Daily Digest

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Daily Digest 2/15 - Meteorite Hits Russian Urals, The Internet's Weakest Links

Friday, February 15, 2013, 8:53 AM


The Internet's Weakest Links (westcoastjan)

Even sophisticated, highly networked countries can be at risk of a blackout if their digital frontier has a paucity of global connections. "Iran is a good example of this," says Cowie. "Iran was one of the countries that came to networking really early – they have nearly 100 ISPs all over the country. But very few [of those] are internationally connected ISPs by design." Renesys's map places Iran in the "significant risk" category, one of 72 countries and territories with "fewer than 10 service providers at [the] international frontier."

Austerity’s children becoming Europe’s ‘lost generation,’ raising fears of new crisis (westcoastjan)

In a report, Caritas said eurozone countries that have received international loans — plus Italy, which hasn’t — are creating a huge class of poorly-educated and poorly-fed young people with low morale and few job prospects.

Meteorite hits Russian Urals: Fireball explosion wreaks havoc, over 900 injured (ScubaRoo)

Army units found three meteorite debris impact sites, two of which are in an area near Chebarkul Lake, west of Chelyabinsk. The third site was found some 80 kilometers further to the northwest, near the town of Zlatoust. One of the fragments that struck near Chebarkul left a crater six meters in diameter.

Why, Despite the Boom in Oil Production, are Gasoline Prices Still High? (James S.)

Technically, the world isn’t even producing enough oil to keep pace with the rise in global incomes. Oil supply has risen by 2.3 percent since 2010. But the world economy has grown by 7.1 percent since then. The only reason that oil prices haven’t soared to record highs, Hamilton points out, is that countries have been undertaking new conservation measures. Americans, for instance, are buying more fuel-efficient cars in droves.

Secret funding helped build vast network of climate denial thinktanks (Michael W.)

The funds, doled out between 2002 and 2010, helped build a vast network of thinktanks and activist groups working to a single purpose: to redefine climate change from neutral scientific fact to a highly polarising "wedge issue" for hardcore conservatives.

U.S. Farmers May Stop Planting GMs after Poor Global Yields (Diana N.)

Some US farmers are considering returning to conventional seed after increased pest resistance and crop failures meant GM crops saw smaller yields globally than their non-GM counterparts.

Farmers in the USA pay about an extra $100 per acre for GM seed, and many are questioning whether they will continue to see benefits from using GMs.

“It’s all about cost benefit analysis,” said economist Dan Basse, president of American agricultural research company AgResource.

New FEMA Flood Insurance Maps For New Jersey (jdargis)

In January, Gov. Chris Christie adopted new FEMA flood zone maps, covering anyone repairing substantial damage to houses along the shore. Many homeowners face five-figure insurance premiums if they don’t elevate their houses. The shading here shows how much the new FEMA maps change minimum first floor elevations.

Gold & Silver

Click to read the Gold & Silver Digest: 2/14/13

Provided daily by the Peak Prosperity Gold & Silver Group

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."


saxplayer00o1's picture
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chm's picture
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Zerohedge Comment on 60% Greek Youth Unemployment


Comment from one of the readers:

"I was in Greece last May.   In Athens most fo the shops are shut.  I was walking in the city centre and asked someone for directions - she was a uni student - had a chat as we walked along and she said THERE ARE NO JOBS - MOST GRADS SHE KNOWS ARE LEAVING THE COUNTRY

I went to Crete - my cab driver was telling me that droves of city people have returned to their families in the provinces to live becaure there are NO JOBS in the cities.  They are working on their small farms now

And since then what has happend?  Right - the economy has crashed with GDP down double digits.   



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Yes, chm, I saw that as well.

Yes, chm, I saw that as well. Living in the UK I watch our close neighbours for indications of how things will play out here. Clearly the Greece tragedy is partly of their own making, but gives an idea of the wave of changes that occur when the markets no longer think you can pay/service your debt.

I have friends in Portugal. One, a UK citizen married to a Portugese for 25 years, with 2 kids. She's back in the UK looking for a job to keep the family going in Portugal. This is not uncommon now. There is tidal wave slowly rolling over Europe and heading North. France's political elite live in the 19th Centuary and when it blows [as it is starting to do with true Socialist zeal - blaming everything on Ze-Anglosaxons] I personally think it is they who will take down the Euro and perhaps the EU.

At least here in the UK we can QE as well as the USA [!] but just delaying the inevitable. There was an article online for The Telegraph few days ago with the work 'Collapse' in the title. I read it, and thought WOW some common sense. But when I went back to show my wife, it had been pulled! Can't find a link now. My friends [sensible middle class] aren't worried or believe the juggernaut is coming. Normative bias. 'It can't happen to us'. We've had 'stalled' house prices [so key to consumer confidence here] propped up with 0.5% interest rates, but that'll pop as soon as rate nudge up a little. We need another 30% fall to bring houses back to the long term trend line. So many households are holding on with finger times at the moment, however. Our employment rates are 'ok' and holding steady, but our deficit is growing meaning our debt to GDP is growing as is yours.

