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The Day I Found Out the Canadian Government Was Spying on Me | DeSmog Canada

December 5, 2013 10:05 pm / Leave a comment

The Day I Found Out the Canadian Government Was Spying on Me | DeSmog Canada.

Nov. 19th, 2013. A Tuesday. The day started out sunny, but hail fell out of the sky in the afternoon. It was a Victoria day like any other until I found out the Canadian government has been vigorously spying on several Canadian organizations that work for environmental protections and democratic rights.

I read the news in the Vancouver Observer. There, front and centre, was the name of the organization I worked for until recently: Dogwood Initiative.

My colleagues and I had been wary of being spied on for a long time, but having it confirmed still took the wind out of me.

I told my parents about the article over dinner. They’re retired school teachers who lived in northern Alberta for 35 years before moving to Victoria.

I asked them: “Did you know the Canadian government is spending your tax dollars to spy on your daughter?”

Then I told them how one of the events detailed in e-mails from Richard Garber, the National Energy Board’s “Group Leader of Security,” was a workshop in a Kelowna church run by one of my close friends and colleagues, Celine Trojand (who’s about the most warm-hearted person you could ever meet). About 30 people, mostly retirees, attended to learn about storytelling, theory of change and creative sign-making (cue the scary music).

In the e-mails, Garber marshals security and intelligence operations between government operations and private interests and notes that his security team has consulted with Canada’s spying agency, CSIS.

To add insult to injury, another set of documents show CSIS and the RCMP have been inviting oil executives to secret classified briefings at CSIS headquarters in Ottawa, in whatThe Guardian describes as “unprecedented surveillance and intelligence sharing with companies.”

These meetings covered “threats” to energy infrastructure and “challenges to energy projects from environmental groups.” Guess who is prominently displayed as a sponsor on the agenda of May’s meeting? Enbridge, the proponent of a controversial oilsands pipeline to the coast of British Columbia.

I asked my folks: “Isn’t that scary? CSIS is hosting classified briefings sponsored by Enbridge?” No answer. My parents are not the type to get themselves in a flap about things like this, but I prodded them: “Dad, this is scary, right?”

“It’s scary,” he admitted.

How much information is being provided to corporations like Enbridge? What about state-owned Chinese oil companies like Sinopec, which has a $10 million stake in Enbridge’s Northern Gateway pipeline and tanker proposal?

What kind of country spies on environmental organizations in the name of the oil industry? It seems more Nigerian than Canadian.

I fought the urge to react with indignation, a sentiment I find all too common in the environmental movement. I also didn’t want to be overwrought about it. Fact is though, the more I thought about those documents, the more I began to feel a sense of loss for my country.

I’m not the touchy-feely type. Everyone from my conservative cousins in Alberta to my former colleagues at the Calgary Herald could attest to that. I grew up in northern Alberta playing hockey and going to bush parties. I think our oil and gas deposits, including the oilsands, are a great asset to our country — if developed in the public interest. Yes, that’s a big “if” — but Canadians own these resources and the number one priority when developing them should be that Canadians benefit.

For speaking up for the public interest and speaking out against the export of raw bitumen through the Great Bear Rainforest, hundreds of people like me have been called radicalsand painted as enemies of the state, as somehow un-Canadian. That last bit is what hits me in the gut.

I love my country. And in my eyes, there isn’t anything much more patriotic than fighting for the interests of Canadian citizens. I’ve argued that after 25 years of oilsands development, Albertans should have something to show for it — not be facing budget crises and closing hospital beds; that Albertans aren’t collecting a fair share of resource revenues; that we should develop resources at a responsible pace that doesn’t cause rampant inflation, undermining Canadians’ quality of life and hurting other sectors of the economy; that we should prioritize Canadian energy security (half of Canada is currently dependent on foreign oil). And I’ve agreed with the Alberta Federation of Labour that exporting raw bitumen and 50,000 jobs to China doesn’t make sense for Canadians

Now, I don’t expect everyone to agree with me, but it’s a stretch to portray any of those statements as unpatriotic or radical. In fact, one of my proudest moments as a Canadian was encouraging citizens to register to speak at the public hearings on Enbridge’s pipeline and tanker proposal for B.C. With a team of committed people at Dogwood, in collaboration with several other groups, we helped more than 4,000 people sign up to have their say — seven times more than in any previous National Energy Board hearing.

It was this act of public participation that sparked the beginnings of the federal government’s attacks on people who oppose certain resource development proposals. Helping citizens to participate in an archaic public hearing process is a vital part of democracy— not something to be maligned.

What makes me sad is the thought that we’ve been reduced to being the type of country that spies on its own citizens when they speak out against certain corporate interests. Not only that, but our government then turns around and shares that intelligence with those corporations.

Disappointingly, a scan of today’s news coverage indicates Canada’s major newspapers never picked up the spying story, save for one 343-word brief on page 9 of the Vancouver Province. Is it now so accepted that the Canadian government is in bed with the oil industry that it doesn’t even make news any more? Now that’s really sad.

Whether you agree or disagree with my ideas about responsible natural resource development, I’d hope we could all agree Canada should be a country where we can have open and informed debate about the most important issues of our time — without fear of being attacked and spied on by our own government.

 

SHTF Survival: How To Prevent Infections

December 5, 2013 6:49 pm / Leave a comment

SHTF Survival: How To Prevent Infections.

This article was written by Tess Pennington and originally published at Ready Nutrition

Storing medical supplies, especially antiseptic is a must when planning for an emergency event where hospitals and other types of medical care will be difficult to access. We all know that accidents happen, but when they get infected then they become life threatening.

