Tag Archives: economy

Socialism has Venezuelans eating garbage to survive

TRUTH BOMBS: AHHH YES the financial consequences of socialism an atheistic product from the belief that man is the solution to the human condition.

ARTICLE: Venezuela has deteriorated to the point where a significant chunk of the population has to eat garbage to survive. A recent study found a stunning 15 percent of Venezuelans say they can feed themselves only with “food waste discarded by commercial establishments.”

What’s more, the study found three-fourths of all Venezuelans were unable to eat an optimal diet of breakfast, lunch and dinner every day. Just over half (54 percent) said they had gone to bed hungry, while 52 percent said they buy their food through the black market. Almost half (48 percent) said they had been forced to take time off work to search for food.

The severe food shortage can be pinned squarely on Venezuela’s socialist economy, according to William J. Murray, author of “Utopian Road to Hell: Enslaving America and the World with Central Planning.”

“The difficulty in Venezuela is the key element of central planning, and that’s price fixing,” Murray told WND. “Price fixing causes shortages, regardless of what price is fixed. In Venezuela, it’s food. In the United States, we have a shortage of certain medical care because the government sets prices on it.”

Murray, chairman of the Religious Freedom Coalition, noted that when prices are allowed to rise in accordance with market forces, as in a free enterprise system, demand is reduced to a manageable level. Also, when the cost of production increases in a free market system, producers raise their prices, which allows them to produce enough to meet demand.

But in a centrally planned economy like Venezuela’s, the government does not allow producers to raise prices on their goods to keep up with increases in the cost of production. Therefore, producers cannot afford to produce as much and shortages result.

Venezuelan President Nicolas Maduro implemented a rationing system in April 2014, prohibiting Venezuelans from buying more than their ration books allow. In fact, Maduro has ordered police and the military to crack down on anyone trying to buy more than their allotted ration, hoarding food or waiting outside a supermarket when the store is not open.

The president also created Socialist Party committees known as Local Committees for Supply and Production to determine who in each neighborhood receives food.

Murray said socialist rationing is simply a necessary outgrowth of price fixing. But he pointed out everything is rationed in America, too – it’s just rationed by the free market instead of the government.

“If the price is allowed to rise, as it is in a free marketplace, that is the rationing; the increasing price is the rationing,” Murray said. “We ration here; everything sold in the United States is rationed, but it’s rationed by price. We make it unaffordable through scarcity, and that causes more to be produced. In Venezuela, they don’t have that opportunity. The price can’t be raised, and as a result, greater amounts cannot be produced.”

When American leftists try to make their case for socialism, they point not to the dumpster fire of Venezuela, but to the Nordic countries of Sweden, Finland, Norway, Denmark and Iceland. Those peaceful nations up north have flourished under “democratic socialism,” they argue.

But Nima Sanandaji, an author and researcher who lives in Sweden, argues it is not socialism that is responsible for the success of the Nordics.

“Quite simply, the Nordic countries base their wealth on capitalism,” said Sanandaji, author of “Debunking Utopia: Exposing the Myth of Nordic Socialism.” “These countries have all for a long time, except a short period when Sweden made a failed experiment with socialism during the 1970s and 1980s, had strong respect for private property and business freedom. During the late 19th century and the first half of the 20th century, Nordic countries had low taxes and a free-market model. As I show in ‘Debunking Utopia,’ while the U.S. turned to the New Deal socialism following the Great Depression, the Nordics retained their faith in the free market – and thus the depression rapidly turned to job growth in the Nordics.

“After the second half of the 20th century, large welfare states have grown up in the Nordics. However, these nations have compensated for the detrimental effects of high taxes and large public sectors by introducing wide-ranging market reforms. This explains why Denmark, the country with the highest tax rate in the world, has the same economic freedom score as the U.S.

“Comparing the Nordics to Venezuela is comparing a free-market model to a socialist one. The differences are huge.”

Murray, for his part, sees no way Venezuela emerges from its food crisis while the socialists retain power over the country.

“Wheat crops cannot be the same year after year; corn crops cannot be the same year after year; the number of cattle produced cannot be the same year after year. And this is the problem with price fixing, which is a central element of centrally planned socialist governments. They have this idea: this is what the people should pay. And with no consequence, no conception of the idea of how much it cost to produce. As long as the socialists are in charge in Venezuela, this will continue to deteriorate.”

