Macron & His Socilist Agenda

Macron’s funding reveals that elite Socialists were really behind him changing the label to sell a centrist agenda, but in reality, to maintain their agenda. Macron was able to raise funds from French abroad with the promises of change, and this targeted particularly the French who fled Hollande living in London and New York. He did a photo-op with Nobel Prize laureate Joseph E. Stiglitz before journalists who is critical of the management of globalization, against laissez-faire economists who he classifies a ‘free market fundamentalists’, as well as international institutions such as the International Monetary Fund (IMF) and the World Bank.
Stiglitz is an American economist and a professor at Columbia University and is a former senior vice president and chief economist of the World Bank. He was also a former member and chairman of the Council of Economic Advisers under Bill Clinton and supported Hillary over Obama saying she is more ‘liberal’ (socialist) than Obama. Stiglitz believes in Georgism, which is a variety of Marxism whereby the State should own all the resources derived from land, which is an old Physicocrat(French) idea that wealth is derived from land. In this way, all natural resources should belong to government from mining to energy just for starters as if government operated industries ever ran efficient or were free from corruption. He also supported a single tax for all and believes that, while people should own the value what they produce themselves with everything derived from land should belong to government characterized as belonging equally to all members of society (government).

This post was published at Armstrong Economics on May 16, 2017.

Globalization Faces Challenges

For much of the second half of the 20th Century, and even into the new millennium, ‘Globalization’ was the dominant theme used to describe the drift of the world economy. It was widely considered both natural and inevitable that the world economy would continue to integrate and that national boundaries would become less constraining to commerce and culture. And with the exception of the eternal ‘anti-globalization’ protesters, who robotically appeared at large gatherings of world leaders, the benefits of globalization were widely lauded by politicians, corporate leaders and rank and file citizens alike. But a casual glance at the world headlines of 2016 suggests that the belief in globalization has crested, and is now in retreat. What are the consequences of this change?
International trade has existed for millennia. But few modern historians would characterize the trade caravans that crossed the Himalayas and the Sahara as sources of international conflict. Rather, they are widely seen as a useful means to bring goods that were plentiful from one region to other regions where they were scarce. Along the way, routes like the Silk Road in Asia created a great number of positive secondary benefits in culture and politics. But relatively modern developments such as ocean-going sailing ships, modern navigation, and steam and diesel power, have greatly increased the size and scope of trade. Globalism was also boosted rapidly by technological advances in communications, including intercontinental jet travel, fax machines, satellite telephones, the Internet, real time money transfers and massive investment flows to international and emerging markets.
Since the end of WWII, the establishment of international reserve currencies and the rise of supranational organizations, such as the United Nations, The World Bank, and International Monetary Fund, has saddled trade with more political baggage. The rise of bi-lateral and multi-lateral trade negotiations, which are often shadowy and bureaucratic affairs conducted behind closed doors, have further eroded support for trade. Oftentimes these efforts have resulted in deals that clearly favor politically connected players and have given rise to justified accusations of cronyism. By opening larger markets and reducing costs, certain corporations have amassed shocking wealth. The benefits to workers are far more diffuse and difficult to quantify.
The Harvard Business Review of May 13, 2016 published an article by Branko Milanovic about the unequal distribution of wealth generated by globalism. Milanovic comments that, since the mid-1980s, globalism has resulted in the ‘greatest reshuffle of personal incomes since the Industrial Revolution. It’s also the first time that global inequality has declined in the past two hundred years.’ Milanovic points to two main conclusions. First, he highlights the massive percentage gain in wages in Asia, particularly among the middle classes. In some cases, percentage wage gains in the Asian middle class have eclipsed the percentage gains experienced by the top one percent in the richer Western economies.
In stark contrast, the U. S. and Western lower and middle classes have enjoyed almost no percentage wage increases, while their top one percent was the only group to experience significant income gains, based on available household surveys from 1988 to 2008. A recent unpublished paper by John E. Roemer, a political scientist at Yale, suggests that the diminishing of global inequality made possible by trade is far less potent politically than the relative increases in national inequality. In other words, the benefits of globalism are obscured while the costs are highly visible.

