Jun 03

Today’s News 3rd June 2017

  • Five Reasons Why America Is About To Become A Very Conservative Country

    Authored by Daniel Lang via SHTFplan.com,

    For generations, we’ve seen the political landscape in this country teeter back and forth between the Left and the Right. Usually about every 8 years or so, whichever political party is dominating Congress, the Executive Branch, and the state legislatures, is kicked out by voters and replaced with the other political party.

    However, there’s something very different going on this time around. Donald Trump’s ascent to the oval office represents a major shift in our society and culture, and I’m not talking about the intermittent shuffle of politicians that we see every few years. Instead, the pendulum is about to swing very hard to the right.

    I think that the political landscape in America is going to be drifting towards conservatism for the next 20-40 years. Though it may not be identical to what we view as conservative today, and it certainly won’t be the phony neoconservatism that dominated the past, it will be right-wing nonetheless. Here’s why:

    1. The Supreme Court Is About To Change

    President Trump has already chosen one Supreme Court justice, and there’s a good chance that he’s going to wind up choosing several more (much to the dismay of the Left). Because of their advanced age, we may see three more Supreme Court justices retire or die over the next four to eight years, two of whom lean to the left.

    If Trump lasts two terms, we’re definitely going to see a Supreme Court that is dominated by conservatives for the next 20-30 years. So even when liberals take back Congress and the presidency on occasion, many of their most radical ideas won’t be able to take hold for many years.

    2. Immigration Is Going To Decline

    The percentage of the population that is foreign born hasn’t been this high since the early 1900’s, and most of those immigrants are liberal. That’s why our loose borders, combined with The Immigration and Nationality Act of 1965, have probably done more to bolster the ranks of the Left than any other law.

    But just as our nation’s political landscape tends to swing back and forth between the Left and the Right, so to does number of immigrants in America. In the short term, we can expect people like Trump to restrict the border and maybe pass laws that will decrease immigration to some degree.

    But there’s a long term trend to consider as well, because the election of Trump likely represents a turning point for our society. Considering how crucial his immigration stance was to his victory, it’s clear that a growing number of Americans want the border tightened up, and the number of immigrants moving here to decrease. And rest assured that in the near future, there will be more conservatives voting for politicians who will try to lower immigration rates, because…

    3. The Next Generation Is Incredibly Conservative

    Over the years we’ve seen each generation of Americans become a little more liberal than the last, but that’s about to change. According to a study from last year, Generation Z, which represents kids born after the year 2000, is the most conservative generation since World War Two. To give you an idea of just how right-wing the next generation is, when asked if they are “quite conservative,” 14% of teenagers say they are, compared to just 2% of Millennials. That’s a mind boggling shift, from one generation to the next.

    4. Liberal Birth Rates Are Declining

    The Left is about to pay a huge price for denigrating the family and traditional gender roles for so many years. Because liberal women tend to be more career minded and wait longer to have children, they often have fewer kids over the course of their lives. That’s why liberal states always have lower birth rates than conservative states.

    All of the states with a birth rate of of 60 or less per 1000 people are liberal, and all of the states with a birth rate of 70 or more per 1000 people are conservative. That may not sound drastic, but consider that these states still have a sizeable mix of conservatives and liberals. Even the most liberal states have millions of conservative residents and vice versa, which offsets the results. If ideology is really driving birth rates, then liberals are probably having very very few children. They’re probably not reaching the minimum replacement rate of 2.1 children per mother.

    When you consider how many values kids learn from their parents and carry into adulthood, it’s obvious that the Left has a serious demographic problem. The only way they’ve been able to create more liberals, is through immigration and through indoctrination in the school system. Unfortunately for the Left, they’re not going to have a stranglehold on our schools for much longer either.

    5. Leftist Academia Is In Serious Trouble

    From Kindergarten to college, our schools are breeding grounds for liberal ideas. That’s become abundantly clear in recent years, as we’ve seen the horrifying rise of political correctness and social justice beliefs on college campuses. These institutions are little more than indoctrination centers for the Left.

    But this isn’t going to go on for much longer. We have a whole generation of kids who were buried in over a trillion dollars worth of debt, just so they could get worthless liberal arts degrees that won’t ever help them get a job. They paid tens of thousands of dollars to be indoctrinated by liberal professors, before going back home to live with their parents.

