Last Thursday the Senate Banking Committee held hearings on Janet Yellen’s nomination as Federal Reserve Board Chairman. As expected, Ms. Yellen indicated that she would continue the Fed’s “quantitative easing” (QE) polices, despite QE’s failure to improve the economy. Coincidentally, two days before the Yellen hearings, Andrew Huszar, an ex-Fed official, publicly apologized to the American people for his role in QE. Mr. Huszar called QE “the greatest backdoor Wall Street bailout of all time.”
As recently as five years ago, it would have been unheard of for a Wall Street insider and former Fed official to speak so bluntly about how the Fed acts as a reverse Robin Hood. But a quick glance at the latest unemployment numbers shows that QE is not benefiting the average American. It is increasingly obvious that the Fed’s post-2008 policies of bailouts, money printing, and bond buying benefited the big banks and the politically-connected investment firms. QE is such a blatant example of crony capitalism that it makes Solyndra look like a shining example of a pure free market!
It would be a mistake to think that QE is the first time the Fed’s policies have benefited the well-to-do at the expense of the average American. The Fed’s polices have always benefited crony capitalists and big spending politicians at the expense of the average American.
By manipulating the money supply and the interest rate, Federal Reserve polices create inflation and thereby erode the value of the currency. Since the Federal Reserve opened its doors one hundred years ago, the dollar has lost over 95 percent of its purchasing power —that’s right, today you need $23.70 to buy what one dollar bought in 1913!
As pointed out by the economists of the Austrian School, the creation of new money does not impact everyone equally. The well-connected benefit from inflation, as they receive the newly-created money first, before general price increases have spread through the economy. It is obvious, then, that middle- and working-class Americans are hardest hit by the rising level of prices.
Congress also benefits from the devaluation of the currency, as it allows them to increase welfare- and warfare-spending without directly taxing the people. Instead, the increase is only felt via the hidden “inflation tax.” I have often said that the inflation tax is one of the worst taxes because it is hidden and because it is regressive. Of course, there is a limit to how long the Fed can facilitate big government spending without causing an economic crisis.
Far from promoting a sound economy for all, the Federal Reserve is the main cause of the boom-and-bust economy, as well as the leading facilitator of big government and crony capitalism. Fortunately, in recent years more Americans have become aware of how the Fed is impacting their lives. These Americans have joined efforts to educate their fellow citizens on the dangers of the Federal Reserve and have joined efforts to bring transparency to the Federal Reserve by passing the Audit the Fed bill.
Auditing the Fed is an excellent first step toward restoring a monetary policy that works for the benefit of the American people, not the special interests. Another important step is to repeal legal tender laws that restrict the ability of the people to use the currency of their choice. This would allow Americans to protect themselves from the effects of the Fed’s polices. Auditing and ending the Fed, and allowing Americans to use the currency of their choice, must be a priority for anyone serious about restoring peace, prosperity, and liberty.
Permission to reprint in whole or in part is gladly granted, provided full credit is given.
A recent IAEA report found that Iran had slowed down its nuclear programme [EPA]
|Saudi Arabia has ruled out any contact with Israel, with which it has no diplomatic ties, after a British newspaper reported that the two countries could coordinate efforts against Iran.
The kingdom “has no relations or contacts with Israel of any kind or at any level,” said a foreign ministry spokesman, quoted by state news agency SPA on Monday.
Under the headline “Two old foes unite against Tehran,” Britain’s Sunday Times newspaper said Israel and Saudi Arabia were working together on “contingency plans for a possible attack on Iran if its nuclear programme is not significantly curbed.”
“As part of the growing cooperation, Riyadh is understood already to have given the go-ahead for Israeli planes to use its airspace in the event of an attack on Iran,” it said.
The Saudi spokesman said the report was “completely unfounded”.
The Israeli and Saudi governments are convinced that the international talks to place limits on Tehran’s military nuclear development will do little to slow its development of a nuclear warhead.
Widely believed to have a formidable nuclear arsenal itself, Israel has refused to rule out bombing Iran’s facilities, as it reportedly did with an Iraqi reactor in 1981 and a Syrian facility in 2007.
The Failure Of Abenomics In One Chart… When Even The Japanese Press Admits “Easing Is Not Working” | Zero Hedge
Since late 2012 Zero Hedge has been very critical of Japan’s Abenomics experiment, and its first and only real arrow: a massive increase in the monetary base thanks to the BOJ’s shock and awe QE announced in April, resulting in the collapse of the Yen (although in a not zero sum world this means ever louder complaints from US exporters such as Ford competing with Japanese companies), a soaring Nikkei (if only through May), and what was expected to be an economic renaissance as a result of a return to stable 2% inflation.
We repeatedly warned that the only inflation anyone would see in Japan is in imported energy costs and food prices, which in turn would crush real disposable income especially once nominal wage deflation accelerated, which it has for the past 16 months straight. So far this has happened precisely as warned.
Another thing we warned about is that the result of the bank reserves tsunami – just like in the US – lending in Japan would grind to a halt, as everyone and their grandmother sought to invest the resulting excess deposits in risk markets as exemplified best by JPMorgan’s CIO division.
Today, with the traditional one year delay (we assume they had to give it the benefit of the doubt), the mainstream media once again catches up to what Zero Hedge readers knew over a year ago, and blasts the outright failure that is Abenomics, but not only in the US (with the domestic honor falling to the WSJ), but also domestically, in a truly damning op-ed in the Japan Times.
