en The Stage Is Set For The Syrian Invasion <p>One week ago, when reporting on the <a href="">latest bizarre plan presented </a>by the Pentagon, namely providing Syrian rebels (but only the moderate ones, not the jihadists like al Nusra, or, well, ISIS) with B-1B Bomber air support in their attacks on ISIS, when we wrote that this "means in the coming weeks and months look forward to a surge in false flag "attacks" blamed on the Assad regime, aiming to give Obama validation to expand the "War against ISIS" to include Syria's regime as well."</p> <p><strong>We didn't have long to wait: in an entirely unsourced Time article written today by Aryn Baker, the Middle East Bureau Chief, the stage for the second attempt at invading Assad regime is finally set. </strong></p> <p>The article, titled "<a href="">Why Bashar Assad Won’t Fight ISIS</a>" is essentially an essay that, as the title suggests "proves" that the Syrian leader is, in fact, quite close with ISIS and derives strategis benefits from his relationship, which is why he won't attack them, and thus by implication is just as bad as ISIS and worthy of America's wrath. </p> <p>How does Baker build up her propaganda? First, she cits a "Sunni businessman who is close to the regime but wants to remain anonymous for fear of repercussions from both ISIS supporters and the regime" and who "trades goods all over the country so his drivers have regular interactions with ISIS supporters and members in Raqqa, the ISIS stronghold in Syria, and in ISIS-controlled areas like Dier-ezzor." According to this Syrian version of Amazon:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>The regime of Syrian President Bashar Assad has long had a pragmatic approach to the Islamic State of Iraq and Greater Syria. Even from the early days the regime purchased fuel from ISIS-controlled oil facilities, and it has maintained that relationship throughout the conflict. “<strong>Honestly speaking, the regime has always had dealings with ISIS, out of necessity</strong>.”</p> </blockquote> <p>"Honestly speaking" of course being used quite loosely, considering that it is by now no secret that ISIS, in the words of General Wesley Clark, "<a href="">got started through funding from our friends and allies</a>", most notably <a href="">Qatar </a>and <a href="">Saudi Arabia</a>, and according to some even <a href="">the CIA is involved </a>so, no: <em>honestly speaking</em>, if anything, the Assad regime has been doing its best to stay away from ISIS, which at least on paper, was created as a result of extremist Al Nusra factions, who were fighting Assad in 2013, and were funded and weaponized by the US.</p> <p>Of course, none of that is mentioned. What is, however, duly emphasized is the goalseeked conclusion that Assad and the Islamic State are like two peas in a pod:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>Assad does not see ISIS as his primary problem, the businessman says. “The regime fears the Free Syrian Army and the Nusra Front, not ISIS. They [the FSA and Nusra] state their goal is to remove the President. But ISIS doesn’t say that. They have never directly threatened Damascus.” As the businessman notes, the strikes on ISIS targets are minimal. “If the regime were serious about getting rid of ISIS, they would have bombed Raqqa by now. Instead they bomb other cities, where the FSA is strong.” That said, the businessman does not believe that the regime has a formal relationship with ISIS, just a pragmatic one. “The more powerful ISIS grows, the more they are useful for the regime. They make America nervous, and the Americans in turn see the regime as a kind of bulwark against ISIS.”</p> </blockquote> <p>Actually, the "Americans" see ISIS as the perfect false flag placeholder to build up yet another case about invading Damascus, after the humiliation of the bumbled attempt to use a doctored YouTube clip showing paid actors following what the CIA guaranteed was an Assad "chemical weapon" attack as a pretext to launch an invasion on Syria in the first attempt to topple Assad. It took an escalation that involved numerous Russian ships side by side with US cruisers in the Mediterranean before John Kerry realized that building Qatar's nat gas pipeline to Europe is not worth rising World War III over, and promptly backed off. </p> <p>This time, ISIS is the bait. </p> <p>Back to the Time article, where next we get the next "source" of information:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><strong>A senior Western diplomat who specializes in the Syrian civil war agrees that ISIS is seen as an asset by Assad. </strong>“They will do whatever it takes to devalue the opposition, even if it means strengthening ISIS. They know that if it comes to choosing between the black flag [of ISIS] and Damascus, the international community will choose Damascus.” And the strategy has worked extremely well. “The way it’s going now, it’s a matter of months, not even a year, <strong>that the moderate opposition is so weakened that it won’t be a factor anymore. </strong>So in just a few months from now <strong>the regime will be able to achieve its strategic goal of forcing the world to choose between Damascus and the black flags.”</strong></p> </blockquote> <p>Actually, according to that logic, the "international community" will choose both Damascus and the "black flags", in fact the community will be delighted to have the "flags" as a cover in an invasion, both air, sea and ground, toppling Assad and replacing him with yet another US-puppet regime (whose fate, following such sterling examples as Egypt, Libya and Iraq will be just spectacular), one which will be glad to accept Qatar and Syria hush money, while thousands of kilometers of pipes are laid under the territory in attempt to dethrone Gazprom as the provider of first and last resort to Europe... which as a reminder is what it is all about.