Friday, March 31, 2017

Impending Famines in Africa and Yemen │ Millions at Risk of Starvation

The Economist (Mar 30, 2017) - 70m people worldwide will need food assistance this year. In Nigeria, South Sudan, Somalia and Yemen, FEWS Net states there is a "credible risk of famine". Between them around 20m people are at risk of starvation [...] “the largest humanitarian crisis” since 1945 is unfolding this year.

[...] The causes of famine are mainly political. The situations in South Sudan, Yemen and Nigeria are no exception. War blights all of these countries. In South Sudan, where 5.8m need food assistance, the government binds delivery of aid in red tape and frequently denies deliveries. Aid workers suggest that by doing so, it prevents supplies getting into the hands of rebels who might then sell them to buy weapons. The main port in Yemen has been bombed out, and the lengthy permit process required to get food through maritime blockades means that it is often spoiled. Some 2m people are in an “emergency situation”, and a further 5m-8m do not have enough to eat. Nigeria’s war in the north has resulted in 800,000 people fleeing to one city alone, Maiduguri.

Emergency food assistance needs unprecedented. Source: FEWS Net.

Sunday, March 26, 2017

The Developed World Populism Index │ Ray Dalio

* The latest point includes cases like Trump, UKIP in the UK, AfD in Germany, National Front in France,
Podemos in Spain, and Five Star Movement in Italy. It doesn’t include major emerging country populists,
like Erdogan in Turkey or Duterte in the Philippines.

On March 22, 2017 Ray Dalio published "Populism: The Phenomenon", a paper that analyzes the role of populism in today’s world and in history. Ray Dalio runs the $150 billion dollar hedge fund Bridgewater Associates, the world’s largest. The paper introduces a "Developed World Populism Index", which Dalio says measures the strength of populism over time. It’s a weighted index of the vote share of anti-establishment parties or candidates in national elections for major developed countries since 1900. The index shows that populism is now at its highest level since the early 1930s. Contemporary populism includes supporters of Donald Trump, UKIP in the UK, AfD in Germany, National Front in France, Podemos in Spain and Five Star Movement in Italy. "Populism is not well understood because, over the past several decades, it has been infrequent in emerging countries (e.g., Chávez’s Venezuela, Duterte’s Philippines, etc.) and virtually nonexistent in developed countries. It is one of those phenomena that comes along in a big way about once a lifetime — like pandemics, depressions, or wars. The last time that it existed as a major force in the world was in the 1930s, when most countries became populist. Over the last year, it has again emerged as a major force."

A portrait of President Andrew Jackson (1829-1837) hangs on the wall behind President Trump in the
Oval Office of the White House. Jackson was a rich, bragging populist, who said: "I was born for a
storm and a calm doesn’t suit me
." Also: "Peace, above all things, is to be desired, but blood must
sometimes be spilled to obtain it on equable and lasting terms.
" Trump like Jackson is a rich, bragging
businessman, a
narcissist and reality TV star, who never held any public office before. Calm doesn’t
suit him either, and millions at the U.S. home front are prepared for storm and blood
see also HERE + HERE).

"We believe that populism’s role in shaping economic conditions will probably be more powerful than classic monetary and fiscal policies (as well as a big influence on fiscal policies)," writes Dalio and three Bridgewater colleagues. Populism is a political and social phenomenon that arises from the common man, typically not well-educated, being fed up with 1) wealth and opportunity gaps, 2) perceived cultural threats from those with different values in the country and from outsiders, the “establishment elites” in positions of power, and 4) government not working effectively for them, according to Dalio. In other words, populism is a rebellion of the common man against the elites and, to some extend, against the system. In summary, populism is:
  • power to the common man.
  • through the tactic of attacking the establishment, the elites, and the powerful.
  • brought about by wealth and opportunity gaps, xenophobia, and people being fed up with government not working effectively, which leads to the emergence of the strong leader to serve the common man and make the system run more efficiently.
  • protectionism.
  • nationalism.
  • militarism.
  • greater conflict, and greater attempts to influence or control the media.

Friday, March 24, 2017

SPX vs 93 Trading Day Cycle

More on the nominal 20 Week Cycle HERE + HERE

SPX vs Mercury 180° Saturn (heliocentric)

Today Mercury opposes Saturn (heliocentric).
March 24, 2017 is also a Sensitive Degree of the Sun (HERE),
a turn-day in the Jupiter-Saturn Cycle (HERE),
and a SoLunar turn-day (HERE).
Martin Armstrong expects a consolidation of US-stock indices into May (HERE).

