- Mervyn King's Alarmist Warning: "All China's Assets In The US Might Be Annulled"
What is it about former central bankers who first destroy the fiat system with their monetarist policies, only to go into retirement, and preach the virtues of the one compound they spend their entire professional careers trying to destroy: gold. To be sure, when it comes to polar reversals of opinion, nobody comes even remotely close to Alan Greenspan: the former Fed chairman who is not only instrumental in launching the “Great Moderation”, which unleashed the current unprecedented global debt wave which will lead to unprecedented disaster sooner or later, has in recent years become one of gold’s biggest advocates as demonstrated most recently in “Greenspan’s Stunning Admission: “Gold Is Currency; No Fiat Currency, Including the Dollar, Can Match It.”
Now it’s the turn of his former colleague at the Bank of England, Mervyn King, who in an interview with the WGC’s Gold Investor monthly, pours cold water over Bernanke’s “explanation” that gold is merely a tradition, and says the following:
“I am very struck by the fact that over many many years, central banks, governments and individuals have always, despite the protestations of economists, held some gold in their portfolio. Obviously, there is no high running return, but when unexpected things happen, particularly when governments rise and fall, then gold is a means of payment that everyone is always prepared to accept. And I think that’s why even central banks have always had a role in their portfolios for gold,” he adds.”
The then innocently pointed out that when it comes to defense against hyperinflation, gold remains the, well, gold standard:
“It’s still early days to conclude that around the world, governments have found the solution to maintaining price stability with a managed paper currency. We made real progress in the 1990s and early 2000s and a lot of countries went down that road and followed us. But hyper-inflation has clearly not disappeared – the second biggest hyper-inflation in history was in Zimbabwe in this century – so I can understand why holding gold would seem to be a sensible part of a national portfolio. Because there is clearly a need to take some precautions against an unknowable future.”
But the most interesting observation from Mervyn King’s interview comes courtesy of an observation by The Money Trap’s Robert Pringle, who writes the following about “Mervyn King’s alarmist warning“:
According to the World Gold Council, Mervyn King, former governor of the Bank of England, believes that in certain circumstances China’s assets in the US could be “annulled”. Mervyn King’s alarmist warning is made in an interview, entitled “Present perilous, future imperfect” that appears in the June issue of Gold Investor, a WGC publication. After pointing out that “China and other countries do not want to be in a situation where all their iternational assets are in effect dependent on the US”, he is quoted as suggesting that all China’s US assets could be at risk:
“Over the last decade or so, the claims by some emerging market countries on the US have grown. Who knows what the future holds, but China and other countries do not want to be in a situation where all their international assets are in effect dependent on the US. Of course the US would not want to renege on its debts, but if some awful conflagration occurred, then all China’s assets in the US might be annulled. So there are plenty of big concerns that make it extremely reasonable to have assets in your portfolio that are not dependent on the goodwill of other countries.”
The choice of the word “annulled” suggests some kind of deliberate action. Under what scenario could this be even contemplated?
Does he have in mind some sort of armed conflict? That is suggested by his reference to an “awful conflagration”. He appears to be suggesting that if China and the US went to war, the US could cancel the Treasuries China owns (only those China owns?) and not repay (nor service the interest) unilaterally.
He does not say so, but of course this would cause all US Treasuries to collapse, and the US would not be able to issue new bonds.
Temporary suspension?
If he means that the US would suspend paying interest or capital on the bonds that it owes to China (and its allies) only while the war went on, then he cannot mean ‘annulled.’
It is fair to point, as he does, to concerns that make it reasonable to have assets in a central bank’s portfolio that are not dependent on the goodwill of other countries.
It is also quite legitimate to consider extreme scenarios other than those mentioned by Mervyn King; e.g. that US fiscal deficits might grow out of control, ending in rapid inflation or even hyperinflation.
But for Mervyn King to say that there are circumstances in which the US could annul its debts is astonishing. Mervyn King’s alarmist warning goes far beyond scenarios outlined in his recent book “The End of Alchemy”
All we can add to this is that with Icahn, Druckenmiller, and Soros, and now Mervyn King too, all warning that major trouble is coming, we are confident that the algos and the 17-year-old hedge fund managers will be right in betting it all on central banks to keep pushing the S&P to new record highs and beyond even as the global economy grinds to a halt.
- How Companies 'Collaborate' to Rip Off and Get Rid of Workers
By EconMatters
We occasionally cover some of the odd and weird phenomenons in the current corporate America. We are going to categorize them as Workplace NWO (NWO = New World Order). Here is the latest we’ve observed.
The current prevalent corporate slogan is ‘team work’ and problem solving, decision-making through ‘collaborative effort’. On the surface, this represents a healthy evolution of workplace process, like the old saying goes ‘Two brains are better than one”.
However, in our previous post we noted how PIP (Performance Improvement Plan) has become a popular tool used by the new generation of less experienced managers to get rid of high performance, more experienced, ‘black horse’ employees who do not fit into an otherwise mediocre ‘team’. In addition to PIP, there’s another way to still rip the benefit, so to speak, of such employee (after all, you can’t put every such employee on PIP) under the cloak of ‘collaboration’.
Cool, You Got A Project That Nobody Else Can Deliver
In this situation, the high performance ‘black horse’ employee is typically given a challenging project or task that nobody else in the ‘team’ is capable of delivering. The project usually requires recurring deliverable, that is, it is not something you do it one time and leave.At first glace, this seems to demonstrate manager’s confidence as well as confirmation in this employee’s skills and capabilities. So this more experienced and high performance ‘black horse’ employee gets a moral boost and works hard on the project. The project eventually gets completed with resulting compliments even from higher-ups. A job well done and this employee gets some deserving recognition, everything seems fair and square, right? Not so fast.
