The Islamist takeover of two-thirds of Mali this year has spurred the West as well as concerned neighboring countries in Africa to find a way to restore Mali to its democratic path and drive out jihadist elements. Islamist groups in Mali currently include Ansar Dine, the Movement for Oneness and Jihad in West Africa (MUJAO), and al Qaeda in the Islamic Maghreb (AQIM), which is considered one of the most dangerous of al Qaeda's affiliated groups.
Dummy Version: Generates $4 trillion a year without borrowing and allowing the elimination of ALL other taxes beginning with personal income taxes. Allows for the recapitalization of our labor pool, our domestic infrastructure, and our Department of Defense (450-ship Navy, long-haul Air Force, air-liftable Army, Marines back on the boats).
Thus, according to LEAP/E2020, the 2012 election year, which opens against the backdrop of economic and social depression, complete paralysis of the federal system (3), strong rejection of the traditional two-party system and a growing questioning of the relevance of the Constitution, inaugurates a crucial period in the history of the United States. Over the next four years, the country will be subjected to political, economic, financial and social upheaval such as it has not known since the end of the Civil War which, by an accident of history, started exactly 150 years ago in 1861. During this period, the US will be simultaneously insolvent and ungovernable, turning that which was the “flagship” of the world in recent decades into a “drunken boat”.
To make the complexity of the current process understandable, our team has chosen to organize its anticipations around three key areas:
1. US institutional deadlock and the break-up of the traditional two-party system
2. The unstoppable spiral of recession/depression/inflation
3. The breakdown of the US socio-political fabric
Greece: The General Confederation of Employees of Greece and the civil servants' union federation declared a 24-hour nationwide strike on Wednesday in protest against the finalization of the new package of austerity measures demanded by Greece's creditors.
Tens of thousands of protesters demonstrated outside Greece's parliament on 26 September against austerity measures. The strike included doctors, teachers, tax workers, ferry operators and air traffic controllers. The Greek government is looking for ways to cut 11.5 billion euros ($14.7 billion) from the country's budget.
Comment: The economic hardships and austerity measures carry the risk of a breakdown in civil order. The key indicator of a spreading, unmanageable breakdown is the duration of protests. Thus far they have been short lived in Spain and Greece.
The international media has suggested the Eurozone crisis is now on a more stable trajectory. The protests suggest otherwise. European bankers and financial experts continue to fail to distinguish financial risks from real threats. There will be more outbreaks of civil disorder and more violent clashes.
Phi Beta Iota: We now know that financial assets inflated seventeen times verus the five times normal inflation (under a corrupt Federal Reserve) for physical assets. We now know that the financial mandarins and “control fraud” on the part of various governments has led to the internal looting of European Union and Americas commonwealths. Spain will be the next to collapse because the Spanish government has resolutely refused to consider the Iceland example. It is difficult to stop doing the wrong thing righter, we know this. Prospects for the USA in 2013-2014 are terrible. This is particularly troubling since there is nothing wrong with the USA that could not be fixed rapidly with the restoration of intelligence and integrity to governance.
Ever since the beginning of the financial crisis and quantitative easing, the question has been before us: How can the Federal Reserve maintain zero interest rates for banks and negative real interest rates for savers and bond holders when the US government is adding $1.5 trillion to the national debt every year via its budget deficits? Not long ago the Fed announced that it was going to continue this policy for another 2 or 3 years. Indeed, the Fed is locked into the policy. Without the artificially low interest rates, the debt service on the national debt would be so large that it would raise questions about the US Treasury’s credit rating and the viability of the dollar, and the trillions of dollars in Interest Rate Swaps and other derivatives would come unglued.
In other words, financial deregulation leading to Wall Street’s gambles, the US government’s decision to bail out the banks and to keep them afloat, and the Federal Reserve’s zero interest rate policy have put the economic future of the US and its currency in an untenable and dangerous position. It will not be possible to continue to flood the bond markets with $1.5 trillion in new issues each year when the interest rate on the bonds is less than the rate of inflation. Everyone who purchases a Treasury bond is purchasing a depreciating asset. Moreover, the capital risk of investing in Treasuries is very high. The low interest rate means that the price paid for the bond is very high. A rise in interest rates, which must come sooner or later, will collapse the price of the bonds and inflict capital losses on bond holders, both domestic and foreign.
The question is: when is sooner or later? The purpose of this article is to examine that question.
The national unemployment rate gets lots of attention, and lately more attention has been paid to the workforce participation rate since more Americans have given up looking for a job, but we can also see that an astounding 100 million Americans don’t have jobs.
Specifically, these are people who are part of the civilian over-16 non-institutional population who are either unemployed or not part of the workforce. According to the April jobs report, the number of jobless American stood at 100.9 million.
That’s an all-time record and it’s an increase of 26.2 million over the last 12 years. It’s as if we absorbed the entire adult population of Canada and not a single person had a job.
The numbers are staggering. The jobs-to-population ratio peaked 12 years ago. If we were to have the same ratio today, we would need 15.3 million more jobs, or 23.7 million fewer people.
(Note: The chart above is the Civilian Over-16 Non-Institutional Population minus the seasonally adjusted Civilian Workforce.)
… Are what again? As the following graphic from IBD demonstrates, for the first time in history, a majority of jobless workers over 25 have attended some college, and now outnumber those without a job who simply have a high school diploma or less. But at least those in the fomer category have tens of thousands of non-dischargeable debt to show for it.
Click on Image to Enlarge
.. Are what again? As the following graphic from IBD demonstrates, for the first time in history, a majority of jobless workers over 25 have attended some college, and now outnumber those without a job who simply have a high school diploma or less. But at least those in the fomer category have tens of thousands of non-dischargeable debt to show for it.