It's a slow motion train wreck...

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Austerity's Children - Non-Linear Nature

If only the the governing leaders would understand that doing something about what you do not understand is usually worse than doing nothing at all.   Today the thinking of the politician is "well, I can make that work better" thinking, incorrectly, that his family management style scales up to a nation with harm not increasing exponentially.  Here is great intro to non-linear understanding "Google Talk - Nassim Taleb" 

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GM antibiotic resistance

GM antibiotic resistance in China’s rivers -A new study conducted in China finds 6 out of 6 major rivers tested positive for ampicillin antibiotic resistant bacteria [1]. Sequencing of the gene responsible, the blá gene, shows it is a synthetic version derived from a lab and different from the wild type. This suggests to the researchers that synthetic plasmid vectors from genetic engineering applications may be the source of the ampicillin resistance, which is affecting the human population. The blá gene confers resistance to a wide range of therapeutic antibiotics and the widespread environment pollution with blá resistant bacteria is a major public health concern. The development of antibiotic resistant pathogens, commonly dubbed “superbugs”, are increasingly common due to the overuse of antibiotics in medical and veterinary practices, and the ever-increasing application of genetic engineering to industrial processes including agriculture, biofuel fermentation and environmental remediation on top of laboratory research. Previously, genetic engineering experiments were confined to the laboratory, but with industrial and agricultural applications becoming more common over the last decade, the chances of uncontrolled discharge as well as deliberate release into the environment has widened. One prime example is the planting of genetically modified (GM) crops, many of which carry antibiotic resistant genes.

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Maybe a factor, but minor compared animal and human drug use

"China is the largest antibiotics producer and consumer in the

world. In a 2007 survey, the estimated annual antibiotics production

in China was 210 million kg, and 46.1% were used in

livestock industries (13), at least four times the amount used in

the US livestock industry in 1999 (14)."


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What I understood from Nasim Tallib's talk is that governments 

A Should be small and local and 

Should intervene in cases of acute distress . They should not try for stability. (Greenspan's mistake.)

I am thinking that might br the error of all top-down authoritarian systems. This is why communism failed. It aimed for stability. Orlov points out that the sub-units of the Soviet era (Smaller, local government) offered an inertia to the collapse process.

This homogenization of governmental entities will give us a world government, but if power congeals around the World Government then it too will fail.

This is why I posited The Wisdom in my science fiction story, which was an integration of the various memes that exist on the Web. The Constitution of the only Laws of the Wisdom were squarely aimed at all exponential curves.(In my Story) There was no one single entity that one could point to and say that that was the Ruler. This human mind is a Fractal Subset of the Wisdom.

The Wisdom emerges from the connectivity of the Web. It is the natural Lawgiver and Decision maker for us all. We and the Web are emerging as the Wisdom of Gaia. Gaia is growing a Brain.


The Law of the Wisdom is minimally codified. Codifying the Law was a usurpation of Power by the Left Brain, and needs to be balanced by the holistic inclusivity of the Right.

Life cannot be successfully run on a set of written rules. (See the US tax laws

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Sex and the Single Cell.

Genetic engineers have borrowed, not invented, gene shuffling.   .   .   Bacteria are not really individuals as much as part of a single global superorganism, responding to changed environmental conditions not by speciating but by excreting and incorporating useful genes from their well-endowed neighbours and then rampantly multiplying,   ,    ,    ,

Imagine that in a coffee house you brush up against a guy with green hair. In so doing, you aquire that part of his genetic code, along with perhaps a few other novel items. Not only can you now transmit the gene for green hair to your children, but you yourself leave the coffee shop with green hair. Bacteria indulge in this sort of casual quick-gene aquisition all the time.. Imagine you are a blue eyed person (perhaps with newly aquired green hair) who, in a swimming pool, gulps the more common gene of brown eyes. Toweling off, you pick up genes from sunflowers and pigeons. Soon the brown eyed you is sprouting petals and flying- eventually reproducing into gliding brown eyed, green haired quintriplets. This fantasy is mundane reality in the world of bacteria,

Stewart Brand. "The Whole Earth Discipline" pp 173 

And you thought you were a swinger?

saxplayer00o1's picture
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"There is no currency war"

OK, read about it here and here.

Doug's picture
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currency war

Since you brought it up, I posted this on the Venezuela Devalues Its Currency thread earlier:



What currency war?

