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Long-Term Charts 1: American Markets Since Independence | Zero Hedge

Long-Term Charts 1: American Markets Since Independence | Zero Hedge.

Sometimes, perhaps all too often; investors, traders, economists, and mainstream media anchors miss the forest and see only the trees (growing to the sky or crashing to the floor). To provide some context on the markets, we present the first of three posts of long-term chart series (and by long-term we mean more than a few decades of well-chosen trends) – stock, bond, gold, commodity, and US Dollar prices for the last 240 years

American Markets Since Independence

 

Stock Prices

 

Interest Rates

 

Commodity Prices

 

The Gold Price

 

The Crude Oil Price

 

The US Dollar

 

 

H/t @Macro_Tourist for these increble charts

 

Of course, as we have noted in the past, Nothing lasts forever… (especially in light of China’s earlier comments )

The Ron Paul Institute for Peace and Prosperity : ‘F**k the EU’: Tape Reveals US Runs Ukraine Opposition

The Ron Paul Institute for Peace and Prosperity : ‘F**k the EU’: Tape Reveals US Runs Ukraine Opposition.

written by daniel mcadams
thursday february 6, 2014
Nuland TapeIn the latest debacle for the US State Department and the Obama Administration, US Assistant Secretary of State Victoria Nuland was caught on tape micro-managing Ukraine opposition party strategies with US Ambassador to Ukraine, Geoffrey Pyatt. That the Ukraine regime-change operation is to some degree being directed from Washington can no longer be denied.

The tape (listen below) was released today, on the eve of Nuland’s second trip to meet with Ukrainian protestors and opposition leaders in the past two months — last time she passed out cookies to protestors.

The taped conversation demonstrates in clear detail that while Secretary of State John Kerry decries any foreign meddling in Ukraine’s internal affairs, his State Department is virtually managing the entire process. The “F**k the EU” part is her expressing anger that the EU is not moving fast enough with regime change in Ukraine and her plan is to get the UN involved in the process.

As the Kyiv Post reports:

In a conversation leaked online and posted to YouTube on Feb. 6, voices closely resembling those of U.S. Ambassador to Ukraine Geoffrey Pyatt and U.S. Assistant Secretary of State Victoria Nuland discuss loosely the roles of Ukrainian opposition leaders and the United Nations, and frustration over inaction and indecision by the European Union in solving Ukraine’s political crisis.

The voice allegedly of Nuland adds that [Ukrainian opposition leader Vitali] Klitschko should not be given a role in government.

“I don’t think it’s necessary, I don’t think it’s a good idea,” she says.

“Yeah… I guess… in terms of him not going into the government, just let him sort of stay out and do his political homework and stuff,” Pyatt says.

Before the call ends, Nuland tells Pyatt she has “one more wrinkle” for him.

Commenting on European pressure put on Yanukovych – or lack thereof – she explains that she has spoken to the United Nations and has gotten an official there who said that Ban Ki-moon, the UN secretary general, agreed to send someone to Ukraine to “help glue this thing and to have the UN glue it.”

She adds: “And you know, fuck the EU.”

“Exactly,” Pyatt replies. “And I think we got to do something to make it stick together, because you can be sure that if it does start to gain altitude the Russians will be working behind the scenes to torpedo it. Let me work on Klitschko, and I think we should get a Western personality to come out here (to Ukraine) and midwife this thing,’’ he adds.

The call is concrete confirmation of what we have been writing here at RPI for some time. This is a cruder and more violent version of the US-sponsoredOrange Revolution.

Particularly interesting from the recording is the treatment of UN Secretary General Ban Ki-Moon as some sort of junior errand boy for Washington. That explains his cowardly move to rescind Iran’s invitation to participate in the Geneva II talks as soon as Secretary Kerry demanded it.

One can only wonder why the government of Ukraine does not rescind Nuland’s visa and send her packing back to Washington, along with the US ambassador. No normal country on earth would allow foreign officials to actively plot inside the country with those seeking to overthrow the government.

A final bit of irony in the US government reaction to the bombshell tape is State Department Spokesperson Jen Psaki directly accusing the Russian government of being behind the tape and expressing shock — shock! — that a foreign government might be spying on the US. “A new low,” she called it. It’s only OK if we do it!

