- GaWD SaVe THe QUeeN…
- Bernie Sanders Is A "Testament To American Suckerdom"
Submitted by Jeff Deist via The Mises Institute,
This article from the Free Beacon about Bernie Sanders being kicked out of a “hippie commune” in 1971 reads like something from The Onion. Bernie, age 30(!) at that point, was like a bad college roommate who preferred late night political discussions to housework and cleaning. And based on uncontested reports of his nonexistent career path, we can safely assume he contributed nothing to the communal finances.
That Bernie Sanders – a shiftless layabout who openly joined socialist and communist groups – can even sniff the US presidency is a testament to American suckerdom and an enduring fetish for collectivism among rich westerners.
But the question of communes is an interesting one for libertarians. Under what conditions, with what people, and for how long can collectivism work? Economics helps explain why communal living (beyond family groups) tends to fail because of bad incentives, but it alone doesn’t explain the political and sociological elements.
Voluntary communal living is not per se impossible, in small homogeneous groups with close-knit identities and deeply shared values. Israeli kibbutzim are one keen example, although most today employ some elements of private property ownership and differing wages for various jobs. Amish and Mennonite communities in the US are another, with the interesting feature of a “rumspringa” period where young people are permitted to sample modern life before deciding to commit to the church and community.
Milton Friedman, writing in Chapter 5 of Free to Choose, had this to say about kibbutz communities in Israel:
Egalitarians in the United States may object that the fewness of communes and their fragility reflect the opprobrium that a predominately “capitalist” society visits on such communes and the resulting discrimination to which they are subjected. That may be true for the United States, but as Robert Nozick has pointed out, there is one country where that is not true, where, on the contrary, egalitarian communes are highly regarded and prized. That country is Israel.
…
Everyone is free to join or leave a kibbutz, and kibbutzim have been viable social organizations. Yet at no time, and certainly not today, have more than about 5 percent of the Jewish population chosen to be members of a kibbutz. That percentage can be regarded as an upper estimate of the fraction of people who would voluntarily choose a system enforcing equality of outcome in preference to a system characterized by inequality, diversity, and opportunity.
Murray Rothbard, critiquing Karl Polanyi's The Great Transformation, had a typically trenchant view:
Anyone who wants to can, in a free society, even join a voluntary commune, like Brook Farm or an Israeli kibbutz, and lead as blissfully communistic life as he or she wishes. Since everyone still has the option to do so, since anyone has the option to go off to a desert island or join a commune, why is Polanyi bitter about the market?
Although US communes enjoyed a resurgence in the 1960s and 70s, their memberships never approached 5% of the population. And their abrupt decline demonstrates that communal living is both hard to sustain and hard to pass on to children.
What must be emphasized is this: in Ron Paul’s America, or Hans Hoppe’s private law society, voluntary “socialist” arrangements would be perfectly allowable and legal. But libertarian communities are never permitted in statist societies.
Libertarianism has nothing to say about private communities except this: force and fraud are not permitted. So thousands or even millions of people could come together in areas like San Francisco and voluntarily create single-payer health schemes, “dues” based on income, free schools, collective child-raising, etc. — the whole panoply of progressive programs.
But the opposite is not true: in Bernie Sanders’s America, libertarians cannot opt out of income taxes, Selective Service, Social Security, Medicare, drug laws, property restrictions, federal regulations, or a host of state and local laws. There are no libertarian communities permitted within the geographical confines of the US.
So while pro-Bernie progressives are free to create their own communities in Ron Paul’s world, Ron Paul libertarians are compelled by force to participate in Bernie’s world. That is the fundamental difference between liberty and socialism, between voluntaryism and collectivism, between statism and private property. Nothing prevents progressives from living as they wish now, except the very things they viciously oppose: decentralization, secession, and local control.
Progressives hate hearing that taxation is theft, that government is force, and that every rule and regulation implies violence for noncompliance. It offends them on a visceral level, because their entire worldview hangs on the myth of social contract. But their currency is violence, and real contracts — in the form of voluntary, private communities — are not allowed.
- "They Should Be Met By Force" – US General Warns Russia Future Fly-Bys "Won't End Well For You"
By Richard Sisk, first posted on Military.com
Russia should be warned that its dangerous flybys of U.S. ships and planes could be met by force, President Barack Obama’s nominee as the next NATO and U.S. European Command commander said Thursday.