We will let readers peruse the WSJ’s “Japan’s Banks Find It Hard to Lend Easy Money: Dearth of Borrowers Illustrates Difficulty in Japan’s Program to Increase Money Supply” on their own. It summarizes one aspect of what we have been warning about – namely the blocked monetary pipeline, something the US has been fighting with for the past five years, and will continue fighting as long as QE continues simply because the “solution” to the problem, i.e., even more QE, just makes the problem worse.
We will however, show the one chart summary which captures all the major failures of the BOJ quite succinctly.
More importantly, we will repost the Japan Times Op-Ed from last night, titled “BOJ’s money mountain growing but debt may explode” because it not only copies all we have said over the past year, but is a dramatic reversal from the Japanese population eagerly drinking Abe’s Koolaid long after its expiration date. Because once the media starts asking questions, the broader population can’t be far behind.
From Japan Times, November 17, 2013 highlights ours
BOJ’s money mountain growing but debt may explode
by Reiji Yoshida
Haruhiko Kuroda hit the ground running when he was appointed by Prime Minister Shinzo Abe in March to take charge of the Bank of Japan.
Out of the blue, the central bank’s new governor unveiled a super-aggressive easing policy the next month to double the nation’s monetary base in just two years. He said the BOJ would buy more than ¥7 trillion in long-term Japanese government bonds per month to flood the financial system with money to end more than a decade of deflation.
The BOJ’s nine-member Policy Board unanimously supported Kuroda’s goal of stoking 2 percent inflation in two years — a surprise about-face from its stance under his predecessor, Masaaki Shirakawa, who was concerned about the potential side effects of embracing such radical quantitative easing.
More than six months have passed. How has the BOJ’s strategy changed Japan’s financial markets and the real economy?
Critics say Kuroda’s monetary easing scheme isn’t working, although most of the public apparently believes otherwise.
There are growing signs of inflation, but not the sort heralding the start of Abe’s much-advertised recovery and rising wages. Instead, imported fuel and other products have become more expensive because of the weak yen ushered in by Kuroda and Abe, and this bodes ill for the public’s living standards.
Meanwhile, Kuroda’s aggressive plan is allowing the debt-ridden government to issue fresh bonds continuously, further increasing the likelihood of a fiscal crisis, they said.
“People have been deceived by ‘Abenomics,’ ” Yukio Noguchi, a prominent economist and adviser to Waseda University’s Institute of Financial Studies, told The Japan Times in a recent interview.
“Monetary easing is not working, and it’s going nowhere,” Noguchi said.
Since April, the BOJ has been gobbling up JGBs from banks and the open market. Its purchases amount to roughly 70 percent of the value of all new JGBs issued.
But the banks are just stowing that money in their accounts at the BOJ because they can’t find any companies interested in borrowing it.
“There is no demand for funds on the part of businesses. That’s why the monetary easing is not working,” Noguchi said.
Japan’s monetary base — the sum of cash in circulation plus banks’ current account balances at the BOJ — surged from 23.1 percent in April to 45.8 percent in October, thanks to the BOJ’s aggressive operations.
But its money stock — the total amount of monetary assets available in an economy including credit created by bank loans, but excluding deposits held by financial institutions and the central government — only rose to 3.3 percent from 2.3 percent in the period.
This means banks are just depositing the massive funds provided by the BOJ in their own accounts at the central bank. The unloaned cash is thus having little affect on the real economy.
Meanwhile, the long-term interest rate, which theoretically factors in an expected rate of inflation, has fallen and is dwindling at an ultralow level of around 0.6 percent.
This signals that the market does not yet seriously believe that inflation in Japan will reach Kuroda’s 2 percent goal, said Kazuhito Ikeo, an economics professor at Keio University.
“When the policy interest rate has effectively fallen to zero, monetary policy won’t work much any more,” Ikeo said in a recent interview.
Ikeo believes the economy is stuck in a rut because its potential for economic growth has declined and monetary measures alone can’t solve the problem, he said.
“I think it has become clearer that there is a limit to what monetary policy can do,” Ikeo said.
Much of the public believes the drastic easing measures adopted by Abe and Kuroda helped weaken the yen and benefitted exporters. The yen-dollar rate has fallen from around 78 to about 100 over the past 14 months. This helped send the Nikkei stock index soaring from December, one of the main reasons Abenomics has public support.
But the yen started depreciating last fall, long before Kuroda’s widely proposed takeover at the BOJ officially took place in April, Noguchi said.
Abe was just “lucky” to see the yen fall, Noguchi claimed, crediting the easing of the eurozone debt crisis last fall rather than clear signs that Abe’s Liberal Democratic Party was getting ready to boot the unpopular Democratic Party of Japan from power.
In September, Japan’s consumer price index rose 0.7 percent from the same month last year to log its fourth consecutive rise, hinting at inflation. The uptick, however, was misleading. It was largely caused by the costly rise in energy imports, exacerbated by a weaker yen.
This, of course, is not a sign of economic recovery, both Noguchi and Ikeo said.
Workers’ real wages fell 2 percent in August compared with the same month the previous year, logging two drops in a row. Inflation without wage hikes will only erode people’s living standards.
“It is wages that matter. If prices go up without a rise in wages, the real income of the people just goes down,” Noguchi said.
Abe apparently is well aware of this risk and has repeatedly urged top business leaders in Keidanren, the nation’s largest business lobby, to push for wage hikes to generate “a virtuous cycle” of raises and economic expansion.