    That’s why student loans constitute a bubble in our economy, and once it pops, colleges are going to have to cut back on many classes that don’t actually increase the earning power of students. Coincidentally, the fields of study that harbor the most liberal professors, are the ones that don’t help most students get jobs, like the arts, humanities, liberal arts, gender studies, etc. Someday soon, colleges are going to be forced to trim the fat, and many of these Marxist professors and diversity administrators are going to get the axe. Their positions are incredibly superfluous.

    As for the leftists public schools, let’s not forget that the number of kids being homeschooled is growing rapidly, and most of their parents are conservatives. They’re raising a new generation that isn’t going to be brainwashed by government run schools.

    And let’s not forget that the mainstream media, which has been largely wed to the left, is dying. So basically, every institution that the Left uses to teach its ideas, from the media to academia, is slowly crumbling away.

    In summation, everything liberals have relied on to bolster their ranks, propagate their ideas, and pass their laws, are failing. So there shouldn’t be any doubt. Over the next few decades, America is going to become a very conservative place.

  • Mapping The U.S. Zip Codes Where "The Rent Is Too Damn High"

    As America’s young snowflakes graduate their liberal bastions of higher education and get ready to migrate around the U.S., at least those who were lucky enough to actually find a job after graduation and avoid the embarrassment of moving back home with mom and dad, we thought it would be helpful to take a look at where they might get the most safe space square footage for their money. 

    And while it may come as a complete ‘shock’ to our readers, those moving to New York and California will seemingly have the hardest time covering monthly rent payments according to the following map from Rent Cafe:

     

    In fact, aside from one zip code in Boston, every single one of the top 20 most expensive zip codes in the country come from a couple of square miles of real estate in Manhattan and San Francisco.

     

    Meanwhile, the more affordable areas seem to be concentrated in the ‘Red States’ in the southeast and midwest.

     

    Of course, it’s not just high rents that people in NY and CA have to contend with as many of the states with the highest rents also have the highest state income tax rates. 

    Taxes by State

     

    All of which probably helps explains why folks in New York City, Los Angeles and San Francisco are packing up and moving out by the 1,000s.  Not surprisingly, America’s ‘domestic migrants’ are flocking to areas with a lower cost of living, lower/no state income taxes, less regulations and higher job growth (aka “Red” states). 

    Domestic Migration

     

    Could it be that while the enlightened citizens of NY and CA love to ‘preach’ their liberal policies they prefer to ‘practice’ their citizenship in states that afford them the economic benefits of conservatism?

  • From Debt Peons To Wage Slaves – Are Students A 'Class'?

    Authored by Michael Hudson, via NakedCapitalism.com,

    Students usually don’t think of themselves as a class. They seem “pre-class,” because they have not yet entered the labor force. They can only hope to become part of the middle class after they graduate. And that means becoming a wage earner – what impolitely is called the working class.

    But as soon as they take out a student debt, they become part of the economy. They are in this sense a debtor class. But to be a debtor, one needs a means to pay – and the student’s means to pay is out of the wages and salaries they may earn after they graduate. And after all, the reason most students get an education is so that they can qualify for a middle-class job.

    The middle class in America consists of the widening sector of the working class that qualifies for bank loans – not merely usurious short-term payday loans, but a lifetime of debt. So the middle class today is a debtor class.

    Shedding crocodile tears for the slow growth of U.S. employment in the post-2008 doldrums (the “permanent Obama economy” in which only the banks were bailed out, not the economy), the financial class views the role industry and the economy at large as being to pay its employees enough so that they can take on an exponentially rising volume of debt. Interest and fees (late fees and penalties now yield credit card companies more than they receive in interest charges) are soaring, leaving the economy of goods and services languishing.

    Although money and banking textbooks say that all interest (and fees) are a compensation for risk, any banker who actually takes a risk is quickly fired. Banks don’t take risks. That’s what the governments are for. (Socializing the risk, privatizing the profits.) Anticipating that the U.S. economy may be unable to recover under the weight of the junk mortgages and other bad debts that the Obama administration left on the books in 2008, banks insisted that the government guarantee all student debt. They also insisted that the government guarantees the financial gold-mine buried in such indebtedness: the late fees that accumulate. So whether students actually succeed in becoming wage-earners or not, the banks will receive payments in today’s emerging fictitious “as if” economy. The government will pay the banks “as if” there is actually a recovery.