“Sir, I believe that should be known — yes,” Army Gen. Curtis M. “Mike” Scaparrotti said when asked by Sen. John McCain whether Russia should be told that the U.S. would take action if American lives were endangered.
Pursuing the same line of questioning, Sen. Joe Donnelly, an Indiana Democrat, asked Scaparrotti whether the Russians should be told that “next time it doesn’t end well for you.”
The general responded that “we should engage them and make clear what’s acceptable. Once we make that known, we have to enforce it.
“I think they’re pushing the envelope in terms of our resolve,” Scaparrotti added. “It’s absolutely reckless, it’s unjustified and it’s dangerous.” As NATO commander, he said one of his first actions would be to review the rules of engagement for U.S. and allied forces in the region.
On Monday, two Russian Su-24 fighters made numerous, close-range and low-altitude passes while the U.S. guided missile destroyer USS Donald Cook was conducting landing drills with helicopters in the Baltic Sea.
On Tuesday, a Russian helicopter circled around the Cook seven times at a low altitude. About 40 minutes later, two Su-24s made 11 close-range and low-altitude passes.
Secretary of State John Kerry later said that the sailors of the Cook would have been justified in shooting down the Russian fighters.
“It’s unprofessional, and under the rules of engagement that could have been a shoot down, so people need to understand that this is serious business, and the United States is not going to be intimidated on the high seas,” Kerry said in an interview on CNN Espanol.
Scaparrotti, now commander of U.S. Forces Korea, was testifying before the Senate Armed Services Committee at what could be called a historic confirmation hearing.Seated next to him at the witness table was Air Force Gen. Lori Robinson, currently commander of Pacific Air Forces, who has been nominated as the next commander of U.S. Northern Command and the North American Aerospace Defense Command (NORAD). If confirmed, Robinson would become the first woman to command a combatant command.
Both Robinson and Scaparrotti appeared headed to easy confirmation. “I look forward to moving your nominations through the U.S. Senate,” said McCain, an Arizona Republican and the SASC chairman.
- Why Voters Will Stay Angry
From the supporters of Donald Trump to the street protesters of southern Europe, voters around the world are mad as hell. Inequality, immigration, and the establishment's perceived indifference are firing up electorates in a way that's rarely been seen before. As the following charts from Bloomberg show, the forces shaping the disruption of global politics have been building for years and aren't about to diminish…
The world's middle classes are getting poorer
The share of wealth owned by the middle class declined in every part of the world on a relative basis
U.S. workers' share of income has dropped to near the lowest since World War II
And in the past century, the rich have gotten markedly richer
Incomes in Europe's southern crisis countries have fallen since 2009, while rising elsewhere
Things are even worse for young people
In Spain and Greece, unemployment among those under 25 is still close to 40 percent despite a slight improvement in recent years
U.S. student debt is soaring, while median pay for recent college graduates has barely budged
Parents in major western countries are increasingly worried about their children's prospects
Immigration and war are compounding the anxiety
European countries are seeing unprecedented flows of refugees seeking asylum and have little power to stop them within the passport-free zone
As Syria's implosion sends millions of refugees toward the EU, more voters choose immigration as a top concern
Americans worry about immigration more than they did 14 years ago
All this is causing politics to fragment
Last year, only 19% of Americans trusted their government "just about always" or "most of the time" – down from 54% after the 9/11 attacks
As measured by historical voting in the U.S. House of Representatives, the two U.S. political parties have moved away from the center in the past 40 years
It's the same picture in Europe as distrust of government has surged, to a high of 84% in Spain
That's all helping insurgent parties storm the region's national parliaments
Political newcomers have gained far greater share in recent elections, and established parties in some cases have withered away
Asia is bucking the trend. So far
Asia has largely been exempt from the West's discontent, in part because incomes have risen so rapidly
But unrest can't be ruled out, especially as China's growth miracle recedes. Already workers' strikes are becoming more and more widespread
Upcoming elections with potential to cause more chaos…
Brexit, June 23, 2016
Polls*:
36% stay
36% leave
28% don't knowU.S., November 2016
Democrat Hillary Clinton leads Republican Donald Trump in the latest average of polls on a head-to-head comparison* of the parties' front-runners. Yet that matchup is far from assured, as Republican power brokers are exploring ways to keep Trump from claiming the nomination at the party's convention in July and pushing his closest rival, Senator Ted Cruz, as the preferred alternative in the remaining state nominating contests.France, May 2017
First-round voting preference:
27% National Front's Marine Le Pen
22% President Francois Hollande
21% Former president Nicolas SarkozyGermany, around summer 2017
While national polls show Angela Merkel's Christian Democratic Union far ahead of the second-biggest party, the Social Democrats, the insurgent Alternative for Germany could cause trouble. Support for the anti-immigrant party surged in recent regional elections. - The British Response To Obama "Why Should We Take Advice From A President Who Has Surrendered The World To Chaos?"