Those that are preparing for short term and long term disasters more than likely have begun stocking up on certain supplies, such as bleach, water and baking soda mainly due to their versatility. But did you know that when these three items are combined together, they create a powerful antiseptic that can save a life? This antiseptic, otherwise known as Dakin’s Solution (diluted sodium hydrochlorite solution 0.5%) can be used to kill most bacterias and viruses.

This antiseptic was first discovered during World War I, when doctors on the battlefield were trying to find ways to kill germs and prevent bacterial related infections, such as gangrene and putrefacation from setting in. Doctors found that when they used Dakin’s solution before and after surgical procedures and for wound irrigation the patient’s condition improved. It was most beneficial after the wound had been adequately cleaned and foreign material and dead tissue had been removed.

Uses For Dakin’s Solution

  • Minor scrapes
  • Skin and tissue infections
  • Can be used before and after surgical procedures to prevent infection
  • Can be used as a mouth wash (should not be swallowed)
  • Used as a wound irrigator solution to clean wounds
  • Can be applied as a wet-to-moist dressing for wounds

Supplies Needed:

  • Sodium hydrochlorite solution at 5.25% (Bleach-unscented)
  • Baking soda
  • Clean tap water
  • Clean pan with lid
  • Sterile measuring cups and spoons
  • Sterile jar with a sterile lid
  • Label for jar to label antiseptic,date, time and discard date

 

To Make Solution:

 

1.  Wash your hands well with soap and water.
2.  Measure out 32 ounces (4 cups) of clean water.  Pour into a clean pan and allow water to boil for  15 minutes. Remove pan from heat.
3.  Using a sterile measuring spoon, add 1/2 tsp. of of baking soda to the water.
4. Measure the bleach according to the strength that is desired:

 

– For full strength – add 3 oz. bleach or 95 ml.
– For 1/2 strength – add 3 tbls. + 1/2 tsp. or 48 ml.
– For 1/4 strength – add 1 tbls. +2 tsp. or 24 ml.
– For 1/8 strength – add 2 1/2 tsp. or 12-14 ml.

 

5.  Place the solution in a jar and close it tightly with a sterile lid. Cover the closed jar with tin foil to protect it from sunlight.
6.  Throw away any unused portion of the antiseptic within 48 hours of use.  This solution can be made up to a month prior to using and stored away.

According to WebMD, “The body’s own wound-healing tissues and fluids can decrease the antibacterial effect of Dakin’s solution. Therefore, this solution is often used only once daily for minor wounds and twice daily for heavily draining or contaminated wounds… Additionally, protect the surrounding healthy skin with a moisture barrier ointment (i.e. petroleum jelly) or skin sealant as needed to prevent irritation.”

Additional Information on Dakins Solution

 

Wikileaks Cables: Saudi Arabia Oil Reserves Overstated – Our World

December 5, 2013 6:46 pm / Leave a comment

Wikileaks Cables: Saudi Arabia Oil Reserves Overstated – Our World.

The United States fears that Saudi Arabia, the world’s largest crude oil exporter, may not have enough reserves to prevent oil prices escalating, confidential cables from its embassy in Riyadh show.

The cables, released by WikiLeaks, urge Washington to take seriously a warning from a senior Saudi government oil executive that the kingdom’s crude oil reserves may have been overstated by as much as 300 billion barrels — nearly 40%.

The revelation comes as the oil price has soared in recent weeks to more than $100 a barrel on global demand and tensions in the Middle East. Many analysts expect that the Saudis and their OPEC cartel partners would pump more oil if rising prices threatened to choke off demand.

However, Sadad al-Husseini, a geologist and former head of exploration at the Saudi oil monopoly Aramco, met the US consul general in Riyadh in November 2007 and told the US diplomat that Aramco’s 12.5 million barrel-a-day capacity, needed to keep a lid on prices, could not be reached.

Tapping the truth

According to the cables, which date between 2007-09, Husseini said Saudi Arabia might reach an output of 12 million barrels a day in 10 years but before then — possibly as early as 2012 — global oil production would have hit its highest point. This crunch point is known as “peak oil“.

Husseini said that at that point Aramco would not be able to stop the rise of global oil prices because the Saudi energy industry had overstated its recoverable reserves to spur foreign investment. He argued that Aramco had badly underestimated the time needed to bring new oil on tap.

 

“We are asleep at the wheel here: choosing to ignore a threat to the global economy that is quite as bad as the credit crunch, quite possibly worse.”

Jeremy Leggett, UK Industry Taskforce on Peak Oil and Energy

One cable said: “According to al-Husseini, the crux of the issue is twofold. First, it is possible that Saudi reserves are not as bountiful as sometimes described, and the timeline for their production not as unrestrained as Aramco and energy optimists would like to portray.”

It went on: “In a presentation, Abdallah al-Saif, current Aramco senior vice-president for exploration, reported that Aramco has 716 billion barrels of total reserves, of which 51% are recoverable, and that in 20 years Aramco will have 900 billion barrels of reserves.

“Al-Husseini disagrees with this analysis, believing Aramco’s reserves are overstated by as much as 300 billion barrels. In his view once 50% of original proven reserves has been reached … a steady output in decline will ensue and no amount of effort will be able to stop it. He believes that what will result is a plateau in total output that will last approximately 15 years followed by decreasing output.”

Kingdom of contradictions

The US consul then told Washington: “While al-Husseini fundamentally contradicts the Aramco company line, he is no doomsday theorist. His pedigree, experience and outlook demand that his predictions be thoughtfully considered.”

