- Hillary Clinton's War Policy: "Turmoil, Chaos, & Catastrophe Lie Ahead"
Submitted by Brian Cloughley via Strategic-Culture.org,
As a result of Trump’s stumbling, Hillary Clinton seems to be on course to become next president of the United States and it is depressing to reflect on what some of her policies might be if she achieves that office. Unfortunately, the future looks bleak for peace and stability around the world.
She is one of the Washington-Brussels war-drum beaters who planned the 2011 aerial blitz on Libya to destroy the government of President Gaddafi, in whose murder she rejoiced, giggling that «We came; We saw; He died». The US-NATO devastation of Libya caused massive deprivation and suffering, opened the way for feuding bands of militants to fight each other for control of parts of the country, and created a haven for the lunatic extremists of Islamic State.
Immediately after Gaddafi was brutally put to death, Clinton went to Libya and declared that she was «proud to stand here on the soil of a free Tripoli and on behalf of the American people I congratulate Libya. This is Libya’s moment, this is Libya’s victory, the future belongs to you». Her sentiments were echoed by the NATO Secretary General of the time, Anders Fogh Rasmussen, who expressed pride that the seven months of rocket, bomb and missile attacks on a defenceless country had been «one of the most successful [operations] in NATO’s history». Not only that, but «Libyans have now liberated their country. And they have transformed the region. This is their victory». Both of them were talking nonsense, but have never given the slightest indication that they regretted for a moment their energetic role in creating the Libyan catastrophe.
Clinton attempted to justify the military assault on Libya by reflecting on the military presence of the United States around the world. She expressed satisfaction that the US maintains massive military bases in so many countries as a result of former conflicts and arrogantly declared «You know, the United States was in Korea, and still is, for many years. We are still in Germany. We are still in Japan. We have a presence in a lot of places in the world that started out as a result of conflict. And if you think about South Korea, there were coups, there were assassinations, there was a lot of problems for the Koreans to build their economy, to create their democracy. This doesn’t happen overnight. And, yes, it’s been a couple of years. I think it’s worth European support, Arab support, American support to try to help the Libyan people realize the dream that they had when they went after Gadhafi».
It is apparent that Clinton will be uncompromising about continuing Obama’s policy of international confrontation, and that she, too, firmly believes «that America remains the indispensable nation». It is open to doubt, however, that the self-imposed mantle of indispensability has done anything to further peace and stability around the globe.
The armed forces and intelligence agencies of the indispensable nation have carried out thousands of airstrikes all over the world over many years. From Pakistan in the east to Libya on the Mediterranean, by way of Afghanistan, Iraq, Yemen, Somalia and Syria there have been attacks by F-15 Strike Eagles, B-52 bombers, helicopter gunships, the A-10 Warthog, the even more terrifying Hercules AC-130 Spectre gunship (one of which destroyed a hospital in Kunduz, Afghanistan, last year), Tomahawk cruise missiles, and drones equipped with Hellfire missiles. The amount of explosives delivered cannot be calculated, but as one indicator of quantities, in the two years of attacks on various groups in Syria and Iraq, «coalition» aircraft have delivered about 50,000 bombs and missiles.
US attacks have included many drone strikes in Yemen where, as reported by the US Military Times, «in March 2015, the US evacuated about 125 special operations troops amid the expanding civil war» but «has launched nine strikes this year against al-Qaida, which the US says is a persistent threat in the region and to Western interests». Other sources record rather higher numbers of covert strikes in 2016 – twenty confirmed and many others suspected – but that is irrelevant in the context of legality and effect.
On July 1 the White House released a statement about its worldwide drone war, and the Washington Post noted its admission that «the United States has inadvertently killed between 64 and 116 civilians in drone and other lethal air attacks against terrorism suspects in non-war zones», and commented that «in releasing only aggregate figures that did not include when or where the strikes occurred, the administration shielded those claims from meaningful public scrutiny, even as it sought to bolster its own assertions about the accuracy and effectiveness of the operations».
Even the Post could not praise the drone war, and recorded that «The New America Foundation and the Long War Journal, which have tracked drone strikes since the George W Bush administration, each put the number of civilians killed under the current administration at just over 200».
