Aug 30

Today’s News 30th August 2016

  • Greek 'Thought Police' Prosecute Bishop For (Accurately) Calling 'Refugees', "Illegal Migrants"

    Submitted by Maria Polizoidou via The Gatestone Institute,

    • The Minister for Immigration Affairs himself, repeatedly stated that 50% to 70% of migratory flows to Greece were illegal migrants and the rest were refugees. The illegal migrants come from 77 different countries.

    • If it is a "racist crime" for a citizen to express accurately the percentages of refugees and illegal migrants entering the country, what will come next, the Thought Police?

    • The real reason for prosecuting Bishop Markos, it seems, is that the government expects that Turkey's migration deal with the EU will collapse, and that if it does, the migrant flows in the coming months will increase dramatically. The government, according to some members in the opposition, has no friendly way to manage illegal migration and therefore prefers to impose restrictions on freedom of speech and prosecute anyone who objects.

    • The government might scare the Bishop of Chios Island by pressing charges against him and trying to stigmatize him as a racist. But the government will still not scare the angry majority of Greeks.

    In coalmines, from 1911 to 1986, canaries operated as an early warning system for the leakage of hazardous gases. Whenever the birds showed signs of distress, the miners knew trouble was coming.

    Greece has deep problems. Greece is presently in the "coalmine" of an endless economic and immigration crisis.

    This month, for the first time, there was a request to activate an anti-racist law, passed in September 2014, against a Greek citizen who also has institutional status.

    The coalition government of Alexis Tsipras (SYRIZA) and Panos Kammenos (Independent Greeks) asked the district attorney to prosecute the Bishop of Chios Island, Markos Vasilakis, because he dared to say, during a sermon, that the thousands of people who recently arrived from Turkey on the island of Chios are illegal migrants, and not Syrian refugees.

    Chios, the fifth-largest island of Greece, is only 3.5 nautical miles from Turkey, and therefore offers an opportunity to migrants and refugees to cross from Turkey into the European Union.

    Chios is also one of a few Greek islands that has received the largest waves of migrants. Its population of 51,320 inhabitants now accommodates, according to the latest official data, 3,078 migrants, with more on the way.

    It seems the government coalition, through the Secretary of Human Rights, has decided that the solution of Greece's migrant/refugee problem will come if the Bishop of Chios Island is prosecuted for incitement to racial hatred, and if the constitutional right of Greek citizens to freedom of speech is overturned. Secretary of Human Rights Kostas Papaioannou asked the district attorney to prosecute Bishop Markos for these specific charges.

    Is Bishop Markos Vasilakis a Greek Orthodox fanatic or a neo-Nazi? Did the church close its doors to refugees and migrants? Did the bishop try to turn the population of Chios against anyone?

    Not at all. Bishop Markos is highly educated, with a PhD in Byzantine Philology from the Philosophical and Theological School of Athens University. Since the beginning of the migrant crisis, according to the residents of Chios, Bishop Markos opened all the island's churches to accommodate the refugees and illegal migrants. Under his command, all the available spaces on the island were given to caring for whoever left his homeland and home. He has fought hard to collect clothing, shoes and food for refugees and illegal migrants. His work speaks for itself.

    If Bishop Markos were such a horrible person, why did Prime Minister Alexis Tsipras met him in his office in November 2015 to discuss the migrant crisis and never express any dissatisfaction him?

    What, then, did Bishop Markos do to infuriate the Greek government to such an extent that they turned on him?

    Bishop Markos spoke the truth. He said that the people arriving in Greece were not refugees but illegal migrants.

    Was it a lie? According to the Hellenic Coast Guard, for the period of July and August 2016, of the 1,950 people who illegally entered Greece from Turkey, only 500 — or 25% — were refugees from Syria; all the others were illegal migrants. The Minister for Immigration Affairs himself, repeatedly stated that 50% to 70% of migratory flows to Greece were illegal migrants and the rest were refugees. The illegal migrants come from 77 different countries.

    Left: The Bishop of the Greek island of Chios, Markos Vasilakis, is being prosecuted for incitement to racial hatred, because he correctly observed that most of the migrants arriving in Greece from Turkey were not refugees but illegal migrants. Right: Migrants occupying the port of Chios in April 2016.

    If it is a "racist crime" for a citizen to express accurately the percentages of refugees and illegal migrants entering the country, what will come next, the Thought Police?

    The real reason for prosecuting Bishop Markos, it seems, at least according to members of the opposition, is that the government expects that Turkey's migration deal with the EU will collapse, and that if it does, the migrant flows in the coming months will increase dramatically. The government, according to some members in the opposition, has no friendly way to manage illegal migration and therefore prefers to impose restrictions on freedom of speech and prosecute anyone who objects. Tsipras's government is leftist; the ideology and the official policy of the SYRIZA party is that of open borders for illegal migrants who wish to settle in Greece.

    Church groups in Greece believe that the government is targeting the Church in an attempt to change the country's Christian foundation and lead the society into a non-Christian era. The SYRIZA party was always "Christianophobic." Its members do not even enter Christian churches. When a notable priest is giving to migrants and being so unjustly prosecuted, the Greek Orthodox Church cannot help wondering about the government's real intentions on the issue of migrants and refugees.

    If Bishop Markos is the canary of freedom of speech, then, as many observers believe, the prosecution of people who have a view on migrant/refugee policy that differs from SYRIZA's will continue.

    If the government believes that prosecuting whoever objects will scare them into silence, as members of the opposition claim, the government is making a big mistake. The government might scare the Bishop of Chios Island by pressing charges against him and trying to stigmatize him as a racist. The government forced him to publish a press release claiming that for him, all people are created in the image of God and that all he had explained to his congregation was the legal difference between refugees and illegal migrants.

    But the government will still not scare the angry majority of Greeks.

    In a country suffering seven years of economic downturn, and where each municipality will have to accommodate 1,000 migrants, whether it wants to or not; in a country that sees on the news migrants fight each other, the natives and the police; in a country that has 61 cases of malaria and 12 municipalities already in quarantine because of the migration problem, according to the Health Ministry, and where gun sales increase day by day — the last thing we need is to abolish the constitutional rights of citizens. Violence and social unrest will then be the next stage in a drama that will have a bad end.

    In Greece — the "coalmine" of the Eurozone — the canary seems to have died. If this is the beginning of a methodical abolition of constitutional rights such as freedom of speech, Greece could turn into a Turkish style of democracy — like that of Erdogan, which he seems hell-bent on turning into an Islamic caliphate. What a very sad fate that would be for Greece, the nation which gave birth to democracy.

     

  • "There Will Be Blood" – The Whole Game Is About Containing Russia-China

    Authored by Pepe Escobar, originally posted op-ed via SputnikNews.com,

    The next BRICS summit, in Goa, is less than two months away. Compared to only two years ago, the geopolitical tectonic plates have moved with astonishing speed. Most BRICS nations are mired in deep crisis; Brazil’s endless political/economic/institutional debacle may yield the Kafkaesque impeachment of President Dilma Rousseff.

    BRICS is in a coma. What’s surviving is RC: the Russia/China strategic partnership. Yet even the partnership seems to be in trouble – with Russia still attacked by myriad metastases of Hybrid War. The – Exceptionalist – Hegemon remains powerful, and the opposition is dazed and confused.