    And if there were to be a recovery, then it would mean that the banks were taking a risk – a big enough risk to justify the high interest rates charge on student loans.

    This is simply a replay of what banks have negotiated for real estate mortgage lending. Students who do succeed in getting a job hope to start a family, or at least joining the middle class. The most typical criterion of middle-class life in today’s world (apart from having a college education) is to own a home. But almost nobody can buy a home without getting a mortgage. And the price of such a mortgage is to pay up to 43 percent of one’s income for thirty years, that is, one’s prospective working life (in today’s as-if world that assumes full employment, not just a gig economy).

    Banks know how unlikely it is that workers actually will be able to earn enough to carry the costs of their education and real estate debt. The costs of housing are so high, the price of education is so high, the amount of debt that workers must pay off the top of every paycheck is so high that American labor is priced out of world markets (except for military hardware sold to the Saudis and other U.S. protectorates). So the banks insist that the government pretends that housing as well as education loans not involve any risk for bankers.

    The Federal Housing Authority guarantees mortgages that absorb up to the afore-mentioned 43 percent of the applicant’s income. Income is not growing these days, but job-loss is. Formerly middle-class labor is being downsized to minimum-wage labor (MacDonald’s and other fast foods) or “gig” labor (Uber). Here too, the fees mount up rapidly when there are defaults – all covered by the government, as if it is this compensates the banks for risks that the government itself bears.

    From Debt Peons to Wage Slaves 

    In view of the fact that a college education is a precondition for joining the working class (except for billionaire dropouts), the middle class is a debtor class – so deep in debt that once they manage to get a job, they have no leeway to go on strike, much less to protest against bad working conditions. This is what Alan Greenspan described as the “traumatized worker effect” of debt.

    Do students think about their future in these terms? How do they think of their place in the world?

    Students are the new NINJAs: No Income, No Jobs, No Assets. But their parents have assets, and these are now being grabbed, even from retirees. Most of all, the government has assets – the power to tax (mainly labor these days), and something even better: the power to simply print money (mainly Quantitative Easing to try and re-inflate housing, stock and bond prices these days). Most students hope to become independent of their parents. But burdened by debt and facing a tough job market, they are left even more dependent. That’s why so many have to keep living at home.

    The problem is that as they do get a job and become independent, they remain dependent on the banks. And to pay the banks, they must be even more abjectly dependent on their employers.

    It may be enlightening to view matters from the vantage point of bankers. After all, they have $1.3 trillion in student loan claims. In fact, despite the fact that college tuitions are soaring throughout the United States even more than health care (financialized health care, not socialized health care), the banks often end up with more education expense than the colleges. That is because any interest rate is a doubling time, and student loan rates of, say, 7 percent mean that the interest payments double the original loan value in just 10 years. (The Rule of 72 provides an easy way to calculate doubling times of interest-bearing debt. Just divide 72 by the interest rate, and you get the doubling time.)

    A fatal symbiosis has emerged between banking and higher education in America. Bankers sit on the boards of the leading universities – not simply by buying their way in as donors, but because they finance the transformation of universities into real estate companies. Columbia and New York University are major real estate holders in New York City. Like the churches, they pay no property or income tax, being considered to play a vital social role. But from the bankers’ vantage point, their role is to provide a market for debt whose magnitude now outstrips even that of credit card debt!

    Citibank in New York City made what has been accused of being a sweetheart deal with New York University, which steers incoming students to it to finance their studies with loans. In today’s world a school can charge as much for an education as banks are willing to lend students – and banks are willing to lend as much as governments will guarantee to cover, no questions asked. So the bankers on the school boards endorse bloated costs of education, knowing that however much more universities make, the bankers will receive just as much in interest and penalties.

    It is the same thing with housing, of course. However much the owner of a home receives when he sells it, the bank will make an even larger sum of money on the interest charges on the mortgage. That is why all the growth in the U.S. economy is going to the FIRE sector, owned mainly by the One Percent.

    Under these terms, a “more educated society” does not mean a more employable labor force. It means a less employable society, because more and more wage and consumer income is used not to buy goods and services, not to eat out in restaurants or buy the products of labor, but to pay the financial sector and its allied rentier class. A more educated society under these rules is simply a more indebted society, an economy succumbing to debt deflation, austerity and unemployment except at minimum-wage levels.