Murray pointed out in the years just before socialist Hugo Chavez took power, Venezuela was one of the most prosperous free enterprise nations in the world. A higher percentage of Venezuelans owned credit cards than in any other Latin American nation. The overwhelming majority of Venezuelans had enough to eat. But now times have changed.

“This was an overwhelmingly middle class nation that bordered on being a First World nation,” Murray declared.

“Socialism has brought the nation to its knees and is causing people to go through trash to survive. That would never have happened one year before Chavez took power; one year before Chavez took power, there was nobody eating out of the trash.”

Source: Socialism has Venezuelans eating garbage to survive


Global Warming’s Fingerprint Doesn’t Exist In The Real World | The Daily Caller

TRUTH BOMBS: And yet we will pump billions of tax dollars (dollars that make you work more hours to pay off this debt) on a sham.

ARTICLE: One of the main lines of evidence used by the Obama administration to justify its global warming regulations doesn’t exist in the real world, according to a new report by climate researchers.

Researchers analyzed temperature observations from satellites, weather balloons, weather stations and buoys and found the so-called “tropical hotspot” relied upon by the EPA to declare carbon dioxide a pollutant “simply does not exist in the real world.”

They found that once El Ninos are taken into account, “there is no ‘record setting’ warming to be concerned about.”

“These analysis results would appear to leave very, very little doubt but that EPA’s claim of a Tropical Hot Spot (THS), caused by rising atmospheric CO2 levels, simply does not exist in the real world,” reads the report by economist James Wallace, climatologist John Christy and meteorologist Joseph D’Aleo.

Source: Global Warming’s Fingerprint Doesn’t Exist In The Real World | The Daily Caller

Banks are preparing for an ‘economic nuclear winter’

The first half of 2016 has been a roller-coaster for financial markets. A combination of uncertainties surrounding the U.K.’s vote to leave the European Union and weaker-than-expected corporate earnings results across the region means a tough second half looms.

European banks, in particular, have had a very tough six months as the shock and volatility around Brexit sent banking stocks south. Major European banks like Deutsche Bank and Credit Suisse saw their shares in free-fall after the referendum’s results were announced. In the U.K., RBS was the worst-hit, with its shares plunging by more than 30 percent since June 24.

The current uncertainty over when the U.K. will start the process of quitting the EU has banks on tenterhooks. But a source told CNBC that banks are “preparing for an economic nuclear winter situation.”

Speaking on the condition of anonymity due to the sensitive nature of the topic, a source from a major investment bank told CNBC that financial services firms have put together a strategy in place that takes into account the worst-case scenario that could happen by the end of this year.

“This could mean triggering Article 50, referendum in other European nations leading to a break-up of the euro or sterling hitting below $1.20 or lower. The banks are ready for anything now,” the source said.

The source further explained that the challenge in 2016 is nothing compared to when the Lehman Brothers collapsed in 2008 and the banking sector is this time a lot more resilient. “Markets hate uncertainty and the events this year have unfortunately created a lot of mystery around what is going to happen next.”

Meanwhile, a common theme across second-quarter results has been a warning of uncertain times ahead. From big investment banks to mining firms like BHP Billiton and Glencore to the auto sector, companies have cited uncertainty and volatility in markets as a reason for weak results and have warned that the second half will be challenging.

Following that, a number of banks have cut their exposure to equities due to the volatile nature of stocks in the first half the year. Earlier this month, Goldman Sachs downgraded stocks to “underweight” as part of its 3-month asset allocation citing global equities to be at the upper end of their “fat and flat range.”

“The second half of the year is going to be very challenging for U.K. corporates,” Craig Erlam, senior market analyst at OANDA told CNBC via email. “Not only are they contending with possible recession in the U.K. and more prolonged slowdown, the uncertainty factor surrounding Brexit leaves planning for the future a very difficult task.”

Erlam further explained that a number of companies won’t know for a while what the future of their operations in the U.K. will look like.