Seven months later, the US embassy in Riyadh went further in two more cables. “Our mission now questions how much the Saudis can now substantively influence the crude markets over the long term. Clearly they can drive prices up, but we question whether they any longer have the power to drive prices down for a prolonged period.”

A fourth cable, in October 2009, claimed that escalating electricity demand by Saudi Arabia may further constrain Saudi oil exports. “Demand [for electricity] is expected to grow 10% a year over the next decade as a result of population and economic growth. As a result it will need to double its generation capacity to 68,000MW in 2018,” it said.

It also reported major project delays and accidents as “evidence that the Saudi Aramco is having to run harder to stay in place – to replace the decline in existing production.” While fears of premature “peak oil” and Saudi production problems had been expressed before, no US official has come close to saying this in public.

In the last two years, other senior energy analysts have backed Husseini. Fatih Birol, chief economist to the International Energy Agency, told the Guardian last year that conventional crude output could plateau in 2020, a development that was “not good news” for a world still heavily dependent on petroleum.

Jeremy Leggett, convenor of the UK Industry Taskforce on Peak Oil and Energy Security, said: “We are asleep at the wheel here: choosing to ignore a threat to the global economy that is quite as bad as the credit crunch, quite possibly worse.”

◊ – ◊ ◊ – ◊

 

Oil Price Volatility on the Way? – Our World

December 5, 2013 6:44 pm / Leave a comment

Oil Price Volatility on the Way? – Our World.

Oil Price Volatility on the Way

Photo: Domiriel

Predictive relationships appear to occur between large, rapid swings in oil price and recessions, stock market crashes and shifts in political polls, as I have previously discussed in articles published in 2010 and 2011. Given the economic disruptions that nearly always happen in the aftermath of oil shocks, it seems important to understand what is behind the timing of transient instabilities in the oil markets.

Last time, I examined whether repetitive patterns could be found in the ebb and flow of oil price changeability (volatility) between 2000 and 2010. To do this, I calculated rolling standard deviations (for explanation, please see Figure 2 in this post)  for a 120-month series of monthly oil prices starting from January 2000. A mathematical tool called Fast Fourier Transform then scanned for repeating patterns in this rolling 10-year sequence.

What I found was that from the mid-2000s, changes in oil price showed evidence of a multi-year oscillation. This pattern was marked by a single dominant frequency that peaked at 2.8 years (~32 months). In other words, during the first decade of the new millennium, volatility in the price of oil appeared to spike every two to three years.

Confirming the potential emergence of a long-term rhythmic pattern, oil price variance spiked again in April 2011, precisely 32 months after the last major round of volatility had topped out in July 2008.

It is coming up on 30 months since the now largely forgotten market turbulence of mid-2011. If oil price volatility is oscillating in a repeating two to three-year cycle, then can we expect to see another wave of instability in oil prices occur in late 2013 or early 2014.

Oil price has lately begun showing signs of increased twitchiness — although the increase in volatility is so far modest. Recently, a crisis triggered by the use of chemical weapons in Syria, is the cause du jour that is being blamed for oil prices ramping up from the mid US$90s to over US$110 per barrel — an explanation that I find doubtful, by the way.

It remains to be seen whether the oscillatory signal described in my 2011 article will continue into the future. However, I have used oil price data that has accumulated since my earlier articles to extend the analysis, presented below.

To improve resolution of changes in oil price volatility over the last 10 or so years, I used a slightly different approach. Instead of scanning through monthly averages, a rolling 3-day standard deviation was calculated using daily prices of West Texas Intermediate (WTI) crude oil from 5 January 2004 to 30 July 2013.

The time series for the daily price of WTI oil (grey line) and its corresponding rolling 3-day standard deviation (orange line) for the period are shown in Figure 1. For those who follow oil prices, the grey line on the plot is all too familiar — distinguished as it is by the scary, vertiginous peak of 2008.

Oil-Price-Volatility

To scan for evidence of repeating signatures in the serrate orange line that traces oil price volatility on the figure, I again used Fast Fourier Transform. The results of this analysis are summarized in Figure 2. From this plot it can be seen that during the last 8 years price volatility has occurred roughly every 2.9 years (33 months).

FFT Power

This 2.9-year estimate for the period between spikes, based on daily oil prices, is in agreement with my 2011 estimate, calculated using monthly prices. Thus, the updated analysis accords with the previous finding — namely, that between 2004 and 2013, variance in the price of oil demonstrated a tendency to spike at a frequency of every two to three years.

Readers of my previous articles will know that I suspect that the “rinse and repeat” volatility cycle suggested by my analyses results from a global plateau in oil production being reached in 2005. I favor the hypothesis that an autonomous (e.g., like a heartbeat) oscillation in price volatility has emerged as a result of imbalances between supply and demand at this production plateau. Interestingly, similar oscillatory phenomena have been noted as an emergent property of predator-prey relationships in nature.

A major new development in the hunt for oil is the rise of “fracking” — the hydraulic fracturing extraction technology that has pushed the United States to the forefront as a major producer. It will be interesting to watch and see whether fracking alters the dynamics of oil price changeability in the next few years — perhaps temporarily damping the amplitude of its oscillatory behavior.

If a new spike in price variance does occur in coming months, then it would pay to keep an eye on stocks, given the tendency of the market to react to oil shocks. Also, if a new wave of instability in the oil market sweeps in, then the 2014 congressional elections could have surprises in store. Stay tuned to this frequency.