    Or is it?

    Slowly but surely – see for instance the possibility of an ATM (Ankara-Tehran-Moscow) coalition in the making – global power continues to insist on shifting East. That goes beyond Russia’s pivoting to Asia; Germany’s industrialists are just waiting for the right political conjunction, before the end of the decade, to also pivot to Asia, conforming a BMB (Berlin-Moscow-Beijing) coalition.

    Germany already rules over Europe. The only way for a global trade power to solidify its reach is to go East. NATO member Germany, with a GDP that outstrips the UK, Canada, Australia and New Zealand, is not even allowed to share information with the “Five Eyes” secret cabal.

    President Putin, years ago, was keen on a Lisbon-to-Vladivostok emporium. He may eventually be rewarded – delayed gratification? – by BMB, a trade/economic union that, combined with the Chinese-driven One Belt, One Road (OBOR), will eventually dwarf and effectively replace the dwindling post-WWII Anglo-Saxon crafted/controlled international order.

    This inexorable movement East underscores all the interconnections – and evolving connectivity – related to the New Silk Roads, the Shanghai Cooperation Organization (SCO), the BRICS’s New Development Bank (NDB), the Asian Infrastructure Investment Bank (AIIB), the Eurasia Economic Union (EEU). The crux of RC, the Russia-China strategic partnership, is to make the multipolar, post-Atlantic world happen. Or, updating Ezra Pound, to Make It New.

    Containing RC

    Russia’s pivot to Asia is of course only part of the story. The core of Russia’s industries, infrastructure, population is in the west of the country, closer to Europe. BMB would allow a double pivot – simultaneously to Europe and Asia; or Russia exploiting to the max its Eurasian character. Not accidently this is absolute anathema for Washington. Thus the predictable, ongoing no holds barred exceptionalist strategy of preventing by all means necessary closer Russia-Germany cooperation.

    In parallel, pivoting to Asia is also essential because that’s where the overwhelming majority of Russia’s future customers – energy and otherwise – are located. It will be a long, winding process to educate Russian public opinion about the incalculable value for the nation of Siberia and the Russian Far East. Yet that has already started. And it will be in full fruition by the middle of the next decade, when all the interpolated New Silk Roads will be online.

    “Containment” of RC will continue to be the name of the exceptionalist game – whatever happens on November 8. As far as the industrial-military-security-surveillance-corporate media complex is concerned, there will be no reset. Proxies will be used – from failed state Ukraine to Japan in the East China Sea, as well as any volunteering Southeast Asian faction in the South China Sea.

    Still the Hegemon will be in trouble to contain both sides of RC simultaneously. NATO does not help; its trade arm, TPP, may even collapse in the high seas before arriving on shore. No TPP – a certainty in case Donald Trump is elected in November – means the end of US economic hegemony over Asia. Hillary Clinton knows it; and it’s no accident President Obama is desperate to have TPP approved during a short window of opportunity, the lame-duck session of Congress from November 9 to January 3.

    Against China, the Hegemon alliance in fact hinges on Australia, India and Japan. Forget about instrumentalizing BRICS member India – which will never fall into the trap of a war against China (not to mention Russia, with which India traditionally enjoys very good relations.)

    Japan’s imperial instincts were reawakened by Shinzo Abe. Yet hopeless economic stagnation persists. Moreover, Tokyo has been prohibited by the US Treasury Dept. to continue unleashing quantitative easing. Moscow sees as a long-term objective to progressively draw Japan away from the US orbit and into Eurasia integration.

    Dr. Zbig does Desolation Row

    The Pentagon is terrified that RC is now a military partnership as well.

    Compared to Russia’s superior high-tech weaponry, NATO is a kindergarten mess; not to mention that soon Russian territory will be inviolable to any Star Wars-derived scheme. China will soon have all the submarines and “carrier-killer” missiles necessary to make life for the US Navy hell in case the Pentagon harbors funny ideas. And then there are the regional details – from Russia’s permanent air base in Syria to military cooperation with Iran and, eventually, disgruntled NATO member Turkey.

    No wonder such exceptionalist luminary ideologues as Dr. Zbig “Grand Chessboard” Brzezinski – foreign policy mentor to President Obama – are supremely dejected.

    When Brzezinski looks at progressive Eurasia integration, he simply cannot fail to detect how those “three grand imperatives of imperial geostrategy” he outlined in The Grand Chessboard are simply dissolving; “to prevent collusion and maintain security dependence among the vassals, to keep tributaries pliant and protected, and to keep the barbarians from coming together.”

    Those GCC vassals – starting with the House of Saud – are now terrified about their own security; same with the hysteric Baltics. Tributaries are not pliant anymore – and that includes an array of Europeans. The “barbarians” coming together are in fact old civilizations – China, Persia, Russia – fed up with upstart-controlled unipolarity.

    Unsurprisingly, to “contain” RC, defined as “potentially threatening” (the Pentagon considers the threats are existential) Brzezinski suggests – what else – Divide and Rule; as in “containing the least predictable but potentially the most likely to overreach.” Still he doesn’t know which is which; “Currently, the more likely to overreach is Russia, but in the longer run it could be China.”

    Hillary “Queen of War” Clinton of course does not subscribe to Brzezinski’s “could be” school. After all she’s the official, Robert Kagan-endorsed, neocon presidential candidate. She’s more in tune with this sort of wacky “analysis”.

    So one should definitely expect Hillary’s “project” to be all-out hegemony expansion all across Eurasia. Syria and Iran will be targets. Even another war on the Korean Peninsula could be on the cards. But against North Korea, a nuclear power? Exceptionalistan only attacks those who can’t defend themselves. Besides, RC could easily prevent war by offering some strategic carrots to the Kim family.

    In many aspects, not much has changed from 24 years ago when, only three months after the dissolution of the USSR, the Pentagon’s Defense Planning Guidance proclaimed:

    “Our first objective is to prevent the reemergence of a new rival…This requires that we endeavor to prevent any hostile power from dominating a region whose resources would, under consolidated control, be sufficient to generate global power. These regions include Western Europe, East Asia, the territory of the former Soviet Union and southwest Asia.”

    Talk about a prescient road map of what’s happening right now; the “rival”, “hostile” power is actually two powers involved in a strategic partnership: RC.

    Compounding this Pentagon nightmare, the endgame keeps drawing near; the next manifestations and reverberations of the never-ending 2008 financial crisis may eventually torpedo the fundamentals of the global “order” – as in the petrodollar racket/tributary scam.

    There will be blood. Hillary Clinton smells it already – from Syria to Iran to the South China Sea. The question is whether she – and virtually the whole Beltway establishment behind her – will be mad enough to provoke RC and buy a one-way ticket to post-MAD (Mutual Assured Destruction) territory.

  • Why A Record Number Of College Grads Are Working Minimum Wage Jobs

    Over the past year we have repeatedly demonstrated that the bulk of the job additions has been focused on the lowest-paying occupations. Now, according to a new study by Bank of America, we find that these lowest paying sector have also accounted for the bulk of wage growth in the past year.

