Daily Digest

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Daily Digest 4/20 - Relocalizing the Trust Horizon, Systemically Dangerous Government Institutions

Saturday, April 20, 2013, 10:39 AM

Economy

Nicole Foss – Relocalising the Trust Horizon (Arthur Robey)

So what happens is when you reach a limit in finance – and these limits are endogenous, you don’t need to trigger an event – you reach a limit in finance, and the changes can be extremely rapid. So if you look at what happened in Cyprus for instance, in two weeks they went back 50 years – they went from being a modern economy to having the banks closed, the ATMs empty, the shops shelves mostly empty, a cash-only economy, capital controls, and the value of these banks went from their full value down to next to nothing in a very short space of time. And so when you have the value of human promises suddenly disappearing, you crash the system.

'Catastrophic' budget laid out by Philly schools (Thomas C.)

Laying out the grimmest possible reality is a strategic move, as the district makes its case in Harrisburg and City Hall for more funding and sits at the negotiating table with its unions, including the 15,000-member Philadelphia Federation of Teachers.

Ireland’s cash-strapped borrowers face ban on vacations, limits on food spending (westcoastjan)

Monthly individual living expenses for people seeking debt relief may be capped at 35.73 euros ($46.7) for clothing, 247.04 euros for food and 33.40 euros for personal-hygiene items, the Insolvency Service of Ireland said in Dublin today. Households in towns with “adequate public transport links” may not need a car, while private health insurance may also be banned, the ISI said.

Canadian deposits safe under bail-in, but no guarantee: Carney (westcoastjan)

The Canadian central banker, who is a few months away from heading the Bank of England, says banks must have a set of buffers in place to draw on in an emergency.

Speaking during a televised interview in Washington, Carney appeared to disagree with the approach taken in Cyprus last month that involved taxing deposits, but would not state his personal position because he said it might be misinterpreted.

Media tycoon David Black’s proposed Kitimat refinery gets Chinese backing (westcoastjan)

China’s financial backing removes the main hurdle to the project, which has been downplayed by the Canadian oil community.

Terence Corcoran: Systemically Dangerous Government Institutions (SDGI) (westcoastjan)

The collective of international agencies, finance ministers and central bank officials should perhaps be known as the Systemically Dangerous Government Institutions (SDGI). Severally and jointly, members of SDGI provide a cornucopia of global economic policy experimentation unseen in world history. The results have ranged from dismal to uneven.

Has gold hit bottom? As big investors rush out, consumers rush in (westcoastjan)

Gold traders are divided on whether bullion will extend declines after the biggest plunge in three decades generated ‘extraordinary’ buying from investors and jewellers.

Tariff Hikes: 'Tax On Everything' Raises Opposition Ire As Retailers Warn Of Price Hikes (westcoastjan)

The Retail Council of Canada and stores such as Canadian Tire are already lobbying the federal government to try to rescind some of the tariff hikes. The Finance Department estimates that changes to the General Preferential Tariff (GPT) will bring $333 million a year in new revenue when they come into effect on Jan. 1, 2015. Those costs will be incurred by the importers and most likely will be passed on to the consumers.

Who Said The Hydra Would Take It Lying Down (Thomas C.)

Under permanent backwardation, as no gold were offered for sale at any price, the ‘price of gold’ would become a vacuous concept. Gold, silver and, soon enough, all other highly marketable goods would only be available through barter. In other words, paper money as we know it would simply cease to function. We cannot fathom how our complex world economy could operate under such circumstances. One thing was certain, though: the world economy would contract in a way that would make the contraction in the 1930’s appear as a blip on the screen.

Supercomputers could generate warnings for stock crashes (Arthur Robey)

"If improved monitoring and regulation can build some greater trust in the market, everyone benefits," said David H. Bailey, director of the lab's new Center for Innovative Financial Technology, which is building a bridge that links computational science and financial market communities.

