Category Archives: Economics

How The Elites Are Divorcing From Reality: The Economist’s “What If”, by Gefira

Europe is beyond saving. Give it a year and nobody will show French President Emmanuel Macron walking on water. From gefira.org:

The Western globalist elites have not digested Trump’s victory or Brexit yet. They are having a hard time dealing with their ideological failures, and when the reality dares not to comply with their day dreaming, they go online and create a parallel world, where their “expert” predictions always turn right and their failures cannot be questioned. The Economist‘s portal named “what if”, a neo-liberal, wishful thinking echo chamber, is the point in case.

Its latest piece1)attributes magical powers to the new hero of the elites, Emmanuel Macron, who soundly defeated “evil” Marine Le Pen in May. For The Economist, Macron is nothing short of Jesus as he was correspondingly depicted on the monthly’s cover walking on water:

The hypothetical scenario of Macron’s success is based on magical reforms that will somehow create enormous numbers of jobs after an initial friction and fix the out-of-control state budget. The text provides no answer how exactly all this is going to be done. The happy predictions do not stop there. Macron’s miracle, would turn France into another Silicon Valley, a paradise for start-ups. Does it not make us think back to the internet bubble of the 90s? After “making France great again” and defeating Marion Maréchal-Le Pen, Marine’s niece (who for the record has already retired from politics, but don’t tell The Economist, it’d break their narrative, they need an evil antagonist), Macron’s magic would next make Europe great again. Academic papers on the “French Renaissance” are beginning to appear, says the article’s author, an intellectual liberal himself and Macron’s flunky. He speaks of “EU-funded military operations in the Sahel”, because clearly that’s what Europe needs most. Why, destabilizing surrounding countries has worked very well so far, hasn’t it? Islamic terrorism isn’t even touched in the article, so we gather it will magically disappear as will the problems of the banlieu which do not deserve much mention either. Here, too, no solution is offered, just pure magic.

To continue reading: How The Elites Are Divorcing From Reality: The Economist’s “What If”

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Muslims Tell Europe: “One Day All This Will Be Ours”, by Giulio Meotti

If you look at Europe’s indigenous non-Muslim birthrates versus Muslim birthrates in both Europe and the Middle East, the headline prediction looks inevitable. From Giulio Meotti at gatestoneinstitute.org:

  • The Archbishop of Strasbourg Luc Ravel, nominated by Pope Francis in February, just declared that “Muslim believers know very well that their fertility is such today, that they call it… the Great Replacement. They tell you in a very calm, very positive way: One day all this, all this will be ours…”.
  • Hungarian Prime Minister Viktor Orbán just warned against a “Muslimized Europe”. According to him, “the question of the upcoming decades is whether Europe will continue to belong to Europeans”.
  • “In the coming 30 years, the number of Africans will grow by more than one billion people. That is twice the population of the entire European Union… The demographic pressure will be enormous. Last year, more than 180,000 people crossed in shabby boats from Libya. And this is just the beginning. According to EU Commissioner Avramopoulos, at this very moment, 3 million migrants are waiting to enter Europe”. — Geert Wilders, MP, The Netherlands, and leader of the Party for Freedom and Democracy (PVV).

This week, yet another Islamic terrorist attack targeted the Spanish city of Barcelona. As it was for many years under Muslim rule, it is, therefore, like Israel, land which many Islamists believe they are entitled to repossess.

At the same time, far from Spain, elementary schools have been closing, shuttered by the state after the number of children dropped to less than 10% of the population. The government is converting these structures into hospices, providing care for the elderly in a country where 40% of the people are 65 or older. That is not a science-fiction novel. That is Japan, the world’s oldest and most sterile nation, where there is a popular expression: “ghost civilization“.

According to Japan’s National Institute of Population and Social Security Research, by 2040 most of the country’s smaller cities will see a dramatic drop of one-third to one-half of their population. Due to a dramatic demographic decrease, many Japanese councils can no longer operate and have been closed. Restaurants have decreased from 850,000 in 1990 to 350,000 today, pointing to a “drying up of vitality”. Predictions also suggest that in 15 years, Japan will have 20 million empty houses. Is that also the future of Europe?

To continue reading: Muslims Tell Europe: “One Day All This Will Be Ours”

Rogoff, Orwell and Kafka, by Raúl Ilargi Meijer

Raúl Ilargi Meijer cuts to the immoral insanity of central banking. From Meijer at theautomaticearth.com:

Harvard professor and chess grandmaster Kenneth Rogoff has said some pretty out there stuff before, in his role as self-appointed crusader against cash, but apparently he’s not done yet. In fact, he might just be getting started. This time around he sounds like a crossover between George Orwell and Franz Kafka, with a serving of ‘theater of the absurd’ on top. Rogoff wants to give central banks total control over your lives. They must decide what you do with your money. First and foremost, they must make it impossible for you to save your money from their disastrous policies, so they are free to create more mayhem.