    As BofA’s Emanuella Enenajor notes, wage growth in low-pay sectors outpacing all others. “If you’ve tuned into CEO earnings calls recently, you’d know that a common theme is wage pressure, especially in low-pay sectors such as restaurants. CEOs cite the need to attract quality hires, a tightening labor market, and the push from higher minimum wages. Last year, companies like McDonalds and Walmart announced higher wages, raising fears of a sudden pick-up in wage pressure, which we argued against in our piece “Fast food, fast wages?” The data confirm a trend of rising wage pressure in low-pay sectors with limited pressure elsewhere: the bottom 20% of industries, by pay, is seeing wages rise at a 3.4% year-on-year pace so far this year, but the remaining 80% of the market is only seeing wage growth of 2.4%.”

    A key driver for this increase is that a number of states have raised the minimum wage this year, including California and New York. BofA estimates that this has provided a modest boost to wages, year to date. The BLS does not publish detailed industry-level data by state and earnings buckets. Here is the logic behind the calculation:

    We use a back-of-the envelope approach for this calculation. First, we estimate 1) the share of low-pay workers impacted by state-level minimum wage hikes. Ideally, we would look for the percentage of low-pay workers earning less than $9.38/hr, as states raising the minimum wage in 2016 have, on average, a minimum wage of $9.38/hr this year. Since this level of granularity is not available, we assume the share is somewhere between 30% (the share of low pay workers making less than $8.99/hr) and 50% (the share of low pay workers making less than $9.99). We assume the mid-point of 40% as our baseline. Then we calculate 2) the percentage of US employees that were located in states seeing a minimum wage increase in 2016 (about 30%). We assume the national distribution mirrors the distribution for low-pay workers.

     

    We multiply 1) by 2) to estimate the share of low-pay workers affected by state-level minimum wage increases. This simplified exercise suggests that of the 3.4% yoy increase in low-pay wages so far this year (equivalent to 46 cents), roughly 8 cents (0.6 ppts) is due to the minimum wage increase. This explains about half of the outperformance of low-pay wages versus high-pay wages. Table 2 shows sensitivity around this estimate. Given the assumptions we have had to make, our baseline estimate and the sensitivities are merely illustrative.1 We can conclude that minimum wage gains have had some part in raising low-pay wages, but are not likely the full story.

    Another likely reason why wages for low-pay workers are picking up is because firms have to offer a higher wage to attract workers. The supply of less-educated workers is dwindling, as seen by a shrinking labor force of 16-24 year olds and workers aged 25+ with a high school diploma or less (no college) (Chart 2).

    One explanation for this is that increasinly more young Americans opt to take advantage of generous student loans (now at a record $1.3 trillion), instead of entering the work force, where the best they can hope for are jobs paying far lower wages relative to expectations. As BofA confirms, this cohort has been declining since the start of this recovery, probably reflecting the continued push towards higher education, as well as demographics which has reduced the number of younger workers willing to flip burgers for a few years while they save for college.

    This trend contrasts sharply with the labor supply of workers with at least some college/bachelor’s degree. Here, supply has been growing, possibly in response to a strengthening recovery as graduates opt to enter the labor force rather than study more.

    One very adverse side effect of this trend is that increasingly more low wage employees are those with a college education, in the form of a Bachelor’s Degree or higher, as they are unable to leverage their diploma credentials to get a better paying job, while the only ones hiring are those seeking minimum-paid workers.

    As firms in sectors with low pay levels struggle to attract workers, they attract more educated/skilled workers with higher wages, but certainly not high enough. Today,  23% of workers in low pay sectors have a bachelor’s degree or higher, up from 18% 15 years ago (Chart 3).  

    This means that the share of college grads working minimum wage jobs is now an all time high; jobs which barely cover the cost of living, let along covering interest expense on student loans.

    A second adverse consequence is that there is little risk that accelerating wages in low pay sectors will spill over to faster overall wage growth in a meaningful way, according to BofA.

    First, low-pay wage growth does not tend to lead wage trends in higher paid sectors, based on a Granger causality test. If we look at production and non-supervisory workers (Chart 4) for which there is a longer time series, we can see that low-page wage growth tends to peak and bottom out at about the same time as top 80% wage growth, although low-pay wages tend to exhibit more volatility. This greater “flexibility” in low-pay wage inflation contradicts findings of San Francisco Fed researcher Mary Daly, which shows evidence of pent-up wage deflation for workers with lower educational attainment.

    BofA then asks the logical question: what will trigger a more meaningful increase in wages outside of the low-pay sectors? It answers that any upward pressure on the national minimum wage could have a modest impact on overall wages, but again, much of this  would be driven by gains in low-pay wages. In our view, wage growth outside of low pay sectors is likely to gradually increase as the overall labor market tightens. However, the trend will be slow, and will likely remain below that of low pay sectors, as the labor force of workers with higher educational attainment (who would presumably be competing for higher-paid work) has been expanding, pointing to a tempering force on wages.

    * * *

    The third, and final, adverse consequence from all of this governmental intermediation in wage allocation is something else we have covered extensively, most recently overnight in “Minimum Wage Claims Its Latest Victims – Ashley Furniture Slashes 840 Jobs In California“, and more extensively in “Something “Unexpected” Happened When Seattle Raised The Minimum Wage” where we said the following:

    Despite our efforts to [convince progressives that raising minimum wages to artificially elevated levels is a bad idea] might be, we thought we would, yet again, report the latest empirical evidence proving that minimum wage results in permanent jobs losses for the same low-skilled workers they’re intended to help.  The latest research comes from the University of Washington which researched the impact of Seattle’s recent minimum wage hike on employment in that city (as background, Seattle recently passed legislation that increased it’s minimum wage to $11 per hour on April 1, 2015, $13 on January 1, 2016 and $15 on January 1, 2017).  “Shockingly”, the University of Washington found that Seattle’s higher minimum wages “lowered employment rates of low-wage workers” (the report is attached in its entirety at the end of this post). 

    In other words, the higher minimum wages are raised, the faster the corporate response of laying off a proportional number of workers will kick in, or as in the case of Starbucks, simply cutting the overall number of work hours across all employees, the net result of which is the same, if not lower, overall compensation.

    Sadly, with long-term US productivity continuing its descent to all time lows…

    … this trend will not change, and we expect even more government meddling, even greater wage gains for low-paid workers leading to less wage gains for the rest of the labor force, more layoffs and so on, until the US economy finally slides into a contraction which not even the NBER will be able to “seasonally-adjust” away.

  • 4 Millennials, 4 Salaries: Survey Finds Millennials At All Income Levels Happy, Self-Assured And Completely Delusional

    Esquire Magazine was actually able to track down 4 millennials not currently living at home with mom to quiz them on their current financial situation as well as their outlook for the future.  Interviewees were chosen at varying income levels ranging from $11,000 per year up to $1.5 million to see how annual income impacted their outlook on life.  To our complete "surprise," the one unifying theme in the responses was that millennials seem to be fairly self-assured and optimistic about their future despite the overwhelming mountain of economic evidence that suggests they're totally screwed.  Seems as though even the millennials that have grown up and gotten jobs have found a way to maintain the "safe space" bubble they created in college and have managed to completely block out reality…fascinating stuff.  That said, we would note this can't really be considered a "scientific" poll given the small sample size of 4, but the results do seem to be remarkably consistent with our past observations of this particular generation. 