Fukushima’s future | openDemocracy

Fukushima’s future | openDemocracy.

BOB STILGER 3 February 2014
 

When communities are devastated by disasters like earthquakes and nuclear explosions, how can they recover? In Fukushima, Japan, transformation may be the only option.

Kesennuma, Japan, after “3/11.” Credit: Reuters/Kyodo. All rights reserved.

When the Great Northeast Earthquake struck Fukushima in Japan’s Tohoku region on March 11 2011, it triggered a tsunami that sent a fifty-foot wave rushing inland at over fifty miles an hour.

In less than a day, nearly 18,000 people were dead or missing, and almost300,000 were homeless. The old normal was gone. Today, communities in the region are struggling to reinvent their lives, but what will their future look like in a context that is permanently changed?

For many, this is not just a matter of regaining property or livelihoods, it’s a profoundly spiritual question that centers on the meaning of happiness and the quality of life.

The earthquake – widely known in Japan as “3/11” – toppled buildings across the region, but it was especially damaging in the coastal towns. In many places the ground literally fell away, dropping by three feet and more. The next day, three of the six reactors exploded at the Dai-Ichi nuclear power plants in Fukushima, while the containment structures for spent nuclear fuel rods were severely compromised at a fourth. Within a very short time, radiation forced another 60,000 people from their homes.

This reactor, Dai-Ichi Four, is now one of the most dangerous places on the planet.  Another large earthquake might lead to nuclear explosions that would force the evacuation of more than 20 million people.  Contaminated water from the reactors at Dai-Ichi is leaking into the Pacific Ocean at an alarming rate. Containing the radiation and making the area safe again is beyond the reach of current technologies.  But while people in California worry about nuclear waste reaching their shores five thousand miles away, those on the ground have more immediate concerns: they want to go home.

What will it take to see these communities reborn, to call them back to life? The local context has changed beyond recognition, with some level of continued contamination guaranteed, along with large-scale depopulation (especially of younger people), and the disappearance of livelihoods based around nuclear energy, tourism, agriculture and fishing. Technical problems abound, and Fukushima is a mess – misunderstood, the object of endless fear-mongering and distortions, and exceptionally complex. The Fairewinds Project provides one of the most accurate overviews of the nuclear situation.

But the underlying problems facing Fukushima are not simply technical, they are human: how to reinvent lives in a new and much more challenging reality. After a community meeting that I recently hosted at Renshoan in Fukushima, an older man approached me.

Somewhat hesitantly he said: “I never thought the future was something I needed to think about.  Tonight I have started, and I think, maybe, thinking about the future is the same as thinking about my happiness.” Trauma presents an opening for much deeper change. Indeed, in this case, transformation may be the only option.

More than a thousand days have passed since the disasters. I have spent half of this time working with communities throughout the Tohoku region to create safe places for people to share their grief, explore new possibilities, and form partnerships with each other to create a different future. This has involved processes such as the Future Center model. Originally developed in Europe, it has now been adapted to the local context, along with ‘dialog technologies’ from the Art of Hosting like the “World Café”, open space, storytelling and appreciative enquiry.

People in Fukushima live in one of three broad realities.  Some are still overwhelmed with despair, since everything they know and love has vanished.  Some would leave Fukushima in an instant if they had a way to relocate elsewhere.  And others have declared that “this is our home, so we will make a new life here together.”  They know that the past is gone and that an unknown future is waiting to be born.

Take Kamada-san, for example, a woman in her late 20s who founded a support organization for other young women called “Peach Heart.” “Some of my friends have left and they keep urging me to come join them,” she told me, “but I can’t go.  I won’t leave the other young women here who are unable to move.  My work is to support them as we talk through so many questions…. Will we be safe?  Will anyone want to marry us?  Can we have babies?  Will they be healthy?”

Kanno-san is another leader of the movement for return. I met him a few days before Christmas in 2013, when he was busy organizing a party in the temporary housing complex in Fukushima that is home to many of the 1,500 people who used to live close to the reactors in Katsurao. “We are forced to compete for increasingly-limited government funds with our neighboring towns,” he said, “even the contracts for reconstruction work are issued in Tokyo and on terms that make it impossible for local firms to do the work.  We have many questions, and must work together to find the way forward.”