Wednesday, March 22, 2017

SPX vs CBOE Equity Put / Call Ratio | Moderate Fear

At 0.79 the CBOE Equity Put/Call Ratio signals moderate fear.
However, this could be a corrective pattern in the SPX, and some sort of a market low close-by.
March 23 (Thu) is a Cosmic Cluster Day (HERE); March 24 (Fri) a SoLunar turn-day (HERE).
CNN's Fear & Greed Index signals moderate Fear.
: CNN Fear & Greed Index

SPX vs CBOE SKEW Index (10 DMA) │ All-Time-High

On March 20 the 10 Day Moving Average of the CBOE SKEW Index reached a historical high at 145.49. The CBOE SKEW Index ("SKEW") is an index derived from the price of S&P 500 tail risk. Similar to CBOE VIX, the price of S&P 500 tail risk is calculated from the prices of S&P 500 out-of-the-money options. SKEW typically ranges from 100 to 150. A SKEW value of 100 means that the perceived distribution of S&P 500 log-returns is normal, and the probability of outlier returns is therefore negligible. As SKEW rises above 100, the left tail of the S&P 500 distribution acquires more weight, and the probabilities of outlier returns become more significant. One can estimate these probabilities from the value of SKEW. Since an increase in perceived tail risk increases the relative demand for low strike puts, increases in SKEW also correspond to an overall steepening of the curve of implied volatilities, familiar to option traders as the "skew".

The Cost of Living Worldwide | Singapore World's Most Expensive City

The Economist (Mar 21, 2017) - Singapore retains its title as the world’s most expensive city for a fourth consecutive year, according to the latest cost-of-living survey from the Economist Intelligence Unit, our sister company. The survey, which compares the prices of 160 goods and services in 133 cities around the world and is primarily used by human resources managers to calculate compensation packages for overseas postings, found that Singapore was 20% more expensive than New York and 5% pricier than Hong Kong, which lies in second place.

A sustained recovery in the strength of the Japanese yen has led to rising costs in Osaka and Tokyo. Asia now hosts five out of the six most expensive cities in the world. This contrasts with a gradual drop down the rankings for European cities, which made up eight of the ten most expensive places a decade ago and now account for just four. In Britain the depreciation of sterling after the Brexit referendum has helped push London and Manchester sharply down the rankings; London is at its lowest position in 20 years.

American cities have fallen down the rankings, too, although they still remain comparatively expensive compared with five years ago, when New York was ranked in 46th position. San Francisco and Lexington, Kentucky were the only American cities out of the 16 surveyed to move up the rankings.

Source: The Economist

Tuesday, March 21, 2017

Denmark Free of Foreign-Currency Debt for the First Time in 183 Years

Eshe Nelson (Mar 20, 2017) - Today marks a milestone for Denmark, centuries in the making. The Danish government will repay a $1.5 billion loan (pdf), freeing it from foreign-currency debt for the first time in at least 183 years. This record probably stretches back even further, since Denmark first raised a loan in a foreign currency back in 1757, when it borrowed in Hamburg and Amsterdam, the central bank said. (The records are spotty, so it is unclear whether the country was ever foreign debt-free before 1834, when data collection became more robust.)

The last time Denmark was this close to ridding itself of foreign debt was the late 1890s, when these obligations were worth less than 1% of GDP. But low European interest rates at the time made financing projects like new railways more attractive with foreign debt, so the borrowing restarted. In recent history, issuing external debt has been a means to ensure sufficient foreign-exchange reserves. After Denmark pegged the krone to the deutsche mark, and later the euro, starting in the late 1970s, market interventions have been used to adjust the krone’s value, which require reserves of foreign currencies to buy and sell. 

Joining Norway and Germany in the ranks of
foreign-currency debt free nations.
Now, Denmark joins neighbors Norway and Germany in the ranks of countries with no foreign-currency government debt. Fellow Scandinavian nation Sweden, meanwhile, maintains about 30% of its government debt (pdf) in foreign currencies. It’s not unusual, nor undesirable, for countries to issue some foreign debt to build currency reserves; the US treasury owes about $1 trillion in foreign currency debt. Issuing debt in dollars will become less attractive as US interest rates rise, but many countries—especially in emerging markets—still find it more affordable than borrowing in local currency subject to much higher rates.

For its part, Denmark’s government still has some 465 billion kroner ($67 billion) in debt, which amounted to 23% of GDP at the end of last year, low by international standards. Around 40% of this debt is held by foreigners, who from now on will only get paid back in krone

Monday, March 20, 2017

Politics, Climate, and the Economy │ Peter Temple

Peter Temple (Mar 19, 2017) - Above is a chart of the US Presidents from 1913 through 2016. You can see the politicians who were liked and are considered “good leaders” by historians (green circles and check marks). The there are those we dislike (red circles and x’s) and threw out of office because “they destroyed the economy.”

