Posts tagged Europe

Peter Schiff ~ Meet “Lowflation”: Deflation’s Scary Pal

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Source: http://www.europac.net

By Peter Schiff

Friday, April 4, 2014

Meet “Lowflation”: Deflation’s Scary Pal

 

Peter Schiff is the CEO and Chief Global Strategist of Euro Pacific Capital

In recent years a good part of the monetary debate has become a simple war of words, with much of the conflict focused on the definition for the word “inflation.” Whereas economists up until the 1960′s or 1970′s mostly defined inflation as an expansion of the money supply, the vast majority now see it as simply rising prices. Since then the “experts” have gone further and devised variations on the word “inflation” (such as “deflation,” “disinflation,” and “stagflation”). And while past central banking policy usually focused on “inflation fighting,” now bankers talk about “inflation ceilings” and more recently “inflation targets”.  The latest front in this campaign came this week when Bloomberg News unveiled a brand new word: “lowflation” which it defines as a situation where prices are rising, but not fast enough to offer the economic benefits that are apparently delivered by higher inflation. Although the article was printed on April Fool’s Day, sadly I do not believe it was meant as a joke.

Up until now, the inflation advocates have focused their arguments almost exclusively on the apparent dangers of “deflation,” which they define as falling prices. Despite reams of evidence that show how an economy can thrive when prices fall, there is now a nearly universal belief that deflation is an economic poison that works its mischief by convincing consumers to delay purchases. For example, in a scenario of 1% deflation, a consumer who wants a $1,000 refrigerator will postpone her purchase if she expects it will cost only $990 in a year. Presumably she will just make do with her old fridge, or simply refrain from buying perishable items for a year to lock in that $10 savings. If she expects the cost of the refrigerator to decline another 1% in the following year, the purchase will be again put off. If deflation persists indefinitely they argue that she will put off the purchase indefinitely, perhaps living exclusively on dried foods while waiting for refrigerator prices to hit zero.

Economists extrapolate this to conclude that deflation will destroy aggregate demand and force the economy into recession. Despite the absurdity of this argument (people actually tend to buy more when prices fall), at least there is a phantom bogeyman for which to conjure phony terror. Low inflation (below 2%) is even harder to demonize. Few have argued that it has the same demand killing dynamics as deflation, but many say that it should be avoided simply because it is too close to deflation. Given their feeling that even a brief bout of minor deflation could lead to a catastrophic negative spiral, they argue for a prudent buffer of 2% inflation or more. But the writer of the Bloomberg piece, the London-based Simon Kennedy, quotes people in high positions in the financial establishment who offer new arguments as to why “lowflation” (as he calls it) is a “threat” in and of itself. And although the article was primarily concerned with Europe, you can be sure that these arguments will be applied soon to the situation in the United States.

The piece correctly notes that those struggling with high debt tend to welcome high rates of inflation. The math is simple. By diminishing the value of money, inflation benefits borrowers at the expense of lenders. By repaying with money of lesser value, the borrowers partially default, even when paying in full. The biggest borrowers in Europe (and the United States for that matter) are heavily indebted governments and the overly leveraged financial sector. Should it come as a surprise that they are the leading advocates for inflation? The writer admits that higher inflation will help these interests manage their debt burdens and in the case of the financial sector, profit from the increased lending that low interest rates and quantitative easing encourage.

On the other side of the ledger are the consumers, the savers, and the retirees. These groups want lower prices and higher rates of interest on their accumulated capital. Such a combination will lead to higher living standards for those who have worked and saved for many years in order to enjoy the fruits of their efforts. But these types of people are simply not on the “must call” list for our best and brightest economic journalists. As a result, we only get one side of the story.

The article also points out that higher inflation gives businesses more flexibility to retain workers in periods of weak growth. The argument is that if sales revenue falls, companies will not be able to lower wages, and will instead resort to layoffs to maintain their profitability. However, this is only true in cases involving labor union contracts or minimum wage workers. In all other cases, business could reduce wages in lieu of layoffs. Plus, if prices for consumer goods are also falling, real wages may not even decline as a result of the cuts.

In circumstances where wages cannot be legally reduced, as is the case for unionized or minimum wage workers, layoffs are often the employer’s only option for keeping costs in line with revenue. However, inflation allows employers to do an end run around these obstacles. In an inflationary environment, rising prices compensate for falling sales. The added revenue allows employers to hold nominal wage costs steady, even when the raw amount of goods or services they sell declines. When inflation rages, higher skilled workers will often demand, and receive, pay raises. But low-skilled workers, who lack such leverage, are usually left holding the bag.

In other words, politicians can impose a high minimum wage to pander to voters, but then count on inflation to lower real labor costs, thereby limiting the unemployment that would otherwise result. So what the government openly gives with one hand, it secretly takes away with the other. Workers vote for politicians who promise higher wages, but those same politicians also create the inflation that negates the real value of the increase. But while government takes the credit for the former, it never assumes responsibility for the latter. The same analysis applies to labor unions. Based upon political protection offered by friendly officials, unions can secure unrealistic pay hikes for their members. But the same governments then work to reduce the real value of those increases to keep their employers in business.

Of course, what the Bloomberg writer was really arguing is that governments need inflation to bail themselves out of the policy mistakes they make to secure votes. But two wrongs never make a right. The correct policy would be to run balanced budgets rather than incur debts that can only be repaid with the help of inflation. On the labor front, the better policy would be to abolish the minimum wage and the special legal protections offered to labor unions, rather than papering over the adverse consequences of bad policies with inflation.

So be on the lookout for any more hand-wringing over the supposed dangers of lowflation. The noise will simply be an effort to convince you that what’s bad for you is actually good. And although it’s an audacious piece of propaganda to even attempt, the lack of critical awareness in the media gives it a fighting chance for success.

Peter Schiff is the CEO and Chief Global Strategist of Euro Pacific Capital, best-selling author and host of syndicated Peter Schiff Show.

Order your copy of Peter Schiff’s latest book, How an Economy Grows and Why It Crashes.

Obama Regime’s Hypocrisy Sets New World Record

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Source: http://www.paulcraigroberts.org

By Dr. Paul Craig Roberts

Obama Regime’s Hypocrisy Sets New World Record

 

Paul Craig RobertsFrom the moment that Washington launched its orchestrated coup in Kiev, Washington has been accusing Russia of “intervening in Ukraine.” This propaganda ploy succeeded. The Western presstitute media reported (nonexistent) Russian intervention to the exclusion of coverage of Washington’s obvious intervention.

Having falsely accused Russia of invading Crimea, the Obama regime now demands that Russia interfere in Crimea and prevent the referendum set for next Sunday. Unless Russia uses force to prevent the people of Crimea from exercising their right of self-determination, John Kerry declared that the Obama regime will not discuss the Ukrainian situation with Russia.

