U.S. war with Iran?

   Primarily the same people who goaded us into wars in Iraq, Syria, Libya and Yemen, and who oppose every effort of Trump’s to extricate us from those wars.

   Should they succeed in Iran, it is hard to see how we will ever be able to extricate our country from this blood-soaked region that holds no vital strategic interest save oil, and America, thanks to fracking, has become independent of that.”    (“War with Iran would become “Trump’s War,” Pat Buchanan, 6/18)

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Iran shoots down US drone aircraft

Oil prices jump after action by Revolutionary Guard escalates tensions between Tehran and Washington (Financial Times, 6/20)

“Iran shoots down US military drone to send “clear message” to Trump”   (Independent, 6/20)

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GERMAN POLITICIAN ASSASSINATED BY NEO-NAZI

Germany’s federal prosecutors have taken over the investigation into the murder of Walter Lübcke, indicating that the killing of the Kassel district president on June 2 is being treated as a politically motivated terrorist act.

If indeed the murder is shown to have been politically motivated, it would be the first such assassination on a sitting German politician since the 1970s.

Trail included death threats, weapons.

A number of German outlets have reported details of the alleged far-right ties of the suspect arrested in the central city of Kassel in the early hours of Sunday morning.

The German daily Süddeutsche Zeitung reported on Monday that the 45-year-old man, named only as Stephan E., had a long criminal record, had already issued death threats via his YouTube channel, and that weapons were found during the search of his home.

According to the paper, Stephan E. had written a comment on YouTube in 2018 under his alias ‘Game Over’ that read, “Either this government abdicates soon or there will be deaths.”  ( “Walter Lubcke murder raises specter of neo-Nazi terrorism,”   Deutsche Welle news)

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Xenophobia stokes extreme-right activism

Puls has also noticed that neo-Nazis became more and more vocal in the last few years, following the influx of refugees who arrived in Germany in 2015 and 2016, which led to more anti-immigrant sentiment in the mainstream political debate and hate speech on social media.

As a supporter of Chancellor Angela Merkel’s policy, Walter Lübke himself was on the sharp end of much of this.

“One can certainly say that the propensity for violence has certainly risen following the right-wing debates around immigration,” he said. “The case of Lübcke is certainly very revealing here.   Walter Lübcke faced an enormous amount of hatred in 2015.   That does raise the question:   how much does it take before one person says ‘I’ll reach for a weapon?’   In certain circumstances, not much.”

( “Walter Lubcke murder raises specter of neo-Nazi terrorism,” Deutsche Welle news)

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Stand up to far right, Germany’s Angela Merkel tells Europe

The resignation of Austria’s vice chancellor led German politicians to warn against alliances with populists.   Chancellor Merkel spoke out against right-wing populism as many are now demanding new Austrian elections.   (DW)

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NEO-NAZIS IN AMERICA

The definition of a neo-Nazi is someone who belongs to an organization that is similar to the German Nazi Party of Adolf Hitler.

“Frontline” (PBS) this week showed the growth of neo-Nazis across America.   It showed synagogues that are now doing everything they can to prepare for further mass shootings.

It also interviewed members of neo-Nazi groups and showed a perverse link with the current Administration.    “To make America great again, you would have to make America white again”,  is a direct quote from a leader of the neo-Nazi movement, the Waffen.

“FRONTLINE and ProPublica continue reporting on the resurgence of white supremacist groups in the United States.   “Documenting Hate:   New American Nazis” investigates a violent neo-Nazi group that has actively recruited inside the U.S. military, and examines the group’s terrorist objectives.” (Frontline).

Overlooked here is the major contribution made by liberals, in the growth of Nazism.   The massive influx of immigrants since 1965 has led directly to anti-immigrant feeling.   The 2008 financial crisis contributed greatly to anti-semitism.