Following Obama’s stunning foray into UK politics with his anti-Brexit oped (which surprised both the pro and anti-Brexit camp as there was little to be gained from Obama’s gracious entrance of an elephant in a UK political China store) on Thursday evening, one person who had a rather visceral reaction was London Mayor Boris Johnson who slammed Obama’s “hypocritical” Brexit diatribe and accused Obama “ancestral dislike of the British empire – of which Churchill had been such a fervent defender” on being part-Kenyan.
Needless to say at this point any rational dialog ended, and even though Johnson had many valid points, they all got lost in the quasi ad hominem din.
However, a far more tempered op-ed appeared in The Telegraph by Janet Daley, one in which she does not invoke Obama’s African heritage, but rather his achievements, or lack thereof, in the global arena, and asks point blank:”Why should we take advice from a president who has surrendered the world to chaos?“
Why indeed?
I wonder who in Downing Street briefed Barack Obama’s team on the wording of his friendly warning to the British. Somebody obviously pointed out that the population of this country retained a quaint obsession with the Second World War, and would therefore treat any reference to the glorious dead as irreproachable. So the President invoked the European graves of those American servicemen who died to protect – well, what exactly?
I thought it was the democratic values and reverence for national independence that Britain shared with the US. Did Mr Obama have any sense at all that what he was now urging the British electorate to accept was precisely the surrender of those sacred principles of democratically accountable government and self-determination for which the combined American and British forces had made their ultimate sacrifice?
Could this bizarre intervention have been more cynical or wilfully misinformed? In the end, it seemed to come down to trade advantages – to what might once, back in the day, have been called the global interests of US corporate capitalism. Mr Obama even made specific reference in his article in Friday’s Daily Telegraph to the importance of current negotiations on the Transatlantic Trade and Investment Partnership (TTIP), which would reduce barriers to US business interests in the European Union.
On the same day, 38 Degrees – a front group for the more proactive elements in the public sector unions – took out full-page newspaper adverts campaigning against the adoption of TTIP (“…no trade deal should give corporations more power than people”). If the Labour Left were not in such disingenuous disarray, they could be making a meal of this. In any event, unnamed US trade officials were being ominously quoted as saying that, in the event of Brexit, the UK would come very low on America’s list of priorities for new trade agreements.
Then Mr Obama himself abandoned such subtlety in his joint press conference with the Prime Minister. Should the UK go its own way, he said, there would be no trade agreement with the US any time soon. Maybe some time down the line, as he put it, we could work something out. But the UK would be “in the back of the queue” because the US would be dealing with the big boys. So this isn’t a warning: it’s a threat. Stay in the EU and make way for American competitors, or else.
The iron fist of a message inside that velvet glove of carefully recited claptrap about the special relationship is that Obama’s America wants us to stay in the conveniently monolithic, homogeneous trading bloc with which it can most easily do business. In other words, the tentative US economic recovery needs us to sacrifice our country’s judicial independence and the primacy of our parliamentary system, just as the US once sacrificed so many of its young military officers for our survival. That’s the deal.
But there is no indication, either in Mr Obama’s words or his actual foreign policy, that America would now be prepared to make another such sacrifice for its allies. The withdrawal of the US from world leadership – from being what Mr Obama’s people refer to disparagingly as “the world’s policeman” – has been one of the most dramatic developments on the international stage of the past eight years.
Into the vacuum left by that withdrawal has stepped (or strode) Vladimir Putin, who can’t believe his luck. At just the moment when Russian national pride desperately needed a renaissance after the mortifying collapse of the Soviet Union and the infuriating rise of all those Lilliputian upstarts in the old Eastern Bloc, along comes a US president who announces in no uncertain terms that America wants to pull out of the global power game. Make no mistake, this began long before the funk over removing Assad in Syria – which Mr Obama has outrageously blamed on David Cameron’s failure to win a parliamentary vote – or the “leading from behind” fiasco in Libya, which Mr Obama also blames on Mr Cameron for having the audacity to think that the US might have been prepared to lead from the front. No, the Obama isolationist doctrine was there from the start: deliberate and consciously chosen.