How can a community be recreated under such conditions? Most of the people in the region who want to move back home are aged over 60.  According to a recent census in the village of Okuma, for example, almost 20 per cent of former residents want to return, and nearly all of them are elderly. Some children are also coming back, but at nowhere near the population densities of the past.  Their old school system cannot be re-created, and even if it could, it wouldn’t teach what students need to learn in order to live in and create a different Fukushima. Houses, shops and fields all lie empty. The economy has collapsed.  And the tsunami clean-up efforts that have taken place outside the radiation zone have left Fukushima almost untouched.

What’s more, not all parts of the region are open for resettlement.  Radiation levels vary almost street-by-street.  But if the Japanese Government decides that it is safe to move back, those affected will lose their “radiation compensation,” the funds that are paid by government to those who have been forced from their homes. This would leave people who are mostly farmers with pensions of just a few hundred dollars a month.  The stresses and strains of being without a permanent home for the last three years are exacerbated by tensions surrounding the varying levels of financial support that different people receive. In this situation it is even more difficult to develop the trust that’s required to rebuild community.

As people do move back, questions remain as to what to do with the nuclear waste that is aggregated during the decontamination process.  Government contractors are currently at work removing the top six centimeters of soil which contain radiation.  But where will this waste be stored?  This process also removes fertile soil from the fields at the same time.  What about “bioremediation,” which research suggests is a better alternative – leaving the soil in place and using mushrooms and other plants that ‘eat’ radiation for their lunch? Who makes these decisions?

Faced by these questions the obvious answer, say some, is that everyone should be forced to move elsewhere for good.  But where is it safe?  Communities in Fukushima probably know more about radiation than most people on the planet, but still there is no certainty.  Epidemiological research from Hiroshima and Nagasaki about the impact of low-dose radiation is inconclusive: we don’t know why some people get sick while others are unaffected.

Those who are returning have made their decision, yet they know that their lives will never be the same. While there are certainly complex technical issues associated with the nuclear reactors, the deeper questions they face are very human. What will this new society be like?  What does it mean to have a population that is overwhelmingly elderly?  What kind of economy will sustain the region now that previous livelihoods have disappeared?  What is possible now that was not possible before?

These questions are slowly becoming more visible as people like Kamada-san and Kanno-san step forward, holding their grief and their dreams and confronting an uncertain future together.  But this process will take decades.  I get annoyed these days when people use the image of a caterpillar and a butterfly as a metaphor for transformation.  There’s almost something glamorous about everything dissolving into ooze, only for beauty to reemerge.

The transformation of people’s lives in Fukushima is very different. This transformation is one of ordinary people who are raising their voices and using their hands, reaching out to each other, taking one step forward and then another, to build new lives in a place that they call home.

A Cheap Way To Protect Ourselves from Radiation? Washington’s Blog

A Cheap Way To Protect Ourselves from Radiation? Washington’s Blog.

Basic Amino Acid May Help Provide Radiation Protection

We recently reported that a high-tech medicine could virtually render radiation harmless by boosting nitric oxide levels in our body. Indeed, high-level scientists were stunned to find that a treatment which boosts nitric oxide levels can virtually bullet-proof mice from high doses of radiation.

There may be a cheaper, lower-tech way to do the same thing.

Specifically, the basic amino acid L-Arginine – widely available at health food stores and on the web – is a precursor to nitric oxide.

L-Arginine boosts nitric oxide levels, and helps to protect us from radiation.

For example, a team of scientists from the University of Pittsburgh published a study concluding that:

L-arginine is shown to protect hematopoietic progenitor (32D cl 3) cells from death due to exposure to γ radiation ((137)Cs).

Let’s unpack this science-talk …

“Hematopoietic” means “blood cell formation”.  In other words, L-Arginine helps to protect our body’s ability to make blood cells.

This sounds boring … but is actually crucial to protecting ourselves from radiation.

Destruction of the hematopoietic system is one of the two primary ways that radiation can kill us.

As Dr. David Roberts – of the Laboratory of Pathology, Center for Cancer Research, National Cancer Institute, National Institutes of Health – told us:

Protection against the hematopoietic syndrome [i.e. destruction of the blood cell creation system by radiation] and the gastrointestinal syndrome … are responsible formost deaths caused by lethal total body irradiation.