</p> <p>The anonymous "western diplomat" continues:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>... by ignoring the conflict between the Syrian opposition and the Assad regime to focus purely on ISIS may solve problems in the short term, says the diplomat, “but there will be more problems to come. These are the ingredients for a further escalation of the conflict — alienating large parts of the Sunni population, so that they have no choice but to join ISIS. Not for ideological reasons, but because they will do whatever it takes to overthrow the regime in Damascus.” Not only that, it will widen the geographical boundaries of the conflict by making this a fight of all Sunnis. “<strong>It’s a clear recipe for further escalation well beyond the geographical boundaries of the current conflict.”</strong></p> </blockquote> <p>Which is why in order to prevent further escalation in the future, the US will be delighted to provide much more escalation right now. </p> <p>And here is the piece de resistance of the article that may as well have been written by a 6th grader who is about to flunk propaganda class:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>Damascus believes that once it has neutralized most of the opposition, it can then defeat ISIS with ease. “ISIS alone, the regime can deal with them. What Assad wants is international recognition of his legitimacy as Syria’s President,” says the businessman. “When the war is over, he can easily handle ISIS with the help of Hizballah and the Iranian Revolutionary Guard.”</p> </blockquote> <p>So let's get this straight:</p> <ol> <li>A "terrorist" group which was created and funded by US allies in the middle east (there are many) is fighting a war on behalf of a regime that the US and its allies in the middle east are desperately trying to topple; a "terrorist" group which until recently did not exist and which, inexplicably according to the author, Assad refuses to fight because.... unlike the US he has not seen the dreadful beheading movies which lead to so much daily water cooler talk across the US?</li> <li>Ths US now believes that "ISIS <em>is seen as an asset by Assad</em>" and that the moderate (this distinction is key: their flag has a pink skull and crossbones as opposed to the red one used by the "non-moderate") opposition which spawned ISIS in the power vacuum following the incomplete first US invasion of Syria in the symmer of 2013, is about to be destroyed by the same ISIS.</li> <li>Assad is confident he can "defeat ISIS with ease" once he has destroyed his so-called moderate enemies; the same ISIS which the US has been "fighting" now for half a year, and achieved absolutely nothing.</li> <li> <p>We know all those due to an essay of amateur propaganda caliber, which derives its entire narrative and conclusions based on two <em>anonymous </em>sources.</p> </li> </ol> <p>At this point we probably speak for everyone when we say: just invade Syria already, and let's proceed to the inevitable, and quite understandable, Russian retaliation, because frankly this endless propaganda and false-flaggery is now as obvious and pathetic as the Greek default which is also about 5 years overdue.</p> <p>* * * </p> <p><em>P.S. from Aryn Baker's <a href="">LinkedIn profile</a>:</em></p> <ul> <li>Producing breaking news, features, analysis and investigative stories from the Middle East, Pakistan and Afghanistan for the world’s most influential English language weekly newsmagazine. </li> <li>Frequent reporting travel to countries affected by the changes of the Arab Spring, from Syria to Saudi, Yemen, Qatar, Bahrain, Egypt, and Libya, as well as continued reporting in Pakistan and Afghanistan, which I have been covering since 2003. </li> <li>Managing a widespread network of stringers, fixers and translators to enable thorough coverage of a rapidly changing region for both the magazine and the associated website. </li> <li>Maintaining contacts with diplomats, politicians, think tanks, influential actors, activists and intelligence sources in all regions in order to provide context and analysis for on-the-ground reporting. </li> <li>Working with world-renowned photojournalists on story development and logistics.</li> </ul> <p><em>Among her previous articles one can find "<a href=",9171,2143557,00.html">The YouTube War</a>"</em></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="1200" height="803" alt="" src="" /> </div> </div> </div> Afghanistan default Iraq Middle East Nat Gas None Saudi Arabia Fri, 27 Feb 2015 03:19:00 +0000 Tyler Durden 502591 at Greenspan: "The Stock Market Is Great", But The Economy Feels Like In "The Late Stages Of The Great Depression" <p>While conflicting economic data leaves hope for both buills and bears, Alan Greenspan warns that, unlike Yellen, <strong>&quot;US economic growth is not strong.&quot;</strong> He then slays another pillar - suggesting the exuberant job growth is anything but (as he focuses on weak productivity as he pinpoints entitlements as &quot;crowding out capital investment&quot; in America. The maestro then breaks the golden rule of central bankers and <strong>explains how The Fed was, in fact, the main driver of the P/E multiple expansion in stocks</strong>; and when asked if this ends as badly as last time? He concludes &quot;It depends...When real interest rates start to move up, that&#39;s when the crisis could hit.