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CalExit 3.0: New Petition Calls For Cali Secession…3rd Time’s A Charm?

August 19, 2017 Tyler Durden 0

A new group of CalExit activists are hoping they can secede (see what we did there?) where two predecessor groups failed in efforts to force California’s independence from the United States of America.  Ironically, you would think that removing Ca…

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UK Opposition Leader Calls For “People’s QE” – It’s Venezuela With Tea & Cakes

August 19, 2017 Tyler Durden 0

Authored by Daniel Lacalle via The Mises Institute,

It is sad to see that, facing the evidence of the failure of demand-side policies and money printing, many commentators propose some of the most outdated and failed policies in modern economic history. In the UK, Mr. Jeremy Corbyn, the new leader of the Labour Party, believes that the government spends too little. With a current 44.4% of GDP public spending, saying the government spends “too little” is an insult to taxpayers and efficient public bodies alike.

But Mr. Corbyn wants to penalize the private sector creating the largest transfer of wealth from savers and taxpayers to government ever designed… The People’s QE (quantitative easing).

In Europe, we are already used to the follies of magic solutions from populist parties. Syriza, Podemos, and others always come up with “magic” and allegedly “simple” ideas to solve large and complex economic issues, and always fail when reality kicks in, but there are few that match the monumental nonsense of the wrongly-called “People´s QE”. It is the “Government´s QE”, rather.

Why Is this People’s QE a Bad Idea?

The analysis starts from the right premise. Quantitative Easing, as we know it, does not work, and creates massive imbalances. So what do they propose? Sound money? Erasing perverse incentives of printing money and unjustifiably low rates? No. Doing exactly the same, but passing the massive perverse incentive of currency debasement to politicians who, as we all know, have no perverse incentive whatsoever to overspend (note the irony).

The UK policy of increasing money supply in the past has always been based on two premises to avoid hyperinflation and currency destruction: the independence of the central bank as a central pillar of monetary policy, and the constant sterilization of asset purchases (ie, what it buys is also sold to monitor market real demand). The balance sheet of the Bank of England has remained stable since 2012, coinciding with the highest economic growth period, and is below 25% of GDP.

Corbyn´s People´s QE means that the central bank will lose its independence altogether and become a government agency that prints currency whenever the government wants, but the increase of money supply does not become part of the transmission mechanism that reaches job creators and citizens in the real economy. All the new money is for the government, with the Bank of England forced to buy all the debt issued by a “Public Investment Bank”.

The first problem is evident. The Bank of England would create money to be used indiscriminately for white elephants, a disastrous policy as seen in many EU countries, that only leaves overcapacity and a massive debt hole. By providing the public investment bank with unlimited funding, the risk of irresponsible spending is guaranteed. In a country where citizens are aware of wasteful public infrastructure, this is not a small risk. However, the monetary imbalances created by this policy would generate a massive “crowding-out” effect and incentivise cronyism, as the private sector would suffer the consequences of inflationary and tax pressures as well as unfair competition from government and its crony sectors.

The second problem is that rising public debt, even if “monetized” (hidden in the balance sheet of the investment bank), would still cripple the economy even with perennial QE. Printing money does not reduce the risk of rising imbalances as we are seeing all over the world. And the new bank´s potential losses would be covered with more taxes.

The idea of building lots of bridges and airports all over the place to “create” jobs would be mildly amusing if it hadn’t failed time and time again and forgets the cost of running those infrastructure projects once built, apart from the debt incurred. All paid by the taxpayer, who guarantees the capital of the Public Investment Bank.

The third problem is that inflation created by these projects is paid by the usual suspects, the private sector, and citizens, who do not benefit from this spending as the laws of diminishing returns and debt saturation show.

The Socialist idea that governments artificially creating money will not cause inflation — because the supply of money will rise in tandem with supply and demand of goods and services — is simply science fiction. The government does not have a better or more accurate understanding of the needs and demand for goods and services or the productive capacity of the economy. In fact it has all the incentives to overspend and transfer its inefficiencies to everyone else. As such, like any perverse incentive under the so-called “stimulate internal demand” fallacy, the government simply creates larger monetary imbalances to disguise the fiscal deficit created by spending and lending without real economic return: Creating massive inflation, economic stagnation as productivity collapses and impoverishing everyone… except itself.