This post was published at Euro Pac on October 26, 2016.

The National Security ‘Experts’ Denouncing Trump Are a Who’s Who of Disastrous Neocons

This piece first appeared at TomDispatch.com.
It’s not every day that Republicans publish an open letter announcing that their presidential candidate is unfit for office. But lately this sort of thing has been happeningmore and more frequently. The most recent example: we just heard from 50 representatives of the national security apparatus, men – and a few women – who served under Republican presidents from Ronald Reagan to George W. Bush. All of them are very worried about Donald Trump.
They think we should be alerted to the fact that the Republican standard-bearer ‘lacks the character, values, and experience to be president.’
That’s true of course, but it’s also pretty rich, coming from this bunch. The letter’s signers include, among others, the man who was Condoleezza Rice’s legal advisor when she ran the National Security Council (John Bellinger III); one of George W. Bush’s CIA directors who also ran the National Security Agency (Michael Hayden); a Bush administration ambassador to the United Nations and Iraq (John Negroponte); an architect of the neoconservative policy in the Middle East adopted by the Bush administration that led to the invasion of Iraq, who has since served as president of the World Bank (Robert Zoellick). In short, given the history of the ‘global war on terror,’ this is your basic list of potential American war criminals.
Their letter continues, ‘He weakens U. S. moral authority as the leader of the free world.’
There’s a sentence that could use some unpacking.

This post was published at David Stockmans Contra Corner on August 24, 2016.

Red Ponzi Update – – Heading For 1929-Style Depression

Andy Xie isn’t known for tepid opinions.
The provocative Xie, who was a top economist at the World Bank and Morgan Stanley, found notoriety a decade ago when he left the Wall Street bank after a controversial internal report went public. Today, he is among the loudest voices warning of an inevitable implosion in China, the world’s second-largest economy.
Xie, now working independently and based in Shanghai, says the coming collapse won’t be like the Asian currency crisis of 1997 or the U. S. financial meltdown of 2008.
In a recent interview with MarketWatch, Xie said China’s trajectory instead resembles the one that led to the Great Depression, when the expansion of credit, loose monetary policy and a widespread belief that asset prices would never fall contributed to rampant speculation that ended with a crippling market crash.
China in 2016 looks much the same, according to Xie, with half of the country’s debt propping up real-estate prices and heavy leverage in the stock market – indicating that conditions are ripe for a correction.
‘The government is allowing speculation by providing cheap financing,’ Xie told MarketWatch. China ‘is riding a tiger and is terrified of a crash. So it keeps pumping cash into the economy. It is difficult to see how China can avoid a crisis.’

This post was published at David Stockmans Contra Corner on June 30, 2016.

It Used To Be Called Political Economy For A Reason

In yet another anecdote that proves the global recovery can only be political, acting Brazilian President Michel Temer appointed Ilan Goldfajn to be the next central bank head for that nation. Goldfajn is about as orthodox as they come: trained at MIT (saltwater, as if makes any difference), former director at the central bank who has ‘consulted’ with the IMF, World Bank, and United Nations. The nomination has pleased all the ‘right’ people who are absolutely certain that Brazil’s worst days are now behind.
Reuters probably wrote about it best, unintentionally, under the headlineBrazil Government Taps Wall Street Favorite To Head Central Bank.
‘Well-trained technocrats … should allow the government to establish a clear regime shift,’ Goldman Sachs senior economist Alberto Ramos wrote in a research note.
Trained by whom? To do what? More of the same. Along with Mr. Goldfajn’s recommendation, the interim government also indicated it would formalize rules making Banco more independent and supposedly less susceptible to political influence. The current structure for the central bank is highly unusual, with a shared power structure among the National Treasury, the Bureau of Currency and Credit while also including a private sector foundation in Banco do Brasil. ‘Independent’ central banks, even here where it is insisted that independence will be expressly limited, are all economists want to hear as it gives them unrestrained power.