Nobody in the West cares about Yemen and the horrors inflicted on its population by the Saudis and their backer in Washington, and it seems nobody cares, either, about the new US onslaught on Libya, also in the name of Freedom.
President Obama rejoiced that his aerial blitzes around the globe are increasing and in June declared that «over the past two months I’ve authorized a series of steps to ratchet up our fight against ISIL [Islamic State]: additional US personnel, including Special Forces, in Syria to assist local forces battling ISIL there; additional advisors to work more closely with Iraqi security forces, and additional assets, including attack helicopters; and additional support for local forces in northern Iraq. Our aircraft continue to launch from the USS Harry Truman, now in the Mediterranean. Our B-52 bombers are hitting ISIL with precision strikes. Targets are being identified and hit even more quickly – so far, 13,000 airstrikes. This campaign at this stage is firing on all cylinders». And that was before he attacked Libya, yet again.
President Obama fired on a few more cylinders when, as reported on August 4 by the US military journal Stars and Stripes, «American warplanes attacked Islamic State group fighters in northern Libya on Wednesday, marking a third consecutive day of US airstrikes in the war-torn nation». It can be expected that the campaign will continue for the last remaining months of Obama’s war-promoting presidency – and that his likely successor will pay as little regard as he has to international and domestic laws concerning such gung-ho forays.
Hillary Clinton has not criticised or even questioned Obama’s years of aerial bombardment around the world and her foreign policy adviser, Jeremy Bash, told London’s Daily Telegraph that she will order a «full review» of US strategy on Syria as a «first key task» of her presidency, resetting the policy to emphasise the «murderous» nature of the Assad regime. He said that Mrs Clinton would work to get Bashar al-Assad, the Syrian president, «out of there».
President Assad has been selected as another target for the Clinton policy of «We came; We saw; He died» and his country appears doomed to a rerun of the Libya fiasco.
If Hillary Clinton becomes president of the United States, there will be an even greater emphasis on global airstrikes and confrontation in general. Turmoil, chaos and catastrophe lie ahead.
- Generation Screwed Fights Back: Investment Implications
Generation Screwed Fights Back: Investment Implications
Written by Peter Diekmeyer (CLICK HERE FOR ORIGINAL)
Numerous data points suggest that Western youth are increasingly disenfranchised, mal-educated and in debt. How that will affect investment outlooks is unclear. The good news is that some Millennials – in Canada of all places – are starting to fight back.
So says Aaron Gunn, executive director of Generation Screwed, a movement sponsored by the Canadian Taxpayer Federation. The group will be conducting its annual retreat of volunteer student coordinators later this month in Quebec City.
There they will upgrade their strategic planning, team building, and activism skills, which they can bring back to campuses across the country to raise awareness of critical issues, such as government debts, unfunded liabilities, and unfavorable demographics facing today’s young.
“We call ourselves “Generation Screwed” because governments are spending money but leaving the bills behind for the young to pay,” says Gunn. “Apathy is our biggest challenge. Many youth are so burdened with the demands of getting a start in life, they are unaware of the lousy hand they are being dealt.”
The key driver of Generation Screwed’s popularity is the country’s rising national debt, which according to the organization’s debt clock, now exceeds $600 billion. And that doesn’t include provincial and municipal obligations. Worse, according to Gunn, the federal government’s 2016 budget projects $99 billion in new borrowing during the coming four years.
Less sex, but “screwed” in so many ways
“Generation Screwed” seems like an odd name for a generation which, according to a recent Washington Post article, is having less sex than previous generations. That said, the movement Gunn leads is particularly timely because Millennials are – to the use the CTF’s term – being “screwed” in so many ways.
The average U.S. student debt is now USD $27,000 – $1.2 trillion overall, according to the Economist Magazine.
Worse, due to the power of academic interest groups, teachers’ unions, and the politically correctness movements, students’ education is increasingly disconnected from reality and poorly adapted to the job market. Most students learn essentially nothing about money management, for example: one of the most important life skills.
Upon graduation, students enter what Donald Trump calls a “rigged” economy, where older workers are entitled to union, government, academic, and other jobs with benefits that are protected by a slew of credentialism strategies. The young get stuck with unpaid internships, work part-time, or do contract work.