So, Kerry has given Russia the green light to send in troops to prevent Crimean self-determination.

The presstitute Western media has not noticed that out of one corner of his mouth Kerry denounces Russia for intervening and out of the other corner of his mouth Kerry demands that Russia intervene in behalf of Washington’s interest and suppress Crimean self-determination.

What is the point of such an absurd demand on Russia?

The Obama regime claims that the Crimean vote is not legal, because all of Ukraine is not voting on Crimea’s future. When Washington stole Kosovo from Serbia, Washington did not allow Serbia to vote on Kosovo secession. In the upcoming Scottish vote on whether to secede from the UK, only the Scottish are voting, not the British population. But these normal processes established in international law cannot be permitted to Crimeans, because the vote will not support Washington’s agenda.

Clearly, an Obama regime this shameless has no shame.

The neoconservative warmongers who control the Obama regime are boasting that unless Russia prevents Crimean self-determination, Washington will use sanctions to
“badly damage the Russian economy.”

Sanctions are likely to backfire. Sanctions would damage economies of Washington’s NATO puppet states, making them think again about providing cover for Washington’s aggressive words and deeds. It is Europe that will pay for Washington’s aggressive actions.

Sanctions are likely to speed up the implementation of the BRICS negotiations to leave the dollar system and settle their international accounts in their own currencies. All countries with financial and economic links to the West can be intimidated, punished, and destabilized by Washington. National sovereignty is inconsistent with being part of the US dollar system.

From Washington’s standpoint, the importance of sanctions is not any economic effects.
The importance is the propaganda advantage of portraying Russia as an offending party who is punished by Washington. Not only does this propaganda put Russia in the wrong, it also portrays Russia as subservient to Washington.

The Crimean government is actually elected, whereas the Washington-installed government in Kiev is not. Here is a report on Global Research about the “democrats” who comprise the unelected government in Kiev: http://www.globalresearch.ca/whos-who-in-ukraines-new-semi-fascist-government-meet-the-people-the-u-s-and-eu-are-supporting/5372422

During the Clinton, George W. Bush, and Obama regimes, Washington has established that whatever serves Washington’s agenda is legal. Laws inconsistent with Washington’s agenda are simply not applicable. They are dead letter laws. Therefore, it comes as no surprise that in violation of US law that prohibits giving financial assistance to governments whose leaders come to power via coup or other illegal means, Washington is offering its stooges in Kiev $1 billion to help the coup government get up and running.

 

 

Reprinted with permission from www.paulcraigroberts.org

 


 

About Dr. Paul Craig Roberts

Paul Craig Roberts was Assistant Secretary of the Treasury for Economic Policy and associate editor of the Wall Street Journal. He was columnist for Business Week, Scripps Howard News Service, and Creators Syndicate. He has had many university appointments. His internet columns have attracted a worldwide following. His latest book, The Failure of Laissez Faire Capitalism and Economic Dissolution of the West is now available.

Russia Threatens To Abandon The U.S. Dollar And Start Dumping U.S. Debt

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Source: http://theeconomiccollapseblog.com

By Michael Snyder

Russia Threatens To Abandon The U.S. Dollar And Start Dumping U.S. Debt

 

The Obama administration and the hotheads in Congress are threatening to hit Russia with “economic sanctions” for moving troops into Crimea.  Yes, those sanctions would sting a little bit, but what our politicians should be made aware of is the fact that Russian officials are promising “to respond” if economic sanctions are imposed on them.  As you will read about below, one top Kremlin adviser is even suggesting that Russia could abandon the U.S. dollar and start dumping U.S. debt.  In addition, he is also suggesting that if sanctions are imposed that Russian companies would not repay the debts that they owe U.S. banks.  Needless to say, Russia could do far more economic damage to the United States than the United States could do to Russia.  The U.S. financial system relies on the fact that the rest of the planet is going to use our currency to trade with one another and lend gigantic piles of it back to us at super low interest rates.  If the rest of the world starts changing their behavior, we are going to be in a massive amount of trouble.  Those that believe that the United States is “economically independent” are being quite delusional.

In order for U.S. economic sanctions against Russia to be effective, Europe would also have to get on board.

But that simply is not going to happen.

As I noted yesterday, Russia is the largest exporter of natural gas on the planet.  And Russia is also Europe’s largest supplier of energy.

There is no way that Europe could risk having Russia cut off the gas, especially considering the economic condition that Europe is currently in.

To get an idea of just how incredibly dependent the rest of Europe is on Russian natural gas, check out the chart in this article.  A whole bunch of European nations get more than half their natural gas from Russia.

And according to the Telegraph, even the UK has already completely ruled out economic sanctions…

Europe would be pushed back into recession, Russia into financial meltdown. This is not the sort of self harm Europe is prepared to contemplate right now. Indeed, thanks to the indiscretion of a UK official, who was snapped going into Downing Street with his briefing documents on display for all the world to see, we know this to be the case. Trade and financial sanctions have already been ruled out.

So the U.S. can do whatever it wants, but Europe is not going to be any help.  Perhaps Canada will stand with the U.S., but that will be about it.

On the flip side, the Russian Foreign Ministry is promising “to respond” if the United States does impose economic sanctions…

Russia said on Tuesday that it would retaliate if the United States imposed sanctions over Moscow’s actions in Ukraine.
 
We will have to respond,” Foreign Ministry spokesman Alexander Lukashevich said in a statement. “As always in such situations, provoked by rash and irresponsible actions by Washington, we stress: this is not our choice.”

So what would the response look like?

Lukashevich did not say, but top Kremlin adviser Sergei Glazyev is suggesting that Russia could abandon the U.S. dollar and refuse to pay back loans to U.S. banks…

“In the instance of sanctions being applied to stated institutions, we will have to declare the impossibility of returning those loans which were given to Russian institutions by U.S. banks,” RIA quoted Glazyev as saying.
 
“We will have to move into other currencies, create our own settlement system.”
 
He added: “We have excellent trade and economic relations with our partners in the east and south and we will find a way to reduce to nothing our financial dependence on the United States but even get out of the sanctions with a big profit to ourselves.”

Glazyev also stated that Russia could start dumping U.S. debt and encourage other nations to start doing the same.  The following comes from a Russian news source

“We hold a decent amount of treasury bonds – more than $200 billion – and if the United States dares to freeze accounts of Russian businesses and citizens, we can no longer view America as a reliable partner,” he said. “We will encourage everybody to dump US Treasury bonds, get rid of dollars as an unreliable currency and leave the US market.

Clearly Russian officials understand the economic leverage that they potentially have.  In fact, Glazyev seems fully convinced that Russia could cause “a crash for the financial system of the United States”

“An attempt to announce sanctions would end in a crash for the financial system of the United States, which would cause the end of the domination of the United States in the global financial system.”