Noguchi calls Abe’s approach “sheer nonsense” because Japan is not a planned economy and the government thus cannot force businesses to raise wages against their will.
Probably the biggest risk with Abenomics, however, is a potential crash in JGB prices that would cause long-term interest rates to spike and gut the debt-laden government.
Ikeo pointed out that the BOJ’s massive bond purchases are in fact helping the debt-ridden government finance itself, even if the central bank claims this is not its intention. If the BOJ keeps up this charade, confidence in JGBs might crash, Ikeo said.
“Soon or later, concerns over fiscal sustainability will emerge. You can’t rule out the possibility of a surge in the (long-term) interest rate at a critical point,” he said.
The resulting surge in debt-serving costs would devastate the government, which has already racked up a public debt totaling almost 200 percent of gross domestic product — the highest of all developed countries. Nearly half of Japan’s ¥92.6 trillion general account for fiscal 2013 is barely being financed by fresh JGB issues.
According to Noguchi’s simulation, if the average JGB yield jumps to 4 percent in fiscal 2014, debt-serving costs will leap to a staggering ¥50 trillion in fiscal 2025 alone, which is more than half the size of the fiscal 2013 budget.
“This is nothing but fiscal bankruptcy,” Noguchi warned.
For some two decades, fears and rumors have swirled about just such a scenario. Economists who warned of the impending crisis were labeled alarmists while speculators who bet on it always lost.
That situation may soon change.
Japan’s trade balance has turned into a deficit and the current account surplus has shrunk. Japan posted a surplus of ¥3.05 trillion in the current account for the April-September half, the second-lowest level since 1985, when comparable data became available.
Ikeo warned that if the current account balance sinks into red and people are convinced the yen will no longer strengthen, investors may start buying foreign bonds and ditch their JGBs.
Another possible danger is, ironically, a full-fledged economic rebound, which would also push up long-term interest rates, Ikeo said.
The government needs to walk “a dangerous narrow path” of seeking a recovery while trying to prevent interest rates from surging at the same time, he said.
It is no wonder that, according to a Gallup Poll conducted in early October, a record-low 14% of Americans thought that the country was headed in the right direction, down from 30% in September. That’s the biggest single-month drop in the poll since the shutdown of 1990. Some 78% think the country is on the wrong track.
Some readers will, of course, ask what this expose about the political future has to do with investments. It has nothing to do with what the stock market will do tomorrow, the day after tomorrow, or in the next three months. But it has a lot to do with the future of the US (and other Western democracies where socio-political conditions are hardly any better).
I have written about the consequences of a dysfunctional political system elsewhere. In May 2011 I explained how expansionary monetary policies had favoured what Joseph Stiglitz called ‘the elite’ at the expense of ordinary people by increasing the wealth and income of the ‘one percent’ far more than that of the majority of the American people.
I also quoted at the time Alexander Fraser Tytler (1747-1813), who opined as follows: ‘A democracy cannot exist as a permanent form of government. It can only exist until voters discover that they can vote themselves largesse from the Public Treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the Public Treasury with the result that a democracy always collapses over loose fiscal policy, always followed by dictatorship‘.
Later, Alexis de Tocqueville observed: ‘The American Republic will endure until the day Congress discovers that it can bribe the public with the public’s money.‘
To be fair to Mr. Obama, the government debt under his administration has expanded at a much slower pace in percentage terms than under the Reagan administration and the two Bush geniuses. In fact, as much as I hate to say this, Mr. Obama has been (or has been forced to be) a fiscal conservative.
However, what 18th and 19th century economists and social observers failed to observe is that democracies can also collapse over loose monetary policies. And in this respect, under the Obama administration, the Fed’s balance sheet has exploded. John Maynard Keynes got it 100% right when he wrote:
‘By a continuing process of inflation, Governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method they not only confiscate, but they confiscate arbitrarily; and, while the process impoverishes many, it actually enriches some…
‘Those to whom the system brings windfalls…become ‘profiteers’ who are the object of the hatred… The process of wealth getting degenerates into a gamble and a lottery… Lenin was certainly right. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.’
The Fed takes great pride in the fact that US household wealth has now exceeded the 2007 high. However, I was pleasantly surprised when I recently attended a presentation by Larry Lindsey, at my friend Gary Bahre’s New Hampshire estate. He unmistakably showed, based on the Fed’s own Survey of Consumer Finance and Flow of Funds, that the recovery in household wealth has been extremely uneven.
Readers should focus on the last column of Table 1, which depicts the change in household wealth between 2007 and 2013 by wealth percentile. As can be seen, the bottom 50% of the population is still down more than 40% in terms of their ‘wealth’ from the 2007 high. (Lindsey is a rather level-headed former Member of the Board of the Governors of the Federal Reserve System, in which capacity he served between 1991 and 1997.)
Besides the uneven recovery of household wealth among different wealth groups, a closer look at consumer credit, which is now at a record level, is also revealing. Furthermore, consumer credit as a percentage of disposable personal income is almost at the pre-crisis high.
But what I found most interesting is how different income and wealth groups adjusted their outstanding total debt (including consumer credit, mortgage debt, etc.) following the crisis.
Larry Lindsey showed us a table – again based on the Fed’s own Survey of Consumer Finance and Flow of Funds data – which depicts total debt increases and decreases (in US$ billions) among these different income and wealth groups.