Given their poor financial, employment and educational circumstances, not surprisingly, more than half of 18-34 year olds live with their parents, according to Pew Research.
Three quarters of declining productivity: a “new normal,” secular stagnation … or decline?
Lack of new blood in many protected sectors, ranging from governments, “too big to fail” banks, and the automotive industry, will almost certainly hit productivity. In fact, that may be happening already. Recent U.S. GDP data show that productivity fell for a third straight quarter in Q2, a first in more than three decades.
Bill Gross, a portfolio manager at Janus, has described today’s economy of rising trade barriers, household deleveraging and increased government regulations as a “new normal.” Larry Summers, a former U.S. Treasury Secretary and others suggest the US economy is in a period of “secular stagnation.”
For long-term planners who worry about funding pension plans, managing government debt (nobody talks about paying it back anymore) or building careers, the stakes are high. That’s because things are likely far worse than even Gross and Summers, both of whom are restricted in what they can say due to the institutions they represent, will admit.
According to a range of researchers – including Laurence Kotlikoff, John Williams of Shadow Statistics, and the Fraser Institute, – the United States and Canadian governments regularly use massaged data and off balance sheet liabilities, to paint a brighter picture than actually exists.
No sympathy from governments
Gunn and Generation Screwed remain undeterred. This despite the long odds, and tough opponents – particularly seniors’ groups lined up against them (in the United States, the powerful American Association of Retired People lobby group, for example, will stop at nothing to protect members’ existing entitlements – the country’s youth are an afterthought).
Nor are Millennials likely to get much sympathy from governments, which increasingly resemble hospital geriatrics wards. The average age of a U.S. Congressman is 61. That of a Canadian Senator is 65. The average age of a U.S. Supreme Court Justice will be 75 by the end of the current U.S. Presidential cycle.
“I know the odds are long,” says Gunn. “But changing mentalities is a slow process. We just keep focused on doing it one person at a time.”
Please email with any questions about this article or precious metals HERE
Generation Screwed Fights Back: Investment Implications
Written by Peter Diekmeyer (CLICK HERE FOR ORIGINAL)
- Pentagon Refuses To Disclose How Many U.S. Troops Are Fighting ISIS
Submitted by Mike Krieger via Liberty Blitzkrieg blog,
The United States will deploy dozens of special operations forces to northern Syria to advise opposition forces in their fight against Islamic State, a major policy shift for President Barack Obama and a step he has long resisted to avoid getting dragged into another war in the Middle East.
Given this new “strategy,” if we can even call it that, I thought it’d be useful to share with readers the 16 times Obama has publicly promised over the last couple of years to not send ground forces into Syria.
From last year’s post: Obama Announces “Boots on the Ground” in Syria, Despite Promising “No Boots on the Ground” 16 Times
With American media once again singularly obsessed with the latest thing Donald Trump said, you might be surprised to find out that actual news is occurring.
What I’m referring to specifically is the latest incident of transparency-flouting from the self-proclaimed “most transparent administration” ever. Namely, the U.S. military’s refusal to disclose how many American soldiers are engaged in combat against ISIS.
The Hill reports:
The Pentagon has declined to say how many U.S. troops are actually on the ground in Iraq and Syria more than two years after the first deployments to fight the Islamic State.
The military only shares the number of full-time troops deployed, known as the “force management level” or FML.
That figure is currently about 3,825 in Iraq and 300 in Syria, but the number of troops on the ground, including temporary deployments, is much higher.
There are an additional 800 to 900 U.S. troops and defense personnel temporarily deployed to Iraq, a figure that a defense official says “tends to run around.”
It’s unclear how many temporary troops are in Syria.
A Central Command spokesman acknowledged to The Hill that some troops that temporarily deploy aren’t counted. In some cases, that’s included senior officials on “personnel visits.”
So kinda like the unemployment rate?
Some worry that officials are hiding the deepening U.S. involvement in the fight against the Islamic State in Iraq and Syria.
You don’t say.
The pressure for the Pentagon to release the actual troop numbers comes as the administration faces questions from both parties about the strategy to fight ISIS and with no signs Congress is close to a deal on a war authorization.
