Daily Digest

Daily Digest 2/24 - Income Inequality In The U.S., Oil Tremors From Middle East Unrest, The Natural Debt Crisis

Thursday, February 24, 2011, 10:07 AM
  • It's The Inequality, Stupid
  • A Visual Reminder Of U.S. Social Stratification
  • Interview between GATA's Chris Powell and James Turk
  • There Is No More Silver Left
  • Why Saudi Arabia can no longer temper oil prices
  • Prepare for a shock from the Middle East
  • All eyes on Bahrain as Gulf tremors frighten oil markets
  • The Natural Debt Crisis: Learning to Live Within Our Planet's Means
  • 50 Million Environmental Refugees By 2020, Experts Predict

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Economy

It's The Inequality, Stupid (jdargis)

A huge share of the nation's economic growth over the past 30 years has gone to the top one-hundredth of one percent, who now make an average of $27 million per household. The average income for the bottom 90 percent of us? $31,244.

A Visual Reminder Of U.S. Social Stratification (Joe M.)

While many watch the revolutions starting virtually on a daily basis in the "developing world", few are concerned that these have any chance of occurring in the United States: "our society is far more cohesive and far less stratified" the rebuttal logic goes. Is it?

Interview between GATA's Chris Powell and James Turk (Claire H.)

James Turk, Director of the GoldMoney Foundation and Founder of GoldMoney, interviews GATA's Secretary/Treasurer Chris Powell. The 34-minutes interview, recently shot in London, offers deep insights into the workings of the gold market. Chris discloses in detail all of the different actions that GATA is currently taking. The gold price suppression scheme is being explained from A to Z. This video is a must-watch for anyone with a clear interest in gold and free monetary markets.

There Is No More Silver Left (pinecarr)

Eric Sprott made an appearance at Casey Research Gold and Resource Summit where in addition to providing a succinct summary of all his monthly letters from the past year, whose forecasts are all gradually panning out, he spoke about the prospects for gold, and particularly silver. We will leave it to readers to parse through the brief must watch clip, but here is the punchling for those wondering why increasingly more distributors are reporting indefinite lack of physical silver inventory: "There's $22 billion of silver available in the world, of which the ETFs already own half, and between you guys and us we probably own the other half... Which means there's nothing left.

Energy

Why Saudi Arabia can no longer temper oil prices (woodman)

These are the kind of prices that one might expect to encounter at the end of an economic cycle, not at the beginning of one. But world oil demand once again grew at lot faster than the oil experts at the International Energy Agency were expecting – almost twice as fast, to be precise.

Prepare for a shock from the Middle East (martinbe)

Global markets paid scant attention to the Egyptian and Tunisian revolutions. Both were seen as lacking systemic economic and financial significance. This is now changing as youth-inspired uprisings spread to other countries in North Africa and the Middle East. While related political and social issues rightly dominate the headlines, this past weekend could also prove a tipping point when it comes to the implications for the global economy; and there is little that western countries can do to offset short-term stagflationary winds.

All eyes on Bahrain as Gulf tremors frighten oil markets (martinbe)

Oil analysts are paying very close attention to fast-moving events in Bahrain, fearing that clashes between the island’s Sunni elite and an aggrieved Shi’ite majority could embroil the two Gulf giants of Iran and Saudi Arabia.

Environment

The Natural Debt Crisis: Learning to Live Within Our Planet's Means (Jeff B.)

Even the terms we use to describe our two debts are similar, as the language used in finance bleeds over into ecology. Conservationists like to talk about "natural capital" — the stuff provided by the planet that underpins prosperity. Clean air, clean water, soil, forests, fish, biodiversity — this is the natural capital in our balance sheet, and without it there would be no life, let alone business. One study done in the mid-1990s estimated that the total value of such ecosystem services was approximately $33 trillion — considerably more than the global GDP at the time. The business of the planet is the environment.