On that last point Glazyev is perhaps overstating things.

On their own, the Russians could do a considerable amount of damage to the U.S. financial system, but I doubt that they could completely crash it.

However, if much of the rest of the world started following Russia’s lead, then things could get very interesting.

Just yesterday, I wrote about how China has chosen to publicly stand in agreement with Russia on the Ukrainian crisis.

If China also decided to abandon the U.S. dollar and start dumping U.S. debt, it would be an absolute nightmare for the U.S. financial system.

And keep in mind that the Chinese were already starting to dump a bit of U.S. debt even before this latest crisis.  In fact, China dumped nearly 50 billion dollars of U.S. debt in December alone.

The only way that the current bubble of debt-fueled false prosperity in the U.S. can continue is if the rest of the world continues to lend us trillions of dollars at ridiculously low interest rates that are way below the real rate of inflation.

If the rest of the world stops behaving in such an irrational manner, interest rates on U.S. government debt would rise dramatically and that would also mean that interest rates on virtually all other loans throughout our financial system would rise dramatically.

And if that happened, it would be a complete and utter nightmare for our economy.

Unfortunately, most Americans have no understanding of these things.  They just assume that we are “the greatest economy in the world” and that nothing is ever going to threaten that.

Well, the truth is that we are rapidly approaching a “turning point”, and after this bubble of false prosperity pops things will never be the same in the United States again.

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This article first appeared here at the Economic Collapse Blog.  Michael Snyder is a writer, speaker and activist who writes and edits his own blogs The American Dream and Economic Collapse Blog. Follow him on Twitter here.

 

 

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Image credit: http://theeconomiccollapseblog.com

 

Washington’s Arrogance, Hubris, and Evil Have Set the Stage for War

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Source: http://www.paulcraigroberts.org

By Dr. Paul Craig Roberts

Washington’s Arrogance, Hubris, and Evil Have Set the Stage for War

 

In some quarters public awareness is catching up with Stephen Lendman, Michel Chossudovsky, Rick Rozoff, myself and a few others in realizing the grave danger in the crisis that Washington has created in Ukraine.

The puppet politicians who Washington intended to put in charge of Ukraine have lost control to organized and armed neo-nazis, who are attacking Jews, Russians, and intimidating Ukrainian politicians. The government of Crimea, a Russian province that Khrushchev transferred to the Ukraine Soviet Republic in the 1950s, has disavowed the illegitimate government that illegally seized power in Kiev and requested Russian protection. The Ukrainian military forces in Crimea have gone over to Russia. The Russian government has announced that it will also protect the former Russian provinces in eastern Ukraine as well.

As Aleksandr Solzhenitsyn pointed out, it was folly for the Communist Party of the Soviet Union to transfer historic provinces of Russia into Ukraine. At the time it seemed to the Soviet leadership like a good thing to do. Ukraine was part of the Soviet Union and had been ruled by Russia since the 18th century. Adding Russian territory to Ukraine served to water down the nazi elements in western Ukraine that had fought for Hitler during World War 2. Perhaps another factor in the enlargement of Ukraine was the fact of Khrushchev’s Ukrainian heritage.

Regardless, it did not matter until the Soviet Union and then the former Russian empire itself fell apart. Under Washington’s pressure, Ukraine became a separate country retaining the Russian provinces, but Russia retained its Black Sea naval base in Crimea.

Washington tried, but failed, to take Ukraine in 2004 with the Washington-financed “Orange Revolution.” According to Assistant Secretary of State Victoria Nuland, since this failure Washington has “invested” $5 billion in Ukraine in order to foment agitation for EU membership for Ukraine. EU membership would open Ukraine to looting by Western bankers and corporations, but Washington’s main goal is to establish US missile bases on Russia’s border with Ukraine and to deprive Russia of its Black Sea naval base and military industries in eastern Ukraine. EU membership for Ukraine means NATO membership.

Washington wants missile bases in Ukraine in order to degrade Russia’s nuclear deterrent, thus reducing Russia’s ability to resist US hegemony. Only three countries stand in the way of Washington’s hegemony over the world, Russia, China, and Iran.

Iran is surrounded by US military bases and has US fleets off its coast. The “Pivot to Asia” announced by the warmonger Obama regime is ringing China with air and naval bases. Washington is surrounding Russia with US missile and NATO bases. The corrupt Polish and Czech governments were paid to accept US missile and radar bases, which makes the Polish and Czech puppet states prime targets for nuclear annihilation. Washington has purchased the former Russian and Soviet province of Georgia, birthplace of Joseph Stalin, and is in the process of putting this puppet into NATO.

Washington’s Western European puppets are too greedy for Washington’s money to take cognizance of the fact that these highly provocative moves are a direct strategic threat to Russia. The attitude of European governments seems to be, “after me, the deluge.”

Russia has been slow to react to the many years of Washington’s provocations, hoping for some sign of good sense and good will to emerge in the West. Instead, Russia has experienced rising demonization from Washington and European capitals and foaming at the mouth vicious denunciations by the West’s media whores. The bulk of the American and European populations are being brainwashed to see the problem that Washington’s meddling has caused in Ukraine to be Russia’s fault. Yesterday, I heard on National Public Radio a presstitute from the New Republic describe Putin as the problem.

The ignorance, absence of integrity, and lack of independence of the US media greatly enhances the prospect for war. The picture being drawn for insouciant Americans is totally false. An informed people would have burst out laughing when US Secretary of State John Kerry denounced Russia for “invading Ukraine” in “violation of international law.” Kerry is the foreign minister of a country that has illegally invaded Iraq, Afghanistan, Somalia, organized the overthrow of the government in Libya, tried to overthrow the government in Syria, attacks the civilian populations of Pakistan and Yemen with drones and missiles, constantly threatens Iran with attack, unleashed the US and Israeli trained Georgian army on the Russian population of South Ossetia, and now threatens Russia with sanctions for standing up for Russians and Russian strategic interests. The Russian government noted that Kerry has raised hypocrisy to a new level.

Kerry has no answer to the question: “Since when does the United States government genuinely subscribe and defend the concept of sovereignty and territorial integrity?”

Kerry, as is always the case, is lying through his teeth. Russia hasn’t invaded Ukraine. Russia sent a few more troops to join those at its Black Sea base in view of the violent anti-Russian statements and actions emanating from Kiev. As the Ukrainian military in Crimea defected to Russia, the additional Russian troops were hardly necessary.

The stupid Kerry, wallowing in his arrogance, hubris, and evil, has issued direct threats to Russia. The Russian foreign minister has dismissed Kerry’s threats as “unacceptable.” The stage is set for war.