Dr. Wheeler spent his entire life analyzing weather cycles back over 20 centuries to 600 BC. He found that major climate cycles changed every 25, 100, 500, and 1000 years and that they’re fractal, which means there are smaller cycles within larger cycles. During his life, he put together an archive of world events relative to changes in climate that was some 2000 pages in length, and when open, spanned a length of some 7 feet. To the left is the only shot I’ve found of him working on “The Big Book.” Here are the four twenty-five year cycles:

Spring: warm and wet
Summer, warm and dry
Fall: cool and wet
Winter: cold and dry.
The roaring ’20s (yellow) were mostly wet and warm, but in 1929 (red arrow), it got very cold – the mercury plunged. Cold and dry has always led to tough economic times. The stock market crashed. Then the next year, 1930 (green arrow points to temperature drop), was the driest year in over 150 years. It ushered in ten straight years of dry and hot (red)—about the hottest on record over the past couple of hundred years: The Great Depression. Hot and dry weather in history has led to a major war, despotism, dictators, socialism, communism, world wars, and other atrocities.

In the mid 40s (purple), it turned cool and wet … the economy picked up and the war ended. It lasted through to the ’60s—we had the Beatles, love and flowers … great times! Cool climate means energy–humans become much more active. Wet means prosperity in terms of food.

But in the late ’60s (green), we turned cold and dry … and that led to a deep recession that lasted through the late 70s. In fact there were articles in all the major newspapers predicting a mini ice age. Well, you’re likely to see those again.

But then it turned warm again in the ’80s (blue), the stock market turned up, and business started to boom! It was a warm-wet spring cycle once again—that means prosperity … and that lasted through the 90s, when it also started to get dry and cool again (after 1998).

These climate cycles happen so regularly, that in the 1940s Dr. Wheeler predicted the current change in climate with his drought clock. And sure enough, in 1998, the temperature started to cool and we’ve been getting cooler and dyer ever since. He also predicted extreme weather in the early twenty first century because we’re at the end of an even larger five hundred year cycle. Two major climate cycles are transitioning right now. That’s why we have such extreme weather (see also HERE).

The World Map of Billionaires

Source: HowMuch

The map above shows each country of the world separated by the percentage of billionaires into various types. The size of each country on the map is relative to its total number of the world’s billionaires. There are five categories of billionaires designated by the colors found in the legend: Inherited, Company Founders, Owners and Executives, Political Connections and Resource Related and the Financial Sector. The data was compiled from this report by the Peterson Institute for International Economics.

The first and most obvious conclusion to draw from the map is the large number of billionaires found in the United States. The world’s largest economy has close to 30 percent of the world’s billionaires and far more than any other single country. The distribution of billionaires in the United States is mostly equal, with the exception of the Political Connections and Resource Related type. Only 3.8 percent of American billionaires attained their wealth through political or resource related ventures, a likely consequence of the US government’s historical hands-off approach to business.

China, the world’s second largest economy, has very few billionaires who inherited money. Before China’s economic success of the past few decades, the country was exceptionally poor. But the rapid growth of its economy through a manufacturing boom has created over 200 billionaires. Around 40 percent of these billionaires are company founders, while around one-quarter are company owners or executives. An opposite trend can found nearby in South Korea. The majority of South Korean billionaires, a whopping 74.1 percent, inherited money from family. In Japan, the majority of billionaires are company founders at 63 percent. The trend in South Korea can also be found in Europe to an extent. With the exception of the United Kingdom, many of the billionaires in the major economies of Europe inherited their wealth. Denmark has the highest percentage, with 83.3 percent of billionaires inheriting their money. Germany comes in second, at 64.7 percent, while Sweden comes in at a close third at 63.2 percent. Europe follows a slightly different path than the United States. While American billionaires are less likely to have inherited wealth, they are more likely the be either the founder of a company or come from the financial sector.

The United States boasts the highest number of billionaires by far and American billionaires acquire wealth almost equally from inheritance, the founding of a company and the financial sector. The number of Chinese billionaires has grown rapidly, with most being either company founders, owners or executives. Many European billionaires inherited wealth, but a large number are also either company founders or from the financial sector.

Saturday, March 18, 2017

Thursday, March 16, 2017

Largest U.S. Onshore Conventional Hydrocarbons Discovery in 30 Years

Spanish oil major and North Slope explorer Repsol and privately held Denver based Armstrong Energy announced the discovery of the massive Horseshoe oil field in Alaska. The contingent resources currently identified in the Nanushuk play amount to approximately 1.2 billion barrels of recoverable light oil. This is the largest U.S. onshore conventional hydrocarbons discovery in the last 30 years. The Horseshoe-1 and Horseshoe-1A wells drilled in the 2016-2017 winter campaign confirm Nanushuk as a significant emerging play in Alaska’s North Slope. The discovery is 20 miles south of where the two companies have already found oil in a project known as Pikka. Preliminary development concepts for Pikka anticipate first production there from 2021, with a potential rate approaching 120,000 barrels of oil per day. The new massive find of conventional oil on state land could bring relief to budget pains in Alaska brought on by slumping production in the state and the crash in oil prices. Source: Repsol.

