Globalisation debt & banking
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Japan actually has 211.7% Government Debt to GDP, but is held mostly by Japanese citizens
Greece 143%
Italy 119%
Australia 22.9%
Unemployment figures:
Spain 25%
Greece 23%
Ireland 15%
Portugal 15%
South Africa 25%
France 10%
Greece 143%
Italy 119%
Australia 22.9%
Unemployment figures:
Spain 25%
Greece 23%
Ireland 15%
Portugal 15%
South Africa 25%
France 10%
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The Baltic Dry is getting LOWER by the day now 850ish.
At 600, its basically saying ships will move Iron Ore/Wheat/Coal for COST.
In other words, DEMAND for commodities is very low....Nothing is moving
3 Possibilities:
1) Demand is now lower and prices will correct/decline further
2) Stockpiles are nearly full and not depleting at a rapid rate
3) Commodity prices have very little to do with Supply/Demand and have been manipulated for geopolitical purposes
In any case, as this INDEX cannot be shorted by the way its calculated - its a very good one to keep on the radar as a leading economic indicator.
THE BALTIC DRY INDEX
At 600, its basically saying ships will move Iron Ore/Wheat/Coal for COST.
In other words, DEMAND for commodities is very low....Nothing is moving
3 Possibilities:
1) Demand is now lower and prices will correct/decline further
2) Stockpiles are nearly full and not depleting at a rapid rate
3) Commodity prices have very little to do with Supply/Demand and have been manipulated for geopolitical purposes
In any case, as this INDEX cannot be shorted by the way its calculated - its a very good one to keep on the radar as a leading economic indicator.
THE BALTIC DRY INDEX
Last edited by crystalballwannabe; 9th Aug 2012 at 11:47.
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Correct!
The Baltic Index has been trending down for some months.
More worrying is the drop off in exports to Europe from China.
This, when things should be ramping up for the Christmas season.
Another indicator that the end of this year may not be too happy.
The Baltic Index has been trending down for some months.
More worrying is the drop off in exports to Europe from China.
This, when things should be ramping up for the Christmas season.
Another indicator that the end of this year may not be too happy.
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With Interest rates so low in the states, the Dow will soon be finding new high ground....
Talk about the whole thing being out of Wack...
I guess Oil will come down, interest rates will go up and then the share market will retreat, but CASH is def King right now.
Talk about the whole thing being out of Wack...
I guess Oil will come down, interest rates will go up and then the share market will retreat, but CASH is def King right now.
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The Emperor is Naked: David Stockman
Source: Karen Roche and JT Long of The Gold Report**(5/4/12)
A "paralyzed" Federal Reserve Bank, in its "final days," held hostage by Wall Street "robots" trading in markets that are "artificially medicated" are just a few of the bleak observations shared by David Stockman, former Republican U.S. Congressman and director of the Office of Management and Budget. He is also a founding partner of Heartland Industrial Partners and the author of The Triumph of Politics: Why Reagan's Revolution Failed and the soon-to-be released The Great Deformation: How Crony Capitalism Corrupts Free Markets and Democracy. The Gold Report caught up with Stockman for this exclusive interview at the recent Recovery Reality Check conference.
Source: Karen Roche and JT Long of The Gold Report**(5/4/12)
A "paralyzed" Federal Reserve Bank, in its "final days," held hostage by Wall Street "robots" trading in markets that are "artificially medicated" are just a few of the bleak observations shared by David Stockman, former Republican U.S. Congressman and director of the Office of Management and Budget. He is also a founding partner of Heartland Industrial Partners and the author of The Triumph of Politics: Why Reagan's Revolution Failed and the soon-to-be released The Great Deformation: How Crony Capitalism Corrupts Free Markets and Democracy. The Gold Report caught up with Stockman for this exclusive interview at the recent Recovery Reality Check conference.
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Foie, good link. Stockman understands exactly what is going on, for me this was the best quote from the link:
The real problem is bets using 30:1 leverage by the banks - financial alchemy dependent on models that fail in the real world given enough time.
DS: Not necessarily. That is one of the great myths that I address in my book. The banking system, especially the mainstream banking system, was not in peril at all. The toxic securitized mortgage assets were not in the Main Street banks and savings and loans; these institutions owned mostly prime quality whole loans and could have bled down the modest bad debt they did have over time from enhanced loan loss reserves. So the run on money was not at the retail teller window; it was in the canyons of Wall Street. The run was on wholesale money—that is, on repo and on unsecured commercial paper that had been issued in the hundreds of billions by financial institutions loaded down with securitized toxic garbage, including a lot of in-process inventory, on the asset side of their balance sheets.
The run was on investment banks that were really hedge funds in financial drag. The Goldmans and Morgan Stanleys did not really need trillion-dollar balance sheets to do mergers and acquisitions. Mergers and acquisitions do not require capital; they require a good Rolodex. They also did not need all that capital for the other part of investment banking—the underwriting business. Regulated stocks and bonds get underwritten through rigged cartels—they almost never under-price and really don't need much capital. Their trillion dollar balance sheets, therefore, were just massive trading operations—whether they called it customer accommodation or proprietary is a distinction without a difference—which were funded on 30 to 1 leverage. Much of the debt was unstable hot money from the wholesale and repo market and that was the rub—the source of the panic.
Bernanke thought this was a retail run ŕ la the 1930s. It was not; it was a wholesale money run in the canyons of Wall Street and it should have been allowed to burn out
The run was on investment banks that were really hedge funds in financial drag. The Goldmans and Morgan Stanleys did not really need trillion-dollar balance sheets to do mergers and acquisitions. Mergers and acquisitions do not require capital; they require a good Rolodex. They also did not need all that capital for the other part of investment banking—the underwriting business. Regulated stocks and bonds get underwritten through rigged cartels—they almost never under-price and really don't need much capital. Their trillion dollar balance sheets, therefore, were just massive trading operations—whether they called it customer accommodation or proprietary is a distinction without a difference—which were funded on 30 to 1 leverage. Much of the debt was unstable hot money from the wholesale and repo market and that was the rub—the source of the panic.
Bernanke thought this was a retail run ŕ la the 1930s. It was not; it was a wholesale money run in the canyons of Wall Street and it should have been allowed to burn out
Last edited by TheWholeEnchilada; 11th Aug 2012 at 22:38.
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This essay should have been shorter, it offers much to consider:
Meet Cannibalistic Capitalism: Globalization's Evil Twin
Meet Cannibalistic Capitalism: Globalization's Evil Twin
Monday, 30 July 2012 14:51 By Craig Collins PhD, Truthout | Op-Ed
"Out of the frying pan, into the fire" is an apt description of our current place in history. No matter what you think of globalization and economic growth, I believe we'll soon discover that capitalism without them is much, much worse.
Of course, no one has to convince establishment economists, politicians and pundits that the absence of economic growth spells trouble. They've always extolled globalization as the Viagra of economic growth. But globalization has never been popular with everyone. Many believe that capitalism generates tremendous wealth and power for a tiny fraction of the Earth's seven billion people, makes room for some in the middle class, but keeps most of humanity destitute and desperate, while trashing the planet and jeopardizing human survival for generations to come.
A loose alliance of ecology and labor activists, small farmers, indigenous peoples and human rights advocates has disrupted international economic summits for many years. They say malignant capitalism demolishes habitats and poisons ecosystems, wreaks havoc with the climate, destroys indigenous cultures, pushes farmers off their land and into slums and erodes wages by pitting desperate workers around the globe against one another. At annual World Social Forums, these social movements voice their opposition to globalization and growth and unite around the belief that "Another World Is Possible!" They work toward the day when neoliberal globalization is replaced by a more democratic, equitable, Earth-friendly society.
Since globalization is so damaging, most activists assume that any future without it is bound to be an improvement. But now, it appears that this assumption may be wrong. In fact, for all of its depredations, future generations may someday look back on capitalism's growth phase as the halcyon days of industrial civilization, a naďve time before anyone realized that the worst was yet to come.
Today, worldwide energy and financial crises - that some call peak oil and peak debt - are beginning to permanently strangle globalization and growth. At the fulcrum of this historic tipping point lies the hard fact that civilization is running low on the only concentrated source of power we know of, whose energy return on energy invested (net energy) is large enough to sustain relentless growth. Today, the unparalleled economic take-off fueled by the Age of Fossil Fuels is reaching its apex. The rapacious flight to the top was powered by the Earth's dwindling hydrocarbon reserves. From these lofty heights, the drastic drop-off ahead appears perilous. As fossil fuel extraction fails to meet global demand, economic contraction and downward mobility will become the new normal and growth will fade into memory. But will this new growth-less future bear any resemblance to the one for which activists have been fighting?
