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Daily Digest 7/14 - Don’t Be Surprised When System Collapses, Student Loan Assistance Often Predatory

Monday, July 14, 2014, 10:28 AM

Economy

The World Is Getting Less Peaceful Every Year (jdargis)

Most of the world’s countries have medium, high, or very high levels of peacefulness. The Cold War period saw a spike in internal conflicts and civil wars, but overall conflicts between state militaries are becoming less frequent. However, global peacefulness has been falling for the past seven years, and over 500 million people currently live in countries at risk for further declines in peacefulness in the short-term. That’s because, today, peacefulness is as much about what happens between people and inside our borders as it is about armies and wars.

BIS chief fears fresh Lehman from worldwide debt surge (Lesphelps)

Mr Caruana said the international system is in many ways more fragile than it was in the build-up to the Lehman crisis. Debt ratios in the developed economies have risen by 20 percentage points to 275pc of GDP since then.

Credit spreads have fallen to to wafer-thin levels. Companies are borrowing heavily to buy back their own shares. The BIS said 40pc of syndicated loans are to sub-investment grade borrowers, a higher ratio than in 2007, with ever fewer protection covenants for creditors.

Rickards: Don’t be surprised when the system collapses (Herman J.)

The international monetary system has collapsed three times in the past 100 years – it collapsed in 1914, again in 1939, and again in 1971. So these collapses happen every 30 or 40 years, and it’s been a little over 40 years since the last one. Now, that doesn’t mean it collapses tomorrow like clockwork, it just means don’t be surprised if it does.

Companies That Offer Help With Student Loans Are Often Predatory, Officials Say (jdargis)

Debt settlement companies, which offer to help borrowers lower their monthly loan payments for a hefty upfront fee, have long been fraught with problems. But federal and state regulators are spotting new instances of abuse as the companies shift away from their traditional targets — credit card and mortgage debt — to zero in on student loans. The companies are coming under fire for potentially questionable tactics.

Colorado Man Infected With Deadliest, Rarest Form Of Plague (Wendy SD)

"The message we're trying to get out is that the plague bacteria is present here in Colorado, and to take necessary precautions to avoid getting infected," is the warning from health officials as a Colorado man is infected with the rarest and most fatal form of the pneumomic plague, an airborne version that can be spread through coughing and sneezing. As Bloomberg reports, it is the first case of pneumonic plague seen in the state since 2004, and rather stunningly, he appears to have contracted the illness from his dog. "We don’t think it’s out in our air," House said. "We think it’s in our dead animal populations."

Trump Plaza owners confirm plan to close in September (DennisC)

The casino, which opened in 1984 under the tutelage of its namesake, Donald Trump, joins Revel Casino-Hotel and Showboat Casino Hotel in announcing closings at the end of the summer tourist season. The latter two properties employ about 3,100 and 2,100 people, respectively. Atlantic Club’s closing, meanwhile, left about 1,600 without work.

BP’s Latest Estimate Says World’s Oil Will Last 53.3 Years (James S.)

According to BP, drivers whose vehicles rely on burning oil have a little more than a half-century to find alternate sources of energy. Or walk. BP’s annual report on proved global oil reserves says that as of the end of 2013, Earth has nearly 1.688 trillion barrels of crude, which will last 53.3 years at current rates of extraction. This figure is 1.1 percent higher than that of the previous year. In fact, during the past 10 years proven reserves have risen by 27 percent, or more than 350 billion barrels.

Some Company Announces Groundbreaking New Battery, Again (Arthur Robey)

I thought it would be fun to collect all the threads about the wonderful new batteries we are frequently promised.

Gold & Silver

Click to read the PM Daily Market Commentary: 7/11/14

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."

8 Comments

sand_puppy's picture
sand_puppy
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Binney: The NSA is about control of the population

I suspect that few here are shocked by this piece from The Guardian where the original NSA whistleblower, William Binney, has testified at a conference in London that

 

The ultimate goal of the NSA is control of the population

“At least 80% of fibre-optic cables globally go via the US”, Binney said. “This is no accident and allows the US to view all communication coming in. At least 80% of all audio calls, not just metadata, are recorded and stored in the US.  The NSA lies about what it stores.