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ZUCKERBERG LAUNCHES NEW CURRENCY

“He causes all, both small and great, rich and poor, free and slave, to receive a mark on their right hand or on their foreheads, and that no one may buy or sell except one who has [a]the mark or the name of the beast, or the number of his name.” (Rev 13:16-17)

Zuckerberg’s $538 billion social network on Tuesday announced plans to create a new digital currency and financial system that it claims will revolutionize banking. Facebook announced the new currency, called Libra, in a 12-page white paper that promised vast improvements on bitcoin and other volatile digital coins.” (New York Post, 6/18)

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THE DARK SIDE OF ZUCKERBERG’S POWERFUL NEW CRYPTO COIN

“In its quest for world domination, Facebook has already disrupted everything from the media industry to American democracy, drawing scrutiny for things like its pitiful handling of user data, its monopolistic tendencies, and a “digital gangster” mentality along the way.   Now, as regulators in Washington, D.C., bear down on Facebook, co-founder Mark Zuckerberg has acquired a new target: the global financial system.

“On Tuesday, Facebook announced plans to debut Libra, a cryptocurrency it has been developing for more than a year. Described by the company as “a simple global currency and financial infrastructure that can empower billions of people,” Libra will partner Facebook with Mastercard, Visa, Uber, and an array of other high-profile companies in what the New York Times called “the most far-reaching attempt by a mainstream company to jump into the world of cryptocurrencies.”

“David Marcus, who is leading Facebook’s blockchain technology research, is stoked.   “It feels like it is time for a better system,” Marcus told The Times. “This is something that could be a profound change for the entire world.”   Even Zuckerberg, who has spent much of the last two years on a sort of apology tour, sounds like he’s regained his change-the-world mojo.   “Being able to use mobile money can have an important positive impact on people’s lives because you don’t have to always carry cash, which can be insecure, or pay extra fees for transfers,”    Zuckerberg wrote in a Facebook post.   “We aspire to make it easy for everyone to send and receive money just like you use our apps to instantly share messages and photos.”   (Eric Lutz, Vanity Fair, 6/18)

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THREAT TO US FOOD SUPPLY

“US beekeepers lost 40% of colonies over past year” – The Guardian 6/19

RASHIDA TLAIB

Rashida Tlaib was kicked out of a Donald Trump event during the 2016 election. She wasn’t sorry then, and will likely remain a strong anti-Trump voice. (Bustle website, By Joseph D. Lyons, Aug 8 2018)

Rashida Tlaib became the first Muslim woman to enter Congress earlier this month.   From Detroit, the lady has already succeeded in re-writing American history.   She famously described the president using a particularly offensive expletive and made an untrue statement that has not been challenged by anyone.   In talking about the use of the Koran in the swearing in, she said:

“I like that,” the Democrat told CNN. “I like that it’s kind of pushing against the stereotype that somehow we’re new to this country.”

Ahh, but Muslims are new to this country.

There’s no record of any before the US Civil War.   If there were, no doubt there would be Muslims buried in Civil war cemeteries.

It is estimated that between 10-20% of African-American arrivals during the slave trade were Muslim, but they were forced to convert to Christianity upon arrival.   They were also forced to accept Christian names.

So, when did Muslims arrive?   From the 1880’s to 1914, many arrived in America as refugees from the Ottoman Empire.

In 1929 the country’s first ever mosque was built, in Chicago.

It was after 1965, the year that Senator Edward Kennedy introduced his Immigration Reform Bill, that Muslims started to arrive en masse.   Additionally, a high birth rate contributed to rapid growth.

“In 2005, more people from Muslim-majority countries became legal permanent United States residents – nearly 96,000 – than there had been in any other year in the previous two decades.   In 2009, more than 115,000 Muslims became legal residents of the United States.”  (Wikipedia, Islam in America.)

So, the real growth in the numbers of Muslims, is fairly recent.

WAS JEFFERSON A MUSLIM?

Most Americans would have been surprised when she was sworn in as a US Congresswoman on Thomas Jefferson’s Koran.   This news has been received with great enthusiasm by the anti-Christian media, ever desirous of distancing American history from its Christian roots.

Now, owning a Koran does not make you a Muslim.   I have one in my library.

But, in the history of US-Muslim relations, Jefferson’s copy may have had more significance.

The Barbary pirates were America’s first major foreign policy challenge following independence.   Four Muslim nations along the North African coast (Algiers, Tripoli, Tunis and Morocco) were seizing shipping and US sailors in the western Mediterranean.   It is estimated that between 1 million and 1.25 million white slaves were being held by these slave-owning nations at this time.   The only nations that escaped were those who paid a ransom to the Arab countries.   The US did this for a while, giving a full 10% of its annual budget.   Clearly, this could not go one.