Who needs Congress when you can just do whatever the fuck you want.
The issue has been simmering for months. Defense officials have rejected repeated requests from reporters for the actual numbers.
“There’s been a decision made not to release that number,” Army Col. Steve Warren, a spokesman, told reporters on March 21. “The number that we release is our force management level… I don’t have a reason for not releasing this number other than it’s the orders that I’m under.”
On Wednesday, a defense official again said the actual number won’t be made public, a decision from the office of the Defense Secretary and Centcom.
A spokesman for the Joint Chiefs said the number of troops deployed on a temporary basis can change widely day-to-day, and it would be too difficult to explain the numbers to the public.
Well that’s a new one. The American public is too stupid to understand!
The current force management level is 3,825 in Iraq and 300 in Syria, There are 800 additional troops and personnel temporarily deployed to Iraq and another 100 U.S. troops at the Office of Security Cooperation in Baghdad, which technically falls under the State Department and is not counted.
And there are more troops on the way: The administration is deploying about 400 more troops to Iraq soon. The Pentagon room also has room to deploy an additional 422 troops at any time under caps set by President Obama.
Those deployments would bring the total number of troops in Iraq and Syria to 5,847 — well above the Pentagon’s publicly released force management level.
But even that number doesn’t include troops involved in the ISIS fight stationed elsewhere in the Middle East, outside of Iraq and Syria.
Centcom told The Hill on May 4 that there were 700 additional U.S. troops fighting ISIS in the region. But weeks later, Col. Warren publicly said the number was actually “several thousand others throughout the region and 1000s more back home.”
That also doesn’t include 1,605 American defense contractors in Iraq and an unknown number in Syria.
Call me a conspiracy theorist, but it sure sounds like they’re trying to hide something.
For now, there is no sign officials will be more forthcoming.
If you like your transparency, you can keep your transparency.
- Justice Department Prevented FBI Probe Of Clinton Foundation; Reporters Slam State Department Stonewalling
For an increasingly vocal group in this country – that sees 'the establishment' for what it is – it may not come as a total shock that CNN is reporting that The (Clinton-appointee-Loretta-Lynch-run) Department of Justice has "pushed back" against The FBI's desires to begin a probe to investigate whether there was a criminal conflict of interest with the State Department and the Clinton Foundation during Clinton's tenure.
Officials from the FBI and Department of Justice met several months ago to discuss opening a public corruption case into the Clinton Foundation, a US official has told CNN…
At the time, three field offices were in agreement an investigation should be launched after the FBI received notification from a bank of suspicious activity from a foreigner who had donated to the Clinton Foundation, according to the official.
FBI officials wanted to investigate whether there was a criminal conflict of interest with the State Department and the Clinton Foundation during Clinton's tenure.
Makes perfect sense right? But before we go on, as a gentle reminder – it was then President Bill Clinton that gave Loretta Lynch her big break, nominating her in 1999 to serve as US Attorney for the Eastern District of New York... "probably nothing"
So with that said, guess what happened next?
The Department of Justice had looked into allegations surrounding the foundation a year earlier after the release of the controversial book "Clinton Cash," but found them to be unsubstantiated and there was insufficient evidence to open a case.
As so as a result…
DOJ officials pushed back against opening a case during the meeting earlier this year.
Some also expressed concern the request seemed more political than substantive, especially given the timing of it coinciding with the investigation into the private email server and Clinton's presidential campaign.
For there to be criminal conflict of interest, there would have to be evidence showing a government employee received something of value in exchange, such as a job post-employment or money. But, as CNN points out,
There doesn't appear to be anything so far suggesting that in the newly released heavily redacted emails from Judicial Watch, but those emails do raise questions about whether the relationship between the State Department and Clinton Foundation was too cozy, particularly after Clinton pledged she would not be involved with the foundation when she became secretary of state in an effort to prevent an inappropriate relationship.
In a case where there's a possible conflict of interest that's not necessarily criminal, the inspector general can look into it and take an administrative remedy if necessary.
The State Department OIG has been looking into connections between the State Department and Clinton during her term as Secretary of State since earlier this year, but has not said anything about the matter.