Collaborate to Rip Off
As mention before, this is a recurring project. Usually, the most difficult part is to establish a sustainable and repeatable process for product creation and delivery on schedule every and each time. In a more traditional workplace, the recurring portion of the project should also fall under the initial project leader and creator (in this case, the ‘black horse’ employee) to continue managing the ongoing process and deliverable. However, in the ‘modern’ corporate workplace dominated by Gen X and millennial, nothing is done with rules based on standard moral compass any more.
What typically happens is that as soon as the project gets some ‘credibility’ and ‘buzz’ (mostly on the back of that ‘black horse’ employee), the manager goes ‘let’s use the collaborative approach’ and distributes project ownership part and parcel to other junior and mediocre ‘team members’. After all, following (an established process) is much easier than creating.
Lead a Project without Ownership
This means this ‘black horse’ employee is still the ‘project leader’ responsible and accountable for the project outcome, but does not have true project ownership any more. You might ask what is the purpose of the manager doing so? Well, for one thing, the ‘black horse’ employee is still the ‘project leader’, so he or she has to do a lot of work mopping up after other ‘team members’. If anything goes wrong, which most likely will, the blame is on the project leader. Secondly, since the initial project leader has established credibility, other team members who now become part project owner are able to ride on that coat tail and may get away with inferior product delivery. A third reason is that every team member gets a bite out of the sweet successful project pie instead of the out-of-favor ‘black horse’ employee getting all the glory.Ripoff Cycle Repeats
The story usually does not end there. There will always be another difficult project, and again it will be assigned to the ‘black horse’ employee and then be taken away just like so. This high-performance and hard-to-terminate employee most likely will not get much benefit on the performance review since most of his or her achievement has now morphed into the ‘collaborative effort” of the team.
Everybody Loves Collaboration!Of course, all other team members support and love how manager is looking out for their ‘personal development’. What’s not to like when somebody else does the heavy lifting and you get to share the credit and glory regardless how little contribution you have made? And since we are in a distorted democratic society where majority rules, this could go on forever with support and approval from seemingly everywhere. The only ‘victim’ is the ‘black horse’ employee who is constantly trying to rein in project quality control behind the scene.
But At Whose Expense?
What is very likely going to take place is that those other relatively mediocre ‘team members’ get noticed or even moved up in positions due to the ‘contribution’ and ‘collaborative’ work of a few high-visibility project, while the brain behind these projects will never move up or go anywhere. Eventually, this high performance, hard-to-terminate employee gets so frustrated and moves on to a new job at a different company.‘More Bang for the Buck’
Similar to PIP, this ripoff disguising as ‘collaboration’ is something that emerged in corporate America within the past 5-10 years, and also has become part of the standard operating procedure for the new generation of middle managers.
Both achieve the same goal – getting rid of a worker disharmonious to the ‘team’ but otherwise hard to terminate based on performance alone. The difference is that PIP leaves a paper trail in HR records with some legal risk, whereas ‘collaborate to rip off’ is much more subtle and stealthy while getting more bang for the buck, figuratively speaking, plus zero risk of a law suit.
Like a Pack of Wolves
In my view, there’s is really nothing significantly unreasonable with PIP or the ‘Collaborative Approach”; however, the problem lies squarely with how they are implemented by the new breed of middle managers after the Boomer generation.
The post-boomer new generation middle managers tend to have a heightened sense of self-entitlement and like to rely on standardization as a managerial skill. That is, their main goal in managing people is to have a ‘group-think-and-act’ team with similar degree of inexperience. So these managers will not tolerate anyone who does not fit the preferred team mode. They also tend to register low on the moral compass, and like to band together like a pack of wolves taking out ‘obstacles’ in the process of climbing the corporate ladder.
Short Term Win (maybe), Long Term Total Loss
I know some will argue that this is what Corporate America needs to complete in the global world against the emerging economies like China or S. Korea. I believe this is purely short-sighted and may see some short-term benefits, but in the longer term, Corporate America will lose out with these Workplace NWO.
© EconMatters All Rights Reserved | Facebook | Twitter | YouTube | Email Digest | Kindle
- No Fly No Buy: Obama's Last Ditch Effort To Cripple The Second Amendment
Submitted by Joshua Krause via TheDailySheeple.com,
There’s one thing that all gun grabbing politicians have in common. They are all quite adamant that they don’t want to take your guns. They’ll tell you over and over again that all they want is a few reasonable regulations. Every once in a blue moon they’ll let their guard down in front of an reporter, and reveal their true long-term intentions, but by and large they’re always trying to put a reassuring face on their gun grabbing agenda.
Obama for instance, has consistently claimed throughout his presidency that all he wants is a few “reasonable” restrictions, and that all he intends to do is keep guns out of the hands of “bad guys.” Whenever he talks about it however, you can read between the lines and find his ulterior motives.
At a recent Town Hall meeting, Obama was put on the spot by gun store owner, who asked him why he wants to restrict gun use for law-abiding citizens. The video has since gone viral among liberals who think that the president gave a stellar response. In reality, he merely showed us his true colors.
“First of all, the notion that I or Hillary or Democrats or whoever you want to choose are hell-bent on taking away folks’ guns is just not true,” he claims “And I don’t care how many times the NRA says it.” Obama then goes on to make the case for restricting gun ownership for people who find themselves on the no fly list, and cites an example of someone who has been visiting ISIS websites but is still allowed to buy firearms.
“So sir I just have to say respectfully, that there is a way for us to have common sense gun laws. There is a way for us to make sure that lawful responsible gun owners like yourself, are able to use them for sporting, hunting, protecting yourself. But the only way we’re going to do that is if we don’t have a situation in which anything that is proposed is viewed as some tyrannical destruction of the Second Amendment.”