Attacks on American shipping began in 1784 and continued for about twenty years.

“In March 1786, Thomas Jefferson and John Adams went to London to negotiate with Tripoli’s envoy, ambassador Sidi Haji Abdrahaman (or Sidi Haji Abdul Rahman Adja).   When they enquired “concerning the ground of the pretensions to make war upon nations who had done them no injury,” the ambassador replied:

“It was written in their Koran, that all nations which had not acknowledged the Prophet were sinners, whom it was the right and duty of the faithful to plunder and enslave; and that every mussulman who was slain in this warfare was sure to go to paradise.   He said, also, that the man who was the first to board a vessel had one slave over and above his share, and that when they sprang to the deck of an enemy’s ship, every sailor held a dagger in each hand and a third in his mouth; which usually struck such terror into the foe that they cried out for quarter at once.””

“Jefferson reported the conversation to Secretary of Foreign Affairs John Jay, who submitted the ambassador’s comments and offer to Congress.   Jefferson argued that paying tribute would encourage more attacks.   Although John Adams agreed with Jefferson, he believed that circumstances forced the U.S. to pay tribute until an adequate navy could be built.   The U.S. had just fought an exhausting war, which put the nation deep in debt.”  (“First Barbary War,” Wikipedia)     (Note:   the word”musselman” is an old term for Muslims.)

Although there is no official record of when Jefferson acquired his copy of the Koran, this seems the most likely.   He was reading it to better inform himself on the actions of the Arab leaders America was threatened by.   Such a course would be advisable today.

The turning point in the war was the Battle of Derma in 1805, when US and mercenary troops, captured the Tripolitan city of Derma. They were then able to use the conquered city as a bargaining chip for the release of US personnel and to impose a peace.

During this twenty-year period the US acted alone, as all the European countries were pre-occupied with fighting Napoleon.

If we do not read more American history, people like Rashida Tlaib will get the better of us, making exaggerated claims by Muslims.

Ms Tlaib should also be mindful of what the Bible says about Jesus Christ.

“Neither is there salvation in any other;  for there is no other name under heaven given among men, whereby we must be saved” (Acts 4:12)

He can even help you clean up your language!

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ISLAMIC PARTY OF ONTARIO

In addition to the four main parties already contesting elections in Ontario, there is now an Islamic party.

“It operates with a mandate to introduce Islamic rule in Ontario and Canada because, according to the fledgling party,   “We understand and believe that Islam is the native DEEN (religion) of Ontario and Canada.”

“The Islamic Party of Ontario is headed by one Jawed Anwar, who operates out of the Toronto neighborhood of Thorncliffe Park.” (Middle East Forum, Tarek Fatah, 1/1/19)

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Palestinian-American activist Linda Sarsour says the prophet Muhammed was a human rights activist

On December 2, 2018, Palestinian-American political activist Linda Sarsour spoke at the 2018 Salam Annual Banquet, held at the Salam Community Center in Sacramento, CA.   She criticized President Trump for moving the U.S. Embassy to Jerusalem, saying:   “I declare to all of you here today in Sacramento that Jerusalem is and always will be the capital of Palestine.”   Calling the Trump administration fascist, she encouraged Muslims to become involved in politics even if their mosques usually avoid politics, because, she said, simply being Muslim is a political act. The Prophet Muhammad, she asserted, was a human rights activist, adding that there is no need for workers’ rights movements, environmental justice movements, or Black Lives Matter movements, or anti-racism or feminism, because Islam taught these values long before they were hashtags or movements.   She added:   “I don’t need people in the West, people in Europe, or people in the United States . . . to teach me what feminism is.”   (MEMRI, No. 7878, January 9 2019)

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SAUDI JOURNALIST WRITES:

In his July 8, 2018 column in the Saudi daily Al-Jazirah, Muhammad Al-Sheikh slams Arab and African Muslim immigrants who choose to live in the West and even risk their lives to reach it, yet express hatred and contempt towards the West and regard it as infidel.   He criticizes in particular the ingratitude of mosque imams in Europe, some of whom are immigrants themselves, who abuse the democracy and free speech in their host countries by inciting against the West.   In light of this, says Aal Al-Sheikh, the European right’s opposition to immigration is justifiable, for it is only natural to oppose the influx of immigrants who are “steeped to the bone in a culture of hostility and hatred.” (MEMRI, 7840. 1/10/19)

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America is heading for an almighty fight over presidential authority  (Leaders * Jan 9th 2019 * The Economist)

THE GOVERNMENT has partially shut down.  Again.   No other advanced democracy has government shutdowns.   In America they have become almost routine.   This is the third since Donald Trump became president and by far the most damaging.   The others were resolved quickly; this is already the second-longest on record. It is not happening because America is in turmoil: the country is not at war, unemployment is as low as it has ever been.   It is happening because that is what the president wants.

What is playing out in Washington is the denouement of a political fight.

Mr. Trump was elected on a promise to build a wall on the southern border, though Mexico was supposed to pay for it.   The new Democratic majority in the House is reluctant to give the president a victory on his best-known policy.   The Senate majority leader, who might be able to end the standoff, is AWOL.

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Stretched Thin

In fact, living paycheck to paycheck – meaning there’s not a cash cushion to cover the bills if the income stops for awhile – is a common condition in America.   In the 12th richest nation in the world by per capita GDP, nearly 8 in 10 U.S. workers live paycheck to paycheck, according to a 2017 study by CareerBuilder, a human capital management firm.   And the trend crosses over income groups:   more than half of minimum wage workers said they needed to hold down two jobs to make ends meet, while one in 10 workers earning $100,000 or more yearly say they live paycheck to paycheck.

And if there’s an emergency?   A large number of Americans don’t have an accessible stash of money to cover a substantial health care expense or car repair, studies show.   The Federal Reserve Board in 2017 found that 44 percent of American households surveyed could not cover a $400 emergency expense.   A separate BankRate study last year yielded similar results, finding that while 34 percent of those surveyed had experienced a major unexpected expense in the previous year, just 39 percent of those surveyed said they could tap $1,000 from savings to cover it.   (“Stretched Thin,” US News, Susan Milligan, 1/11/19)

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FROM THE EURO TO BREXIT

The Euro is twenty years old this month.  The Telegraph’s finance writer, Ambrose Evans-Pritchard wrote an article commemorating the anniversary.   Here’s an excerpt.

“While EU leaders quibbled over decimal points and debt repayment in Brussels, youth jobless rates reached 57pc in Greece, 56pc in Spain, and much the same across Italy’s Mezzogiorno.  These were levels once unthinkable in a modern developed democracy.  They have left a wreckage of ‘labour hysteresis’ that will lower economic speed limits for a generation to come.

“Several hundred thousand economic refugees came to work in Britain from the EMU depression belt.   A further wave from Eastern Europe came to the UK instead of going to the eurozone as they would have done in normal times.   The double surge had maximum impact just before the Referendum.

“More subtly, the euro crisis revealed that the pathologies of monetary union cannot be managed by normal democratic means. The elected prime ministers of Greece and Italy were toppled in 2010 and 2011 and replaced by EU functionaries in soft coups organized by Brussels and the pro-EMU vested interests of each country.

“The ECB switched off liquidity support for Greek commercial banks in 2015, knowingly (and illegally?) precipitating a banking collapse that was hard to reconcile with the ECB’s treaty duty to uphold financial stability.   When push come to shove, the reflex was authoritarian.   It spoke to the character of the EU.   That I why I voted for Brexit.”

 

 

 

ECONOMIC PROSPECTS NOT BRIGHT

John McLaughlin

PBS’s “McLaughlin Group” (www.mclaughlin.com) remains the best political discussion of the week. John McLaughlin has the chair, with three regular guests and one visitor. This week’s program was particularly good.

The first item discussed was the US economy.   The program began with President Obama lauding the accomplishments of his Administration in this area. Economist Robert Gordon of Northwestern University was then quoted.

Whereas the CBO (Congressional Budget Office) predicts an average growth rate of 2.1% over the next ten years (down from the 3.5% averaged since World War II), Professor Gordon predicts 1.6%. The reasons he gives are that the baby boomers are leaving the work force; new hires will not fully replace them, so less will be produced. He also predicts the national debt will increase to 87% of GDP by 2024, 9% higher than the government’s estimate.