    For half a century Americans imagined themselves getting richer and richer by going into debt to buy their own homes and educate their children. Their riches have turned out to be riches for the banks, bondholders and other creditors, not for the debtors. What used to be applauded as “the middle class” turns out to be simply an indebted working class.

  • "Sell Economic Ignorance, Buy Gold"

    "We live in an age of advanced monetary surrealism…." is how Incrementum's Ronald-Peter Stoeferle and Mark J. Valek begin their latest epic tome on the precious metals market "In Gold We Trust."

     In Q1 2017 alone, the largest central banks created the equivalent of almost USD 1,000 bn. worth of central bank money ex nihilo. Naturally the fresh currency was not used to fund philanthropic projects but to purchase financial securities1. Although this ongoing liquidity supernova has temporarily created an uneasy calm in financial markets, we are strongly convinced that the real costs of this monetary madness will reveal themselves down the line.

    We believe that the monetary tsunami created in the past years, consisting of a flood of central bank money and new debt, has created a dangerous illusion: the illusion of a carefree present at the expense of a fragile future. The frivolity displayed by many investors is for example reflected by record-low volatility in equities, which have acquired the nimbus of being without alternative, and is also highlighted by the minimal spreads on corporate and government bonds. Almost a decade of zero and negative interest rates has atomised any form of risk aversion.

    In the past years, rate cuts and other monetary stimuli have affected mainly asset price inflation. Last year, we wrote: “Sooner or later, the reflation measures will take hold, and asset price inflation will spill over into consumer prices. Given that consumer price inflation cannot be fine-tuned by the central banks at their discretion, a prolonged cycle of price inflation may now be looming ahead.” 2016 might have been the year when price inflation turned the corner. However, the hopes of an economic upswing due to Trumponomics and the strong US dollar have caused inflation pressure to decrease for the time being. Upcoming recession fears resulting in a U-turn by the Fed, and the consequential depreciation of the US dollar would probably finalise the entry into a new age of inflation. This will be the moment in which gold will begin to shine again.

    The following chart shows the similarities between the 1970s and the status quo. The analysis reveals the fact that the bear market since 2011 has been following largely the same structure and depth as the mid-cycle correction from 1974 to 1976. However, we can see that the duration of both corrections diverges significantly.

    Not only the absolute, but also the relative development is important for a comprehensive assessment of the status quo of the gold market. Along with gold, silver, and mining shares, industrial metals such as zinc, nickel, copper and energy commodities (especially coal and oil) marked stellar performances last year. All of this happened in an environment where the US dollar climbed to a 14-year high. We regard this as a remarkable development and as a prime example of a bull market, whose starting gun has not been heard yet by the majority of investors.

    "Sell economic ignorance; buy gold." – Tim Price

    We consider a bullish stock market currently as the most significant opportunity cost for gold. Therefore, a clear break-out of the gold price should only be occurring amid a stagnating or weaker equity market. If we now compare the gold price performance with the development of equity prices, we can see that the relative weakness of gold seems to be slowly coming to an end. Last year we had already noticed that the intensity of the upward trend had declined significantly. After almost five years of underperformance relative to the broad equity market, the tables might slowly be turning now in favour of gold.

    In a historical context, the relative valuation of commodities to equities seems extremely low. In relation to the S&P500, the GSCI commodity index is currently trading at the lowest level in 50 years. Also, the ratio sits significantly below the long-term median of 4.1. Following the notion of mean reversion, we should be seeing attractive investment opportunities.

    *  *  *

    Key topics and takeaways of the full report include:

    • High expectations of Trump's growth policy dampened the gold price increase in 2016 – Still up 8.5% in 2016 and 10.2% since Jan. 2017
    • The further development of the normalization of monetary policy in the US will be the litmus test for the US economy.
    • Bitcoin: Digital gold or fool's gold?
    • White, Gray and Black Swans and their consequences for the gold price
    • Exclusive Interview with Dr. Judy Shelton (Economic advisor to Donald Trump) about a possible remonetisation of gold
    • 5 Reasons why the gold bull market will continue

    Full Incrementum report below (note the complete 170-page version is available here)

  • Putin: "We Should Be Grateful To President Trump: In Moscow It's Cold And Snowing"

    Russian President Vladimir Putin said Friday during a panel at the St. Petersburg Economic Forum that the US investigations into whether the Kremlin meddled in the US election are nothing more than "hysteria," and that the anti-Russia sentiment in the US was about as virulent as anti-semitism.  “It’s like saying everything is the Jews’ fault,” said Putin, who said the blame for Hillary Clinton’s November loss lies squarely at the feet of the Democratic presidential candidate and members of her party, according to a report.