I find it remarkable that the lower 40% of income recipients and the lower 50% of wealth owners actually increased their debts meaningfully post-2007. In other words, approximately 50% of Americans in the lower income and wealth groups who are both voters and consumers would seem to be more indebted than ever. A fair assumption is also that these people form the majority of the government’s social benefits recipients.
Now, since these lower income and wealth groups increased their debts post-2007 and enjoyed higher social benefits, they were also to some extent supporting the economy and corporate profits. But what about the future?
Entitlements are unlikely to expand much further as a percentage of GDP, and these lower-income recipients’ higher debts are likely to become a headwind for consumer spending. Simply put, in my opinion, it is most unlikely that US economic growth will surprise on the upside in the next few years.
It is more likely there will be negative surprises.
for The Daily Reckoning Australia
Publisher’s Note: Household Wealth Leans Over an Uneven Recovery originally appeared in the Daily Reckoning USA.
This article was written by Michael Snyder and originally published at The American Dream
Have you noticed that the mainstream media has a tremendous amount of disdain for preppers? Even though there are now approximately 3 million preppers in the United States, most of the time the media ignores us. But once in a while an editor in New York City or Los Angeles decides that it would be fun to do a story about the “crazies” that are preparing for doomsday.
And of course it is very rare for any piece in the mainstream media about preppers to be even close to balanced reporting. Most of the time, news stories that report on preppers portray them as mentally unstable kooks and loons that everyone else in society should be laughing at. But perhaps there is a deeper explanation for the contempt that the mainstream media has for preppers.
After all, those in the media are representatives of the establishment, and they are probably deeply offended on some level that we don’t have the same kind of blind faith in the system that they do. The fact that so many Americans believe that the system is on the verge of collapse doesn’t make any sense to them, and instead of really looking into the truth of what we are saying, they would much rather dismiss us by labeling all of us a bunch of uneducated nutjobs on the fringe of society.
A few days ago, I came across another example of this demonization of preppers by the mainstream media. The following are a few lines from a recent CNN article entitled “What I saw at the doomsday prepper convention“. For the first few paragraphs the piece actually seems fairly balanced, but by the end of the article the author can’t resist openly mocking preppers and what many of them believe. Just check out these zingers…
-“It’s so much more fun to worry about martial law than a hurricane. People like zombies as a marketing tool.”
-“I spot more than a few zombie-themed rifle targets at the show.”
-“Still, it was impossible to completely ignore the presence of an element many would consider reactionary.”
-“After a relatively measured primer on the threats of inflation, featured economist Dr. Kirk Elliot encouraged me to look into how the Rothschild and Rockefeller families continue to own the Federal Reserve.”
-“Finally, at the end of my conversation with John Egger about the rise of ‘suburban homesteading,’ a man with a white shock of hair interjected himself into the conversation. ‘You know what chemtrails are?’ he asked, referring to another conspiracist trope that sees chemical tampering in jetstream vapor trails. ‘They’re changing the weather, then selling drought tolerant seeds. George Soros and Bill Gates are behind it.’ Egger nodded politely and smiled, tolerant of a potential customer’s eccentricities.”
-“While normalcy and centrism may be the goal for businesspeople like Cindy and Jim Thompson, it seems the preparedness lifestyle hasn’t completely shaken loose its extremists and kooks.”
And of course this is hardly an isolated example of prepper bashing. The following is an excerpt from a Los Angeles Times review of the Doomsday Preppers television show on the National Geographic channel…
Still, it’s hard not to feel for young Jason from tiny Plato, Mo. (pop. 109), who is awaiting worldwide financial collapse with his homemade, nail-studded “mace-ball bat,” and that his is a life on the verge of going completely wrong. “I’m not afraid to have to kill,” Jason says, in his camouflage pants and dog tag, and there seems to be no question in his mind that it will come to that. (“Jason has always been a worrywart,” says his mother.)
Or for Big Al, from Nashville, who is getting ready for old-school nuclear war by digging down into the earth and surrounding himself with steel. (“I prefer not to use the term ‘bunker’ — to me, it’s an underground house.”) He spends months at a time by himself down there, training for the inevitable — which he expects to weather alone — cooking different combinations of canned goods and, you know, spending too much time alone. One leg pumps constantly as he talks.
The preppers don’t want my pity, of course — quite the opposite, I’m sure. The joke will be on me, they would say, when I am expiring from fallout or smallpox, being carried away in a tornado or torn apart by the hungry ravaging hordes. (I am not even prepared for the Big Earthquake that might more probably get me.)
Would the Los Angeles Times mock other groups of Americans in a similar manner?
I think not.
Meanwhile, as the mainstream media continues to mock us, there is a perfect example of why we should all be prepping that is unfolding right in front of our eyes. The most destructive typhoon in the history of the Philippines is showing just how rapidly society can completely fall apart in the event of a major disaster…
The cries of the suffering carried through a small, cramped one-story clinic in typhoon-ravaged Tacloban where the medicine was all but gone Thursday, but the number of wounded in the hard-hit Philippine city continued to grow.
The clinic at the airport in the decimated capital city of Leyte province is one of the few places where those injured in Super Typhoon Haiyan and its aftermath can turn for help, what little help there is six days after the storm.
“We don’t have any medicines. We don’t have any supplies. We have IVs, but it’s running out,” Dr. Katrina Catabay told CNN.
“Most of the people don’t have water and food. That’s why they come here. Most of the kids are dehydrated. They are suffering from diarrhea and vomiting.”