It began in his first term as president when he visited Eastern Europe and gave a series of speeches to make the point: the countries that had once required America’s protection from a Soviet superpower were now emerging democracies and fledgling free-market success stories. They could take care of themselves militarily in future. The interceptor missiles that had been scheduled to arrive in Poland, courtesy of the US, would not be delivered. Although they had never been intended as any sort of threat against Moscow, Obama still allowed this move to be seen as part of his “reset” of relations with post-Soviet Russia.
At home, this was presented as a refusal to pay forever for the protection of a Europe that was no longer threatened by aggressive Communism. The disproportionate share of the Nato budget that the US had been stumping up could be better spent on the kind of welfare and health provision that Europeans took for granted.
All this suited Putin’s self-image as a global strongman perfectly. America and the West had definitively won the Cold War, and were now apparently unconcerned that they might lose the peace. Putin saw clearly that no one would stand in his way when he launched his irredentist assault on eastern Ukraine. Not only did he annex Crimea but the forces he had unleashed shot a civilian airliner out of the sky – which might have been seen as a contemporary sinking of the Lusitania. He went from triumph to triumph, playing hard-faced poker against Washington’s half-hearted attempt at chess. In the Middle East, Obama’s White House scarcely shows any interest now that it is no longer dependent on the region for oil. It can only be roused to do what is minimally required to keep Americans safe from Isil terrorism.
But permitting Russia’s proxy, Assad, to remain in place in Syria, as American inaction does, drives every dissident in the region into the arms of anti-Western extremism, and puts American (and European) security at the mercy of a Russia-Syria alliance. Not to mention the salient fact that Assad’s genocidal tyranny fuelled the migrant rush to the European borders. Was Mr Obama aware of that great success story of EU collaboration, in which an emergency was turned into an international tragedy by bureaucratic incompetence and a complete collapse of cooperative goodwill? The abandonment of border checks inside the EU, combined with the unilateral decision by Germany to encourage mass entry, created a living hell in which organised people-trafficking on an industrial scale became a fixture of life.
When this referendum began, what seems an eternity ago, I was unsure how I would vote. Membership of the EU on a day-to-day basis is pretty much all gain for me, because I am an affluent professional who benefits from the supply of inexpensive domestic help, willing tradesmen and convenient travel that the EU provides. Unlike those whose wages are being undercut by cheap imported labour, or who cannot afford to buy their own homes because of the pressure on housing from unlimited immigration, I have lost nothing.
But I believe in democratic legitimacy, which means paying attention to people who do not have my advantages. So should I go for self-interest, or for political principle? Watching this campaign, with its unscrupulous attempts to bully and terrorise a brave and conscientious electorate, has made up my mind. I shall be voting for Leave.
- Chinese Dragon: Breathing Credit Fumes
Submitted by Eugen von Bohm-Bawerk via Bawerk.net,
Economic forecasting, no matter how complex the underlying model may be, is essentially about extrapolating historical trends. We showed last week how economic models completely fail to pick up on structural shifts using Japan as an example. On the other hand, if an economy doesn’t really change much, as in the case of Australia over the last thirty years, model “forecast” are generally quite accurate. However, spending millions of dollars to do the job of a ruler doesn’t seem like wise resource allocation to us. That said there’s obviously a very limited market for model based GDP forecast and most of them are not exchanged among pure market based players, but rather between governmental funded agencies. True, Wall Street spews out their sell-side GDP propaganda on a regular basis, but claiming international banking is anything akin to a free market is absurd. GDP forecasting is something only wasteful organizations do and that should tell you all you need to know about these exercises in futility.
Take the latest IMF forecast for China as a half decent example. According to the IMF, the credit junkie known as China, which needed one trillion dollar in fresh credit in the first quarter alone to create GDP “growth” of somewhere between 6.3 and 6.7 per cent (265 billion dollars for the quarter) will continue to race ahead with six per cent growth for the foreseeable future. The Chinese economy is 100 per cent dependent on ever more money and credit expansion to maintain its completely unsustainable momentum and will very soon come crashing down. And by the way, China’s reported GDP numbers are obviously grossly overstated anyway.