These policies lead to tax increases, a higher cost of living and, above all, destroying a large part of the British private sector as the government monopolizes the major sectors of the economy and increases taxes for the rest.

These dangerous magic-solution policies have already been implemented in the past. They are nothing more than the Argentine model of Kirchner and Kiciloff disguised in Anglo-Saxon terms, a model that has only created stagflation. It is also the Venezuela model (Mr. Corbyn was a defender of Chavez and his economic policies). To think that the government can decide how much money is created and spend it on whatever it wants without thinking of the consequences for the economy.

The myth is that they say printing money will not cause inflation because it will increase productivity and the increase in money supply will come in tandem with more goods and services:

Inflation occurs when you have more money chasing the same or less amount of goods and services. If you have money creation that increases productivity, yes you have more money but you also have more goods and services…the supply of both increases in tandem, so you don’t necessarily have to have inflation.

It’s Been Tried Before 

The problem? It is simply a myth debunked by history. Every single attempt at this socialist myth of productivity, supply and demand moving in tandem because the government says so, fails. It never happens. The government does not have better or more detailed information than the private sector of what goods and services the economy needs, and even less knowledge of how to boost productivity because it does not have the incentive of profitability and efficiency, just of maximizing budget spending.

Productivity collapses as government overspends on white elephants and politically motivated investments with no real economic return. The supply of goods and services does not increase in tandem with money supply in an open economy dependent on imports like the UK’s. Basically, the theory sounds nice, it simply never happens.

At least, when private banks “create money”, they have an incentive to lend with a real economic return and to try to recover the principal, with an interest. They might fail, and therefore my defense of a minimum cash coefficient and sound money. However, the government has no such incentive, rather the opposite. To create money to spend on politically motivated items, and pass the imbalance through inflation and currency debasement to the productive sectors.

The lesson from Japan was clear: “Individual consumption only went up by around 0.1-0.2% of GDP and failed to increase long-run consumption. Overall, the program did not ignite inflation or help Japan out of its economic rut“. And the lessons from Chile with Allende, and Argentina with Kiciloff, are scary.

Corbyn forgets that the public sector cannot exist without private sector revenues. Printing money does not create prosperity, it dilutes it. Be it through current or other QEs.

The aristocrats of public spending always think that intervening on money creation and the economy is going to solve everything.

Do they know this will not work either? Yes, but the final objective is different. To make government control all aspects of the economy, whether it is in recession or in depression. For Corbyn, the government is infallible and any mistake it makes has to be blamed on an external enemy.

If Corbyn implements this “People’s QE”, it will be “Venezuela with tea and cakes”.

The People’s QE is the same as any other quantitative easing, a massive monetary imbalance today under the promise of solving it in the future. The current QEs will likely end with a financial crisis. The People’s QE would do the same. Except that the “alleged” beneficiaries, the “people”, will likely be drowned in inflation as the mirage of money supply and goods and services growing in tandem is proven as fake as it is in today’s QE programs. But without sterilization and transmission mechanisms, the inflation that is created today in financial assets would make prices soar due to devaluation.

Monetary imbalances always create inflation. Whether it is asset price inflation or goods, it is the symptom of aa larger problem. Because all monetary imbalances end with either a financial crisis, massive inflation or massive unemployment once the small and temporary effect of the monetary placebo ends.

The artificial creation of money without any support is always behind every crisis. The People’s QE has failed every time it has been implemented. This would not be different.