&quot; The interview is somewhat stunning in its honesty (for a central banker) as he warns <strong>global &quot;effective demand is extraordinarily weak - tantamount to the late stages of the great depression.&quot;</strong></p> <p>Some other excerpts...</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>&quot;Lower long-term rates is not a conundrum, <strong>its an indication of how weak global economic growth is.&quot;</strong></p> <p>&nbsp;</p> <p><strong>&quot;effective demand is extraordinarily weak - tantamount to the late stages of the great depression.&quot;</strong></p> <p>&nbsp;</p> <p><strong>&quot;Monetary policy is not responsible for economic weakness - it&#39;s a fiscal issue.&quot;</strong></p> <p>&nbsp;</p> <p>The Fed is responsible for the inflation of the stock market</p> <p>&nbsp;</p> <p>&quot;Almost all the problems are due to a lack of long-term capital investment&quot; - reflecting perfectly on our detailed explanations of company&#39;s preference for shareholder enhancement through buybacks rather than investing in the corporate growth of the economy...<strong> &quot;nobody wants to invest in the long-term because nobody knows what is going to happen.&quot;</strong></p> </blockquote> <p><strong>Greenspan...</strong></p> <p><iframe allowfullscreen="" frameborder="0" height="360" src="" width="480"></iframe></p> <p>And finally:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><u><strong>&quot;Stock market is great - the economy is not.&quot;</strong></u></p> </blockquote> <p>You are right Alan...</p> <p><a href=""><img alt="" src="" style="width: 600px; height: 317px;" /></a></p> <p>&nbsp;</p> <p>*&nbsp; *&nbsp; *</p> <p>We suspect this will be the last time Greenspan is invited on The Truth Channel.</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="282" height="224" alt="" src="" /> </div> </div> </div> Alan Greenspan Great Depression Monetary Policy Real Interest Rates Fri, 27 Feb 2015 03:10:56 +0000 Tyler Durden 502581 at Provocation? NATO Conducts Military Maneuvers 300 Yards From Russia's Border <p><a href=""><em>Submitted by Daniel McAdams via The Ron Paul Institute for Peace &amp; Prosperity</em></a>,</p> <p>When a Russian bomber flew over international waters some 25 miles off the southwest tip of England last week, UK Defense Secretary Michael Fallon called Russia "a real and present danger." The UK government scrambled jet fighters to meet the Russian aircraft as a show of force. </p> <p>Said Secretary Fallon of the incident, "NATO has to be ready for any kind of aggression from Russia, whatever form it takes." He added that, "NATO is getting ready," warning particularly that Russia may soon move to invade the Baltic countries of Estonia, Latvia, and Lithuania. </p> <p>Reading the feverish Twitter feed of NATO's Supreme Allied Commander Europe, Gen. Phil Breedlove, one would get the impression that NATO is already at war with Russia. Fighter jets sit menacingly atop aircraft carriers as the General beams about NATO member countries' commitment to contribute to the fight. </p> <blockquote class="twitter-tweet" lang="en"><p>Our <a href="">@NATO</a> allies are stepping up, making significant contributions. <a href="">#NATO</a> <a href=""></a></p> <p>— Phil Breedlove (@PMBreedlove) <a href="">February 25, 2015</a></p></blockquote> <script src="//"></script><p><span style="text-decoration: underline;"><strong>The message is clear: Russia is about to attack!</strong></span> NATO has, for no understandable reason, found itself in Russia's crosshairs. NATO cannot figure out how it is that Russia could possibly feel threatened by its actions, which, unlike Russia's are not in the slightest provocative.</p> <p>Russian military plane over international waters 25 miles from the UK coast is "real and present danger" to NATO. Yet...</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><span style="text-decoration: underline;"><strong>Yet yesterday US combat vehicles conducted a military parade and show of military force in Estonia just 300 yards -- yards! -- from the Russian border. That is just over 60 miles from downtown St. Petersburg. </strong></span></p> </blockquote> <p>Here is dramatic video of NATO's military display just three football fields from Russia:</p> <p><iframe src="" width="560" height="315" frameborder="0"></iframe></p> <p><strong>This is not a provocation, we are to believe.</strong> This is not a "real and present danger" to Russia. NATO is exempt from the rules it imposes on its enemies. </p> <p>In the <a href="">Guardian's review of a new book</a> by Politics professor George Sakwa, the current fallout from a near quarter century of post-Cold War NATO policies is perfectly captured:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>The hawks in the Clinton administration ignored all this, Bush abandoned the anti-ballistic missile treaty and put rockets close to Russia’s borders, and now a decade later, after Russia’s angry reaction to provocations in Georgia in 2008 and Ukraine today, we have what Sakwa rightly calls a “fateful geographical paradox: that Nato exists to manage the risks created by its existence”.</p> </blockquote> <p>That line bears repeating: <em>"Nato exists to manage the risks created by its existence."