This is also significant because the Pittsburgh study focused on cesium 137, the biggest danger from Fukushima. As the New York Times notes:

Over the long term, the big threat to human health is cesium-137, which has a half-life of 30 years.

At that rate of disintegration, John Emsley wrote in “Nature’s Building Blocks” (Oxford, 2001), “it takes over 200 years to reduce it to 1 percent of its former level.”

It is cesium-137 that still contaminates much of the land in Ukraine around the Chernobyl reactor.

***

Cesium-137 mixes easily with water and is chemically similar to potassium. It thus mimics how potassium gets metabolized in the body and can enter through many foods, including milk.

***

The Environmental Protection Agency says that … once dispersed in the environment … cesium-137 “is impossible to avoid.”

Moreover, a study published in the Journal of Surgical Research found that L-Arginine can help protect the intestines from radiation.

So what?

It’s vitally important because – as Dr. Roberts told us – radiation damage to the stomach and intestines is the other major cause of lethal radiation poisoning.

A study published in the journal Radiation Research also found that L-Arginine can reverse radiation-induced immune dysfunction.

A study published in the Journal of Environmental Pathology, Toxicology and Oncology concludesthat L-Arginine helps to protect the lungs from radiation damage.

And a Russian study notes that L-Arginine “prevented an increase in chromosome aberration frequency in bone marrow cells of irradiated mice”.

Important notes:   While nitric oxide boosters such as L-Arginine may be exciting possibilities for protecting ourselves from radiation, further studies are needed.  And there are in fact many winning strategies for protecting ourselves from radiation.

Any supplement – even if very healthful – can be toxic at too high a dose. Even drinking too muchwater can kill.

You shouldn’t take any supplements without consulting your doctor or other qualified healthcare provider.

Do more to prevent war | www.timesrecord.com | The Times Record

Do more to prevent war | www.timesrecord.com | The Times Record.

BY DAVID SWANSON
GUEST COLUMN


David Swanson

David Swanson

Polls showed a large percentage of us in this country supporting the invasion of Afghanistan in 2001 and even — though somewhat reduced — the invasion of Iraq in 2003. But not long after, and ever since, a majority of us have said those were mistakes.

We’ve opposed attacking Iran whenever that idea has entered the news. We opposed bombing Libya in 2011 and were ignored, as was Congress. And, by the way, advocates of that happy little war are rather quiet about the chaos it created.

But last September, the word on our televisions was that missiles must be sent to strike Syria. President Barack Obama and the leaders of both big political parties said they favored it. Wall Street believed it would happen, judging by Raytheon’s stock. When U.S. intelligence agencies declined to make the president’s case, he released a “government” assessment without them.

Remarkably, we didn’t accept that choice. A majority of us favored humanitarian aid, but no missiles, and no arming of one side in the war. We had the benefit of many people within the government and the military agreeing with us. And when Congress was pressured to demand approval power, Obama granted it.

It helped more that members of Congress were in their districts with people getting in their faces. It was with Congress indicating its refusal to support a war that Obama and Kerry accepted the pre-existing Russian offer to negotiate. In fact, the day before they made that decision, the State Department had stressed that Syrian President Bashar al-Assad would never ever give up his chemical weapons, and Kerry’s remarks on that solution had been “rhetorical.”

The war in Syria goes on. Washington sent guns, but refrained from air strikes. Major humanitarian aid would cost far less than missiles and guns, but hasn’t materialized. The children we were supposed to care about enough to bomb their country are still suffering, and most of us still care.

But a U.S. war was prevented.

We’re seeing the same thing play out in Washington right now on the question of whether to impose yet more sanctions on Iran, shred a negotiated agreement with Iran, and commit the United States to joining in any war between Israel and Iran.

In January, a bill to do all of that looked likely to pass through the Senate. Public pressure has been one factor in, thus far, slowing it down.

Are we moving away from war?

The ongoing war in Afghanistan, and White House efforts to extend it beyond this year, might suggest otherwise. The military budget that still eats up, across various departments, roughly half of federal discretionary spending, and which is roughly the size of all other countries’ military spending combined, might suggest otherwise. The failure to repeal the authorizations for war from 2001 and 2003, and the establishment of permanent practices of surveillance and detention and secrecy justified by a permanent state of war, might suggest otherwise. As might the ongoing missile strikes from drones over a number of nations.