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10 dead as train derails in India

August 19, 2017 rbksa 0
Author: 
AFP
Sat, 2017-08-19 17:47
ID: 
1503154770204425100

NEW DELHI: Ten people were killed and dozens injured when an express train derailed in north India on Saturday, an official said.
Emergency workers were pulling people out of mangled, upended carriages and rushing the wounded to hospital after five coaches derailed early on Saturday evening.
“Ten people have died and dozens have been injured. Most of the injured have been taken to the hospital,” said P S Mishra, chief medical officer for the area, by phone.
Police said the casualties were being rushed to hospital, but they were unable to give numbers.
“There are certainly casualties but right now the focus is on evacuation,” senior police officer Jitender Kumar told AFP by phone from the accident site.
“We are shifting everyone to the hospital. We are trying to take out those trapped inside the coaches.”
Photographs from the scene in the north Indian state of Uttar Pradesh showed people climbing onto upended carriages to try to pull passengers out.
The accident is the latest disaster to hit India’s most populous state. It comes just a week after dozens of children died at a hospital that had run out of oxygen there.
India’s railway network is still the main form of long-distance travel in the vast country, but it is poorly funded and deadly accidents often occur.
Less than a year ago 146 people died in a similar disaster in Uttar Pradesh.
A 2012 government report said almost 15,000 people were killed every year on India’s railways and described the loss of life as an annual “massacre.”
Prime Minister Narendra Modi’s government has pledged to invest $137 billion over five years to modernize the crumbling railways, making them safer, faster and more efficient.

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Forex Forecast for EURUSD, GBPUSD, USDJPY and USDCHF for August 21 – 25, 2017

August 19, 2017 MQL5: Traders' Blogs 0

First, a review of last week’s forecast:

– EUR/USD. Only 35% of experts expected the pair to fall. However, graphical analysis and a number of oscillators on D1 sided with them. The support at 1.1685 was named as the nearest goal: it was reached by the pair by mid Tuesday. After that, the pair made several more attempts to break through this level, and it even managed to drop 25 points. This was not a true breakthrough, however, and the pair returned to the Pivot Point of the last two weeks in the 1.1755 zone. Thus, the week’s decline was only about 70 points;

– GBP/USD. 45% of analysts voted for the fall of this pair last week. As for the medium term, 65% of them sided with the bears. The pair itself went ahead of the curve and by Tuesday evening it lost 170 points. There, the bears’ forces dried up, and it initiated a lateral movement along the 1.2875 Pivot Point, near which it completed the weekly session;

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“Colossal Fraud”: Lawsuit Accuses Poland Spring Of Selling Groundwater

August 19, 2017 Tyler Durden 0

Ever wonder if that bottled mineral water you just spent several dollars on is really mineral water? According to a bombshell new lawsuit filed this week, at least in the case of one company it isn’t.

A group of bottled water drinkers has brought a class action lawsuit against Nestle, the company which owns Poland Spring, alleging that the Maine business has long deceived consumers by mislabeling common groundwater. The lawsuit was filed on Tuesday in a Connecticut federal court and accuses Nestle Waters North America Inc. of a “colossal fraud perpetrated against American consumers” the Bangor Daily News reports.

The plaintiffs claim that falsely labeling its “groundwater” product as pure spring water allowed Nestle to sell Poland Spring water at a premium; as a result the consumers who brought the legal action are seeking at least $5 million in monetary damages for a national class and several state subclasses. They requested a jury trial. The civil suit was brought by 11 people from the Northeast who collectively spent thousands of dollars on Poland Spring brand water in recent years. It seeks millions of dollars in damages for a nationwide class and hinges on whether the sources of Poland Spring water meet the Food and Drug Administration’s definition of a spring.

The 325-page lawsuit, which was filed by lawyers from four firms, claims that none of the company’s Maine water sources meets the federal definition for spring water and that the company has “politically compromised” state regulators. Rather than spring water, Nestle Waters is actually purifying and bottling groundwater, some of which comes from sites near waste and garbage dumps, the suit claims. The legal challenge comes as Nestle is looking to expand its operations in Maine.

For instance, the suit claims that the company’s wells in Poland, Maine, have never been scientifically proven to be connected to a spring and draw in surface water, which cannot legally be called spring water. It further alleges that the company has put water from some of these wells through a purification process that disqualifies it as spring water under federal regulations.