Peddling IMF-fiction though becomes even clearer when we reverse engineer their GDP forecast based on traditional growth models. We know the Chinese labour force is shrinking and the millions of underemployed peasants which used to be the backbone of China’s success are close to exhausted. As the labour force contracts and more resources are spent on taking care of the unproductive members of society savings, and hence investments, will also contribute less to growth going forward.
So how do IMF economists come up with their 6 per cent forecast? Simple, they add to the total factor productivity assuming China with its credit dependence and excess capacity somehow will suddenly become much better at allocating and utilizing its resources. The problem with this line of thinking is that a more efficient resource allocation today will crush all those factories with excess capacity. In other words, to boost TFP a short term recession is a necessity. Avoiding the recession, id est using ever scarcer capital to fund zombie businesses will wreak havoc with future TFP growth.
In conclusion, the chart below is utter nonsense as the internal dynamics between capital, labour and productivity does not add up.
True believers want to think China will continue to grow at breakneck speed and the IMF is feeding them what they want to hear to lift animal spirits accordingly. When the house of credit-cards comes crumbling down the IMF will once again be proven to have completely missed an obvious structural shift as the Chinese economy will linger on like Japan has done over the last three decades.
- Ron Paul Asks "What Did Fed Chairman Yellen Tell Obama?"
As we reported yesterday, following the meeting held between Obama and Yellen last Monday, one reader tried to get some additional information on what was exchanged between the two most important people in the world beyond the cursory White House statement which is reposted below:
The President and Chair Yellen met this afternoon in the Oval Office as part of an ongoing dialogue on the state of the economy. They discussed both the near and long-term growth outlook, the state of the labor market, inequality, and potential risks to the economy, both in the United States and globally. They also discussed the significant progress that has been made through the continued implementation of Wall Street Reform to strengthen our financial system and protect consumers.
Dissatisfied with the token boilerplate language, the reader requested the minutes from said meeting. The Fed’s response: “we don’t keep those.“
It goes without saying that with both the White House and the Fed eager to prevent the disclosure of what was said leaking into the public arena, that it had to be quite important.
How improtant? Here is Ron Paul with his own take on the question of:
“What Did Fed Chairman Yellen Tell Obama?
Last week, President Obama and Vice President Biden held a hastily arranged secret meeting with Federal Reserve Chairman Janet Yellen. According to the one paragraph statement released by the White House following the meeting, Yellen, Obama, and Biden simply “exchanged notes” about the economy and the progress of financial reform. Because the meeting was held behind closed doors, the American people have no way of knowing what else the three might have discussed.
Yellen’s secret meeting at the White House followed an emergency secret Federal Reserve Board meeting. The Fed then held another secret meeting to discuss bank reform. These secret meetings come on the heels of the Federal Reserve Bank of Atlanta’s estimate that first quarter GDP growth was .01 percent, dangerously close to the official definition of recession.
Thus the real reason for all these secret meetings could be a panic that the Fed’s eight year explosion of money creation has not just failed to revive the economy, but is about to cause another major market meltdown.
Establishment politicians and economists find the Fed’s failures puzzling. According to the Keynesian paradigm that still dominates the thinking of most policymakers, the Fed’s money creation should have produced such robust growth that today the Fed would be raising interest rates to prevent the economy from “overheating.”
The Fed’s response to its failures is to find new ways to pump money into the economy. Hence the Fed is actually considering implementing “negative interest rates.” Negative interest rates are a hidden tax on savings. Negative interest rates may create the short-term illusion of growth, but, by discouraging savings, they will cause tremendous long-term economic damage.
Even as Yellen admits that the Fed “has not taken negative interest rates off the table,” she and other Fed officials are still promising to raise rates this year. The Federal Reserve needs to promise future rate increases in order to stop nervous investors from fleeing US markets and challenging the dollar’s reserve currency status.
The Fed can only keep the wolves at bay with promises of future rate increases for so long before its polices cause a major dollar crisis. However, raising rates could also cause major economic problems. Higher interest rates will hurt the millions of Americans struggling with student loan, credit card, and other forms of debt. Already over 40 percent of Americans who owe student loan debt are defaulting on their payments. If Federal Reserve policies increase the burden of student loan debt, the number of defaults will dramatically increase leading to a bursting of the student loan bubble.
By increasing the federal government’s cost of borrowing, an interest rate increase will also make it harder for the federal government to manage its debt. Increased costs of debt financing will place increased burden on the American people and could be the last straw that finally pushes the federal government into a Greek-style financial crisis.
