How Goes the War? | James Howard Kunstler

Oh, you didn’t notice that World War Three is underway, actually has been for more than year?

Well, that’s because most of it has been taking place in the banking sector, which for most people is just an alternative universe of math. The catch, which many people either miss or don’t care about, is that the math doesn’t add up.

For instance, the runaway choo-choo train of linked European sovereign bond obligations with its overloaded caboose of interest rate swaps and other janky derivatives of mass destruction. That train left the station in Athens a few weeks ago bound for Frankfurt. Ever since, the German government and its cohorts in the EU, the ECB, and the IMF have been issuing reassurances that the choo choo train will not blow up when it reaches its destination.

Few people grok that Greece is an entity with an economy not much bigger than North Carolina’s, yet it is burdened with roughly $350 billion of old debt that will never be paid back. The only thing at issue is how it will not be paid back, that is, what mode of pretense will be employed to disguise the inability to pay back this debt. The mode du jour has been the crude one of lending Greece more money to pay back the interest on the old debt. A seven-year-old ought to be able to understand where that leads.

It’s kind of up to the Greeks this week to possibly opt out of that farcical deal. They have at least two other present options: return to being a sunwashed semi-medieval backwater of olive farmers, shepherds, and inn-keepers, or perhaps lease out some cozy corner of their vast Mediterranean coastline to the Russian navy for enough annual walking-around money to keep the lights on for the aforementioned farmers, shepherds, and inn-keepers. Of course, that would drive the United States and its NATO quislings batshit crazy.

Complete story at - How Goes the War? | James Howard Kunstler

Mass default looms as world sinks beneath a sea of debt - Telegraph

As if the fast degenerating geo-political situation isn’t bad enough, here’s another lorry load of concerns to add to the pile.

The UK and US economies may be on the mend at last, but that’s not the pattern elsewhere. On a global level, growth is being steadily drowned under a rising tide of debt, threatening renewed financial crisis, a continued squeeze to living standards, and eventual mass default.

I exaggerate only a little in depicting this apocalyptic view of the future as the conclusion of the latest “Geneva Report”, an annual assessment informed by a top drawer conference of leading decision makers and economic thinkers of the big challenges facing the global economy.

Aptly titled “Deleveraging? What Deleveraging?”, the report points out that, far from paying down debt since the financial crisis of 2008/9, the world economy as a whole has in fact geared up even further. The raw numbers make explosive reading.

Contrary to widely held assumptions, the world has not yet begun to de-lever. In fact global debt-to-GDP – public and private non financial debt - is still growing, breaking new highs by the month.

Complete story at - Mass default looms as world sinks beneath a sea of debt - Telegraph

Europe dragged into a division of the world between debtors and creditors: the United States' desperate solutions for not sinking alone

In the present confrontation between Russia and the West over the Ukrainian crisis, the image of the Cold War inevitably comes to mind and the media are obviously fond of it. However, contrary to what it gives us to understand, it’s not Russia that seeks the return of an iron curtain but really the US. An iron curtain separating the old powers and emerging nations; the world before and the world afterwards; debtors and creditors. And this in the crazy hope of preserving the American way of life and the US’ influence over “its” camp in the absence of being able to impose it on the whole world. In other words, go down with as many companions as possible to give the impression of not sinking.

For the US, these are the current stakes in fact: drag along the whole Western camp with them to be able to continue dominating and trading with enough countries. So, we are witnessing a formidable operation of turning round opinion and leaders in Europe to ensure docile and understanding rulers vis-à-vis the American boss, supported by a blitzkrieg to link them permanently with the TTIP and to cut them off from what could be their lifeline, namely the BRICS, their huge markets, their vibrant future, their link with developing countries, etc. We are analyzing all these aspects in this GEAB issue, as well as the subtle use of the fear of deflation to convince Europeans to adopt US methods.

In the light of the extreme danger of these methods used by the US, it goes without saying that leaving the US ship wouldn’t be an act of betrayal by Europe, but really a major step forward for the world as we have already extensively analyzed in previous GEAB issues (1).

Unfortunately, the most reasonable European leaders are completely paralyzed and the best strategy that they are still capable of currently putting into effect, in the best case scenario, seems to be simply to delay (2), certainly useful and welcome but hardly sufficient…

Complete story at - Europe dragged into a division of the world between debtors and creditors: the United States' desperate solutions for not sinking alone

How Underpaid German Workers Helped Cause Europe’s Debt Crisis - NYTimes.com

How Underpaid German Workers Helped Cause Europe’s Debt Crisis - NYTimes.com

To understand a crucial reason for the European financial crisis that nearly caused a global financial collapse and threatened to undo a six-decade push toward a united Europe, you could look at a bunch of charts of bond markets and current account deficits and fiscal imbalances.

Or, you could take a look at new data compiled by LIS, a group that maintains the Luxembourg Income Study Database, that shows how income is distributed in countries around the world. It offers a surprising insight about why Europe came to the financial brink.

In most advanced economies, the middle class made significant advances in earning power over the last few decades, even if the rich have done quite a lot better. But one major country stands out as the exception, with middle-income workers seeing no meaningful increase since the 1990s.

It is Germany, the largest economy in Europe. And the numbers are remarkable. From 2000 to 2010, after-tax income for people in the middle of the income distribution in Germany increased 1.4 percent. Not per year. Total.

Complete story at - How Underpaid German Workers Helped Cause Europe’s Debt Crisis - NYTimes.com