Wednesday, March 15, 2017

Exposing the Real Deep State │ Tony Cartalucci

Real power is held by those who control the essentials of any
given state, province, district, or community. Essentials include
control over monetary instruments, essential infrastructure such
as water, power, communication, and transportation, control over
manufacturing, healthcare, and basic public services, as well as
more obvious forms of power such as control over police and
military forces.
Tony Cartalucci (Mar 13, 2017) - Many both within and beyond America’s borders labor under the delusion that US policy is determined by the nation’s elected representatives amid a careful balancing act between the judicial, legislative, and executive branches of government. In reality, the inner workings of US policy resemble nothing of the sort. In reality, an unelected deep state controls the United States, its resources, government, and people. However, the term “deep state” has been overused and intentionally abused, particularly since the election of US President Donald Trump in an effort to continue concealing the real deep state and divert public attention away from what is becoming an increasingly obvious continuity of agenda from one presidency to the next. Uncovering and understanding the nature of the real deep state is in fact elementary, but essential in understanding the genesis and perpetuation of US policy. It is also essential in formulating solutions aimed at reining in the unwarranted power and influence wielded by this seemingly nebulous entity.

Despite the myth of “democracy,” real power is held by those who control the essentials of any given state, province, district, or community. Essentials include control over monetary instruments, essential infrastructure such as water, power, communication, and transportation, control over manufacturing, healthcare, and basic public services, as well as more obvious forms of power such as control over police and military forces. In rare instances, such vital essentials are controlled by decentralized, grassroots organizations – and in these instances deep states are either weak or virtually nonexistent. However, more often than not, this is not the case – at least not yet. Ordinarily, regardless of apparent, ongoing political processes, those who actually, truly control these essentials often exist well beyond but not out of reach of politics. They include large corporations and financial institutions. Organizations, lobbyists, media platforms, think tanks, and political parties are set up and controlled by these special interests to then project their power and influence into or entirely driving any given political process. The concept of a “deep state” is not unique to only the US. Virtually every nation and throughout all of human history, regardless of a nation’s alleged political proclivities, has been ruled by wealthy and influential special interests either directly or by proxy. Ignoring political rhetoric and charades, and focusing on where money, power, and influence truly resides, reveals the real deep state.

Unraveling the “Trump Vs Deep State” Narrative

A cursory examination of President Trump’s administration reveals that he is but one of many extensions of the real deep state. Allegedly “alternative” Breitbart News mogul Stephen Bannon who functions as President Trump’s chief strategist is in fact a former Goldman Sachs banker. US Secretary of the Treasury, Steven Mnuchin, is also a former Goldman Sachs banker. Additionally, he managed funds for alleged “Trump archenemy,” George Soros, and had invested in the presidential campaigns of both Hillary Clinton and Barack Obama. US Secretary of State, Rex Tillerson, is a long-time ExxonMobil executive, and the list goes on. If one were to map the flow of US power and influence globally, tracing it back to its source, they would find themselves on Wall Street and in the boardrooms of financial institutions and corporations like Goldman Sachs and ExxonMobil. They would also find, leading out from these boardrooms, proxy news platforms like Breitbart News aimed at manipulating, distracting, and preying on the emotions of the American public. In other words, in reality, the Trump administration, like those of previous presidencies, is the embodiment of the deep state. However, a narrative has emerged alleging that President Trump is actually at war with a shadowy “deep state” consisting of everything from the US intelligence community to career bureaucrats “resisting” the Trump administration and “its” policies from within the system.

To explain this contrived narrative to the American public, another one of the real deep state’s propaganda functionaries, TIME Magazine, punished an article titled, “President Trump’s Allies Keep Talking About the ‘Deep State.’ What’s That?“ In it, it claims: To allies of Trump in the conservative media and on Capitol Hill, it is an organized resistance within the government, working to subvert his presidency. They blame career bureaucrats, many of whom they see as loyal to former President Barack Obama, for leaking damaging information to the news media. TIME also cites Freedom House, a US government-funded organization dedicated to regime change worldwide and chaired by the very same special interested centered upon Wall Street – again, the actual, real deep state – in an effort to downplay and dismiss the notion that the United States is actually run by just such an entity. It claims: “[The White House] is taking a sexy term that means something very real in an environment in which there has been a lot of violence associated with this term and we’re applying it to stuff that’s pretty normal in terms of a large bureaucracy,” said Schenkaan, the Freedom House project director. “These are state employees and they have been implementing their jobs faithfully for a long time.

Back in reality, the American public is beginning to suspect in much larger numbers than ever before, that the US government is simply carrying out a singular agenda – regardless of election results and political affiliations – of  a permanent, deeply rooted conglomeration of special interests that transcend political parties, ideologies, presidential terms, as well as both domestic and international law. The creation of an attractive, provocative, almost irresistible strategy of tension between various functionaries within the real deep state is intentionally designed to draw in and trap political discourse long before it reaches and reveals the true nature of both the real deep state and the solutions required to dismantle it.

