Daily Digest

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Daily Digest 1/16 - America's Defiance Revolution, Will you lose your job to a computer?

Thursday, January 16, 2014, 1:15 PM

Economy

Baltic Dry Continues Collapse - Worst Slide Since Financial Crisis (pinecarr)

Despite 'blaming' the drop in the cost of dry bulk shipping on Colombian coal restrictions, it seems increasingly clear that the 40% collapse in the Baltic Dry Index since the start of the year is more than just that. While this is the worst start to a year in over 30 years, the scale of this meltdown is only matched by the total devastation that occurred in Q3 2008. Of course, the mainstream media will continue to ignore this dour index until it decides to rise once again, but for now, 9 days in a row of plunging prices is yet another canary in the global trade coalmine and suggests what inventory stacking that occurred in Q3/4 2013 is anything but sustained.

U.S. has concerns about Iran-Russia oil-for-goods swap reports (Matt K.)

The agreement with the P5+1 group of major world powers includes a pause on efforts to further reduce Iran's exports of crude oil - although it does not allow major buyers to increase their imports.

Russia is part of the P5+1 group, but has not been part of the sanctions efforts, led by the United States and Europe.

A Brother's Vengeance: The Preacher Who Could Topple Erdogan (westcoastjan)

But just half a year later, everything has changed. "Erdogan must go," the former fan now says, adding that the prime minister has "betrayed" millions of Turks. Keles long voted in favor of Erdogan's conservative Justice and Development Party (AKP). But his support of the party is exceeded by his admiration of Muslim preacher Fethullah Gülen, the leader of a powerful civic movement that is now at odds with Erdogan.

Is now the time to ‘Back Up The Truck’? (Taki T.)

This number is close enough to be a Fibonacci retracement (technically at 38.2%), to have run its course. For some reason, the higher the price, the deeper is the eventual pullback. By extrapolating these numbers, the next major correction could very well cause a 50% price reduction. Possible numbers could be from a top at $3,850 down to support at $1,925. That scenario is a few years down the road.

Jim Rickards: The Fed is tapering QE into a recession (Herman J.)

“Tapering QE has failed twice before – QE1 and QE2 – in my view it’s failing again, and we’re starting to see early signs of that in the December employment report which was pretty weak.”

Fire and Ice: Inflation and Deflation (GE Christenson)

Fractional reserve banking and central banking began their reign of destruction upon our financial world a few centuries ago.

Politicians' greed and need for control over people have been ever present.

Their mutual interests created an unholy union from which were born two progeny. Call them Fire and Ice. Call them Inflation and Deflation. This is their story – simplified and sanitized."

Canadian bank bosses plot new course as ‘leveraged up’ consumers borrow less and save more (westcoastjan)

Statistics Canada reported last month that household debt touched an all-time high during the third-quarter of 2013, inching up 0.6 percentage points to 163.7% over the summer months. The increase means Canadians owe nearly $1.64 for every $1 in disposable income they earn in a year.

Google's Nest Acquisition Targets Smart Homes In A Digital World (westcoastjan)

As influential as smartphones have become, their role in understanding people's habits and preferences could be eclipsed once everything in the home has a computer chip and is connected to the Internet.

"Google bought Nest in order to learn about this world where even more information is going to be accessible by computers," said Forrester Research analyst Frank Gillett.

Shift as Vietnam marks South China Sea battle (westcoastjan)

The move comes in the month that the Chinese government published new rules requiring foreign fishing vessels to seek Beijing's permission to operate in most of the South China Sea - an action likely to further raise anti-China rhetoric in the Vietnamese press.

Prior to the battle, Vietnam had controlled some islands within the Paracel archipelago (Xisha in Chinese) and China had controlled others. Both sides claimed them in full, as did Taiwan.

Feeding the debt monster is killing our RRSPs (westcoastjan)

“There is just a lack of money,” said Mike Henry, senior vice-president of retail payments, deposits and lending at Scotiabank, about the lack of contributions. “RRSPs continue to be a really important and tax effective way to maximize their retirement savings.”

Nest acquisition: Where next for 'new' Google? (westcoastjan)

These days, it's the biggest player in internet advertising. It's a company that sends balloons into near-space, and kits out entire cities with underground cables. It's a company that runs most of the world's smartphones and tablets (logging customers' locations as it goes), and is taking on the wearable tech sector with its smart goggles, Google Glass.

Monday's announcement that Google was to acquire smart-thermostat-maker Nest for $3.2bn (£2bn) came hot on the heels of a big shopping spree in robotics, with the notable acquisition of Boston Dynamics.

Failing elites threaten our future (westcoastjan)

Complex societies rely on their elites to get things, if not right, at least not grotesquely wrong. When elites fail, the political order is likely to collapse, as happened to the defeated powers after first World War. The Russian, German and Austrian empires vanished, bequeathing weak successors succeeded by despotism. The war also destroyed the foundations of the 19th century economy: free trade and the gold standard. Attempts to restore it produced more elite failures, this time of Americans as much as Europeans. The Great Depression did much to create the conditions for the second World War. The cold war, a conflict of democracies with a dictatorship sired by the first World War, followed.

William Watson: Will you lose your job to a computer? (westcoastjan)

So what are the results? In general, the kinds of jobs computers don’t yet do well involve creative intelligence, social intelligence and perception and manipulation (though one Spanish food company does already use them to pick up and reject bad heads of lettuce from its production line).

Why You Should Be Freaking Out About The End Of Net Neutrality (westcoastjan)

Everyone gets their Internet from an Internet service provider -- an ISP like AT&T, Verizon, Comcast or Time Warner Cable. Under net neutrality rules, these ISPs have to treat all content you access over the Internet "roughly the same way" -- they can't speed up traffic from websites they like or delay competitor's traffic.

Are Fracking Fluids to Blame for Rail Car Explosions? (James S.)

Back in August Bloomberg identified another problem caused by the fracking chemicals, which is much of the millions of gallons of chemicals injected into the ground during fracking is in the form of hydrochloric acid. This is a highly corrosive substance and the railway administration has begun to note an increasing number of tanker cars are suffering damage to their interior surfaces after transporting light crude, likely due to the presence of the acid, and that this is weakening the tanks and making them more prone to rupture.

A Genius Investor Thinks Billions Of People Are Going To Starve To Death — Here's Why (Ralph B.)

Phosphorus is a critical ingredient of fertilizer, and there is a finite supply of it. The consensus is that we will hit "peak phosphorus" production within a few decades, after which point our phosphorus supply will inexorably decline. As it declines, we will be unable to feed ourselves. And you know the rest.

Contempt of cop, America's defiance revolution (westcoastjan)

And while it is difficult to tell what's driving this new assertiveness, you have to feel it's part of a recovery from the almost supine attitude that most people here adopted in the years after 9/11.

During those years, in response to demands for security from a terrified public, the American "deep state" grew almost exponentially, at a cost so staggering no one seems able to produce a reliable estimate, the Washington Post reported following a two-year investigation.

Gold & Silver

Click to read the PM Daily Market Commentary: 1/15/14

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."

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