Unfortunately, his idea to restrict gun ownership for people on the no-fly list is exactly the kind of thing that could lead to the tyrannical destruction of the Second Amendment. In a perfect world it would be nice if we could keep guns away from terrorists, but restricting the gun rights of people who are on the no-fly list is anything but reasonable or “common sense.”
That’s because literally anyone can find themselves on the no-fly list. You don’t have to commit a crime and you don’t need to visit any suspicious websites. They can take away your right to travel freely without any due process whatsoever. At best, all the government needs to do is hear that you might have some sympathies for a terrorist organization, and you’ll be barred from being on a plane for life.
As Techdirt.com pointed out last year, more than a third of the people on the no-fly list have no known terrorist affiliations. If Obama’s plan were ever put in place, you could lose your right to bear arms over nothing more than a hunch or a rumor.
Leaks to the Intercept revealed that the “process” by which people are put on either the no fly list or the terrorist watch list basically involves hunches, and revelations from just a few months ago show that DHS still uses flim flam pseudo science to put people on the list based on hunches that the government laughably calls “predictive judgment,” but which experts have said has no scientific basis whatsoever.
If you want to understand how incredibly wrong this proposal is, you just need to replace “buy guns” with something else, like “the right to assemble” or “the right to use the internet.” It’s easy to say: “What could possibly be the argument for allowing a terrorist suspect to use the internet?” But then you remember that these aren’t actual suspects — they’re just people put on a list by law enforcement with no thorough process, let alone due process to defend themselves or to get off the list. And, of course, being a “suspect” doesn’t mean you’re guilty. Innocent until proven guilty used to actually mean something.
And let’s not forget, that our government has a very broad definition of “terrorist,” and has in the past claimed that conservatives, libertarians, veterans, and Christians should be watched closely for their supposed terrorist potential (i.e., the groups that are most likely to own firearms).
Sorry Obama, but you’re a gun grabber plain and simple. At best perhaps, you’re ignorant of what your proposal could do to our rights, and at worse you’re lying to the American people. You know exactly what a “no-buy list” would lead to. Furthermore, the fact that more guns were sold during your administration than any other in history does not prove that you’re not trying to take our guns, it’s only proof that you’ve failed to take them. You can sugarcoat your anti-Second Amendment vision, and claim that you just want to make us all a little safer, but we know what your ideas would do to our rights.
- Americans Have Never Been Fatter – And It's Getting Worse
Two recent reports from the Centers for Disease Control (CDC) show that efforts to encourage Americans to lose weight aren't working.
In one study of more than 5,400 adults, the results show that 33% of US adults are overweight, and 38% of US adults are obese. Breaking the data down a bit further, the report writes that "the age-adjusted prevalence of obesity in 2013-2014 was 35% among men, and 40.4% among women." Additionally, more than 5% of men and nearly 10% of women came in morbidly obese.
For adults, people are considered overweight when their body mass index reaches 25, obese when it hits 30, and morbidly obese when it reaches 40.
As an example, someone who is 5-foot-5 and weighs 149 pounds has a body mass index of 24, which is considered a healthy weight according to NBC News. If a pound is added, and that same person has a BMI of 25, the person is considered overweight. At 180 pounds that individual would have a BMI of 30 and would be considered obese.
In a second study done on children and teens, the results showed that 17% are obese and 5.8% were extremely obese. Obesity in kids is measured a little bit differently, it's how heavy they are compared to other kids the same age and height – those weighing more than 95% of kids the same age are considered obese.
People who are obese have higher rates of heart disease, diabetes, some cancers, arthritis, and Alzheimer's disease, however despite a lot of effort and millions of dollars spent, there is not much evidence the epidemic is diminishing.
From NBC News
It's not clear why obesity continues to worsen, despite many studies trying to put a finger on it.
"Numerous foundations, industries, professional societies, and governmental agencies have provided hundreds of millions of dollars in funding to support basic science research in obesity, clinical trials and observational studies, development of new drugs and devices, and hospital and community programs to help stem the tide of the obesity epidemic," the journal's editors, Dr. Jody Zylke and Dr. Howard Bauchner, wrote in a commentary.
"The obesity epidemic in the United States is now 3 decades old, and huge investments have been made in research, clinical care, and development of various programs to counteract obesity. However, few data suggest the epidemic is diminishing," they added.
"Perhaps it is time for an entirely different approach, one that emphasizes collaboration with the food and restaurant industries that are in part responsible for putting food on dinner tables."
Not only is it not diminishing, the Trust for America's Health projects that 44% of Americans will be obese by 2030, while the Centers for Disease Control and Prevention projects 42% of adults will be.
From a financial perspective, a Gallup and Healthways study shows that 34% of obese adults were more likely to suffer financially than non-obese adults.
* * *
It appears as though Americans could use some time away from smart phones and video games, and redirect their efforts to a gym. Obesity is also a prime example of the fact that throwing money at a problem does not necessarily make the problem go away.
Here are some other interesting facts from our #FatLivesMatter post.
Adult obesity by state
Here are the states with statistically significant increases in obesity between 2008 and 2015
And finally, the healthcare costs attributable to obesity…
- The Federal Reserve's Strange Behavior Makes Perfect Sense
Submitted by Brandon Smith via Alt-Market.com,
I have made this comment many times in the past, but I think it needs to be stated again here: If you think the Federal Reserve’s goal is to maintain or repair the U.S. economy, then you will never understand why they do the things they do or why the economy evolves the way that it does. The Fed’s job is not to protect the U.S. economy. The Fed’s job is to DESTROY the U.S. economy to make way for a truly global system.
There seems to be a collective delusion within certain parts of the liberty movement that the “globalists” (the banking and political elites that promote total global centralization of finance and power) are a purely American or Western problem, and that they have some kind of loyalty to the success, or perceived success, of the U.S. “empire.” This is nonsensical when you look at the progression of the American fiscal system after the Fed was established over a century ago.