America’s Deep State is the World’s Problem 

It is beyond obvious that America’s real deep state represents not only the usurpation of American sovereignty, but also a threat to global peace and stability. The wielding of America’s unwarranted power and influence manifests itself as regional wars, subsequent waves of refugees, socioeconomic exploitation and catastrophe within targeted states and across entire regions, as well as a general global malaise  resulting from a minute handful of special interests abusing and egregiously wasting the planet’s human and natural resources for its own petty, self-serving pursuits. It is not, then, an American problem, because the consequences of America’s unchecked deep state stretch out across the entire globe. Confronting this deep state, and all others like it regardless of size and reach, requires a careful transition pursued by lesser states – and more importantly – by modern, decentralized institutions and alternatives driven by individuals. Confronting the real deep state at the very source of its power – its corporate and financial activities and the profits reaped from billions of people across the planet paying into them – is fundamental.

The effectiveness of doing so is already evident in such realms as information space where decentralized networks of genuine alternative news platforms have countered and overcome the real deep state’s information war capabilities. Adding leverage to this process are competing centers of global power in Eurasia who have created competing media platforms that have further diluted the US deep state’s grip on information. A similar process – enabled by technology – is unfolding across all aspects of manufacturing and infrastructure. The emergence of aerospace industries across the developing world is beginning to challenge the US-European monopoly over both air and space. Chinese corporations building trains and aircraft – on the largest end of the spectrum – are diluting monopolies enjoyed for decades by corporations like Boeing and Airbus.

On the smaller end of the spectrum, localized manufacturing of simpler goods carried out by individuals or small businesses, both within formal and informal economies and markets, are chipping away at centralized manufacturing and retail monopolies. Alternative energy such as solar power lends itself well to decentralized power production both for individuals and members of networks known as microgrids. As these microgrids proliferate, energy monopolies will inevitably whither. And the organic food movement – a mesh network that continues to expand by leaps and bound in both size and capabilities – has challenged and in some instances, entirely replaced centralized agricultural and processing monopolies who also constitute the membership of the US deep state.

Solving the Deep State Problem

Despite this, the deep state still poses a formidable and dangerous threat to both global and individual peace and prosperity. The natural human inclination to create alternatives to compete with such a threat – but which simply resemble a mirrored version of the threat – means that a “Chinese” or “Russian” dominated deep state leading any given unipolar global order will simply replace America’s immense deep state and continue carrying on the abuses and destructive role Wall Street and Washington currently fulfill.

Talk of a multipolar world order in which nations balance themselves against one another rather than fall under a single, unipolar order dominated by a single deep state and the handful of interests that constitute it, forms a bridge between today’s current global order and a decentralized, balanced future. A multipolar world order in which nations are balanced globally, then leads to an internal process of decentralization and balance, all of which is driven by technology and the opportunities in business and sociopolitical pursuits opened up by it which allow each individual to take a more proportional share of a nation’s or community’s resources. While it may seem counterintiutive for nations like Russia, India, or China, or even smaller players like Iran, Thailand, or Brazil to invest in decentralization, national and local self-sufficiency, and even informal economies, currencies, and markets, by doing so, they help chip away at the current, dominate global deep state which through its media and consumerism still reaches into, threatens, and influences virtually every society on Earth. Ultimately, sidestepping the crass, unsophisticated but highly provocative and alluring strategy of tension created around the Trump administration and the alleged “deep state” it is supposedly fighting, is essential in identifying and confronting the real deep state that is orchestrating both sides of this charade.

Placing stock in political functionaries of the deep state to solve the deep state problem is beyond futile – it is a rouse intentionally engineered to preserve and perpetuate the deep state. By identifying the true source of the real deep state’s power and influence – the wealth it derives from its corporate-financier monopolies, its control over national and international infrastructure, and its media – we can begin devising practical alternatives to dilute these monopolies and thus the power and influence they grant those who control them. It requires a period of transition involving both state and individual efforts pursued by all who stand threatened by the deep state – and all those who are threatened by the deep state consist of anyone who resides outside the boardrooms from within which its agenda is devised and implemented.

Monday, March 13, 2017

The US Cyberwar on Europe │ WikiLeaks Vault 7

With friends like these one needs no enemies.
CIA Hacking Revealed
On March 8, 2017, WikiLeaks launched the first tranche of secret CIA documents providing an overview of CIA cyber crime practices in Europe, Africa and the Middle East. The published papers are from the years 2013 to 2016 and are to be assessed as common operational practice of the CIA. The period coincides with the discoveries in the NSA affair in Germany from mid-2013. What is noticeable here is the fact that the CIA has not drawn any discernible conclusions from this affair. On the contrary the documents underline the technical and structural progress realized by the CIA since 2013. However, they also show that Germany as the center of American espionage activities in Europe was still expanding.