</em></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="942" height="631" alt="" src="" /> </div> </div> </div> Estonia Latvia Lithuania Ron Paul Twitter Twitter Ukraine Fri, 27 Feb 2015 02:52:33 +0000 Tyler Durden 502578 at Meet Londoner Mohammed Emwazi - ISIS Chief Executioner 'Jihadi John' <p>As ISIS unleashed various escalatingly grotesque execution videos over the past few months, one thing has been constant - the image of a masked man, dressed in black (with a British accent). The world has come to know ISIS apparent chief executioner as 'Jihadi John' but today, <a href="">as WaPo reports</a>, he has been identified - his real name, according to friends and others familiar with his case, is <strong>Mohammed Emwazi, a Briton from a well-to-do family who grew up in West London and graduated from college with a degree in computer programming</strong>. Not exactly the dis-enfranchised under-employed sad terrorist that the US state department suggests ISIS supportes are...</p> <p>&nbsp;</p> <p><a href=""><em>As The Washington Post reports</em></a>,</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><strong>The world knows him as “Jihadi John,”</strong> the masked man with a British accent who has beheaded several hostages held by the Islamic State and who taunts audiences in videos circulated widely online.</p> <p>&nbsp;</p> <p><strong>But his real name, according to friends and others familiar with his case, is Mohammed Emwazi, a Briton from a well-to-do family who grew up in West London and graduated from college with a degree in computer programming.</strong> He is believed to have traveled to Syria around 2012 and to have later joined the Islamic State, the group whose barbarity he has come to symbolize.</p> <p>&nbsp;</p> <p><strong>“I have no doubt that Mohammed is Jihadi John,”</strong> said one of Emwazi’s close friends who identified him in an interview with The Washington Post. <strong>“He was like a brother to me. .&thinsp;.&thinsp;. I am sure it is him.”</strong></p> <p>&nbsp;</p> <p>A representative of a British human rights group who had been in contact with Emwazi before he left for Syria also said he believed Emwazi was Jihadi John, a moniker given to him by some of the hostages he once held.</p> <p>&nbsp;</p> <p><strong>“There was an extremely strong resemblance,”</strong> Asim Qureshi, research director at the rights group, CAGE, said after watching one of the videos. “This is making me feel fairly certain that this is the same person.”</p> </blockquote> <p><strong>Mohammed Emwazi was born in Kuwait in 1988. </strong>We do not know when he came to the UK but he is understood to have been educated at the Quintin Kynaston Community Academy, in St John's Wood, north London and the University of Westminster.</p> <p><a href=""><img src="" style="width: 600px; height: 552px;" /></a></p> <p>&nbsp;</p> <p><a href="">The BBC notes </a>that <strong>we don't know exactly when the British or the American security services worked out that the masked man in the killing videos was Londoner Mohammed Emwazi - and nobody in official security circles is going to comment on how they got to that conclusion.</strong></p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>But we do know that he was, to use the jargon, a "person of interest" to MI5 going back to at least 2010 because he features in semi-secret court cases relating to extremism overseas and back in the UK.</p> <p>&nbsp;</p> <p><a href=""><img src="" style="width: 599px; height: 288px;" /></a></p> <p>&nbsp;</p> <p>UK court documents relating to Mohammed Emwazi</p> <p>&nbsp;</p> <p>A UK court document said Mohammed Emwazi was part of an extremist network linked to al-Shabab</p> <p>&nbsp;</p> <p>Emwazi has been previously described as a member of a network involving at least 13 men from London - and at least two of them were subjected to house arrest control orders or T-Pims. One absconded. Another was killed in a drone strike. <strong>The chances of Emwazi ever returning to the UK are vanishingly small.</strong></p> </blockquote> <p>*&nbsp; *&nbsp; *</p> <p>Ironically, while last week US FOX News 'accidentally' assigned President Obama's image to a rape accusation, CNN 'accidentally' assigned Putin's image to 'Jihadi John'...</p> <p><iframe src="" width="600" height="600" frameborder="0"></iframe></p> <script src=""></script> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="376" height="346" alt="" src="" /> </div> </div> </div> Fox News Kuwait Fri, 27 Feb 2015 02:50:34 +0000 Tyler Durden 502588 at Gas Prices Hit 2-Month Highs, Rise At Fastest In a Decade <p>Despite still low crude oil prices, gas prices at the pump have been on the rise recently. While still at levels not seen since 2009, <strong>gas prices in February have surged at the fastest pace in at least a decade to 2-month highs</strong>. As SMRA notes, shutdowns at some refineries due to strikes has been a good part of the reason for the gain in recent weeks, but prices for gasoline also typically start to rise with the approach of spring as refineries prepare to change over to less polluting formations for the summer months. <strong>We assume, in some incredible way, higher gas prices are also a positive for the US economy (just as lower gas prices were... not).</strong></p> <p>&nbsp;</p> <p>This is the biggest surge in prices (around 14%) in February for at least a decade...</p> <p><a href=""><img src="" width="600" height="302" /></a></p> <p>Notice also above the seasonality of gas prices.</p> <p>Of course - levels remain notably 'low' relative to the last few years...</p> <p><a href=""><img src="" width="600" height="316" /></a></p> <p>&nbsp;</p> <p>SMRA provides some further color...