    Our key takeaways from the survey were the following:

    • Millennials are extremely HAPPY – 3 out of 4 millennials ranked their "happiness" as 8 or 9 out of 10.  The lowest-income millennial ranked his happiness at a 4 but we assume it has more to do with that fact that he lives in Washington D.C. than his income level…this nuance pretty much disqualifies his response to this particular question.  
    • Millennials have an inflated sense of their self-worth – 3 out of 4 millennials seem to think their earnings will grow at an annual rate of 17% which is just "slightly" higher than overall wage growth which has been running around "flattish."  So good luck with that.
    • Millennials feel over-taxed – 3 out of 4 millennials thought they were over-taxed…though we have a sneaking suspicion many of them vote for politicians that would like to raise their taxes…go figure.

    It's unclear if millennials are happy because of their inflated sense of self-worth or the other way around…we'll let you decide. 

    The full results for the survey are below:

    Ed Zitron (30) – $1,500,000 per year

    Location: Oakland, California

    Occupation: Founder & CEO of a PR Firm

    Salary: $1.5 million

    Family status: Getting married next year.

    Homeowner? Renter? Homeowner. It's an $800,000 house in the Oakland Hills.

    Monthly Mortgage: $3,200, but I choose to pay more than the minimum.

    Do you keep a budget? Yes, we try to keep our expenses below $2,000 or $3,000 per month.

    What's a weekly grocery bill for you? We sometimes get away with $200, sometimes $500. It depends on what I'm making, because I sous-vide a lot, and my fiancée is an amazing chef. We cook at home most nights.

    One thing your family needs but can't afford: I can't think of anything.

    One thing you want but can't afford: It's trite to say, but I'd like to bring my family—who are in England, where I'm from—out to America. And as silly as it sounds, I wish I could afford a second home in London. Also, one in Hawaii.

    The last thing you bought that required serious planning: The wedding.

    Do you have credit cards? We have three, and we pay them off in full every month.

    How much debt are you carrying now? Just the mortgage.

    Saving for retirement? We are. I would say I have a decent sum in retirement, and a rainy day fund. I put a sizable amount away each month in an IRA.

    At what age would you like to retire? Tomorrow? [Laughs] As soon as possible would be great. But truthfully, I'll probably be aiming for around 45. That would be the dream.

    College plans for your kids? Yes. I've already set aside $15,000 to go into a 529 Plan—it's tax-free, and our child will have to use the money toward higher education.

    Looking at your current career prospects, how much money do you think you'll be earning in ten years' time? At least $2 million a year. But I'm just happy to be making what I make right now. I feel so lucky. I have a Tesla, so I realize I'm kind of a douche. But I don't live ostentatiously. I don't take drugs, I don't do crazy parties, I don't rent private jets, I don't do any of the things I've always associated with classical richness.

    How happy are you on any given day, on a scale of one to ten? I'd say an 8.5 or a 9. I look at people who make more money than I do, like crazy rich CEOs, and they seem so overworked and so sad and so angry at everything. They want more, they feel they should have as much Mark Zuckerberg. I'm really happy—I live in this wonderful home. I have a big television. When I need to de-stress, I can take a drive through Napa. Not everyone gets to do these things.

    How often do you worry about money? That's the funny thing: I've never stopped worrying. That doesn't mean that I'm sitting there every second of the day saying, "Oh God, that was a $4 latte." But I'm immensely conscious of what things cost. I don't just have a budget, I have—how do I describe it—a running total in my head of what everything I'm doing costs, and I know what expenditures I can make. It's an awareness, not an anxiety.

    How much money do you think you'd need to have the life you want? I have it now. I'm happy. Sure, I wish I could pay off the mortgage right now. That would be awesome. But I'm really lucky for the life I have, and for the love I have, and being able to provide for my fiancée and my friends. One thing my mother always taught me was that if you can't share money with other people, it's not worth having.

    Do you think you have more or less financial opportunity than your parents did? I think I have more. My job would not have existed in their time, and if it did, I don't think I'd do so well. I suffer from a learning disability, so if I was required to write, I don't think I'd be able to do it. Without the Internet, I would not be able to make any money.

    Do you think being exposed to the lives of your friends via Facebook and Instagram affects your spending habits? No. You should never not spend on yourself, but you should also not be bloody stupid.

    Do you think your taxes are too high? No. Don't get me wrong, it sucks. But if you make a bunch of money, you should pay a bunch of tax. It's not garnishing your wages; it's being a part of society. And if you can't accept that, I don't know what kind of human being you are.

     

    Josh Cohen (33) – $250,000 per year

    Location: Stamford, Connecticut

    Occupation: Founder & CEO, Junkluggers. We go to people's homes or businesses and haul away stuff that they no longer want or need. What we're all about is separating stuff for reuse, donations, and recycling, with the goal of keeping as much out of landfills as possible.

    Family Status: Married with two-year-old twins—a boy and a girl—and a dog named Otis.

    Homeowner? Renter? Homeowner.

    Monthly mortgage: Around $3,500 per month.

    Do you keep a budget? We don't. We typically spend the same amount every month and we've been able to afford it.

    What's a weekly grocery bill for you? We spend close to $600 a week on food. We mostly eat in.

    One thing your family needs but can't afford: I don't think we need anything we don't have.

    One thing you want but you can't afford? A nicer house, nicer cars, a boat—we live by the water, so that would be awesome. And we would love to travel more.

    The last thing you bought that required serious planning and budgeting for? Our house. We bought it three years ago. We had to start saving money and liquidating some of our stock accounts. And I needed to start making more money. 

    Do you have credit cards? We've got one—we use that for everything.

    How much debt are you carrying right now? Just the mortgage.

    Saving for retirement? We put away around $5,000 to $10,000 a year into a retirement account. But I also consider my business to be our retirement savings plan.

    At what age would you like to retire? I don't think I will. Maybe I'll do things differently when I'm older—grow the business so that we have more support staff and a larger executive team.

    College plans for your kids? We put aside some money every month for them. We have a tax-free 529 Plan.

    Looking at your current career prospects, how much money do you think you'll be earning in ten years' time? $1 million a year. That's based on how I expect my business to grow. We're franchising right now and expanding throughout the country.

    How happy are you on any given day, on a scale of 1 to 10? I go through tremendous highs and lows as a business owner. So I would say there is no average. I woke up yesterday feeling like a 2. I got my shit together, worked out, and got busy at work. Then I woke up today and I'm probably closer to an 8 or a 9. I'm glad you and I talked today.

    How often do you worry about money? Sometimes. I started the business from scratch when I was 21, so I'm used to bootstrapping.

    How much money do you think you'd need to have the life you want? In some ways I feel like I am living the life I want. I've got a beautiful family, a growing business, and I'm making decent money. But I guess many people—including me—want more. I would love to have another house somewhere else, cooler cars. So I would probably say double what I'm earning now. Or triple.

    Do you think you have more or less financial opportunity than your parents did? More. My Dad is a business owner—he owns an accounting firm. But I know my house is more valuable than his is, for instance. And I believe I earn more.

    Do you think being exposed to the lives of your friends via Facebook and Instagram affects your spending habits? I try not to spend too much time on those sites, because a lot of times when you see what other people are posting it makes you feel inferior. Like you're not doing enough. There's always someone more who's successful. Or living a life that seems better.