This post was published at David Stockmans Contra Corner by Jeffrey P. Snider ‘ May 19, 2016.

Skunk At A Garden Party – -Kuroda’s Money Printing Failure In Japan Is Bringing Bad News To The G-20

The world’s central bankers, already hitting limits of their effectiveness on growth and inflation, are now contending with another risk: that additional stimulus could produce lackluster results and undercut investor confidence.
The Bank of Japan’s decision in January to take interest rates negative has sent bond yields tumbling, while doing little to curb a surging yen that’s squeezing the world’s third-biggest economy just when it needs a weaker currency. That’s put even more monetary and fiscal stimulus on the agenda at a time when Japanese households and companies are increasingly doubting the program.
‘Japan is bringing bad news to the world,’ said Hiromichi Shirakawa, chief Japan economist at Credit Suisse Group AG and a former BOJ official. ‘It’s demonstrating that massive monetary easing doesn’t work for everyone. Any additional stimulus may invite criticism from other central banks.’
The decline in credibility in Japan is a warning sign for central bankers and finance ministers who gather this week in Washington for spring meetings of the International Monetary Fund and World Bank, as well as a Group of 20 session.

This post was published at David Stockmans Contra Corner on April 11, 2016.

The War On Cash – -The Central Banks’ Survival Campaign

Over the last few months a stream of articles have crossed my screen, all proclaiming the need of governments and banks to eliminate cash. I’m sure you’ve noticed them too.
It is terrorists and other assorted madmen, we are told, who use cash. And so, to protect us from being blown up and dismembered on our very own street corners, governments will have to ban it.
It would actually take some effort to imagine a more obvious, naked attempt at fearmongering. Cash – in daily use for centuries if not millennia – is now, suddenly, the agent of spring-loaded, instant death? And we’re supposed to just accept that line?
But there are good reasons why the insiders are promoting these stories now. The first of them, perhaps, is simply that they can: After 9/11, a massive wave of compliance surged through the West. It may not last forever, but it’s still rolling, and if the entertainment corporations can pump enough fear into minds that want to believe, they may just get them to buy it.
The second reason, however, is the real driver:
Negative Interest Rates
The urgency of their move to ban one of the longest-lasting pillars of daily life means that the backroom elites think it will be necessary soon. It would appear that the central banks, the IMF, the World Bank, the BIS, and all their backers, see the elimination of cash as a central survival strategy.

This post was published at David Stockmans Contra Corner on February 10, 2016.

“Time To Panic”? Nigeria Begs World Bank For Massive Loan As Dollar Reserves Dry Up

Having urged “don’t panic” just 4 short months ago, it appears Nigeria just did just that as the global dollar short squeeze forces the eight-month-old government of President Muhammadu Buhari to beg The World Bank and African Development Bank for $3.5bn in emergency loans to help fund a $15bn deficit in a budget heavy on public spending amid collapsing oil revenues. Just as we warned in December, the dollar shortage has arrived, perhaps now is time to panic after all.
In September, Nigerian central bank Governor Godwin Emefiele ruled out a naira devaluation on Thursday and told people not to panic about a government order which risks draining billions of dollars from the financial system.
In an interview with Reuters, Emefiele said he was ready to inject liquidity if needed into the interbank market, which dried up this week following the directive to government departments to move their funds from commercial banks into a “Treasury Single Account” (TSA) at the central bank. The policy is part of new President Muhammadu Buhari’s drive to fight corruption, but analysts say it could suck up as much as 10 percent of banking sector deposits in Africa’s biggest economy – playing havoc with banks’ liquidity ratios.

This post was published at Zero Hedge on 01/31/2016 –.