50 Million Environmental Refugees By 2020, Experts Predict (Johan V.)

What do food shortages have to do with climate change? Warmer winters keep pests alive, allowing them to carry plant diseases in the spring. Greenhouse gases and air pollution affect a plant's structure, reducing its ability to defend against pests and diseases. Heavy rainfall carries animal waste into human food, spreading even more disease. 2.2 million people die every year in developing countries from food and water-borne diseases.

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."

15 Comments

saxplayer00o1's picture
saxplayer00o1
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idoctor's picture
idoctor
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rjs's picture
rjs
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Geithner Says US Financial System Is Stronger Than Before the Re

saxplayer said:

 Geithner Says US Financial System Is Stronger Than Before the Recession (save this one, it'll be worth a few chuckles)

dps's picture
dps
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The link for: Prepare for a

The link for:

Prepare for a shock from the Middle East (martinbe)

Above is not working.  Can you please forward the link?  Many thanks ... dons

dps's picture
dps
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I just asked the group in my

I just asked the group in my area at work:  Timothy Geithner ... who is that?  You know, right?

Blank stares all around.  That's about 5 people.

This is an example of how "aware" our US public is.  We deserve what we get.  We don't care enough about our freedoms to even pay attention to who the leaders are.  I wonder if they know who their mayor is.

Geezzzz ... dons

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pwoody82
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onset-catabolic-collapse Interesting concept

http://www.energybulletin.net/stories/2011-01-20/onset-catabolic-collapse

This makes sense to me.

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britinbe
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Prepare for a shock from the ME
dps wrote:

The link for:

Prepare for a shock from the Middle East (martinbe)

Above is not working.  Can you please forward the link?  Many thanks ... dons

The link works but needs a registration, here's the article

Please respect FT.com's ts&cs and copyright policy which allow you to: share links; copy content for personal use; & redistribute limited extracts. Email [email protected] to buy additional rights or use this link to reference the article - http://www.ft.com/cms/s/0/b62b7532-3e79-11e0-9e8f-00144feabdc0.html#ixzz1EuRnRdH0

Global markets paid scant attention to the Egyptian and Tunisian revolutions. Both were seen as lacking systemic economic and financial significance.

This is now changing as youth-inspired uprisings spread to other countries in North Africa and the Middle East. While related political and social issues rightly dominate the headlines, this past weekend could also prove a tipping point when it comes to the implications for the global economy; and there is little that western countries can do to offset short-term stagflationary winds.

It is understandable that Egypt and Tunisia had essentially not registered on the markets’ traditional scale of systemic influence. The two countries are not significant global economic powers; they do not owe much money to western banks and governments; and they are not large exporters of commodities.

Yet Egypt and Tunisia are catalysts for a broader phenomenon of change that is gaining systemic importance. Over the weekend, protests occurred in a growing number of countries in the region, from Algeria and Morocco in the west to Bahrain and Yemen in the east. Two developments are particularly important when it comes to global demand and price dynamics.

With an oil exporter such as Libya now in the grips of a popular uprising, markets will push oil prices higher to reflect much greater supply uncertainties for this key global commodity. And with sectarian issues now on display in Bahrain, geopolitical risks are higher for the region – especially as other countries seek to influence events in the Kingdom.

Unfortunately, this weekend also saw a deplorable change in dynamics; and one that makes this transformational period even more unpredictable and dangerous.

Relatively peaceful movements in Egypt and Tunisia regrettably gave way to violence elsewhere as governments applied force to clamp down on street protests. Casualties multiplied alarmingly. Yet the strength and determination of the popular movement became even more apparent for all to see.

In the short run, regional developments will be stagflationary for the global economy due to three main factors: First, higher oil prices will increase production costs and act as a tax on consumers. Second, greater precautionary stockpiling around the world will intensify pressures on commodities as a whole, aggravating the impact of demand-supply imbalances and large injections of liquidity. Third, the region will be a smaller market for other countries’ exports.

This economic reality is far from encouraging for western countries that have few options in reacting to what is an increasingly fluid situation.

On the regional stage, they are essentially bystanders to developments in countries where protests are in their early phases. At best, they can only marginally offset tendencies towards violence.