    “This reminds me of anti-Semitism,” Putin said. “The Jews are to blame for everything. An idiot cannot do anything himself, so the Jews are to blame. But we know what such attitudes lead to. They end with nothing good.”

    Putin, who was being interviewed by NBC's Megyn Kelly, brushed off questions about meetings that members of the Trump campaign – including then-Sen. Jeff Sessions – had with Russian officials such as ambassador Sergey Kislyak. 

    “So our ambassador met someone. That's his job. That's why we pay him,” Putin said. “So what? What's he supposed to do, hit up the bars?”

    Putin was amused when Kelly touched on the subject of Russian foreign news coverage spreading “disinformation.” Putin accused her “colleagues” of dragging Russia into their coverage unfavourably.

    “Let’s end this,” Putin told her. “You will feel better and we will feel better.”

    Donald Trump won because he had run a more effective presidential campaign than Hillary Clinton, Putin said, adding the US intelligence agencies may have faked evidence of Russian hacking, according to Reuters. Allegations of Russian involvement were nothing more than "harmful gossip," Putin insisted, there were no "Russian fingerprints" on the alleged hacks, Reuters reported.

    Earlier this week, Putin denied the Russian state had directed any hacking operations designed to influence the U.S. election – though he did say Russian “patriots” could have been behind the plot on their own, Fox reported.

    Following President Donald Trump's decision Thursday to take the US out of the Paris Climate Accord talks, Putin said that there's still time to reach a deal on the 2015 pact even without the US's involvement, before adding, in English, "don't worry, be happy," according to Reuters.

    Despite the critism that has been heapened upon Trump by other world leaders since he announced his decision to leave the accord last night, Putin said that he "wouldn't blame Trump" for leaving the accord, though he hoped the White House would set its own climate rules. 

    “By the way, we should be grateful to President Trump. In Moscow it’s raining and cold and even, they say, some snow. Now we could blame this all on American imperialism, that it’s all their fault. But we won’t.”

    And though he said he hopes that US sanctions against Russia would soon be lifted, he noted that they did have some positive effects. "We had to use our brains," Putin said. "Not rely on oil and gas dollars."

    Allegations of collusion between the Trump campaign and the Kremlin have dogged the new administration since before the inauguration. In recent weeks, US media have taken aim at Trump's son-in-law Jared Kushner, whom NBC and WaPo reported was a “person of interest” in the FBI’ campaign.

    As a reminder, Kelly is set to interview Putin in St. Petersburg Friday for a Sunday night special that will air on NBC.

  • 12 Signs That The Inevitable Economic Slowdown Is Now Here

    Authored by Michael Snyder via The Economic Collapse blog,

    Since the election there has been this perception among the American public that the economy is improving, but that has not been the case at all.  U.S. GDP growth for the first quarter was just revised up to 1.2 percent, but that is even lower than the average growth of just 1.33 percent that we saw over the previous ten years.  But when you look even deeper into the numbers a much more alarming picture emerges.  Commercial and industrial loan growth is declining, auto loan defaults are rising, bankruptcies are absolutely surging and we are on pace to break the all-time record for most store closings in a single year in the United States by more than 20 percent.  All of these are points that I have covered before, but today I have 12 new facts to share with you. 

    The following are 12 signs that the economic slowdown that the experts have been warning about is now here…

    #1 According to Challenger, the number of job cuts in May was 71 percent higher than it was in May 2016.

    #2 We just witnessed the third worst drop in U.S. construction spending in the last six years.

    #3 U.S. manufacturing PMI fell to an 8 month low in May.

    #4 Financial stocks have lost all of their gains for the year, and some analysts are saying that this is “a terrible sign”.

    #5 One new survey has found that 39 percent of all millionaires “plan to avoid investing in the coming month”.  That is the highest that figure has been since December 2013.

    #6 Jobless claims just shot up to a five week high of 248,000.

    #7 General Motors just reported another sales decline in May, and it is being reported that the company may be preparing for “more job cuts at its American factories”.

    #8 After an initial bump after Donald Trump’s surprise election victory, U.S. consumer confidence is starting to fall.

    #9 Since Memorial Day, Radio Shack has officially shut down more than 1,000 stores.