And it is this stonewalling in the face of clear evidence of the potential for 'inappropriate relationships' that has pushed a normaly docile press corps to its breaking point with The State Department. As Mediaite details, having refused to comment – other than the prepared party-line bullshit – when asked straightforward questions with regard the potential for conflicts of interest raised by the emails, reporters confronted State spokeswoman Elizabeth Trudeau…
Three separate reporters – starting with NBC’s Abigail Williams – asked Trudeau about whether there was any improper relationship between State and the Clinton Foundation.
Trudeau repeatedly downplayed the emails and said the department is “regularly in touch” with a wide range of people.
One reporter pointed out that Clinton had “made a pledge” not to involve herself with the foundation while she was Secretary of State. Trudeau shot back that the agreement did not preclude others from talking to foundation staff.
At one point, as another reporter – the AP’s Matt Lee – was getting frustrated with the lack of answers, he said this: “I’m sorry, are you – am I not speaking English? Is this – I mean, is it coming across as foreign – I’m not asking you if – no one is saying it’s not okay or it’s bad for the department to get a broad variety of input from different people. Asking – the question is whether or not you have determined that there was nothing improper here.”
Enjoy…
So – to summarize – we have hard evidence of the potential for an inappropriate relationship between Hillary Clinton's State Department and The Clinton Foundation – after she had pledged that this would not occur. We have The Justice Department – led by Clinton appointee Loretta Lynch – implicitly blocking The FBI's probe of The Clinton Foundation's dealings (for, among other reasons, the timing could be viewed as "politically motivated." We have a State Department Inspector General who is silent.. and a State Department public relations person who has stonewalled so much, even the American press corps has grown frustrated… and the mainstream media on TV will be running stories on Trump's poll numbers, his apparent 'resignation' to losing, and his "friends and family" economic plan.
Is it any wonder an increasingly frustrated majority of Americans do not trust Hillary, the establishment, and the status quo's American Dream? Simply put, the lengths by which strings are being pulled to ensure a Clinton presidency may well turn out to the straw that broke the camel's back of public restraint… especially if GDP, productivity, US corporate revenues, and construction spending is a more accurate picture of economic reality than the goal-seeked narrative-confirming payrolls data.
- One Simple Reason Why Gold Can Still Jump 50%
Submitted by Simon Black via SovereignMan.com,
Heike Hoffman is a 54-year old fruit merchant in a small town in western Germany.
She has no formal training in finance. She’s not running a multi-billion dollar portfolio.
And yet, as the Wall Street Journal reported on Monday, “[w]hen Ms. Hoffman heard the ECB was knocking rates below zero in June 2014, she considered it ‘madness’ and promptly cut her spending, set aside more money, and bought gold.”
She’s right. It is madness.
There’s $13+ trillion worth of bonds in the world right now have negative yields, much of which is issued by bankrupt governments (like Japan).
Stock markets around the world are at all-time highs even as corporate profits have been in long-term decline.
And in a growing number of countries, even doing absolutely nothing and holding money in the bank means that you’ll be penalized with negative interest.
These risks are even worse for major “institutional” investors like pension funds.
Big investors have far fewer investment options than regular people like us. They need extremely large markets to deploy their capital.
Think about it like this: if you have $100 billion to manage, you wouldn’t even be able to consider a small investment, like a $200,000 town home.
$200,000 is just .0002% of your portfolio. It’s far too small to even think about.
A senior investment manager at one of China’s sovereign wealth funds once told me they only consider deals that are at least $1 billion or more.
Anything else is just too small, no matter how attractive.
This is why it’s so great to be a smaller investor.
We have recommended unique investments to members of our premium services, for example, that generate anywhere from 5% to 12% in very safe returns that are fully backed at a substantial margin by real assets (including gold).
But the market size for these investments is only around $20 million.
If you had $20,000, $200,000, or even $2 million to invest, your portfolio is the perfect size for these types of investments.
But if you had $200 billion to manage, you wouldn’t be able to consider them. The investments are simply too small.
That’s why large investors end up buying government bonds: the market is enormous.
The market for US Treasuries, for example, is $19 trillion.
So even if you’re managing $200 billion, the market size for US government bonds is big enough that you could easily snap up Treasuries.