•••

 

Climate Change and Fukushima – Radio Ecoshock Paints the Big Picture

December 5, 2013 6:40 pm / Leave a comment

Climate Change and Fukushima – Radio Ecoshock Paints the Big Picture.

by Janaia Donaldson, originally published by Peak Moment Television  | TODAY

 

Two ongoing environmental events are affecting all life on the planet, even if it’s not yet noticeable where you live. Alex Smith of Radio Ecoshock is watching climate change and Fukushima very closely. In this program, he summarizes the latest reports and predictions. Extreme weather events are increasing and worsening. Ocean dead zones are growing. Methane from melting permafrost is warming the atmosphere faster than carbon dioxide.

The Fukushima nuclear site has already increased airborne radioactivity in the northern hemisphere. Ocean-borne radioactivity will be hitting the North American west coast by 2014. And no one knows what to do about it. But Alex has ideas on how we can respond individually and positively. Episode 251.

 

Editorial Notes: More on Fukushima:

Fukushima two years on: a dirty job with no end in sight – 3 Dec, 2013 – The tsunami that wrecked the Fukushima Daiichi power plant has led to the toughest nuclear cleanup ever. Radioactive water is still poisoning the sea – and it could take 40 years to fix the mess. Is Japan up to the challenge?

Fukushima’s fuel rod removal plan – 8 Nov, 2013 – When I asked the same experts how long it would be until reactors one, two and three could be dismantled, they shook their heads. When I asked them where they thought the melted reactor cores were, they shook their heads again.

Japan cracks down on leaks after scandal of Fukushima nuclear power plant – 26 Nov, 2013 – State secrecy law carrying threat of 10-year jail term criticised as attack on democracy but PM denies trying to gag press.

 

Ontario to refurbish existing nuclear reactors, not build new | Canada | Reuters

December 5, 2013 6:25 pm / Leave a comment

Ontario to refurbish existing nuclear reactors, not build new | Canada | Reuters.

Canada geese stand near the troubled Ontario Hydro Pickering nuclear power station August 13, 1997.
1 of 1Full Size

(Reuters) – The province of Ontario plans to refurbish units at the Darlington and Bruce nuclear power plants but no longer wants to build new reactors, according to its 2013 long-term energy plan.

Instead the Energy Ministry said in the plan released this week it will encourage conservation and demand management programs before building new generation.

The Ministry said consumer costs will still rise under the new plan but less than in the last plan in 2010, even though Ontario will phase out its coal-fired generation by the end of 2014.

According to the new plan, residential power bills are expected to rise about 2.8 percent a year for the next 20 years, down from a forecast increase of 3.5 percent under the 2010 plan, the Ministry said.

Under the current plan, residential bills will rise to C$178 in 2018 from about C$138 a month in 2013. The 2010 plan forecast residential bills would reach C$191 a month in 2018.

The Ministry forecast Ontario’s energy mix in 2025 at 42 percent nuclear, 46 percent renewable, and 12 percent natural gas. None would come from coal.

In 2013, Ontario produced 59 percent of its power from nuclear, 28 percent from renewable, 11 percent from natural gas and 2 percent from coal.

Ontario Power Generation (OPG), the province-owned power generator, has said it wants to refurbish the four reactors at its 3,512-megawatt Darlington plant, located along Lake Ontario about 70 km (43 miles) east of Toronto, to keep them running for another 25 to 30 years.

Under the latest plan, the Energy Ministry said OPG will work on Darlington 2 in 2016-2019, Unit 1 in 2019-2022, Unit 3 in 2021-2024 and Unit 4 in 2022-2025.

The Ministry has estimated the Darlington refurbishment cost at about C$6 billion to C$10 billion.

OPG also operates the 3,100-MW Pickering nuclear plant along Lake Ontario, about 40 km east (24 miles) of Toronto. OPG said it plans to spend about C$200 million to refurbish four of the six reactors at Pickering, Units 5-8, to keep them running through 2020, when the entire plant will retire.

The Ministry said OPG could retire some Pickering reactors sooner than 2020, depending on projected demand, the progress of fleet refurbishment and the completion of a new substation in Clarington.

Hydro One, the province-owned transmission company, expects to complete the Clarington substation, located between Pickering and Darlington, by 2017, according to the Ministry.

NO NEW REACTORS

OPG had been looking to build two new reactors at Darlington, and in 2012 signed agreements with Westinghouse Electric, a unit of Japanese multinational Toshiba Corp, and SNC Lavalin Group Inc’s Candu Energy to prepare cost estimates.

The Energy Ministry said the deferral of the new reactors in the new plan reduced capital expenditures by up to C$15 billion.

Bruce Power, the other nuclear operator in Ontario, decided not to pursue construction of new reactors in 2009 due in part to weak market conditions.

Over the past few months, Bruce said it was ready to invest billions to refurbish the eight reactors at its 6,300-MW Bruce plant to keep them running through 2040. Bruce is located in Tiverton, about 225 km (139 miles) west of Toronto along Lake Huron.

The Energy Ministry said Bruce will work on Bruce 4 in 2016-2020, Unit 3 in 2019-2022, Unit 5 in 2022-2025, Unit 6 in 2024-2027, Unit 7 in 2026-2029 and Unit 8 in 2028-2031.

In September, Bruce said it was investing C$430 million to overhaul the 750-MW Units 2 and 3 during future planned outages to extend the reactors’ lives.

Bruce Power is partnership between TransCanada Corp; Cameco Corp; Borealis Infrastructure Management, a division of the Ontario Municipal Employees Retirement System; the Power Workers’ Union; the Society of Energy Professionals; and a majority of Bruce Power’s employees.