Note the absurdity of the situation. Kiev has been taken over by ultra-nationalist neo-nazis. A band of ultra-nationalist thugs is the last thing the European Union wants or needs as a member state. The EU is centralizing power and suppressing the sovereignty of the member states. Note the alignment of the neoconservative Obama regime with anti-semitic neo-nazis. The neoconservative clique that has dominated the US government since the Clinton regime is heavily Jewish, many of whom are dual Israeli/US citizens. The Jewish neoconservatives, Assistant Secretary of State Victoria Nuland and National Security Adviser Susan Rice, have lost control of their coup to neo-Nazis who preach “death to the Jews.”

The Israeli newspaper Haaretz reported on February 24 that Ukrainian Rabbi Moshe Reuven Azman advised “Kiev’s Jews to leave the city and even the country.” Edward Dolinsky, head of an umbrella organization of Ukrainian Jews, described the situation for Ukrainian Jews as “dire” and requested Israel’s help.

This is the situation that Washington created and defends, while accusing Russia of stifling Ukrainian democracy. An elected democracy is what Ukraine had before Washington overthrew it.

At this time there is no legitimate Ukrainian government.

Everyone needs to understand that Washington is lying about Ukraine just as Washington lied about Saddam Hussein and weapons of mass destruction in Iraq, just as Washington lied about Iranian nukes, just as Washington lied about Syrian president Assad using chemical weapons, just as Washington lied about Afghanistan, Libya, NSA spying, torture. What hasn’t Washington lied about?

Washington is comprised of three elements: Arrogance, Hubris, and Evil. There is nothing else there.

Reprinted with permission from www.paulcraigroberts.org


 

About Dr. Paul Craig Roberts

Paul Craig Roberts was Assistant Secretary of the Treasury for Economic Policy and associate editor of the Wall Street Journal. He was columnist for Business Week, Scripps Howard News Service, and Creators Syndicate. He has had many university appointments. His internet columns have attracted a worldwide following. His latest book, The Failure of Laissez Faire Capitalism and Economic Dissolution of the West is now available.
 

Russia And China Stand In Agreement On Ukraine – And That Is Very Bad News For The United States

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Source: http://theeconomiccollapseblog.com

By Michael Snyder

Russia And China Stand In Agreement On Ukraine – And That Is Very Bad News For The United States

 

Vladimir_Putin_with_Zhang_Deguang-300x300So much for “isolating” Russia.  The Chinese government is publicly siding with Russia on the crisis in Ukraine, and that is very bad news for the United States.  Not only does it mean that the U.S. is essentially powerless to do anything about the situation in Ukraine, it also means that Russia and China are starting to understand how much economic leverage that they really have.  Yes, the Obama administration can threaten to slap “sanctions” on Russia or threaten to kick Russia “out of the G8“, but those actions would not actually hurt too much.  On the other hand, Russia and China hold approximately 25 percent of all foreign-owned U.S. debt, and if they started massively dumping U.S. debt it could rapidly create a nightmare scenario.  In addition, it is important to remember that Russia is the largest exporter of natural gas and the second largest exporter of oil in the world.  And China now imports more oil than anyone else on the planet does, including the United States.  If Russia and China got together and decided to kill the petrodollar, they could do it almost overnight.  So when it comes to Ukraine, it is definitely not the United States that has the leverage.

If China and the rest of the world abandoned Russia over Ukraine, that would be one thing.  But that is not happening at all.  In fact, China has chosen to publicly stand with Russia on this issue.  The following is from a Sky News article entitled “Russia And China ‘In Agreement’ Over Ukraine“…

Russian foreign minister Sergei Lavrov discussed Ukraine by telephone with his Chinese counterpart, Wang Yi, on Monday, and claimed they had “broadly coinciding points of view” on the situation there, according to a ministry statement.

And Chinese state news agency Xinhua is publicly rebuking the West for their handling of the Ukrainian crisis…

China’s state news agency Xinhua accused western powers of adopting a Cold War- like mindset towards Russia, trying to isolate Moscow at a time when much needed mediation is need to reach a diplomatic solution to the crisis in Crimea.
 
“Based on the fact that Russia and Ukraine have deep cultural, historical and economic connections, it is time for Western powers to abandon their Cold War thinking. Stop trying to exclude Russia from the political crisis they failed to mediate, and respect Russia’s unique role in mapping out the future of Ukraine,” Xinhua wrote in an opinion piece.

Apparently clueless as to how the geopolitical chips are falling, the Obama administration is busy planning all sorts of ways that it can punish Russia

Behind the scenes, Obama administration officials are preparing a series of possible battle plans for a potential economic assault on Russia in response to its invasion of Ukraine, an administration source close to the issue told The Daily Beast. Among the possible targets for these financial attacks: everyone from high-ranking Russian military officials to government leaders to top businessmen to Russian-speaking separatists in Ukraine. It’s all part of the work to prepare an executive order now under consideration at the Obama administration’s highest levels.

Does the Obama administration really want to start an “economic war” with Russia and potentially against China as well?

Considering how much money we owe them, and considering the fact that we desperately need them to continue to use the petrodollar, we stand to lose far more than they do.

This is one of the reasons why I have always insisted that the national debt was a national security issue.  By going into so much debt, we have given other nations such as Russia and China a tremendous amount of leverage over us.

Unfortunately, the debtmongers in Washington D.C. never have listened to common sense.

When it comes to Ukraine, there are other economic considerations as well.

For example, about 25 percent of the natural gas that Europe uses comes from Russia, and Ukraine only has about four months of natural gas supplies stockpiled.

If Russia cut off the natural gas, that would create some huge problems.  Fortunately, winter is just about over or the Russians would have even more leverage.

In addition, Ukraine is one of the leading exporters of wheat and corn on the planet, and a disruption in the growing of those crops could make the emerging global food crisis even worse.

But of course the biggest concern is that the Ukraine crisis could ultimately spark a global war.

Unfortunately, there is a treaty that requires the United States to defend Ukraine if it is attacked…

President Bill Clinton, along with the British, signed in 1994 a nearly forgotten agreement to protect Ukraine’s borders. Ukraine now is appealing to the countries that signed the agreement.
 
As the British Daily Mail points out, it means that, technically, if Russia were to invade Ukraine, it would be difficult for the U.S. and Britain to avoid going to war.
 
Given that the late Russian president, Boris Yeltsin also signed it, it was apparent that it wasn’t expected that the Russians would take the action that Putin now is undertaking.

And top Ukrainian politicians are now asking western nations to come to the aid of Ukraine militarily

Ukraine’s former prime minister Yulia Tymoshenko has appealed for the West to adopt ‘strongest means’ to intervene in Russia’s occupation of Crimea if diplomacy fails.
 
In an interview with CNN’s Christiane Amanpour, Tymoshenko, freed last week after the riots throughout the nation, said if Russia is allowed to ‘take away’ Crimea, life will change ‘practically everywhere in the world.’
 
She added: ‘Then we have to accept… an aggressor, can violate all the international agreements, take away territories, whenever she likes.’