It’s the same with stocks.
Wal Mart, Apple, Toyota, Samsung… the market size of large public companies is worth tens of trillions of dollars, big enough for major funds to invest.
But again, that’s precisely the problem.
Almost every single market and asset class that’s big enough for major institutional investors is at/near its all-time high.
The yields on government bonds are at the lowest levels in recorded history (and in many cases even negative).
Stocks are at record highs at a time when corporate profits are in decline.
Many funds around the world (especially in Europe) have been jumping into the US market as a “safe haven” against all the Brexit uncertainty.
Yet they’re doing so at a time when the US dollar is at a multi-decade high, and both US stocks and bonds are at all-time highs.
It’s generally not the greatest investment strategy in the world to buy assets at their all-time highs… you’re taking on a LOT of risk.
But major funds and institutions have very few options available.
Simply due to their massive size, they’re chained to these risky asset classes. Even doing nothing and holding money in the bank could mean paying negative interest.
But there is one very big exception: gold.
The total market size for gold, as estimated by the World Gold Council, is more than $7 trillion.
That’s a big market, more than sufficient for institutional investors to deploy billions, even tens of billions.
Central bankers have been doing it themselves, snapping up hundreds of tons of gold in recent years.
(The Chinese bought tens of billions of dollars worth of gold in the last year.)
Yet unlike stocks and bonds, gold is NOWHERE NEAR its all-time high, at least in US dollar terms.
In fact gold can still appreciate nearly 50% before it breaks its previous price record.
This means that GOLD is about the only major asset class that isn’t anywhere close to its all-time high, but still a big enough market for institutional investors.
Stocks are very expensive. Bonds are insane. Bank rates are negative for many large investors.
But gold is still historically inexpensive despite having appreciated substantially this year.
So gold should become much more attractive to large investors, especially since there will likely be more debt, more money printing, more capital controls, and more monetary insanity in the future.
These trends are pretty clear.
And if you understand them, the case for owning at least a small amount of gold is obvious.
Don’t fall in love with gold. Don’t maintain a religious devotion to it. And don’t dive in headfirst with your entire life’s savings. Accumulate slowly.
But do recognize that there’s no other global, highly liquid asset that increases in value as governments and central banks decline.
So having even just a little bit of gold can be an excellent insurance policy.
- Mapping Millennials: Over-Educated, Under-Employed, Debt-Ridden, & "Looking To Make A Difference" In The World
Millennials continue to puzzle the general population.
Many Boomers are still trying to pinpoint how millennials approach life. They are trying to understand how to impress millennial colleagues, how to sell to them, or how to retain them as employees. Boomers want to know what it was like to grow up with today’s technology, and how that impacts one’s outlook.
Even millennials are still perplexed by their own generation. Just because there is a lot being written about Gen Y in the media does not mean that anyone really understands anything. In fact, many millennials are truly unique, and can’t really be meaningfully categorized in any black or white box.
The reality is that millennials were not shaped by just three TV channels – their culture stems from access to millions of different websites and Youtube channels, unfiltered points of view, a wealth of diversity, and recent world events.
And while we don’t want to put millennials in a box, we do like to focus on data. Take away your own conclusions from the following infographic…
Courtesy of: Visual Capitalist - Why Donald Trump's "Sound Money" Stance Scares The Mainstream
Authored by Judy Shelton, originally posted Op-Ed via The Wall Street Journal,
The source of trade anxiety is a broken global monetary system that distorts price signals with sharp currency moves.
The surest way to become alienated from Donald Trump supporters is to invoke the word “global” with regard to trade or economic interests. Even if you embrace the Trump economic agenda for enhancing U.S. competitiveness by lowering taxes and easing regulation, even if you support an “America First” approach for tackling domestic shortcomings from education to infrastructure – there is still a negative stigma attached to proposing any kind of global economic initiative.
Yet by insisting that the U.S. Treasury label China a “currency manipulator” and by promoting trade that is both free and “fair,” Mr. Trump may be laying the groundwork for a significant breakthrough in international monetary relations – one that could ultimately validate the rationale for an open global marketplace and restore genuine free trade as a vital component of economic growth.
