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    Daily Digest 8/6 – Chicago Sees Imminent Pension Crisis, The Energy Cost Of Food

    by DailyDigest

    Tuesday, August 6, 2013, 3:30 PM


How did Estonia become a leader in technology? (westcoastjan)

The foundation was laid in 1992 when Mart Laar, Estonia’s prime minister at the time, defibrillated the flat-lining economy. In less than two years his young government (average age: 35) gave Estonia a flat income-tax, free trade, sound money and privatisation. New businesses could be registered smoothly and without delays, an important spur for geeks lying in wait. Feeble infrastructure, a legacy of the Soviet era, meant that the political class began with a clean sheet. When Finland decided to upgrade to digital phone connections, it offered its archaic 1970s analogue telephone-exchange to Estonia for free. Estonia declined the proposal and built a digital system of its own. Similarly, the country went from having no land registry to creating a paperless one. “We just skipped certain things…Mosaic [the first popular web browser] had just come out and everyone was on a level playing field,” recalls Toomas Hendrik Ilves, the president. Not saddled with legacy technology, the country's young ministers put their faith in the internet.

Worth Less, Yet Not Worthless (Ilene)

Perhaps surprisingly, the buying power of the dollar had been increasing for three and a half decades before the Federal Reserves’ creation in 1914. Since the Fed’s been minding the store, however, the value of the dollar has been on an almost non-stop decline. It’s now worth merely 5% of its original value. (To simplify the terms “inflation” and “deflation,” inflation occurs when the value of money declines. The dollar buys less and less. Conversely, deflation results from an unchecked rise in the value of money, which shows up lower prices.)

Global Gold’s Quarterly Outlook – Has Gold Exited The Bull Market? (Taki T.)

This is just one of the many tricks that policy makers are using to make you believe there is an economic recovery underway. We are afraid there is no recovery. We justify our view with the following chart. It compares the current “recovery” to previous recoveries in the US. As you can see the recovery is clearly below its’ historical mean.

Obama to Outline Plans for Fannie Mae and Freddie Mac (jdargis)

After years in which the formerly formidable Fannie Mae and Freddie Mac and their Congressional allies blocked proposals for payment of fees or risk premiums, Mr. Obama is calling for financial institutions to pay an assessment to the government on the value of mortgage-backed securities. Under his proposals, the revenue would help finance assistance for borrowers and subsidize construction of homes and rental properties that would be affordable to lower-income Americans.

Polls Open in Detroit’s Mayoral Primary (jdargis)

That did not stop a crowd of candidates from jumping into the race. For months, campaign workers have canvassed the city’s blighted streets and candidates have become regular guests on radio and television news shows, each making the case that Detroit’s time under state authority will be short lived. They say a strong mayor must be in place to lead the city back from the brink once local governance is returned.

Chicago Sees Pension Crisis Drawing Near (jdargis)

The financial woes of Detroit, which last month became the nation’s largest city to file for bankruptcy protection, dwarf the financial issues here. But as Detroit makes its way through the federal court system, other cities, including Chicago, are wrestling with overwhelming pension liabilities that threaten to undermine their capacity to provide municipal services and secure their futures.

Children Banned from Talking about Fracking as Reign of Silence Spreads (James S.)

As with many such cases, the settlement deal included a non-disclosure agreement that prevented not just Stephanie and Chris Hallowich from speaking about the case or their experiences, for the rest of their lives, but also their young children, aged just 7 and 10.

George Monbiot: Why humans should back off and let nature heal itself (westcoastjan)

“One of our tendencies,” Monbiot told Sunday Edition guest host Laura Lynch, “is to try to manage and control and see ourselves as stewards of the land, and to take an Old Testament view of dominion that we’re responsible for all the animals and plants. Well, nature did pretty well for the three billion years before we turned up, and it could do pretty well again if we learned to interfere less.”

The Energy Cost Of Food (Eric G.)

Food systems use two classes of energy: direct and indirect. Direct energy includes fuels bought and used by enterprises, such as the diesel fuel a farmer buys to run their tractor or the electricity that runs my grocery co-op’s refrigerated cases. Indirect energy is used to manufacture, deliver, maintain and repair the machines, infrastructure and consumable inputs made outside the food system but used within it. Examples include the energy required to manufacture and maintain the above-mentioned farmer’s tractor, and to manufacture the fertilizers, synthetic or otherwise, that maintain the productivity of agricultural soils. Even gasoline, diesel and electricity have indirect energy associated with them; they’re all products of manufacturing processes and delivery networks that require energy as a key input.

Risks to Global Food Supply and Impacts to Investors – Steve Yuzpe (westcoastjan)

“The areas where there may be opportunities in agriculture over the next five years include taking advantage of the growing consumer demand for healthy foods, and greater attention being paid to nutrition. Companies that provide food traceability and safety services, like the tags on the ears of animals being raised for meat production, are likely to benefit. As we tragically saw during the mad cow disease outbreak that culminated in a European ban on British beef in 1996, the ability to trace the source of food is essential to assuring a safe food supply.”

Gold & Silver

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