Peak oil brings no relief to climate activists like Bill McKibben, since there is more than enough carbon left in the planet's accessible fossil reserves to unleash horrific climate catastrophes. Nevertheless, optimistic Green reformers like Al Gore, Jeremy Rifkin and Lester Brown see a window of opportunity at this historic juncture. For years, they've jetted from one conference to the next, tirelessly trying to convince world leaders to embrace their planet-saving plans for a sustainable, carbon-free society before it's too late. They hope energy scarcity and economic contraction can act as wake-up calls, spurring world leaders to embrace their Green New Deals that promise to save capitalism and the planet.
Their message is clear: rapid, fossil-fueled growth is burning through the Earth's remaining reserves of precious hydrocarbons and doing untold damage to the biosphere in the process. Businesses must lead the way out of this dangerous dead end by adopting renewable energy and other planet-healing practices, even if it means substantial reductions in growth and profits. But, despite their dire warnings, hard work, innovative proposals and good intentions, most heads of state and captains of industry continue to politely ignore them.
The more radical activists in the anti-globalization movement also hope climate chaos, peak oil and economic contraction will become game changers. Many assume that economic growth is so essential that capitalism must fail without it. And, as it does, social movements will seize the opportunity to transform this collapsing system into a more equitable, sustainable one, free of capitalism's insatiable need to expand at all costs.
Both the optimistic reformers and the radical anti-globalization activists misunderstand the true nature of capitalism and underestimate its ability to withstand - and profit handsomely from - the great contraction ahead. Growth is not the primary driving force behind capitalism - profit is. When the overall economic pie is expanding, many firms find it easier to realize profits big enough to continually increase their share price. But periods of crisis and collapse can generate huge profits as well. In fact, during systemic contractions, the dog-eat-dog nature of capitalism creates lucrative opportunities for mergers, hostile takeovers and leveraged buyouts, allowing the most predatory firms to devour their competition.
One of capitalism's central attributes is opportunism. Capitalism is not loyal to any person, nation, corporation or ideology. It doesn't care about the planet or believe in justice, equality, fairness, liberty, human rights, democracy, world peace or even economic growth and the "free market." Its overriding obsession is maximizing the return on invested capital. Capitalism will pose as a loyal friend of other beliefs and values, or betray them in an instant, if it advances the drive for profit ... that's why it's called the bottom line! Growth is important because it tends to improve the bottom line. And ultimately, capitalism may not last without it. But those who profit from this economic system are not about to throw up their hands and walk off the stage of history just because boom has turned to bust. Crisis, conflict and collapse can be extremely profitable for the opportunists who know where and when to invest.
But how long can this go on? Can capitalism's profit motive remain the driving force behind a contracting economy the net energy returns of which are too paltry to generate growth? Definitely - but the consequences for society will be grim indeed. Without access to cheap energy to extract resources, power factories, maintain infrastructure and transport goods around the world, capitalism's productive sector will lose its position as the most lucrative source of profit and investment. As profits dwindle, factories close, workers are laid off, benefits and wages are slashed, unions are broken and pension funds are raided - whatever it takes to remain solvent. Transnational corporations will find that their size, complexity and economies of scale have become liabilities rather than assets.
Declining incomes and living standards mean poorer consumers, contracting markets and shrinking tax revenues. Of course, collapse can be postponed by using debt to artificially extend the solvency of businesses, consumers and governments; but without growth, paying off debts with interest becomes futile, eventually. And, when the credit bubbles burst, the defaults, foreclosures, bankruptcies and financial fiascos that follow can paralyze the economy.
Without the capacity for growth, the recessions and depressions of times past, that temporarily disrupted production between long periods of expansion, now become chronic features of a contracting system. On the downside of peak oil, neither liberal programs to increase employment and stimulate growth nor conservative tax and regulatory cuts have any substantial impact on the economy's descending spiral. Both production and demand remain so constricted by low net energy that any brief growth spurts are quickly stifled by resurgent energy prices. Instead, periods of severe contraction and collapse may be buffered between brief plateaus of relative stability.
In a growth-less economy, the profit motive can have a powerful catabolic impact on society. The word "catabolism" comes from the Greek and is used in biology to refer to the condition whereby a living thing feeds on itself. Catabolic capitalism is a self-cannibalizing economic system.
The essence of catabolic capitalism is captured by the riotous train scene in the film "The Marx Brothers Go West." The wacky brothers commandeer a locomotive that runs out of fuel. In desperation, they ransack the train, breaking up the passenger cars, ripping up seats and tearing down roofs and walls to feed the steam engine. By the end of the scene, terrified passengers desperately cling to a skeletal train, reduced to little more than a fast moving furnace on wheels.
Without fuel to generate growth, catabolic capitalists stoke the profit engine by taking over troubled businesses, selling them off for parts, firing the workforce and pilfering their pensions. Scavengers, speculators and slumlords buy up distressed and abandoned properties - houses, schools, factories, office buildings and malls - strip them of valuable resources, sell them for scrap or rent them to people desperate for shelter. Illicit lending operations charge outrageous interest rates and hire thugs or private security firms to shake down desperate borrowers or force people into indentured servitude to repay loans. Instead of investing in struggling productive enterprises, catabolic financiers make windfall profits by betting against growth through hoarding and speculative short selling of securities, currencies and commodities.
Social benefits, legal and regulatory protections and modern society itself will also be sacrificed to feed the profit engine. During a period of contraction, single-minded catabolic capitalists put their lawyers and lobbyists to work tearing down any legal barriers to their insatiable appetite for profit. Regulatory agencies that once provided some protection from polluters, dangerous products, unsafe workplaces, labor exploitation, financial fraud and corporate crime are dismantled to feed the voracious fires of avarice.
Society's governing institutions of justice, law and order become early victims of this catabolic crime spree. Public safety is stripped down, privatized and sold to those who can still afford it. As budgets for courts, prisons and law enforcement shrivel, private security firms hire unemployed cops to break strikes, provide corporate security and guard the wealthy in their gated communities. Meanwhile, the rest of us will be forced to rely on alarm systems, dogs, guns and - if we're lucky - watchful neighbors to deal with rising crime. Meanwhile, privatized prisons will profit by contracting convict labor to the highest bidders.
As tax-starved public services and social welfare programs bleed out from deep budget cuts, profit-hungry capitalists pick over the carcasses of bankrupt governments. Revenues for social security, food stamps and health care programs are chopped to the bone. Public transportation and decaying highways are transformed into private thoroughfares, maintained by convict labor or indentured workers. Corporations scarf up failing public utilities, water treatment, waste management and sewage disposal systems to provide businesses and wealthy communities with reliable power, water and waste removal. Schools and libraries go broke, while exclusive private academies employ a fraction of the jobless teachers and university professors to educate a shrinking class of affluent students.
In the previous era of industrial expansion, catabolic capitalists were marginal profiteers, living in the shadows of the growth economy. They were the illicit arms, drugs and sex traffickers; the loan sharks, debt collectors and repossessors; the smugglers, pirates, poachers, black market merchants and pawnbrokers; the illegal waste dumpers, shady sweatshop operators and unregulated mining, fishing and timber operations.
As the productive sector contracts, this corrupt, cannibalistic sector emerges from the shadows and metastasizes rapidly, thriving off conflict, crime and crisis; hoarding and speculation; insecurity and desperation. Catabolic capitalism flourishes because it can still generate substantial profits by dodging legalities and regulations; stockpiling scarce resources and peddling arms to those fighting over them; scavenging, breaking down and selling off the assets of the decaying productive and public sectors; and preying upon the sheer desperation of people who can no longer find gainful employment elsewhere.
Cannibalistic profiteers can thrive in a growth-less environment for quite some time, but ultimately, an economy bent on devouring itself has a dismal, dead-end future. Nevertheless, changing course will be difficult because, as the catabolic sector expands at the expense of society, powerful cannibalistic capitalists are bound to forge influential alliances, poison and paralyze the political system and block all efforts to pull society out of its economic nosedive.