In the past 100 years, the U.S. has suffered a gradual but immense devaluation in the dollar’s real buying power. We witnessed the first long-term fiscal depression in the nation’s history. We saw the removal of the gold standard. We saw the dismantling of the greatest industrial base in the history of the world. We have struggled through the implosion of the derivatives and credit bubble, which Fed officials have openly admitted responsibility for. And now, we are on the verge of the final implosion of a massive equities bubble and the collapse of the dollar itself.
All of these developments require careful planning and staging, not recklessness or random chance. Free-market economies tend to heal and adapt over time. Only constant negative manipulation could cause the kind of steady decline plaguing the U.S. ever since the Federal Reserve was forced into being.
The Fed has had multiple opportunities to strengthen the economic lifespan of America, but has ALWAYS chosen to take the exact opposite actions needed, guaranteeing an inevitable outcome of crisis. The goal of internationalists and international bankers is to acquire ever more centralized authority, and thus, ever more centralized power. The U.S. is an appendage to the great vampire squid, an expendable tool that can be sacrificed today to gain greater treasures tomorrow. Nothing more.
But this reality just does not seem to sink into the skulls of certain people. They simply cannot fathom the idea that the Fed is a saboteur. Not a bumbling greed fueled monster, or even a mad bomber, but a careful and deliberate enemy agent with precise destruction in mind.
Case in point; the recent institution of the Fed rate hike program. No one really gets it and no one is asking the right questions. Why, for example, did the Fed begin raising rates in December? No one asked them to take such measures. Certainly not day traders in the market casino; they were too busy enjoying the fiat inflation of biggest equity bubble in the encyclopedia of humanity. The politicians weren’t demanding any drawback of Fed stimulus, they were too busy enjoying the fraudulent recovery afforded by the recapitalization of too-big-to-fail banks. So, again, why bother promoting rate hikes that are essentially guaranteed to cause a market crisis?
Some might argue that the Fed must raise rates slightly so that they have room to cut them again when their stimulus schemes eventually fail. This is certainly possible, however, such an action only reinforces the position that the Fed is deliberately undermining the U.S. system. To hike rates now only to then cut them immediately after would result in the end of faith in the central bank’s ability to administer our financial structure. A crash would occur regardless.
I do not believe the Fed intends to cut rates again, at least not until it is already too late to stall a full spectrum breakdown in stock markets. Even though the majority of analysts, mainstream and independent, hold the position that the Fed is unlikely to raise rates for a second time (or ever again), I am not convinced that this is the plan. The question remains — why begin raising rates at all if the goal is not to bulldoze forward and squeeze the U.S. economy?
As I wrote in my article “The Global Economic Reset Has Begun,” the Fed has a habit of doing exactly what it says it is going to do. They may fool the public as far as the exact timing of policy changes, but they never back away from the policy changes themselves. I cannot find a single instance in the history of the central bank in which they announced future measures and then didn’t eventually follow through within the year. This is how I predicted the first rate hike in December of last year, and it is why I believe another rate hike is coming this summer. Fed officials today have been adamant that at least two more rate hikes will be initiated in 2016. If they do not enact these hikes, it will be the first example that I will have witnessed or seen in research in which they “backed off” completely from a policy initiative.
Some analysts argue that this makes no sense. The Fed has spent the better part of the past eight years trying to keep equities markets alive. Why would they now risk crashing the same markets with rate hikes that will cut off corporations and banks from cheap or free overnight loans? Why would they strangle the steady stream of stock buybacks that have been supporting the markets for the past few years? Why risk the fragile rice paper psychology of the markets? Why would they kill the “golden goose”?
As the recent jobs report from the Bureau of Labor Statistics shows, our fiscal foundations are crumbling and eventually, the fundamentals of our economy will overwhelm central bank orchestrated optimism anyway. Keep in mind, the report of only 38,000 jobs added in May does not paint the full picture of the unemployment problem in America.
The BLS and the mainstream media consistently gloss over the REAL job loss statistics including U-6 measurements which indicate that more than 664,000 working age Americans were removed from unemployment rolls and are no longer “counted” as jobless. This brings the grand total number of workers without jobs or that are underemployed to nearly 95 MILLION! The BLS ignores these people in their primary calculations for the national unemployment rate, which magically dropped again last month to 4.7 percent.
While the “official” jobs numbers are bad enough to cause concerns among mainstream traders and economists, the real numbers are far worse.
Nearly every base economic indicator globally, from raw materials demand, to manufacturing and exports, to corporate earnings, to retail sales and employment are printing negative this year. Despite all of this, markets remains levitated (for now) because the insane assumption within the mostly inane world of stocks is that bad economic news ensures the fed will bow to market forces and support the equities bubble for another quarter. When the entirety of investment markets embraces a singular assumption, when the markets has "no doubts", this is when bad things happen.
I have to laugh when I hear the claim that the Fed “cannot raise rates” in light of the new data. The fed is not "trapped"; rather, it is the U.S. economy that is trapped with the Fed as the instigator. Obviously, the Fed was well aware of the real unemployment problem as well as numerous other negative data when they hiked rates the first time in December. So, let’s just say it plainly — The Fed is NOT dependent on data when making its decisions. The Fed does whatever it wants to do whenever it feels like doing it, and it is very likely that Fed policy decisions are made months in advance, while publicly scheduled policy meetings are designed just for show.
They may claim that they care about the latest dismal jobs report, or other detrimental fiscal developments, but they don’t. They have their own agenda and their own data points, many of which we will never be privy to.
I would also mention the fact that the Fed has raised rates during recessionary economic conditions on several occasions, including during the onset of the Great Depression; a move which Ben Bernanke later publicly admitted was the ultimate cause of the prolonged depression event. You can read my analysis of this in my article “What Fresh Horror Awaits The Economy After Fed Rate Hike?”