On the other side, deposed Ukrainian President Viktor Yanukovych has formally requested that Russia militarily intervene in his nation…

Russia’s U.N. envoy said Monday that ousted Ukrainian President Viktor Yanukovych asked Russia to send troops to “establish legitimacy, peace, law and order, stability, and defending the people of Ukraine.” Russian Ambassador Vitaly Churkin read a letter from Yanukovych at the U.N. Security Council meeting.
 
“Ukraine is on the brink of civil war. In the country, there is chaos and anarchy. The life, the security and the rights of people, particularly in the southeast part in Crimea are being threatened. So under the influence of Western countries, there are open acts of terrorism and violence. People are being persecuted for language and political reasons,” the letter said. “So in this regard, I would call on the President of Russia, Mr. Putin, asking him to use the armed forces of the Russian Federation to establish legitimacy, peace, law and order, stability, and defending the people of Ukraine.”

And it is very important to note that Yanukovych would have never issued this letter if the Russian government has not asked him to.

So the stage is set.

Russia has already grabbed Crimea, and it is eyeing other territories in eastern Ukraine.

China is publicly backing Russia, and collectively they have a tremendous amount of economic leverage.

The Obama administration is barking loudly about what Russia has done, but the reality is that the U.S. has very little economic leverage at this point.

What the U.S. does have is the strongest military on the entire planet, but let us hope and pray that Obama does not decide to get the U.S. military involved in Ukraine.  That would be absolutely disastrous.

In the end, the U.S. has no good options in Ukraine.  The Obama administration helped aid and organize the violent revolution that overthrew the Ukrainian government, and now we have a giant mess.

Nobody is quite sure what comes next, but one thing is certain…

The relationship between the United States and Russia will never, ever be the same again.

This article first appeared here at the Economic Collapse Blog.  Michael Snyder is a writer, speaker and activist who writes and edits his own blogs The American Dream and Economic Collapse Blog. Follow him on Twitter here.

 

 

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Image credit: http://theeconomiccollapseblog.com

 

12 Signs That Russia Is Ready To Fight A War Over Crimea

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Source: http://theeconomiccollapseblog.com

By Michael Snyder

12 Signs That Russia Is Ready To Fight A War Over Crimea

 

Russian-Military-Vehicles-300x300Russia will never, ever give up Crimea without a fight.  Anyone that thinks otherwise is just being delusional.  The Russian Black Sea fleet’s main base at Sevastopol is far too strategically important.  In addition, ethnic Russians make up approximately 60 percent of the population of Crimea, and most of the population is rabidly pro-Russian.  In fact, many prominent Crimean politicians are already calling for reunification with Russia.  So if you have been thinking that Russia is just going to fold up shop and go home now that pro-European protesters have violently seized power in Kiev, you can quit holding your breath.  The truth is that Russia is more than willing to fight a war over Crimea.  And considering the fact that vitally important pipelines that pump natural gas from Russia to the rest of Europe go right through Ukraine, it is not likely that Russia will just willingly hand the rest of Ukraine over to the U.S. and the EU either.  If the U.S. and the EU push too hard in Ukraine, a major regional war may erupt which could ultimately lead to something much larger.

Russia and Ukraine have very deep historical ties.  Most Americans may not think that Ukraine is very important, but the Russians consider Ukraine to be of the utmost strategic importance.

As an American, how would you feel if another nation funded and organized the violent overthrow of the democratically-elected Canadian government and replaced it with a government that was virulently anti-American?

By doing this to Ukraine, the United States and the EU are essentially sticking a pin in Russia’s eye.  Needless to say, Russia is extremely angry at this point and they are gearing up for war.

The following are 12 signs that Russia is ready to fight a war over Crimea…

#1 More Russian military vehicles continue to pour into Crimea.  Just check out this video.

#2 Russian military vehicles have been photographed in the main square of Sevastopol.

#3 Russian military jets near the border with Ukraine have been put on combat alert.

#4 Russia has ordered “surprise military exercises” along the Ukrainian border.

#5 In connection with those “exercises”, it is being reported that Russia has deployed 150,000 troops along the border with Ukraine.

#6 Russia already has approximately 26,000 troops stationed at their naval base in Sevastopol.

#7 Russian ships carrying additional soldiers have been spotted off the coast of Crimea…

Russia’s large landing ship Nikolai Filchenkov has arrived near the Russia Black Sea Fleet’s base at Sevastopol, which Russia has leased from Ukraine since the fall of the Soviet Union in 1991.
 
The ship is reported to be carrying as many as 200 soldiers and has joined four additional ships carrying an unknown amount of Special Forces troops. Flot.com also reported over the weekend that personnel from the 45th Airborne Special Forces unit and additional divisions had been airlifted into Anapa, a city on Russia’s Black Sea coastline.

#8 Russian Defense Minister Sergei Shoigu made the following statement to reporters on Wednesday…

“Measures are taken to guarantee the security of our facilities.”

#9 An unidentified Russian official has told the Financial Times that Russia is willing to use military force to protect Crimea…

Moscow earlier revealed that it would be ready to go for war over the Crimea region in order to protect the large population and army installations.
 
“If Ukraine breaks apart, it will trigger a war. They will lose Crimea first [because] we will go in and protect [it], just as we did in Georgia,” an unidentified Russian official told the Financial Times.

#10 Officials in Sevastopol have “installed” a Russian citizen as mayor of the city.

#11 Approximately 120 pro-Russian gunmen have seized the Crimean parliament building and have raised the Russian flag.

#12 There are rumors that Russian authorities have offered protection to ousted Ukrainian president Viktor Yanukovych…

Viktor F. Yanukovych, the ousted president of Ukraine, declared on Thursday that he remained the lawful president of the country and appealed to Russia to “secure my personal safety from the actions of extremists.” Russian news agencies reported that he had already arrived in Russia, but officials did not immediately confirm that.

No matter what the “new government” in Kiev says, and no matter how hard the U.S. and the EU push, Russia will never give up Crimea.  The following is what a recent Debka article had to say about the matter…

There is no way that President Vladimir Putin will relinquish Russian control of the Crimean peninsula and its military bases there – or more particularly the big Black Sea naval base at Sevastopol. This military stronghold is the key to Russia’s Middle East policy. If it is imperiled, so too are Russia’s military posture in Syria and its strategic understandings with Iran.

And you know what?

The people of Crimea do not want Russia to leave either.  In fact, they overwhelmingly want Russia to help defend them against the “new government” in Kiev.

As you read this, militia groups are being formed in Crimea to fight back against the “nationalist invasion” that they are anticipating.  Just check out the following excerpt from a recent Time Magazine article

Many of the people at the rally in Sevastopol were not just ready to believe. They were convinced of the imminent nationalist invasion. What scared them most were the right-wing political parties and militant groups that have played a role in Ukraine’s revolution. “What do you think they’re going to do with all those weapons they seized from police in Kiev? They’re going to come here and make war,” said Sergei Bochenko, who identified himself as the commander of a local militia group in Sevastopol called the Southern Russian Cossack Battalion.
 