Catabolic enterprises are not the only profit-makers in a growth-less economy. Even a contracting economy must extract energy and other resources from the Earth. Unless the profit motive is removed by bringing these assets under public control, fresh water, farm land, timber, energy and mining corporations will deploy their lobbying muscle to completely privatize these vital resources and enhance their bottom line with government subsidies, tax breaks and "regulatory relief." The growing capital and technology commitments needed to commodify scarce resources may cut deeply into profit margins. As less solvent outfits fail, the remaining politically connected resource conglomerates may maximize their profits by forming cartels to corner markets and send prices soaring while blocking all attempts at public regulation and rationing.
The extractive and the catabolic sectors of capitalism have a lot in common. An alliance between them could put irresistible pressure on failing federal and state governments to open public lands and coastlines to unregulated offshore drilling, fracking, coal mining and tar sands extraction. Scofflaw resource extractors and criminal poaching operations proliferate in corrupt, catabolic conditions where legal protections are ignored and shady deals can be struck with local power brokers to maximize the exploitation of labor and resources. To pay off government debt, national and state parks may be sold and transformed into expensive private resorts while public lands and national forests are auctioned off to energy, timber and mining corporations.
So, is catabolic capitalism inevitable? What about Green capitalism? Isn't there money to be made in wind, solar and geothermal energy? What about redesigning transportation systems, buildings and communities? Couldn't capitalists profit by producing alternative energy technologies if government helped finance the unprofitable, but necessary, infrastructure projects needed to bring them online? Wouldn't a Green New Deal be far more beneficial than catabolic catastrophe?
Catabolic capitalism is not inevitable. However, in a growth-less economy, catabolic capitalism is the most profitable, short-term alternative for those in power. This makes it the path of least resistance from Wall Street to Washington. Green capitalism is another story. As both radical Greens and the corporate establishment realize, Green capitalism is essentially an oxymoron. Truly Green policies, programs and projects contradict capitalism's primary directive - profit before all else! This doesn't mean there aren't profitable niche markets for some products and services that are both ecologically benign and economically beneficial. It means that capitalism's overriding profit motive is fundamentally at odds with ecological balance and the general welfare of humanity.
In its growth phase, capitalism used fossil fuels to turn an enormous profit. Capitalists used machines and desperate workers to transform the Earth's resources into an ever-expanding marketplace of disposable commodities. But energy scarce, catabolic capitalism can be profitable as well - by tearing down, hoarding and auctioning off society's shrinking assets; selling weapons to those fighting over them; and exploiting the desperation of those willing to do whatever it takes to stay alive.
But profit is a problem for stable, ecologically balanced societies. The profusion of insidious opportunities to exploit greed and fear, so prevalent in capitalism's manic-depressive economy, drop to a manageable minimum in a healthy economy that encourages people to take care of each other and the planet. While people and the planet may thrive in a sustainable society, the self-centered drive for profit and power cannot. Thus, capitalists will resist, to the bitter end, any effort to replace their dysfunctional bipolar economy with a stable one.
Would the transition to a sustainable society be expensive? Of course. Our petroleum-addicted infrastructure of tankers, refineries, pipelines and power plants; cities, suburbs, gas stations and freeways; shopping centers, mega-farms, fast food franchises and supermarkets would have to be replaced with smaller towns fed by local farms and powered by decentralized, renewable energy. But the cost of making this Green transition is a priceless bargain compared to the horrific consequences of suicidal catabolic collapse.
The real problem isn't price; it's politics ... breaking the death grip of profit-driven corporate power over our lives. (A discussion of this daunting struggle will be the subject of the upcoming article: "Defending the Future.")
This article is a Truthout original.
Monday, 30 July 2012 14:51 By Craig Collins PhD, Truthout | Op-Ed
"Out of the frying pan, into the fire" is an apt description of our current place in history. No matter what you think of globalization and economic growth, I believe we'll soon discover that capitalism without them is much, much worse.
Of course, no one has to convince establishment economists, politicians and pundits that the absence of economic growth spells trouble. They've always extolled globalization as the Viagra of economic growth. But globalization has never been popular with everyone. Many believe that capitalism generates tremendous wealth and power for a tiny fraction of the Earth's seven billion people, makes room for some in the middle class, but keeps most of humanity destitute and desperate, while trashing the planet and jeopardizing human survival for generations to come.
A loose alliance of ecology and labor activists, small farmers, indigenous peoples and human rights advocates has disrupted international economic summits for many years. They say malignant capitalism demolishes habitats and poisons ecosystems, wreaks havoc with the climate, destroys indigenous cultures, pushes farmers off their land and into slums and erodes wages by pitting desperate workers around the globe against one another. At annual World Social Forums, these social movements voice their opposition to globalization and growth and unite around the belief that "Another World Is Possible!" They work toward the day when neoliberal globalization is replaced by a more democratic, equitable, Earth-friendly society.
Since globalization is so damaging, most activists assume that any future without it is bound to be an improvement. But now, it appears that this assumption may be wrong. In fact, for all of its depredations, future generations may someday look back on capitalism's growth phase as the halcyon days of industrial civilization, a naďve time before anyone realized that the worst was yet to come.
Today, worldwide energy and financial crises - that some call peak oil and peak debt - are beginning to permanently strangle globalization and growth. At the fulcrum of this historic tipping point lies the hard fact that civilization is running low on the only concentrated source of power we know of, whose energy return on energy invested (net energy) is large enough to sustain relentless growth. Today, the unparalleled economic take-off fueled by the Age of Fossil Fuels is reaching its apex. The rapacious flight to the top was powered by the Earth's dwindling hydrocarbon reserves. From these lofty heights, the drastic drop-off ahead appears perilous. As fossil fuel extraction fails to meet global demand, economic contraction and downward mobility will become the new normal and growth will fade into memory. But will this new growth-less future bear any resemblance to the one for which activists have been fighting?
Peak oil brings no relief to climate activists like Bill McKibben, since there is more than enough carbon left in the planet's accessible fossil reserves to unleash horrific climate catastrophes. Nevertheless, optimistic Green reformers like Al Gore, Jeremy Rifkin and Lester Brown see a window of opportunity at this historic juncture. For years, they've jetted from one conference to the next, tirelessly trying to convince world leaders to embrace their planet-saving plans for a sustainable, carbon-free society before it's too late. They hope energy scarcity and economic contraction can act as wake-up calls, spurring world leaders to embrace their Green New Deals that promise to save capitalism and the planet.
Their message is clear: rapid, fossil-fueled growth is burning through the Earth's remaining reserves of precious hydrocarbons and doing untold damage to the biosphere in the process. Businesses must lead the way out of this dangerous dead end by adopting renewable energy and other planet-healing practices, even if it means substantial reductions in growth and profits. But, despite their dire warnings, hard work, innovative proposals and good intentions, most heads of state and captains of industry continue to politely ignore them.
The more radical activists in the anti-globalization movement also hope climate chaos, peak oil and economic contraction will become game changers. Many assume that economic growth is so essential that capitalism must fail without it. And, as it does, social movements will seize the opportunity to transform this collapsing system into a more equitable, sustainable one, free of capitalism's insatiable need to expand at all costs.
Both the optimistic reformers and the radical anti-globalization activists misunderstand the true nature of capitalism and underestimate its ability to withstand - and profit handsomely from - the great contraction ahead. Growth is not the primary driving force behind capitalism - profit is. When the overall economic pie is expanding, many firms find it easier to realize profits big enough to continually increase their share price. But periods of crisis and collapse can generate huge profits as well. In fact, during systemic contractions, the dog-eat-dog nature of capitalism creates lucrative opportunities for mergers, hostile takeovers and leveraged buyouts, allowing the most predatory firms to devour their competition.
One of capitalism's central attributes is opportunism. Capitalism is not loyal to any person, nation, corporation or ideology. It doesn't care about the planet or believe in justice, equality, fairness, liberty, human rights, democracy, world peace or even economic growth and the "free market." Its overriding obsession is maximizing the return on invested capital. Capitalism will pose as a loyal friend of other beliefs and values, or betray them in an instant, if it advances the drive for profit ... that's why it's called the bottom line! Growth is important because it tends to improve the bottom line. And ultimately, capitalism may not last without it. But those who profit from this economic system are not about to throw up their hands and walk off the stage of history just because boom has turned to bust. Crisis, conflict and collapse can be extremely profitable for the opportunists who know where and when to invest.
But how long can this go on? Can capitalism's profit motive remain the driving force behind a contracting economy the net energy returns of which are too paltry to generate growth? Definitely - but the consequences for society will be grim indeed. Without access to cheap energy to extract resources, power factories, maintain infrastructure and transport goods around the world, capitalism's productive sector will lose its position as the most lucrative source of profit and investment. As profits dwindle, factories close, workers are laid off, benefits and wages are slashed, unions are broken and pension funds are raided - whatever it takes to remain solvent. Transnational corporations will find that their size, complexity and economies of scale have become liabilities rather than assets.