(Reporting by Scott DiSavino; Editing by Jeffrey Benkoe)

 

Kyle Bass Warns When “Everyone Is ‘Beggaring Thy Neighbor’… There Will Be Consequences” | Zero Hedge

December 5, 2013 4:11 pm / Leave a comment

Kyle Bass Warns When “Everyone Is ‘Beggaring Thy Neighbor’… There Will Be Consequences” | Zero Hedge.

“There are going to be consequences to central bank balance sheet expansion all over the world,” Kyle Bass tells Steven Drobny in his new book, The New House of Money, adding “It’s a beggar-thy-neighbor policy, but everyone is beggaring thy neighbor.” The Texan remains concerned at QE’s effects on wealth inequality and worries that “at some point this is going to ignite and set cost pressures off.” While Gold-in-JPY is his recommended trade for non-clients, his hugely convex trades on Japan’s eventual collapse remain as he explains the endgame for his thesis, “won’t buy back until JPY is at 350,” and fears “the logical conclusion is war.”

Excerpted from Steven Drobny’s The New House Of Money,

Drobny: You’re on the tape saying that dollar/yen is going to 200.

Bass: If I’m right, it will go much further than that. I don’t think it will hit 500, but in crises, currencies swing too far. They can start discounting 15% or 20% rates out ad infinitum because they are in a full bond crisis. But once they flush the debt and have a reset, you’re not going to have 20% rates ad infinitum. We’ve committed more capital to the currency market, but all of the convexity is in the bond market.

Drobny: Recently we’ve seen the yen move your way and everyone is getting excited about “The Japan Trade” – is this the big move you’ve been looking for?

Bass: No, this is just the beginning. It’s not the real move. The real move happens when it runs away from the authorities and they lose control.

Drobny: At what point do you go the other way and buy Japan?

Bass: When the yen is 350 and they’ve wiped out their debts.

Drobny: Let’s play out your Japan scenario. If the yen goes to 350 and Japanese government bond yields go to 20% and they can no longer finance themselves such that it becomes a financial disaster, what are the implications for the rest of the world?

Bass: Well, policymakers have been changing the rules, which is challenging for macro hedge funds. But that’s the beauty of this situation.

Drobny: What if they decide to just knock a few zeros off the debt?

Bass: In the end, they may be forced to do so.

Drobny: What if they bought the whole debt stock at 1% yield?

Bass: That’s the St. Louis Fed’s school of thought, which contends that countries that have their own central banks can print their own currency and will never fall. For the world’s sake, I wish that were true. For the last 2000 years, it hasn’t been true, and I don’t believe it to be true. If it is true, I’ll lose 150 basis points a year and move on. Our core portfolio will be fine. Still, if it were true, then why even have fiscal policy? We don’t need a fiscal policy if that’s the case – we could just spend the money however we want. Policymakers don’t believe there are consequences to their actions, but the consequences will come. Economic gravity will actually set in.

Drobny: But you don’t suffer the consequences if you are out of office. That’s the next person’s problem.

Bass: The point is that no one will make those difficult decisions unless they’re forced to make them. The politics of all these situations tell me how this is going to play out, and that’s through massive central bank balance sheet expansion and capital controls.

The Fed recently wrote a paper that actually endorsed capital controls if done concurrently with other nations. It’s hard for me to fathom that capital controls can ever be a great idea, but this is what you’re going to see.

We are in a period that will be characterized by enormous cross-border capital flows. How will it play out? Let’s assume that I’m right about Japan. What happens then? Nominal interest rates in the US and Germany go negative. The Pavlovian response is to fly to perceived safety; this is why we’re not betting against US rates. In fact, we’re receiving rates in Europe and Australia right now because some sort of stagflation will play out first, before you start to see the real problems in Japan. If you look at history and try to understand what has created despotic rulers and wiped out populations financially in the past, and what happens next, the logical conclusion is war.

Drobny: Who is the war going to be between?

Bass: I’m not exactly sure, but it seems to me that the aggressor in Asia is China and they don’t get along with Japan.

Post-World War II, Japan has been constitutionally limited, such that they cannot declare war. But current Prime Minister Abe is talking about rewriting the constitution so that they can actually declare war again. That’s not stabilizing for the region. Nationalism is rearing its head as we speak.

A third of the population in Japan is over the age of 60, and a quarter is over the age of 65. To put this into context, in the broader developed world only about 8% of the population is over 65. At a point when these people need the money the most, they could lose 30-40% of their savings, maybe more in terms of purchasing power. The social repercussions bother us more than the financial repercussions because the social fabric of Japan will either be stretched or most likely torn, and we don’t know what’s going to happen next.

Drobny: Besides Japan, what bothers you?

Bass: There are going to be consequences to central bank balance sheet expansion all over the world. Look at currency cross rates. If all central banks are expanding at the same rate, the cross rates aren’t moving, but your purchasing power, in terms of goods and services in the country where you live, is diminishing. You’re not focused on real returns, you’re preoccupied with the cross rates.It’s a beggar-thy-neighbor policy, but everyone is beggaring thy neighbor.

I really worry about the true cost of goods and services, but people are preoccupied by the dollar/euro exchange rate to gauge the relative strength of the European economy. You see this preconditioned response and even macro players say things like, “Oh, buy the Nikkei at week end.” They’re picking up a dime in front of a bulldozer. Japanese industry has been hollowed out. The exchange rate may stop the decline for a certain period of time but it’s a secular decline. The people that own Japanese equities right now are tourists. But this creates opportunities in the marketplace.