“I imagine many are already putting plans in place for moving operations abroad should the U.K. lose access to the single market. With companies less likely to invest and recession very possible, the second half of the year isn’t looking great, particularly for those companies with greater exposure to the UK.”

But while challenges continue to loom, some analysts have said it was important for companies to get on with their business.

“I think the main problem for the second half of the year is the uncertainty caused by Brexit, though that’s likely to persist for two years or more, so I suspect companies are likely to roll up their sleeves and get on with their business,” Laith Khalaf, senior analyst at Hargreaves Lansdown told CNBC via email.

Khaif explained that the challenges will remain but it is important for industries like banking for instance to focus on maintaining their solvency ratios and “de-risking and simplifying their businesses.”

Source: Banks are preparing for an ‘economic nuclear winter’

Global central banks dump U.S. debt at record pace – Aug. 16, 2016

Global central banks are unloading America’s debt.In the first six months of this year, foreign central banks sold a net $192 billion of U.S. Treasury bonds, more than double the pace in the same period last year, when they sold $83 billion.China, Japan, France, Brazil and Colombia led the pack of countries dumping U.S. debt.

It’s the largest selloff of U.S. debt since at least 1978, according to Treasury Department data.”Net selling of U.S. notes and bonds year to date thru June is historic,” says Peter Boockvar, chief market analyst at the Lindsey Group, an investing firm in Virginia.

Source: Global central banks dump U.S. debt at record pace – Aug. 16, 2016

Painful To Watch: This Is The Weakest U.S. Economic ‘Recovery’ Since 1949

TRUTH BOMBS: Yet he promised full transparency, and most Americans believed him. Who is the bigger fool, the fool or the fool who follows him?

ARTICLE: Most of us have never witnessed an economic “recovery” this bad.  As you will see below, the average rate of economic growth since the last recession has been the lowest for any “recovery” in at least 67 years.  And unfortunately, the economy appears to be slowing down even more here in 2016.  On Friday, I talked about how the U.S. economy grew at a painfully slow rate of just 1.2 percent in the second quarter after only growing 0.8 percent during the first quarter.  And last week we also learned that the homeownership rate in the United States has dropped to the lowest level ever.  This is not what a recovery looks like.  Instead, it very much appears that a new economic downturn has already begun.

But don’t just take my word for how painful this economic “recovery” has been.  The following comes from a Wall Street Journal article that was just posted entitled “Seven Years Later, Recovery Remains the Weakest of the Post-World War II Era“…

Even seven years after the recession ended, the current stretch of economic gains has yielded less growth than much shorter business cycles.

In terms of average annual growth, the pace of this expansion has been by far the weakest of any since 1949. (And for which we have quarterly data.) The economy has grown at a 2.1% annual rate since the U.S. recovery began in mid-2009, according to gross-domestic-product data the Commerce Department released Friday.

The prior expansion, from 2001 through 2007, was the only other business cycle of the past 11 when the economy didn’t grow at least 3% a year, on average.

This entire seven year stretch has come while Barack Obama has been in the White House.  After more than seven and a half years, he is solidly on track to be the only president in U.S. history to never have a single year when the U.S. economy grew by at least three percent.

And unlike many presidents, he has had two terms in which to try to accomplish that feat.

One of the industries that had been doing fairly well during this recovery was the auto industry, but now in early 2016 they have found themselves struggling too

Now, the auto sector, which has propped up GDP growth for years, is slowing down. For the first six months, total car and light truck sales, at a seasonally adjusted annual rate (SAAR) of 17.5 million vehicles, are lagging behind last year by 100,000 units. Over the first half, fleet sales to rent-a-car companies and big fleet buyers were up industry wide. But retail sales fell 2%.

All over the corporate world, earnings are down.

In some cases, they are way down.

It is being projected that this will be the fifth quarter in a row when corporate earnings have declined, and even mainstream analysts are now admitting that it is “evident” that we have entered “a global slowdown”

“Earnings season in the U.S. confirms the overall macro picture that we have. We have a global slowdown. It’s evident in all of the major economies,” said Peter Garnry, head of equity strategy at Saxo Bank, on a Bloomberg podcast.

Of course I have been saying this exact thing for the past 12 months, but a lot of people have tuned me out because the stock market in the United States has been doing so well.