The no-win situation the Fed finds itself in is a sign that we are reaching the inevitable collapse of the fiat currency system. Unless immediate steps are taken to manage the transition, this collapse could usher in an economic catastrophe dwarfing the Great Depression. Therefore, those of us who know the truth must redouble our efforts to spread the ideas of liberty.
If we are successful we may be able to force Congress to properly manage the transition by cutting spending in all areas and auditing, then ending, the Federal Reserve. We may also be able to ensure the current crisis ends not just the Fed but the entire welfare-warfare state.
- White Lies Matter
Submitted by Matthew Continetti via NationalReview.com,
How bad is Hillary Clinton’s image? This bad:
Fifty-six percent of Americans view her unfavorably, according to the Huffington Post pollster trend.
One-third of New York Democratic primary voters say she is neither honest nor trustworthy.
Her image, writes Dan Balz, “is at or near record lows among major demographic groups.”
Like, all of them.
Among men, she is at minus 40. Among women, she is at minus 9. Among whites, she is at minus 39. Among white women, she is at minus 25. Among white men, she is 17 positive, 72 negative. Her favorability among whites at this point in the election cycle is worse than President Obama’s ever has been. . . . Among African Americans nationally the NBC–Wall Street Journal poll shows her with a net positive of 51 points. But that’s down 13 points from her first-quarter average and is about at her lowest ever. Among Latinos, her net positive is just two points, down from plus 21 points during the first quarter.
Emphasis mine. No doubt some of this degradation is related to a primary that has turned out to be much more competitive than Clinton imagined. But it’s also worth asking why that campaign has lasted so much longer than we assumed.
A lot of the reason is Clinton: her tin ear, her aloofness, her phony eagerness to please, her suspicion of the press and of outsiders, her — let us say –complicated relationship with the truth, the blithe way in which she dissembles and deceives.
Over the course of three decades in public life Hillary Clinton has misspoken and misled the public and mismanaged herself and her team to such a degree that voters cannot help noticing. Yes, many of her falsehoods are white lies. But white lies accumulate. They matter. Not only do they harm the truth. They are turning Clinton into one of the least popular candidates in history.
Since 1998 Clinton has blamed her poor reputation on the vast right-wing conspiracy. Whitewater, Travelgate, Filegate, the health-care disaster — it was all the fault of the Republicans. What’s forgotten is that Clinton has been lying in the service of her ambitions — most notably by protecting her husband from the truth of his infidelities — since long before Bill ran for president. Nor can she blame conservatives for her failure to win the Democratic nomination eight years ago. Hillary can’t help being secretive and deceptive. It’s her nature.
Think of the transcripts of the speeches she gave to Wall Street audiences. Bernie Sanders would like Clinton to release them. She refuses. Why? “When everybody agrees to do that, I will as well, because I think it’s important we all abide by the same standards.” What baloney. Democratic primary voters see the obvious: Hillary is hiding behind a standard she invented.
What the other candidates have said to bankers isn’t the issue. No one expects Donald Trump to have been anything other than fulsome in his praise of Wall Street. He probably spoke mainly about himself anyway. What Sanders wants to know is if Clinton said one thing to the financial-services industry and another to the public. Fair question. Especially considering the lady we’re talking about.
It’s also a question that Clinton could settle rather easily in her favor. Other than the most committed of Bernie Bros, does anyone really think Clinton offered to sell her soul to Lloyd Blankfein, at least on stage? The transcripts won’t contain bombshells but platitudes — thank you so much for having me, it’s great to be here, Bill and I really appreciate the socially conscious investment and work you’re doing for young people around the world, diversity, inclusion, hot sauce, Chelsea built a clinic in Haiti, climate change, I’m a grandma, blah, blah, blah. You won’t be shocked by what she said. You’ll be bored.
The act of concealment transforms the banal into the insidious. I sometimes wonder if Clinton does this just to give her rather humdrum and lackluster public life a frisson of excitement and danger, or to goad her enemies into overreaction.
Take the emails. She built the private server to shield her privacy. But the public learned of the server nonetheless. The public always finds out. A judge ordered the emails released. Thus the result of Clinton’s actions was the very opposite of her intent.
It remains to be seen whether the FBI will indict her for compromising national security, though I rather doubt that will happen. There is no smoking gun. The emails themselves show Clinton to be a tech ignoramus, a workaholic, harried by the pace of events, self-interested, paranoid, dependent on a few close advisers. Nothing we didn’t already know.
