Daily Digest

Daily Digest 10/24 - We Can't Spend Our Way Back To Normal, The Global Debt Clock, Why OWS Is Important

Monday, October 24, 2011, 10:40 AM
  • Why We Can't Spend Our Way Back To Normal
  • Eurozone Summit - Despair And Backbiting In The Corridors Of Power
  • Bumi Offers Assets To Chinese Wealth Fund To Cut £1.3bn Debt
  • What No One Is Telling You About Medicare
  • Occupy Wall Street is Important
  • Dalio: "There Are No More Tools In The Tool Kit" - Complete Charlie Rose Transcript With The Head Of The World's Biggest Hedge Fund
  • The Global Debt Clock
  • U.S. To Increase Oil Production and Begin Mining Rare Earth Minerals
  • Offshore Turbines More Powerful than First Nuclear Plant

Our 'What Should I Do?' guide has steps to cook, see & stay warm in times of power outage

Economy

Why We Can't Spend Our Way Back To Normal (Jeff B.)

According to my estimates, the number of new items of clothing bought by the average American rose from 41 to 67 items per year. Furniture purchases rose 150%. Consumer electronics — from coffee makers to laptops to cell phones — rose between 100 and 1000% depending on the item, and it wasn’t just the cool gadgets. We bought 180% more vacuum cleaners. By both weight and volume, material acquisition hit all-time highs.

Eurozone Summit - Despair And Backbiting In The Corridors Of Power (pinecarr)

The ever-worsening eurozone crisis has sent relations between its leaders to an all-time low, reports Bruno Waterfield in Brussels.

Bumi Offers Assets To Chinese Wealth Fund To Cut £1.3bn Debt (pinecarr)

Bumi, the Indonesian coal mining giant created by Nat Rothschild, is considering approaching China Investment Corporation (CIC) about reducing some or all of the $1.3bn (£815m) debt it has in one of its subsidiaries in return for control of a series of exploration assets.

What No One Is Telling You About Medicare (Jeff B.)

Medicare, the federal health insurance program for seniors and disabled Americans, represents a giant chunk of your nest egg: A married couple who retired last year can expect to reap $350,000 in lifetime benefits, according to calculations by the Urban Institute's Eugene Steuerle and Stephanie Rennane. A couple who are 46 today can expect to get $525,000 worth.

Just one problem: That constantly growing cost is getting harder and harder to pay. By 2030, maintaining Medicare's current level of benefits would push up government spending to 24% of the economy, and even higher as the years roll on. Taxes, however, are set to generate revenue equal to only about 18% of gross domestic product.

Occupy Wall Street is Important (Jaime)

For the past 3 years, it has appeared as though the Jamie Dimons of the world, with the aid of the Robert Rubins of the world, were going to exit the crisis with their personal hundreds of millions of dollars intact, regardless of their having made that money by taking on risk on a scale that would threaten the world's economy. That's recklessness. And when you act recklessly and it damages other people, you are liable for damages. And, often, you are also liable for criminal sanction.

Of course, recklessness is insufficient to describe what the banks did leading up to the bailouts. Along with their recklessness, they committed fraud. Fraud, deceit perpetrated for profit, is always a criminal offense.

Dalio: "There Are No More Tools In The Tool Kit" - Complete Charlie Rose Transcript With The Head Of The World's Biggest Hedge Fund (pinecarr)

When it comes to reading the world's "tea leaves", few are as capable as Ray Dalio, head of the world's biggest (macro) hedge fund, Bridgewater Associates. So when none other than Ray tells PBS' Charlie Rose that "there are no more tools in the tool kit" of fiscal and monetary policy to help America kick the can down the road, perhaps it would behoove the respective authorities to sit down and listen.

The Global Debt Clock (ScubaRoo)

The clock is ticking. Every second, it seems, someone in the world takes on more debt. The idea of a debt clock for an individual nation is familiar to anyone who has been to Times Square in New York, where the American public shortfall is revealed. Our clock shows the global figure for all (or almost all) government debts in dollar terms.

Energy

U.S. To Increase Oil Production and Begin Mining Rare Earth Minerals (James S.)