But the stock market is not an accurate barometer for the real economy.  It never has been, and it never will be.

If stocks accurately reflected the health of the U.S. economy, they would have already crashed really hard a long time ago.  At this moment, stock prices are completely disconnected from economic reality, and this has many of the most respected names on Wall Street scratching their heads.  One of them is Jeffrey Gundlach, the chief executive of DoubleLine Capital.  Just check out what he told Reuters on Friday

Noting the recent run-up in the benchmark Standard & Poor’s 500 index while economic growth remains weak and corporate earnings are stagnant, Gundlach said stock investors have entered a “world of uber complacency.”

The S&P 500 on Friday touched an all-time high of 2,177.09, while the government reported that U.S. gross domestic product in the second quarter grew at a meager 1.2 percent rate.

“The artist Christopher Wool has a word painting, ‘Sell the house, sell the car, sell the kids.’ That’s exactly how I feel – sell everything. Nothing here looks good,” Gundlach said in a telephone interview. “The stock markets should be down massively but investors seem to have been hypnotized that nothing can go wrong.”

If you follow Gundlach, you probably already know that he has been dead on accurate with regard to the financial markets over the past couple of years.

So when he says that the stock market “should be down massively” and that it is time to “sell everything”, we should all take him very, very seriously.

All throughout history, a huge decline in corporate earnings has almost always resulted in a huge decline in stock prices.  As Jesse Felder has noted, “we have never seen a decline in earnings of this magnitude without at least a 20% fall in stock prices” during the last 50 years.

To any rational observer, it is quite obvious that stock prices should have already started collapsing quite some time ago.

And to a large extent this has already happened around the planet, but here in the United States stocks continue to defy the laws of economics.

But at this point it isn’t going to do much good to warn people about this.  Those that could see the danger coming have already pulled their money out of stocks, and most of those that want to stick their heads in the sand and pretend that things are somehow going to be different this time are not likely to be persuaded this late in the game.

In the end, we should all be grateful that this absurd financial bubble has lasted for as long as it has, because stability is much more pleasant than instability.  The U.S. economy and the U.S. financial system have enjoyed a prolonged period of stability that has defied all the odds, and let us hope that it lasts for at least a little while longer…

Source: Painful To Watch: This Is The Weakest U.S. Economic ‘Recovery’ Since 1949

The Price Of Oil Is Crashing Again, And That Is Very, Very Bad News For The U.S. Economy

TRUTH BOMBS: Yeah but keep voting for those democrats, maybe 8 more years will fix everything [sarcasm]. Christians know that terrible times are coming.

ARTICLE: This wasn’t supposed to happen.  The price of oil was supposed to start going back up, and this would have brought much needed relief to economically-depressed areas of North America that are heavily dependent on the energy industry.  Instead, the price of oil is crashing again, and that is really bad news for a U.S. economy that is already mired in the worst “recovery” since 1949.  On Monday, U.S. oil was down almost four percent, and for a brief time it actually fell below 40 dollars a barrel.  Overall, the price of oil has fallen a staggering 21 percent since June 8th.  In less than two months, the “oil rally” that so many were pinning their hopes on has been totally wiped out, and if the price of oil continues to stay this low it is going to have very seriously implications for our economy moving forward.

One of the big reasons why the price of oil has been declining is because the OPEC nations continue to pump oil at very high levels.  The following comes from CNBC

Production in July by the Organization of the Petroleum Exporting Countries likely rose to its highest in recent history, a Reuters survey found on Friday, as Iraq pumped more and Nigeria squeezed out additional crude exports despite militant attacks on oil installations.

Top OPEC exporter Saudi Arabia also kept output close to a record high, the survey found, as it met seasonally higher domestic demand and focused on maintaining market share instead of trimming supply to boost prices.

These countries don’t know if or when the price of oil will eventually rebound, but what they do know is that they desperately need cash in order to keep their sputtering economies going.  Many of these nations are already experiencing significant economic downturns, and substantially reducing oil revenues at this time would definitely not help things.

Here in North America, oil production costs tend to be higher, and so when the price of oil crashes we tend to see companies shut down rigs.  But when rigs get shut down, that means that good paying jobs are lost.