</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><strong>In spite of still low prices for crude oil,</strong> the cost of gasoline prices has reversed in the past four weeks, ending a generally downward trend that began in early July and extended through January. From a <strong>near-term peak of $3.704 per gallon</strong> for regular gasoline in the June 30 week in the EIA data, the price plunged over $1.60 to $2.044 in the January 26 week. The price has now retraced 28.8 cents of that to $2.332 in the February 23 week.</p> <p>&nbsp;</p> <p>Still, even at current levels, <strong>consumers have not seen prices like this since the summer of 2009</strong> in the depths of the recession when low demand for oil helped reduce costs for gasoline.</p> <p>&nbsp;</p> <p><span style="text-decoration: underline;"><strong>Shutdowns at some refineries due to strikes has been a good part of the reason for the gain in recent weeks, but prices for gasoline also typically start to rise with the approach of spring as refineries prepare to change over to less polluting formations for the summer months.</strong></span></p> <p>&nbsp;</p> <p><strong>Consumers may be a little disappointed at losing a bit of the discretionary income freed up by the substantial decline in gas prices</strong>, but on the whole the pinch should be small. Fro now, prices more affordable than any time since 2010.</p> </blockquote> <p>*&nbsp; *&nbsp; *</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="959" height="483" alt="" src="" /> </div> </div> </div> Crude Crude Oil Recession Fri, 27 Feb 2015 02:20:51 +0000 Tyler Durden 502587 at U.S. Healthcare And The Tragedy Of The Commons <p><a href=""><em>Submitted by Charles Hugh-Smith of OfTwoMinds blog</em></a>,</p> <p><span><em>When the system is set up to encourage maximizing self-interest, accountability for the whole is lost.</em></span></p> <div>&nbsp;</div> <div><span><strong>The lessons drawn from the U.S. healthcare system's failures can be fruitfully applied to a variety of large-scale problems around the world.</strong>&nbsp;Let's start with an insightful look at the fixes that have largely failed to rein in costs and improve actual care/patient health. <p><a href="" target="_blank">Dilemma over Deductibles: Healthcare costs crippling middle class</a>:</p></span></div> <div><span><em>"Physician Praveen Arla is witnessing a reversal of health care fortunes: Poor, long-uninsured patients are getting Medicaid through Obamacare and finally coming to his office for care. But middle-class workers are increasingly staying away.</em> <p><em>"It's flip-flopped," says Arla, who helps his father run a family practice in Hillview, Ky. Patients with job-based plans, he says, will say: " 'My deductible is so high. I'm trying to come to the doctor as little as possible. … What is the minimum I can get done?' They're really worried about cost."</em></p> <p><em>It's a deep and common concern across the USA, where employer plans cover 60% of working-age Americans, or about 150 million people. Coverage long considered the gold standard of health insurance now often requires workers to pay so much out-of-pocket that many feel they must skip doctor visits, put off medical procedures, avoid filling prescriptions and ration pills — much as the uninsured have done."</em></p> <p><em>The average hourly wage is nearly identical to what it was 50 years ago in today's dollars: $19.18 in 1964 compared with $20.67 in 2014, according to U.S. Bureau of Labor data analyzed by the Pew Research Center. Meanwhile, U.S. health spending ballooned from 5% of gross domestic product in 1960 to 17% in 2013."</em></p></span> <p><img src="" style="border-width: 0px; border-style: solid; height: 336px; width: 500px;" /><br /><span>While I have often discussed unintended consequences of centralized policies such as ObamaCare, my focus today is how&nbsp;<strong>U.S. healthcare perversely reflects the&nbsp;<a href="" target="resource">Tragedy of the Commons</a></strong>, the seminal paper by Garrett Hardin which described the failure of the market to value/price communally owned assets, i.e. "the commons."</span></p> <p><strong>Here is a basic example of the dynamic:&nbsp;</strong>Each individual farmer will graze his cattle/sheep on the communally owned pastures ("the commons") to boost his own profit, since the commons are "free". &nbsp;This exploitation of what the market has determined is "free" leads to overgrazing and the destruction of the commons--a huge loss to the entire community as well as to the farmers who were grazing their animals in the commons.</p> <p><strong>When everyone sees the commons as "free for the taking," then the commons is soon destroyed for all.</strong></p> <p>To the degree that Central State (federal) revenue is a form of public commons (since it is collected from taxpayers), the siphoning of that resource to serve individual gain leads to the loss of the commons,&nbsp;<strong>as well as the loss of any notion of the "common good."</strong></p> <p>This dynamic is reflected in the extraordinary expansion of healthcare's share of the national economy, from 5% to 18% (on its way to 20%). While healthcare for practioners is about patients, from the financial point of view, healthcare is focused on increasing revenues and profits by whatever means are necessary.</p> <p>Financially, the commons (tax revenues) are being stripped by those with the most political power.</p> <p><strong>Though we don't normally think of the health of a nation's citizens as a commons, I think this makes a lot of sense.