Ice Ice Baby (Arthur Robey)

This week we speak to Professor Peter Wadhams, Professor of Ocean Physics, and Head of the Polar Ocean Physics Group in the Department of Applied Mathematics and Theoretical Physics, at the University of Cambridge. Prof. Wadhams is an expert in Arctic sea-ice, and is a review editor for the physical sciences component of the upcoming 2014 IPCC (or Intergovernmental Panel on Climate Change ) Fifth Assessment Report. We discuss the precarious nature of the Arctic Sea-Ice, the end of summer ice altogether, the problems with the IPCC reports, climate tipping points, the release of massive quantities of methane into the atmosphere, and likelihood of Southern Europe turning into desert in this century.

Gold Reveals Global Economy on Thin Ice (Nervous Nelly)

To understand the real reason behind gold’s selloff, investors first need to acknowledge that it’s not just gold coming under pressure. Industrial and growth stocks are plummeting across the board. For example, Caterpillar (CAT) is down 20% in the last 30 days, base-metal commodities are headed into bear market territory and copper is down 15% since February and is now trading at a over a 52-week low. Oil is also dropping sharply of late, falling down to $86 per barrel from the mid-90’s a few week ago. Also, the recent stock market rally has been very narrowly based. Those equities that have been working are defensive in nature like healthcare and consumer staples…that is not representative of a healthy market. What gold is really telling us is that the global economy is on very thin ice.

Energy

World’s largest OTEC power plant planned for China (Jason C.)

Lockheed Martin has been getting its feet wet in the renewable energy game for some time. In the 1970s it helped build the world’s first successful floating Ocean Thermal Energy Conversion (OTEC) system that generated net power, and in 2009 it was awarded a contract to develop an OTEC pilot plant in Hawaii. That project has apparently been canceled but the company has now shifted its OTEC sights westward by teaming up with Hong Kong-based Reignwood Group to co-develop a pilot plant that will be built off the coast of southern China.

Deepwater Horizon: Surviving the oil spill (jdargis)

Three years on from the Deepwater Horizon oil spill, which devastated the Gulf Coast of the US, the residents of Grand Isle, Louisiana, are still living with the effects of the disaster.

Environment

Superstorm Sandy Shook the Earth (Jason C.)

Storm-induced seismic vibes aren't a newly recognized phenomenon. In 2005, ground motions triggered by Hurricane Katrina were picked up by seismometers in California. And even storms that remain far from land can trigger ground motions, Sufri and Koper note.

Gold & Silver

Click to read the Gold & Silver Digest: 1/18/13

Provided daily by the Peak Prosperity Gold & Silver Group

Article suggestions for the Daily Digest can be sent to dd@peakprosperity.com. All suggestions are filtered by the Daily Digest team and preference is given to those that are in alignment with the message of the Crash Course and the "3 Es."

6 Comments

westcoastjan's picture
westcoastjan
Status: Gold Member (Offline)
Joined: Jun 4 2012
Posts: 485
re Nicole Foss article

This is the great article! Well worth the read. Her belief that a financial system re-boot is the first thing that has to happen before we can even begin to address other global issues such as resource depletion, pollution, population etc is bang on, IMHO. My interpretation is that of the 3E's, she is saying the financial aspect, economy, must be a capital E in terms of focus, while energy and environment are lower case e's. That is not to say they are not crucially important, just that we must give our attention to the most pressing problem first.

I like her idea that there need not be a single trigger event to bring on a crash of sorts. Sometimes we are all looking for a Black Swan event to give us the signal of pending implosion. Rather, as she points out with Cyprus, a small scale systemic collapse can happen very quickly without there having been any one big event to trigger it. Whether it is clear to the masses or not, we are witnesses small scale systemic collapses all around us on a regular basis - the bankruptcy of Detroit being one example. An accumulation of smaller breakdowns here and there can only morph into much larger breakdown, in the same way that a small group of campfires that burn out of control will eventually become a forestfire.