But you’ll notice that they don’t ask us before launching drone strikes, and that their assurances that no innocent people are harmed have proven highly misleading.

War may be becoming acceptable only as what its advocates have long claimed it was: a last resort. Of course if we can really make that true, we’ll never have a war again.

DAVID SWANSON will be speaking at 3 p.m. Feb. 15 at Curtis Memorial Library in Brunswick.

Guest Post: Underneath Their Autocratic Rulers, Russia And U.S. On Diverging Societal Paths | Zero Hedge

Guest Post: Underneath Their Autocratic Rulers, Russia And U.S. On Diverging Societal Paths | Zero Hedge.

Submitted by L. Todd Wood, a former special operations helicopter pilot and bond trader.  


Underneath Their Autocratic Rulers, Russia and U.S. on Diverging Societal Paths

As the State of the Union address highlighted, both the Russia Federation and the United States have leaders that lean toward various degrees of autocratic government to achieve their agendas.  President Putin rules with an iron fist and treats the legislative branch as an afterthought to use as needed but otherwise ignores.  President Obama declares he will use executive action to get what he wants and quietly uses government agencies to intimidate and stifle his opposition in flagrant abuses of power.  Putin has dismantled the Russian free press and imprisoned vocal opponents.  The majority of the American press does Obama’s bidding for him while the administration puts movie makers in jail.

Underneath the tyrannical policies of the two Presidents, American and Russian society are diverging.  First let’s look at welfare – it really doesn’t exist in Russia.  If you’re a single mother raising your child alone, the state will pay you less than $50 a month.  Unemployment insurance is also miniscule.  The minimum wage is around $200 a month.  I recently asked a Russian friend what they would receive if they lost their job.  Her answer was, “It’s my problem, why should the government pay?”  Health care is free but of very low quality.  Russians with money typically choose private care and buy their own private health insurance.

In the United States, we are seeing an obscene explosion of the nanny-state.  Obamacare has been exposed as a huge wealth redistribution scheme.  The CBO states that the ACA is a disincentive to work.  Disability payments are skyrocketing.  The number of Americans receiving food stamps has doubled and is spiraling out of control.  Welfare work requirements have been weakened.  The left continuously pushes to add more immigrants to the government dole and refuses to enforce current immigration law.

The difference in the tax code between the two countries is also striking.  If you live in New York, the combined government tax bite is above sixty percent.  It is a safe bet that any Democratic state government will continue to try and raise taxes.  Obama raised rates on the top earners in America and would boost them across the board if he could.  In Russia, the individual tax rate is a flat thirteen percent.  There is an eighteen percent VAT and the corporate rate is twenty-four percent.  If Russia could remove her corrupt barriers to entry, her economy would explode higher.

The difference between the two nations when approaching geopolitical challenges cannot be more extreme.  The United States has shown a willingness to abandon long standing allies time and time again on the global chessboard.  Whether it be Israel, Poland, or Saudi Arabia, the Obama administration has shrank from global leadership and left a gigantic vacuum for President Putin to happily fill.  Russia has shown a willingness to ignore Western political correctness and stand up for Russian long-term interests.  One only has to look to the Iranian nuclear issue, the Syrian situation, or the Snowden embarrassment to see evidence of Putin schooling the American government.  The American position seems to consist of avoiding conflict and appeasing adversaries rather than standing up for historical American values, our allies, and our way of life.

One of the most interesting differences that has been inconveniently obvious in the international press is the Russian refusal to embrace the religion of global warming.  While the American government strives to shut down energy economic engines of power, Russia uses energy to achieve its national goals.  Putin has been quoted as describing the climate change alarmist agenda as a marketing scheme.  Putin has not bought into the madness of crowds to the benefit of Russia.

Perhaps the most curious cavern between the United States and Russia is their approach to religion.  The church was effectively shut down during the Soviet experiment.  However, in the last few decades, the Russian Orthodox Church has roared back to favor in Russian government opinion.  President Putin has even felt emboldened enough to accuse the West of being morally decadent.  The Democratic Party in the United States has largely morphed into an atheistic, anything goes, hedonist entity.  One only has to look at the refusal of the Obama administration to enforce marijuana laws in America to find evidence of this fact.