    Do you think your taxes are too high? Yes, always. Of course. I think they're too high personally, and I think they're too high for business. From a business perspective, we're not incentivized to grow. And the government doesn't spend the money wisely. I believe if we had more people with business experience in power—not necessarily Donald Trump—then it would be really good for the economy, and the country would be better-run.

     

    Kelby Green (33) – $55,000 per year

    Location: Houston, TX

    Occupation: Business owner, CEO of Common Cents Content & Marketing, a digital-marketing agency that works with financial advisors. I also have a personal-finance blog for millennials called The Frugalennial.

    Family status: Married with two daughters—one and two years old.

    Homeowner? Renter? Homeowner.

    Monthly Mortgage: $1100

    Do you keep a budget? Absolutely! My wife and I are frugal by nature, but having two kids and running a small business requires that we know where every penny of our budget is going. Our largest expenses are mortgage and daycare.

    What's a weekly grocery bill for you? $75 per week. We eat at home ninety percent of the time. We figure out—well, my wife figures out—when certain items go on sale. And we have a system of using coupons. I'm looking at the dollars and cents, so as long as we can stay within our budget,we may spend the extra time going to three stores instead of one.

    One thing your family needs but can't afford: A vacation! Our last one was a year and a half ago, before my youngest was born.

    One thing you want but can't afford: Updated kitchen appliances. I wouldn't say 'can't afford'—it's more like the purchase is not a priority. Like I mentioned, we spend a good amount of time cooking at home, and most of our appliances are probably original to the house, which was built in 1971. With a gentle nudge here and there they work just fine. Though we did update the dishwasher for my wife's birthday—she asked her family to contribute to our dishwasher fund, and we paid the $150 difference.

    The last thing you bought that required serious planning: We budget our money all of the time, so we've already been planning for everything—I could tell you exactly where all my money is going over the next five years.

    Do you have credit cards? I have a few but I don't use them anymore. We're hyper-focused on paying down debt.

    How much debt are you carrying now? With student loans and credit cards, I would say around $30,000 to $35,000.

    Saving for retirement? My wife is contributing to hers, mainly to get the employer match. But I've put mine on hold while I aggressively pay down debt and try to build my business.

    At what age would you like to retire? I don't think I'll ever retire. Not that I won't be able to, I just don't see myself wanting to.

    College plans for your kids? We've talked about it, but haven't pulled the trigger on actually setting up a plan. It's one of those things where it's so far down the line…but that's a terrible way to look at it. There's no valid excuse for it besides life being crazy.

    Looking at your current career prospects, how much money do you think you'll be earning in ten years' time? I'd say three times what I'm earning now—so around $150,000—would be a reasonable expectation.

    How happy are you on any given day, on a scale of one to ten? A solid 8. My business is new so I put in a ton of work there, but it's 100% worth it. My office is in my house, so I don't have to miss out on seeing my family due to working so much. I think that helps a lot.

    How often do you worry about money? Fairly often. I was not always frugal—growing up, I was an impulsive shopper. I don't want to fall into those same mistakes.

    How much money do you think you'd need to have the life you want? I live a simple life, so I'm perfectly happy with the amount I earn now. Sure, by earning more we could buy more stuff and travel more often, but I don't know that it would move the happiness needle much.

    Do you think you have more or less financial opportunities now than your parents did? Yes and no. Being able to create a business around something I enjoy and doing it completely online is an opportunity that my parents didn't have. And the opportunity to make money is greater than in previous generations. But millennials are saddled with so much student-loan debt. We're not getting an even start. We're digging ourselves out of a hole.

    Do you think being exposed to the lives of your friends via Facebook and Instagram affects your spending habits? Yes, no doubt about it. You flip through Instagram and see your friends in the same salary bracket as you, and they're traveling every other month and taking pictures on the beach. It makes you think, What am I doing wrong? I work hard. I deserve a trip.

    Do you think your taxes are too high? No, I'm actually fine with my taxes. Of course, I wouldn't have a problem if they were lowered a little.

     

    Tyron Harris (28) – $11,000 per year

    Location: Washington, D.C.

    Occupation: STRIVE DC helped prepare me to find work. I landed a job in early July as an overnight stocker for a grocery store. To get there, I take a bus, two trains, and then I walk almost a mile—it takes me an hour and a half. The work is part-time. I've been looking for full-time work. I've applied to a million and one different things. The job market is so small and there are so many people who are more qualified than me.

    Family status: I have a six-year-old daughter. She stays with her mother.

    Homeowner? Renter? I rent a room in a house owned by a friend of the family. She cuts me some slack. If it wasn't for her, I'd more than likely be homeless.

    Monthly Rent: $250.

    Do you keep a budget? At the beginning of the month I pay my cellphone bill—about $40 each month. The grocery store has a union, so they take their dues—around $10 or $12 each week. And then I pay the lady I live with—sometimes I pay her $50, sometimes $75, until I get to $250.

    What's a weekly grocery bill for you? I can eat whatever's in the house. The woman I live with just asks me to not eat her out of house or home.

    One thing your family needs but can't afford: A car. I'm trying to get a brickmason apprenticeship. Most of the work is in Virginia and Maryland, so they need me to have my own transportation before accepting me. I've saved $175, but I need around $1100.

    One thing you want but can't afford: My own place to live in.

    The last thing you bought that required serious planning. A pair of New Balance shoes. They were $160—I saved up for six months. I use them at work because they're comfortable.

    Do you have credit cards? Yes, one credit card.

    How much debt are you carrying now? Not much—about $480. I was raised to not spend money you don't have. I only use it in real pinches, or something for my daughter that her mother can't provide.

    Saving for retirement? No. It's not a reality right now. I was taught at an early age to think about it. But it's one thing to know how to do it, and it's another to have the funds.

    At what age would you like to retire? It would be nice to retire before I'm sixty. But that's unrealistic.

    College plans for your kids? I would love to, but right now it's not an option.

    Looking at your current career prospects, how much money do you think you'll be earning in ten years' time? If I become a brickmason, it's not farfetched to think I'll make $100,000.

    How happy are you on any given day, on a scale of one to ten? I'd say a 4. Staying awake all night, lifting boxes, cutting your hands—it's so much labor. And at the end of the week, after I pay my bills, I've only got an extra $30 to my name.

    How often do you worry about money? Every day, five or six times a day.

    How much money do you think you'd need to have the life you want? I don't need much—$50,000 a year.

    Do you think you have more or less financial opportunity than your parents did? We have more opportunity, but the price of living is unbearable.

    Do you think being exposed to the lives of your friends via Facebook and Instagram affects your spending habits? I don't have Facebook—I figured that if I had time to look at Facebook, I had time to be applying to jobs. So I deactivated my account. But I have Instagram. When you look at your friends' pictures and see all the fun they're having, you don't become bitter, you want to become better. You shouldn't have to save for sixth months to go out with your friends.

    Do you think your taxes are too high? In a sense I do. The middle and lower classes are taxed too much. The upper class isn't taxed enough. I respect businesses, and I respect when they're savvy enough to find legal loopholes that'll allow them to save money. Because more than likely, if I were in their shoes I'd do the same thing.