Declining incomes and living standards mean poorer consumers, contracting markets and shrinking tax revenues. Of course, collapse can be postponed by using debt to artificially extend the solvency of businesses, consumers and governments; but without growth, paying off debts with interest becomes futile, eventually. And, when the credit bubbles burst, the defaults, foreclosures, bankruptcies and financial fiascos that follow can paralyze the economy.
Without the capacity for growth, the recessions and depressions of times past, that temporarily disrupted production between long periods of expansion, now become chronic features of a contracting system. On the downside of peak oil, neither liberal programs to increase employment and stimulate growth nor conservative tax and regulatory cuts have any substantial impact on the economy's descending spiral. Both production and demand remain so constricted by low net energy that any brief growth spurts are quickly stifled by resurgent energy prices. Instead, periods of severe contraction and collapse may be buffered between brief plateaus of relative stability.
In a growth-less economy, the profit motive can have a powerful catabolic impact on society. The word "catabolism" comes from the Greek and is used in biology to refer to the condition whereby a living thing feeds on itself. Catabolic capitalism is a self-cannibalizing economic system.
The essence of catabolic capitalism is captured by the riotous train scene in the film "The Marx Brothers Go West." The wacky brothers commandeer a locomotive that runs out of fuel. In desperation, they ransack the train, breaking up the passenger cars, ripping up seats and tearing down roofs and walls to feed the steam engine. By the end of the scene, terrified passengers desperately cling to a skeletal train, reduced to little more than a fast moving furnace on wheels.
Without fuel to generate growth, catabolic capitalists stoke the profit engine by taking over troubled businesses, selling them off for parts, firing the workforce and pilfering their pensions. Scavengers, speculators and slumlords buy up distressed and abandoned properties - houses, schools, factories, office buildings and malls - strip them of valuable resources, sell them for scrap or rent them to people desperate for shelter. Illicit lending operations charge outrageous interest rates and hire thugs or private security firms to shake down desperate borrowers or force people into indentured servitude to repay loans. Instead of investing in struggling productive enterprises, catabolic financiers make windfall profits by betting against growth through hoarding and speculative short selling of securities, currencies and commodities.
Social benefits, legal and regulatory protections and modern society itself will also be sacrificed to feed the profit engine. During a period of contraction, single-minded catabolic capitalists put their lawyers and lobbyists to work tearing down any legal barriers to their insatiable appetite for profit. Regulatory agencies that once provided some protection from polluters, dangerous products, unsafe workplaces, labor exploitation, financial fraud and corporate crime are dismantled to feed the voracious fires of avarice.
Society's governing institutions of justice, law and order become early victims of this catabolic crime spree. Public safety is stripped down, privatized and sold to those who can still afford it. As budgets for courts, prisons and law enforcement shrivel, private security firms hire unemployed cops to break strikes, provide corporate security and guard the wealthy in their gated communities. Meanwhile, the rest of us will be forced to rely on alarm systems, dogs, guns and - if we're lucky - watchful neighbors to deal with rising crime. Meanwhile, privatized prisons will profit by contracting convict labor to the highest bidders.
As tax-starved public services and social welfare programs bleed out from deep budget cuts, profit-hungry capitalists pick over the carcasses of bankrupt governments. Revenues for social security, food stamps and health care programs are chopped to the bone. Public transportation and decaying highways are transformed into private thoroughfares, maintained by convict labor or indentured workers. Corporations scarf up failing public utilities, water treatment, waste management and sewage disposal systems to provide businesses and wealthy communities with reliable power, water and waste removal. Schools and libraries go broke, while exclusive private academies employ a fraction of the jobless teachers and university professors to educate a shrinking class of affluent students.
In the previous era of industrial expansion, catabolic capitalists were marginal profiteers, living in the shadows of the growth economy. They were the illicit arms, drugs and sex traffickers; the loan sharks, debt collectors and repossessors; the smugglers, pirates, poachers, black market merchants and pawnbrokers; the illegal waste dumpers, shady sweatshop operators and unregulated mining, fishing and timber operations.
As the productive sector contracts, this corrupt, cannibalistic sector emerges from the shadows and metastasizes rapidly, thriving off conflict, crime and crisis; hoarding and speculation; insecurity and desperation. Catabolic capitalism flourishes because it can still generate substantial profits by dodging legalities and regulations; stockpiling scarce resources and peddling arms to those fighting over them; scavenging, breaking down and selling off the assets of the decaying productive and public sectors; and preying upon the sheer desperation of people who can no longer find gainful employment elsewhere.
Cannibalistic profiteers can thrive in a growth-less environment for quite some time, but ultimately, an economy bent on devouring itself has a dismal, dead-end future. Nevertheless, changing course will be difficult because, as the catabolic sector expands at the expense of society, powerful cannibalistic capitalists are bound to forge influential alliances, poison and paralyze the political system and block all efforts to pull society out of its economic nosedive.
Catabolic enterprises are not the only profit-makers in a growth-less economy. Even a contracting economy must extract energy and other resources from the Earth. Unless the profit motive is removed by bringing these assets under public control, fresh water, farm land, timber, energy and mining corporations will deploy their lobbying muscle to completely privatize these vital resources and enhance their bottom line with government subsidies, tax breaks and "regulatory relief." The growing capital and technology commitments needed to commodify scarce resources may cut deeply into profit margins. As less solvent outfits fail, the remaining politically connected resource conglomerates may maximize their profits by forming cartels to corner markets and send prices soaring while blocking all attempts at public regulation and rationing.
The extractive and the catabolic sectors of capitalism have a lot in common. An alliance between them could put irresistible pressure on failing federal and state governments to open public lands and coastlines to unregulated offshore drilling, fracking, coal mining and tar sands extraction. Scofflaw resource extractors and criminal poaching operations proliferate in corrupt, catabolic conditions where legal protections are ignored and shady deals can be struck with local power brokers to maximize the exploitation of labor and resources. To pay off government debt, national and state parks may be sold and transformed into expensive private resorts while public lands and national forests are auctioned off to energy, timber and mining corporations.
So, is catabolic capitalism inevitable? What about Green capitalism? Isn't there money to be made in wind, solar and geothermal energy? What about redesigning transportation systems, buildings and communities? Couldn't capitalists profit by producing alternative energy technologies if government helped finance the unprofitable, but necessary, infrastructure projects needed to bring them online? Wouldn't a Green New Deal be far more beneficial than catabolic catastrophe?
Catabolic capitalism is not inevitable. However, in a growth-less economy, catabolic capitalism is the most profitable, short-term alternative for those in power. This makes it the path of least resistance from Wall Street to Washington. Green capitalism is another story. As both radical Greens and the corporate establishment realize, Green capitalism is essentially an oxymoron. Truly Green policies, programs and projects contradict capitalism's primary directive - profit before all else! This doesn't mean there aren't profitable niche markets for some products and services that are both ecologically benign and economically beneficial. It means that capitalism's overriding profit motive is fundamentally at odds with ecological balance and the general welfare of humanity.
In its growth phase, capitalism used fossil fuels to turn an enormous profit. Capitalists used machines and desperate workers to transform the Earth's resources into an ever-expanding marketplace of disposable commodities. But energy scarce, catabolic capitalism can be profitable as well - by tearing down, hoarding and auctioning off society's shrinking assets; selling weapons to those fighting over them; and exploiting the desperation of those willing to do whatever it takes to stay alive.
But profit is a problem for stable, ecologically balanced societies. The profusion of insidious opportunities to exploit greed and fear, so prevalent in capitalism's manic-depressive economy, drop to a manageable minimum in a healthy economy that encourages people to take care of each other and the planet. While people and the planet may thrive in a sustainable society, the self-centered drive for profit and power cannot. Thus, capitalists will resist, to the bitter end, any effort to replace their dysfunctional bipolar economy with a stable one.
Would the transition to a sustainable society be expensive? Of course. Our petroleum-addicted infrastructure of tankers, refineries, pipelines and power plants; cities, suburbs, gas stations and freeways; shopping centers, mega-farms, fast food franchises and supermarkets would have to be replaced with smaller towns fed by local farms and powered by decentralized, renewable energy. But the cost of making this Green transition is a priceless bargain compared to the horrific consequences of suicidal catabolic collapse.