</strong>&nbsp;After all, the healthier a population is, the more productive and happy it will be, and that serves the interests of the nation and its citizenry.</p> <p>From this perspective, we have to ask if the enormous expense of healthcare is improving the health and happiness of the populace as much as it could, were it spent more effectively. &nbsp;I think it is fair to say&nbsp;<strong>that the overall health of the U.S. populace is actually declining, despite modest advances in longevity and survival rates.</strong></p> <p>This does not reflect any lack of effort from the often-overworked &nbsp;providers--rather,&nbsp;<strong>it seems to reflect a deterioration of the populace's own habits and lifestyles, and the lack of focus and accountability of the entire system.</strong></p> <p>We can trace this failure to the Tragedy of the Commons: when every participant is driven to seek maximum gain from exploiting the commons for their own interests,&nbsp;<strong>no one is accountable for protecting the commons as a whole.</strong></p> <p>When we ask, who is responsible for improving the overall health and well-being of the citizens, we get an answer that boils down to:&nbsp;<strong>everyone and no one.</strong></p> <p><img src="" align="middle" border="0" /></p></div> <div>&nbsp;</div> <div><span><strong>When the system is set up to encourage maximizing self-interest, accountability for the whole is lost</strong>. And once accountability for the effectiveness and health of the whole system is lost, the system will degrade and eventually collapse, for the same reason that unrestricted grazing by individuals eventually destroys the commons. <p>Put another way: if I concern myself with the health of the commons (or the overall health of the populace), I earn nothing for this work. Even worse, while I devoted myself to the common good, someone else increased his herd grazing the commons.&nbsp;<strong>I will eventually be forced to either join in the exploitation or go broke.</strong></p> <p>That's the Tragedy of the Commons dynamic, and I think it applies to many systems around the globe.</p></span></div> <div>&nbsp;</div> <p><span><em>For more on this topic:&nbsp;<a href="" target="resource">The Slide to Collapse Is Greased with Self-Interest</a>&nbsp;(August 4, 2014)</em></span></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="448" height="286" alt="" src="" /> </div> </div> </div> Gross Domestic Product Obamacare Fri, 27 Feb 2015 01:50:06 +0000 Tyler Durden 502586 at Welcome To Obama-Land <p>Presented with no comment...</p> <p>&nbsp;</p> <p><a href=""><img src="" width="600" height="404" /></a></p> <p>&nbsp;</p> <p><a href=""><em>Source:</em></a></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="872" height="587" alt="" src="" /> </div> </div> </div> Fri, 27 Feb 2015 01:20:10 +0000 Tyler Durden 502585 at The Austrian Solution to Greece <p><a href=""><em>Submitted by Tom Cullis via Mises Canada blog,</em></a></p> <p>Arnold Kling asks economists to <a href="">fill in the blank</a>:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong>&ldquo;Greece will achieve economic success when ____&rdquo;</strong></p> </blockquote> <p>There is an answer from the Austrian perspective, but first I want to highlight some thoughts from other prominent bloggers.</p> <p><strong>Option A: <a href="">Paul Krugman</a>&nbsp;</strong>of <em>The New York Times</em>&nbsp;believes that they need a major reduction in their debt burden.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>&ldquo;Two years after the Greek program began, the I.M.F. looked for historical examples where Greek-type programs, attempts to pay down debt through austerity without major debt relief or inflation, had been successful. It didn&rsquo;t find any.&rdquo;</p> </blockquote> <p><strong>Option B:&nbsp; <a href="">John Cochrane</a></strong> urges structural reforms:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>&ldquo;Advice remains, stop fooling around, massive structural reform tomorrow morning, grow like crazy, pay off debt.&rdquo;</p> </blockquote> <p><strong>Option C: <a href="">Scott Sumner</a></strong> wants the country to build a factory that pumps out nGDP units at an ever increasing, but predictable, pace (I&rsquo;m kidding, he thinks leaving the euro is likely their best bet):</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>&ldquo;a Grexit may be the best outcome for Syriza. There would probably be six months to a year of financial chaos (as occurred in Argentina), followed by many years of very strong RGDP growth for which Syriza would get credit (as in Argentina.) The new Greek currency would immediately lose half of its value, creating a huge boom in industries such as tourism.&rdquo;</p> </blockquote> <p><strong>Option D: none of the above</strong></p> <p><u><strong>So which is it from an Austrian perspective, A, B, C or D?&nbsp; Surprisingly it&rsquo;s option E: All of the above.</strong></u> Before we get into that though, a brief rephrasing of Austrian Business Cycle Theory (ABCT) will be helpful.&nbsp; The Austrian description of a recession comes down to the market&rsquo;s realization that the path of the economy is unprofitable, and that the path must be altered until a profitable way forward can be found.&nbsp; If we piece together our three answers we can create a larger solution that not only should work for Greece but also agrees in principal with major voices in the field of economics.</p> <p>First we have Krugman&rsquo;s prescription for reduced debt, and specifically reduced debt servicing.