    #10 Payless has just increased the number of stores that it plans to close to about 800.

    #11 According to the Los Angeles Times, it is being projected that 25 percent of all shopping malls in the United States may close within the next five years.

    #12 Over the past 12 months, the number of homeless people living in Los Angeles County has risen by a  staggering 23 percent.

    And in case those numbers have not persuaded you that the U.S. economy is heading for rough times, I would encourage you to go check out my previous article entitled “11 Facts That Prove That The U.S. Economy In 2017 Is In Far Worse Shape Than It Was In 2016” for even more eye-popping statistics.

    During a bubble, it can feel like the good times are just going to keep rolling forever.

    But that never actually happens in reality.

    The truth is that we are in the terminal phase of the greatest debt bubble of all time, and the evidence is starting to mount that this debt bubble has just about run its course.  The following comes from Zero Hedge…

    A recurring theme on this website has been to periodically highlight the tremendous build up in US corporate debt, most recently in April when we showed that “Corporate Debt To EBITDA Hits All Time High.” The relentless debt build up is something which even the IMF recently noted, when in April it released a special report on financial stability, according to which 20% of US corporations were at risk of default should rates rise. It is also the topic of the latest piece by SocGen’s strategist Andrew Lapthorne who uses even more colorful adjectives to describe what has happened since the financial crisis, noting that “the debt build-up during this cycle has been incredible, particularly when compared to the stagnant progression of EBITDA.”

     

    Lapthorne calculates that S&P1500 ex financial net debt has risen by almost $2 trillion in five years, a 150% increase, but this mild in comparison to the tripling of the debt pile in the Russell 2000 in six years. He also notes, as shown he previously, that as a result of this debt surge, interest payments cost the smallest 50% of stocks in the US fully 30% of their EBIT compared with just 10% of profits for the largest 10% and states that “clearly the sensitivity to higher interest rates is then going to be with this smallest 50%, while the dominance and financial strength of the largest 10% disguises this problem in the aggregate index measures.”

    The same report noted that net debt growth in the U.S. is quickly headed toward negative territory, and the last time that happened was during the last recession.

    We see similar things when we look at the 2nd largest economy on the entire planet.  According to Jim Rickards, China “has multiple bubbles, and they’re all getting ready to burst”…

    China is in the greatest financial bubble in history. Yet, calling China a bubble does not do justice to the situation. This story has been touched on periodically over the last year.

     

    China has multiple bubbles, and they’re all getting ready to burst. If you make the right moves now, you could be well positioned even as Chinese credit and currency crash and burn.

     

    The first and most obvious bubble is credit. The combined Chinese government and corporate debt-to-equity ratio is over 300-to-1 after hidden liabilities, such as provincial guarantees and shadow banking system liabilities, are taken into account.

    We just got the worst Chinese manufacturing number in about a year, and it looks like economic conditions over there are really starting to slow down as well.

    Just like 2008, the coming crisis is going to be truly global in scope.

    It is funny how our perspective colors our reality.  Just like in 2007, many are mocking those that are warning that a crisis is coming, but just like in 2009, after the crisis strikes many will be complaining that nobody warned them in advance about what was ahead.

    And at this moment it may seem like we have all the time in the world to get prepared for the approaching storm, but once it is here people will be talking about how it seemed to hit us so quickly.

    My hope is that many Americans will finally be fed up with our fundamentally flawed financial system once they realize that we are facing another horrendous economic crisis, and that in the aftermath they will finally be ready for the dramatic solutions that are necessary in order to permanently fix things.

  • Puerto Rico's Population Drain Since 2013 Equivalent To US Losing 20 Million People

    Puerto Rico’s economic decline and, now bankruptcy, has triggered an astonishing exodus as thousands flee the commonwealth in search of economic opportunity in the Continental US, Bloomberg reported.

    The population has been declining rapidly. The island has lost 2 percent of its people in each of the past three years, a comparable departure in the 50 states would mean 18 million people moving out since 2013. About 400,000 fewer Puerto Ricans live on an island of 3.4 million today compared with a decade ago, when its economy began contracting, Bloomberg reports.

    “I had to choose for my family,’’ said Aledie Amariah Navas Nazario, 39, a pediatric pulmonologist, told Bloomberg. She left behind young asthma patients when she, her husband and two small daughters moved to Orlando, Florida.
    Reasons for leaving were compelling enough for Navas Nazario, who treated asthma on an island where it’s more prevalent than anywhere else in the U.S.