The real problem isn't price; it's politics ... breaking the death grip of profit-driven corporate power over our lives. (A discussion of this daunting struggle will be the subject of the upcoming article: "Defending the Future.")
This article is a Truthout original.
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There are just as many people predicting the US market will go up as down.
With very low interest rates - the blue chips (DOW) are increasing.
Fear creates some buy opportunities
As for OZ - Our population will double by 2050 so steady growth companies should perform well.
5-6 percent Bonus savings accounts are also fairly attractive
With very low interest rates - the blue chips (DOW) are increasing.
Fear creates some buy opportunities
As for OZ - Our population will double by 2050 so steady growth companies should perform well.
5-6 percent Bonus savings accounts are also fairly attractive
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Posts: n/a
Are all these people talking "horse****"? One must assume they have done their homework on the figures they have published.
Peak oil denial: How does this help? | Energy Bulletin
If free markets are the most efficient economic system known, why is it that, in 1940, the more localised short chain food system produced 2.3 calories of food for one calorie of oil; but, after several decades of “market efficiency dividends”, it now takes between 8 and 10 calories of oil – and often much more – to deliver that same calorie of food? What’s worse, in 1940 oil was easily extracted from a few hundred feet at a cost of one barrel of oil to produce 100 barrels. Today the ratio is 1:10, dropping to 1:3 for “non-conventional” oil sources such as tar sands and coal seam gas.
In truth, the “market efficiencies” are largely illusory. Cheap and easily accessible oil allowed the industrial food system to flourish, but this era is ending. Oil is an extremely compact and versatile energy source with no simple replacement. Biofuels are one of the market’s responses to the price rises of this dwindling resource (coal seam gas is another); but the corporate rush to produce them, underwritten by state subsidies and targets in the name of the “green economy”, has been identified as a chief cause of the mass suffering that occurred in the 2008 food crisis.
In truth, the “market efficiencies” are largely illusory. Cheap and easily accessible oil allowed the industrial food system to flourish, but this era is ending. Oil is an extremely compact and versatile energy source with no simple replacement. Biofuels are one of the market’s responses to the price rises of this dwindling resource (coal seam gas is another); but the corporate rush to produce them, underwritten by state subsidies and targets in the name of the “green economy”, has been identified as a chief cause of the mass suffering that occurred in the 2008 food crisis.
Last edited by prospector; 12th Aug 2012 at 08:42.
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Peak oil is a "Mantra" - Don't believe it.
There is a large body of evidence that oil is produced constantly by the Earths Core. Not decomposed Dinosaurs like you were told in school.
There is plenty of oil for centuries to come - but oil is a VERY EFFECTIVE GEOPOLITICAL TOOL. Its price can effect Countries destiny's. Anything produced underground is Brilliant for such things because spy satellites are useless and planes with geomagnetic abnomaly detecters look worse than the A380 and stand out like Dogballs. Think of underground mines as resources with a very shady con artist/charlatan out the front offering crazy prices that serves his purpose - NOT yours.
The Food Crisis is much more REAL. Half the world live on less than 10 dollars a day. They will spend most of that on Food. This creates wars and instability. Feeding the world is a growing problem. You could buy wheat or rice futures, or invest in a company like Graincorp.
The Euro will be devalued to avert a meltdown, debt will be refinanced over decades and it will most likely wright itself - the countries know what is at stake.
If you want to get in the market - Look for Companies with a P/E of 10 and a dividend yield of 7% and you should be fine.
There is a large body of evidence that oil is produced constantly by the Earths Core. Not decomposed Dinosaurs like you were told in school.
There is plenty of oil for centuries to come - but oil is a VERY EFFECTIVE GEOPOLITICAL TOOL. Its price can effect Countries destiny's. Anything produced underground is Brilliant for such things because spy satellites are useless and planes with geomagnetic abnomaly detecters look worse than the A380 and stand out like Dogballs. Think of underground mines as resources with a very shady con artist/charlatan out the front offering crazy prices that serves his purpose - NOT yours.
The Food Crisis is much more REAL. Half the world live on less than 10 dollars a day. They will spend most of that on Food. This creates wars and instability. Feeding the world is a growing problem. You could buy wheat or rice futures, or invest in a company like Graincorp.
The Euro will be devalued to avert a meltdown, debt will be refinanced over decades and it will most likely wright itself - the countries know what is at stake.
If you want to get in the market - Look for Companies with a P/E of 10 and a dividend yield of 7% and you should be fine.
Last edited by crystalballwannabe; 12th Aug 2012 at 09:08.
No - it was horse**** from beginning to end.
Join Date: Oct 2009
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STOP LOOKING!!! I've found all the money!
Let's face it, we all know where the money is!
AND
How the IMF and the European Central Bank Are Strangling the Greek Economy
BYARI PAUL
AUGUST 3, 2012
With Greek workers bracing themselves for more announcements of privatization of public services and industries, the fight among political factions continues. But the drama that is unfolding proves that Greek Parliament is but a puppet regime for an occupying force known as the troika: the International Monetary Fund, the European Commission and the European Central Bank.
The pro-austerity government (led by the conservatives, New Democracy) installed this summer is already on shaky ground. With three ministers already having resigned, the country is just a few rowdy demonstrations away from new elections in the fall. The troika is using its leverage to arrange the debt-ridden country’s economy and governance as it sees fit, which, as shadow justice minister and Coalition of the Radical Left (SYRIZA) parliamentarian Zoe Konstantopoulou said, constitute “violations of our international obligations,” and amounts to the nation being “a guinea pig for Europe, and the experiment has failed again and again.”
Common sense says that lower wages means people would spend less money, hurting the retail economy and giving the government less through value-added taxes. Unemployment is above 20 percent, and left-wing activists and politicians note the country is already experiencing pain in the healthcare sector because of medicine shortages and delays in surgeries due to cuts in spending. While the International Labor Organization recently stated that these austerity measures will only cause even more unemployment, European Commission President Jose Manuel Barroso told the Greek government to “deliver, deliver, deliver” on the cuts.
Greece has seen its fair share of foreign occupiers and home-grown tyrants: the Ottomans, the Nazis and the military dictatorship that fell in 1974. Geopolitically, Greece is the West, considering its ancient contributions to its early entrance into NATO. But in other ways, it is more like an small nation in the Global South. It’s been occupied, but never an empire in modern times. It shares a religion and borders with Eastern Europe. And like Jamaica or Argentina, it is enduring a political crisis as it copes with its debt. When the country came into the European community, it was told that it was poor, at least in terms of its industrial output, despite its agricultural self-sufficiency. The new European order would integrate it into the modern economy, which of course wouldn’t work for geopolitical reasons, so now the lenders get to auction off its assets through forced privatization.
“We were self-sufficient in bread, sugar, olive oil and meat,” Liana Kanelli, a member of Parliament from the Communist Party (KKE), said of the country before 2001. “We survived under German occupation by just eating olive oil. Now we import everything. We have three state-owned sugar companies--they will be [liberalized], and the price will go up.” Kanelli believes that unless Greece leaves the Eurozone and the entire European community, the "loan sharks" of the troika and Northern Europe will continue to come and impose hurtful economic policy onto Greeks.
Yet, the mundane punditry about the crisis focuses on this myth that Greece suffers from a bloated public sector and a backward private sector that consists of nothing but tourism and feta cheese--there is also shipping and steel, and as some activists point out, the often overlooked fact that the Greek Orthodox Church, despite being a major land owner, doesn’t pay enough taxes, they say. It is true that the public sector is rife with corruption, but activists point out that cutting people’s wages doesn’t address that problem.
And like any other colonizer, Northern Europe has found allies in the Greek 1 percent. As Konstantopoulou explained, one of the most curious things about the austerity plan first implement by the Panhellenic Socialist Movement (PASOK) led government is that its mandates for labor reform in the private sector went beyond what the troika asked for. “There are very strong internal interests who have found their way into the troika,” she said.
There are, of course, activists who don’t take this view, such as Olga Lafazani of the Network for Social and Political Rights. Taking a
break from her organizing duties at July’s Anti-Racist Festival, she explains of the colonial view, “It makes us passive, so I don’t like it very much, because it’s like there’s nothing you can do.”