Fortunately, they can do more in post-revolutionary Egypt and Tunisia, where both Europe and the US are eager and able to support the peaceful path to democracy, including the important visit to Cairo of David Cameron, the UK prime minister.

Domestically, having already countered aggressively the impact of the global financial crisis, western economies have little room left for further demand stimulus. Some have already embarked on fiscal consolidation, while for others it is only a matter of time. Moreover, recent evidence of inflationary pressures is already influencing the narrative of some central banks.

In the next few days, markets will react to the changed outlook for the region and the global economy. Higher commodity prices will be accompanied by greater risk aversion in the equity and credit markets. Over time, however, such market apprehension is likely to give way as the impact of greater long-term stability in a key part of the world is felt. In the long term, after all, democracy and individual freedoms are the best drivers of prosperity.


 

Nate's picture
Nate
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A recent hire at work (MIT

A recent hire at work (MIT PhD) mentioned the discussion should shift from income inequality to outcome equality.  His point was that the quality of my medical care, food, and available free time was essentially equivalent to Bill Gate's.  I'm not here to agree or disagree, but I thought it was an interesting point.

Another key point to remember is that the living standards for even the poor during our thin sliver of fossil fuel madness is comparable to kings of Biblical times.

Nate

dps's picture
dps
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pwoody82: Thanks for the

pwoody82:

Thanks for the link to the article about catabolic collapse.

A really great read.  I would encourage all to take the time.

That is one of the most refreshingly positive perspectives I've seen in a long time.

Looking forward to the future of living lightly on the Earth ... dons

guardia's picture
guardia
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Re: pwoody82: Thanks for the
dps wrote:

pwoody82:

Thanks for the link to the article about catabolic collapse.

A really great read.  I would encourage all to take the time.

That is one of the most refreshingly positive perspectives I've seen in a long time.

Looking forward to the future of living lightly on the Earth ... dons

Yeah, and I like his humor too!

Quote:

Whether or not dumping billions of tons of CO2 every year from our tailpipes and smokestacks is the sole cause of this destabilization is really beside the point; if you happen to be sitting next to a sleeping grizzly bear, the fact that the bear may have its own reasons for waking up in a bad mood is not a good argument in favor of poking it repeatedly with a stick.

http://thearchdruidreport.blogspot.com/2011/02/overcoming-systems-stupidity.html

Laughing

Samuel

r's picture
r
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Drilling for an oil crisis

Drilling for an oil crisis

http://www.nytimes.com/2011/02/25/opinion/25lynch.html

Quote:

And, in fact, they are hardly an unreasonable estimate. While peak-oil advocates have in the past ridiculed optimistic industry expectations, the evidence continues to confound them. Over recent decades, the consensus estimates of the amount of recoverable oil on the planet have roughly doubled. And recovery rates — the percentage of those reserves that we are technologically able to collect — have grown from 10 percent a century ago, to 25 percent a half-century ago, to an estimated 35 percent now. In some areas, like the North Sea, the figure is above 60 percent.

 

Damnthematrix's picture
Damnthematrix
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Drilling for an oil crisis
r wrote:

Drilling for an oil crisis

http://www.nytimes.com/2011/02/25/opinion/25lynch.html

Quote:

And, in fact, they are hardly an unreasonable estimate. While peak-oil advocates have in the past ridiculed optimistic industry expectations, the evidence continues to confound them. Over recent decades, the consensus estimates of the amount of recoverable oil on the planet have roughly doubled. And recovery rates — the percentage of those reserves that we are technologically able to collect — have grown from 10 percent a century ago, to 25 percent a half-century ago, to an estimated 35 percent now. In some areas, like the North Sea, the figure is above 60 percent.

 

As usual, they miss the point.....  it's the production rate that matters, and the ERoEI.

idoctor's picture
idoctor
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saxplayer00o1's picture
saxplayer00o1
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For 2/25 news 1) Fed

''

ffowler's picture
ffowler
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Sad isn't it.  I would say

Sad isn't it.  I would say most people are living in lala land and haven't got a clue.

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