Red Ponzi Update – -Greatest Capital Flight In History

For lovers of dramatic numbers, China has long been a gift. The flood of cash leaving the country has produced another impressive statistic: We are witnessing the greatest episode of capital flight in history.
China’s foreign-exchange reserves fell by $700 billion last year. The flood of cash across its borders is complicating the country’s economic transformation and is raising the risks of problems in other emerging markets, where cash already is flowing outward.
‘What happened in 2015 coming out of China was unprecedented in magnitude,’ saidCharles Collyns, chief economist for the Institute of International Finance, a global trade group for the financial industry.
The size of China’s $10 trillion economy and its still-huge foreign reserves means the outflow won’t cause an immediate crisis in the country, though there are risks. According to World Bank data, the $700 billion decline in China’s foreign-currency reserves is bigger than the total foreign-currency reserves of all but three other central banks in the world – Japan, Switzerland and Saudi Arabia. China’s outflows are the biggest in absolute terms, although other countries have had larger outflows relative to the size of their economies.

This post was published at David Stockmans Contra Corner on January 29, 2016.

Are the BRICS Crumbling?

Following the recent move by Goldman Sachs in closing its BRICS fund, the future of this economic A-team seems uncertain. What does the future hold for the BRICS? And can we still expect a credible alternative to the Western-created IMF and World Bank to emerge?
Face: [the team’s plane is starting to malfunction] Uh, Murdock, what’s going to happen?
Murdock: Looks like we’re going to crash.’
Face: No, what’s *really* going to happen?
Murdock: Looks like we’re going to crash and die.
Could we be seeing a similar script unfolding for the international economic A-team? Well, according to Goldman Sachs, yes.
It comes as little surprise to some institutional investors that Goldman decided to pull the plug on their depreciating investment product.
Assets under management have dwindled to approximately $100 million, from a peak of $800 million at the end of 2010. However, it does seem ironic that the institution that first gave life to the idea of the BRICs (later turned BRICS to accommodate South Africa) has now decided to kill its own creation.
But in the game of international finance economic, Darwinism is the name of the game.
BRICS Who?
In 2001 Lord Jim O’Neill, the then chief economist at Goldman Sachs, noted that the real GDP among Brazil, Russia, India, and China had surpassed that of the G7 group of mature economies.
This informal association of nations, he stated, were the ‘strategic pillars’ of a supposedly entirely new international system. And thus voil ! A new investment angle opened up to the world.
This awkward arranged marriage served as a powerful inspiration not only for investors who rushed to place their bets on big emerging markets, but also for political scientists and academics who sought to understand how this new goliath will operate as a political entity. They were not disappointed.
Listen to: Stratfor’s Reva Bhalla: BRICS in Trouble; Russia a “Huge Concern”
Brazil, Russia, India, and China make up half the world population, one-fifth of the world’s GDP, and one-quarter of the world’s land mass, so yes, a force to be reckoned with it is.
In 2006 this partnership was solidified following a series of meetings on the side-lines of a UN General Assembly summit in New York.
South Africa joined the party in 2010 following a political move to include an African nation as the group couldn’t possibly represent the idea of emerging economies without an African representative.
Nigeria and South Africa were shortlisted with South Africa winning out as it fit the acronym.

This post was published at FinancialSense on 11/30/2015.

Su-24 Downing: Ankara, Washington Acting in Unison in Wake of Attack

Ankara knows perfectly well that the Russian Su-24 bomber did not violate Turkish airspace and by no means posed any threat to the country, geopolitical analyst and former World Bank economist Peter Koenig, pointing to the fact that Washington has demonstrated its solidarity with Turkey.
Since the very beginning of the Russian military operation in Syria, Russia’s mission was absolutely clear to the international community: Moscow joined in response to the official request from Damascus to fight against terrorism as well as to protect the sovereignty of the Syrian nation.
“Russia’s mission was clear to all the 19 nations which attended the G20 meeting some 10 days ago in Antalya, Turkey, when the entire group unanimously decided to cooperate in fighting the Islamic State (IS – or Daesh, according to its Arabic acronym),” geopolitical analyst and former World Bank economist Peter Koenig emphasizes in his recent piece for Global Research.