Lafazani is speaking for a generation getting used to hopelessness. Fifty percent of Greeks between 18 and 30 years old are unemployed, and their options are only being cut. While some activists admit that efforts to put pressure on the current government might be in vain, they join various union leaders in doubting the capabilities of SYRIZA, a hodgepodge of leftist groups, to fight either the ruling parties or craft a strategy against the troika if they take power. During a protest outside an Athens metro station urging riders to evade the fare, an out-of-work man in his mid-20s explains that while SYRIZA may talk of resistance, he fears that if they come into power they will go the way of PASOK, which started as a social democratic party, and has now suffered electoral defeat after bringing in the first round of austerity measures (it has 33 seats to SYRIZA’s 71).
SYRIZA, however, is still popular among workers and those who oppose the Northern European path. New Democracy was able to gain power in the last election despite SYRIZA’s impressive showing, but SYRIZA supporters pointed to a concerted scare campaign in the Greek media that argued that a left-wing government would mean Greece leaving the Eurozone, ensuring widespread economic misery.
Konstantopoulou believes that if the government falls the public won’t accept this line again. She thinks that the idea of Greece leaving the Eurozone is laughable, as not only would this cause financial harm to Northern Europe, but having all Greeks switch currencies would be a logistical nightmare. “There is no way this is going to happen, structurally or legally,” Konstantopoulou said of the idea of Greece going back to the drachma. “We believe this government--which I call the internal troika--is the last parenthesis before SYRIZA and the people come to power.”
Ari Paul is a journalist based in New York who has written for The Nation, The Guardian, Dissent, The Forward and many other outlets. This article was originally published by Alternet .
BYARI PAUL
AUGUST 3, 2012
With Greek workers bracing themselves for more announcements of privatization of public services and industries, the fight among political factions continues. But the drama that is unfolding proves that Greek Parliament is but a puppet regime for an occupying force known as the troika: the International Monetary Fund, the European Commission and the European Central Bank.
The pro-austerity government (led by the conservatives, New Democracy) installed this summer is already on shaky ground. With three ministers already having resigned, the country is just a few rowdy demonstrations away from new elections in the fall. The troika is using its leverage to arrange the debt-ridden country’s economy and governance as it sees fit, which, as shadow justice minister and Coalition of the Radical Left (SYRIZA) parliamentarian Zoe Konstantopoulou said, constitute “violations of our international obligations,” and amounts to the nation being “a guinea pig for Europe, and the experiment has failed again and again.”
Common sense says that lower wages means people would spend less money, hurting the retail economy and giving the government less through value-added taxes. Unemployment is above 20 percent, and left-wing activists and politicians note the country is already experiencing pain in the healthcare sector because of medicine shortages and delays in surgeries due to cuts in spending. While the International Labor Organization recently stated that these austerity measures will only cause even more unemployment, European Commission President Jose Manuel Barroso told the Greek government to “deliver, deliver, deliver” on the cuts.
Greece has seen its fair share of foreign occupiers and home-grown tyrants: the Ottomans, the Nazis and the military dictatorship that fell in 1974. Geopolitically, Greece is the West, considering its ancient contributions to its early entrance into NATO. But in other ways, it is more like an small nation in the Global South. It’s been occupied, but never an empire in modern times. It shares a religion and borders with Eastern Europe. And like Jamaica or Argentina, it is enduring a political crisis as it copes with its debt. When the country came into the European community, it was told that it was poor, at least in terms of its industrial output, despite its agricultural self-sufficiency. The new European order would integrate it into the modern economy, which of course wouldn’t work for geopolitical reasons, so now the lenders get to auction off its assets through forced privatization.
“We were self-sufficient in bread, sugar, olive oil and meat,” Liana Kanelli, a member of Parliament from the Communist Party (KKE), said of the country before 2001. “We survived under German occupation by just eating olive oil. Now we import everything. We have three state-owned sugar companies--they will be [liberalized], and the price will go up.” Kanelli believes that unless Greece leaves the Eurozone and the entire European community, the "loan sharks" of the troika and Northern Europe will continue to come and impose hurtful economic policy onto Greeks.
Yet, the mundane punditry about the crisis focuses on this myth that Greece suffers from a bloated public sector and a backward private sector that consists of nothing but tourism and feta cheese--there is also shipping and steel, and as some activists point out, the often overlooked fact that the Greek Orthodox Church, despite being a major land owner, doesn’t pay enough taxes, they say. It is true that the public sector is rife with corruption, but activists point out that cutting people’s wages doesn’t address that problem.
And like any other colonizer, Northern Europe has found allies in the Greek 1 percent. As Konstantopoulou explained, one of the most curious things about the austerity plan first implement by the Panhellenic Socialist Movement (PASOK) led government is that its mandates for labor reform in the private sector went beyond what the troika asked for. “There are very strong internal interests who have found their way into the troika,” she said.
There are, of course, activists who don’t take this view, such as Olga Lafazani of the Network for Social and Political Rights. Taking a
break from her organizing duties at July’s Anti-Racist Festival, she explains of the colonial view, “It makes us passive, so I don’t like it very much, because it’s like there’s nothing you can do.”
Lafazani is speaking for a generation getting used to hopelessness. Fifty percent of Greeks between 18 and 30 years old are unemployed, and their options are only being cut. While some activists admit that efforts to put pressure on the current government might be in vain, they join various union leaders in doubting the capabilities of SYRIZA, a hodgepodge of leftist groups, to fight either the ruling parties or craft a strategy against the troika if they take power. During a protest outside an Athens metro station urging riders to evade the fare, an out-of-work man in his mid-20s explains that while SYRIZA may talk of resistance, he fears that if they come into power they will go the way of PASOK, which started as a social democratic party, and has now suffered electoral defeat after bringing in the first round of austerity measures (it has 33 seats to SYRIZA’s 71).
SYRIZA, however, is still popular among workers and those who oppose the Northern European path. New Democracy was able to gain power in the last election despite SYRIZA’s impressive showing, but SYRIZA supporters pointed to a concerted scare campaign in the Greek media that argued that a left-wing government would mean Greece leaving the Eurozone, ensuring widespread economic misery.
Konstantopoulou believes that if the government falls the public won’t accept this line again. She thinks that the idea of Greece leaving the Eurozone is laughable, as not only would this cause financial harm to Northern Europe, but having all Greeks switch currencies would be a logistical nightmare. “There is no way this is going to happen, structurally or legally,” Konstantopoulou said of the idea of Greece going back to the drachma. “We believe this government--which I call the internal troika--is the last parenthesis before SYRIZA and the people come to power.”
Ari Paul is a journalist based in New York who has written for The Nation, The Guardian, Dissent, The Forward and many other outlets. This article was originally published by Alternet .
Verdict on Vatican transparency offers criticism, praise
Jul. 30, 2012
By John L Allen Jr
The Institute for the Works of Religion, popularly known as the Vatican Bank, is located in the Bastion of Nicholas V in the Vatican.
Given the Vatican's traditional obsession with secrecy and autonomy, the report of the first independent, secular evaluation of the Vatican on financial transparency made news less for how the Vatican scored than the fact that it took the test in the first place.
Results of the highly anticipated evaluation were released July 18 by Moneyval, the Council of Europe's anti-money-laundering agency.
It came against the backdrop of the ongoing Vatican leaks scandal, which has featured revelations of private letters to the pope two years ago by a senior official charging financial corruption and cronyism, as well as memoranda documenting internal debates over the powers of a new financial watchdog unit touted as the leading edge of reform under Pope Benedict XVI. Still other leaks have focused on the Vatican Bank, including rumors of secret encrypted accounts allegedly used by Italian VIPs to evade tax obligations and by the Italian mob to launder money.
Collectively, the leaks have created impressions in some quarters that the "bad old days" of Vatican financial scandals, which crested in the early 1980s with the bizarre hanging death of a Vatican-linked financier in London and a $240 million payout to settle claims from the collapse of an Italian bank, are back.
Especially in that climate, the Moneyval evaluation offered the Vatican a welcome dose of good news. In a nutshell, evaluators concluded that the Vatican "has come a long way in a very short period of time" toward compliance with accepted global standards of transparency, and that "there is no empirical evidence of corruption taking place within the Vatican City State."
That said, the verdict was a mixed bag, offering criticism as well as praise.
For instance, evaluators strongly urged independent supervision for the Institute of the Works of Religion, popularly known as the "Vatican Bank." The absence of such oversight, the report warned, "poses large risks to the stability of the small financial sector of the Holy See and Vatican City State."
The Vatican Bank has slightly more than 33,000 accounts, mostly in Europe, though also including dioceses and religious orders around the world, and controls an estimated $7 billion in assets.
Moneyval likewise raised concerns about the new fiscal watchdog launched by Benedict, called the Financial Information Authority.