Our task as I see it is to take to heart in a serious way the message of both Nicole and CM, which is to channel our energies into developing our local economies. This is the one thing that very much remains within the realm of our control and ability.

Jan

Arthur Robey's picture
Arthur Robey
Status: Diamond Member (Offline)
Joined: Feb 4 2010
Posts: 2700
Why waste a crisis?

Nicole sees a re-boot  of the financial system.

There is something that has come in from Left field. A dot that needs to be joined.

The Internet. 

An empire's size is dependant on it's speed of communication.

Asimov.

Who knows the balance of payment between Boston and San Francisco? Who cares?

Annon.

We can either do the traditional thing and go to bloody war and then start thinking and talking and finding a solution or we can skip the Lizard bit and go straight to finding a solution.

I was in Korea. What did I find? Why, they are just like us! I married a Communist economist. What did we discover? Communists and Capitalists have to get out of bed when the alarm goes off and drag their sorry carcases off to work. Idealism makes not one jot of difference to the outcome.

We will discover this truth. Either after a war, or before. Choose.

Let me assume that you, dear reader, are not a lizard.

This is a global problem and requires a global fix.

Let us not exagerate the importance of money and gold. They are Models of the true economy. Models can be discarded like last night's lover. (Pause for thought.)

We are going to have a pretty thin time of it anyway, what with the Climate Catastrophe and unavailable oil. Why make things more difficult by not siezing the opportunity to have a World Note that is a true reflection of the state of the underlying world economy?

This should be a walk in the park compared with the other issues we face. 

Asimov.

Arthur Robey's picture
Arthur Robey
Status: Diamond Member (Offline)
Joined: Feb 4 2010
Posts: 2700
A Breakfast distraction.

A bit into this video we are told the wheat sensitivity is being caused by genetic modifications to wheat to make the plant less appealing to pests.

Whether the method is GE or traditional breeding does not affect the result.

Arthur Robey's picture
Arthur Robey
Status: Diamond Member (Offline)
Joined: Feb 4 2010
Posts: 2700
Nice find Nelly.

To understand the real reason behind gold’s selloff, investors first need to acknowledge that it’s not just gold coming under pressure. Industrial and growth stocks are plummeting across the board. For example, Caterpillar (CAT) is down 20% in the last 30 days, base-metal commodities are headed into bear market territory and copper is down 15% since February and is now trading at a over a 52-week low.

Source

Over here in Australia they are admitting that the capital investment projects (mines and infrastructure) have stopped. I am interested that there is no atempt to put anything into context.

The context is the Limits to Growth report. The bit where they say that we will be forced to divert capital from industry into agriculture in order to feed ourselves.

Catastrophe? I see no meteor! Willfully blind.

gillbilly's picture
gillbilly
Status: Gold Member (Offline)
Joined: Oct 22 2012
Posts: 401
Australian mines

Arthur, I talked with our relatives from Dubbo and Gilgandra and they say the same thing. Mining in all PM was booming for many years with contracts stretching out 4 years. Contracts are only stretching 6 months now. One of our relatives works in the mining industry and says they are laying off in droves.

westcoastjan's picture
westcoastjan
Status: Gold Member (Offline)
Joined: Jun 4 2012
Posts: 485
further to my first post...

...on the Nicole Foss article, here are a couple of links that show some of the things being done on the BC coast to promote "local economies"

http://healingcities.org/services/dimensions/

http://neweconomy.ca/

Much of what they are trying to action ties in very nicely with the 3e's. The community currency is intriguing. I am going to the idea jam today to learn more and find ways to get involved. It will be interesting to see the level of attendance and enthusiasm.

It is somewhat heartwarming in the midst of all the negative global news that there are groups of people trying to effect change at the grassroots level. Imagine the powerful movement that could arise if each of our communties embraced such thinking.

Jan

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