  • Germans "Lose Faith In Banks", Rush To Buy Safes

    It is no secret that one of the most admirable qualities of the German public – in addition to its striking propensity for thrift in the aftermath of Weimar – is its stoic patience and pragmatism when dealing with adversity. However, over the past month, we grew increasingly confident that said patience would be tested, if only when it comes to matters of monetary trust vis-a-vis the local, neighborhood bank. First it was the news that Raiffeisen Gmund am Tegernsee, a German cooperative savings bank in the Bavarian village of Gmund am Tegernsee, with a population 5,767, finally gave in to the ECB’s monetary repression, and announced it’ll start charging retail customers to hold their cash. Then, just last week, Deutsche Bank’s CEO came about as close to shouting fire in a crowded negative rate theater, when, in a Handelsblatt Op-Ed, he warned of “fatal consequences” for savers in Germany and Europe – to be sure, being the CEO of the world’s most systemically risky bank did not help his cause.

    That was the last straw, and having been patient long enough, the German public has started to move. According to the WSJ, German savers are leaving the “security of savings banks” for what many now consider an even safer place to park their cash: home safes.

    Indeed, as even the WSJ now admits, for years, “Germans kept socking money away in savings accounts despite plunging interest rates. Savers deemed the accounts secure, and they still offered easy cash access. But recently, many have lost faith.” We wondered how many “fatal” warnings from the CEO of DB it would take, before this shift would finally take place. As it turns out, one was enough.

    To be sure, the Germans are merely catching up to where the Japanese were over half a year ago. As we wrote in February, “look no further than Japan’s hardware stores for a worrying new sign that consumers are hoarding cash–the opposite of what the Bank of Japan had hoped when it recently introduced negative interest rates. Signs are emerging of higher demand for safes—a place where the interest rate on cash is always zero, no matter what the central bank does.

    “In response to negative interest rates, there are elderly people who’re thinking of keeping their money under a mattress,” one saleswoman at a Shimachu store in eastern Tokyo told The Journal, which also says at least one model costing $700 is sold out and won’t be available again for a month.

     

     

    “According to the BOJ theory, they should have moved their funds into riskier but higher-earning assets. Instead, they moved into pure cash that earned nothing,” Richard Katz, author of The Oriental Economist newsletter wrote this month.

     Now it’s Germany’s turn.

    “It doesn’t pay to keep money in the bank, and on top of that you’re being taxed on it,” said Uwe Wiese, an 82-year-old pensioner who recently bought a home safe to stash roughly €53,000 ($59,344), including part of his company pension that he took as a payout.

    Interest rates’ plunge into negative territory is now accelerating demand for impregnable metal boxes.

    Burg-Waechter KG, Germany’s biggest safe manufacturer, posted a 25% jump in sales of home safes in the first half of this year compared with the year earlier, said sales chief Dietmar Schake, citing “significantly higher demand for safes by private individuals, mainly in Germany.”

    Burg-Waechter KG, Germany’s biggest safe manufacturer, posted a 25% jump
    in sales of home safes in the first half of this year compared with the
    year earlier, said sales chief Dietmar Schake, citing “significantly higher demand for safes by private individuals, mainly in Germany.”

    Rivals Format Tresorbau GmbH and Hartmann Tresore AG also report double-digit-percentage German sales increases. “Safe manufacturers are operating near their limits,” said Thies Hartmann, managing director of Hamburger Stahltresor GmbH, a family-owned safe retailer in Hamburg, which he says has grown 25% since 2014. He said deliveries take longer from safe makers, some of which are running three production shifts.

    Thies Hartmann, managing director of the Hamburger Stahltresor store in Hamburg

    The biggest irony in all of this, as we first pointed out last October, is the epic mistake that central bankers did by unleashing negative rates: instead of forcing savers to spend, it has – at least in the case of Japan and Germany – forced them to not only pull their cash out of the bank, thereby further slowing the velocity of money, but to save even more, forcing central bankers to come up with even more unprecedented “solutions” to a problem of their own creation.

    As the WSJ adds, in a country where few people buy stocks, the possibility of having to pay fees on deposits has turned savers’ world—and their piggy banks—upside down.

    “The moment the bank tells me I have to pay interest on my deposit I’ll take my €50,000 or whatever it is and put it under my pillow, or buy a safe and stick the money inside,” said Dagmar Metzger, a 53-year-old entrepreneur in Munich.

    Alas, with every passing day, that moment gets ever closer.

    Meanwhile, for those who can’t find or afford a safe, there are other options. Ms. Metzger, a game hunter, said she would also consider squirreling cash away in her gun cabinet, which has solid locks. Paying to save is “preposterous,” said Marlene Marek, 58, owner of a Frankfurt bistro. “I would rather withdraw my money and stash it at home, or keep it in a safe-deposit box at a bank.”

    She is not the only one – many Germans have a similar idea, which has led to safes selling out, and creating waiting lists for safe-deposit boxes in some big cities as a growing number of Germans prefer self-sufficiency. “When you put money in a safe-deposit box, everyone notices, and you’re paying fees,” said Mr. Wiese, the Hamburg retiree, who said his new safe is roughly twice the size of a hotel safe.

    And while one could blame retail savers for being conspiracy theorist nuts, in Germany it is the very biggest corporations who have been, throughout 2016, rebelling against the ECB’s idiotic policies. Indeed, banks and other financial institutions themselves are also keeping more cash. As we reported earlier in the year, reinsurance giant Munich Re AG said earlier this year it would cache over €20 million in cash in a safe, alongside gold bars the company stockpiled two years ago.

    “We are testing that and are happy that this works without any glitches and at reasonable costs,” said Chief Financial Officer Jörg Schneider. The reinsurer said it would consider augmenting its cash stash.

    Finally, in what may be the pinnacle fo practicality over stupidity, Germans are particularly focused on safes because they prefer cash to plastic. “Only cash is real,” goes an old saying.

    Well, yes, until it is confiscated as sad Harvard economists have been urging in recent months.

    Unlike their more “hip” Scandinavian peers, roughly 80% of German retail transactions are in cash, almost double the 46% rate of cash use in the U.S., according to a 2014 Bundesbank survey. Germans also keep more cash in their wallets and visit ATMs more often, withdrawing on average $256 at a time, the study found. Americans withdraw $103 on average.

    Germany’s love of cash is driven largely by its anonymity. One legacy of the Nazis and East Germany’s Stasi secret police is a fear of government snooping, and many Germans are spooked by proposals of banning cash transactions that exceed €5,000. Many Germans think the ECB’s plan to phase out the €500 bill is only the beginning of getting rid of cash altogether.

    And they are absolutely right; we can only wish more Americans showed the same foresight as the ordinary German.

    Meanwhile, the WSJ concludes, Ms. Metzger is a member of an activist group demanding the existence of cash be guaranteed in Germany’s constitution.  “I don’t want to become completely transparent,” she says.”I don’t want everyone to know whether I buy chocolate, strawberries or mangoes at the store.”

    Alas, if “erudite” Harvard economists like Larry Summers and, now, David Rogoff get their way, Ms. Metzger’s, and everyone else’s, worst nightmare will soon come true.

    Until that moment, however, as a final reminder, in a fractional reserve banking system, only the first ten or so percent of those who “run” to the bank to obtain possession of their physical cash and park it in the safe will succeed. Everyone else, our condolences.