According to the Moneyval report, the unit lacks adequate powers to carry out its duties, has not yet carried out any inspections or sample testing of files, and has received a surprisingly low number of reports concerning suspect transactions even allowing for the small size of the Vatican's financial sector.
NCR: reporting on justice issues since 1964
Staff writer Joshua McElwee talks about the 8th Day Center for Justice in this preview to his article in the August 3 Peace & Justice issue.
Overall, Moneyval evaluates states based on 49 benchmarks of transparency. Four were judged non-applicable to the Vatican, while it got passing grades on 22 and failing marks on 23. The Vatican was judged "compliant" or "largely compliant," the highest marks available, on nine of the 16 "key and core" standards.
Those results place the Vatican squarely in the middle of the global pack, with scores comparable to recent evaluations of Germany, Italy and the Czech Republic. As a result, the Vatican will not be assigned to Moneyval's "Compliance Enhancing Procedures" designed for problem states -- as close as Moneyval comes to saying that a country "failed." Instead, the Vatican will be subject to the normal follow-up process for states seen as moving in the right direction.
[img_assist|nid=31480|title=|desc=Msgr. Ettore Balestrero (CNS/Catholic Press/Giacomo Ligi)|link=none|align=right|width=120|height=180]The Vatican official who headed up the team working on the Moneyval evaluation, Italian Msgr. Ettore Balestrero, called the July 18 report "not an end, but a milestone in our continuing efforts," and said the Vatican takes "both the praise and the criticism with seriousness."
In particular, Balestrero pledged that the Vatican will issue new regulations shortly for the Financial Information Authority, giving teeth to its powers of oversight.
Standing back from the details, the fact the Vatican chose to subject itself to such scrutiny is, by itself, something of a watershed.
Moneyval is the European arm of the Financial Action Task Force, an intergovernmental agency created by the G-8 in 1989 to lead the global fight against money laundering. The task force's mandate was expanded after 9/11 to include the financing of terrorism. Most Western nations have undergone three rounds of review over the last two decades by the task force and its regional satellites.
Until two years ago, the Vatican had not been part of that process. In February 2011, however, the Vatican requested a Moneyval evaluation, which involves a team of outside experts scouring legal and financial records, conducting an on-site visit, and reviewing the performance of financial institutions. The team in this case included the president of the main European body of financial intelligence units, a professor of international law, and two senior financial professionals, as well as the president and other senior officials of Moneyval.
American lawyer Jeffrey Lena, an advisor to the Vatican on the Moneyval process, told NCR that evaluators were able to examine records of judicial and diplomatic cooperation, anti-money-laundering certifications, accountancy management letters, foundation registry records, and other confidential legal documents. Observers say it's the first time the Vatican has granted such access to outside regulators.
The team apparently did not experience difficulties with closed doors. According to the report, "The Holy See and Vatican City State authorities have cooperated closely with the evaluators."
Given the Vatican's traditional reluctance to open up like this, why do it?
Officially, the Vatican has styled it as a case of setting a good example. In a July 18 press briefing, Balestrero described the process as "first and foremost, a moral rather than a technical commitment."
Balestrero added that the Vatican's newfound commitment to transparency should "guide and orient Catholic religious organizations throughout the world."
Observers add, however, that there's also an imminently practical motive. If a state is perceived to be at risk for money laundering, its financial institutions -- in this case, the Vatican Bank in particular -- usually pay a price. Depositors may take their business elsewhere, worried about possible seizures of assets, while banks in other countries may impose higher transaction costs to cover more aggressive "due diligence" measures. In general, a state's ability to play the global financial game is impeded.
In other words, it's not just the Vatican's moral capital at stake, but its dollars and euros too.
To be sure, many analysts say the Vatican's conversion to transparency remains a work in progress.
For instance, Pope John Paul II launched the tradition of issuing an annual financial statement back in 1981, partly in response to the earlier Vatican Bank scandals. Although external auditors review that statement, it falls short of a true certified audit, and still lacks details many observers would like to have. This year's version, released July 5, didn't even contain overall 2011 revenue or expenses for either the Roman Curia or the Vatican City State, simply indicating the amount each entity was in the red or the black.
Jul. 30, 2012
By John L Allen Jr
The Institute for the Works of Religion, popularly known as the Vatican Bank, is located in the Bastion of Nicholas V in the Vatican.
Given the Vatican's traditional obsession with secrecy and autonomy, the report of the first independent, secular evaluation of the Vatican on financial transparency made news less for how the Vatican scored than the fact that it took the test in the first place.
Results of the highly anticipated evaluation were released July 18 by Moneyval, the Council of Europe's anti-money-laundering agency.
It came against the backdrop of the ongoing Vatican leaks scandal, which has featured revelations of private letters to the pope two years ago by a senior official charging financial corruption and cronyism, as well as memoranda documenting internal debates over the powers of a new financial watchdog unit touted as the leading edge of reform under Pope Benedict XVI. Still other leaks have focused on the Vatican Bank, including rumors of secret encrypted accounts allegedly used by Italian VIPs to evade tax obligations and by the Italian mob to launder money.
Collectively, the leaks have created impressions in some quarters that the "bad old days" of Vatican financial scandals, which crested in the early 1980s with the bizarre hanging death of a Vatican-linked financier in London and a $240 million payout to settle claims from the collapse of an Italian bank, are back.
Especially in that climate, the Moneyval evaluation offered the Vatican a welcome dose of good news. In a nutshell, evaluators concluded that the Vatican "has come a long way in a very short period of time" toward compliance with accepted global standards of transparency, and that "there is no empirical evidence of corruption taking place within the Vatican City State."
That said, the verdict was a mixed bag, offering criticism as well as praise.
For instance, evaluators strongly urged independent supervision for the Institute of the Works of Religion, popularly known as the "Vatican Bank." The absence of such oversight, the report warned, "poses large risks to the stability of the small financial sector of the Holy See and Vatican City State."
The Vatican Bank has slightly more than 33,000 accounts, mostly in Europe, though also including dioceses and religious orders around the world, and controls an estimated $7 billion in assets.
Moneyval likewise raised concerns about the new fiscal watchdog launched by Benedict, called the Financial Information Authority.
According to the Moneyval report, the unit lacks adequate powers to carry out its duties, has not yet carried out any inspections or sample testing of files, and has received a surprisingly low number of reports concerning suspect transactions even allowing for the small size of the Vatican's financial sector.
NCR: reporting on justice issues since 1964
Staff writer Joshua McElwee talks about the 8th Day Center for Justice in this preview to his article in the August 3 Peace & Justice issue.
Overall, Moneyval evaluates states based on 49 benchmarks of transparency. Four were judged non-applicable to the Vatican, while it got passing grades on 22 and failing marks on 23. The Vatican was judged "compliant" or "largely compliant," the highest marks available, on nine of the 16 "key and core" standards.
Those results place the Vatican squarely in the middle of the global pack, with scores comparable to recent evaluations of Germany, Italy and the Czech Republic. As a result, the Vatican will not be assigned to Moneyval's "Compliance Enhancing Procedures" designed for problem states -- as close as Moneyval comes to saying that a country "failed." Instead, the Vatican will be subject to the normal follow-up process for states seen as moving in the right direction.
[img_assist|nid=31480|title=|desc=Msgr. Ettore Balestrero (CNS/Catholic Press/Giacomo Ligi)|link=none|align=right|width=120|height=180]The Vatican official who headed up the team working on the Moneyval evaluation, Italian Msgr. Ettore Balestrero, called the July 18 report "not an end, but a milestone in our continuing efforts," and said the Vatican takes "both the praise and the criticism with seriousness."
In particular, Balestrero pledged that the Vatican will issue new regulations shortly for the Financial Information Authority, giving teeth to its powers of oversight.
Standing back from the details, the fact the Vatican chose to subject itself to such scrutiny is, by itself, something of a watershed.
Moneyval is the European arm of the Financial Action Task Force, an intergovernmental agency created by the G-8 in 1989 to lead the global fight against money laundering. The task force's mandate was expanded after 9/11 to include the financing of terrorism. Most Western nations have undergone three rounds of review over the last two decades by the task force and its regional satellites.
Until two years ago, the Vatican had not been part of that process. In February 2011, however, the Vatican requested a Moneyval evaluation, which involves a team of outside experts scouring legal and financial records, conducting an on-site visit, and reviewing the performance of financial institutions. The team in this case included the president of the main European body of financial intelligence units, a professor of international law, and two senior financial professionals, as well as the president and other senior officials of Moneyval.