Bass On inflation,

When you look at what’s going on from an inflation perspective, central banks have printed about $10 trillion dollars since the beginning of the crisis. The first $4-5 trillion went into re-equitizing heavily leveraged structures and bringing down rates. The second $4-5 trillion is making its way into the monetary base, and even though the multiplier is not working, at some point this is going to ignite and set cost pressures off. Again, it won’t be demand-pull, which is technically a good kind of inflation. Rather, it would result from too much money in the system.

Bass On QE’s effects on wealth inequality,

It will show up in food in the early stages. Global QE is filtering its way into asset prices. Those closest to the proverbial spigot are enjoying the printing the most with most in the middle and lower class not feeling the love at all. All you have to do is look at the gap between median income and mean income growing ever wider. This means the rich are getting richer while the rest stay stagnant or even decline.

Drobny: If you could do only one trade for the next ten years – non-risk-managed…

Bass: Actually, the answer to this one is easy – I would buy gold in yen.

 

Violent storms batter UK triggering emergency response | UK news | The Guardian

December 5, 2013 4:06 pm / Leave a comment

Violent storms batter UK triggering emergency response | UK news | The Guardian.

Allonby

Heavy seas and high tides batter the village of Allonby in Cumbria. Photograph: Owen Humphreys/PA

Two people were killed, dozens were injured and thousands of residents were rescued or fled from their homes on Thursday as the UK was battered by powerful winds and seaside communities were threatened by the worst storm surge for more than 60 years.

The government’s emergency Cobra committee met twice and local emergency plans swung into operation as the surge threatened to engulf areas of the east coast of England from Northumberland to Kent plus parts of the north-west from Cumbria to Cheshire as well as communities in north Wales.

Emergency services and local authorities advised more than 15,000 people to leave their homes on the east coast of England. Some were due to spend a worrying night with relatives or in emergency rest centres, although many others refused to move, insisting they would stay to protect their properties.

By Thursday evening, more than 40 severe flood warnings – indicating danger to life – had been issued by the Environment Agency, which said the surge could be worse than in 1953 when more than 300 people died and 24,000 homes were damaged or destroyed.

However, the agency was confident that modern flood defences including the Thames and Hull barriers and more efficient warning systems meant such disaster would be averted this time.

The Met Office said the winds were calming but the danger of a storm surge would remain into Friday and snow or ice could also cause problems in the north of England and Scotland.

John Curtin, the Environment Agency’s head of incident management, said: “Flooding of coastal communities along the eastern and north west coasts is expected into Friday. Some defences could be overtopped by the combined effect of high tides, high winds and a large tidal surge.”

The Ministry of Defence was represented at the Cobra meetings and military personnel were standing by ready to help with the rescue effort if needed.

The high winds (a gust of 142mph was recorded over high ground in central Scotland) brought down power lines leaving tens of thousands of households without electricity in Scotland, Northern Ireland and England.

There was also misery for travellers with train services and flights cancelled or delayed. Motorists faced hazardous driving conditions and ferries were disrupted.

According to the Met Office, the problem was caused by a combination of the strong winds, low pressure and high tides. The wind was strong enough to cause water to “pile up” on to some coastlines. Low pressure associated with an Atlantic storm allowed the sea surface to rise temporarily. This combined with high tides to create the surge. Parts of the North Sea are particularly prone to storm surges partly because water flowing into the shallower southern end cannot escape quickly through the narrow Dover Strait and English Channel.

It was the wind rather than the surge that led to the two deaths. One man was killed when he was struck by a tree blown down by the gusts as he rode a mobility scooter through a park in Retford, Nottinghamshire, in the early afternoon.

Earlier, a driver died when his HGV toppled on to a number of cars in West Lothian. Four other people were treated for minor injuries.

Other motorists had lucky escapes. In Birmingham, care worker Muhammad Sial described how his car was crushed by a tree moments after he got out of it. “I just got to the front door and turned to look back and the tree had smashed my car,” he said.

The wind was so strong that people were blown off their feet in some places. In Birmingham’s city centre, a pedestrian was taken to hospital with serious injuries after being hit by falling glass from a window. Two people were also hurt when the roof blew off one of the huts in the city’s popular German Christmas market. A few miles away in Walsall, West Midlands, neighbours had to lift a tree that had toppled on to a man. He was taken to hospital where he was treated for back and neck injuries.

There were some worrying moments for air travellers. A flight to Glasgow was forced to abort two landing attempts in Scotland before being diverted to Manchester. Passenger Hazel Bedford, a charity worker, said: “I’m feeling really lucky to be alive. An awful lot of people were being sick but the plane, it was incredibly quiet. All I could think of was my new year’s resolution this year, which was to write my own will, and I haven’t done it. I was absolutely terrified.”

In Rhyl in north Wales, 40 residents – and six dogs – were ferried to safety by teams from the Royal National Lifeboat Institution and North Wales fire and rescue service. About 400 people in all left their homes in the resort.

As the violent weather moved south from Scotland during the day, police and other emergency services were trying to evacuate thousands of residents on the east coast. They were being asked to move inland and stay with relatives if possible – and local authorities were also opening emergency shelters in leisure centres and schools. Norfolk’s deputy chief constable Charlie Hall said: “We understand people may be anxious, but we would like to reassure residents that Norfolk has tried and tested flood response plans which are being put in place, in line with Environment Agency advice.”

Many said they would not leave. Anne Edwards, of Great Yarmouth, said: “We’re staying put. The house we live in was flooded in 1953 and there’s a four-and-a-half foot-high water line in the dining room from then. We always knew we might be at risk of flooding, so there is a camping stove upstairs and we have water and cans of food. I’ve got my wellies ready.”