Prepare For Negative Interest Rates In The Next Recession Says Top Economist

Negative interest rates will be needed in the next major recession or financial crisis, and central banks should do more to prepare the ground for such policies, according to leading economist Kenneth Rogoff. Quantitative easing is not as effective a tonic as cutting rates to below zero, he believes. Central banks around the world turned to money creation in the credit crunch to stimulate the economy when interest rates were already at rock bottom.

Central banks create recessions and crises. Not people, and not economies. Central banks. The next recession, which is inevitable, that’s the one thing Rogoff has right, will come when the bubbles in housing, stocks, bonds, etc., created by central banks’ QE, ZIRP, NIRP, start to pop. And there’s nothing worse than giving central banks even more tools for creating crises. We should take away the tools they have now, not hand them more sledgehammers.

In a new paper published in the Journal of Economic Perspectives the professor of economics at Harvard University argues that central banks should start preparing now to find ways to cut rates to below zero so they are not caught out when the next recession strikes. Traditionally economists have assumed that cutting rates into negative territory would risk pushing savers to take their money out of banks and stuff the cash – metaphorically or possibly literally – under their mattress. As electronic transfers become the standard way of paying for purchases, Mr Rogoff believes this is a diminishing risk.

To continue reading: Rogoff, Orwell and Kafka

Venezuela: Dictatorship, Collapse, And Consequence, by Brandon Smith

Socialists blame everything but socialism when socialist states collapse. From Brandon Smith at alt-market.com:

If you want to outline the numerous failures of ideological and economic socialism, just name any socialist nation and you are sure to uncover an endless supply of examples. In fact, many countries where socialism is not total but making considerable inroads often suffer from severe decline — the U.S. being one of them. Whatever socialism touches it destroys, because forced interdependency does not work. It is a broken concept with no large scale successes (this includes China, which suffers from considerable poverty and a totalitarian government despite it being the most successful garbage economy out of a host of other garbage economies). Yet, proponents of socialism keep trying again and again claiming that “this time is different.”

So ample have been socialism’s failures in the past several years that socialists have resorted to a classic blame game in order to maintain the delusion. You see, when you bring up nations at the very end of the socialist cycle on the verge of extinction — nations like Venezuela, all you are going to hear is the argument that it was “the evil western capitalists that sabotaged the experiment.”

This is a fascinating journey into cognitive dissonance. Because in order to believe this nonsense, you have to first ignore the cold hard reality that socialist policies and politics have permeated every aspect of most western nations to the point that they can no longer be called free market societies. The fact is, IF sabotage of Venezuela can be proven as the cause of its economic ills rather than the inherent pitfalls of socialism, it would merely be a group of socialist nations sabotaging another socialist nation. “Capitalism” plays no part in this mess whatsoever.

In fact, it has been international banks like Goldman Sachs that continue to fund failed socialist projects like Venezuela through bond investment.  If anything, the banks have been artificially keeping the government afloat when it should be allowed to fail so that it can be replaced.

Venezuela is perhaps the easiest of modern examples of socialist collapse, and maybe it is lazy to pull the Venezuela card when discussing these issues, but consider for a moment that the country is important exactly because it is a cautionary tale. Venezuela as a disaster state is at the end of the path ALL other socialist nations are traveling down. Venezuela is the future, and the future is bleak.

To continue reading: Venezuela: Dictatorship, Collapse, And Consequence

 

Just Wait a Little While, by James Howard Kunstler

Prompted by the coming financial crisis, America and Americans will have to change dramatically. Better prepare yourself. From James Howard Kunstler at kunstler.com:

The trouble, of course, is that even after the Deep State (a.k.a. “The Swamp”) succeeds in quicksanding President Trump, America will be left with itself — adrift among the cypress stumps, drained of purpose, spirit, hope, credibility, and, worst of all, a collective grasp on reality, lost in the fog of collapse.

Here’s what you need to know about what’s going on and where we’re headed.

The United States is comprehensively bankrupt. The government is broke and the citizenry is trapped under inescapable debt burdens. We are never again going to generate the kinds and volumes of “growth” associated with techno-industrial expansion. That growth came out of energy flows, mainly fossil fuels, that paid for themselves and furnished a surplus for doing other useful things. It’s over. Shale oil, for instance, doesn’t pay for itself and the companies engaged in it will eventually run out of accounting hocus-pocus for pretending that it does, and they will go out of business.