During the first four months of 2016, approximately 35,000 jobs were lost at Texas energy companies.  Globally, more than 290,000 energy jobs have been lost since the price of oil started falling back in 2014.

And even though there was hope that energy companies would add jobs as the price of oil started rebounding during the second quarter, it turned out that the job losses just kept on coming

Energy companies continued to cut thousands of jobs during the second quarter, even though many chief executives are now voicing optimism that the oil market crash is ending and a rebound in drilling is afoot.

Although the heads of Halliburton Co. , Schlumberger Ltd. and other major firms forecast higher crude prices and a return to U.S. shale fields when discussing earnings this week, those companies and others disclosed another 15,000 industry layoffs.

Personally, I have quite a few members of my own extended family that live in areas that are heavily dependent on the energy industry, and three of them have lost their jobs so far this year.

And these are precisely the sort of good paying middle class jobs that we cannot afford to lose.  In order to having a thriving middle class, you need lots of middle class jobs.  Unfortunately, those kinds of jobs are going away, and the middle class in the United States is systematically dying.

If the price of oil keeps going lower, that will mean even more jobs losses for the energy industry, and that will be very bad news for the U.S. economy.

In addition, many of these energy companies are getting into very serious debt problems.  Delinquency rates on corporate debt are already the highest that they have been since the last recession as firms struggle to pay their bills.  Of course some of them have already gone belly up, and this has pushed default rates on corporate debt to the highest level since the last financial crisis.

At a price of 40 dollars a barrel, most oil companies in the United States are not profitable in the long-term.  The longer the price of oil stays down in this neighborhood, the more energy companies we will see go bankrupt.  At this point it is just a waiting game.

Also, it is important to keep in mind that Wall Street is very heavily exposed to the energy industry.  Just as subprime mortgages brought down quite a few financial institutions back in 2008, so this time around it is inevitable that the oil crash will claim a fair number of victims as well.

As the global economy has slowed down, the demand for oil has decreased.  And at this point, even the U.S. economy appears to be seriously slowing down.  U.S. GDP only grew at about a one percent rate for the first half of 2016, and the rate of homeownership in this country just hit the lowest level ever recorded.

In the mainstream financial media, there is a lot of hopeful talk about a potential turnaround for the energy industry, but most of that talk appears to be just wishful thinking.

To me, about the only thing that could push the price of oil back to where U.S. oil companies need it to be in the short-term would be a major war in the Middle East.  And of course that is definitely always a possibility considering who is running things in Washington.  But absent that, it is hard to see the price of oil getting back to 70 or 80 dollars a barrel any time soon.

So that means that we are likely to see more job losses, more debt delinquencies and debt defaults, and more financial institutions getting into trouble due to their reckless exposure to the energy industry.

Source: The Price Of Oil Is Crashing Again, And That Is Very, Very Bad News For The U.S. Economy

Italy Granted “Extraordinary ” €150BN Bank Bailout Program To Prevent “Panic, Run On Deposits” | Zero Hedge

TRUTHBOMBS: Christians, keep your eyes on the times!

Article: As we noted today, the rumors of an Italian bank bailout, which started on Monday morning, and were promptly shot down by Merkel the next day, got louder after a Reuters report that the Italian government is considering more creative ways to inject liquidity into Italy’s banks. However that was just an appetizer to a main course, which came later today when as the WSJ reported citing a spokeswoman for the European Union’s executive arm that the “European Commission has authorized Italy to use government guarantees to create a precautionary liquidity support program for their banks.” How did this happen so quietly under the table and without Merkel’s blessing? WSJ says that the program was approved under the bloc’s “extraordinary crisis rules for state aid.”And here we thought that Italy’s banks are actually doing so very well. Oh wait, no we didn’t.As the WSJ notes, the proposed “crisis” plan is the “other leg of an intervention plan considered by the government” namely, the direct capital injection into Italian banks that would add up to €40 billion in capital to the banking sector”, the one we profiled previously. It is also the plan that Merkel supposedly shut down before it got off the ground. However, Europe had a Plan B up its sleeve.What are the details of this latest “crisis” program?

Source: Italy Granted “Extraordinary ” €150BN Bank Bailout Program To Prevent “Panic, Run On Deposits” | Zero Hedge