In Sandwich, Kent, residents were sent a message by the Environment Agency reading: “Severe Flooding. Danger to life.” and adding: “Act now to protect yourself, family, neighbours, pets and valuables.”

Police in Jaywick, Essex, asked people who wanted to stay in their homes to sign a disclaimer acknowledging they had been advised to leave. Some said they were worried their homes would be looted if they left.

The environment secretary, Owen Paterson, urged people to listen to the emergency services and heed their advice. He said: “These storms are dangerous. I would urge everybody to pay close attention to announcements by the Environment Agency, the department for transport and local government.”

 

Food Poverty in the UK Has Reached “Public Health Emergency” Levels | A Lightning War for Liberty

December 5, 2013 2:51 pm / Leave a comment

Food Poverty in the UK Has Reached “Public Health Emergency” Levels | A Lightning War for Liberty.

Food Poverty in the UK Has Reached “Public Health Emergency” Levels

Posted on December 5, 2013

This tragic story emanating from the UK just doesn’t seem to go away. Probably because it’s true. The food crisis across the pond first came to my attention in earnest back in October when the Red Cross announced it was set to providefood aid to the UK for the first time since World War II.

The latest twist to this unacceptable saga comes via a letter send by a group of doctors and senior academics from the Medical Research Council and two leading universities to the British Medical Journal calling it a “public healthy emergency” and accusing the government of covering up the problem by delaying a report on the subject.

More from The Independent:

Hunger in Britain has reached the level of a “public health emergency” and the Government may be covering up the extent to which austerity and welfare cuts are adding to the problem, leading experts have said.

In a letter to the British Medical Journal, a group of doctors and senior academics from the Medical Research Council and two leading universities said that the effect of Government policies on vulnerable people’s ability to afford food needed to be “urgently” monitored.

A surge in the number of people requiring emergency food aid, a decrease in the amount of calories consumed by British families, and a doubling of the number of malnutrition cases seen at English hospitals represent “all the signs of a public health emergency that could go unrecognised until it is too late to take preventative action,” they write.

Despite mounting evidence for a growing food poverty crisis in the UK, ministers maintain there is “no robust evidence” of a link between sweeping welfare reforms and a rise in the use of food banks. However, publication of research into the phenomenon, commissioned by the Government itself, has been delayed, amid speculation that the findings may prove embarrassing for ministers.

Chris Mould, chief executive of the Trussell Trust, the largest national food bank provider said that one in three of the 350,000 people who required a food bank hand-out this year were children.

In their letter, Dr Taylor-Robinson, Professor Whitehead and colleagues cite figures recently released by the Government which revealed a surge in the number of malnutrition cases diagnosed at English hospitals since the recession – up from 3,161 in 2008/09 to 5,499 in 2012/13. They also draw attention to reports from the Institute for Fiscal Studies which found a decrease in the number of calories purchased by families, as well as “substitution with unhealthier foods, especially in families with young children”.

Fortunately for the UK, they are blessed with a concentration of oligarchs withsupposedly extraordinary capabilities so they should be able to sort this all out in now time. Isn’t that right Boris Johnson?

Full article here.

In Liberty,
Mike

 

Too Big To Fail Banks Are Taking Over As Number Of U.S. Banks Falls To All-Time Record Low

December 5, 2013 2:48 pm / Leave a comment

Too Big To Fail Banks Are Taking Over As Number Of U.S. Banks Falls To All-Time Record Low.

The too big to fail banks have a larger share of the U.S. banking industry than they have ever had before.  So if having banks that were too big to fail was a “problem” back in 2008, what is it today?  As you will read about below, the total number of banks in the United States has fallen to a brand new all-time record low and that means that the health of the too big to fail banks is now more critical to our economy than ever.  In 1985, there were more than 18,000 banks in the United States.  Today, there are only 6,891 left, and that number continues to drop every single year.  That means that more than 10,000 U.S. banks have gone out of existence since 1985.  Meanwhile, the too big to fail banks just keep on getting even bigger.  In fact, the six largest banks in the United States (JPMorgan Chase, Bank of America, Citigroup, Wells Fargo, Goldman Sachs and Morgan Stanley) have collectively gotten 37 percent larger over the past five years.  If even one of those banks collapses, it would be absolutely crippling to the U.S. economy.  If several of them were to collapse at the same time, it could potentially plunge us into an economic depression unlike anything that this nation has ever seen before.

Incredibly, there were actually more banks in existence back during the days of the Great Depression than there is today.  According to the Wall Street Journal, the federal government has been keeping track of the number of banks since 1934 and this year is the very first time that the number has fallen below 7,000…

The number of federally insured institutions nationwide shrank to 6,891 in the third quarter after this summer falling below 7,000 for the first time since federal regulators began keeping track in 1934, according to the Federal Deposit Insurance Corp.

And the number of active bank branches all across America is falling too.  In fact, according to the FDIC the total number of bank branches in the United States fell by 3.2 percent between the end of 2009 and June 30th of this year.

Unfortunately, the closing of bank branches appears to be accelerating.  The number of bank branches in the U.S. declined by 390 during the third quarter of 2013 alone, and it is being projected that the number of bank branches in the U.S. could fall by as much as 40 percent over the next decade.

Can you guess where most of the bank branches are being closed?

If you guessed “poor neighborhoods” you would be correct.