The notion that something good might come out of a Trump policy elicits guffaws in certain economic circles. And questioning whether today’s exchange-rate regime serves the cause of beneficial cross-border commerce is tantamount to advocating protectionism. Nevertheless, Mr. Trump’s emphasis on currency manipulation brings into focus the shortcomings of our present international monetary system—volatility, persistent imbalances, currency mismatches—which testify to its dysfunction. Indeed, today’s hodgepodge of exchange-rate mechanisms is routinely described as a “non-system.” Or, as former International Monetary Fund chief Jacques de Larosière termed it at a Vienna conference in February 2014, an “anti-system.”
If monetary scholars once diligently sought to explain the relative virtues of fixed-versus-flexible exchange rates on global economic performance, they have largely abdicated any responsibility for the escalating political backlash against trade that blames currency manipulation for lost business.
No serious economist would claim today that the “dirty float” intervention tactics practiced by numerous countries would be remotely acceptable within the freely flexible exchange-rate system envisaged by Nobel Laureate Milton Friedman. Nor would anyone suggest that any coherent mechanism exists comparable with the fixed-rate system anchored by a gold-convertible dollar that reigned in the decades following World War II.
Nobel Laureate Robert Mundell has consistently argued for the restoration of a system of formally maintained exchange rates to reduce uncertainty and promote growth. Yet the lack of willingness among the great majority of economists to recognize the imperative for global monetary reform to avoid a breakdown in global trade relations has left policy makers in the lurch. Faced with mounting demands to address currency manipulation through “strong and enforceable provisions”—i.e., tariffs—those who support free trade are being forced to consider the broader implications of a sluggish world economy that has become overly reliant on central banks.
Is it more egregious when governments deliberately intervene in foreign-exchange markets to manipulate currencies to gain an export advantage—or when central banks seek to accomplish the same thing through monetary policy?
The point is that today’s free-for-all approach to international monetary relations permits nations to pursue any exchange-rate policy they wish. Relative currency values are thus vulnerable not only to the manipulative tactics of government authorities, but also to the speculative maneuvering of foreign-exchange traders—the most active of which, in a market that averages $4.9 trillion in daily volume, are the world’s largest banks.
No wonder so many workers employed by U.S. companies that manufacture products requiring substantial capital investment—automobiles and tractors, computer and electronic equipment—have become disenchanted with the supposed long-term benefits of free trade. It is one thing to lose sales to a foreign competitor whose product delivers the best quality for the money; it’s another to lose sales as a consequence of an unforeseen exchange-rate slide that distorts the comparative prices of competing goods.
To brand trade skeptics as sore losers is to malign them unfairly. To resent being victimized by currency movements is not the same as being opposed to free trade, nor does it signal an eagerness to engage in protectionist retaliation. It’s simply an honest response to incongruity: We need to reconcile global monetary arrangements with global trade aspirations.
As former Federal Reserve Chairman Paul Volcker has observed:
“Trade flows are affected more by ten minutes of movement in the currency markets than by ten years of (even successful) negotiations.”
Mr. Trump’s forceful rhetoric may help put an end to the politically correct attitude so prevalent among economists that breezily dismisses what was once accepted as a truism: Stable exchange rates foster long-term prosperity by maximizing the productive use of economic resources and financial capital. Why continue to passively accept the negative economic consequences of global monetary disorder? Why permit legitimately earned profits from business operations and investments in foreign countries to be wiped out by unpredictable currency losses? Why hold global economic growth prospects hostage to antiquated exchange-rate arrangements?
It’s time to end the intellectual vacuum and focus on serious initiatives for global monetary reform. The goal is to maximize prosperity by harnessing the power of free-market signals across borders. Monetary clarity is the key to reconciling the principles of free trade with the promised benefits of an open global marketplace.
By focusing on currency manipulation as an unfair trade practice, Mr. Trump has not only identified the crux of the economic dilemma, he has also spotlighted the social and political tensions its consequences have fostered.
- Demographic 'Death Cross' Looms As World "Plague" Of Elderly Population Grows
The number of countries where the elderly outnumber the young is on the rise…
What began in 1995 in a single country, Italy, will spread globally to economies as diverse as New Zealand and Georgia, by 2030. As Joseph Chamie – an independent consulting demographer and a former director of the United Nations Population Division – details, by 2030, 56 countries will have more people aged 65 and over than children under 15.
