Daily Digest

Daily Digest 1/2 - Things That Will Happen In 2012, Pakistan To Produce Natural Gas, Iran Produces First Nuclear Fuel Rod

Monday, January 2, 2012, 10:40 AM
  • 2012 - Things That Will Happen 
  • Enemy Of The State
  • Austerity Reigns Over Euro Zone as Crisis Deepens
  • Pakistan to Produce Natural Gas - By Burning Underground Coal
  • Did Fukushima Really Put a Nail in Atomic Power's Coffin?
  • Iran Says It Has Produced First Nuclear Fuel Rod
  • How Iran’s Saber Rattling Could Affect Oil Prices and the Environment

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Economy

2012 - Things That Will Happen (roddickrr)

Mitt (the suit) Romney will be the Republican presidential candidate. The nomination will be a fight to the very end. Newt (the fool) Gingrich will come close, but will not get the nod. Romney will announce that his running mate will be South Carolina Governor, Nikki Haley. Her presence on the ticket will give Mitt a chance.

Enemy Of The State (jdargis)

Especially to the self-selected group that comes to the Iowa Republican caucuses, Paul’s positions are pulse quickening. If you are antitax, Paul has that sentiment nailed more than any other candidate. If you are antiwar, Paul is right there with you. If you fear for your personal freedoms, Paul has you covered. And if you want a sweeping philosophy, deeply grounded in fundamental texts (Hayek, von Mises, Rothbard), Paul is your man. Nobody has a better claim to be a protest candidate. He’s the only one who has ever run for office from a third party. He’s not about passing bills; he’s about root-and-branch change. His popularity, even if it’s temporary, demonstrates that all politics isn’t necessarily local—that big ideas can exert a pull on voters, too.

Austerity Reigns Over Euro Zone as Crisis Deepens (jdargis)

While the economic picture in the United States has brightened recently with more upbeat employment figures, Europe remains mired in a slump. Most economists are forecasting a recession for 2012, which will heighten the pressure governments and financial institutions across the Continent are seeing.

Energy

Pakistan to Produce Natural Gas - By Burning Underground Coal (James S.)

With about 50 per cent less electricity generation capability than the actual demand, Pakistan’s National Grid is facing more than a 5,000-megawatt shortfall in power generation, leading to blackouts in both urban and rural areas of the country. Due to unscheduled shortages by the National Power Control Center, urban areas are facing unscheduled minimum 8-hour power blackouts each day, while in rural areas the blackouts can last as long as 14 hours.

Did Fukushima Really Put a Nail in Atomic Power's Coffin? (James S.)

If you are doubtful about nuclear power, or you are simply a political opportunist, this event was the final nail in the coffin, the proof that the end had arrived. For you, it provided more evidence that nuclear power is inherently unsafe and that its use, as American scientist Alvin Weinberg once said, is a Faustian bargain. (It was a remark that Weinberg wished he had not made and which his staff and supporters tried to justify by explaining that in the German legend, Faust finally gets his soul back, having foolishly pledged it to the devil.)

Iran Says It Has Produced First Nuclear Fuel Rod (jdargis)

The announcement on the fuel rod came just a day after Tehran proposed a new round of talks on its nuclear program with six world powers. The last round of negotiations between Iran and the five permanent members of the U.N. Security Council plus Germany was held in January in Istanbul, Turkey, but it ended in failure.

How Iran’s Saber Rattling Could Affect Oil Prices and the Environment (James S.)

Iran bombastic talk has some merit, having mine-laying and missile capability to wreak some damage to ships and seaman’s lives, but the real candidate for disaster would be the environment, as a lot of oil would spill into waters at war. Iran could go down in history as causing the single largest environmental disaster even seen. If the oil spilled was substantial and stays mostly in the gulf, the mess could turn a seawater gulf into dead zone. The Persian Gulf doesn’t seem to be as deep or robust or is as large as the Gulf of Mexico.

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7 Comments

KennethPollinger's picture
KennethPollinger
Status: Platinum Member (Offline)
Joined: Sep 22 2010
Posts: 653
Understanding Debt

 Chris.  Please read and then respond to Paul Krugman'sw NYTimes column in today's

paper.  Tittle: "Nobody Understands Debt"   Krugman does not seem to have the same

take on the urgency to pay down the national debt as you do.  Any comments?

Thanks, Ken

 

Woodman's picture
Woodman
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Posts: 1028
Krugman doesn't understand unsustainable trends

 

I scanned that column by Krugman:

www.nytimes.com/2012/01/02/opinion/krugman-nobody-understands-debt.html

I would agree with him that the US debt doesn't have to be paid back; we just have to be able to service it to keep the happy party going.  But I don't agree that debt won't be a problem in the future just because it isnt' a big problem now.  

It's the exponential growth trend that will ruin us, as debt rise ever faster and faster than growth in GDP, and there are no indications that this trend will be reversed.  And the reported debt doesn't include the libabilities for unfunded mandates like SS and Medicare.

The argument that the debt is okay since it's money we owe ourselves ignores the trend for an increasing percentage of foreign owned debt (32% as of Jan 2011):

en.wikipedia.org/wiki/United_States_public_debt

Krugman also ignores that interest rates are being artificially depressed by the Fed's manipulations or Financial Repression.

The only way out of a predicament is to recognize and avoid it before you get into it to begin with!