I recently had a conversation with a young urban professional in Moscow.  Their comment to me was that most young Russians were embarrassed of the communist revolution in Russia.  “They killed our best people,” this person commented.  I find it curious that the Rolling Stone recently published an article extolling the benefits of the teachings of Karl Marx and echoing the mindset of many of the current millennial generation in America.  When the youth of American are yearning for communism, I fear America must relearn the very harsh lessons of the past.  If Russia can ever deal with the specter of corruption, her society may leap to the future.

Russia presses Ukraine on debt amid protests – Europe – Al Jazeera English

Russia presses Ukraine on debt amid protests – Europe – Al Jazeera English.

Russian finance minister pledges to give second tranche of $15bn bailout package, but wants gas debt paid first.

Last updated: 08 Feb 2014 15:21

The protesters have been demanding resignation of the president and early elections [Reuters]
Russia has increased economic pressure on Ukraine by drawing a link between disbursement of the next tranche of its $15 billion aid package to Kiev with repayment of a hefty gas bill owed to Russian firms.

“We will fulfill what we have promised to Ukraine, but we would like the Ukrainian side to comply with the obligations that it has committed to.Russian Finance Minister Anton Siluanov.

The link, made in comments by Russia’s finance minister to the Reuters news agency on Saturday, came as the Kremlin confirmed President Vladimir Putin had held private talks with Ukraine’s leader Viktor Yanukovich in Sochi on Friday before the opening of the Winter Olympics.

No details of the leaders’ talks were disclosed.

“We will fulfill what we have promised to Ukraine, but we would like the Ukrainian side to comply with the obligations that it has committed to,” Anton Siluanov told Reuters.

The gas debt was due for repayment in late January, but Ukraine did not pay up, he said.

On Saturday, thousands of people angered by months of anti-government protests in the Ukrainian capital, Kiev, converged on one of the protesters’ barricades, the Associated Press news agency reported.

They retreated after meeting sizeable resistance, averting a violent showdown. The incident underlined tensions that persist as the protests slog through a third month with no sign of concessions from either side.

About 2,000 people streamed toward the barricade near city hall at midday, blocking traffic on the capital’s main avenue and placing tires in the roadway.

Igor Polishchuk, one of the men placing the tires, said the crowd wanted to show its peaceful opposition to the protests that have pushed the country into a political crisis and complained that police had done little against the protesters.

“It’s a critical mass in there, without control,” he said. “The authorities aren’t anywhere inside.”

EU versus Russia

The anti-government protesters have set up an extensive tent camp in Kiev’s main square and occupy three nearby buildings, including the city hall, that they use for operations centres, sleeping quarters and even an improvised library.

Yanukovich has been battling massive anti-government protesters, demanding his resignation and early elections, since he rejected a trade deal with the EU in favour of closer ties with Russia.

The president must now decide whether to submit to protesters’ demands by taking a more conciliatory approach towards a new agreement with the EU – a possibility that prompted Russia to suspend its bailout payments after issuing just one instalment of $3bn in December.

The US and the EU have backed the anti-government protests and promised a financial package to Ukraine on the condition that the government agrees to political reform.

The 4 Pillars of Poverty

The 4 Pillars of Poverty.

Marc Faber

Posted Feb 5, 2014.

Ithink it is remarkable that, despite the growth the US has enjoyed since the 1960s, the poverty rate has barely changed. Writing for the Wall Street Journal last month under the title “How the War on Poverty Was Lost”, Robert Rector notes that: “Fifty years and $20 trillion later, LBJ’s goal to help the poor become self-supporting has failed.” He writes further:

On Jan. 8, 1964, President Lyndon B. Johnson used his State of the Union address to announce an ambitious government undertaking. “This administration today, here and now,” he thundered, “declares unconditional war on poverty in America.”

Fifty years later, we’re losing that war. Fifteen percent of Americans still live in poverty, according to the official census poverty report for 2012, unchanged since the mid-1960s. Liberals argue that we aren’t spending enough money on poverty-fighting programs, but that’s not the problem. In reality, we’re losing the war on poverty because we have forgotten the original goal, as LBJ stated it half a century ago: “to give our fellow citizens a fair chance to develop their own capacities.”

