Aug 21, 2014

Spain Dips 37% Into Social Security "Piggy Bank", Fund Exhausted in 4 Years at Current Rate; What, Me Worry?

From Mike "Mish" Shedlock:

The "recovery" news in Spain keeps piling up. Via translation from El Economista, Government has already taken 37% of the total 'pensions piggy bank'. If extractions continue at the current rate, the fund would be exhausted in 4 years. 
The Government of Mariano Rajoy has released 24.65 billion euros of the Social Security Reserve Fund in less than two years. Such amount represents nearly 37% of the total 66.815 billion fund accumulation. That figure marks the highest cumulative piggy bank draw-down in history, following its commissioning in 2000 and after eleven years in which successive governments did not need to dip into it.

The situation changed dramatically with the height of the crisis. The current government has broken into the social security bank twelve times since 2012. The total amount withdrawn exceeds 24.6 billion euros while 54.69 billion remains.

This implies "at the current depletion rate, in a period of four years or so, the fund would be exhausted".
Advice of the Day

I am sure glad no one sees a problem here. As we all know, problems vanish if you ignore them. It's mind over matter. I learned that from former US secretary of treasury, Tim Geithner.

And as long as you are ignoring some problems, why not ignore all problems?

For example, please ignore Spain's trade deficit unexpectedly rising as noted in Recovery Mirage in Spain Dissipates Into Ashes.

Instead, let's focus on the dramatic improvement of Spain's unemployment rate.


In a few years, at the current rate of progress, Spain's unemployment rate may be back to a mere 21% or so. Is that something to be proud of?

I sure would think so. But will there be anything left in the piggy bank?

What, Me Worry?

To all you naysayer pessimists who may be shocked by the above, please consider this simple question: If Social Security bankruptcy doesn't bother the US, why should it bother Spain or any other country?

Far be it from me, Mish the eternal optimist, to be any sort of worrywart, but your answer must take into account one additional question: Who controls the printing press in the US and who controls the press in Spain?  

Mike "Mish" Shedlock

Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit to learn more about wealth management and capital preservation strategies of Sitka Pacific.

ANALYSIS: The beheading of James Foley is a fake. The beheading of African bank accounts isn’t.


How the Foley beheading gore has been overstated, and the Africa Bank haircut has been understated

If you’ve been trying to view the ‘beheading’ of James Foley over the last two days, then I’d imagine you’ve found it well-nigh impossible. It seems that in Britain, if you watch it you may be committing an offence under the Terrorism Act. I don’t live in Britain any more, so I don’t have that problem. Here in France, I’m not allowed to be rude about French banks (each State to its own censorship of free speech) but watching grizzly videos is OK.
I watched the tape because a valued source suggested I should. These are my observations:
1.The prisoner is very clearly James Foley
2. His alleged executioner is from South London, and probably of West Indian genetic origin
3. Mr Foley does not display any fear consonant with imminent death
4. The ‘beheading’ is faked.
As that last point above has conspiracy-theory looney written all over it, let me expand on the reasons for my opinion:

30 stats to show to anyone that does not believe the middle class is being destroyed