With May’s job report so negative even with all the BLS manipulation, it is presumed that the Fed will not hike rates again at their June meeting. I believe that the Fed is certainly capable of raising in June. The timing of the meeting, right before the vote in the UK on the Brexit referendum, is perhaps not a coincidence.
While I understand the argument that the Fed would be “better off” taking its time and raising in July or September, I want readers to entertain another possible scenario for a moment. Imagine if the Fed raised rates in June to everyone’s shock and surprise. Market turmoil is almost a guarantee. A hike in June BEFORE a Brexit event would also be easier to rationalize to the public than a hike after a Brexit event.
Imagine then that, again, to everyone’s shock and surprise, the Brexit vote is successful and the UK leaves the European Union (a supposed black swan that the IMF has warned will cause a global equities crisis).
At this point, who gets blamed for the resulting equities crash? The Fed? The citizens of the UK? Who? If the globalists wanted to trigger the next leg down in the global economy, I can’t think of better circumstances or a better smokescreen.
I also acknowledge the possibility that only one of these events might be necessary to increase market turmoil. But from the perspective of an evil-minded internationalist, wouldn’t it be spectacular to have both? I could be wrong, but it is something to think about…
If you want answers to questions on why the Fed takes the risks it does, or why internationalists engineer crisis events, I suggest you read my article “The Economic End Game Explained.” Suffice to say, the Fed serves the interests of globalists and Fabian socialists, not the interests of America as a nation, and the globalists know that chaos is the best method for influencing populations to accept a “new order.” I would also say that they are pulling the plug simply because this year is most opportune.
I don’t pretend to fully understand every detail of the timelines of globalists and the motivations behind them, but I do know that the evidence shows they have such timelines, and according to recent actions the clock appears to be running out.
- Goldman Crushes Democrat's Dreams: Shows Obamacare Has Cost "A Few Hundred Thousand Jobs"
We suspect Lloyd Blankfein will be receiving a call from The White House (or Treasury) very soon as Goldman Sachs' economists did the unthinkable in the age of political correctness – while investigating the state of under-employment in America, the smartest people in the room found that ObamaCare has led to a rise in involuntary part-time employment, estimating that "a few hundred thousand workers" have been forced to cut hours and has "created disincentives for full-time employment."
Goldman's Jan Hatzius explains that they find mixed evidence to support the theory that the employer mandate under the Affordable Care Act (ACA) has contributed to the elevated level of involuntary part-time work.
Our estimates of the effect by industry do show signs of an effect, particularly among the sectors that had the greatest gaps in required health insurance coverage prior to implementation of the mandate, but the relationship is weak.
It is possible that the level of involuntary part-time workers could be a few hundred thousand higher than it would be otherwise as a result of the mandate, which is a small share of the 6.4 million workers employed part-time involuntarily, but potentially a much larger share of the “underemployment gap”.
Their research into the relative slack in the labor force notes that…
The share of workers who would like to work full-time but are only able to find part-time work for economic reasons has declined much more slowly than the unemployment rate, raising the possibility that structural factors could be keeping the involuntary part-time rate elevated (Exhibit 1). If true, this would suggest that there is currently even less slack remaining in the labor market than we have assumed.
One potential explanation of the structural rise in the ratio of share of part-time to full-time employment is the employer mandate in the Affordable Care Act (ACA).
In principle, the ACA should increase part-time employment as a share of total employment, from both the demand and supply side.
- On the demand side, some employers that do not offer health insurance coverage for full-time employees may seek to avoid penalties by relying on part-time labor instead.
- On the supply side, the ACA potentially creates disincentives for full-time employment, as it increases the implicit tax on marginal low- and middle- income earnings by reducing subsidies as incomes rise. It also loosens the link between employment and health insurance coverage – coverage can now be purchased more easily away from one’s employer – which may allow some who previously worked full-time for the offered health benefits to now work part-time instead. However, these supply-side effects should not be contributing to the elevated level of involuntary part-time work.
As Goldman concludes…
Overall we believe that the evidence suggests that the ACA has at least modestly elevated involuntary part-time employment.
While the effect is hard to quantify given the apparently loose relationship just noted, we would estimate that a few hundred thousand workers might be working part-time involuntarily as a result of the ACA. We reach this estimate by multiplying the difference between the actual and estimated involuntary part-time workers in the five sectors most affected by the ACA mandate by total employment in those sectors. We can reach a similar estimate by dividing the sectors into two groups weighted equally by total employment, and subtracting the difference between actual and estimated involuntary part-time employment in the less-affected group by the difference in the more affected group. These admittedly rough measures fall in the middle of the few academic studies on the topic, and suggest that while the effect of the ACA employer mandate is small compared to the total number of the 6.4 million workers employed part-time for economic reasons, it could constitute a more significant share of the estimated remaining “underemployment gap.”
There goes Blankfein's invite to Hillary's inauguration.
- Currency Wars Re-Escalate As Bank Of Korea Eases To Record Low Rate With Surprises Rate Cut
With the 655th rate-cut globally since Lehman, the Bank of Korea stunned the market tonight and cut rates 25bps to 1.25% (a record low). Only 1 of 18 economists expected a rate cut as it appears record highs in US equities signal nothing about the underlying turmoil in the world’s economy. After 6 straight days stronger (against the USD), the Won is sliding back above 1160 as it seems the currency wars are reigniting in AsiaPac…
The 25bps cut, the first reduction since June 2015, shocked the market as only one BOK board member said at the May decision (according to the minutes) that there was a need to cut rates in near term.. which makes us wonder just what changed so quickly.
As Bloomberg reports, South Korea’s central bank unexpectedly cut the benchmark interest rate to a new record low as concerns rose that the government’s push to restructure indebted companies is putting pressure on the economy.