In all this Frankfurt am Main plays a central role. The documents provide an insight into the state of the art capabilities of the US intelligence community. A little over two years ago, the CIA has begun to develop cyber capacities similar to those of the NSA. What the former CIA boss John Brennan had already announced, has now taken shape: 5,000 programmers and operational staff at the Center of Cyber ​​Intelligence at the CIA headquarters in Langley are working on more than 500 projects worldwide. The Center for Cyber ​​Intelligence Europe, based in Frankfurt, is one of several global branches of this CIA-led structure. The world's largest American consulate, the one in Frankfurt am Main, is home to an area that is only accessible to CIA staff and other American services. It is described as a Sensitive Compartmented Information Facility, a structure composed of operating agents, programmers and hackers. Their task is to systematically identify security gaps and weaknesses in smartphones, computers, and television sets, such as often used in hotels. Special targets are telephone systems used for teleconferencing and video conferencing, which have long become one of the most important means of communication for global players such as Siemens, Deutsche Bank and other European companies. The installation in Frankfurt is not limited to the programming of malicious software, but also dedicated to the installation of this software on selected targets' devices which are not connected to the Internet. Therefore the hacker's activities are not only about office work, but also about operational field work. To infect computers not connected to the Internet for security reasons, CIA agents enter company buildings to physically crack computers and to copy data there.

Meanwhile German intelligence always has been fully aware of these activities out of the diplomatic screen of the American Consulate in Frankfurt. The reason is that the Federal Intelligence Service (BND) was founded by the CIA as an embedded extension. And after all they are not even violating any law of their vassal state. Formally the General Prosecutor should be in charge of investigating foreign espionage. But this is just another issue too delicate for the Merkel regime, as already seen during the NSA spying affair. Therefore, after more than three years of simulation, the General Prosecutor's investigations were silently discontinued, and it is to be expected that a fake parliamentary investigation committee will be terminated as well. German sovereignty is thoroughly restricted by the NATO-Truppenstatut, regulating the presence and operation of allied forces and intelligence. The NATO-Truppenstatut grants a myriad of privileges to American forces, including the validity of American law in Germany. Hence de jure and de facto the CIA is allowed to spy from Frankfurt on the entire German economy, every single citizen, and on all other European partners. True, in the current legal situation, the Merkel regime can not do much to protect citizens and businesses. But worse, it does not even pretend to think about to do so.

Instead the reactions are characterized by striking disinterest. The Merkel regime actually had a speaker telling that it wouldn't know whether these WikiLeaks documents were real. It is shocking that such outright ignorance about what intelligence services do and what is actually the issue prevails in the most important European economy. US economic espionage in Western Europe has been operating for decades. On March 7, 2000, the former CIA chief James Woolsey quite bluntly confirmed this at a press conference at the U.S Department of State Foreign Press Center: "We are stealing secrets with espionage, detraction and reconnaissance satellites". Economic espionage by the US in Europe was justified since European companies had a "national culture" of bribery. Woolsey said literally: "Some of our oldest friends and allies have a national culture and practice that consists of the fact that bribery is an important part of the way they try to do business in international trade." The danger comes from massive US data collection and the use against European companies: This includes patent rights, work processes, key positions, suppliers, sales markets, customer relationships, political networks, pricing, calculation, logistics, balance sheets, financing, loans, etc. The CIA is able to crack any cell phone and PC and to combine the data with the many Google services, Skype, Facebook, Microsoft or data aggregated from the intranets of companies. Every single European citizen, government agency, administrator, scientist, politician, businessman and company is an open book in real-time in front of its competitors from the US and the Five Eyes countries (see also HERE + HERE).

Effective Corporate Tax Rates in G20 Countries │ 2003 and 2012

It is common to think of the US as the rip-roaring home of market capitalism, at least as compared to most other high-income countries round the world. But this belief sits uncomfortably with the fact that US corporate tax rates are among the highest in the world. The Congressional Budget Office has published "International Comparisons of Corporate Income Tax Rates" (March 2017). It's a short just-the-facts report, with lots of tables and figures.

In most G20 countries, effective corporate tax rates declined from 2003 to 2012 — mainly because of reductions in top statutory rates. The decline in the U.S. rate was relatively small. As a result of small reductions, on average, in state tax rates, it dropped by less than half a percentage point between 2003 and 2012. By 2012, the U.S. rate was the fourthhighest among G20 countries. The largest declines were driven by a combination of changes. Italy’s rate dropped by 36 percentage points because of a reduction in the top statutory rate and the introduction of a tax allowance for corporate equity. In Canada, the 12 percentage-point decline was caused by a reduction in the top statutory rate and an acceleration of cost recovery allowances for equipment. Reductions in four countries’ top statutory corporate tax rates were accompanied by a deceleration of cost recovery allowances. In Germany and Turkey, the effect of the reduction in the statutory rate was greater than the effect of the change in the allowances, leading to reductions in the effective corporate tax rates. The opposite was true in India and the United Kingdom, where effective corporate tax rates rose.

In Argentina and Brazil, two of the three countries whose top statutory tax rates were unchanged from 2003 to 2012, effective corporate tax rates remained the same. Australia’s effective corporate tax rate declined because of an acceleration of its cost recovery allowances.