  • Former Barrick Gold President: "A Big Move Has Begun. There's Something Fundamentally Wrong With The Economy"

    Submitted by Mac Slavo via SHTFPlan.com,

    There are few people as knowledgeable about  global commodities markets, fundamentals, cycles and the effects of investor sentiment on price movements as Jim Gowans. He is the former Co-President of mega-mining company Barrick Gold, the former President of De Beers Canada, and currently serves as the President and Chief Executive Officer of mineral exploration firm Arizona Mining.

    In a recent interview with SGT Report Gowans warns that economic and monetary fundamentals suggest we have some deep rooted problems with no resolution in sight. Having personally witnessed the effects of Zimbabwe’s hyperinflation , Gowans notes that when currencies around the world finally collapse from the weight of unlimited quantitative easing, paper money as we know it today will no longer be a viable mechanism for trade. When that inevitable day comes for the U.S. dollar, the general populace will have no choice but to replace it with “in-kind” commodities like gold that will be used for trading for essential goods.

    I was living in Africa, in Botswana, and looking over across the border into Zimbabwe watching hyperinflation to the point where people were collecting million dollar bills that were worth nothing… ZimDollars they called it… I had a few friends of mine in Zimbabwe that were trillionaires…

     

    In Zimbabwe they went to the U.S. dollar… in other places they’ll go to in-kind commodities like gold. 

    Watch the full interview with Arizon Mining’s Jim Gowans:


    (Watch at Youtube)

    Gowans says that mining is simply not sustainable for the companies who produce gold if the price is $1100 per ounce or lower, which explains why we’ve see a powerful up-trend in precious metals since the start of 2016:

    You just look at the world economies and you know that the fundamentals are there for a significant change in gold price… it wasn’t sustainable at around $1100 or $1150… It doesn’t surprise me at all… I think you’re going to see gold start to rise again because of the fundamentals in the world economy.

     

    …

     

    I think a move has begun… When you have bonds at negative interest rates you know there’s something fundamentally wrong with the economy. That’s a statement of the relative safeness of currencies… when people actually feel they can buy that bond and pay money to keep it in that bond just because it’s a safer haven than other investments then that’s pretty bad.

    Deep pocketed global investors and Wall Street institutions have certainly taken notice of the impending meltdown of global currencies and economies. That’s why people like George Soros, Stanley Druckenmiller and Carl Icahn are rapidly shifting capital into precious metals.

    That’s telling us people are concerned about currencies… When you see gold and silver equities, and those are just proxies for the metal, it’s a much more convenient way to invest than owning physical… They see gold and silver as a much more reliable investment than bonds from all the central banks and the like… that’s what’s been driving gold and silver equities. 

    Keeping in mind that absolutely nothing has changed for the better since the Crash of 2008 and that the Federal Reserve has hinted at even more large-scale central bank intervention, we can reasonably conclude that the situation is about to get even worse.

    That, of course, can mean only one thing: the price of commodities, especially safe haven assets like gold and silver, will continue to rise.

  • Recent Surge In Inner-City Heroin Overdoses "Unlike Anything We've Seen Before"

    For the past week, the the city of Cincinnati has been battling an unprecedented spike in heroin overdoses that has left police and emergency responders drained.  Per the Cincinnati Enquirer, in a “normal” week, police and healthcare officials indicate that Cincinnati encounters roughly 25-30 heroin-related overdoses.  That said, within the past 6 days that number has spiked by over 5.5x as 174 overdose cases have been reported by local emergency rooms.

    Given the sudden spike in overdoses, local police authorities speculate that the heroin supply has likely been cut with a potent painkiller called fentanyl or the mega-potent animal opioid Carfentanil.  Carfentanil, an analgesic for large animals including elephants, is about 10,000x stronger than morphine and was discovered in July in the region’s heroin stream.  Police are still working to find the source of the deadly heroin supply. Per Cincinnati Enquirer:

    “These people are intentionally putting in drugs they know can kill someone,” Synan told WCPO. “The benefit for them is if the user survives, it is such a powerful high for them, they tend to come back. … If one or two people die, they could care less. They know the supply is so big right now that if you lose some customers, in their eyes, there’s always more in line.”

     

    “We’re working very closely to find the source dealer,” said Newtown Police Chief Tom Synan, who heads the law enforcement task force for the Hamilton County Heroin Coalition. He said local, state and federal authorities are combining their forces to investigate the source or sources. “We don’t have anything solid to go off of.”

     

    “This is unprecedented to see as many alerts as we’ve seen in the last six days,” said Hamilton County Health Commissioner Tim Ingram. He was referring to a surveillance system that alerts the public health department when an unusual number of drug-related emergency-room encounters occur.

     

    “We can’t confirm in the short term if someone’s had fentanyl, carfentanil or heroin – the tests flag only as positive or negative for opiates,” said Nanette Bentley, spokeswoman for Mercy Health. Tests could be ordered, but results could take days to weeks to come back, she said.

    Further complicating matters is that Narcan, the nasal-spray version of the drug Naxolone, which reverses the side effects of an overdose, is not working anymore, at least not as reliably. Usually one or two doses of Narcan will stabilize a patient but doctors say that patients under the influence of Carfentanil can require up to 5x the normal dosage.

     

    While it’s still unclear which drug may be causing the spike in overdoses, drug enforcement officials are quite confident the source supply is flowing in from overseas. 

    There’s no telling whether carfentanil is the drug that was sold to the overdose victims, but investigators believe it’s a possibility.

     

    If that’s a question, the drug could be identified by Drug Enforcement Administration lab tests, however, said Melvin Patterson, a DEA spokesman in Washington, D.C.

     

    The DEA has been on alert for the animal opioid since its appearance in U.S. and at the Canadian border.

     

    There’s little doubt that the carfentanil that’s showing up in street drugs is from overseas, just as fentanyl is manufactured and brought across the U.S. borders, Patterson said.

     

    “It’s such a restricted drug there’s only a handful of places in the United States that can have it,” he said.

    This rising crisis comes as many states across the country are pushing ballot measures to legalize marijuana use.  Several studies over the years have linked marijuana use to more dangerous drugs like methamphetamine and heroin earning it the title of the “gateway drug.”  Robert L. DuPont, President of the Institute for Behavior and Health and the first director of the National Institute on Drug Abuse, recently pointed out the flawed logic of legalizing marijuana use in an article published in the New York Times.

    It should come as no surprise that the vast majority of heroin users have used marijuana (and many other drugs) not only long before they used heroin but while they are using heroin. Like nearly all people with substance abuse problems, most heroin users initiated their drug use early in their teens, usually beginning with alcohol and marijuana. There is ample evidence that early initiation of drug useprimes the brain for enhanced later responses to other drugs. These facts underscore the need for effective prevention to reduce adolescent use of alcohol, tobacco and marijuana in order to turn back the heroin and opioid epidemic and to reduce burdens addiction in this country.

     

    People who are addicted to marijuana are three times more likely to be addicted to heroin.

     

    The legalization of marijuana increases availability of the drug and acceptability of its use. This is bad for public health and safety not only because marijuana use increases the risk of heroin use.

     

    The aggressive commercialization of marijuana that is now rampant and still growing is particularly damaging to the public health because it markets marijuana and an array of increasingly potent products in ever more attractive ways that encourage marijuana use and frequent highdose THC use.

     

    We are at a crossroads. Legalizing marijuana will have lasting negative effects on future generations. The currently legal drugs, alcohol and tobacco, are two of the leading causes of preventable illness and death in the country. Establishing marijuana as a third legal drug will increase the national drug abuse problem, including expanding the opioid epidemic.