by Michael Snyder, Economic Collapse Blog:
 The 30 statistics that you are about to read prove beyond a shadow of a doubt that the middle class in America is being systematically destroyed.  Once upon a time, the United States had the largest and most prosperous middle class in the history of the world, but now that is changing at a staggering pace.  Yes, the stock market has soared to unprecedented heights this year and there are a few isolated areas of the country that are doing rather well for the moment.  But overall, the long-term trends that are eviscerating the middle class just continue to accelerate.  Over the past decade or so, the percentage of Americans that are working has gone way down, the quality of our jobs has plummeted dramatically and the wealth of the typical American household has fallen precipitously.  Meanwhile, we have watched median household income decline for five years in a row, we have watched the rate of homeownership in this country decline for eight years in a row and dependence on the government is at an all-time high.  Being a part of the middle class in the United States at this point can be compared to playing a game of musical chairs.  We can all see chairs being removed from the game, and we are all desperate to continue to have a chair every time the music stops playing.  The next time the music stops, will it be your chair that gets removed?
And in this economy, you don’t even have to lose your job to fall out of the middle class.  Our paychecks are remaining very stable while the cost of almost everything that we spend money on consistently (food, gas, health insurance, etc.) is going up rapidly.  Bloomberg calls this “the no-raises recovery”…
Call it the no-raises recovery: Five years of economic expansion have done almost nothing to boost paychecks for typical American workers while the rich have gotten richer.
Meager improvements since 2009 have barely kept up with a similarly tepid pace of inflation, raising the real value of compensation per hour by only 0.5 percent. That marks the weakest growth since World War II, with increases averaging 9.2 percent at a similar point in past expansions, according to Bureau of Labor Statistics data compiled by Bloomberg.
There are so many families out there that are struggling right now.  So many husbands and wives find themselves constantly fighting with one another about money, and they don’t even understand that what is happening to them is the result of long-term economic trends that are the result of decades of incredibly foolish decisions.  Without middle class jobs, we cannot have a middle class.  And those are precisely the jobs that have been destroyed during the Clinton, Bush and Obama years.  Without enough good jobs to go around, we have seen the middle class steadily shrink and the ranks of the poor grow rapidly.
The following are 30 stats to show to anyone that does not believe the middle class is being destroyed…
1. In 2007, the average household in the top 5 percent had 16.5 times as much wealth as the average household overall.  But now the average household in the top 5 percent has 24 times as much wealth as the average household overall.
2. According to a study recently discussed in the New York Times, the “typical American household” is now worth 36 percent less than it was worth a decade ago.
3. One out of every seven Americans rely on food banks at this point.
4. One out of every four military families needs help putting enough food on the table.
5. 79 percent of the people that use food banks purchase “inexpensive, unhealthy food just to have enough to feed their families”.
6. One out of every three adults in the United States has an unpaid debt that is “in collections“.
7. Only 48 percent of all Americans can immediately come up with $400 in emergency cash without borrowing it or selling something.
8. The price of food continues to rise much faster than the paychecks of most middle class families.  For example, the average price of ground beef has just hit a brand new all-time record high of $3.884 a pound.
9. According to one recent study, 40 percent of all households in the United States are experiencing financial stress right now.
10. The overall homeownership rate has fallen to the lowest level since 1995.
11. The homeownership rate for Americans under the age of 35 is at an all-time low.
12. According to one recent survey, 52 percent of all Americans cannot even afford the house that they are living in right now.
13. The average age of vehicles on America’s roads has hit an all-time high of 11.4 years.
14. Last year, one out of every four auto loans in the United States was made to someone with subprime credit.
15. Amazingly, one out of every six men in their prime working years (25 to 54) do not have a job at this point.
16. One recent study found that 47 percent of unemployed Americans have “completely given up” looking for a job.
17. 36 percent of Americans do not have a single penny saved for retirement.
18. According to one survey, 76 percent of all Americans are living paycheck to paycheck.
19. More than half of all working Americans make less than $30,000 a year in wages.
20. Only four of the twenty fastest growing occupations in America require a Bachelor’s degree or better.

CDC caught in scientific fraud, perpetrating vaccine violence against blacks in shocking eugenics cover-up

by Mike Adams, Natural News:
 Yesterday I wrote that Natural News is investigating a report of a massive scientific cover-up perpetrated at the very highest levels of the CDC.
Today I can report that I now have in my possession CDC documents which prove beyond any doubt that the former head of the CDC, Dr. Julie Gerberding, actively participated in willful scientific fraud in order to bury clinical evidence linking the MMR vaccine to a 340% increase in autism among African-American children.
Yes, the CDC knew that MMR vaccines caused autism in black babies, and its top scientists actively conspired to cover up that fact for the last twelve years.

Classified Information on Malaysia Airlines MH370 Case Stolen - Reports

MOSCOW, August 20 (RIA Novosti) - Classified information from the computers of officials involved in the investigation into the disappearance of Malaysia Airlines MH370 has been stolen, The Star Online reported Wednesday.
The computers of the high-ranking officials are said to have been hacked and the stolen information was allegedly being sent to a computer in China before the Malaysian Science, Technology and Innovation Ministry blocked the transmissions, the website reported.
The national cyber security specialist agency CyberSecurity Malaysia said that the malware that led to the information leak was sent to the officials via email on March 9, one day after the aircraft disappeared en route from Kuala Lumpur to Beijing, according to The Star Online.
According to the security agency’s estimates, about 30 computers were infected by the malware. The agency is said to be working with Interpol on the incident at the moment. CyberSecurity Malaysia suspects that the motivation for the attack was the accusations of the Malaysian government made by some people of concealing crucial information about the investigation.
The Malaysia Airlines Boeing 777-200 flight MH370 traveling from Kuala Lumpur to Beijing vanished on March 8 with 239 people on board, of which there were 227 passengers and 12 crew members. On March 24, Malaysian Prime Minister Najib Razak said that, according to the satellite data, MH370 crashed in the southern part of the Indian Ocean.