Most Americans assume that if anything like this ever happened here that the federal government would rush in and rescue them.
But what if the government didn’t come to rescue you?
Past disasters such as Hurricane Katrina have long since faded from the memories of many Americans. How quickly we forget the lessons that we should have learned from past tragedies.
And what if there is an event such as a massive EMP blast that causes public services to go down permanently?
What would you do?
In the Philippines, there is widespread looting and rioting even though this natural disaster is only temporary and governments from all around the world are rushing in to offer assistance…
TV reports said security forces exchanged fire with armed men amid widespread looting of shops and warehouses for food, water and other supplies in the village of Abucay, part of worst-hit Tacloban in Leyte province.
While eight people were crushed to death when looters raided rice stockpiles in a government warehouse in the town of Alangalang, causing a wall to collapse, local authorities said.
Other looters still managed to cart away 33,000 bags of rice weighing 110 lb each, said Orlan Calayag, administrator of the state-run grain agency National Food Authority.
Warehouses owned by a food and drinks company were ransacked in the storm-hit town of Palo in Leyte, along with a rice mill in Jaro, said Alfred Li, head of the Leyte Chamber of Commerce and Industry.
Tacloban city administrator Tecson John Lim said 90 percent of the coastal city of 220,000 people had been destroyed, with only 20 percent of residents receiving aid. Houses were now being looted because warehouses were empty, he said.
If you don’t think that anything like this could ever happen here, you are just being delusional. Americans are not any better than those living in the Philippines. When something really, really bad happens in the heart of the United States, we will see mass panic and fear here too.
And most Americans are completely and totally unprepared for even a minor emergency…
–44 percent of all Americans do not have first-aid kits in their homes.
–48 percent of all Americans do not have any emergency supplies stored up at all.
–53 percent of all Americans do not have a 3 day supply of nonperishable food and water in their homes.
So instead of making fun of preppers, perhaps the mainstream media should be encouraging more people to prepare for future emergencies.
Someday major disaster will strike this nation, and when that happens it will be the preppers who will have the last laugh.
Published on the Doomstead Diner on November 17, 2013
Discuss this article at the Environment Table inside the Diner
Last weekend the Phillipines got whalloped by yet ANOTHER disaster, a “Super-Typhoon. This is apparently the most powerful cyclonic storm ever, coming in bigger and harder than Sandy and Katrina combined. The storm pushed in a tidal surge of 6 meters, pretty close to the size of the Tsunami that hit Fukushima. Fortunately, the Phillipinos do not have a Nuclear Reactor around Tacoban.
For at least 10,000 Philipinos though, not having a Nuke to spill radioactive waste all over the island is not a big help, since they are dead anyhow. Death toll as of Monday anyhow, sure to rise over the days ahead, so by the time I publish on Sunday, I should have a more updated number. For those left alive, the situation is not a whole lot better, no electricity, no potable water, not much shelter since pretty much all the flimsy shacks they call homes were basically flattened. Even most of their public buildings were flattened, Emergency Shelters packed with refugees went down too.
Much 2nd guessing of the Philipino Goobermint also for not getting the people evacuated effectively, but really where would they send them? Well, higher ground would make sense if you are expecting a tidal surge, but they don’t have any shelters up in the mountains so basically people would have had to strap themselves to Trees up there to try to ride it out. Besides that it’s not like most Philipinos have SUVs they can jump into for a Bugout either. These are are pretty much dirt poor people of course. So basically they hunker down and hope for the best, but in this case they got the WORST.
In the aftermath, the NATO military sent in a few ships and Choppers, and pretty much every AID Charity in the Phone Book was already there. Why? Because the same neighborhood had a decent size Earthquake a few months ago, and before that they had enormous floods last year. Said 3 disasters have set one new record after another for Damage Costs, this one should be well over $1B, Chump Change here but Big Money in the Philipines. The only reason damage estimates are so low is because most of the shacks destroyed are pretty close to worthless Tin Roof and Scrap Wood jobs.
Now, the Philipines have always been in “Typhoon Alley”, getting an average of 24 a year or so, but of course prior to Ocean Cooking they didn’t pack quite such a whallop. Though they always had flooding issues, they didn’t get new Record Breaking flooding every year either. They also didn’t see near as much Earthquake activity either.
This is just the problem on the Weather/Geological side of the equation. The other side of the equation is the increase in Population size and the change in the way they live. Prior to WWII when the Philipines served as a Battleground for Gen. Douglas MacArthur and the Japanese Imperial Army, the place basically contained a few small communities and fishing villages scattered around the islands, no electricity, no running water, no industrial infrastructure at all. After the war, as a Protectorate of the FSoA Empire, they were leveraged up into the 20th Century, built some Big Shities and wired up the Islands for Juice. Like all the rest of the 3rd world countries, their population EXPLODED.
So now when you read stories about the disaster, you repeatedly read the line “Many Philipinos are cut off from BASIC SERVICES of electricity and running water.” In our psycho world, these pretty complex and expensive bits of infrastructure to maintain are considered “BASIC” services. They weren’t basic 100 years ago there, they didn’t even EXIST! They are basic now though, because in the absence of them the whole system falls apart. Now instead of having a few people living in vulnerable areas living a subsistence life, you have a LOT of people dependent on the same kind of JIT Food delivery as you do here, and when it STOPS they wander around like Zombies, “loot” whatever stores might have a few cans of food and as thirst catches up with them start drinking water from streams that are now polluted to beat the band in the first place, and with all the Dead Bodies floating around now also breeding up every disease carrying organism in the Microbiology Handbook.