This post was published at Sputnik News

The Great Grunge?

The IMF and World Bank sponsored a great gathering of policymaking economists for a week of discussions. I can only imagine the statistics and regressions that must have been traded back and forth in lieu of actual discussions about how true capitalism needs no overlorded purveyor, or why, despite the incessant heavy hand of every central bank and central banker, the world economy may have been already toppled once more. It may not have been a true worm hole in the manner of hard physical reality, but you can imagine how some of the same people that have going to these kinds of affairs over and over are just replaying the same concerns with even the same kind of language. It may be 2015, but how much has really changed?
That’s a problem in the real world of the real economy because change is growth, health and satisfaction. It is sclerosis and stasis that are the enemy of economic and financial progress, so there should have been some great appreciation for why the world still debates what the Fed will or won’t do; there, of course, wasn’t. Somehow, in all the fine academic stupor of exotic settings, no one will explain how we all got here, and, worse, remain here.
And Gary D. Cohn, the president of Goldman Sachs, said at a panel discussion on Saturday that if you had just awakened from a yearslong slumber and had to make a decision about raising rates, you would most likely choose not to do so.
‘We have a global economic growth problem,’ Mr. Cohn said.
That’s truly the point, as you might have been asleep a year or eight years and it would not truly matter – we’re still here. While there were few interesting-sounding panel discussions, there should have been several days, maybe even the whole works, dedicated to at least reminiscing how ‘they’ came up with trillions upon trillions upon trillions (so much that billions no longer seem important) in financial units of all kinds and still ‘we have a global economic growth problem.’ By count of that simple reckoning, there is no global growth problem apart from the monetarism that so devastatingly and clearly coincides.

This post was published at David Stockmans Contra Corner by Jeffrey P. Snider ‘ October 13, 2015.

BRIC countries facing unprecedented collapse – U.S. wins major round of global currency wars

September 2015 – GLOBAL ECONOMY – Brazil, which saw its credit rating downgraded to junk last week, is only the latest BRICs economy to crumble in the face of a strong dollar, a global trade slowdown and the prospect of higher US interest rates. Russia is already in recession; many economists believe China is heading towards a ‘hard landing’; and South Africa, which managed to append itself to the emerging-markets club in 2010, is on the brink of recession. Of the group once identified as the shining economic beacons of the future, only India has so far remained relatively insulated from what World Bank chief economist Kaushik Basu described last week as the ‘troubled’ state of the global economy. It wasn’t supposed to be like this. In 2009, as the rich western countries were surveying the chaos wrought by the financial-market crisis, China was cranking up an immense fiscal stimulus program to boost demand and kick-start growth. Beijing’s ability to muster financial firepower in the face of the crisis seemed to underline the shift of power towards the nimble emerging nations, with their rapidly growing middle classes, and away from the sclerotic Old World.
‘Decoupling’ became fashionable. Instead of being tethered to the fortunes of the mighty US (‘When America sneezes, the world catches a cold,’ went the old saw), emerging economies would break free, nurturing trade links across the developing world and fostering homegrown demand. But seven years on from the collapse of Lehman Brothers, the chaos wrought across financial markets in emerging countries by the prospect of a rise in US interest rates – which could come as soon as the Federal Reserve’s meeting this week – is a reminder of how closely tied the BRICs economies remain to the world’s biggest economy, and vice versa. The term BRICs was coined by former Goldman Sachs economist Jim (now Lord) O’Neill – George Osborne’s freshly ennobled Treasury minister. He never saw their rise as inevitable, but the acronym captured a widespread sense of optimism, and indeed China, India and Brazil in particular have made extraordinary strides in lifting their populations out of poverty.

This post was published at UtopiatheCollapse on September 14, 2015.