 

[The latest Snowden leaks] show that the NSA is not just pursuing terrorism, as it claims, but ordinary citizens going about their daily communications. The NSA is mass-collecting on everyone...  There have been at least 15-20 trillion constitutional violations...

And his conclusion:  "The goal of the NSA is to control the population."

So the average citizen is finding that, as much as they do not want it to be true, that it is increasingly difficult to ignore or deny this.

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saxplayer00o1
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cmartenson
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More Fantasy Bait From BP

I'm really not sure what the motive(s) really is (are) but BP continues to muddy the waters with their yearly petroleum report.

This headline gem has made the rounds over the past week:

BP’s annual report on proved global oil reserves says that as of the end of 2013, Earth has nearly 1.688 trillion barrels of crude, which will last 53.3 years at current rates of extraction.

*sigh*

First of all, even if you could simply get it out of the ground as fast you wanted, the 53.3 years would be at current rates of extraction.  No growth in oil output = no growth in world economy = no chance of getting all the oil out of the ground since much of it requires a complex economy which is not what you get once the economy stops growing.

Second of all, the oil will last a lot longer than 53.3 years because there's no possible way that current rates of extraction could be sustained....oil fields peak and then decline with a long, slow , miserable tail of production involving stripper wells pulling up 95% water and 5% oil towards the end.  Heck, sometimes it's 99%+.  Those will last many decades into the future beyond the 53.3 year timeframe.

Third of all, those 'proved reserves' are going to be adjusted upwards, downwards, and generally fiddled with as technology improves and prices gyrate.  Note the massive downgrade of the Monterrey shale just recently for one example, but count on a more honest assessment of Saudi Arabia's reserves as a very probable future example.

Instead BP should be telling us why it is that $2.5 trillion has been spent since 2005 and the world only has ~5% more oil to show for the trouble.  Or how long the world's exportable oil will last given the twin dynamics of increasing domestic consumption and falling production in all but a select few exporting nations?

These are the sorts of things that a responsible company would be helping us sort out but BP is playing some other game.

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Stan Robertson
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Proved reserves are not the same as probably reserve or resouces
cmartenson wrote:

Instead BP should be telling us why it is that $2.5 trillion has been spent since 2005 and the world only has ~5% more oil to show for the trouble.  Or how long the world's exportable oil will last given the twin dynamics of increasing domestic consumption and falling production in all but a select few exporting nations?

These are the sorts of things that a responsible company would be helping us sort out but BP is playing some other game.

The game that BP is playing is simply that of extrapolating present trends into the future. They say that world Proved oil reserves have increased by 27% in the last ten years and they expect that to continue. Bear in mind that Proved Reserves are those that are recoverable with presently available technology at present prices. Proved reserves can increase if either technology or pricing changes without finding a single new oil reservoir. It is not in the interest of many companies to develop inventory with a shelf life of much more than about ten years, especially if that takes money out of the CEO bonuses.

Arthur Robey's picture
Arthur Robey
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Internet engineer speaks.

Interesting post by Cougar.

I don't have any numbers, but I'll give you my gut feeling, and I have the feeling that the internet is vulnerable to a kind of senility due to loss of senior engineers. And this is going on right now.

 

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saxplayer00o1
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KennethPollinger
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Rickards at 1:50:00

on Alex Jones above--interconnection between Fed, banks, treasuries, cash and derivatives, and stock market--fascinating. Buy some SDRs as transition money?

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ejhr
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cmartenson 5 above

BP' s game is that all the 1% seem to be playing, denial and obfuscation.

It's about the coming "end of civilization" event already beginning to unfold before our eyes.

Steven Kopits points out 1 car in 3 lies idle at home and 1 airplane  in 6 sits on the tarmac compared to pre 2005.

This is going only one way. downhill. And it will gather spee

It's not just oil, but oil is the engine of all our current growth and the standard of living. So, even if oil is around forever at an affordable price, other factors will combine to drive our civilization to extinction.

Maybe loss of soil fertility, clean water, fisheries and other resources. Maybe unsustainable debt [worthy of a blog on its own] maybe climate change[probably not crucial in the current timetable but a big factor in the future] or even oil itself when the ERoEI is unaffordable and expensive oil cannot be extracted due to technological capability failures. We should be quarantining the easy oil, because we will need it a lot more in the future if we are to avoid mass starvation.

But we will do none of those things. The 1% wouldn't like it!!!

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