This concept of “Looting” in a disaster also is one I have quite a few issues with. I would consider it “Looting” if somebody runs into the local Electronics store and runs out carrying a Plasma TV, quite unlikely to WORK anytime to soon around there anyhow. Is it “Looting” though to go through the busted window of a food store and scavenge for a few cans of beans that you might find? There are no cashiers working to PAY for the food anyhow! Electricity is OUT, EBT cards don’t work, HTF can you BUY it anyhow? This is not “Looting”, it is just pure SURVIVAL! You are supposed to “STARVE” rather than “LOOT”? What? If MY Hovel was just washed away with all my preps and I was lucky enough to not get washed out to sea with it, bet your bottom dollar I would climb out from the wreckage and see if I could scavenge up some Cans of Beans anywhere in the neighborhood! We need a new Definition/Words for this besides “Looting”. “Disaster Scavenging” maybe or “Food Seeking”, something a bit more Postive than “Looting”.
So they gotta fix all this stuff up and QUICK, except they can’t in most places because the roads are blocked by debris and downed trees, and they can’t even get Trucks through without Heavy Equipment clearing the pathways first. Do the Philipinos HAVE tons of Heavy Equipment to motor up and do this? Of course not. So really it falls to our friends the Army Corps of Bozos to ship in and clear all this out of the way for them. Who pays for that? You the Taxpayer of course.
Where does all the Money come for the Rebuild(s)? From Fresh New Loans issued to the Philipinos that get freed up whenever there is a Disaster, but otherwise are unavailable to them. This of course is Broken Window Economic Stimulus in the Krugman Handbook. Problem is, how do the Philipinos ever pay back these new loans, on top of the old loans they got after the last disaster collapsed their infrastructure? How many times can you keep repairing it all?
By now I think a decent portion of the damage done to the Jersey Shore and Long island from Sandy has been fixed up, though probably the worst hit areas were just Bulldozed and those folks now relocated elsewhere, living with relatives who knows? It is about GUARANTEED though sometime in the next few years the same thing will happen again, and if this insane economic system has not already crashed by then, they’ll do it all over again.
The reality is we can’t have so many peple living so close to the coastline, particularly at or near what USED to be mean Sea Level. This because it is not mean Sea level you gotta worry about, it is how high the Sea Level goes at Peaks. The Flooding events are not gonna happen from a slow creep of an inch or two a year up the beach, they come from when the Peaks get really big and inundate the shoreline a Kilometer or two in at a time. Said Peaks come from big Storm Surges and Tsunamis, and if you have more of both occurring (and you do), low lying areas will be rolled over by the oncoming waves and surf.
In all my growing up years probably until my mid forties I don’t recall a single event like Sandy occurring around my neighborhood, and the Indian Ocean Tsunami in the 90s was the first real big one I remember Globally. Now it seems like we get at least 1 or 2 of these Mega Events every year somewhere around the globe.
The bottom line of course is that people have to migrate away from the shoreline, at least in terms of Fixed housing and industry. Problem there is, currently this is where MOST of the world population lives! Reason of course is that most commerce depends on Shipping and all the “stuff” people depend on comes in on Container ships that need shore facilities to unload at, and those facilities need people to work in them, who obviously cannot be DRIVING long distances anymore to get to work! Besides that, even if you keep a Skeleton Crew at the Unload point for all the Junk, if the Factories and Konsumers who use the Junk are far inland, then you incur additional costs and use more fossil fuel to move the stuff inward.
So, in the absence of complete economic collapse of the monetary system, you won’t see a RAPID inward migration from the coastlines, and the infrastructure will be rebuilt as many times as they can muster up a new set of Loans creating more new money to Do it All Again, Amen. “I’m a Happy Idiot as I struggle for the Legal Tender” as Jackson Browne so aptly put it.
Although the movement in the near term is probably not going to come Suddenly, it will come inexorably. For people who had their whole lives ripped out from under them when Sandy hit, many do NOT return to their destroyed McMansions and try to rebuild. They become Invisible Refugees of Climate Change, first moving a bit inward to live with Relatives for a while, then eventually relocating somewhere else further in. If they are fortunate, they find New Jobs and restart their lives, but that occurs less and less often these days. Da Goobermint Statistics show ever more people dropping out of the Labor Force, not appearing on Unemployment stats but turning up elsewhere on the SNAP card roles and SSDA recipient lists. This particular Kludge also can only last so long of course.
Over in the Philipines, it is likely you will see another sort of Disapperance, that of Population itself, not just employed people. It is unlikely the MSM reports on it much (in fact the Philipine disaster already has dropped off the lead pages of the MSM), but many more people are likely to go to the Great Beyond there as a result of Disease and Suicide, stuck in a situation that was already quite hopeless, but at least livable. Now the situation is not just Hopeless, but unlivable also. Switching back to a subsistence life for most will be impossible, they will be stuck for months and years in Refugee Camps, and those camps also will be inundated by Typhoons and Tsunamis and Earthquakes. The Earth Giveth, and She Taketh Away, and she is taking it away from the Philipinos faster than in most places of the world right now, but this Show WILL come to a Theater Near You also.