Sunday, March 12, 2017

Where did Steve Bannon get his Worldview? From my Book. │ Neil Howe

Steve Bannon, Donald Trump’s chief strategist.
Source: TIME Magazine Cover @ flickr
Neil Howe (Feb 24, 2017) - The headlines this month have been alarming. “Steve Bannon’s obsession with a dark theory of history should be worrisome” (Business Insider). “Steve Bannon Believes The Apocalypse Is Coming And War Is Inevitable” (Huffington Post). “Steve Bannon Wants To Start World War III” (The Nation). A common thread in these media reports is that President Trump’s chief strategist is an avid reader and that the book that most inspires his worldview is “The Fourth Turning: An American Prophecy.

I wrote that book with William Strauss back in 1997. It is true that Bannon is enthralled by it. In 2010, he released a documentary, “Generation Zero”, that is structured around our theory that history in America (and by extension, most other modern societies) unfolds in a recurring cycle of four-generation long eras. While this cycle does include a time of civic and political crisis — a Fourth Turning, in our parlance — the reporting on the book has been absurdly apocalyptic.

I don’t know Bannon well. I have worked with him on several film projects, including “Generation Zero,” over the years. I’ve been impressed by his cultural savvy. His politics, while unusual, never struck me as offensive. I was surprised when he took over the leadership of Breitbart and promoted the views espoused on that site. Like many people, I first learned about the alt-right (a far-right movement with links to Breitbart and a loosely defined white-nationalist agenda) from the mainstream media. Strauss, who died in 2007, and I never told Bannon what to say or think. But we did perhaps provide him with an insight — that populism, nationalism and state-run authoritarianism would soon be on the rise, not just in America but around the world.

Because we never attempted to write a political manifesto, we were surprised by the book’s popularity among certain crusaders on both the left and the right. When “The Fourth Turning” came out, our biggest partisan fans were Democrats, who saw in our description of an emerging “Millennial Generation” (a term we coined) the sort of community-minded optimists who would pull America toward progressive ideals. Yet we’ve also had conservative fans, who were drawn to another lesson: that the new era would probably see the successful joining of left-wing economics with right-wing social values. Beyond ideology, I think there’s another reason for the rising interest in our book. We reject the deep premise of modern Western historians that social time is either linear (continuous progress or decline) or chaotic (too complex to reveal any direction). Instead we adopt the insight of nearly all traditional societies: that social time is a recurring cycle in which events become meaningful only to the extent that they are what philosopher Mircea Eliade calls “reenactments.” In cyclical space, once you strip away the extraneous accidents and technology, you are left with only a limited number of social moods, which tend to recur in a fixed order.

Along this cycle, we can identify four “turnings” that each last about 20 years — the length of a generation. Think of these as recurring seasons, starting with spring and ending with winter. In every turning, a new generation is born and each older generation ages into its next phase of life.
The cycle begins with the First Turning, a “High” which comes after a crisis era. In a High, institutions are strong and individualism is weak. Society is confident about where it wants to go collectively, even if many feel stifled by the prevailing conformity. Many Americans alive today can recall the post-World War II American High (historian William O’Neill’s term), coinciding with the Truman, Eisenhower and Kennedy presidencies. Earlier examples are the post-Civil War Victorian High of industrial growth and stable families, and the post-Constitution High of Democratic Republicanism and Era of Good Feelings.

The Second Turning is an “Awakening”, when institutions are attacked in the name of higher principles and deeper values. Just when society is hitting its high tide of public progress, people suddenly tire of all the social discipline and want to recapture a sense of personal authenticity. Salvation by faith, not works, is the youth rallying cry. One such era was the Consciousness Revolution of the late 1960s and 1970s. Some historians call this America’s Fourth or Fifth Great Awakening, depending on whether they start the count in the 17th century with John Winthrop or the 18th century with Jonathan Edwards.

The Third Turning is an “Unraveling”, in many ways the opposite of the High. Institutions are weak and distrusted, while individualism is strong and flourishing. Third Turning decades such as the 1990s, the 1920s and the 1850s are notorious for their cynicism, bad manners and weak civic authority. Government typically shrinks, and speculative manias, when they occur, are delirious.

Finally, the Fourth Turning is a “Crisis” period. This is when our institutional life is reconstructed from the ground up, always in response to a perceived threat to the nation’s very survival. If history does not produce such an urgent threat, Fourth Turning leaders will invariably find one — and may even fabricate one — to mobilize collective action. Civic authority revives, and people and groups begin to pitch in as participants in a larger community. As these Promethean bursts of civic effort reach their resolution, Fourth Turnings refresh and redefine our national identity. The years 1945, 1865 and 1794 all capped eras constituting new “founding moments” in American history.
Just as a Second Turning reshapes our inner world (of values, culture and religion), a Fourth Turning reshapes our outer world (of politics, economy and empire).