As Bloomberg reports, the former UN head demographer compared population projections of kids under the age of 15 to that of people aged 65 and over. It’s not just industrialized nations like Japan and Germany succumbing to the age curse. The turning point will take place in 2020 in the Cuba and South Korea, followed five years later in Thailand and the U.S.
By 2075, the global population is forecast to pass the demographic milestone…The Demographic Death Cross…
Chamie refers to this as “the jump from a Toys ‘R’ Us society to an Olds ‘R’ Us one.”
While the prospect of longer lives is a good thing, problems arise when a shrinking work force cannot foot the pension bill. Several decades ago, you could have had about 10 workers per retiree, but that could shrink to the point where in Italy, for example, you had three workers per retiree. While the political choices are unsavory — increase taxes or cut benefits — governments are running out of time to act.
You “can't repeal the law of demographics,” Chamie said.
- Erdogan Threatens To Abandon US Dollar In Trade With Russia
The unexpectedly sharp antagonism between Turkey and the west accelerated today, and one day after NATO preemptively reminded Turkey that it is still a NATO alliance member and advising Ankara that “Turkey’s NATO membership is not in question”, Turkey had some more choice words for its military allies. Cited by Reuters, Turkey foreign minister Mevlut Cavusoglu told Turkish’s NTV television on Thursday that the country “may seek other options outside NATO for defense industry cooperation, although its first option is always cooperation with its NATO allies.” Translation: if Russia (and/or China) gives us a better “defensive” offer, we just may take it.
The sharply worded retort came on the same day that Turkey said it will resume airstrikes on Islamic State targets in Syria, and asked Russia to carry out joint operations against its “common enemy.” Ankara halted strikes after the downing of a Russian plane by Turkish forces last year.
In the same interview, Cavusolgu said that Ankara “will again, in an active manner, with its planes take part in operations” against Islamic State targets. Cavusolgu also said that Ankara has called on Moscow to carry out joint operations against the “common enemy” of IS. “Let’s fight against the terrorist group together, so that we can clear it out as soon as possible,” Cavusolgu said, adding that otherwise IS will continue to expand and spread into other countries.
To be sure, coming from the nation which directly engaged in oil trade with the Islamic State, this is at least a little ironic, however, what is notable is the significant pivot Turkey has made vis-a-vis military engagements, rotating not toward the US alliance, but toward the Kremlin.
“We will discuss all the details. We have always called on Russia to carry out anti-Daesh [IS] operations together,” he said, adding that the proposal is still “on the table.” The foreign minister went on to tout the benefits of closer cooperation between Turkey and Russia.
“Many countries are engaged in Syria actively. There could be mistakes,” he said. “In order to prevent that, we need to put into practice the solidarity and cooperation [mechanism] between us including sharing of real-time intelligence.”
The comments came just days after Turkish President Erdogan visited St. Petersburg for talks with Russian President Vladimir Putin, in the first meeting between the two leaders since the plane was downed.
But perhaps the most notable development was reported today by Turkey’s Gunes newspaper, which said that as part of the discussion between Putin and Erdogan on Tuesday, the Turkish president suggested to abandon the US dollar in bilateral trade between Turkey and Russia, and instead to transact directly in lira and rubles. This would “benefit both Russia and Turkey”, Erdogan allegedly said in his August 9 meeting in St Petersburg, adding that this would relieve the lira from the USD’s upward pressure. The reason Erdogan is concerned about exchange rates is because recently Turkish inflation soared by nearly 8% Y/Y, and the recent devaluation of the TRY against the USD has only poured more oil on the fire.
Needless to say, such a bilateral agreement would further infuriate Turkey’s European “friends”, permanently halting Turkish accession into the customs union, in accordance with Austria’s recent demands, and would in turn lead to a dissolution of the refugee agreement that is still keeping millions in refugees away from Europe in general and Germany, and Merkel’s plunging popularity ratings, in particular. Which, incidentally, means that not only Erdogan, but now also Putin, holds key leverage over the career of Europe’s most important politician.
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