Is there anything YOU personally can do about this problem? Well, if you live on a coastline at or near Sea Level, it would be a wise idea to think about moving NOW, rather than AFTER a disaster actually hits you. Its much easier to make a move while everything around you is functioning than after your home and SUV have been washed out to Sea of course. This is not a choice most Philipinos have, but if you are not already off the economic cliff here, you probably have a car and can Bugout in it to Somewhere Else.
There are of course a few real problems which most people face who currently live in such locations, first if you still HAVE a job, you don’t wanna give it up without having another one to go to. Then there is the problem of UNLOADING your McHovel to another Sucker who will buy the thing. Finally, many if not most people have Family and attachments to the place they grew up and live and they don’t WANT to leave, even if they KNOW eventually they are likely to be REALLY underwater, not just financially so. You Roll the Dice and you repeat the Mantra, “It won’t Happen Here, It won’t Happen to Me and my Family”. If you are LUCKY, it won’t, but the further we go down the road here, the lower your odds get on this one the closer you live to the shoreline.
The only other Option you have is preparing for the Fast Bugout, which only works of course if you get enough WARNING to make that bugout. Big Cyclonic Storms usually come with a few days warning these days, so if you have an SUV and a Bugout Package prepared, in most cases I think you can GTFO of Dodge in time with this type of event. Tsunamis, less so, the Tsunami Warnings are only a few hours in advance most of the time, and if the Quake that caused it is pretty close to you a lot less than that. If you happen to be playing a round of Golf or are busy making the Beast with two Backs with your Significant Other and don’t have a Radio playing, you probably miss the warning anyhow. Some communities do have those big Sirens, but not sure how prevalent they are everywhere. If it is an Earthquake, you get ZERO warning, there still is no method of predicting when a Big Quake will hit your locale, only statistics which say you are due for one in the next decade or something like that.
If you live AWAY from the shoreline, you still are not SAFE of course, though probably safer in most cases. However, on any given day out in Tornado Alley, the Funnel Clouds can start dropping down around you. As with the Cyclonic Storms on the coastline, usually there is pretty decent warning from NOAA, Jeff Masters on Weather Undergound and your local Weatherman when conditions are right for Tornadoes to hit your neighborhood, and these neighborhoods usually DO have Sirens that go off when Funnel Clouds are spotted. However, you better have your Bugout Machine pre-packed and Ready to Go in this situation, because when those Sirens go off it is usualy only minutes before the Tornadoes start hitting. Then you gotta know which way the weather system is moving so you know which way to GO, and not drive yourself into the middle of the disturbance. Mostly though, even out on the road you can see which way the system is going, and if you DO spot a MONSTER, which way it is going. If it is coming TOWARD you, go the OTHER WAY! FAST! Like Pedal to the Metal fast and don’t worry about the Speeding tickets either! Cars generally can outrun Tornadoes, the Tornado freaks do this all the time capturing the videos.
The bigger problem if you live in Tornado Alley is the Boy Who Cried Wolf problem. Probably 99% of the time when the sirens go off, the Tornado does not touch down on your McHovel. So if every time you hear it you jump in your Bugout Machine and go Running for them thar Hills, this gets a little wearing on you and you stop doing it, choosing instead to just head down to the basement and hope the thing does not land on your House and ship it to Oz. MOST of the time this will WORK, and even if your house does experience SOME damage, it is not flattened and you and the family are fine. You head over to Home Depot, by some plywood and new Windows and go back to BAU after makng the repairs. The problem only comes when the Tornado hits YOUR McHovel as Ground Zero, then not only is your McHovel Flattened but your Bugout Machine has gone to Oz without you, and you are left with NOTHING. So you do have to resist the temptation to complacency on this, not ignore the warnings and Do The Drill as often as it crops up in your Nabe.
There are other problems to deal with also in almost every spot, Wildfires in Remote Mountainous areas, Flash Floods, Volcanoes etc. Where I live on the Ring of Fire we got plenty of Volcanoes and Anchorage had an Earthquake back in ’64 bigger than the Sendai Quake which sent the Tsunami firing at Fukushima. So, it is a bit of a Dice Roll anywhere you go, but Coastlines have the worst Odds here, and they get steadily worse all the time with each passing year. So if you can evacuate now, this would be a good time to do so. At the very least, if you cannot leave now, know WTF the High Ground is.
For the Philipinos now, I don’t think their choices are much different or better than the Nips living on Honshu Island, even though they don’t have a Nuke poisoning the water supply. They either Evacuate or Die. It’s not going to get any better any time soon in either locale, and a good chance it gets a whole lot worse. Any given day under Fukushima Daichi they can get another big quake that brings down the whole containment facility and all the Radioactive Water Containment Tanks they have built around it now. The ground underlying Japan shakes like a Pole Dancer on Steroids, I have an Earthquake Monitor program on my laptop which shows almost constant 4-5 Mag Quakes under Japan every day. They’ll get another Big One there, it is GUARANTEED. Just a matter of WHEN, and every day they live on Borrowed Time. One can only hope before this occurs they MIRACULOUSLY get all the fuel rods out of there and we don’t see a Super Critical event, because this will do a lot more damage than to just Honshu Island.
In reality of course, MOST Philipinos HAVE NO CHOICE. They can’t leave, they don’t have money for Busfare much less a Plane Ticket out. Where to go that would accept them as Refugees, and what kind of Jobs or economic opportunity is there anywhere else? All they can do here is try to rebuild, long as the AID flows in with money to do so. For the Philipinos, FAST COLLAPSE has already come and gone. May still be Slow and Catabolic in your Nabe, but not for the Philipinos anymore.