September 11, 2001: The sinister Neocon Project for a New American Century, engineering "some
catastrophic and catalyzing event – like a new Pearl Harbor
" — one generation ahead of time

In our paradigm, one can look ahead and suggest that a coming time period — say, a certain decade — will resemble, in its essential human dynamic, a time period in the past. In “The Fourth Turning,” we predicted that, starting around 2005, America would probably experience a “Great Devaluation” in financial markets, a catalyst that would mark America’s entry into an era whose first decade would likely parallel the 1930s. Reflecting on the decade we’ve just lived through, we can probably agree that the 1930s parallel works well. In the economy, both decades played out in the shadow of a global financial crash, and were characterized by slow and disappointing economic growth and chronic underemployment of labor and capital. Both saw tepid investment, deflation fears, growing inequality and the inability of central bankers to rekindle consumption.

In geopolitics, we’ve witnessed the rise of isolationism, nationalism and right-wing populism across the globe. Geostrategist Ian Bremmer says we now live in a “G-Zero” world, where it’s every nation for itself. This story echoes the 1930s, which witnessed the waning authority of great-power alliances and a new willingness by authoritarian regimes to act with terrifying impunity. In social trends, the two decades also show parallels: falling rates of fertility and home-ownership, the rise of multi-generational households, the spread of localism and community identification, a dramatic decline in youth violence (a fact that apparently has eluded the president), and a blanding of pop youth culture. Above all, we sense a growing desire among voters around the world for leaders to assert greater authority and deliver deeds rather than process, results rather than abstractions.

September 1, 2005: FEMA-camp, New Orleans, in the aftermath of Hurricane Katrina (HERE).

We live in an increasingly volatile and primal era, in which history is speeding up and liberal democracy is weakening. As Vladimir Lenin wrote, “In some decades, nothing happens; in some weeks, decades happen. Get ready for the creative destruction of public institutions, something every society periodically requires to clear out what is obsolete, ossified and dysfunctional — and to tilt the playing field of wealth and power away from the old and back to the young. Forests need periodic fires; rivers need periodic floods. Societies, too. That’s the price we must pay for a new golden age. If we look at the broader rhythms of history, we have reason to be heartened, not discouraged, by these trends. Anglo-American history over the past several centuries has experienced civic crises in a fairly regular cycle, about every 80 or 90 years, or roughly the length of a long human life. This pattern reveals itself in the intervals separating the colonial Glorious Revolution, the American Revolution, the Civil War, and the Great Depression and World War II. Fast-forward the length of a long human life from the 1930s, and we end up where we are today. 

America entered a new Fourth Turning in 2008. It is likely to last until around 2030. Our paradigm suggests that current trends will deepen as we move toward the halfway point. Further adverse events, possibly another financial crisis or a major armed conflict, will galvanize public opinion and mobilize leaders to take more decisive action. Rising regionalism and nationalism around the world could lead to the fragmentation of major political entities (perhaps the European Union) and the outbreak of hostilities (perhaps in the South China Sea, the Korean Peninsula, the Baltic states or the Persian Gulf).  

September 18, 2008: Treasury Secretary Henry Paulson and Fed chairman Ben Bernanke met with key
legislators to propose a $700 billion emergency bailout. Bernanke reportedly told them: "If we
don't do this, we may not have an economy on Monday.
" (HERE)

Despite a new tilt toward isolationism, the United States could find itself at war. I certainly do not hope for war. I simply make a sobering observation: Every total war in U.S. history has occurred during a Fourth Turning, and no Fourth Turning has yet unfolded without one. America’s objectives in such a war are likely to be defined very broadly. At the end of the 2020s, the Fourth Turning crisis era will climax and draw to a close. Settlements will be negotiated, treaties will be signed, new borders will be drawn, and perhaps (as in the late 1940s) a new durable world order will be created. Perhaps as well, by the early 2030s, we will enter a new First Turning: Young families will rejoice, fertility will rebound, economic equality will rise, a new middle class will emerge, public investment will grow into a new 21st-century infrastructure, and ordered prosperity will recommence.

"Prestige lasts at best four generations in one lineage."
Muqaddimah (1377), Ibn Khaldun.

During the next First Turning, potentially the next “American High,” millennials will move into national leadership and showcase their optimism, smarts, credentials and confidence. Sometime in the late 2030s, the first millennial will be voted into the White House, prompting talk of a new Camelot moment. Let a few more years pass, and those organization-minded millennials may face a passionate and utterly unexpected onslaught from a new crop of youth. Welcome to the next Awakening. The cycle of history keeps turning, inexorably (see also HERE).

The Global Financial Crisis catalyzed by the 2008 financial meltdown in the US was the most severe
economic downturn since the Great Depression in the 1930s. With public trust continuing to ebb, the
regeneracy phase of this crisis still seems years away. Most likely, this Fourth Turning will come
to an end in the late 2020s, just as the Generation Zero/Millennials will embark on careers