The decision to cut the seven-day repurchase rate to 1.25 percent was projected by only one of 18 economists in a Bloomberg survey. While Goldman Sachs Group Inc. was the sole forecaster predicting a cut at this meeting, Citigroup Inc., HSBC Holdings Plc, and Nomura Holdings Inc. were among those seeing a reduction in the next couple of months.
South Korea’s sovereign yield dropped to a record low this month after minutes of the May meeting showed a board member called for lower rates while the government and central bank announced plans to create a fund to facilitate corporate restructuring, boosting rate-cut bets as part of policy coordination. The board’s May minutes showed several members were worried about downside risks from the corporate overhaul such as unemployment and declining investment.
The market’s focus is on how many times the BOK will cut rates this year, Park Jong Youn, a fixed-income analyst for NH Investment & Securities Co., wrote in a report before the decision. Risks to the economy include unemployment from corporate restructuring, less fiscal spending due to front-loading in the first half of the year, and the anti-corruption law taking effect, according to Park, who expects two cuts in 2016.
The government and central bank said on Wednesday that they’ll create an 11 trillion won ($9.5 billion) fund to recapitalize policy banks and prepare for the potential financial market impact from corporate restructuring. Korean shipbuilders announced plans to sell assets and cut jobs to pare debt.
South Korea’s exports fell for a 17th consecutive month in May, although the pace of decline eased. Indicators of corporate activities such as investment ratios fell to post-financial crisis lows amid shipbuilders’ downsizing, while consumption held up.
The economy grew more than initially estimated in the first quarter, expanding by 0.5 percent from the previous three months. Household debt rose to a record high of 1,223.7 trillion won in the first quarter, central bank data show.
The three-year sovereign yield closed at an unprecedented 1.39 percent on Wednesday. The won gained 3 percent this month through Wednesday, erasing losses earlier this quarter, as expectations waned for a June rate increase by the Federal Reserve.
With inflation set to trail BOK’s 2 percent target for six straight months, Governor Lee will hold a press briefing in July to explain monetary policy measures to achieve the target. This accountability measure was one reason Goldman Sachs had predicted a cut at this meeting.
Now, who is next? Vietnam? Or does China come over the top with a big one?
- What The IRS Just Revealed Should Start A Wave Of Outrage
Submitted by Allen West via AllenBWest.com,
Just imagine if this had been a Republican presidential administration these past seven years. The media would have been all over it like white on rice. However, for some very apparent reason, the liberal progressive media has dismissed or ignored scandals, faults, issues of deception, lies, abandonment of Americans to die, and tyrannical unconstitutional actions. Now the IRS has finally revealed its nefarious actions to us all – and it’s far worse than we thought.
As reported by the Washington Times,
“More than three years after it admitted to targeting tea party groups for intrusive scrutiny, the IRS has finally released a near-complete list of the organizations it snagged in a political dragnet.
The tax agency filed the list last month as part of a court case after a series of federal judges, fed up with what they said was the agency’s stonewalling, ordered it to get a move on. The case is a class-action lawsuit, so the list of names is critical to knowing the scope of those who would have a claim against the IRS. But even as it answers some questions, the list raises others, including exactly when the targeting stopped, and how broadly the tax agency drew its net when it went after nonprofits for unusual scrutiny.
The government released names of 426 organizations. Another 40 were not released as part of the list because they had already opted out of being part of the class-action suit. That total is much higher than the 298 groups the IRS‘ inspector general identified back in May 2013, when investigators first revealed the agency had been subjecting applications to long — potentially illegal — delays, and forcing them to answer intrusive questions about their activities.
Tea party and conservative groups said they was the target of unusually heavy investigations and longer delays, Edward D. Greim, the lawyer who’s pursuing the case on behalf of NorCal Tea Party Patriots and other members of the class, said the list also could have ballooned toward the end of the targeting as the IRS, once it knew it was being investigated, snagged more liberal groups in its operations to try to soften perceptions of political bias.
Sixty of the groups on the list released last month have the word “tea” in their name, 33 have “patriot,” eight refer to the Constitution, and 13 have “912” in their name — which is the moniker of a movement started by conservatives.
Another 26 group names refer to “liberty,” though that list does include some groups that are not discernibly conservative in orientation. Among the groups that appear to trend liberal are three with the word “occupy” in their name. And then there are some surprising names, including three state or local chapters of the League of Women Voters — a group with a long history of nonprofit work.”
There should be a wave of incredible outrage all across the nation knowing this has occurred. Lois Lerner should not be sitting back enjoying a nice six-figure tax payer-funded pension. Now, imagine if this were a Republican administration and the preponderance of these groups were liberal progressive? There’s no doubt t the manner of stories would be incessant and rampant — much like Abu Ghraib. It must be accepted that the liberal progressive left will leverage the power of the federal government against the common American citizen.
After the 2010 midterm election cycle President Obama and the left knew there was no way they could allow for a constitutional conservative grassroots movement to go forward. So they came up with the treacherous scheme of using the tax collection agency to undermine the effort.
In other words, the president of the United States turned the government on his own people — well, I suppose we’re not his own people. We still have to hear about the breaking and entering of Watergate, but mum’s the word on something as horrific as this. This was a widespread and calculated strategy, and if anyone wants to believe the president of the United States of America wasn’t cognizant of this activity, well, they’re delusional.
And if President Obama wasn’t aware of this, then someone needs to explain to us who is in charge of the federal government — namely, this episode. Yes, I would concur that much lies at the feet of the modern-day Rasputin, Valerie Jarrett. But, Obama can’t come up with some “plausible deniability” excuse. I suppose he also had no idea Ben Rhodes was lying about the Iranian nuclear deal or creating a false narrative about the Benghazi incident. And yes, I will continue to address Benghazi since four Americans no longer walk this earth — while those who abandoned them still do.
We may not know the full extent of the tyranny of the Obama administration until years afterwards. However, we should be careful about turning this country over to another tyrant.