 

The suit makes similar claims about Poland Spring water sources in Hollis, Fryeburg, Denmark, Dallas Plantation, Pierce Pond Township and Kingfield.

Poland Spring has gotten away with this deception for years, the suit claims, by co-opting state regulators and interweaving its interests with those of state government. Since 1998 the company has generated millions of dollars for Maine through licensing agreements, and since 2003 it has had an executive on the governor-appointed body that oversees the state drinking-water regulation enforcement agency, the suit states.

The court complaint further says that the Maine Drinking Water Program scientist who approved many of the company’s spring water permits spent a decade working with this executive at a private engineering firm and that the agency failed to get independent proof of the springs’ existence.

In response to the lawsuit, a Nestle Waters spokesperson said that its water meets all relevant federal and state regulations on the classification and collection of spring water and that the suit is “an obvious attempt to manipulate the legal system for personal gain.”

“The claims made in the lawsuit are without merit. Poland Spring is 100 [percent] spring water.”

This is not the first time that Nestle Waters has faced such allegations. In 2003, it settled a class action lawsuit alleging that Poland Spring water doesn’t come from a spring. In that case, the company did not admit the allegation but agreed to pay about $10 million in discounts to consumers and charity contributions. In other words, pulling a page from Wall Street, it neither admitted, nor denied guilt.

The full lawsuit is below

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Berlin Police Separate Hundreds Of Neo-Nazis, Opponents In Hess Tribute March

August 19, 2017 Tyler Durden 0

Approximately 500 Neo-Nazis and far-right extremists are marching in Berlin on Saturday to commemorate the 30th anniversary of the death of Hitler’s first deputy and right-hand man Rudolf Hess, German media reported. At the same time hundreds of counter-demonstrators have gathered near the parade in Berlin’s Spandau district, separated by hundreds of heavily armored police, according to AP.

Berlin police spokesman Carsten Mueller told The Associated Press that authorities gave permission to far-right extremists to hold the rally in the city, but imposed a number of restrictions on Saturday’s march to ensure it passes peacefully. Police have told organizers they can march, but they’re not allowed to glorify Hess “in word, writing or image” who died at Spandau prison, or use military music during the march. The neo-Nazis are allowed to bring banners, one for every 50 participants.

The demonstrators are also allowed to use two pieces by Beethoven and two by Wagner during the march, the court order said, as cited by Der Tagesspiegel newspaper.  Berliner Kurier newspaper released a route, which the demonstration should reportedly use.  “I regret nothing,” a banner held by demonstrators read during the neo-Nazi march.

Policewoman firmly escorts 2 young neo-Nazis away from crowd of Spandau locals shouting “Nazis out.” #b1908 pic.twitter.com/70a37InIFx

— Frank Jordans (@wirereporter) August 19, 2017

The measures are aimed at balancing free speech rights and rights of counter-demonstrators, Sven Richwin, a Berlin lawyer told AP. “Anything intimidating is ‘verboten,’ [Eng: forbidden]” Richwin added.

According to AP, such restrictions are common in Germany and rooted in the experience of the pre-war Weimar Republic, “when opposing political groups would try to forcibly interrupt their rivals’ rallies, resulting in frequent bloody street violence.”

The exact rules differ according to the circumstances, but police in Germany say they generally try to balance protesters’ rights to free speech and free assembly against the rights of counter-demonstrators and residents. As the AP adds, according to German rules, the shields, helmets and batons carried by far-right and Neo-Nazi protesters in Charlottesville last weekend wouldn’t be allowed in Germany.

Furthermore, openly anti-Semitic chants would prompt German police to intervene, although efforts would be made to detain specific individuals rather than to stop an entire rally, police say.

In the meantime, left-wing groups are holding a counter-protest, expected to draw some 1,000 people, in Spandau, AP reported.