In preparation, he said, his group of several hundred men had armed themselves with assault rifles and begun to train for battle. “There’s not a chance in hell we’re going to accept the rule of that fascist scum running around in Kiev with swastikas,” he said. That may be overstating the case. Nowhere in Ukraine has the uprising involved neo-Nazi groups, and no swastikas have appeared on the revolution’s insignia. But every one of the dozen or so people TIME spoke to in Sevastopol was certain that the revolt was run by fascists, most likely on the payroll of the U.S. State Department.

And just remember what happened back in 2008 in South Ossetia and Abkhazia.  The Russians have already shown that they are not afraid to militarily intervene in order to protect Russian citizens.

So what would the U.S. and the EU do if a war erupts between Russia and Ukraine?

Would they risk a direct military confrontation with Russia in order to help Ukraine?

This article first appeared here at the Economic Collapse Blog.  Michael Snyder is a writer, speaker and activist who writes and edits his own blogs The American Dream and Economic Collapse Blog. Follow him on Twitter here.

 

 

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Outlawing “Bankruptcy” in Europe

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Source: http://mises.ca

By

Outlawing “Bankruptcy” in Europe

 

256px-La2-euroThe European Union (EU) is currently discussing banning “bankruptcy.” Not the actual financial act, but the word.

Apparently there is a stigma attached to going bankrupt. It leaves people thinking that perhaps you are not credit worthy and that they should think twice about lending you money. To stop people governments from being unduly harmed by the use of this word, the EU wants to replace it with the more neutral “debt adjustment.”

Of course this is not the EU’s first salvo against the English language. It has already banned its lawmakers from using the words “‘Miss” and “Mrs”. By forcing all men to be referred to as “Mr” and women as “Ms”, European legislators will stamp out all remnants of sexism. Or at least, that’s the plan.

What EU politicians are missing is that words are not inherently good or bad. They are just the combination of letters used to refer to an idea. A woman will no longer be unmarried (a Miss) or married (a Mrs), just because the use of the appropriate identifier is removed. Likewise, European officials could well outlaw all nation state demonyms, and force all citizens to refer to themselves as “European”. This would not erase the fact that there are Germans, Frenchmen, and Luxembourgers, all in need of some term of reference.

By legislating away use of a term such as “bankruptcy”, all these officials are doing is needlessly complicating the affairs of those bound by the law. There is a state of affairs that exists when one’s cash flow is insufficient to pay off his debts. Whether one calls such a state “bankruptcy” or “debt adjusted” is immaterial.

If the EU thinks that bankruptcy is such a bad thing, why doesn’t it strike the root? Outlaw bankruptcy. Since the largest offenders are governments, this would amount to legislating balanced budgets and forcing governments to drastically reign in their spendthrift ways. Of course, methinks that asking politicians to draft a law that hampers the way they go about their own affairs to be an unpopular proposal in Brussels.

 


About the Author

David Howden
David Howden is Chair of the Department of Business and Economics, and professor of economics at St. Louis University, at its Madrid Campus, Academic Vice President of the Ludwig von Mises Institute of Canada, and winner of the Mises Institute’s Douglas E. French Prize. Send him mail.

Image credit: https://commons.wikimedia.org/wiki/File%3ALa2-euro.jpg

 

If America Continues To Go Down The Same Path As Europe, This Is What Life Will Be Like…

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Source: http://endoftheamericandream.com

By Michael Snyder

If America Continues To Go Down The Same Path As Europe, This Is What Life Will Be Like…

 

EUSSR-Flag-Photo-by-Finn-Skovgaard-300x256Becoming more like Europe is not a good thing.  But that is the path that we are currently on.  For the most part, Europeans live in a socialist “Big Brother” system in which the government completely dominates your life from the cradle to the grave.  Of course there are differences from country to country, but generally speaking the lives of most Europeans are very tightly regulated.  You see, the truth is that high levels of individual liberty and freedom are considered to be “dangerous” by the European elite.  They believe that if we are all allowed to just do whatever we want that it would result in utter chaos.  They are convinced that life is better when those that are smarter (them) control the lives of everyone else.  In essence, Europe is like a giant religious cult in many ways (minus the religion).  With each passing year, the number of rules and regulations governing the daily lives of Europeans steadily grows, as does the level of control.  If you try to live outside of that control, you could very well find yourself in a direct confrontation with the authorities very rapidly.

Just consider what is happening in Germany.  Authorities there have stated repeatedly that they do not believe in having any “parallel societies”, and therefore everyone must participate in the system that the government has established.

That includes all children.  In Germany today, almost all forms of homeschooling are illegal.  In fact, one judge shockingly ruled that one set of parents could not have custody of their children because they might move them to another country and homeschool them there

A judge has issued a stunning verdict in a homeschooling case in Germany, ordering that the parents cannot have custody of their children because the family might move to another country and homeschool, posing a “concrete endangerment” to the children.
 
Dirk and Petra Wunderlich’s case made international headlines in August when 20 armed police arrived with a battering ram and forcibly took their four children from their home in Darmstadt, Germany, and enrolled them in public school.
 
As WND reported at the time, the children, ages 7 to 14, were taken into police custody. They were allowed to return home three weeks later when their father and mother, given no choice by the federal bureaucracy in Germany, agreed to allow their kids to attend public schools despite their objection to the social and religious instruction there.

Are you starting to see what I meant when I compared Europe to a cult?

In Europe, government is god, and everyone and everything belongs to the government.

Apparently, that even includes the life savings of their own citizens.  The following is from a Reuters article that was just posted this week…

The savings of the European Union’s 500 million citizens could be used to fund long-term investments to boost the economy and help plug the gap left by banks since the financial crisis, an EU document says.

Did you catch that?  The EU apparently believes that they could use the private savings of their own citizens “to fund long-term investments” any time that they want.

But what if you don’t want your life savings to be invested in that way?

Too bad for you.

In fact, according to that Reuters article the EU wants to find ways to “mobilize more personal pension savings” so that there will be a larger pool with which to potentially fund long-term projects…

The Commission will ask the bloc’s insurance watchdog in the second half of this year for advice on a possible draft law “to mobilize more personal pension savings for long-term financing”, the document said.

In Europe, they also tend to love any “Big Brother” technologies that will allow them to watch, track, monitor and record the activities of their citizens.

For example, it has been reported that in the UK there are 1.85 million video cameras watching the population, and London has been called “the most watched city in the world“.

The control freaks in the UK are so paranoid that it is even illegal to carry a knife in public, but despite all of their crazy laws the rate of violent crime in the UK is still far higher than it is in the United States.