The U.S. Energy Information Administration (EIA) is reporting U.S. daily crude oil production was 5.891 million barrels of oil per day for the week of October 14, 2011. A look at the EIAs chart of weekly U.S. crude production back to January of 1983 shows a slow production fall over two decades. But since January of 2009 the climb back has been steady rising from under 5 million barrels per day to now closing in on 6 million.

Offshore Turbines More Powerful than First Nuclear Plant (jdargis)

Germany is the first highly developed, industrialized nation to decide to be dependent on renewable energy in the future. Germany is also the country where nuclear fission was discovered and the internal combustion engine was invented. By 2020 Germany, a country dotted with auto plants, chemical factories and steel mills, is to derive fully one fifth of its power from wind turbines.

Article suggestions for the Daily Digest can be sent to [email protected]. 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."

12 Comments

saxplayer00o1's picture
saxplayer00o1
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rjs's picture
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yen

with japanese debt levels over 230% of GDP, why does the yen continue to hit record highs?

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Johnny Oxygen
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rjs wrote: with japanese
rjs wrote:

with japanese debt levels over 230% of GDP, why does the yen continue to hit record highs?

Excellent question. And with Europe about to collapse and all the problems within the US why is the Dow heading back up to 12,000?

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Damnthematrix
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Canada warns EU on oil sands ranking plan

Canada warns EU on oil sands ranking plan
October 24, 2011 - 8:04AM

http://www.smh.com.au/business/world-business/20111024-1mf1m.html

Canada has warned that it will "defend its interests" if the European Union (EU) goes through with a proposal to rank Canadian oil sands as a highly polluting fuel.

In a letter to EU Energy Commissioner Guenther Oettinger, Canadian Natural Resources Minister Joe Oliver also said the European Commission's Fuel Quality Directive (FQD) potentially violates the EU's international trade obligations.

"Canada objects to policy measures that ignore evidence-based approaches to meet the stated goal of the FQD, in favour of what appears to be an asymmetrical and arbitrary proposal," the letter said.

"If unjustified, discriminatory measures to implement the FQD are put in place, Canada will not hesitate to defend its interests."

The letter is part of a broader push by Canada, the western province of Alberta and the energy industry to sway the EU from labeling the lucrative export as inherently dirty.

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saxplayer00o1
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Analysis: California school districts to take down reserves

 

"When California lawmakers reached a deal to close a $10 billion budget gap in June, critics warned the agreement relied too heavily on $4 billion in additional tax revenue projected to materialize with a rapidly rebounding economy.

Now, with the state's recovery stalling, the new revenue is not coming in -- setting the stage for automatic budget cuts that could threaten the solvency of some state's largest school districts.

According to the state controller's office, revenue since the start of fiscal year has fallen $705 million short of projections. That signals big new cuts to school spending, said political scientist Larry Gerston of San Jose State University.

"There is nothing out there that indicates that $4 billion will appear," Gerston said.

School districts are in an especially bad spot because teacher payrolls, by far their largest expense, are off limits; the 325,000-member California Teachers Association won a guarantee against teacher layoffs as part of the budget negotiations."
 

 

ECB's Trichet wants more euro zone power over states

Vatican calls for global authority on economy

saxplayer00o1's picture
saxplayer00o1
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Debts of states over $4 trillion: Budget group

"The total of U.S. state debt, including pension liabilities, could surpasses $4 trillion, with California owing the most and Vermont owing the least, according to an analysis released on Monday.

The nonprofit State Budget Solutions combined states' major debt and future liabilities, primarily for pensions and employee healthcare, unemployment insurance loans, outstanding bonds and projected fiscal 2011 budget gaps. It found that in total, states are in debt for $4.2 trillion.

The group, which follows state fiscal conditions and advocates for limited spending and taxes, said the deficit calculations that states make "do not offer a full picture of the states' liabilities and can rely on budget gimmicks and accounting games to hide the extent of the deficit.""
 