Viva la Antifa…Spandau pic.twitter.com/4ntrbgJHp7

— Rebella Kurp (@rebellakurp) August 19, 2017

Friedliche Demo eines breiten Bündnisses gegen Nazi-Aufmarsch in #Spandau pic.twitter.com/NxqX9ur6tI

— Anett Seltz (@AnettSeltz) August 19, 2017

Hess, who received a life sentence at the Nuremberg trials for his role in planning World War II, died on Aug. 17, 1987. Allied authorities ruled his death a suicide, but Nazi sympathizers have long claimed that he was killed and organize annual marches in his honor. He was the deputy Führer from 1933 until he embarked on a covert mission to Britain in 1941 in an effort to secure a peace treaty between the UK and Nazi Germany.

1241 #b1908 #Berlin #Spandau Hess Marsch verhindern! #Antifa #NoNazis #ACAB pic.twitter.com/U59z5B6Zsc

— monotua (@monotua030) August 19, 2017

The marches used to take place in the Bavarian town of Wunsiedel, where Hess was buried until authorities removed his remains.

Hess was transferred to Spandau Prison following the trials and spent there some 40 years until his death. He was the only Spandau inmate during his last 20 years of imprisonment. Neo-Nazi theories claim that Hess was murdered and his followers consider him a martyr.

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Congo landslide death toll likely to rise over 200 — Ituri vice governor

August 19, 2017 rbksa 0
Author: 
Reuters
Sat, 2017-08-19 00:25
ID: 
1503148901433915800

CONGO: A landslide in eastern Democratic Republic of Congo likely killed more than 200 people, based on estimates from the number of households submerged, the vice governor of affected Ituri province said on Friday.
The landslide struck the village of Tora, on the shores of Lake Albert, a seismically active zone in the western Rift Valley, on Thursday.
“There are many people submerged whom we were unable to save,” Pacifique Keta, the vice governor of Ituri province, where Tora lies, told Reuters by telephone. “The rescue is very complicated because there are mountains everywhere, which makes it very difficult to have access.”
Many parts of west and central Africa are vulnerable to landslides, because land is heavily deforested and communities crowd into steep hillsides.
On Friday, Sierra Leone buried 461 victims of a mudslide that swept away homes on the edge of Freetown, the capital, and 600 more people are missing.
Eastern Congo has the added risk of being on a seismic fault line, which means it frequently suffers earthquakes and sometimes volcano eruptions.
Keta said the toll was an estimate based on the number of households submerged and the population of the households. He said that so far about 40 people had been buried.
“We are trying to enhance the emergency response. The aid agencies and MINUSCO (the UN peacekeeping force) are there to evacuate bodies and any survivors as quickly as possible,” Keta said.

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Regeni’s family has names of Egyptian officials involved in his murder

August 19, 2017 Middle East Monitor 0

The family of Italian student Giulio Regeni, who was tortured and murdered in Egypt in 2016, announced that they have the names of three Egyptian officials involved in his abduction, torture and murder; the Egyptian daily, Almesryoon, reported on Friday. The family expressed its anger over the recent return of Italy’s ambassador to Cairo. They regard the move as devoid of the “least form of sympathy.” In a TV interview, the family said that it would travel to Cairo in October as part of its effort to get a closer look at the circumstances surrounding Giulio’s death. They, however, maintained that they only have trust in their lawyer and the Italian investigators. Meanwhile, Italy’s Prime Minister Paolo Gentilini said that […]

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Yemeni FM: We’re ready to offer all concessions for peace

August 19, 2017 Middle East Monitor 0

Yemen’s Foreign Minister Abdulmalik Al-Mekhlafi said that the legitimate Yemeni government is ready to offer all concessions, whatever they are, for the sake of peace, Anadolu Agency reported on Friday. Speaking before the UN Security Council, Al-Mekhlafi said that the government is also ready to open Sana International Airport as part of the concessions, on condition that the UN supervises its operations. The minister also said he was saddened that no international attention was given to the “oppressive” siege imposed on Taiz by the Houthis and their allies, namely Ali Abdullah Saleh’s militias. He said that residents in Taiz feel as if the international community has adopted double standards toward their issue. About the situation in Taiz, Al-Mekhlafi said that […]

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