    Puerto Rico’s economy had taken yet another leg down, and she was worried about her future income because of uncertainty about health insurance.

    “I’m sad about not being able to take care of those kids anymore,’’ said Navas Nazario, who keeps in touch with former patients on Facebook. “You have to make a hard decision to leave relationships with friends and family just to get out, just because you need a better life.’’

    Departures like Navas Nazario’s have trapped the commonwealth’s economy in a downward spiral, Bloomberg reports.

    Joblessness at 11.5 percent, and a $74 billion mountain of debt that pushed the island to insolvency have made collecting taxes key to an economic rebound, Bloomberg said. At the same time, more Puerto Ricans from all walks of life are moving away to better their lives, meaning government revenue is dwindling.

    The island’s debt has grown 87% since 2006, and one easy way to avoid paying any of the debt is for Puerto Ricans to leave the island. But one telling sign for anyone who owns Puerto Rican debt: The government’s official turnaround plan – a path to sustainability approved by a US oversight board – assumes the population will shrink by just 0.2% each year for the next decade.


    The government is using this number as the basis for its projections of tax receipts and economic growth. Expect it to fall far short on both measures.

    “Most people believe that those forecasts in the fiscal plan are really, really optimistic and probably would have to be revised at some point,’’ said Sergio Marxuach, public policy director at the Center for the New Economy in San Juan, told Bloomberg.

    And professionals aren’t the only ones leaving: The exodus includes blue-collar construction workers and taxi drivers. Research by the New York Fed found that college graduates make up roughly the same proportion of emigres as they do the broader population, suggesting, as Bloomberg reports, that the departures have touched “every corner” of the commonwealth.

    The reason for leaving is obvious: The earnings disparity between PR and the mainland can be wide. John Starkey, a principal of the Lafayette International Community High School in upstate Buffalo, New York, told Bloomberg he traveled to the island to recruit teachers after it started shutting down schools to save money. On the mainland, Starkey said, educators find they can double or triple their earnings, even if it means trading a balmy Caribbean island for the frigid shores of Lake Erie.

    “Many of the candidates wanted to stay on the island to help their community,’’ Starkey said. “Our pitch was: come up to Buffalo and you’ll be able to better provide for your family, but you’ll also be able to help your community here.’’

    The commonwealth applied for Title III protection from its creditors last month in what will be the largest-ever US municipal debt restructuring, further complicating the territory’s efforts to pull itself out of a financial crisis.

    The Puerto Rico restructuring would be far larger than Detroit’s record-setting bankruptcy, with little to no details how long a court proceeding would last or what cuts would are imposed on bondholders. The island’s financial recovery plan covers less than a quarter of the debt payments due over the next decade.

    The island has been a U.S. possession since American troops invaded in the Spanish-American War, and Puerto Ricans have been U.S. citizens since 1917. That means there’s little to prevent them from seeking better prospects on the mainland, something they’ve always done, just not to this extent.

    Migration to the US mainland is by far the biggest driver of the island’s declining population, but a declining fertility rate isn’t helping either. The natural population increase — excess births over deaths — fell to 3,000 last year from 20,000 a decade ago, as families facing poorer economic prospects and the threat of the Zika virus put off having kids, Bloomberg reported. At the same time, younger generations of child-bearing age are more likely to take off for the mainland.
     

  • And The 2017 Global Peace Prize Goes To… Black Lives Matter (No, Seriously)

    Authored by Mac Slavo via SHTFplan.com,

    Every year the Sydney Peace Foundation bestows their Global Peace Prize on extraordinary people who advocate for “true and lasting peace” by ending “war and violent conflict” through addressing “deep injustices and structural inequality.”

    Previous years have seen such individuals as Noam Chomsky, Hans Blix and Archbishop Desmond Tutu receive the esteemed prize.

    But this year the award is taking a different direction, and rather than being given to a single person, it is being awarded to an entire movement for the first time.

    And the winner of the 2017 Global Peace Prize goes to…

    Drum roll…

    Black Lives Matter.

    Black Lives Matter, the movement against racial inequality and police violence in the US which began as a powerful hashtag and became a global rallying cry, will be the 2017 recipient of the Sydney Peace Prize – the first time the often-controversial award has gone to a movement and not an individual.