Damnthematrix's picture
Damnthematrix
Status: Diamond Member (Offline)
Joined: Aug 10 2008
Posts: 3998
Woodman wrote:   I scanned
Woodman wrote:

 

I scanned that column by Krugman:

www.nytimes.com/2012/01/02/opinion/krugman-nobody-understands-debt.html

I would agree with him that the US debt doesn't have to be paid back; we just have to be able to service it to keep the happy party going.  But I don't agree that debt won't be a problem in the future just because it isnt' a big problem now.

That is precisely the point......  the EXPONENTIAL GROWTH of the DIFFERENCE between the GDP and the interest owed is what is becoming problematic now....  So Krugman doesn't understand basic mathematics!  The Debt to GDP ratio is just growing and growing and growing, and one day none of us will be earning enough of anything to service the debt, especially as Resource Depletion slams us against the Limits to Growth wall...

Not a clue.

Mike

KennethPollinger's picture
KennethPollinger
Status: Platinum Member (Offline)
Joined: Sep 22 2010
Posts: 653
Debt comments by Martenson Community

 Thanks guys for the clarity.  No disrespect, but I'd like to see Chris's take on it all.

After all, Krugman has a BIG following and generally seems to know what he is talking about.

Ken

saxplayer00o1's picture
saxplayer00o1
Status: Diamond Member (Offline)
Joined: Jul 30 2009
Posts: 4065
Krugman

After all, Krugman has a BIG following and generally seems to know what he is talking about.

Ken

"Dubya's Double Dip?

By PAUL KRUGMAN
Published: August 02, 2002"

(Last paragraph on the page)

"The basic point is that the recession of 2001 wasn't a typical postwar slump, brought on when an inflation-fighting Fed raises interest rates and easily ended by a snapback in housing and consumer spending when the Fed brings rates back down again. This was a prewar-style recession, a morning after brought on by irrational exuberance. To fight this recession the Fed needs more than a snapback; it needs soaring household spending to offset moribund business investment. And to do that, as Paul McCulley of Pimco put it, Alan Greenspan needs to create a housing bubble to replace the Nasdaq bubble."

rhare's picture
rhare
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Joined: Mar 30 2009
Posts: 1323
Krugman Mumbo Jumbo
KennethPollinger wrote:

No disrespect, but I'd like to see Chris's take on it all. After all, Krugman has a BIG following and generally seems to know what he is talking about

Perhaps Chris will post, but I think he has already covered it pretty well in the Crash Course on the section on Debt.

What I find is that Krugman and the other Keynesians economic models are completely divorced from the real world of resources and labor.  As the Crash Course points out, money (and therefore debt) is a claim on human labor.  When there is not enough human labor (or he resources to support it) the claim will be voided.  We are now at that point. 

I find common sense works really well in examining economics.  If it doesn't make sense then it's probably mumbo-jumbo that will fail in the long run.  Do keep in mind, that experts like Krugman that shovel this BS can keep people baffled for quite a long time.  For the US, 40 or 100 years depending on when you think things really went off the rails.

 

saxplayer00o1's picture
saxplayer00o1
Status: Diamond Member (Offline)
Joined: Jul 30 2009
Posts: 4065
World’s Biggest Economies Face $7.6T Debt

 

(For 1/3)

"Governments of the world’s leading economies have more than $7.6 trillion of debt maturing this year, with most facing a rise in borrowing costs.

Led by Japan’s $3 trillion and the U.S.’s $2.8 trillion, the amount coming due for the Group of Seven nations and Brazil, Russia, India and China is up from $7.4 trillion at this time last year, according to data compiled by Bloomberg. Ten-year bond yields will be higher by year-end for at least seven of the countries, forecasts show.

Investors may demand higher compensation to lend to countries that struggle to finance increasing debt burdens as the global economy slows, surveys show."

"General Electric Co. and Ally Financial Inc. lead U.S companies that have $620 billion of bonds and loans coming due in 2012 as borrowing costs start to rise from record lows with the economy strengthening.

GE, the world's largest maker of jet engines, faces $78.7 billion of notes maturing in 2012, the most of any U.S. company, according to data compiled by Bloomberg. Detroit-based Ally has $11.7 billion that needs to be repaid, the largest requirement of any speculative-grade issuer. Borrowers must refinance $498 billion of debt in 2013 and $505 billion in 2014, Bloomberg data show."

Other headlines: 

  1. Global oil search may cost $595 billion in 2012
  2. Spain, Germany, France Debt Insurance Costs Rise
  3. $96b sale likely to deepen India's worst bond losses
  4. Ambrose Evans-Pritchard: 2012 could be the year Germany lets the euro die
  5. Billions needed to upgrade America’s leaky water infrastructure
  6. Spain warns deficit could top 8%
  7. Philly schools send layoff notices to 1,400
  8. French banks 'cutting US staff'
  9. 2012 Medicare debate is all about the baby boomers
  10. Greece warns on euro exit if bailout not signed
  11. Spanish Social-Security System Won’t Record 2011 Surplus
  12. Goldman’s O’Neill Sees Aging Labor in BRICs
  13. Hungary Budget Deficit Amounted to 5.7% of GDP in Third Quarter
  14. Hungary’s New Constitution Triggers Joint Protest by Opposition
  15. Funding gap doubles for US corporate pensions
  16. UK Faces Private Sector Pensions 'Collapse'

 

 

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