…LBJ promised that the war on poverty would be an “investment” that would “return its cost manifold to the entire economy.” But the country has invested $20.7 trillion in 2011 dollars over the past 50 years. What does America have to show for its investment? Apparently, almost nothing: The official poverty rate persists with little improvement.

My impression is that there are far more “poor” people today as a percentage of the population than there were in the 1960s, because lower middle-class and middle-class people have moved into the ranks of the poor. (Since 2007, the bottom 50% by wealth percentile lost more than 40% of their net worth and their debts are up 16%.) This may be a factor that explains the still muted consumer confidence at a time when stock investors’ sentiment is at its highest level since 1987.

In my opinion, the increase in poverty rests on four pillars: cultural and social factors, educational issues, excessive debt, and government handouts, which encourage people not to work. Other factors include: international competition, which keeps wages down; and monetary policies, which create bubbles and impoverish the majority.

As an example, social factors and government handouts led to a sharp increase in out-of-wedlock births. In the 1960s in the US, out-of-wedlock births comprised only 5.3% of total births; in 1980, 18.4%; and today, over 40%. Babies born out of wedlock are likely to have fewer educational opportunities than those raised in two-parent families.

This is one reason; educational standards have also slipped – certainly relative to the rest of the world – due to poor policies. Of course, by far the worst cause of rising poverty rates is monetary policies that have encouraged credit growth, enslaving poor people with debts and financing an increase in entitlement programs by the government.

According to Rector, “The federal government currently runs more than 80 means-tested welfare programs that provide cash, food, housing, medical care and targeted social services to poor and low-income Americans. Government spent $916 billion on these programs in 2012 alone, and roughly 100 million Americans received aid from at least one of them, at an average cost of $9,000 per recipient. (That figure doesn’t include Social Security or Medicare benefits.) Federal and state welfare spending, adjusted for inflation, is 16 times greater than it was in 1964. If converted to cash, current means tested spending is five times the amount needed to eliminate all official poverty in the U.S.”

It is no wonder, therefore, that with these generous social programs, largely financed now by the Fed, single women have been encouraged to have babies without the “inconvenience” of having a husband.

The problem, however, as I mentioned above, is that (again according to Rector) the Heritage Foundation has found in a study that “children raised in the growing number of single-parent homes are four times more likely to be living in poverty than children reared by married parents of the same education level. Children who grow up without a father in the home are also more likely to suffer from a broad array of social and behavioral problems. The consequences continue into adulthood: Children raised by single parents are three times more likely to end up in jail and 50% more likely to be poor as adults.”

Now, I realise that it would be unfair to place the entire blame on the Fed for the failure of entitlement programs. However, the Fed and other central banks around the world have been enablers of Big Government and poor economic policies. As John Taylor (a professor of economics at Stanford University, and one of the few economists who appears to be sane) opined in the Wall Street Journal about the various secular stagnation hypotheses:

In the current era, business firms have continued to be reluctant to invest and hire, and the ratio of investment to GDP is still below normal. That is most likely explained by policy uncertainty, increased regulation, including through the Dodd Frank and Affordable Care Act, about which there is plenty of evidence, especially in comparison with the secular stagnation hypothesis.

I suppose the emergence of the secular stagnation hypothesis shouldn’t be surprising. As long as there is a demand to pin the failure of bad government policies on the market system or exogenous factors, there will be a supply of theories. The danger is that this leads to more bad government policy [emphasis added]

Tax Law Measured in Pages of Law

Concerning increased regulation it is clear that “Big Business” loves increased regulation. Take, as an example, the increasingly complex tax laws (click the chart to enlarge). Large corporations can hire an army of accountants, lawyers, tax consultants, and lobbyists in order to reduce their tax burden. But, what about the small business owner?

He is at the mercy of some tax collector who can waste his time endlessly with repeated audits. The same goes for other regulatory requirements, which lead to less competition and favour large business groups.

Many of my friends who own independent small money management firms are being forced to close down their businesses, merge, or sell to larger financial institutions because of increased regulation. The more regulation there is, the more likely it becomes an inhibiting factor for innovation.

Furthermore, I am certain that the secular stagnation hypothesis is another attempt by the government to justify more interventions with fiscal and monetary policies into the free market.