&nbsp; This is widely accepted as sound advice for companies that enter bankruptcy protection, and the same holds true for countries. Many have suggested that austerity alone is the way to go to demonstrate Greece&rsquo;s willingness to pay for their mistakes (while Krugman goes the other way and says debt reduction with no austerity). This is conceptually problematic for the Austrian as this pathway is highly limiting. It is possible that there is a path to growth that can be found with this combination, but it is far from certain. Pursuit in this direction eliminates any possibility that would contain a short term reduction in income as that would lead to a ballooning of debt and probably an increase in the debt/GDP ratio.</p> <p><strong>The repudiation or reduction of debt fits nicely into the Austrian model and into generic advice from this perspective.</strong> The debt was built up during the unsustainable practices that caused many of Greece&rsquo;s problems and attempting to pay it off &nbsp;tie Greece&rsquo;s path to those choices for even longer while also convincing investors in Greek bonds that those purchases were sound for even longer.&nbsp; It should be noted that the debt is not limited to bondholders, obligations to Greek citizens such as pensioners should also face a similar haircut.&nbsp; The same double effect can be noted in this case as well. The government will reduce their expenditures but if they do so without touching pensions those who work in the public sector will be granted greater security than those in the private one.&nbsp; Such a mismatch can only lead to more interest in working in the public sector and thus higher costs for the Greek private sector as they fight for quality employees.</p> <p>Moving on to Cochrane&rsquo;s advice, this is just straightforward common sense.&nbsp; Virtually every analysis of Greece&rsquo;s situation at least nods to major structural problems in Greece.&nbsp;<strong> If your issues are caused by cronyism, corruption and government interference in markets then it shouldn&rsquo;t be a shock if the only way out is to cut back on those issues.&nbsp;</strong> No one expects Greece to jump to the top of the <a href="">corruption perceptions index</a>, but any improvement could open up opportunities for entrepreneurs to help push the economy forward.</p> <p>Scott Sumner&rsquo;s suggestion is more subtle than either of our first two, and at first it might seem surprising that a return to a national currency would be included in an Austrian analysis but there is a strong case that it would be a step in the right direction.&nbsp; One of the foundations of ABCT is that prices carry information crucial to properly functioning markets. Moving to the euro was supposed to bring the stability of a powerful currency to peripheral European countries that would encourage foreign investment by reducing exchange rate risk. This logic failed because it is healthy markets that drive the stability of the larger zones which allows for strength and stability of their currency.&nbsp; <strong>Trying to impose stability to create healthier markets is backwards as that instability was actually information about the health of those economies.</strong> As part of the euro, the immediate effects of Greek policy decisions were swamped by even minor actions of more influential members. The excesses that built up over time were not consistently punished by market forces because the question of how much debt they could service became swallowed by the greater questions of what would happen with that debt when it became an issue for the euro as a whole. An astute investor that realized the structural problems early and shorted Greek debt could be wiped out by a political decision made in Berlin, which made the question of solvency more complicated and opaque than necessary.&nbsp; <strong>Additionally the lack of their own currency totally eliminated a secondary pathway of transmitting information- that of fluctuating exchange rates. Returning to the Drachma would allow for greater transparency and in all likelihood the better functioning of Greek markets.</strong></p> <p>To answer Arnold Kling&rsquo;s question that started this piece, <strong><u>Greece will achieve economic success when the weight of past mistakes is reduced, including not only bond prices but promised benefits as well as reforms to cut back government influence and corruption, and markets are once again allowed to set prices that reflect Greece as a country and not Greece as a tiny portion of a massive conglomerate.</u></strong></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="871" height="577" alt="" src="" /> </div> </div> </div> B+ Bond Corruption Cronyism Greece Krugman New York Times None Paul Krugman Recession Transparency Fri, 27 Feb 2015 00:50:51 +0000 Tyler Durden 502584 at 2 Years Of Abenomics Later: Joblessness Jumps As Retail & Household Spending Slump <p>For all the constant bullshit spewing from the mouths of any and every Japanese monetary and fiscal policy maker about a &quot;continued moderate recovery&quot;, the facts are the facts and the data is the data - 2 years of Abenomics has utterly failed. The lastest example is tonight&#39;s triple whammy of <strong>surging joblessness</strong> (up to 3.6% from 3.4% - highest in 6 months), a 2.0% <strong>tumble in retail sales</strong> YoY (double expectations and worse since the tax hike), and a <strong>plunge in household spending</strong> (-5.1% YoY - down for the 10th month in a row). But, of course, Japanese stocks are at 15-year highs - so &quot;everything must be awesome&quot; - what a farce.