According to Bloomberg, an astounding 93 percent of all bank branch closings since late 2008 have been in neighborhoods where incomes are below the national median household income…

Banks have shut 1,826 branches since late 2008, and 93 percent of closings were in postal codes where the household income is below the national median, according to census and federal banking data compiled by Bloomberg.

It turns out that opening up checking accounts and running ATM machines for poor people just isn’t that profitable.  The executives at these big banks are very open about the fact that they “love affluent customers“, and there is never a shortage of bank branches in wealthy neighborhoods.  But in many poor neighborhoods it is a very different story…

About 10 million U.S. households lack bank accounts, according to a study released in September by the Federal Deposit Insurance Corp. An additional 24 million are “underbanked,” using check-cashing services and other storefront businesses for financial transactions. The Bronx in New York City is the nation’s second most underbanked large county—behind Hidalgo County in Texas—with 48 percent of households either not having an account or relying on alternative financial providers, according to a report by the Corporation for Enterprise Development, an advocacy organization for lower-​income Americans.

And if you are waiting for a whole bunch of new banks to start up to serve these poor neighborhoods, you can just forget about it.  Because of a whole host of new rules and regulations that have been put on the backs of small banks over the past several years, it has become nearly impossible to start up a new bank in the United States.  In fact, only one new bank has been started in the United States in the last three years.

So the number of banks is going to continue to decline.  1,400 smaller banks have quietly disappeared from the U.S. banking industry over the past five years alone.  We are witnessing a consolidation of the banking industry in America that is absolutely unprecedented.

Just consider the following statistics.  These numbers come from a recent CNN article…

-The assets of the six largest banks in the United States have grown by 37 percent over the past five years.

-The U.S. banking system has 14.4 trillion dollars in total assets.  The six largest banks now account for 67 percent of those assets and all of the other banks account for only 33 percent of those assets.

-Approximately 1,400 smaller banks have disappeared over the past five years.

-JPMorgan Chase is roughly the size of the entire British economy.

-The four largest banks have more than a million employeescombined.

-The five largest banks account for 42 percent of all loans in the United States.

-Bank of America accounts for about a third of all business loans all by itself.

-Wells Fargo accounts for about one quarter of all mortgage loans all by itself.

-About 12 percent of all cash in the United States is held in the vaults of JPMorgan Chase.

As you can see, without those banks we do not have a financial system.

Our entire economy is based on debt, and if those banks were to disappear the flow of credit would dry up almost completely.  Without those banks, we would rapidly enter an economic depression unlike anything that the United States has seen before.

It is kind of like a patient that has such an advanced case of cancer that if you try to kill the cancer you will inevitably also kill the patient.  That is essentially what our relationship with these big banks is like at this point.

Unfortunately, since the last financial crisis the too big to fail banks have become even more reckless.  Right now, four of the too big to fail banks each have total exposure to derivatives that is well in excess of 40 TRILLION dollars.

Keep in mind that U.S. GDP for the entire year of 2012 was just 15.7 trillion dollars and the U.S. national debt is just 17 trillion dollars.

So when you are talking about four banks that each have more than 40 trillion dollars of exposure to derivatives you are talking about an amount of money that is almost incomprehensible.

Posted below are the figures for the four banks that I am talking about.  I have written about this in the past, but in this article I have included the very latest updated numbers from the U.S. government.  I think that you will agree that these numbers are absolutely staggering…

JPMorgan Chase

Total Assets: $1,947,794,000,000 (nearly 1.95 trillion dollars)

Total Exposure To Derivatives: $71,289,673,000,000 (more than 71 trillion dollars)

Citibank

Total Assets: $1,319,359,000,000 (a bit more than 1.3 trillion dollars)

Total Exposure To Derivatives: $60,398,289,000,000 (more than 60 trillion dollars)

Bank Of America

Total Assets: $1,429,737,000,000 (a bit more than 1.4 trillion dollars)

Total Exposure To Derivatives: $42,670,269,000,000 (more than 42 trillion dollars)

Goldman Sachs

Total Assets: $113,064,000,000 (just a shade over 113 billion dollars – yes, you read that correctly)

Total Exposure To Derivatives: $43,135,021,000,000 (more than 43 trillion dollars)

Please don’t just gloss over those huge numbers.

Let them sink in for a moment.

Goldman Sachs has total assets worth approximately 113 billion dollars (billion with a little “b”), but they have more than 43 TRILLON dollars of total exposure to derivatives.

That means that the total exposure that Goldman Sachs has to derivatives contracts is more than 381 times greater than their total assets.

Most Americans do not understand that Wall Street has been transformed into the largest casino in the history of the world.  The big banks are being incredibly reckless with our money, and if they fail it will bring down the entire economy.

The biggest chunk of these derivatives contracts that Wall Street banks are gambling on is made up of interest rate derivatives.  According to the Bank for International Settlements, the global financial system has a total of 441 TRILLION dollars worth of exposure to interest rate derivatives.

When that Ponzi scheme finally comes crumbling down, there won’t be enough money on the entire planet to fix it.

We had our warning back in 2008.

The too big to fail banks were in the headlines every single day and our politicians promised to fix the problem.

But instead of fixing it, the too big to fail banks are now 37 percent larger and our economy is more dependent on them than ever before.

And in their endless greed for even larger paychecks, they have become insanely reckless with all of our money.

Mark my words – there is going to be a derivatives crisis.

When it happens, we are going to see some of these too big to fail banks actually fail.

At that point, there will be absolutely no hope for the U.S. economy.

We willingly allowed the too big to fail banks to become the core of our economic system, and now we are all going to pay the price.

 

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