The question is, of course, who are the governments? Will Durant opined in The Age of Louis XIV that the “men who can manage men manage the men who can only manage things, and the men who can manage money manage all”. In Lessons of History, he wrote:

…the bankers, watching the trends in agriculture, industry, and trade, inviting and directing the flow of capital, putting our money doubly and trebly to work, controlling loans and interest and enterprise, running great risks to make great gains, rise to the top of the economic pyramid.

From the Medici of Florence and the Fuggers of Augsburg to the Rothschilds of Paris and London and the Morgans of New York, bankers have sat in councils of governments, financing wars and popes, and occasionally sparking a revolution. Perhaps it is one secret of their power that, having studied the fluctuations of prices, they know that history is inflationary, and that money is the last thing a wise man will hoard [emphasis added].

I suppose that one solace for poor people, in view of this rather sobering fact, may be these words of Frank McKinney Hubbard:

“It’s pretty hard to tell what does bring happiness; poverty and wealth have both failed.”

Regards,

Marc Faber
for The Daily Reckoning

Ed. Note: Not discounting the point Mr. Faber is trying to make with this final thought, even if wealth can’t bring you happiness, it can – at the very least – help offer a little piece of mind to those in search of happiness. And that’s why we write the Daily Reckoning – to try to help you live a wealthier, healthier, and happier life than you could ever imagine. And it doesn’t take much. The Daily Reckoning offers you regular chances to discover some of the world’s most lucrative and overlooked investment plays. And it is completely FREE. So you’ve got nothing to lose by signing up. Click here now to see what all the buzz is about.

Flood alerts across England and Wales as south-west braces for 80mph storm | UK news | theguardian.com

Flood alerts across England and Wales as south-west braces for 80mph storm | UK news | theguardian.com.

Somerset, Devon and Dorset at greatest risk of flooding as Environment Agency issues warnings as far north as Hull
theguardian.com, Saturday 8 February 2014 12.26 GMT
Waves break at Porthleven in Cornwall

Waves break at high tide in Porthleven, Cornwall, on Saturday as south-west England and Wales braced for more storms and flooding. Photograph: Matt Cardy/Getty Images

Large areas of England and Wales are on flood and storm alert as a new storm is poised to hit the south and south-west with winds of up to 80mph.

The flooded Somerset Levels where many residents have already been forced from their homes after weeks of heavy rain remain at the highest risk of continued flooding on Saturday.

The Environment Agency said there was a risk of flooding along the coast of Devon and Dorset from the combination of high tides and high winds.

There are more than 300 low-level flood alerts and nearly 200 medium-risk flood warnings in place across Wales and southern and central England as far north as Hull.

The Met Office issued an amber warning of high winds for the south of England and Wales and yellow rain warnings for the south and west of England and Wales.

“After a short lull, winds will increase from the south-west during the course of Saturday with severe gales affecting coastal districts, bringing gusts of 60-70mph and isolated 80mph at the most exposed locations within the amber warning area. Large waves are also expected to affect south-west facing coasts. Further inland, gusts of 50-60 mph are likely.”

The Met Office warned the public to be prepared for disruption to transport and power supplies, particularly when combined with the effect of heavy rain.

A spokesman for the Ministry of Defence said an additional 1,500 troops were on six hours’ notice to move if required to help victims of new flooding. Several hundred Royal Marines and engineers are already helping in south-west England.

Engineers have strengthened the shore along the railway line at Dawlish in Devon to prevent further damage to the tracks although Cornwall and Plymouth remain cut off from the rest of the rail network. Flybe said it will increase the number of weekday flights between Gatwick and Newquay in Cornwall from three to six after the airport said it would waive fees.

As residents in Somerset have struggled to cope with rising water, police arrested three men on suspicion of stealing fuel from near the cut-off village of Muchelney.

The arrests follow the theft of 600 gallons of domestic heating oil from a farm in Moorland and the theft of two fire service quad bikes from Burrowbridge last week.

Eric Pickles, the local government secretary, has ordered a flood defence repair audit of both Environment Agency defences and private defences after the latest meeting of the government’s emergency committee Cobra on Friday night.

He said: “We continue to make sure every preparation is made before the severe weather expected this weekend and the following days. I ask everyone to remain vigilant and follow the advice being issued by the Environment Agency.

“I want to reassure the country that everything possible is being done to help those communities affected by these terrible storms, and work to be prepared for any further bad weather we may see in the days ahead.”

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