    Of course, DuPont’s concerns about the negative health effects of marijuana and opioids doesn’t even touch upon the staggering spikes in violent crime that follows the distribution chain of these drugs in our inner cities.  One has to look no further than Chicago for evidence of how quickly violent crime in a city can spiral out of control. 

  • The "Devastating" Truth Behind America's Record Household Net Worth

    Every quarter, as part of its Flows of Funds statement, the Fed releases a detailed breakdown of America’s assets and liabilities, of which the most interesting section is the one dealing with US household wealth and debt, and most importantly, their net worth. The last such release in June showed that as of March 31, total US household assets rose decidedly above $100 trillion, hitting an all time high $102.6 trillion, offset by $14.5 trillion in liabilities, resulting in $88.1 trillion in household net worth. It is worth noting that of this $100+ trillion in assets, 69% was in the form of financial assets (stocks, mutual funds, pensions, deposits, etc), and only $31.5 trillion was real, tangible assets including $26 trillion worth of real estate.

     

    To be sure, the media loves reporting this number as proof of successful Obama policies: after all how can anyone complain when US households have never been richer, at least according to the Fed’s estimate of their net worth?

    Well, if the chart above was indeed an accurate depiction of the prevailing US net worth, then it would indeed be a thing to celebrate. Alas, it is anything but, and as Pedro da Costa points out, when one looks beneath the surface, a “devastating” picture emerges: US inequality like no-one has seen it before.

    To help with this peek behind the scenes, we look at the latest, just released CBO report on Trends in Family Wealth, which shows that far from equitable, US wealth has never been so skewed.

    The picture in question:

    Here are the CBO report’s summary findings:

    In 2013, aggregate family wealth in the United States was $67 trillion (or about four times the nation’s gross domestic product) and the median family (the one at the midpoint of the wealth distribution) held approximately $81,000, the Congressional Budget Office estimates. For this analysis, CBO calculated that measure of wealth as a family’s assets minus its debt. CBO measured wealth as marketable wealth,  which consists of assets that are easily tradable and that have value even after the death of their owner. Those assets include home equity, other real estate (net of real estate loans), financial securities, bank deposits, defined contribution pension accounts, and business equity. Debt is nonmortgage debt, including credit card debt, auto loans, and student loans, for example.

    But to get to the stunning punchline, one has to read The section on How Is the Nation’s Wealth Distributed? Here is the answer:

    • In 2013, families in the top 10 percent of the wealth distribution held 76 percent of all family wealth, families in the 51st to the 90th percentiles held 23 percent, and those in the bottom half of the distribution held 1 percent.
    • Average wealth was about $4 million for families in the top 10 percent of the wealth distribution, $316,000 for families in the 51st to 90th percentiles, and $36,000 for families in the 26th to 50th percentiles. On average, families at or below the 25th percentile were $13,000 in debt.

    How Did the Distribution of Wealth Change From 1989 to 2013? Over the period from 1989 through 2013, family wealth grew at significantly different rates for different segments of the U.S. population. In 2013, for example:

    • The wealth of families at the 90th percentile of the distribution was 54 percent greater than the wealth at the 90th percentile in 1989, after adjusting for changes in prices.
    • The wealth of those at the median was 4 percent greater than the wealth of their counterparts in 1989.
    • The wealth of families at the 25th percentile was 6 percent less than that of their counterparts in 1989.

    As the chart below shows, nobody has experienced the same cumulative growth in after-tax income as the “Top 1%”

    Marxists of the world may want to avoid the following section, as they may suffer permanent injury:

    • The distribution of wealth among the nation’s families was more unequal in 2013 than it had been in 1989. For instance, the difference in wealth held by families at the 90th percentile and the wealth of those in the middle widened from $532,000 to $861,000 over the period (in 2013 dollars). The share of wealth held by families in the top 10 percent of the wealth distribution increased from 67 percent to 76 percent, whereas the share of wealth held by families in the bottom half of the distribution declined from 3 percent to 1 percent.

    And there is your recovery: the wealthy have never been wealthier, while for half of America, some 50% of households, now own just 1% of the country’s wealth, down from 3% in 1989.

    * * *

    Finally, when Obama touts the recovery, he may have forgotten about half of America, but one entity remembers well: loan collectors. As the chart below shows, America’s poor families have never been more in debt.

    The share of families in debt (those whose total debt exceeded their total assets) remained almost unchanged between 1989 and 2007 and then increased by 50 percent between 2007 and 2013. In 2013, those families were more in debt than their counterparts had been either in 1989 or in 2007. For instance, 8 percent of families were in debt in 2007 and, on average, their debt exceeded their assets by $20,000. By 2013, in the aftermath of the recession of 2007 to 2009, 12 percent of families were in debt and, on average, their debt exceeded their assets by $32,000.

     

    The increase in average indebtedness between 2007 and 2013 for families in debt was mainly the result of falling home equity and rising student loan balances. In 2007, 3 percent of families in debt had negative home equity: They owed, on average, $16,000 more than their homes were worth. In 2013, that share was 19 percent of families in debt, and they owed, on average, $45,000 more than their homes were worth. The share of families in debt that had outstanding student debt rose from 56 percent in 2007 to 64 percent in 2013, and the average amount of their loan balances increased from $29,000 to $41,000.

    Finally, it worth noting that the numbers shown above are as of 2013. Since then the trends shown above, and the record gap between America’s rich and poor has grown to even more unprecedetned proportions.

    Source: CBO

  • What The Media Did Not Report: Here Is The "Ignored" Part Of Kaepernick's Speech

    Colin Kaepernick has made headlines in recent days for his decision to sit during the National Anthem. According to the mainstream media, his reasoning is simple (because the only thing that is comprehendible to the majority of Americans is a soundbite) – police brutality and the oppression of people of color.

    Implicit in that simple narrative is one thing unsaid – it’s Trump’s fault… and Hillary will fight the good fight to support black people.

    However, if one took the time to actually read Kaepernick’s full interview transcript, the narrative is very different, and not at all what the mainstream would like you to hear…

    Colin Kaepernick (CK): People don’t realize what’s really going on in this country. There are a lot things that are going on that are unjust. People aren’t being held accountable for. And that’s something that needs to change. That’s something that this country stands for freedom, liberty and justice for all. And it’s not happening for all right now.

     

    Media: Does the election year have anything to do with timing?

     

    CK: It wasn’t a timing thing, it wasn’t something that was planned. But I think the two presidential candidates that we currently have also represent the issues that we have in this country right now.

     

    Media: Do you want to expand on that?

     

    CK: You have Hillary who has called black teens or black kids super predators, you have Donald Trump who’s openly racist. We have a presidential candidate who has deleted emails and done things illegally and is a presidential candidate. That doesn’t make sense to me because if that was any other person you’d be in prison. So, what is this country really standing for?

     

    Media: It is a country that has elected a black president twice…

     

    CK: It has elected a black president but there are also a lot of things that haven’t changed.

    Clip:

    So, according to the football player, it’s not just Trump that is racist, but so is Hillary, and – shockingly – should be in prison, while Barack Obama has failed in eight years to make any difference. And yes, all of that was ignored by the mainstream.

    Because if played on CNN, questions might emerge…

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