     

    The prize recognises the work of the amorphous racial justice movement that exists under the catch-all moniker, but has nevertheless managed to unite activists from around the world, including in Australia.

     

    …

     

    The Sydney Peace Prize jury’s citation for this year’s winners applauded the movement “for building a powerful movement for racial equality, courageously reigniting a global conversation around state violence and racism. And for harnessing the potential of new platforms and power of people to inspire a bold movement for change at a time when peace is threatened by growing inequality and injustice.”

     

    Via Sydney Peace Foundation

    But as Louder With Crowder points out, peace is not exactly how one would describe the activities engaged in and supported by Black Lives Matter:

    It’s like people don’t have internet access. Memories. Basic motor functions. If they did, they’d be able to use the digits sticking out of their hands to peck a few letters into The Google. Just to verify if Black Lives Matter is worthy of an award bestowment. Like a kind of “vetting” process, if you will. Since the Sydney Peace Foundation lacks finger privilege, I did the search for them.

    If this is what the Sydney Peace Foundation considers champions of peace, I’d hate to see what they think war is.

    In a world where former U.S. President Barrack Obama is awarded the Nobel Peace Prize in 2009 for doing absolutely nothing and then subsequently orchestrating campaigns that have led to the slaughter of hundreds of thousands of people across the world it would make perfect sense for the Sydney Peace Foundation to award a similar prize to an organization whose immediate membership and loosely based offshoots advocate for racial segregation, violent protest, and the killing of police officers.

    In the eyes of some, peace is war.

  • "It's Not Just Wages" – Workers Without College Degrees Face "More Instability"

    If you believe San Francisco Fed President John Williams, the US labor market has almost never been ore robust than it is today. Of course, middle- and working-class Americans who are struggling with levels of financial uncertainty that would be unfamiliar to their parents’ generation don’t necessarily care that the official unemployment rate is 4.4%. They’re too busy struggling to make ends meet when real wages have been stagnant for decades and economic growth is expected to slouch along at 2% for the foreseeable future.

    While researching their new book “The Financial Diaries,” Jonathan Morduch and Rachel Schneider followed more than 200 working and middle-class families around for a year and tracked “every dollar of their financial lives." They found that millions of workers without college degrees, especially those who are paid hourly, or who are paid by commission, experience what they call call income variability – when their pay fluctuates by 25% above or below their average. One of Murdoch and Schneider's subjects, a truck mechanic named Jeremy, even quit his job to take a lower paying job with a steady salary.

    They discussed their findings during an episode of Bloomberg's "Benchmark" podcast.

    “When we first met him, his weekly paychecks were very variable. And he was bearing all that risk. At the end of the year, he quit his job for another job with lower pay that was more steady. ”

    “On average, we’re seeing households spend about five months of the year where their income was 25% above their average or 25% below their average. So income insecurity wasn’t about ‘am I going to lose my job,’ it’s about ‘how am I going to navigate the ups and downs in my given job.’”

    The pair also found that existing financial services don't adequately serve the needs of workers struggling with income variability. Schneider discussed how one subject whom she called Jane intentionally placed obstacles to withdrawing money from her savings account.

    “Often the strategies they were using to make that money stretch show gaps in how financial services are or are not serving them. For example, we tell the story in the book of a woman called Janice who has a savings account and a checking account but she cut up her checkbook for her checking account and she cut up her ATM card. She has those accounts in different institutions and the savings account is an hour’s drive from her home.”

     

    “A bank might say she’s not using those products right, she’s paying check cashers and fees on money orders to pay her bills she’s using it wrong. But I look at it the other way she actually wants some wall between herself and her spending or savings. She cut up the check book because she doesn’t want temptation to take out payday loans which she’s had trouble with in the past.”

    Regardless of race, workers without degrees are stuggling "in a lot of ways."

    “One of the things that we see is that today workers without college degrees are struggling in a lot of ways. We see that in the labor market in terms of wages and what our data and related data are showing is it’s not just average wages they also are facing much more instability than other workers."

    "The economic backlash is being felt by lower class workers, regardless of race, because the system isn’t working for the poor.Black workers have a hard time and white worker as well are living very precarious lives. Even though they have jobs there’s economic anxiety in America even for people with jobs. And that’s the big puzzle in America. That people are trying to sort out what the big answer is but you spend time and follow people month to month you see exactly why there’s so much anxiety in a sense because the system really isn’t working for them.”
     

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