But that didn’t stop Clinton from lying about it. Never does. “The secrecy and the closed nature of her dealings generate problems of their own, which in turn prompt efforts to restrict information and draw even more tightly inside a group of intimates,” wrote Sarah Ellison last year in Vanity Fair. “It is a vicious circle.” And the person responsible for keeping the circle going is none other than the candidate herself: circumspect, wary, so damaged by her years in the public eye that she trusts no one. And receives no trust in return.
- China's Brave New Math: 24 Of 28 Provinces Report Higher GDP Than National Average
There is a saying that the whole is greater than the sum of its part. This may be true everywhere, except in China, where the total is whatever some goalseek machine decides it is.
We first saw China’s flagrant manipulation of data when the nation released its “better than expected” trade “data” two weeks ago. As shown in the chart below, when it comes to the biggest contributor, imports from Hong Kong, it was beyond simply grotesque and had entered the sublimely ridiculous.
Then last weekend, following the release of China’s official national GDP print of 6.7%, China also released its sequential GDP growth of 1.1% which, when annualized, one got a number of 4.5%. Just as bad, based on the accumulated quarter-on-quarter data over the last year, annual growth in 1Q was just 6.3% – substantially below the NBS’s 6.7% reading for year-on-year growth.
Then over the weekend, China’s farcical “data” entered the twilight zone, when 24 of 28 Chinese province-level regions reported GDP that was higher than the national figure of 6.7%.
As China Radio International reports, 28 of 32 Chinese provinces, municipalities and autonomous regions have released their first-quarter GDP growth figures, with Chongqing and the Tibet Autonomous Region taking the lead.
24 of the provincial-level regions reported rates above the national figure of 6.7%, while places like Jilin found themselves at the bottom of the list with a 6.2% growth. Two other provinces in the country’s northeast, Liaoning and Heilongjiang, have not revealed their numbers yet as well as central Shanxi.
The immediate spin was even more hilarious: not even stepping for second to appreciate that 85% of provinces “reported” numbers that were greater than the average, a professor Liu Yuanchun at the Renmin University of China said “the figures show the government’s stimulus policies are producing results, which signal stable growth.”
Actually, what the figures show is that China not only continues to fabricate its data with every passing quarter, but it has gotten to the point where it no longer cares if the data makes no sense at all and the government is exposed lying with every incremental data release.
Considering China once again is desperate to recreate its massive debt-fueled capacity glut, one would think it could afford at least a handful of “data” quality control inespectors to make sure that the presented “data package” is at least modestly believable.
That said, as CRI adds, “China’s warming property market is also said to have contributed to the better-than-expected GDP numbers. An earlier survey shows that prices of new homes continued to grow in most Chinese cities, as the country is trying to rid overstock.”
That is surely the case if only for a few more months: the problem as we showed last week is that any “growth”, is incredible as it may be, is entirely on the back of a record $1 trillion in new loan injections in the first quarter.
And since only a portion of these funds have once again entered the economy, the rest have gone on to create the latest and greatest commodity bubble China has ever seen, one we profiled yesterday with this stunning chart showing that, according to Deutsche Bank, the onshore China commodity markets this week traded (conservatively) $350bn notional, a 17x increase on the $20bn notional that traded on Feb 1st 2016 i.e. a month ago (is it coincidence that the notional is about the same as at the peak of the equity frenzy?).
There is a problem for China: while in the past it may have avoided international mainstream media attention, this time it is being immediately called out on its numbers: As the FT reported earlier today, “China’s total debt rose to a record 237 percent of gross domestic product in the first quarter, far above emerging-market counterparts, raising the risk of a financial crisis or a prolonged slowdown in growth, economists warn. While the absolute size of China’s debt load is a concern, more worrying is the speed at which it has accumulated — Chinese debt was only 148 percent of GDP at the end of 2007.”
And while we welcome the MSM’s focus to a topic we have been covering since 2012, we would like to make a correction: China’s total debt/GDP is not 237%, but instead as we reported back in January, was over 100% higher, or 346%. And since in the subsequent three months, China added another $1 trillion in loans or about 10% of GDP (and who knows how much corporate debt), it is safe to say that as of this moment, China’s real total debt/GDP is now well over 350% and rising exponentially fast.
So aside from rigged numbers, a commodity bubble and newly exploding debt creation, everything else is ok with China and all those fears about a Chinese hard landing that were so prevalent 4 months ago can be safely swept away…
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