Robert Samuelson of the Washington Post wrote:

“If he’s right, this could be our next nasty economic surprise . . . the prospect now is for years of modest to, in Europe, non-existent growth.  How will political systems cope?  Will class warfare intensify as groups battle harder for bigger shares of a stagnant pie?  Without an expanding economy as a shock absorber, will racial, ethnic, generational and ideological conflicts worsen?   . . . prolonged sluggishness would turn the economy into a zero-sum game, where one group’s gain is another’s loss.  This is no formula for social peace.”  (Washington Post, 9/22/14).

This all led to an interesting discussion. “Are we in for a decade of political and social unrest?” asked host John McLaughlin. Conservative Pat Buchanan’s response was: “More than a decade . . . the share of the labor force that is working is dwindling . . . the baby boomers were the best skilled and best educated generation ever . . . Millions of folks are coming in from the Third World who lack the skills, education, and abilities that are needed.”

Liberal Eleanor Clift predictably felt that the exact opposite was the case and that the economy is all set for a wonderful decade. She added that “the dollar is the indispensable currency” – on this last point, she was correct.

Journalist Tom Rogan (National Review and The Daily Telegraph) felt that “the biggest issue is the national debt.” Rising debt threatens social security and Medicare.

Pat Buchanan pointed out that “real wages have been stagnant since 1974.”   Mort Zuckerman (publisher of US News and World Report) added: “In the last half a dozen years, real wages have gone down by about $4,500 per year.” Buchanan felt that “neither party will deal with social security, Medicare and Medicaid,” government programs whose costs keep rising way above the annual rate of growth in the economy.

Zuckerman mentioned a recent poll that showed that “78% of Americans have no confidence that Washington can ride to their rescue.”

Host John McLaughlin quoted a recent poll that showed 58% of Americans feel the need for a third party. Eleanor Clift quoted Shakespeare to sum up the attitude of most Americans: “A pox on both their houses,” a condemnation of both political parties. Pat Buchanan observed: “Our system is breaking down.” Mort Zuckerman added that ‘we’ve had five years of low growth.”

This is clearly not a rosy picture of America’s future.

The same day the McLaughlin Group was recorded, The Economist was working on a leader warning of the danger of deflation, the worst thing that can happen to an economy.

Western countries have had low inflation rates for over a decade now.

Falling prices at first seem benign but can soon turn deadly. At the time of writing, gas prices in the US are falling, which is making everybody happy. But a fall in gas prices means that demand for oil is dropping and this means that economies are slowing down. This will increase unemployment, which will mean a further drop in demand, which will lead to more unemployment, etc. And so it goes on in a downward spiral.

Some countries are already showing the first signs of deflation. Italy, Spain, Greece, Sweden and Israel are five western countries where inflation is below zero. Deflation can easily follow, warns The Economist in “The Dangers of Deflation” (10/25). A twisting of the title of Edgar Allen Poe’s famous 1842 short horror story, “The Pit and the Pendulum,” The Economist’s sub-title is “the pendulum swings closely to the pit.”

The world is dangerously close to a deflationary downward spiral.

 

EUROPE ON US FISCAL CRISIS

economist sphere

“Imagine you are in a taxi and the driver suddenly turns violently and speeds towards a wall, tires screeching, only to stop at the very last moment, inches from the bricks — and cheerfully informs you that he wants to do the same to you in three months time.  Would you be grateful that he has not killed you? Or would you wonder why you chose his cab in the first place?  This is the journey Congress has taken the American people on over the past few weeks.

“….the country’s long-term fiscal problem is immense: it taxes like a small-government country but spends like a big-government one.  Eventually demography — and the huge tribe of retiring baby-boomers who expect pensions and health care — will bankrupt the country.  By the IMF’s calculation, if America is to reduce its debt to what it regards as a sensible level by 2030, allowing for all this age-related spending, it needs a ‘fiscal adjustment’ of 11.7% of GDP — more than any other advanced country other than Japan.”

(“Worse than Europe, really”.  Economist October 19th)