The self-evident absence of growth means the end of borrowing money at all levels. When you can’t pay back old loans, it’s unlikely that you will be able to arrange new loans. The nation could pretend to be able to borrow more, since it can supposedly “create” money (loan it into existence, print it, add keystrokes to computer records), but eventually those tricks fail, too. Either the “non-performing” loans (loans not being paid off) cause money to disappear, or the authorities “create” so much new money from thin air (money not associated with real things of value like land, food, manufactured goods) that the “money” loses its mojo as a medium of exchange (for real things), as a store of value (over time), and as a reliable index of pricing — which is to say all the functions of money.

To continue reading: Just Wait a Little While

 

Doug Casey On The End Of The Nation-State

Let it not be said that SLL is all gloom-and-doom. Here’s an upbeat prediction from Doug Casey: the imminent (in historic time) end of the nation-state. From Casey at internationalman.com:

Doug Casey on the End of the Nation-State

There have been a fair number of references to the subject of “phyles” in Casey Research publications over the years. This essay will discuss the topic in detail. Especially how phyles are likely to replace the nation-state, one of mankind’s worst inventions.

Now might be a good time to discuss the subject. We’ll have an almost unremitting stream of bad news, on multiple fronts, for years to come. So it might be good to keep a hopeful prospect in mind.

Let’s start by looking at where we’ve been. I trust you’ll excuse my skating over all of human political history in a few paragraphs, but my object is to provide a framework for where we’re going, rather than an anthropological monograph.

Mankind has, so far, gone through three main stages of political organization since Day One, say 200,000 years ago, when anatomically modern men started appearing. We can call them Tribes, Kingdoms, and Nation-States.

Karl Marx had a lot of things wrong, especially his moral philosophy. But one of the acute observations he made was that the means of production are perhaps the most important determinant of how a society is structured. Based on that, so far in history, only two really important things have happened: the Agricultural Revolution and the Industrial Revolution. Everything else is just a footnote.

Let’s see how these things relate.

The Agricultural Revolution and the End of Tribes

In prehistoric times, the largest political/economic group was the tribe. In that man is a social creature, it was natural enough to be loyal to the tribe. It made sense. Almost everyone in the tribe was genetically related, and the group was essential for mutual survival in the wilderness. That made them the totality of people that counted in a person’s life—except for “others” from alien tribes, who were in competition for scarce resources and might want to kill you for good measure.

To continue reading: Doug Casey On The End Of The Nation-State

Productivity and Debt, by Raúl Ilargi Meijer

Raúl Ilargi Meijer reaches the same conclusion as SLL for the US’s declining productivity and wealth: debt. From Meijer at theautomaticearth.com:

Earlier this week I was struck by the similarities and differences between two graphs I saw float by. And the thought occurred that they are as scary as they are interesting. The graphs show eerily similar trends. And complement each other. The first graph, which Tyler Durden posted, shows productivity, defined as more or less the same as GDP per capita. It goes all the way back to 1790 and contends that 2017 productivity is about back to the level it was at in 1790. In the article, Tyler suggests a link with the amount of time people spend on Instagram et al, but perhaps there is something more going on.

That is, America and Western Europe exported almost their entire manufacturing capacity to China etc. And how can you be productive if you don’t manufacture anything? Yeah, I know, ‘knowledge economy’ and ‘service economy’ and all that, but does anyone still really believe those terms? Sure, that may have worked for a while as others were still actually making stuff (and nobody really understood the idea anyway), but it’s a sliding scale. As productivity plunged, so did GDP per capita. We can all wrap our heads around that.

America’s Productivity Plunge Explained

For the first time since the financial crisis, US multifactor productivity growth turned negative last year, mystifying economists who have struggled to find something to blame for the fact that worker productivity is declining despite a technology boom that should make them more efficient – at least in theory. To be sure, economists have struggled to find explanations for the exasperating trend, with some arguing that the US hasn’t figured out how to properly measure productivity growth correctly now that service-sector jobs proliferate while manufacturing shrinks. But what if there’s a more straightforward explanation? What if the decline in US productivity measured since the 1970s isn’t happening in spite of technology, but because of it?

To wit, Facebook has just released user-engagement data for its popular Instagram photo-sharing app. Unsurprisingly, the data show that the average user below the age of 25 now spends more than 32 minutes a day on the app, while the average user aged 25 and older. The last time Facebook released this data, in October 2014, its users averaged 21 minutes a day on the app. According to Bloomberg, “time spent is an important metric for advertisers, which like to hear that users are browsing an app beyond quick checks for updates, making them more likely to run into some marketing.” Maybe they should matter more to economists, too.

To continue reading: Productivity and Debt