Now, the UK has decided that all of the medical records for the entire population will be gathered into a single database.  The following is from a recent TechDirt article

The UK government is currently building a database called care.data that will contain all of England’s medical records. It’s being promoted as providing valuable information for healthcare management and medical researchers that will lead to improved treatment.

But this database will not be private.  In fact, it is being reported that information from this database will be sold to drug companies and insurance companies

Drug and insurance companies will from later this year be able to buy information on patients – including mental health conditions and diseases such as cancer, as well as smoking and drinking habits – once a single English database of medical data has been created.
 
Harvested from GP and hospital records, medical data covering the entire population will be uploaded to the repository controlled by a new arms-length NHS information centre, starting in March. Never before has the entire medical history of the nation been digitised and stored in one place.

How would you feel if that was being done to your private medical information?

Not that the U.S. is a bastion of freedom and liberty these days either.

For example, Infowars is reporting that the Department of Homeland Security plans to launch a “national license plate tracking system”…

The Department of Homeland Security is set to activate a national license plate tracking system that will be shared with law enforcement, allowing DHS officers to take photos of any license plate using their smartphone and upload it to a database which will include a “hot list” of “target vehicles”.

The details are included in a PDF attachment uploaded yesterday to the Federal Business Opportunities website under a solicitation entitled “National License Plate Recognition Database.”

The system will “track vehicle license plate numbers that pass through cameras or are voluntarily entered into the system from a variety of sources (access control systems, asset recovery specialists, etc.) and uploaded to share with law enforcement” in order to help locate “criminal aliens and absconders.”

And for many more ways that the U.S. is becoming a “Big Brother society”, please see my previous article entitled “32 Privacy Destroying Technologies That Are Systematically Transforming America Into A Giant Prison“.

Another way that America is becoming more like Europe is in the area of religious behavior.

At one time, Europe was a hotbed for religious faith.  Of course those days are long gone.  And the United States is now heading down the exact same path, although Europe is still way ahead of us.  The following is from a Pew Research survey conducted a few years ago…

Half of Americans deem religion very important in their lives; fewer than a quarter in Spain (22%), Germany (21%), Britain (17%) and France (13%) share this view.

So why has religion become so unimportant?

Well, it is because that is what the government system tells them to believe from the time that they are little children.

As I mentioned earlier, the government dominates your life from the beginning to the end in Europe.  This even includes decisions about ending your life.

In fact, in Belgium they actually want to extend the euthanasia law to children

Making the argument that everybody has the right to die, Karine Lalieux, a Socialist member of the Belgian House, is pushing legislation that would extend the country’s 2002 euthanasia law to minors under 18.
 
“Our responsibility is to allow everybody to live, but also to die, in dignity,’’ said Lalieux.

And in the Netherlands they actually have mobile euthanasia teams that go door to door helping elderly people end their lives in the comfort of their own homes.

Europe is not a model for the rest of us to follow.

Instead, Europe should serve as a stark warning to the rest of the world about what can happen when you let the control freaks get too much control.

EUSSR-Flag-Photo-by-Finn-Skovgaard

 

This article first appeared here at the The American Dream.  Michael Snyder is a writer, speaker and activist who writes and edits his own blogs The American Dream and Economic Collapse Blog. Follow him on Twitter here.

 

 

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Washington Orchestrated Protests Are Destabilizing Ukraine

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Source: http://www.paulcraigroberts.org

By Dr. Paul Craig Roberts

February 12, 2014

Washington Orchestrated Protests Are Destabilizing Ukraine

 

Paul Craig RobertsThe protests in the western Ukraine are organized by the CIA, the US State Department, and by Washington- and EU-financed Non-Governmental Organizations (NGOs) that work in conjunction with the CIA and State Department. The purpose of the protests is to overturn the decision by the independent government of Ukraine not to join the EU.

The US and EU were initially cooperating in the effort to destroy the independence of Ukraine and make it a subservient entity to the EU government in Brussels. For the EU
government, the goal is to expand the EU. For Washington the purposes are to make
Ukraine available for looting by US banks and corporations and to bring Ukraine into NATO so that Washington can gain more military bases on Russia’s frontier. There are three countries in the world that are in the way of Washington’s hegemony over the world–Russia, China, and Iran. Each of these countries is targeted by Washington for overthrow or for their sovereignty to be degraded by propaganda and US military bases that leave the countries vulnerable to attack, thus coercing them into accepting Washington’s will.

The problem that has arisen between the US and EU with regard to Ukraine is that Europeans have realized that the takeover of Ukraine is a direct threat to Russia, which can cut Europe off from oil and natural gas, and if there is war completely destroy Europe. Consequently, the EU became willing to stop provoking the Ukraine protests.

The response of the neoconservative, Victoria Nuland, appointed Assistant Secretary of State by the duplicitous Obama, was “fuck the EU,” as she proceeded to describe the members of the Ukraine government that Washington tended to impose on a people so unaware as to believe that they are achieving independence by rushing into Washington’s arms. I once thought that no population could be as unaware as the US population. But I was wrong. Western Ukrainians are more unaware than Americans.

The orchestration of the “crisis” in Ukraine is easy. The neoconservative Assistant Secretary of State Victoria Nuland told the National Press Club in Washington on December 13, 2013, that the US has “invested” $5 billion in agitation in Ukraine. http://www.informationclearinghouse.info/article37599.htm The crisis essentially resides in western Ukraine where romantic ideas about Russian oppression are strong and the population is less Russian than in the eastern Ukraine.

The hatred of Russia in western Ukraine is so dysfunctional that the duped protesters are unaware that joining the EU means the end of Ukraine independence and rule by the EU bureaucrats in Brussels, the European Central Bank, and US corporations. Perhaps Ukraine is two countries. The western half could be given to the EU and US corporations, and the eastern half could be reincorporated as part of Russia, where the entire Ukraine resided for as long as the US has existed.

The disaffection from Russia that exists in western Ukraine makes it easy for the EU and US to cause trouble. Those in Washington and Europe who wish to destroy Ukraine’s independence portray an independent Ukraine as a hostage of Russia, while a Ukraine in the EU is allegedly under the protection of the US and Europe. The large sums of money that Washington funnels into NGOs in Ukraine propagate this idea and work the population into a mindless frenzy. I have never in my life witnessed people as mindless as the Ukrainian protesters who are destroying the independence of their country.

The US- and EU-financed NGOs are fifth columns designed to destroy the independence of the countries in which they operate. Some pretend to be “human rights organizations.” Others indoctrinate people under cover of “education programs” and “building democracy.” Others, especially those run by the CIA, specialize in provocations such as “Pussy Riot.” Few if any of these NGOs are legitimate. But they are arrogant. The head of one of the NGOs announced prior to the Iranian elections in which Mousavi was Washington’s and the CIA’s candidate that the election would result in a Green Revolution. He knew this in advance, because he had helped to finance it with US taxpayer dollars. I wrote about it at the time. It can be found on my website, www.paulcraigroberts.org and in my just published book, How America Was Lost.