I have to admit, I just don’t hear much discussion, reference, and quotes by the remaining three presidential candidates regarding the Constitution and individual rights. I’m not talking about populist messaging. I want to know how we shall restore this Constitutional Republic to its standing and regard for individuals and their right to petition the government for redress of grievances.
This is a very serious issue and it needs to be addressed — this should be a critical item to bring to the awareness of the American people. We truly do not need to be talking about someone’s individual court case. The fact that the Internal Revenue Service has released a list of groups that they targeted should not go unnoticed. This is a critical message point. And the liberal progressive left must be forced to admit if they do or do not consent to this type of abhorrent behavior.
It can no longer be dismissed as having never happened. What America do we live in that an agency can produce a target list? And it would be interesting to see the exact dates for each group when they were first targeted — I bet that would be rather revealing.
Here we thought we lived in a free country. Sadly it seems the last seven years have been anything but.
- How The IRS Used Civil Asset Forfeiture To Ruin The Lives Of Two Connecticut Bakers
Submitted by Mike Krieger via Liberty Blitzkrieg blog,
At the beginning of this year, Attorney General Eric Holder attempted to close an exploitable loophole in asset forfeiture laws. State and local law enforcement agencies often sought federal “adoption” of seizures in order to route around statutes that dumped assets into general funds or otherwise limited them from directly profiting from these seizures. By partnering with federal agencies, local law enforcement often saw bigger payouts than with strictly local forfeitures.
The loophole closure still had its own loopholes (seizures for “public safety,” various criminal acts), but it did make a small attempt to straighten out some really perverted incentives. But deep down inside, it appears the DOJ isn’t really behind true forfeiture reform. In fact, it seems to be urging local law enforcement to fight these efforts by pointing out just how much money these agencies will “lose” if they can’t buddy up with Uncle Sam.
– From the post: How the Department of Justice is Actively Trying to Prevent Civil Asset Forfeiture Reform
It’s been a while since I’ve reported on the lawless and barbaric practice of civil asset forfeiture. However, just because it hasn’t been a focus doesn’t mean it isn’t happening. Indeed, it appears the same federal agencies that couldn’t find a bank executive they didn’t want to coddle, take particular pleasure in harassing and abusing average Americans generally, and small businesspeople in particular.
The following case highlighted by the Huffington Post is an extremely sad and sobering expose. Below are some excerpts, but you can read the whole thing here: IRS Returns Bakery’s Money After 3 Years. Now It Wants To Put The Owners In Prison.
In May 2013, David Vocatura watched $68,000 disappear.
He was at his family’s bakery in Norwich, Connecticut, when a squad of armed IRS agents filed into the store. The agents wanted to know if Vocatura and his brother Larry were trafficking drugs or running a prostitution ring. The brothers had no idea what they were talking about.
The IRS refused to believe Vocatura’s Bakery was operating on the up and up. Agents said the business raised red flags because of a series of cash deposits in sums under $10,000, the amount at which banks are required to report transactions to the federal government. They said this behavior was consistent with a crime known as structuring, which the IRS defines as making calculated financial transactions in order to skirt reporting requirements. The agents had no evidence of other wrongdoing, but thanks to a controversial law enforcement tool known as civil asset forfeiture, they didn’t need any to seize every penny in the Vocaturas’ bank account: $68,382.22.
Under the practice of civil forfeiture, authorities can move to permanently take property they suspect of being linked to criminal activity, without obtaining a conviction — and, in cases like the Vocaturas’, without even charging the owner with a crime.
USA! USA!
For the past three years, the brothers have been fighting to get their money back, maintaining they’d done nothing wrong. The IRS has responded by subjecting David, 53, and his brother Larry, 69, to a series of increasingly aggressive legal maneuvers — including threats of significant prison time and additional fines — in an attempt to strong-arm them into permanently forfeiting their assets.
On Tuesday, the Institute for Justice, a libertarian public interest law firm, filed a lawsuit in U.S. District Court for the District of Connecticut on behalf of Vocatura’s Bakery, demanding that the IRS promptly return their money. The suit argued that the Vocaturas were just the latest example of the government hastily seizing property, and then going to extreme and even unconstitutional lengths to justify it after the fact.
Hours after the suit was filed, the IRS said it would finally give the Vocaturas their money back. But the prosecutor didn’t drop the case. Instead, he now plans to mount an expansive investigation into the bakery’s finances, looking for a reason to bring criminal charges against the brothers.
At issue in the Vocaturas’ case are hundreds of deposits between March 2007 and April 2013 that ranged from $7,000 to $9,900 — a total of around $2.8 million. The Vocaturas say the deposited money was from the bakery’s sales, as they were doing mainly cash business at the time, and they have a less suspicious explanation for why the deposits were so close to the reporting limit. David Vocatura says a representative from their local bank told him that an employee had to fill out forms each time they brought in more than $10,000, so he decided to make life easier for the bank attendants by making smaller, more frequent deposits.
If the IRS has proof that the Vocaturas were deliberately structuring payments or hiding illicit proceeds, it hasn’t provided it.
Earlier this month, Peter S. Jongbloed, assistant U.S. attorney for the District of Connecticut, served the Vocaturas a grand jury subpoena calling for them to turn over every financial record from the six years between March 2007 and April 2013, so the agency could finally begin investigating the business’s tax and regulatory compliance. At the time, it was the latest reminder that the government was intent on taking the brothers’ assets, even if it had to change its approach three years after the fact.
The Institute for Justice argues that the subpoena is an attempt to retroactively justify an improper seizure and punish the Vocaturas for not rolling over.
“At this point, the government is in so deep, they’ve put these guys through three years of hell — and held onto their money for three years — and so they feel like they need to justify it,” said Robert Everett Johnson, an attorney for the Institute for Justice who is representing the Vocaturas. “So now they’re going to conduct this investigation into the bakery in some effort to try to find something that will make it look like they were doing the right thing all along.”