Just as we are wrapping our heads around the idea of an ongoing currency war, this analysis comes along that agrees with much of what we agree to on this site, but finds that these currency devaluations are controlled and agreed upon by tptb:



Currency War – Theory & Practice

All seem to agree now that global monetary authorities are fully engaged in trying to protect their currencies from relative appreciation. The fundamental question remains: is there a growing likelihood of a messy sovereign “currency war” in which monetary authorities compete to beggar their neighbors or are treasury ministries (in fact, central banks) collaborating with one another to devalue their respective currencies in a sequentially, but orderly fashion? By identifying the answer we should gain insight into the nature and timing of significant changes in economic output and market valuations.

We do not think current whack-a-mole currency devaluations imply a belligerent currency war, now or in the future. Let’s follow incentives. Who does a cheap currency ultimately benefit? It theoretically helps indebted governments fund themselves with foreign investment from entities with stronger currencies, and it benefits cheap currency-based exporters deliver cheaper goods and services than exporters that report earnings in domiciles with stronger currencies. On the first score, most indebted sovereigns have come to rely predominantly on their central banks for funding (i.e., QE), rather than foreign funding.

Regarding global exporters, most have set up foreign manufacturing capabilities where their products are consumed, better matching costs with revenues. Further, swap markets and trade receivables allow exporters to adequately manage their currency exposures. Everyone knows the enormity of the swaps market and it has recently come to light that trade receivables have become the largest credit market in the world (see graphic on following page). At $17 trillion, it is larger than the mortgage and corporate markets. That exporters must report earnings in their native currency by converting all margins back is a direct problem for corporate treasurers and their shareholders, not domestic employees (at least directly), which means strong currencies are not directly a problem for politicians.

For these markets to break down, the banking system would have to break down, which leads us to our final point about the potential for a global currency war. Modern currencies are created by banks and their central banks – not by governments or by domestic exporters that would benefit from cheaper currencies. This suggests a trade war is not a decision for politicians or exporters to make. Ultimately, SIFI banks control the game.

When push comes to shove, the primary mission of central banks is to keep their banking systems solvent in times of stress. (Should this effort be claimed to support economic objectives like price stability or full employment, all the better.)
A monetary food fight would risk the demise of a major currency, which, with today’s cross-levered, cross-funded bank balance sheets, would further suggest mutually-assured global bank system destruction. As bank deposits are now highly concentrated within very large SIFI banks, one major global bank failure anywhere in the world arising from one economy “winning” a currency race to the bottom would impact all global banks and, by extension, the broad perception of bank failures.When push comes to shove, the primary mission of central banks is to keep their banking systems solvent in times of stress. (Should this effort be claimed to support economic objectives like price stability or full employment, all the better.)

SIFI banks are the controlling shareholders of the most influential central banks. Central bankers controlling over 75% of global GDP, in turn, gather every two months at the BIS in Basel, Switzerland to discuss and coordinate policies. We think this implies a continuation of managed, discrete currency takedowns. Beggar-thy-neighbor attitudes and rhetoric among sovereign politicos may spring up from time to time but we do not expect such attitudes in the global banking system, where it counts.

Share prices of the world’s largest banks are lagging the general market even though their revenues and earnings are soaring. Some argue the market fears that one day central banks will reverse their loose monetary conditions, in turn decreasing bank net interest margins. We do not think narrowing loan margins is a valid reason to be concerned. The cash flows of most large banks are almost certainly hedged against higher market rates, if not with each other than with their central banks. The real problem, as we see it, would be the value of their loan books, which would decline materially were rates to rise coincident with a decreasing appetite for new bank assets (loans). This fear, in itself, provides the fundamental reason not to be concerned that central banks will withdraw from the markets, letting interest rates rise, before adequately reserving SIFI banks. We expect no interest rate surprises.

So by our way of thinking there is very little risk of a belligerent global currency war. This is not to say we think central banks will stop methodically cheapening their currencies. They must continue to satisfy their principal aim of de-levering bank balance sheets to maintain bank loan book valuations. Consistent with domestic optics central banks will continue to destroy their currencies in a coordinated fashion that avoids “a global currency event.”

From a trading perspective, we speculate it is wise to play reversals at extremes of cross-rate FX ranges. The risk of major currencies breaching well-established ranges seems remote as long as major central banks work together to preserve their currency oligopoly. In light of this theory, consider the significant bounce of the EURUSD since July 2012, from 1.21 to 1.35, against almost universal sentiment believing it would see parity to the USD. Should FX traders now apply this theory to the universally accepted demise of JPYUSD?

I guess the questions remain whether these "controlled" devaluations can stay controlled, and whether currency war is preferable to coordinated currency devaluations.


PS, Was Japan's 10% or so devaluation of the yen in the past couple months planned and coordinated by tptb?


saxplayer00o1's picture
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Currency war....Doug

At the moment I had to post that quote without comment. I was thinking of a few comments though....just thought it wouldn't be very proper to post them.

A couple more headlines:

Adviser to Japan PM defends depreciation of yen

G20 set to dilute big powers' demands on currencies



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