American lawyer Jeffrey Lena, an advisor to the Vatican on the Moneyval process, told NCR that evaluators were able to examine records of judicial and diplomatic cooperation, anti-money-laundering certifications, accountancy management letters, foundation registry records, and other confidential legal documents. Observers say it's the first time the Vatican has granted such access to outside regulators.
The team apparently did not experience difficulties with closed doors. According to the report, "The Holy See and Vatican City State authorities have cooperated closely with the evaluators."
Given the Vatican's traditional reluctance to open up like this, why do it?
Officially, the Vatican has styled it as a case of setting a good example. In a July 18 press briefing, Balestrero described the process as "first and foremost, a moral rather than a technical commitment."
Balestrero added that the Vatican's newfound commitment to transparency should "guide and orient Catholic religious organizations throughout the world."
Observers add, however, that there's also an imminently practical motive. If a state is perceived to be at risk for money laundering, its financial institutions -- in this case, the Vatican Bank in particular -- usually pay a price. Depositors may take their business elsewhere, worried about possible seizures of assets, while banks in other countries may impose higher transaction costs to cover more aggressive "due diligence" measures. In general, a state's ability to play the global financial game is impeded.
In other words, it's not just the Vatican's moral capital at stake, but its dollars and euros too.
To be sure, many analysts say the Vatican's conversion to transparency remains a work in progress.
For instance, Pope John Paul II launched the tradition of issuing an annual financial statement back in 1981, partly in response to the earlier Vatican Bank scandals. Although external auditors review that statement, it falls short of a true certified audit, and still lacks details many observers would like to have. This year's version, released July 5, didn't even contain overall 2011 revenue or expenses for either the Roman Curia or the Vatican City State, simply indicating the amount each entity was in the red or the black.
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There is a large body of evidence that oil is produced constantly by the Earths Core. Not decomposed Dinosaurs like you were told in school.
There is plenty of oil for centuries to come
There is plenty of oil for centuries to come
Lid (retired energy engineer - UK gas industry 40 odd years)
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Its just not practical to flood the market with oil when so much work has gone into previous arrangements with countries like Saudi Arabia and administration policies that have crippled nations like the Soviet Union.
When the time is right MASSIVE oil reserves will be "discovered".
Peak oil is like Y2K.
US strategic oil reserves hold about 1 months supply - If it was really an issue, they would have years of reserves.
Peak Oil is for People with Gold Bars under their bed. Energy diversification is a natural hedge for Countries who cannot know what other countries may source/discover to affect the balance of power first.
When the time is right MASSIVE oil reserves will be "discovered".
Peak oil is like Y2K.
US strategic oil reserves hold about 1 months supply - If it was really an issue, they would have years of reserves.
Peak Oil is for People with Gold Bars under their bed. Energy diversification is a natural hedge for Countries who cannot know what other countries may source/discover to affect the balance of power first.
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If peak oil is described as when production can no longer meet demand, then that time was reached sometime between 2005 and 2006.
Demand is still rising so the only solution is price increase.
If the Eurozone play ends in tears as it looks like it will, or if the Chinese development slows down, as it looks like it will, or if something happens that is not as yet apparent, then no doubt demand for oil will fall and production may catch up with demand.
No matter how the oil is originated, dead dinosaurs, or being replenished from the Earths core, it has taken millions of years to accumulate and not much more than a 100 years to reach peak production.
Time to Worry: World Oil Production Finishes Six Years of No Growth - Scitizen
Demand is still rising so the only solution is price increase.
If the Eurozone play ends in tears as it looks like it will, or if the Chinese development slows down, as it looks like it will, or if something happens that is not as yet apparent, then no doubt demand for oil will fall and production may catch up with demand.
No matter how the oil is originated, dead dinosaurs, or being replenished from the Earths core, it has taken millions of years to accumulate and not much more than a 100 years to reach peak production.
Time to Worry: World Oil Production Finishes Six Years of No Growth - Scitizen
Last edited by prospector; 13th Aug 2012 at 02:11.
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Peak oil hey??????
What next - Oxygen bottles under the bed with the guns, gold bars, oil and food and water?
Don't lose any sleep over this one.
**** - forgot about an asteroid hitting the planet!!!!!!!!!!!!!!
What next - Oxygen bottles under the bed with the guns, gold bars, oil and food and water?
Don't lose any sleep over this one.
**** - forgot about an asteroid hitting the planet!!!!!!!!!!!!!!
Last edited by wilcoleaks; 13th Aug 2012 at 03:06.
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Grandpa Aerotart
Arnold E get hold of a book by Bjorn Lomborg called The Skeptical Environmentalist.
Now Lomborg is a gay greenie - not my usual reading material - but he is also a statistician and a man anchored firmly in reality.
It's 4 odd years since I read the book but IIRC the figures for KNOWN reserves were 3000+ years. That figure was based on 1990s prices, which were around $20/bbl, and late 90s usage rates.
Much is made by Peak Oilers that at various times only '30 years' worth of oil (proven reserves) are left!
Why would an oil company waste money looking for more oil when they have 30 years worth stashed away?
How much oil makes it from the 'known' to 'proven' columns in an oil companies ledger depends on the price. At $90/bbl there is a ****LOAD more oil that is profitably extractable than there is at $20/bbl.
Vast amounts of oil has been found since Lomborg wrote his book...but the peak oilers, like the moon landing conspiracy nuts, ignore inconvenient facts.
The facts are that when oil was $20, and that wasn't that long ago, oil companies stopped exploring because it's fcking expensive to go drilling holes all over the place. As oil prices have increased and technology has improved they have gone out drilling and found LOTS of oil. In the next decade the USA will, again, be producing more oil and natural gas than the Saudis, or anyone else for that matter - despite idiot Obama's best efforts.
Oil prices will plummet.
The Saudis, Russians, Iranians et al NEED $90/bbl to fund their various activities both legitimate and illegitimate - $40/bbl will solve a LOT of western concerns with respect to terrorism and Islamism. Even the current price of oil is artificially high - speculators are still in there bidding up the price like they are all through the stock exchanges of the world - and will be until interest rates rise to realistic levels and crush them. Bernanke et al are as responsible for the current oil price as anyone.
But don't believe me - educate yourself - but don't read anything full of apocalyptic language and no references. Like a lot of the horse**** on this thread...and the horse**** I referred to in my last post in particular.
Peak oil is a Malthusian wet dream - its horsehit - and everything that 'logically' flows from horse**** - that entire article - is also horse****.
Now Lomborg is a gay greenie - not my usual reading material - but he is also a statistician and a man anchored firmly in reality.
It's 4 odd years since I read the book but IIRC the figures for KNOWN reserves were 3000+ years. That figure was based on 1990s prices, which were around $20/bbl, and late 90s usage rates.
Much is made by Peak Oilers that at various times only '30 years' worth of oil (proven reserves) are left!
Why would an oil company waste money looking for more oil when they have 30 years worth stashed away?
How much oil makes it from the 'known' to 'proven' columns in an oil companies ledger depends on the price. At $90/bbl there is a ****LOAD more oil that is profitably extractable than there is at $20/bbl.
Vast amounts of oil has been found since Lomborg wrote his book...but the peak oilers, like the moon landing conspiracy nuts, ignore inconvenient facts.
The facts are that when oil was $20, and that wasn't that long ago, oil companies stopped exploring because it's fcking expensive to go drilling holes all over the place. As oil prices have increased and technology has improved they have gone out drilling and found LOTS of oil. In the next decade the USA will, again, be producing more oil and natural gas than the Saudis, or anyone else for that matter - despite idiot Obama's best efforts.
Oil prices will plummet.
The Saudis, Russians, Iranians et al NEED $90/bbl to fund their various activities both legitimate and illegitimate - $40/bbl will solve a LOT of western concerns with respect to terrorism and Islamism. Even the current price of oil is artificially high - speculators are still in there bidding up the price like they are all through the stock exchanges of the world - and will be until interest rates rise to realistic levels and crush them. Bernanke et al are as responsible for the current oil price as anyone.
But don't believe me - educate yourself - but don't read anything full of apocalyptic language and no references. Like a lot of the horse**** on this thread...and the horse**** I referred to in my last post in particular.
Peak oil is a Malthusian wet dream - its horsehit - and everything that 'logically' flows from horse**** - that entire article - is also horse****.
Last edited by Chimbu chuckles; 13th Aug 2012 at 13:47.