What Could Possibly Go Wrong

Genetic modification blamed for rejected Washington alfalfa crop

"Authorities were investigating a new suspected case of crop contamination on Thursday – the second in the Pacific northwest in five months – after samples of hay tested positive for genetically modified traits. The investigation was ordered after a farmer in Washington state reported that his alfalfa shipments had been rejected for export after testing positive for genetic modification. Results were expected as early as Friday. If confirmed, it would be the second known case of GM contamination in a major American crop since May, when university scientists confirmed the presence of a banned GM wheat growing in a farmer’s field in Oregon." Continue reading →

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WATCH OUT BELOW: S&P 1987 Compared with S&P 2013

"It's a terrible mistake to just look at the data from two time periods and forecast the trends to continue. However, as I have been pointing out at the EPJ Daily Alert, there are many reasons to suspect another crash may be on the way: 1. Money supply growth has declined dramatically since the start of the year. 2. There is a natural tendency for the consumption-savings ratio to move towards consumption, starting in September. BTW: In the summer of 1987, money supply, in the manner I track it in the EPJ Daily Alert, collapsed, just like it has this summer." Continue reading →

Continue ReadingWATCH OUT BELOW: S&P 1987 Compared with S&P 2013

The Treasury Secretary on How Unstable U.S. Government Finances Are

"Treasury Secretary Jack Lew made the following statement during remarks today before the Economic Club of Washington D.C.: '[W]e are relying on investors from all over the world to continue to hold U.S. bonds. Every Thursday, we roll-over approximately $100 billion in U.S. bills. If U.S. bond holders decided that they wanted to be repaid rather than continuing to roll-over their investments, we could unexpectedly dissipate our entire cash balance.'" Continue reading →

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Bill Bonner: Larry Summers Was a Lousy Choice Anyway

"Yes, Summers is smarter than we are. Yes, he has a better academic record. Yes, he is a real economist. Yes, he has widespread political support and a winning personality. But beyond those things, studies find that people with lower IQs make better truck drivers than people with high IQs. Which puts the critical question right out in the open: What kind of thing is running a central bank? And how smart do you have to be to be a successful central banker?" Continue reading →

Continue ReadingBill Bonner: Larry Summers Was a Lousy Choice Anyway

Krugman: “The Employment Story is Highly Unimpressive”

"Even Paul Krugman gets it. He writes: 'The measured unemployment rate is down a lot — in fact, at 7.3 percent it’s almost exactly the same as it was in November 1982 1984, when Ronald Reagan won big on claims of restored prosperity. But most of the fall in unemployment reflects lower labor force participation rather than job growth. Even if we focus on prime-age workers, so as to net out demographic effects, the employment story is highly unimpressive.'" Continue reading →

Continue ReadingKrugman: “The Employment Story is Highly Unimpressive”

Everything’s Fixed, Everything’s Great

"Much to the amazement of doom-and-gloomers, everything's been fixed and as a result, everything's great. The list is impressive: China: fixed. Japan: fixed. Europe: fixed. U.S. healthcare: fixed. Africa: fixed. Mideast: well, not fixed, but no worse than a month ago, and that qualifies as fixed. Everything's fixed, because everybody that can create their own money can do so without limit or consequence. It's a perpetual money machine, and that fuels a perpetual growth machine. No limits on credit and debt means no limit on spending. Free money for everyone and everything--it's unbelievably easy. The solution to every problem is at hand: create more money and credit, in ever larger sums." Continue reading →

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A Rare Sign of Fiscal Sanity in France

"France’s state auditor urged the government Tuesday to redouble efforts to limit spending rather than increases taxes… He said 'the spiraling welfare debt was particularly abnormal and particularly dangerous.' During his first year in power, President François Hollande relied on large tax increases to plug holes in public finances, including social programs such as pensions, unemployment benefits and health care. But economic stagnation in 2012, coupled with a mild recession at the start of 2013, has waylaid the plan, while both companies and households are crying foul over what some have called 'a tax overdose.'" Continue reading →

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Pension Funds: The $4 Trillion Problem

"Using the lower, safer growth rate of 3.22%, the unfunded liability in Pennsylvania’s two pension plans grows to a combined $156 billion. This different form of measuring liabilities produces some truly scary results. In five states, State Budget Solutions calculates pension liabilities represent more than 40% of the entire state economy. In two states — Ohio and Mississippi — the pension costs are equal to more than half the state’s gross production. On a per-capita basis, it’s equally worrisome. There are five states where the unfunded pension liability would represent a per capita cost of more than $20,000, with Alaska leading the way, at more than $32,000 per person." Continue reading →

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Danger! Exploding Wealth Gap!

"We don’t just have an economic bankruptcy, but we also have a moral and ethical bankruptcy taking place on top of the threat of war, and the fact that most governments are taking away freedoms and personal initiatives by making them people dependent on state handouts. We also have the very dangerous situation where the rich are getting richer and the poor are getting poorer. Since 2009, the wealthiest 7% have seen their wealth increase by 28%, while the other 93% have seen their wealth decline by 4%. If you take the wealthiest 300 in the world, they have more wealth than the poorest 3 billion. This is very dangerous for a world which that will have more and more people going hungry." Continue reading →

Continue ReadingDanger! Exploding Wealth Gap!