Indonesia recalls Canberra ambassador over Yudhoyono phone tapping attempt | World news | theguardian.com
Indonesia has recalled its ambassador to Australia following Guardian Australia’s revelations that Australian spy agencies attempted to listen to the private phone calls of the Indonesian president and targeted the phones of other senior figures in Jakarta, including his wife.
The Indonesian foreign minister, Marty Natalegawa, confirmed on Monday that he and the president had contacted the ambassador in Canberra and told him to return to Jakarta for “consultations”. He added that Indonesia was reviewing all information-sharing agreements between the two nations, a damning move given the new Australian government’s pledge to combat people-smuggling in the region.
Natalegawa said any tapping of Indonesian politicians’ personal phones “violates every single decent and legal instrument I can think of – national in Indonesia, national in Australia, international as well”.
He added: “It is nothing less than an unfriendly act which is already having a very serious impact on bilateral relations.”
Natalegawa said summoning the ambassador was “not considered a light step” but was the “minimum” that could be done to “consolidate the situation”.
“The ball is very much in Australia’s court,” he said, calling for an official, public explanation from Canberra.
He expressed frustration at the response he had received from the Australian capital, adding he would be speaking with the Australian foreign minister, Julie Bishop, later on Monday. Natalegawa dismissed any suggestion that phone surveillance was “common practice between countries”, saying: “I have news for you: we don’t do it, we certainly should not be doing it among friends.”
Natalegawa said he would be examining whether the phone tapping revelations were in violation of the Lombok treaty signed by the two nations in 2006, which aimed to enhance bilateral security co-operation.
The foreign minister, known for his reserved demeanour, spoke in an unusually forthright manner. He said he would be “quite flabbergasted” if tapping the private phone calls of the president had relevance to Australia’s security interests.
“I need quite desperately an explanation how a private conversation involving the president of the Republic of Indonesia, involving the first lady of the Republic of Indonesia, how they can even have a hint, even a hint of relevance impacting on the security of Australia,” he said.
Earlier on Monday, the deputy Australian ambassador to Indonesia, David Engel, was called to the foreign ministry for talks. After a 20-minute meeting, he described talks as “very good”.
A line of severe storms swept across southern and eastern Ontario Sunday night, bringing heavy rain and winds gusting to 90 km/h.
Hydro One says at the height of the storm the power was knocked out to well over 100,000 homes and businesses between Windsor and the Kingston area.
The power was back on for some by 6 a.m., but through the early morning some 86,000 Hydro One customers were still without power.
High winds responsible for outages across the province. Crews working to restore power to those affected.
— Hydro One (@HydroOne) November 18, 2013
In the Greater Toronto Area some 70,000 customers were left in the dark, and another 24,000 in London. Crews worked through the night to get the lights back on, though by early morning “small pockets” of Toronto were still without power according to Toronto Hydro.
We’re experiencing outages in a few small pockets as a result of winds. Approx. 150 customers affected. Hope to have all restored by 6 a.m.
— Toronto Hydro (@TorontoHydro) November 18, 2013
The weather system roared into Ontario after punishing the American Midwest with tornadoes and thunderstorms that left at least six dead in Illinois.
In the central Illinois town of Washington, a twister obliterated entire neighbourhoods, flipping vehicles, uprooting trees, and ripping down power lines.
The storms also caused damage in Kentucky, Wisconsin, Indiana, Ohio and Michigan.
|Deforestation in Brazil’s Amazon region has risen 28 percent over the past year, the country’s environment minister says.
Making the announcement in the capital Brasilia on Thursday, Izabella Teixeira said she was calling an emergency meeting to try to remedy the situation.
“We confirm a 28 percent increase in the rate of deforestation, reaching 5,843sq km,” she said quoting provisional statistics for August 2012 through July this year.
Extensive farming and soya-bean production in the northern state of Para and the central-western state of Mato Grosso were key factors behind the rise, Teixeira said, citing increases for the two states of 37 and 52 percent respectively.
Teixeira said she would meet Amazon regional environment secretaries of state next week to demand explanations and measures to deal with the situation on her return from a UN climate change summit in Warsaw.
Teixeira also criticised the apparent ineffectiveness of monitoring by federal state authorities.
“The Brazilian government does not tolerate and does not accept any rise in illegal deforestation,” she said, insisting that the country was firmly committed to drastically reducing deforestation.
Although large in percentage terms, the rise in absolute terms is the second smallest in recent years as 2012 saw 4,571sq km of deforestation, following an even more disturbing 6,418sq km in 2011.
The worst year on record was 2004, when 27,000sq km of forest was lost.
Environmentalists blame the increase on a loosening of Brazil’s environmental laws. They also say that the government’s push for big infrastructure projects like dams, roads and railways is pushing deforestation.
Paulo Adario, coordinator of Greenpeace’s Amazon campaign, said it was scandalous that there was such an increase in the destruction.
“The government can’t be surprised by this increase in deforestation, given that their own action is what’s pushing it,” he said.
“The change in the Forest Code and the resulting amnesty for those who illegally felled the forest sent the message that such crimes have no consequences.”
Brazil, a major global agricultural producer, is caught between environmental pressures and the interests of large-scale farmers.
The country’s forestry code requires landowners in the Amazon to devote 80 percent to native forests. But enforcement has been lax.