Mirv's picture
Mirv
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with japanese debt levels over 230% of GDP, why does the yen con

I have been wondering this too.   I noticed in a financial summary last month that compared countries, that of all countries, the Japanese people have the best (highest) asset to debt ratio (the US had the worst).  That day I drove to work (Virginia) in my Toyota and stopped for gas and coffee at a Japanese company (7-11) on my way to work for my Japanese clients.   Also, the "national debt" incurred by the central government is almost all held by Japanese citizens.  Most individual people I know in Japan have very high savings, often invested in America as well as in their own national debt.  Last, the national sales tax in Japan is purposely hidden from the people (when you buy something, the tax is already included and never listed)  and the politicians plan to increase sales tax to at least 10 percent (maybe 25% some day?)  at which time it will just seem like a little inflation.  There's more smoke and mirrors here and less in your face confrontation of reality, which makes it easier to control and extract from the people, I suppose.

Regarding the stock market's continual rise: I remember when the US had horrible inflation in the 70s, the stock market shot up too.  IF the market assets truly reflect ownership of companies that grow and distribute food, mine oil, and make things, then why shouldnt such stock be more important than gold, since you cant eat gold, or wear gold to keep warm, or burn it in your car?  If the price of oil, clothing and food double, then why shouldnt the evaluation of assets used to make those things double (or more) in value?  Following this line of logic, the obscene 20% market valuation associated with banks is probably the real anomaly which represents waste or bogus value.

 

 

 

 

 

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guardia
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Re: yen
rjs wrote:

with japanese debt levels over 230% of GDP, why does the yen continue to hit record highs?

From personal experience living here in Japan, I see two main reasons:

  1. People work their asses off. Case in point: When the nuclear plants were exploding in Fukushima, practically no one (well, no Japanese employee) left Tokyo, even only for a few days, and they continued working as normally as they could, given the circumstances (power failures, cracked roads, screwed up train schedules, half-empty grocery stores, etc.)
  2. The ongoing "reverse carry trade" (Japanese are bringing money home for safety, just like it has started in Europe, particularly in France, this is why the euro has been going up lately).

But the single and only reason we hear in the media is:

  • "Those damn speculators, let them all burn in hell" wouldn't be too far from the official replies.

Yeah, so much for objectivity... They wouldn't want Japanese to know they should work less, now would they?

Samuel

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Arthur Robey
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Dr Edmond Storms discusses the consequence of Cold Fusion.

Good catch Ruby.

http://www.youtube.com/watch?feature=player_embedded&v=nmyl7dV6hg0

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Ford_Ruiz
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Global Debt Clock

 I wasn't aware of The Economist's Global Debt Clock, nice...

 

__________________

www.tradingclearly.com

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Damnthematrix
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It has been talked about for years
It has been talked about for years

This is what a retired (CSIRO - Australia's Science Peak Body) energy scintist thought of this when I asked for his opinion:

 

Dear Mike,

                        I had a quick look at this stuff on cold fusion. It has been talked about for years, but totally discredited scientifically. There are Nickel Hydride batteries, but that is only for energy storage. I did a quick Google search of “andrea rossi cold fusion” because it seems to have originated with Andrea Rossi at the University of Bologna. There, I came across the interesting comment:

 

Rossi and Focardi’s paper on the nuclear reactor has been rejected by peer-reviewed journals, but the scientists aren’t discouraged. They published their paper in the Journal of Nuclear Physics, an online journal founded and run by themselves, which is obviously cause for a great deal of skepticism. They say their paper was rejected because they lack a theory for how the reaction works. According to a press release in Google translate, the scientists say they cannot explain how the cold fusion is triggered, “but the presence of copper and the release of energy are witnesses.”

 

In other words, it is a fraud. It is what happens when “absolute desperation” meets a smart conman. It is like that joke about “Did you know that the word gullible has been deleted from the dictionary?”

 

Apparently, their 1 MW unit is due to be launched this month, so let us wait and see! For details of this unit, see:

 

http://pesn.com/2011/09/14/9501913_Rossis_One_Megawatt_Reactor_Gets_A_New_E-Cat_Model/

 

Regards,

 

Chris Mardon

Arthur Robey's picture
Arthur Robey
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For a very good reason.

Dear Mike,

                        I had a quick look

That about covers it.

Still, it beats what the other peers do.

The reasons for the West's rejection are discussed by Dr. Edmund Storm in Ruby's video.

Hrepeats itself, with the boot on the other foot this time. This time it not the Chinese who are being reactonary to new ideas, but the West. Why should we change the status quo?

 http://www.youtube.com/watch?feature=player_embedded&v=nmyl7dV6hg0

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