Yes, my fellow Americans, this is your government.
The government’s seizure of the Vocaturas’ account is part of a broader pattern of concerns about the use of civil asset forfeiture, a practice that brings in billions of dollars each year to federal, state and local law enforcement agencies.
Critics say each step of the process is ripe for abuse. Authorities frequently base seizures on weak circumstantial evidence. In some of the most publicized civil asset forfeiture cases, the mere presence of cash has constituted enough probable cause to justify a seizure. In cases like the Vocaturas’, the act of depositing cash isn’t necessarily illegal on its own, but authorities are quick to treat anyone who does it like a criminal.
Once the government seizes property, it’s difficult to get back. Unlike in criminal trials, where suspects are considered innocent until proven guilty, property owners must often prove their innocence in civil forfeiture cases.
Once someone’s assets are forfeited, those proceeds go to the agency that made the seizure — and there is very little oversight of how that money can be used. Critics of civil asset forfeiture say this dynamic incentivizes law enforcement officials to bring in as much money as possible, creating a motive to “police for profit” rather than for public interest or safety.
The IRS has used structuring allegations to seize hundreds of millions of dollars through civil asset forfeiture in recent years, some of which has been funneled directly into the agency’s coffers. A report from the Institute for Justice put the total value of forfeitures — money the government kept in IRS structuring cases — at nearly $125 million between 2006 and 2013.
Of the more than 2,500 seizures in the report, at least one-third involved no claims of criminal activity beyond the cash transactions themselves. Only 1 in 5 were ultimately prosecuted as a criminal structuring case. The numbers also show that the IRS failed to keep seized money in many cases, which could be a troubling sign of over-prosecution.
The Vocaturas’ home state of Connecticut is a hotbed for structuring-based seizures, according to IRS data provided to the Institute for Justice through a public records request. Among states with a single U.S. attorney, Connecticut ranks third worst for these sorts of seizures. Between 2005 and 2013, federal prosecutors in the state approved 9.2 seizures for suspected structuring for every 10,000 businesses in the state — a rate that the Institute for Justice says is dramatically higher than other states.
In February, 33 months after the bakery’s bank account was seized, Jongbloed broke his silence. He offered the Vocaturas an opportunity to end their ordeal, while also preventing the public backlash that had impeded recent structuring cases.
Though the federal government had still not filed criminal charges against the brothers, Jongbloed wanted them to plead guilty to structuring, a felony, and admit that they’d “acted with the intent to evade the reporting requirement.” By doing so, the Vocaturas would be subject to a potential four-year prison sentence and would have to agree to forfeit both the initial $68,000 and an additional $160,000 in personal assets between them.
But by getting the Vocaturas to admit guilt, the IRS would also have been able to keep the brothers from speaking out about their case. The plea deal would have served as an admission that the government had some cause to take their money. Nobody could accuse the government of once again abusing civil forfeiture if the victims ultimately handed over the money as punishment for a crime they had copped to.
Jongbloed noted that sanctions could be harsher if the case went to trial, and encouraged the Vocaturas to take the deal. The brothers, who still insist that they’ve done nothing wrong, rejected that offer.
On May 10, Jongbloed responded by demanding more than six years of business records documenting all of the bakery’s dealings. He finally wants to figure out if the Vocaturas had actually broken the law when IRS agents raided their account.
While the government is finally giving the Vocaturas their money back, the fact that they were able to hold it for so long without taking concrete action shows how much leeway they have in these cases.
As long as the current system of civil asset forfeiture remains intact, new federal guidelines or policy are unlikely to be effective, said Steven L. Kessler, a New York attorney who has defended a number of clients in high-profile forfeiture cases. He believes clear legislative action is needed to keep the government from compromising people’s property rights in the hunt for money.
“When the government says they’re going to do that on their own, they’re going to make the change, everyone is very happy and we move on to the next story,” said Kessler. “Rarely does anything change, because we’re dealing with a guideline — we’re dealing with something that is within the full discretion of the government.”
There are some rumblings in Congress for a legal overhaul.
Last week, Rep. Jim Sensenbrenner (R-Wis.) and a bipartisan group of co-sponsors introduced a bill to rein in civil asset forfeiture. Among the most significant measures, the Deterring Undue Enforcement by Protecting Rights of Citizens from Excessive Searches and Seizures Act of 2016, or the DUE PROCESS Act, would shift the burden of proof from the property owner to the government, and raise the standard needed to validate a forfeiture. If passed, the new law would require the government to provide “clear and convincing” evidence that property was substantially connected to criminal activity — still below the “beyond a reasonable doubt” standard for criminal convictions.
This needs to pass.
These legislative fixes would do little for Vocatura’s Bakery, however.
While their legal saga began as a civil forfeiture case, the IRS has now decided to pursue criminal forfeiture against them. That isn’t addressed in the DUE PROCESS Act, which only deals with civil cases.
Nor is it assumed that these bills will pass. Civil asset forfeiture reform has hit snags in Congress before, in part due to aggressive lobbying from law enforcement groups intent on preserving the practice.
Yep. Recall: Land of the Unfree – Police and Prosecutors Fight Aggressively to Retain Barbaric Right of “Civil Asset Forfeiture”
“The way you would expect the criminal justice system to work if you were reading your high school civics textbook is that you’d expect the government first to investigate people, then to obtain an indictment if they think something wrong has happened, and then to obtain a conviction and then finally to punish them,” he said.
“But in this case that all has happened exactly backwards,” Johnson continued. “The government first punished the Vocaturas by taking their property, then they tried to get them to plead guilty to charges, and only when they refused to plead guilty did the government investigate.”
This is not what freedom looks like.
Digest powered by RSS Digest
Saving...