21/5/2105: The Darker Side of Transparency?

World Bank paper published earlier this month and titled “The Dark Side of Disclosure: Evidence of Government Expropriation from Worldwide Firms” raises some very interesting questions about the relationship between corporate transparency and government incentives.
The paper by Liu, Tingting and Ullah, Barkat and Wei, Zuobao and Xu, Lixin Colin (May 4, 2015, World Bank Policy Research Working Paper No. 7254: looks at “the effects of voluntary accounting information disclosure through auditing on firm access to finance, exposure to corruption, and sales growth.” The authors use data for more than 70,000 firms in 121 countries.
The authors find that “…disclosure can be a double-edged sword” with overall effect depending on institutional capital present in a specific country.

This post was published at True Economics on Thursday, May 21, 2015.

China Targets Dollar, Washington Has Conniptions

Now even Israel – joined at the hip to the US though the relationship has run into rough waters – has applied to become a founding member of the China-led Asian Infrastructure Investment Bank. Despite US gyrations to keep them from it, over 40 countries, including bosom buddies Australia, Britain, and Germany, have signed up to join. Japan is still wavering politely.
The US government sees the China-dominated AIIB as competition to the US-dominated World Bank and Asian Development Bank. But now that it is clear even to the White House that the US can’t stop the tide, Treasury Secretary Jack Lew backpedaled vigorously on Tuesday. The government would welcome the AIIB, he suddenly said, as long as certain conditions are met, such as adequate transparency.
So after this bruising setback, the US now has another opportunity to oppose China’s financial and monetary ambitions.
China is trying to get the IMF to bestow reserve currency status on the yuan, which would add the yuan to a glorious basket that includes the dollar and the euro – currently the dominant reserve currencies with a 63% and 22% share respectively. So it has been lobbying core members of the IMF behind the scenes for support, and they’re coming around despite US conniptions, the Wall Street Journal reported.
China also wants the yuan to become part of the IMF’s Special Drawing Rights ‘in the foreseeable future,’ Yi Gang, Director of the State Administration of Foreign Exchange and Deputy Governor of the People’s Bank of China, pointed out a couple of weeks ago. With the yuan, SDRs – which currently include only the dollar, the euro, the yen, and the British pound – would ‘undoubtedly’ be more ‘representative’ of the global economic landscape, Yi said.

This post was published at Wolf Street on April 2, 2015.

Obama Goes After UK, Australia, the World for “Constant China Accommodation”; US Influence Clearly Waning

Constant China Accommodation
A major spat between the US and the UK broke out last week with the Obama administration attacking UK prime minister David Cameron and the UK for Britain’s decision to join AIIB, a new China-sponsored financial institution that allegedly could rival the World Bank.
In particular, Obama accused David Cameron of “Constant China Accommodation“.
The Obama administration accused the UK of a ‘constant accommodation’ of China after Britain decided to join a new China-led financial institution that could rival the World Bank.
The rare rebuke of one of the US’s closest allies came as Britain prepared to announce that it will become a founding member of the $50bn Asian Infrastructure Investment Bank, making it the first country in the G7 group of leading economies to join an institution launched by China last October.
Thursday’s reprimand was a rare breach in the ‘special relationship’ that has been a backbone of western policy for decades. It also underlined US concerns over China’s efforts to establish a new generation of international development banks that could challenge Washington-based global institutions. The US has been lobbying other allies not to join the AIIB.
Relations between Washington and David Cameron’s government have become strained, with senior US officials criticising Britain over falling defence spending, which could soon go below the Nato target of 2 per cent of gross domestic product.
A senior US administration official told the Financial Times that the British decision was taken after ‘virtually no consultation with the US’ and at a time when the G7 had been discussing how to approach the new bank.
‘We are wary about a trend toward constant accommodation of China, which is not the best way to engage a rising power,’ the US official said.

This post was published at Global Economic Analysis on March 16, 2015.