Bitcoin vs. Political Power: The Cryptocurrency Revolution – Stefan Molyneux at TNW Conference

Historically, politicians have always fought for the power to create money out of thin air, so they can increase their spending without having to directly increase taxes. The staggering growth of political power throughout the twentieth century — the century of war — was largely made possible by replacing money limited by gold with paper currencies, which can be printed at will by government-controlled banks.
Cryptocurrencies are the first self-limiting monetary systems in the history of mankind, and could be our greatest chance to check the growth of political power since the Magna Carta. Join Stefan Molyneux, the host of Freedomain Radio – the most popular philosophy show in the world – as he reveals the hidden political and military power of government currencies, and shows how cryptocurrencies could be greatest revolution in human history, and the foundation of a truly free and prosperous planet.
The Next Web Europe Conference – April 25th, 2014
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Get more from Stefan Molyneux and Freedomain Radio including books, podcasts and other info at:

[Failed States]: Italian economy minister delays goal of repaying state’s commercial debts

“The Italian state owes some 75 billion euros to private suppliers. The unpaid bills have starved companies of cash and triggered layoffs, factory closures and bankruptcies.  Prime Minister Matteo Renzi promised in March to pay back all the debt arrears by July. Within a week he put back the target date to September.  The government is finding it hard to tackle the problem because of public finance constraints, inefficiency, uncertainty over exactly how much is owed and a reluctance on the part of some public bodies to acknowledge their debts.  Italy is aiming to raise 8-10 billion euros from privatizations over the next two years to help cut its public debt.”

Aug 20, 2014

Deflation Fallacies

by Andrew Hoffman, Miles Franklin:

 As the financial world nears the end of its six-year trek across the Sahara Desert of money printing, market manipulation and propaganda, en route to the same result of all such journeys, when undertaken without water – new “false memes” appear to emerge on a daily basis. From “tapering” to “recovery” to “de-escalation,” new reasons to shun precious metals – and buy financial assets – are fabricated to “kick the can” one last mile. Few such reasons actually make sense, and fewer still are actually true. However, as the “eye of the hurricane” created by history’s most advanced financial engineering scheme passes, many have been lulled into believing nothing can go wrong. At least, not in the commandeered financial markets, as opposed to the reality of cratering global economy activity, surging debt and inflation, and burgeoning social unrest.

The beginning of a realization in the US elites?

John Mearsheimer just published a piece in Foreign Affairs entitled "Why the Ukraine Crisis Is the West’s Fault - The Liberal Delusions That Provoked Putin".  It is a typical "establishment" piece in style and assumptions - along with some rather misleading statements about the war in Georgia - but I still recommend that you read it.  Here is the interesting excerpt:
There is a solution to the crisis in Ukraine, however -- although it would require the West to think about the country in a fundamentally new way. The United States and its allies should abandon their plan to westernize Ukraine and instead aim to make it a neutral buffer between NATO and Russia, akin to Austria’s position during the Cold War. Western leaders should acknowledge that Ukraine matters so much to Putin that they cannot support an anti-Russian regime there. This would not mean that a future Ukrainian government would have to be pro-Russian or anti-NATO. On the contrary, the goal should be a sovereign Ukraine that falls in neither the Russian nor the Western camp.

To achieve this end, the United States and its allies should publicly rule out NATO’s expansion into both Georgia and Ukraine. The West should also help fashion an economic rescue plan for Ukraine funded jointly by the EU, the International Monetary Fund, Russia, and the United States -- a proposal that Moscow should welcome, given its interest in having a prosperous and stable Ukraine on its western flank. And the West should considerably limit its social-engineering efforts inside Ukraine. It is time to put an end to Western support for another Orange Revolution. Nevertheless, U.S. and European leaders should encourage Ukraine to respect minority rights, especially the language rights of its Russian speakers.

Some may argue that changing policy toward Ukraine at this late date would seriously damage U.S. credibility around the world. There would undoubtedly be certain costs, but the costs of continuing a misguided strategy would be much greater. Furthermore, other countries are likely to respect a state that learns from its mistakes and ultimately devises a policy that deals effectively with the problem at hand. That option is clearly open to the United States.
Now, I have no illusion about Mearsheimer, he is spokesman for what I call the "old Anglo guard", the folks who have been gradually, if partially, displaced by the Neocons, who then got behind Obama, only to be re-displaced when the Neocons skillfully took Obama under their control.  In other words, Mearsheimer only speaks for the defeated and resentful part of the establishment, but a still powerful and influential one.  His article could also serve as a kind of a "feeler" with the rest of the US "deep state" to see what reactions it triggers.  

What do you think - does the publication of this article mean that some kind of the beginning of a realization that the US needs to revise it's Ukrainian policy?

What do you think?

The Saker