</p> <p>&nbsp;</p> <p><strong>Instead of 3 Arrows...</strong></p> <p>Strike 1 - Japanese Joblessness surges to 6-month highs - far in excess of expectations...</p> <p><a href=""><img alt="" src="" style="width: 600px; height: 316px;" /></a></p> <p>&nbsp;</p> <p>Strike 2 - Retail Sales tumble 2.0% YoY - almost twice as bad as expected - and on par with the tax-hike impact...</p> <p><a href=""><img alt="" src="" style="width: 600px; height: 317px;" /></a></p> <p>&nbsp;</p> <p>Strike 3 - Household Spending collapses 5.1% YoY - the 10th drop in a row...</p> <p><a href=""><img alt="" src="" style="width: 600px; height: 313px;" /></a></p> <p>&nbsp;</p> <p>But...</p> <p><a href=""><img alt="" src="" style="width: 600px; height: 313px;" /></a></p> <p>&nbsp;</p> <p>So everything is awesome!!!</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="958" height="499" alt="" src="" /> </div> </div> </div> Abenomics recovery Fri, 27 Feb 2015 00:48:38 +0000 Tyler Durden 502590 at ECB Warns UK: Excluding Russia From SWIFT "Could Undermine Confidence In The Whole System" <p>As <em><strong>&quot;isolated&quot;</strong></em> Russia signs a military deal with Cyprus, agrees bilateral trade with Greece, ratifies the $100 billion BRICS Bank, and offers to trade advanced anti-aircraft missiles to Iran, it seems threats of more sanctions against Putin and his nation are finding resistance from an unexpected place. With British PM David Cameron re-demanding that Russia be excluded from the SWIFT global financial payments system, none other than ECB Governing Council member Ewald Nowotny has exclaimed, &quot;one has to be very careful here, <strong><em>exclusion of Russia from Swift would be very problematic because it could potentially undermine confidence in this system as a whole.&quot;</em></strong></p> <p>&nbsp;</p> <p><a href=""><em>As Der Standard reports (via Google Translate)</em></a>,</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>A SWIFT exclusion of Russia as a sanction against the EU-Ukraine Moscow because of the crisis had last been suggested by British Prime Minister David Cameron. Nowotny said he had spoken with EU Commissioner for Economic Affairs Pierre Moscovici... the question of the Russia-EU sanctions.</p> <p>&nbsp;</p> <p><span style="text-decoration: underline;"><strong>&quot;I pointed out that one has to be very careful here,&quot; the governor said. Exclusion of Russia from Swift &quot;we would see as very problematic because it could potentially undermine confidence in this system as a whole&quot;.</strong></span></p> <p>&nbsp;</p> <p>Austria would advocate a pragmatic way. His warning was not so much related to Austria, but on<strong> the credibility of the SWIFT system. This international payment system should be a neutral service,</strong> Nowotny said.</p> <p>&nbsp;</p> <p>For Austria exclusion of Russia from Swift would have no immediate effect. However,<strong> Russia could then put retaliation, &quot;and, of course, would have implications for all companies doing business in Russia there&quot;.</strong> But he assumed that it would not come to such a step. He would not comment on the sanctions, &quot;only if sanctioned, this is not the appropriate field.&quot;</p> </blockquote> <p>*&nbsp; *&nbsp; *</p> <p>Of course, Russia has already created an alternative to SWIFT - as it said it would...<a href=""><em>as Sputnik News reports,</em></a></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong>Almost 91 domestic credit institutions have been incorporated into the new Russian financial system, the analogous of SWIFT, an international banking network.</strong></p> <p>&nbsp;</p> <p><span style="text-decoration: underline;"><strong>The new service, will allow Russian banks to communicate seamlessly through the Central Bank of Russia.</strong></span></p> <p>&nbsp;</p> <p>It should be noted that Russia&#39;s Central Bank initiated the development of the country&#39;s own messaging system in <strong>response to repeated threats voiced by Moscow&#39;s Western partners to disconnect Russia from SWIFT.</strong></p> <p>&nbsp;</p> <p><em>...</em></p> <p>&nbsp;</p> <p>Joining the global interbank system in 1989, <strong>Russia has become one of the most active users of SWIFT globally, sending hundreds of thousands of messages per day. </strong>In general, SWIFT provides a secure communication network for more than ten thousands of financial institutions around the world, approving transactions of trillions of US dollars.</p> <p>&nbsp;</p> <p>Earlier this month Russian Deputy Prime Minister Igor Shuvalov expressed confidence that Russia would not be disconnected from SWIFT. In her turn, Russian Central Bank First Deputy Chair Ksenia Yudaeva called upon Russian civilians and financial institutions not to dramatize the current situation.</p> <p>&nbsp;</p> <p><strong>Russian experts point to the fact that Western businesses would face severe losses if they expelled Russia from the international SWIFT system. </strong>On the other hand, the alternative system launched by Russia might reduce the negative impacts caused by measures imposed by the West, including possible disconnection from SWIFT, and diminish Western financial dominance over Russia.</p> </blockquote> <p>*&nbsp; *&nbsp; *</p> <p>...and one wonders how destabilizing it would be for the world financial system if Russia decided unilaterally to leave SWIFT?</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="649" height="630" alt="" src="" /> </div> </div> </div> BRICs Google Greece Iran None SWIFT Fri, 27 Feb 2015 00:20:56 +0000 Tyler Durden 502583 at