The Ukrainian “protesters” have been violent, but the police have been restrained. Washington has a vested interest in keeping the protests going in the hopes of turning the protests into revolt so that Washington can grab Ukraine. This week the US House of Representatives passed a resolution threatening sanctions should the violent protests be put down by the police.

In other words, if the Ukrainian police behave toward violent protesters in the way that US police behave toward peaceful protesters, it is reason for Washington to interfere in the internal affairs of Ukraine. Washington is using the protests to destroy the independence of Ukraine and has ready the list of puppets that Washington intends to install as Ukraine’s next government.
 

Reprinted with permission from www.paulcraigroberts.org


 

About Dr. Paul Craig Roberts

Paul Craig Roberts was Assistant Secretary of the Treasury for Economic Policy and associate editor of the Wall Street Journal. He was columnist for Business Week, Scripps Howard News Service, and Creators Syndicate. He has had many university appointments. His internet columns have attracted a worldwide following. His latest book, The Failure of Laissez Faire Capitalism and Economic Dissolution of the West is now available.

 

 

20 Signs That The Global Economic Crisis Is Starting To Catch Fire

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Source: http://theeconomiccollapseblog.com

By Michael Snyder

20 Signs That The Global Economic Crisis Is Starting To Catch Fire

 

Lighting-A-Match-Photo-by-Sebastian-Ritter-300x300If you have been waiting for the “global economic crisis” to begin, just open up your eyes and look around.  I know that most Americans tend to ignore what happens in the rest of the world because they consider it to be “irrelevant” to their daily lives, but the truth is that the massive economic problems that are currently sweeping across Europe, Asia and South America are going to be affecting all of us here in the U.S. very soon.  Sadly, most of the big news organizations in this country seem to be more concerned about the fate of Justin Bieber’s wax statue in Times Square than about the horrible financial nightmare that is gripping emerging markets all over the planet.  After a brief period of relative calm, we are beginning to see signs of global financial instability that are unlike anything that we have witnessed since the financial crisis of 2008.  As you will see below, the problems are not just isolated to a few countries.  This is truly a global phenomenon.

Over the past few years, the Federal Reserve and other global central banks have inflated an unprecedented financial bubble with their reckless money printing.  Much of this “hot money” poured into emerging markets all over the world.  But now that the Federal Reserve has begun “tapering” quantitative easing, investors are taking this as a sign that the party is ending.  Money is being pulled out of emerging markets all over the globe at a staggering pace and this is creating a tremendous amount of financial instability.  In addition, the economic problems that have been steadily growing over the past few years in established economies throughout Europe and Asia just continue to escalate.  The following are 20 signs that the global economic crisis is starting to catch fire…

#1 The unemployment rate in Greece has hit a brand new record high of 28 percent.

#2 The youth unemployment rate in Greece has hit a brand new record high of 64.1 percent.

#3 The percentage of bad loans in Italy is at an all-time record high.

#4 Italian industrial output declined again in December, and the Italian government is on the verge of collapse.

#5 The number of jobseekers in France has risen for 30 of the last 32 months, and at this point it has climbed to a new all-time record high.

#6 The total number of business failures in France in 2013 was even higher than in any year during the last financial crisis.

#7 It is being projected that housing prices in Spain will fall another 10 to 15 percent as their economic depression deepens.

#8 The economic and political turmoil in Turkey is spinning out of control.  The government has resorted to blasting protesters with pepper spray and water cannons in a desperate attempt to restore order.

#9 It is being estimated that the inflation rate in Argentina is now over 40 percent, and the peso is absolutely collapsing.

#10 Gangs of armed bandits are roaming the streets in Venezuela as the economic chaos in that troubled nation continues to escalate.

#11 China appears to be very serious about deleveraging.  The deflationary effects of this are going to be felt all over the planet. The following is an excerpt from Ambrose Evans-Pritchard’s recent article entitled “World asleep as China tightens deflationary vice“…

China’s Xi Jinping has cast the die. After weighing up the unappetising choice before him for a year, he has picked the lesser of two poisons.
 
The balance of evidence is that most powerful Chinese leader since Mao Zedong aims to prick China’s $24 trillion credit bubble early in his 10-year term, rather than putting off the day of reckoning for yet another cycle.
 
This may be well-advised for China, but the rest of the world seems remarkably nonchalant over the implications.

#12 There was a significant debt default by a coal company in China last Friday

A high-yield investment product backed by a loan to a debt-ridden coal company failed to repay investors when it matured last Friday, state media reported on Wednesday, in the latest sign of financial stress in China’s shadow bank sector.

#13 Japan’s Nikkei stock index has already fallen by 14 percent so far in 2014.  That is a massive decline in just a month and a half.

#14 Ukraine continues to fall apart financially

The worsening political and economic circumstances in Ukraine has prompted the Fitch Ratings agency to downgrade Ukrainian debt from B to a pre–default level CCC. This is lower than Greece, and Fitch warns of future financial instability.

#15 The unemployment rate in Australia has risen to the highest level in more than 10 years.

#16 The central bank of India is in a panic over the way that Federal Reserve tapering is effecting their financial system.

#17 The effects of Federal Reserve tapering are also being felt in Thailand

In the wake of the US Federal Reserve tapering, emerging economies with deteriorating macroeconomic figures or visible political instability are being punished by skittish markets. Thailand is drifting towards both these tendencies.

#18 One of Ghana’s most prominent economists says that the economy of Ghana will crash by June if something dramatic is not done.

#19 Yet another banker has mysteriously died during the prime years of his life.  That makes five “suspicious banker deaths” in just the past two weeks alone.

#20 The behavior of the U.S. stock market continues to parallel the behavior of the U.S. stock market in 1929.

Yes, things don’t look good right now, but it is important to keep in mind that this is just the beginning.

This is just the leading edge of the next great financial storm.

The next two years (2014 and 2015) are going to represent a major “turning point” for the global economy.  By the end of 2015, things are going to look far different than they do today.

None of the problems that caused the last financial crisis have been fixed.  Global debt levels have grown by 30 percent since the last financial crisis, and the too big to fail banks in the United States are 37 percent larger than they were back then and their behavior has become even more reckless than before.

As a result, we are going to get to go through another “2008-style crisis”, but I believe that this next wave is going to be even worse than the previous one.

So hold on tight and get ready.  We are going to be in for quite a bumpy ride.

This article first appeared here at the Economic Collapse Blog.  Michael Snyder is a writer, speaker and activist who writes and edits his own blogs The American Dream and Economic Collapse Blog. Follow him on Twitter here.

 

 

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